High Yielding Shares Again

china said:
I am also amazed that the entire trifecta is down.
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I like to keep old newspaper stock recommended from weeks ago up till several years,and it can be a waste of emotions to take anyone serious because if you track several forecasters they all get it wrong,some were saying sell of all the high end banks several months ago,now they say buy
but what you learn on your own even with short term mistakes you will remember for a life time..
 
http://www.theaustralian.com.au/new...190755861?nk=12fc91a37b6295120a80944897f09308


And this makes sense from a buy and hold perspective?????

For the traders out there I have no problem. The hunt for yields could keep pushing up some equity prices.

Yet for the so called buy/hold/forget????????


How does this flow into the ETF's everyone has been talking about on this forum?????

Most popular bank CBA, achieved a highest ROE against book value of 18.4% the year before the GFC. Yet its now trading on a multiple of 2.7 times book value.

During the GFC its ROE dropped to 14.7 (but in hindsight to what degree were we saved by China). There wont be a China to the same degree next time.

(For those interested see how China protected itself during/post GFC.)

CBA (and other banks) make up a massive proportion of ETF's giving their massive market weightings.

And do I want to buy into this, at this stage of the cycle????

IV hasn't had a good 2014 year (but neither did he have a good 2008/09 two year combo).

In 2010 he had a couple hundred % return, from 2011-2013 he had a 20-30% return per year.

Nah, I think IV has to try to protect what capital he has.
My main mistake in 2014 is trying to always growth that capital, even by buying 'cheap but sh**ty' companies, when there are no good quality companies on sale at a reasonable price).


Could I be wrong in the short term.

Very likely, with bond yields being squeezed, everyone looking for yields.

Over longer terms, no still quite confident (just don't blow up my capital in the meantime, until reasonable opportunities present themselves, and stop looking at always trying to make money, remember your callsign)
 
Why is ANZ looking at off loading Esanda?

What was ANZ's criteria?

Any business division with less than a ROE performance of less than 15%.

Why that 15%?????

Because that's the long term average that the big four banks can grow their books.

Anything beneath this impairs their ability to grow their own book at long term ROE

And how does a bank achieve that ROE, through the differential between the margin cost of borrowing against the margin cost of lending, multiplied by fractional banking
 
china said:
Thats my plan. I just feel lucky that I am not about to retire or that I need the cash right now. The money had previously been sitting in a term deposit. I am also amazed that the entire trifecta is down.
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You've probably already been been advised of this, but as your experience has shown but three stocks really isn't enough for a buy and hold portfolio. You don't necessarily need 200-300 ala an Index Fund, but I'd imagine 10-20 minimum. You could do less, but you have to really understand them well and watch them closely

However I'm not here to just rub salt in wounds - so if you need some motivation to stay the course, read this article. It talks about putting things in a long term perspective and is positive on holding stocks in general

"If The Stock Market Worries You, Remember This!"
http://www.fnarena.com/index4.cfm?type=dsp_newsitem&n=368D2592-D7BF-825C-543AB728A26984B2
 
Marcus Padley talks about the Morons Portfolio

The moron portfolio is not called that because only a moron would pick it; on the contrary, it is so labelled because any moron could pick it. It is a portfolio designed to protect financial professionals (definition: people who have a licence to give advice) from legal action, and when it comes to legal action the main concern is that they have to have a reasonable basis for their recommendation.

On that basis the moron portfolio picks itself, and for the timid financial professional, here is the process. You print off the ASX 200 in market cap order and, starting at the top, pick the biggest stocks that you can't be sued for recommending. You do this not by picking the best stocks but by eliminating any stocks that you could be sued for recommending.

The 10-stock moron portfolio includes the four banks. Most safe advisers quite rightly recommend holding all four banks because there are more important games in town that finessing which bank. All will do. Then it's BHP, Rio Tinto, Woolworths, Westfield Group and Woodside. Anyone who likes gold would add Newcrest; finally, it's a toss-up between QBE, CSL or Macquarie Group.
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Link
 
I'll ask a question relating to high yielding shares.


Given the lack of returns from other fixed income investments, and the subsequent rush to high yielding stocks particularly the banks and telstra, is there not a significant risk that the share price of these companies is being significantly overvalued?
 
johnpendles said:
and the subsequent rush to high yielding stocks particularly the banks and telstra, is there not a significant risk that the share price of these companies is being significantly overvalued?
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Depends on who you read and if they are still looking in the rear view mirror,,because some Australian based forecasters sometimes post feedback that cancels out the short term effects,both TLS-CBA are volume wise still trending upwards while all the miners are going the slow trend the other way,very few can produce reliable projections,and if they could you would not be telling anyone..
 
johnpendles said:
I'll ask a question relating to high yielding shares.


Given the lack of returns from other fixed income investments, and the subsequent rush to high yielding stocks particularly the banks and telstra, is there not a significant risk that the share price of these companies is being significantly overvalued?
Click to expand...

Yes that is a risk. However many quality companies in the ASX, not necessarily high yielding ones, have always been on high PEs. The market marks them up, since significant profit growth is so rare in the Australian share market.

Take CSL, Ramsay, Dominos, REA for example

High yielding shares such as Telstra are pretty much being traded like a bond. I.e. interest rates go down, they go up in value, and vice versa. Hence if interest rates finally rise, you would do well to get out of your over valued high yielding stocks IMO
 
willair said:
Another example is start up companies like "PYL" maybe not something investors would think about,but I have watched companies like this one multiplied beyond measurability,not bad for a 20 cent start-up.. ..imho..

http://www.phytotechmed.com/holding
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That's a story stock IMO, i.e. if you believe in the "story" and have enough expertise in the field to value it, do your due diligence, etc...

Personally that stuff is a bit too difficult for me, and for every one of those that goes ten times it's initial value, there are nine that never go anywhere. But if you invested in this company and did well, then my congratulations to you!

Personally I keep a very small portion aside for such speculative plays. I have a little money invested in Nanosonics (NAN) and so far it's up around 30% from when I bought it, which albeit was later than optimal.
 
JohnMichael said:
there are nine that never go anywhere. But if you invested in this company and did well, then my congratulations to you!
.
Click to expand...

0.630-19.231% -$0.150 0.6300.6400.8050.9100.6308,042,270

I think the numbers would be higher then that,some 20 cent startups all go the same way,very high % of miners went that way,but I only bought a small amount in the company I was talking about,and intend to sell the lot this afternoon..imho..
 
gnokkybbob said:
lol what makes you assume I invest in RFE? If I did, 200 bucks will not be an issue at all
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Firstly, it's not a high yielding share, so really it's off topic.

Secondly, Noone would ask twice being concerned about a share unless they were invested in it:
http://somersoft.com/forums/showpost.php?p=1257469&postcount=652

DT gave you your answer: receivers appointed = gone!

Plus I'm guessing it's more than a $200 punt, because minimum is $500.


pinkboy
 
It seems the 'high yielding' blue chip shares are becoming less 'high yielding'.

Ive been investing in shares for 50 weeks now, and they are up just over 10%, with an average yield just under 6% FF.

Noting also my BHP shares are now up 18%.

How is WES and WOW performing? :rolleyes:

pinkboy
 
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