High Yielding Shares Again

[The Falcon]

Thought I might share a couple of resources that I like.

For those that might like to learn about value investing rather than just indexing and like listening to podcasts while exercising or on train of whatever I can recommend ;

https://itunes.apple.com/au/podcast/value-investing-podcast-thought/id642016120?mt=2

A general investment stuff (covers a wide range of topics, hosts and some guests mildly annoying but still worthwhile)

http://www.theinvestorspodcast.com/

 

[willair]

Hi all

I will try to reply to all the people asking questions on what I am doing.

I am not directly managing any of the 50 companies that I choose to invest in, I simply do some investigation into which type of companies I want to put some money into and then look at some of the specific companies and then buy them and that is it, time to look for more. I am investing in a little bit of shares solely for the reason that I am not over exposed in the property market. Traditionally I have been concentrating 100% on the property sector which up till January this year were the only investments I had and will still retain.

I have not considered EFT's or LIC's but will in the future, one step at a time for me.

Whilst I do not know if any of the companies I invest in will achieve higher than 6% growth with add on franking credits I dare say I will be much better off than putting the money in a bank term deposit or government bond with the opportunity of investing into a range of businesses that I could not have created or establishd myself due to the high entry costs and the expertise and skills required in some of the businesses I will choose to invest in.

If people think that choosing shares to invest in is to risky, feel free to let me know what other investments I should take a look at to diversify my investment portfolio and mitigate my risk of investing in only one asset class.

PLEASE NOTE: I am an in-experienced investor when it comes to shares so don't follow any of my advice or recommendations. I have no idea and can give no guarantee that I what I am doing will work or is right because the only thing I can feel right now is no Ferrari in the garage!

Regards,

alicudi

When you look at one day like today,some I trade in are down over 5% and still on the downtrend without thinking too much clarity, you get three days like this and most would come into margin call territory not going to worry me but some people would be..

 

[xactly]

All fairly boring, topped up on Berkshire and Johnson & Johnson last week. Watching Diageo, Chevron, Philip Morris, Walmart.

Did similar with Berkshire. Its been good to me.

but instead of watching the large multinationals, bought into IXI.
Global consumer staples, Unhedged. to broaden the portfolio and lift results with the falling $AU

No matter where you live in the world, you gotta eat!
with the proviso of past performance /future etc etc, they have done solid work
http://au.ishares.com/fund/fund-performance-IXI-ASX.do

not trying to ramp.
Just explaining how Ive chosen to broaden diversity from US and ASX to include global in my stock portfolio.
I don have the time or expertise to monitor 50 stocks and have a lot of time to wait for investment fruits.
Also I was a bit heavy on health stocks and I don't feel bank stocks are value. I sold them to switch to IXI.
after todays CBA fall Im glad i did but Im sure it was just luck.

 

[The Falcon]

IXI is not a bad vehicle, I have held for some time. Won't sell (Don't want to trigger CGT) but these days I want the underlying holdings. I really like consumer staples too and 8 of the top 10 holdings in IXI are on my long term internatioal watchlist (only 21 stocks). IXI MER at .48% but certainly beats international brokerage for smaller positions. Dollar cost averaging in to consumer staples, consumer discretionary, medical and energy has proven to be extremely effective over the long term.

 

[steveadl]

A really good post Steveadl. Really valuable that you identify your weaknesses and then plan accordingly which you have done.

PMC and MGE are good platforms. I'd also look at MFF which is now trading below NTA.
CIN has performed well but has a very large holding in Amalgamated Holdings so you would need to have a position on that. I'd add CIN but at a larger discount to NTA. I'd give Perpetual LIC the **** though and take a look at AFI/ARG/MLT/BKI for that ASX large cap exposure.

I don't follow WAX/WAM. Pinkboy is keen on some active small/mid LIC's so he might pass comment too.

PS. PIC might be interesting in time but current at 1% MER is a killer. Understand it will go to 0.85% at market cap $1B, but that's a way off and still high. I do like their daily NTA announcements though, and trading at 2% discount currently.

Good luck Steve

Thanks. I'm actually doing a lot of reading at the moment on index fund investing and its really opening up my eyes as to the benefit of them and conversely the risk in using an active fund.

Am currently making further changes, but will update down the track a bit once I've settled on my long term strategy.

If you liked it have a read of 'Common sense on mutual funds'. A similar concept but more in depth and updated post GFC. May be a bit of index fund overkill reading many similar books essentially saying the same thing, but i got value out of both.

Thanks Rickardo, will look into it. I've also downloaded 'A Random Walk Down Wall Street' but probably won't start reading that until I've finished the current couple books I'm on. I've found the thoughts of Paul Merriman quite interesting and have just started one of his free eBooks.

 

[The Falcon]

Thanks. I'm actually doing a lot of reading at the moment on index fund investing and its really opening up my eyes as to the benefit of them and conversely the risk in using an active fund.

No worries, just bear in mind there is a world of difference between an open end fund (managed fund) at 2% MER maybe with performance fees as well, and the large ASX LICs (closed end funds) with 0.20% MER only. I like Bogle and Malkiels stuff, but its easy for proponents to get overly dogmatic almost as though they have found a new religion

 

[The Falcon]

Peter Thornhill's latest rant and rave is out, good stuff covering annuities, government bonds, volatility vs. risk. Good to see the old fella still swinging ;

http://www.motivatedmoney.com.au/mysay.php?iid=f1yp9gz45q

This bit chimes nicely with the other thread about Gen Y credit card debt, speaking of priorities ;

On a related interest rate topic: With household debt at very high levels, I didn't know whether to laugh or cry at a current St George Bank advertisement on television advertising their offer of zero interest rates for 18 months on transfers to their new credit card. The hint is that if your present debt is a burden then a switch to their card will alleviate the pain. So far, so good.

Then, whilst extolling the virtues of the zero rate, the lady in the ad goes on to justify this by saying what a great deal it is for her as it will enable her to, 'get ahead' and concentrate on the important things in life. These important things she then lists as socialising and going out at weekends; go figure! Perhaps her interpretation of 'getting ahead' is different to mine and whilst I'm used to some irony in advertising this borders on the insulting and speaks eloquently to potential problems for a generation. I would hasten to add that it won't be the first time.

 

[Rickardo]

Thanks Rickardo, will look into it. I've also downloaded 'A Random Walk Down Wall Street' but probably won't start reading that until I've finished the current couple books I'm on. I've found the thoughts of Paul Merriman quite interesting and have just started one of his free eBooks.

Steve,

I've also read 'A Random Walk Down Wall Street' and found it good and would recommend it but essentially a similar message to Bogle's books just written in a different style - all pro index books that I've read tend to say the same thing, that over the long term, empirical research has shown it is very, very difficult for an active fund to beat the returns of an index fund after costs, and the chances of picking such a fund in the early stages are near impossible. In my opinion they make a compelling argument, and the research seems to back this up. If anyone has read a book on the counter argument that's backed up by empirical research, I'd be interested to hear their thoughts.

The reading I've done over the past couple of years has definitely shaped my share investing - long term accumulation of index funds all the way for the largest component of my share market funds, with maybe a small amount in direct shares if I feel like becoming more involved, and stay away from active managed funds.

 

[china]

With the current selloff, it may be time for my first batch of VAS soon.

 

[willair]

With the current selloff, it may be time for my first batch of VAS soon.

What if the selloff only just started,some people that bought into CBA at above 93 bucks would be thinking right now wtf happened..

 

[china]

What if the selloff only just started,some people that bought into CBA at above 93 bucks would be thinking right now wtf happened..

I am thinking if VAS hits 65, may buy a small batch.

 

[Bunlee]

I purchased a parcel of AFI this morning at $6.08. This LIC and MIR (another LIC) are acquired for future income and stability of my portfolio. Last week purchased some more AWC @ $1.64 for the growth element of the portfolio.

I look to weight my direct Australian shares portfolio at 70% income and 30% growth.

I like to see some volatility in the market

all the best

 

[pinkboy]

These are very tempting at the moment:

AFI: $6.03
ARG: $7.65
MLT: $4.42
CDM: $1.395
WAM: $1.92 (already hold)

All but WAM trading below pre-tax NTA now.


pinkboy

 

[keithj]

AFI: $6.03
ARG: $7.65
MLT: $4.42
CDM: $1.395
WAM: $1.92 (already hold)

All but WAM trading below pre-tax NTA now.

How did you calculate their NTA ?

 

[JohnMichael]

Thought I might share a couple of resources that I like.

For those that might like to learn about value investing rather than just indexing and like listening to podcasts while exercising or on train of whatever I can recommend ;

https://itunes.apple.com/au/podcast/value-investing-podcast-thought/id642016120?mt=2

A general investment stuff (covers a wide range of topics, hosts and some guests mildly annoying but still worthwhile)

http://www.theinvestorspodcast.com/

Thanks for the suggestions mate.

I listened to an episode of "the investors podcast" and it kind of scared me to be honest! It was an episode on Napoleon Hills Think and Grow Rich, and he had about 5 of his fellow investor friends on who formed their "mastermind group" on investing.

They were all talking about how there was a big crash coming and they'd sold 90% of their portfolios and were sitting on cash.

It scared me a little, since I hold VTS/VGS, which is the US market/60ish percent US market.

It got me thinking though - if VGS/VTS was around during the GFC, or if you simply held US stocks.... would it have been such a massive loss? Because yes there was a 50% ish fall from top to bottom, but this would have be largely offset by the AUD falling from high 90s to low 60s. So if you did sell (not recommending selling) this would have given you time to "get out" with significantly less loss, since in AUD terms the investment would have fallen far less.

Would this be likely to happen again, or was it just chance?

Thoughts?

 

[The Falcon]

Thanks for the suggestions mate.

I listened to an episode of "the investors podcast" and it kind of scared me to be honest! It was an episode on Napoleon Hills Think and Grow Rich, and he had about 5 of his fellow investor friends on who formed their "mastermind group" on investing.

They were all talking about how there was a big crash coming and they'd sold 90% of their portfolios and were sitting on cash.

It scared me a little, since I hold VTS/VGS, which is the US market/60ish percent US market.

It got me thinking though - if VGS/VTS was around during the GFC, or if you simply held US stocks.... would it have been such a massive loss? Because yes there was a 50% ish fall from top to bottom, but this would have be largely offset by the AUD falling from high 90s to low 60s. So if you did sell (not recommending selling) this would have given you time to "get out" with significantly less loss, since in AUD terms the investment would have fallen far less.

Would this be likely to happen again, or was it just chance?

Thoughts?

Firstly, I'd take all such prognostications with a grain of salt...but that's just me. People are notoriously bad at calling tops....The purpose of all that stuff is to get you to think, not to tell you what to think. Regardless, take a look at NYSE:VTI which VTS mirrors. Hit a high in 07 of USD $77 and is now USD $107 + dividends. That's after the GFC....the biggest fall since '29.

This a really valuable recent quote from a retired (mid 40s) fund manager and actuary ;

It is better to find something with an edge. Something that has the ability and reasoning to make you money from the market. Overall, it is probably the most secure thing (of all the insecure ways to make money) is to be a buy-hold equity investor with a super long term horizon. It is a game that many can win. Your edge is being able to take on equity risk and holding on. I can confirm that a premium is very likely to exist at present prices, although that premium is less than what it has been in the past.

There is something in this..........

 

[pinkboy]

How did you calculate their NTA ?

All of these LICs report monthly.

pinkboy

 

[keithj]

All of these LICs report monthly.

Has their NTA changed since they last reported ? My back of envelope calc - XJO has fallen ~3% since 30th April when they reported... I would expect their NTA to have changed similarly.

 

[The Falcon]

As of 3PM ARG was at +0.8% and +0.1% according to brokers internal sheet. That was AFI at 608cps at the time.

 

[dajackal]

Using my crude method here's how the LICs are tracking against the XJO

mlt nta 30/04/15 4.58
mlt close 7/05/15 4.38 -4.37%
arg nta 30/04/15 7.84
arg close 7/05/15 7.67 -2.17%
afi nta 30/04/15 6.19
afi close 7/05/15 6.09 -1.62%
xjo close 30/04/15 5,790
xjo close 7/05/15 5,645.70 -2.49%

Only MLT's SP is below NTA