This is just a simple chart the most can understand and i have been in and out several times from december up till early last week,people always sink the boot into the big 4 Banks everytime the "RBA" deals a new set of playing cards,who cares what anyone thinks longterm they are as solid as a rock,but companies like the one above are the one i make small after tax money on every time just look and study they are out there everyday and just a phone call away..imho..
ASX good value?
- Thread starter Pom
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This is just a simple chart the most can understand and i have been in and out several times from december up till early last week,people always sink the boot into the big 4 Banks everytime the "RBA" deals a new set of playing cards,who cares what anyone thinks longterm they are as solid as a rock,but companies like the one above are the one i make small after tax money on every time just look and study they are out there everyday and just a phone call away..imho..
the market has so far been kind in 2012 for those not in direct resource sectors.
My significant holdings that have done well price wise:
CAB;
SWM
SXL
AHE
MLB
BSA
VOC
TRG
APN
my two mining related stocks are contractors (own the general store selling the picks and shovels, rather than be the prospector), one has done well one hasnt:
COF (have now sold after the spike in price)
IDL
My major nanocap holding:
AMA
My significant holdings that have done didley squate but have good dividend ylds:
MOC
NAB
My continued let down:
QBE (but am now increasing exposure again)
My stoploss exit stocks (based on discussions that Evan has regularly highlighted) and for which i havent bought back in:
*HVN (on the sidelines)
*MYR (holding onto small amount of shares at lower entry point)
*JBH (on the sidelines)
My US Shares:
*going up, but the majority are in 'boring stocks' so appreciation is being reduced by rising AU$. US shares go up, AU$ goes up, US shares going up a bit faster than AU$ going up, so net positive, but nothing to boast about.
Total return for 2012 so far: around 20%
Return for 2011: negative a few %
Return for 2010: 25-30% (lazy to check exact figures)
Return for 2009: absolutely massive
Return for 2008: big loss but lots of cash to keep putting into the market
Return for 2007: wasnt in the market in australia to any significant extent.
total accumulated return 2008-2012 ytd: around 280% roughly quick back of the envelope calculation.
Lessons learnt:
As Evan has constantly stated: when the market is dropping like flies, exit.
Intrinsic Value modification of Evans rule:
When the market is dropping like flies, exit, remain on the side lines whilst serious selling pressure is occurring. If intrinsic value is significantly above share price, then regain positions as soon as selling pressure eases.
cashflow position: stupendisly (word?) positive. so positive that the more i borrow the higher the cashflow
My significant holdings that have done well price wise:
CAB;
SWM
SXL
AHE
MLB
BSA
VOC
TRG
APN
my two mining related stocks are contractors (own the general store selling the picks and shovels, rather than be the prospector), one has done well one hasnt:
COF (have now sold after the spike in price)
IDL
My major nanocap holding:
AMA
My significant holdings that have done didley squate but have good dividend ylds:
MOC
NAB
My continued let down:
QBE (but am now increasing exposure again)
My stoploss exit stocks (based on discussions that Evan has regularly highlighted) and for which i havent bought back in:
*HVN (on the sidelines)
*MYR (holding onto small amount of shares at lower entry point)
*JBH (on the sidelines)
My US Shares:
*going up, but the majority are in 'boring stocks' so appreciation is being reduced by rising AU$. US shares go up, AU$ goes up, US shares going up a bit faster than AU$ going up, so net positive, but nothing to boast about.
Total return for 2012 so far: around 20%
Return for 2011: negative a few %
Return for 2010: 25-30% (lazy to check exact figures)
Return for 2009: absolutely massive
Return for 2008: big loss but lots of cash to keep putting into the market
Return for 2007: wasnt in the market in australia to any significant extent.
total accumulated return 2008-2012 ytd: around 280% roughly quick back of the envelope calculation.
Lessons learnt:
As Evan has constantly stated: when the market is dropping like flies, exit.
Intrinsic Value modification of Evans rule:
When the market is dropping like flies, exit, remain on the side lines whilst serious selling pressure is occurring. If intrinsic value is significantly above share price, then regain positions as soon as selling pressure eases.
cashflow position: stupendisly (word?) positive. so positive that the more i borrow the higher the cashflow
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Humbleness test:
what would a leveraged position in gold have generated over the last 4 years?
Yes gold can be leveraged.
My results are based on leverage, so its only fair to highlight that a leveraged position in gold would have worked very well.
So a new rule:
In a secular bull market, use leverage with stop losses. The major trend is your friend, the market will be aware of the major trend and will be pricing it accordingly. (this is a trading rule, not an investing rule). So long as the major trend is intact, the use of leverage with stoplosses is in accordance with the intelligent speculator.
what would a leveraged position in gold have generated over the last 4 years?
Yes gold can be leveraged.
My results are based on leverage, so its only fair to highlight that a leveraged position in gold would have worked very well.
So a new rule:
In a secular bull market, use leverage with stop losses. The major trend is your friend, the market will be aware of the major trend and will be pricing it accordingly. (this is a trading rule, not an investing rule). So long as the major trend is intact, the use of leverage with stoplosses is in accordance with the intelligent speculator.
Ahhh you shouldn't generalise.
not when you look at our market is US% terms.
Look at the S&P/ASX50 TR USD
The graph looks much better.
doesn't help those of us based in Australia though
If the strength of AUD is going to act as an anchor on the ASX, is it going to be better to invest in high income yield stocks in the short / medium term, such as banks and QBE?
Most foreigners are playing the yield game through the debt market, especially with government securities, thats why our fed government long term bonds are quite low, they are being heavily bought: long AU$ short US$ or Yen and invest the proceeds in Australian government debt (high yielding compared to other nations, and safe given Australian government debt relative to others). This form the majority of whats referred to as the carry trade.
In regards to stocks,its a more difficult question to answer. One needs to consider how susceptible the underlying company is to the exchange rate. One also needs to consider its future profitability as its future profitability will dictate future dividends. No point buying a 'high yield' if its future profit gets crushed. If future profit gets crushed, then the future dividend will be severely cut, then the logic of owning the stock (the high yield) will cease and on will not only receive a lower yield but take a nice whack from a drop in the share price.
I think one reason that many of the high yielders in the australian market have rececently run is becasue the release of the half year profit reports show that things are not as bad as the market feared, so the market is re-rating the stocks.
But in a low growth environment one has to be very careful chasing stock prices (for investment purposes, traders will try to just catch the momentum and will exit once that momentum plateaus).
In regards to the stocks you highlighted: the banks and QBE.
The banks are probably ok at the moment as part of a diversified portfolio. Their yields are quite good at around 9-10% gross (ie including franking credits), but i dont think their profit will be increasing much in the near term, until lending starts to increase. Lending wont increase until consumers and businesses become more confident. If profit doesnt increase then its hard to see dividends increasing (in fact dividends may decrease since a large proportion of dividends are issued as new shares through DRP, more shares on offer, same lending, same profit will equal lower EPS)
In regards to QBE
Oracle has made some excellent posts re QBE in recent times, search this forum for his posts.
For myself i consider 4 essential elements for QBE
(a)QBE now reports its profits in US$. Given that the AU$ has been appreciating, this has acted as a consistent drag for several years on the AU$ restated profits. So one needs to consider is the AU$ going to continue to appreciate. If so, then AU$ will continue to be under pressure. My view is that the AU$ will gravitate back towards its long term trend of around $0.75-$0.8, but when i dont know. The market will do what the market wants. This is a long term view, using long term views to guess profit performance is dangerous (for example the AU$ could appreciate to US$1.3 in the next two years, then crash to US$0.7 in the third, this will be in accordance with my long term view, but will still hamer the share price in the next two years)
(b) Global interest rates. Whilst global interest rates are low, QBE (as do other insurers) generates a very low return on its funds held (insurers get your money, invest it, and only pay out when there is a claim). I think alot of this risk is already factored into the share price given that interest rates have been low for a year now, and they cant get much lower)
(c) Insurance margins. This is now increasing given the recent spate of significant global insurance catastrophes. This should bode well for future profits, especially if we see a period of lower catastrophes.
(d) Management quality. QBE has consistently been rated in the top global insurance companies for management quality. Factors (a)-(c) have caused the drag on insurance profits, now management quality.
In regards to QBE yield, remember it generates most of its profit overseas. So the dividend you see (unlike the banks) is NOT fully franked. It has lower franking. When looking at yields one should look at gross yields (ie including franking) not net yields, so we can match apples with apples.
Hope this helps.
yes true, i was talking sectors as a whole. Within those sectors individual stocks can perform very diffierently to the sector average
I'm a share-trader/mug punter with quite a few years trading experience. I always appreciate the comments on the sharemarket on Somersoft. They seem far more balanced than other sites...maybe because some here are investing substantial $'s but more likley because they have a more educated approach.
I have friends with substantial $ invested in the market who merely buy dividend yielding stocks...banks, TLS and others...on the advice of large broking houses. They say that whilst the total value of their equity has fallen in recent years their fully franked dividnend income has risen so they are not concerned about fluctuating equity values.
I have far less equity to use so have gone for more speculative stocks with a resultant volatile outcome...up a lot one year, down a lot the next year.
I noticed the concern about bank stocks on this thread. I suppose where you have banks laying people off (ANZ recently laying off 1000 people) and possibly quiet property markets these may not be the best place to be. However they are a protected species (protected by the 4 pillars policy and a govt that will bail them out in troubled times). The big 4 are also an oligolopy. These are good to invest in. Monopolies (such as ASX when it had it) are even better to invest in. Telstra (a protected specie to some extent) is also good to invest in.
I like the idea of picking the next sector to boom. Gas exploration has recently been one such sector and I have held Senex (although only briefly). Mining contractors are still possibly a good sector. Manufacturing is defintiely not unless the AUD retrraces a lot. Supermarket chains such as Woolworths and Coles (Wesfarmers) as a duopoly are good to invest in.
I have friends with substantial $ invested in the market who merely buy dividend yielding stocks...banks, TLS and others...on the advice of large broking houses. They say that whilst the total value of their equity has fallen in recent years their fully franked dividnend income has risen so they are not concerned about fluctuating equity values.
I have far less equity to use so have gone for more speculative stocks with a resultant volatile outcome...up a lot one year, down a lot the next year.
I noticed the concern about bank stocks on this thread. I suppose where you have banks laying people off (ANZ recently laying off 1000 people) and possibly quiet property markets these may not be the best place to be. However they are a protected species (protected by the 4 pillars policy and a govt that will bail them out in troubled times). The big 4 are also an oligolopy. These are good to invest in. Monopolies (such as ASX when it had it) are even better to invest in. Telstra (a protected specie to some extent) is also good to invest in.
I like the idea of picking the next sector to boom. Gas exploration has recently been one such sector and I have held Senex (although only briefly). Mining contractors are still possibly a good sector. Manufacturing is defintiely not unless the AUD retrraces a lot. Supermarket chains such as Woolworths and Coles (Wesfarmers) as a duopoly are good to invest in.
As long as you understand what you are investing in, go for it. I'm even starting to look at the idea.
I just occasionally try to caution newbes that buying bank shares is not really diversifying out of property.
Definitely don't listen to your broker, especially the average joe blow broker. And as for research analysts, well research/broker reports written by people who most of us can get access to probably aren't worth the paper they're written on.
I don't want to say much more but in my opinion, from what I've seen, the sharemarket is generally a massive mug's game. People in the know make money because they are in the know. People who aren't in the know make money because they are lucky.
I don't want to say much more but in my opinion, from what I've seen, the sharemarket is generally a massive mug's game. People in the know make money because they are in the know. People who aren't in the know make money because they are lucky.
Well, my picks are fairing pretty well so far - particularly QBE where i'm up 30%+. All are in positive territory.
I'm newish to shares and particularly the Aussie market so i'd appreciate peoples thoughts on specific stocks for 2012. That way I don't have to research 200 companies and I can cherry pick from the experience of you guys.
I'm newish to shares and particularly the Aussie market so i'd appreciate peoples thoughts on specific stocks for 2012. That way I don't have to research 200 companies and I can cherry pick from the experience of you guys.
RIO is looking massively undervalued right about now.
I'm buying $20k worth on Monday morning when trading resumes.
Also Woolworths looks fairly good value right now with a good yield.
I wouldn't mind putting a couple of g's here and there in a few small caps too. Just for the odd chance that one of them skyrockets etc.
I'm buying $20k worth on Monday morning when trading resumes.
Also Woolworths looks fairly good value right now with a good yield.
I wouldn't mind putting a couple of g's here and there in a few small caps too. Just for the odd chance that one of them skyrockets etc.
Bad attitude.I'm newish to shares and particularly the Aussie market so i'd appreciate peoples thoughts on specific stocks for 2012. That way I don't have to research 200 companies and I can cherry pick from the experience of you guys.
Why would you ask property investors about shares?The ASX has underperformed the DOW for some time but that is easily explained by the ASX being dominated by four banks and two diversified resource stocks, none of which are the flavour of the month. Small/med caps are doin' OK.
Just had a quick look at my two bank stocks on purchase price
+24.37%
+9.30%
A couple of resource stocks though are at
+43.76%
+52.63%
+100%
Its not all good news though, there's even a speccy thats
-98.67%
Not even worth selling that as I only had a punt, it would cost me more to sell than to forget it..no risk management in place by me and its a nice reminder that its not all rainbows and lollipops
I still have around 30% sitting on the sidelines
