And this is exactly what we are seeing now, especially point two (which is why i was underweight banks on the way down). You have to take into consideration the carry trade when making buy/sell decisions (i dont own resource companies so cant really comment on this sector)
Australian Sharemarket
- Thread starter Empty Pockets
- Start date
And this is exactly what we are seeing now, especially point two (which is why i was underweight banks on the way down). You have to take into consideration the carry trade when making buy/sell decisions (i dont own resource companies so cant really comment on this sector)
I want to also highlight this point made in another topic thread:
http://www.somersoft.com/forums/showpost.php?p=637262&postcount=33
In my opinion its very relevant at the moment, especially for australia, and more relevant the greek crisis.
http://www.somersoft.com/forums/showpost.php?p=637262&postcount=33
In my opinion its very relevant at the moment, especially for australia, and more relevant the greek crisis.
Just wondering with the new resources tax announced yesterday where do you position BHP now?
I'd reckon BHP is going to be worth a lot less with the resources tax than without. So BHP is now a bet on who wins the next election. If the bunch of lunatics currently running the place get booted out, BHP will go back up. If they win and get control of the senate BHP will drop by even more than it already has.
BHP has dropped from $44 to $38.50 in a week or so. Hard to say how much of that is from the tax, as stocks were already dropping due to other things, especially Greece and Euro things. Plus BHP also dropped before the tax was announced as it was well anticipated. I'd guess BHP has dropped maybe $3 or $4 due to the tax. So that's 7 to 10%.
I'd guess BHP might be worth 15 to 20% less if the tax came in, so the market is giving us odds of the tax being implemented. Or odds of the lunatics staying in power and running the country down even further.
The real effects of this could be much more. If overseas investors think that Australia now has too much sovereign risk, if the government can just move the goal posts when someone is doing great, then you would rather invest your money elsewhere.
See ya's.
Disclosure. I hold BHP and RIO.
ps.
Everything said above was a guess. This is not advice. Anyone who takes free advice about shares from a farmer on a property forum deserves to lose all their money.
I had a quick look back and couldn't pick up when I posted that and thus I can't get an actual price of BHP at the time but considering it is now on a PE of 16.5 then there has been abt a 7% drop.
As I said: The market scares me ATM.
My No 1 son gets around the mines and agrees with me that the big thing going for BHP is that they can make money faster than they can waste it. The same elements of a successful marriage.
well thought out, the only thing that i think needs to be highlighted is China, this is just as much a risk/opportunity, in fact more so, than the resource tax.
Disclosure: I DONT HOLD BHP, RIO or any resource stock.
Sure it is. Agreed. But that risk applies to the whole Australian economy. So it applies to all your non resource shares and your units in Melbourne too. What happens if demand for commodities disappears? It will be a case of who loses least wins.
See ya's.
It's rapidly getting to the point where I trust the autocratic Chinese more than our communistic Western democracies. Democracy can only last as long as there is someone else's pocket to pick. Someone may be able to remember Margaret Thatcher's quote along these lines.
Obama will be next with a super-profits tax. Makes Hugo Chavez look like a moderate.
Obama will be next with a super-profits tax. Makes Hugo Chavez look like a moderate.
The utilisation of the melbourne units will be more determined by the level of overseas students studying in melbourne.
Because the 'demand' from china is significantly higher than supply, i am not worried about a 'bust in china' effecting demand for chinese student applications to study in melbourne.
What will have a greater effect is government legislation on student visa requirements and the process on to australian PR (many overseas students regard studying in australia as a 'bribe' to get australian PR).
Overall i am not worried about the rent, however i am concencered about near term future rent appreciation, given the fact that rents have jumped significantly in the last 3 years (nearly 40%).
Therefore i look at current ylds and market prices of units for sale in the CBD.
Market prices have also jumped 60% during this time.
So i am happy to start taking money off the table, which is what i have recently done. One unit sold last month, one currently on the market at a price of +15% of the one that sold. The other 3 are still in hold mode.
In regards to non-resource shares, you are right in the short term there will be a negative effect on non-resource shares but the degree will be less.
The key here is to make sure that you are buying with a significant buffer (ie discount) to intrinsic value, and to watch any margin debt.
I should also point out here that part of the portfolio is exposed to overseas shares and part of the portfolio benefit from a declining $AU dollar.
If china has a temporary crash, $AU dollar will depreciate and this will be a net positive for the shares.
Last edited:
Personally I thought the super tax was a very bad tax until I did some research on mining rights and how it all works in this country. The miners don't really have strong ownership rights over the minerals being mined, all they hold is a lease. They are more "paying rent" as compared to laws in other countries, the landlord has come knocking (Aust Govt) asking for a higher rent, in my view that is just bad luck, they've chosen to operate a business where the government really does call the shots.
Paul, did your research also show that it is the States who own the minerals and have the right to charge rent (royalties)? They enter a contract with the miners and have, up until now, abided by the terms of those contracts.
How often have you doubled the rent on a property while a valid lease is still in place?
How often have you doubled the rent on a property while a valid lease is still in place?
that's my point in debating this.
you can't retrospectively "raise rents" while a signed lease and/or agreement is in place.
Did anyone here buy BHP today-Wednesday 5 May?
I bought at an average of just under $37.80.
I am hoping for a bit of a recovery as I think its oversold. RIO's shareprice has turned green...BHP could be next.
I also hold Perseus Mining shares-sold some at $1.80 today and bought some back at $1.715
Am waiting for things to settle down a bit-this super resources tax has thrown a cat amongst the pigeons.
Interestingly its also affecting the price of Australian resource stocks with mining operations exclusively overseas-such as Perseus Mining (gold in Ghana and Cote d'Ivoire) and Riversdale (coal in Mozambique).
I bought at an average of just under $37.80.
I am hoping for a bit of a recovery as I think its oversold. RIO's shareprice has turned green...BHP could be next.
I also hold Perseus Mining shares-sold some at $1.80 today and bought some back at $1.715
Am waiting for things to settle down a bit-this super resources tax has thrown a cat amongst the pigeons.
Interestingly its also affecting the price of Australian resource stocks with mining operations exclusively overseas-such as Perseus Mining (gold in Ghana and Cote d'Ivoire) and Riversdale (coal in Mozambique).
Tempted, really tempted... still think it'll go lower...
rio's gonna tank.
i hope no-one's holding LNC.
i hope no-one's holding LNC.
The sell in May rhyme may be apt this year:
http://campaign.constantcontact.com...1NsKHbT-dDYv2JlyXNODWKl4FkGKKShDOU-cnagabSnoh
http://campaign.constantcontact.com...1NsKHbT-dDYv2JlyXNODWKl4FkGKKShDOU-cnagabSnoh
xjo may see support at 4650=200dsma or 4600=previous support line.
unless Greece or Spain fails, or China recession and property bust, or terrorist attack, doubt it will go lower for a while.....
but then only fools make predictions like this huh
unless Greece or Spain fails, or China recession and property bust, or terrorist attack, doubt it will go lower for a while.....
but then only fools make predictions like this huh
Don't be too hard on yourself. I blew 20 big ones on Mon night when my miner missed estimates by 4c/sh. It's a tough market with everything priced for perfection.well here's my tale of woe for this week...pick away guys
was holding MGX in CFD form and it gapped down and took me out and I mean out. Not happy Jan.
yeah, yeah I know, cfds are dangerous etc etc have learned my lesson the hard way and am embarassed (but not ashamed) to say so. sigh
I wonder how Rudd's Army will feel when their super funds cop another big hit.
