Anyonw know where Keith is at now?
How I got from just a PPOR to multi millionaire retiree in 5 years using only OPM.
- Thread starter keithj
- Start date
Thanks redwing. Finished that thread. Buy low and sell higher is obviously a key concept. V simple, but amazingly powerful.
the post from Iv indicated the use of Evans strategy in conjunction with keiths strategy. From memory keiths strategy is essentially dollar cost averaging in property.
I was curious as to how "Evans strategy".supplemented this (apart from buying low and selling high).
the post from Iv indicated the use of Evans strategy in conjunction with keiths strategy. From memory keiths strategy is essentially dollar cost averaging in property.
I was curious as to how "Evans strategy".supplemented this (apart from buying low and selling high).
I have used a modified version of Evands strategy which i posted somewhere recently in this forum.
The modified version is working out very well in conjuction with my own proprietary stock selection program.
I am not prepared to talk about the exact details of my own program, but essentially Evands strategy which i basteerdised to suit my own purpose, is when the stock price is under heavy selling pressure, move to the side lines (ie sell) and get back in as soon as the price stabalises so long as my stock evaluation system is telling me that my intrinsic values are either still stable or at least still significantly above current market prices.
By utilising Evands strategy i have managed to avoid large losses when shares rapidly decline, such as SWM, APN, MYR, JBH, SXJ. Hasnt worked so well with QBE as the price tends to stag down on bad updated announcements.
Worked very well with CAB which is my largest holding. (but not interested in adding to at current prices, in case anyone is thinking of buying now off my comments).
I have very nice positions in CAB, SWM, APN and SXJ, all at significantly lower than current market prices, yet havent needed to be a pig and just dollar average all the way down. These positions all showing very nice profit (net of entry/exit costs).
Evands strategy allowed me to generate just a small loss for 2011, yet am up now about 35% for 2012 (and with 2010 being up around 25-30%, 2009 being up several hundred 100%, and 2008 being down massively (but with cash on the side that i could keep investing in the market, but major lesson learnt here, which is why i now use a modified Evands strategy).
If i can minimise my losses, but create gains, then i should do very nicely.
The modified version is working out very well in conjuction with my own proprietary stock selection program.
I am not prepared to talk about the exact details of my own program, but essentially Evands strategy which i basteerdised to suit my own purpose, is when the stock price is under heavy selling pressure, move to the side lines (ie sell) and get back in as soon as the price stabalises so long as my stock evaluation system is telling me that my intrinsic values are either still stable or at least still significantly above current market prices.
By utilising Evands strategy i have managed to avoid large losses when shares rapidly decline, such as SWM, APN, MYR, JBH, SXJ. Hasnt worked so well with QBE as the price tends to stag down on bad updated announcements.
Worked very well with CAB which is my largest holding. (but not interested in adding to at current prices, in case anyone is thinking of buying now off my comments).
I have very nice positions in CAB, SWM, APN and SXJ, all at significantly lower than current market prices, yet havent needed to be a pig and just dollar average all the way down. These positions all showing very nice profit (net of entry/exit costs).
Evands strategy allowed me to generate just a small loss for 2011, yet am up now about 35% for 2012 (and with 2010 being up around 25-30%, 2009 being up several hundred 100%, and 2008 being down massively (but with cash on the side that i could keep investing in the market, but major lesson learnt here, which is why i now use a modified Evands strategy).
If i can minimise my losses, but create gains, then i should do very nicely.
thanks redwing,
here is the post i was looking for:
http://somersoft.com/forums/showpost.php?p=872166&postcount=64
http://somersoft.com/forums/showpost.php?p=874238&postcount=84
(but notice the difference for an investor vs a trader)
here is the post i was looking for:
http://somersoft.com/forums/showpost.php?p=872166&postcount=64
http://somersoft.com/forums/showpost.php?p=874238&postcount=84
(but notice the difference for an investor vs a trader)
i should point out one other point here.
The real secret of a successful investor or trader:
(a) they have wins, but not all wins
(b) they have losses and will realise they will never have 100% success rate on every stock selection.
(c) the difference between successful person and a looser in the markets is how the control the interaction of (a) and (b).
For myself i follow a Peter Lynch approach and use a casino methodoligy. I dont need success every time, i just need to play the odds. Repeat enough times and the end result is (hopefully) a total return that is satisfactory.
How do i play the odds:
(a) a number of stock positions, no matter how confident i am in a single stock, i will never allow a single stock to dominate the whole portfolio.
(b) i let my winners run (subject to movements in intrinsic value, my best scenario is picking up a cheap share, yet its intrinsic value just keeps increasing, ie SIV, FXL, go back to 2009/10 for my posts on this). These two stocks dont have the same % in the portfolio, yet i still hold some position, their intrinsic value is still rising even though the % profit on purchase price is now massive).
(c) control the losses, ruthlessly cut out wrong decisions as dictated by a reduction in intrinsic value that is below market price. Use Evands strategy to avoid being a pig.. Bears make money, bulls make money, pigs get slaughtered.
The real secret of a successful investor or trader:
(a) they have wins, but not all wins
(b) they have losses and will realise they will never have 100% success rate on every stock selection.
(c) the difference between successful person and a looser in the markets is how the control the interaction of (a) and (b).
For myself i follow a Peter Lynch approach and use a casino methodoligy. I dont need success every time, i just need to play the odds. Repeat enough times and the end result is (hopefully) a total return that is satisfactory.
How do i play the odds:
(a) a number of stock positions, no matter how confident i am in a single stock, i will never allow a single stock to dominate the whole portfolio.
(b) i let my winners run (subject to movements in intrinsic value, my best scenario is picking up a cheap share, yet its intrinsic value just keeps increasing, ie SIV, FXL, go back to 2009/10 for my posts on this). These two stocks dont have the same % in the portfolio, yet i still hold some position, their intrinsic value is still rising even though the % profit on purchase price is now massive).
(c) control the losses, ruthlessly cut out wrong decisions as dictated by a reduction in intrinsic value that is below market price. Use Evands strategy to avoid being a pig.. Bears make money, bulls make money, pigs get slaughtered.
This approach about asset classes is a general view. A specific view will provide better results imo.
A property buyer isn't looking to buy the whole 'Sydney market' or the whole 'Melbourne market'. A property buyer is looking to buy one property at a time. They are looking for the best property for them with the cheapest price and the highest yield.
Same goes for shares. A share market participant (not trader) isn't buying the whole ASX. They are looking to buy a part of one business at a time. They are looking for the best business that they understand at the cheapest price with the best outlook.
and again for 2012 it has held me in good stead.
My 11 month return up to december 2012 is 47% for 2012.
Also notice this importance of evands logic with regards to my post to my own comment.
CAB is agin one of my largest holdings, but this time with a net average position of under $4.00 bcause i some money off the table on the rise before and most of the rest of the money when it started droppin several months ago. Even though SWM has had a shocking year i am making profit by exiting and moving down on volatilty. APN not so fortunate, copping it on this one, but sold part of the holding, the remander is on a whopping loss now, butat a small % of the portfolio. SXJ been in and out, back in, but with just a small holding (2% of the portfolio). Myr showing profit given my average buy in price is only around $1.70. International shares really gave me the kicker this year, especially the banks BAC and citi, as well as the old holdings small cap holdings AMA, FXL (which have now been totally sold, FXL at a buy in price of $0.6 now totally out, AMA at a buy in price of around $0.15 now totally out, SIV in the process of selling down.
Still using my usual diversifed portfolio approach with about 60 shares in the portfolio, so of greater weighting than others.
Well done. You have outperformed 99.9% of professional fund managers. My first state super fund - high growth option- in the same period has returned minus 5%. Thats correct, losses. And thats their full time job.
Thats terrible performance given what the asx has done you need a new fund.
I think you are correct. It has been one of the things at the back of my mind for a long while. I have been with this fund since 1999, with about 100k in it at present. Again, I am paralysed by indecision. I have been thinking about withdrawing the funds and setting up a SMSF to borrow to buy commercial IP. However, this seems like a big deal to me and I have let things drag on, hoping that first state super will pick up its act.
Start a SMSF. Contribute 25k pa, as you sound like you earn reasonable coin. Put it in afi, arg, mlt easy. I wouldnt bother with direct property in super unless you have a very large super balance.
We both do this, x 2 (couple) it adds up very very quickly. Means you should be in a position to retire off either smsf or non-smsf investments independently, if both a bonus!!
At present I have 100k in super. If I was to withdraw that for smsf and make 450k non-concessional super contributions over the next three years, that would mean about 550k in super and then would it be worthwhile to use the smsf to borrow and buy a commercial IP for about 1 mil which I would occupy? Does this sound reasonable or best to buy index funds with sMsF?
Disagree. Take a couple both earning in the top or second top bracket.
Thats 50k x .85 ie 42.5k into shares. With compounding just doing this for 10 years ie 30 to 40 yrs old would have retirement stream covered at 60. Of course you should invest outside super but such a free kick to save in some cases 30+ % tax.
And a chunk of the 25 is already covered by employer contributions, makes you 'take ownership' of super money. And not much extra per month in after tax money lost.
For a couple on higher income bracket you'd be silly not to take advantage.
Thats 50k x .85 ie 42.5k into shares. With compounding just doing this for 10 years ie 30 to 40 yrs old would have retirement stream covered at 60. Of course you should invest outside super but such a free kick to save in some cases 30+ % tax.
And a chunk of the 25 is already covered by employer contributions, makes you 'take ownership' of super money. And not much extra per month in after tax money lost.
For a couple on higher income bracket you'd be silly not to take advantage.
I think you overestimate the power of superannuation. In theory it sounds great to put money in there because it will compound over time with less tax etc. However, as we have seen recently, superannuation is the great big kitty for governments to tap into when their budgets are in trouble. Too much regulatory risk, especially 30-40 years out, and you can guarantee that in the next few decades we will get taxed more in this vehicle as more Australians get older and their super balances get bigger. Would rather the cash in my own pocket to invest because you are not so vulnerable to legislative changes.
I have sporadically been placing 25k into super over the past few years but because of the poor performance of first state super, I have been discouraged to continue as I feel that I could do better with investing the 25k myself even without tax concession.
Have you had any experience with a sMsF group called
www.esuperfund.com.au
Its meant to be DIY, online and has lower fees than traditional smsf providers.
Have you had any experience with a sMsF group called
www.esuperfund.com.au
Its meant to be DIY, online and has lower fees than traditional smsf providers.
I agree with legislative risk but for an extra 32 percent of my money retained and thereafter compounding at 15 % im happy to take that gamble as odds are good.
The 30% surcharge affects those odds a bit however.
Smsf is just the icing on the cake aiming for retirement funded outside smsf but the smsf deal is also too good to pass up.
I wont even go into the tax free pension phase arrangements oldies get now!! Unlikely to be there when im of that age, but i can dream
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