High Yielding Shares Again

[Intrinsic_Value]

And the lesson here is fundamental value based analysis should exclude cyclicals...unless you know how far the pendulum has to swing and have conviction on the resource cycle. run the value screens on the ASX and it's all cyclicals

Re YMAX headline numbers are great, until you look at the distribution notices, franking 20% on average. The only smart beta that I think is valid, after tax in the hands of the investor is RAFI etf QOZ , and even then in superannuation low tax environment due to moderate turnover.

yes you make a good point.
My resource exposure was concentrated on mining service companies where their net tangible assets was higher than the share price.

It has not been a good outcome

Like I have said previously, Mistress Market is a very good teacher, but her tuition fees can be quite high.

 

[The Falcon]

I'm with you in that IV, take SVW at $6.10 at the time, 30% below NTA. Only mining services stock I hold and will continue to. Value investors usually buy too early, and sell too early

I think it was Jesse Livermore who said, to paraphrase ; the market delivers the lesson you need, but you don't get to choose the fee. lol.

 

[Gendry]

And the lesson here is fundamental value based analysis should exclude cyclicals...unless you know how far the pendulum has to swing and have conviction on the resource cycle. run the value screens on the ASX and it's all cyclicals

Re YMAX headline numbers are great, until you look at the distribution notices, franking 20% on average. The only smart beta that I think is valid, after tax in the hands of the investor is RAFI etf QOZ , and even then in superannuation low tax environment due to moderate turnover.

Why QOZ over MVW may I ask? You were posting earlier about avoiding MVW due to turnover / churn, but I thought I read a while ago that QOZ was very high in turnover.

 

[The Falcon]

QOZ cap 50m vs MVW cap 18m, the smaller the cap the more market maker movements churn. Both still sub scale though. Distribution franking levels 80% vs. 70%. I like the RAFI rules approach more than equal weight, and I see less risk on Betashares pulling QOZ than MVW being pulled by Van Eck due to lack of support from the market

 

[Intrinsic_Value]

MCS, NWH and SSX

pinkboy

Still we need to see how these play out.

SSX is doing share buybacks. Price is now just 15% below my average cost.

NWH: I dare not do anything, suffering large losses and don't dare dollar average down.

MCS: I dollar averaged downwards at 18c, average cost is now around 30c. Will see how this plays out.

But still as Gartman says, the main problem with loosing positions is mental capital.
Loosing positions chew up a lot of mental capital.

 

[pinkboy]

Still we need to see how these play out.

SSX is doing share buybacks. Price is now just 15% below my average cost.

I have no comment on these guys.

NWH: I dare not do anything, suffering large losses and don't dare dollar average down.

We do work for NRW. I have a cycle buddy who works there. Share cap is so low that its less than the value of the assets. Id be betting an imminent buyout, possibly a lot lower than PP. Only 1 mine site in Qld is scary for them.


MCS: I dollar averaged downwards at 18c, average cost is now around 30c. Will see how this plays out.

Watch outgoing Director Pricey buy back his heavy haulage part of the business. . Hes well off taking both cash and shares when he entered the business. Gilberto I think is hurting a little, with many of his personal assets for sale.

But still as Gartman says, the main problem with loosing positions is mental capital.
Loosing positions chew up a lot of mental capital.

Above in red.

pinkboy

 

[pinkboy]

IV, are you still holding VET as well on top of these?

pinkboy

 

[redwing]

. I like the idea of something like MVW - an equal weighted ETF of the ASX200 which gives a larger tilt towards mid caps and has outperformed things like VAS this year, albeit with a slightly lower div yield.

There's an interesting interview on Burton Malkiel where he talks on a number of issues such as Rob Arnott and his Fundamental Indexing which I found interesting

Rob Arnott has made a huge business with so called 'fundamental indexing.' which he says is this new great invention, a combination of value investing, plus size. Over his history, he has outperformed. In the book, I dig into that and show he really only outperformed in one particular period, coming out of the financial crisis of 2008, when he doubled the weight of his portfolio in banks -- and put 15% of his portfolio in two stocks, Citi and BofA.

Don't tell me that wasn't risk! A lot of people thougth at the time that the government would let 'em go out of business. (But Arnott was right, and reaped profits when the banks were bailed out and their stocks recovered.) I give him credit. But dont tell me this is brilliant new investing. It's taking on a whole lot of risk.

He also talks of Vanguards foray into ETF's, Vanguard as a giant activist investor, and his thoughts on replacing part of a bond portfolio with a dividend substitution portfolio of relatively safe stocks for income.

Link to interview

However part of me has doubts about indexing in Australia in general and thinks perhaps the fund managers here can outperform the index more often than a more efficient and diversified market like America.

Because it's a smaller market in Australia i.e. Commonwealth Bank, BHP, Westpac, ANZ and NAB account for 40% of the ASX top 200 and we represent only 3% of the worlds stockmarket

What was last years purchases if I may ask?

Hi Oracle

Last year was the US, World (ex US), Australian and Australian Fixed Interest Markets. Though I did also top up on some CBA Shares

There is a small possibility I might start the diversification process probably close of the end of the year into VTS (US Index) once my target goal of VAS is reached.. That will go on probably for atleast 2 years in order to build significant position.

Cheers,
Oracle.

I've held VTS for a few years now and the US markets have had a great run in comparison to others and VTS along with regular contributions has certainly helped the portfolio progress

 

[oracle]

Hi Oracle

Last year was the US, World (ex US), Australian and Australian Fixed Interest Markets. Though I did also top up on some CBA Shares

I've held VTS for a few years now and the US markets have had a great run in comparison to others and VTS along with regular contributions has certainly helped the portfolio progress

Very good redwing!

All my ETF purchases will be pretty much set and forget. Plan is to never sell..just enjoy the passive income stream Ad infinitum

Cheers,
Oracle.

 

[The Falcon]

I've attached some papers on Smart Beta / Fundamental weight that some might find of interest.

 

[Intrinsic_Value]

IV, are you still holding VET as well on top of these?

pinkboy

yes still hold VET, but I don't know whether your question has been buy and hold.

I bought, dollar averaged downwards, when it moved upwards recently offloaded a lot.

Reason has been the degree of uncertainty regarding IV.


I am quite happy with this position.

Even when IV is uncertain, the correlation between probability of IV and share price is always inversely correlated (although the probability will never equal 1 or 100%).

So yes I have a position. Its note huge, but its profitable.

 

[Oscar]

Very good redwing!

All my ETF purchases will be pretty much set and forget. Plan is to never sell..just enjoy the passive income stream Ad infinitum

Cheers,
Oracle.

same here pretty much. this year I'll be continuing the DCA strategy monthly and buying extra when I see the big dips, and add progressively to my commercial property fund. I really want to get into the US market via Vanguard but don't want to jump in at record highs ???? My only exposure to US stocks are through my companies health stocks via stock options and restricted stock units which are doing even better than the overall market!

 

[yadreamin]

Wow some real gems in this thread, and some great long time SS ers putting out some good advice/info.
So after 2.5 years working my but off to recover from the GFC l am finally getting my head above water again. Hard lessons learnt. Extra cautious now with where my $ will go and l WILL have total control. No managed funds or what ever for me ever ever again. Managed to hold onto 1 ip and PPOR. Would sell the ip but that would be too big of a loss to swallow. It's kreeping up in value and when it gets to 50 k over what l paid l will sell, I am lucky l have great tenants in there and it hasn't caused me any grief apart from the $ loss. It's now basically returning all my PAYG each year through neg gearing so that's good. At least it's something.
So been too busy working to even follow the markets. Which brings me to my question. After reading Keithj s post in this thread can any one tell me where is the tide ? Yes yes there are many markets.
Where is the tide in the share market then as this is a share thread ?
I know the property market in my immediate area is going very well a sign goes up and it sells in a very short period of time. Not great prices but it's a buyers market and the buyers are jumping in. There is a lot of development starting again in the Mandurah area. It's been stagnant. For quite a few years now but seems to have jump started again.
Glad to hear you are still doing well MTR.
And a huge big well done to want to be wealthy l was there when he put up his first post. Great effort. Great planning and fabulous effort to follow through
Reminds me of Rixters saying "if you fail to plan then you plan to fail"
Cheers
I off to make my plans
Cheers
Yadreamin

 

[MTR]

Thanks Yadreamin, always loved that user name.

This has turned out to be a gem of a thread, always pop in to see what the share gurus are doing, and perhaps I can learn from them

 

[johnpendles]

Wow some real gems in this thread, and some great long time SS ers putting out some good advice/info.
So after 2.5 years working my but off to recover from the GFC l am finally getting my head above water again. Hard lessons learnt.

Sorry to hear about your bad experience.

May I ask what happened and what lessons you learnt?

 

[Intrinsic_Value]

I'm with you in that IV, take SVW at $6.10 at the time, 30% below NTA. Only mining services stock I hold and will continue to. Value investors usually buy too early, and sell too early

I think it was Jesse Livermore who said, to paraphrase ; the market delivers the lesson you need, but you don't get to choose the fee. lol.

But at least if you go down, so does the captain of your ship (in this case Mr Kerry Stokes).

Its not always possible, but I generally like it when there is a big insider, owning lots of shares.

If I loose, so does he.

Nothing like having a significant proportion of ones money invested (for a big fish), for that big fish to keep his eye on the LONG TERM, game.

I don't hold SVW, but I do hold (and recently topped up) on SWM.

 

[Intrinsic_Value]

Wow some real gems in this thread, and some great long time SS ers putting out some good advice/info.
So after 2.5 years working my but off to recover from the GFC l am finally getting my head above water again. Hard lessons learnt. Extra cautious now with where my $ will go and l WILL have total control.
Cheers
Yadreamin

For what its worth, most retail investors think the same as you.

Post GFC (5 years ago now), there is deep retail suspicion about shares.

Residential property seem the only game in town for the retail investors.

Few of my friends are happy to talk much about shares, no cab driver ever talks about it.

Those friends that do talk about it, talk about it in speculative terms (no buy and hold, I am not stupid enough to fall for that game again!!!!)

 

[johnpendles]

IV,

what would be your top 5 medium to long term blue chip (or likely to become blue chip) hold recommendations?

 

[Intrinsic_Value]

IV,

what would be your top 5 medium to long term blue chip (or likely to become blue chip) hold recommendations?

sorry mate, in this environment, NONE.

There is going to be a period of structural change.

Structural change involves pain.

The 'safe' areas are very expensive, even if they do well, the fact that they are expensive means that long term (just buy and hold and forget), means that from a financial perspective, they might not do that well over the longer term.

 

[johnpendles]

sorry mate, in this environment, NONE.

There is going to be a period of structural change.

Structural change involves pain.

The 'safe' areas are very expensive, even if they do well, the fact that they are expensive means that long term (just buy and hold and forget), means that from a financial perspective, they might not do that well over the longer term.

fair. this is the thing, I'm relatively early in my investment life. every thing I've read tells me to not bother trying to time the market, to not worry about the macro-economics, to not bother with short term trading etc etc

how does one know when it is the right time?

do you just wait for GFC like events? they obviously aren't that common.

if you are in it for the long term, does it really matter if stocks are currently 10% too expensive?

what does one do in the meantime? hold cash in high interest accounts?