is this a bouncing cat?

[chilliaa]

BC, I said 'investing' not 'trading'.


Why do so many people on this forum consider their own experience should be everyone elses? That's twice in one thread its happened to me.

You mean like your response to this post:
http://www.somersoft.com/forums/showpost.php?p=575874&postcount=172

Or when you comment on buy and hold residential investment strategies.

Seems to me you dont mind commenting on other peoples strategies, but get narky when others reply to yours (especially if they dont agree)

 

[Aaron Sice]

BC, I said 'investing' not 'trading'.

But yes, i work with percentages (actually i'm always looking at both % & $) but at the end of the day/week/month/year i look at the dollars made. That's what its all about, that's how i measure my success. You can measure yours any way you like.

BTW: i'm already a good trader but thanks for the advice.

Why do so many people on this forum consider their own experience should be everyone elses? That's twice in one thread its happened to me.

you'll do as you're told young man or it's straight to bed!

not telling you how to suck eggs, evand. just explaining that money brings emotion. to help lose the emotion, look at percent instead.

i don't trade for a living, i trade with side money. much easier to disassociate yourself with that.

 

[VYBerlinaV8]

Hotcopper.
A shares chat site. Most forum owners don't like posters mentioning other chat sites and SS is no exception, hence the deception.

Thanks heaps - much appreciated.

 

[redwing]

BC, I said 'investing' not 'trading'.

But yes, i work with percentages (actually i'm always looking at both % & $) but at the end of the day/week/month/year i look at the dollars made. That's what its all about, that's how i measure my success. You can measure yours any way you like.

BTW: i'm already a good trader but thanks for the advice.

Why do so many people on this forum consider their own experience should be everyone elses? That's twice in one thread its happened to me.

% and $

Otherwise, I made 100% could actually mean "I made $20"

 

[GlennG]

Guys im not going to spend my time entering each buy and sell order i have made for the last 18 months into some spreadsheet just to prove a point. (actually i can but you will have to wait until after June 30 when my accountant will do it for me).

I have spent somewhere around $55-$60k in brokerage fees (the cost of which is already reflected in my postion) since the start of 2008. With $100 minimum trade or 1% this equates to alot of transactions.

Please tell me you meant 5.5-6K! How can one spend 60K on brokerage? Surely that must become an enormous negative factor in investment performance.

chilliaa was making a lot of sense to me up till now, but I thought that one advantage of his approach was a lower turnover of stocks (sell only when intrinsic value has changed) but obviously not.

How did this all work out by the way? What is chilliaa/Intrinsic value's position now?

Very interesting thread - I think that most of what chilliaa has said is how I see things and what I'm aiming to do. (Though I would hope to not spend so much on brokerage!)

 

[Intrinsic_Value]

Please tell me you meant 5.5-6K! How can one spend 60K on brokerage? Surely that must become an enormous negative factor in investment performance.

chilliaa was making a lot of sense to me up till now, but I thought that one advantage of his approach was a lower turnover of stocks (sell only when intrinsic value has changed) but obviously not.

How did this all work out by the way? What is chilliaa/Intrinsic value's position now?

Very interesting thread - I think that most of what chilliaa has said is how I see things and what I'm aiming to do. (Though I would hope to not spend so much on brokerage!)

It very much depends on the size of ones portfolio. That $60k was over a period of roughly two years from memory, maybe a year and a half. cant remember now.

but that equates to maybe a commission of say 2% of the portfolio value.

Also 2008/09 saw distressed markets with prices at first going down down down, then in 2009 up up up so lots of churning.

Last year i (2010) i made roughly a 30% return in an overall market that returned a few %. So the brokerage didnt comprise a large % of total profits.
ie assuming i paid no brokerage the return would have been say 32%.

I like the comfort of a full broker and am happy to pay for it as a cost of doing business.

 

[Intrinsic_Value]

actually the above is wrong because commission cost is a % of gross portfolio value, return a function of net portfolio value. With debt of say 50% the cost of commission on the return would be say 4% of net portfolio value.

 

[Intrinsic_Value]

This bit really gives me the chits! What makes you think I want a lesson in "shares" from you in the first place?

You are from a different generation with different aspirations and expectations than I. You may understand that (there's some doubt though) but you could not possibly "understand" what I'm hoping to achieve and therefore have nothing to contribute to my financial welfare.

You are too full of yourself with far too much to say on a topic I that suspect you only fairly recently picked up a theoretical knowledge. That is a guess but it's how you come across to me, so I'm sure you understand when I decline your kind offer to teach me some new tricks.

mmm looking back at this old old post.
You state you dont want lessons in 'shares' in the first place.

Yet you are quite happy to doll out your opinons on others.

 

[Intrinsic_Value]

If you took the time to logically reason why you purchased the stocks in the first place and that reasoning still holds then inaction can be better than action if you are prepared to take a long term view.

A long thread but makes interesting reading hey Sunfish

 

[Intrinsic_Value]

Its a trading position because your underlying premise is that gold will rise (and i am not commenting on whether this will occur or not), which will support an increase in the share price. So basically you are taking an indirect exposure to gold through gold stocks.

An investing decision might be say:
Look at company A, analyse the fundamentals of the company. Use Porters 5 forces, look at its profit margins, free cashflow, debt position, strategic outlook etc.
Does the company have cyclical earnings or relatively consistent growth earnings.

From this i can get an estimate of the value of the company. Divide the value of the company by the number of issued shares and i get a value per share.

Now because of uncertainty and to provide a margin of safety in case some of my assumptions are wrong, i apply a discount to the calculated value per share. This is my insurance (and like any insurance policy it doesnt always work out 100%, so to put insurance on insurance i dont invest all my capital in a single stock, i hold a diversified portfolio).

So lets say my valuation of company A is $5. But the market price is $5. I dont act because i dont have a margin of safety yet (i havent got insurance yet).
The price falls to $4 and i buy.
Now the market suddenly becomes more fearful and the share price falls to $3.
What do i do?
If this was a trading position, you would be looking at exiting the stock and protecting your capital.

But as an investor i have to take a different course. I have to stand back and think: has anything fundamentally changed in the company, is there some significant change in its strategic outlook, or is it just short term market noise.

If the company itself is still strategically the same (and strategic is the opperative word, i couldnt really care if sales are down a few % points for the quarter, i need to concentrate on strategic issues because strategic issues will dominate the success or otherwise of the company over the long term) then i can dollar average downwards.

Dollar averaging downwards for a trader is deadly (Refer to my post on trading rules). Dollar averaging downwards for an investor is not, so long as the fundamentals of the underlying company are the same.

The question for investors then becomes: at what price points do i dollar average downwards, and the answer is just a question of relativity and personal judgement. If you set the price points in too narrow a band, then you have the risk of building up an unsustainably large % of your total holdings in a single stock (which even for an investor is a big no no).

This post is very relevant to the current times, because the individual company stratetic environment is so uncertain. An uncertain strategic environment (ie not opperational) makes future company fundamentals more uncertain, this makes future intrinsic value uncertain.

An investor dollar averages whereby the share price is significantly lower the current and future intrinsic value. So if future intrinsic value is at risk of falling one should not only not be dollar averaging, one should be giving serious consideration to exiting the position (depending on the relationship between the lowered share price and the lowered future intrinsic value).

This is why in my more regular posts in 2010 i have been constantly highlighting the risk of value traps.

 

[Intrinsic_Value]

mmm looking back at this old old post.
You state you dont want lessons in 'shares' in the first place.

Yet you are quite happy to doll out your opinons on others.

and just as relevant today hey Sunfish.

 

[Sunfish]

mmm looking back at this old old post.
You state you dont want lessons in 'shares' in the first place.

Yet you are quite happy to doll out your opinons on others.

The word is "dole out".

You have made the last seven posts on this thread I notice.

 

[redwing]

i asked this question somewhere else on the forum as part of a different thread - but now can't find it.

i'm looking at buying some more shares in the near future, but got stung by the last bounce - my share value has now halved since then!!

the experts on ss had been screaming "sell sell" at that time, but i didn't listen. now i am ready to do so. is this recent upswing a cause of the chinese government bailout/investment internally, or is the belief that the market drop has finished and now is the time to buy.

would appreciate some advice that will be listened to this time!!

Interesting to look back

Just having a quick look back, we've had a flat year this year but even so the market as a whole is up about 42% plus dividends since this posts date to now, the US market is up over 110% plus dividends

The ASX Accumulation index (dividends reinvested) was at 27,054 in June 2009 and at 45,991 in June 2014 (69%).

 

[The Falcon]

A good lesson on "time in the market"