Opinions in Investment

[Bill.L]

Hi all,

This is the thread where all those who wish I would just go away can say their piece. I know that I have a "different" approach to investment to many on this forum, and many times have argued the toss with people on what their plans/actions are.

Yes, I also will play devil's advocate, hopefully to get people to think more fully about what they are about to do/are doing.

What do I gain from my postings?, nothing other than to be convinced my view is correct/incorrect.
My detractors say that I am nothing but a conservative, knocker, "simple scaremongerer " etc, they forget to mention that when asked for my alternative I simply point in the direction of Jan Somers book, stating that there is a sure fire way to success with the smallest amount of risk. I then do not get questioned on the approach.
If the topic is shares, then my approach is to buy what is rising in price, and to have a stoploss point where I get out if I am wrong.

My investing and philosophy on investment comes about from many years of experience in the stockmarket, commodities trading, and property purchases over a period of 25 years. I have made most of the classic mistakes, and hope to pass on just a part of my knowledge to help others avoid the same mistakes I have made.

For those who think that I should go and do this course or that course, to get an education on the ............ method of investing, I challenge you to give a valid reason why. If this is the forum for discussing investments, why should we all have to run to the nearest seminar??

If you think my questioning of various professionals is too harsh, let us all know why we should not discuss a methodology rigourously. If someone puts up a fabulous method for making money in the good times, should allowances for what can and does go wrong not be catered for??

If you have a grievance with my approach, I am prepared to discuss it in this thread "without prejudice" to anything that anybody wishes to say (about me).

bye

 

[Andrew]

Bill, I for one appreciate your comments on the forum, much better to have balance than to become another fan club here. Keep it up.

andy

 

[GreatPig]

Bill,

I also enjoy your comments, particularly on share trading which is my current main area of focus.

I might just say though, when asking touchy questions, perhaps - like in all those TV court case programs - they would be better asked in a manner that doesn't "lead the witness" (ie. carry an implied answer - a statement dressed up as a question). Otherwise it can sound a bit like a Sixty Minutes reporter barging in the door.

Cheers,
GP

 

[NigelW]

Hi all,

This is the thread where all those who wish I would just go away can say their piece. I know that I have a "different" approach to investment to many on this forum, and many times have argued the toss with people on what their plans/actions are.

Yes, I also will play devil's advocate, hopefully to get people to think more fully about what they are about to do/are doing.

What do I gain from my postings?, nothing other than to be convinced my view is correct/incorrect.
My detractors say that I am nothing but a conservative, knocker, "simple scaremongerer " etc, they forget to mention that when asked for my alternative I simply point in the direction of Jan Somers book, stating that there is a sure fire way to success with the smallest amount of risk. I then do not get questioned on the approach.
If the topic is shares, then my approach is to buy what is rising in price, and to have a stoploss point where I get out if I am wrong.

My investing and philosophy on investment comes about from many years of experience in the stockmarket, commodities trading, and property purchases over a period of 25 years. I have made most of the classic mistakes, and hope to pass on just a part of my knowledge to help others avoid the same mistakes I have made.

For those who think that I should go and do this course or that course, to get an education on the ............ method of investing, I challenge you to give a valid reason why. If this is the forum for discussing investments, why should we all have to run to the nearest seminar??

If you think my questioning of various professionals is too harsh, let us all know why we should not discuss a methodology rigourously. If someone puts up a fabulous method for making money in the good times, should allowances for what can and does go wrong not be catered for??

If you have a grievance with my approach, I am prepared to discuss it in this thread "without prejudice" to anything that anybody wishes to say (about me).

bye

Bill

Please keep posting. My only suggestion would be (and this is to everyone) that we focus on the rigorous discussion of methodologies and assess their actual outcomes rather than attacking the poster.

After 25 years you must have picked up a few wrinkles and substantially increased your net worth. Out of interest how much has your net worth increased (in percentage terms) over your 25 years of investing? Maybe somebody could do a poll??

Cheers
N.

 

[Sim]

Bill - I have no problem with your strategies, in fact I know people who have done very well with their investments with even more "conservative" strategies (I don't consider any type of share "trading" to be conservative - that's a very active investment technique unless the trades are generally more than a year apart - in my opinion).

The problem I have is the way in which you question other people's strategies - I think GreatPig summed it up quite well. "Leading the witness" is a good description of what I think you do.

What I would prefer you to be doing is something like:

"I have been trading shares for over X years now, so I've been around the traps a few times and made all the classic mistakes. Based on my experience, I have my personal concerns about the way in which strategy Y as proposed by forum member Z will work in the case of a 20% drop in the market."

Posting that once is enough to register your response to a strategy. Posting it multiple times in a thread and asking the question over and over again in the manner in which is quite aggressive - does not achieve much, other than to show your belligerence - especially when it seems you have made no effort to try and understand the mechanics of the strategy you are questioning.

I certainly don't want you to stop posting - just perhaps moderate your approach slightly.

 

[willair]

Bill L,
I like to look inside everyones investments activities,
and i like the your balance,but there is always a turning
point in any investments,and i do agree if you dont look at
down side first then its too late once it happens..
i hope you keep on posting..
good luck
willair..

 

[keithj]

I think a part of the problem is that most of the people here are optimists – they get out there & make things happen. They don’t want to hear a negative viewpoint doesn’t help them move forward.

Additionally, lots of them haven’t seen the bad and stagnant times & either can’t or don’t want to believe it might happen to them. How many people here have ever had a bank call in a loan for lack of serviceability, or a margin call? And I’d guess that the vast majority of them believe it’ll never happen to them either.

I believe some of the D&G and perceived negative posters are saying two things –

• - bad things might happen - so think about them and mitigate the risks
• - presenting a balanced view - some posters have an interest (financial or otherwise) in presenting one side of a case, so anyone who asks hard Qs of them can be seen as ‘knocking’

So to all those realists out there – keep up the good work.

 

[WillG]

Keep on posting Bill. I don't regard your posts as 'knocking' other peoples strategies. Your constructive criticism / 'devils advocate' helps other investors analyse deals and understand the implications of deals.

The forum certainly has some very 'passionate' folk who believe their strategies are best and don't understand why others could possibly choose any other strategy. They will miss out on the 'gems'.

I too have been labeled 'too conservative' in recent threads and understand where you are coming from

Happy posting

 

[see_change]

Bill

I think Sim's suggestion is the way to go.

I'm never quite sure if I'm being labeled as a doom and gloom merchant , but I do get frustrated with people who question others being constantly labelled as negative.

There's also a potential double standard occuring on the forum. It seems ok to keep posting the same ( or variations of ) " positive " message over and over again, but to keep questioning that " positive " message over and over again is not the done thing.

I admire your and Steve's perseverence though I think myself along with most of the forum are tuning out which is a sad thing. Some times small doses of medicine work better.

See Change

 

[TryHard]

It takes all sorts

Bill.L

Sim, NigelW and Great Pig hit the nail right on the head.

I don't have a problem with you personally and am glad there are balancing views aired here.

Maybe I have read too much into your pursuit of Mr Navra, and perhaps got a little defensive on his behalf given that I know and have personal proof his strategy has helped me in the last 2 years, and I am certainly better off bottom line than I would have been if I had simply stuck to the strategies in the "Jan Somers Book". If I bought and held in the markets I'm in, I wouldn't have the serviceablility I need to move on to my next phase.

Jan's books and her seminars gave me my start in property and helped me understand what I had been doing wrong. However Jan's book doesn't cover enough detail on financial strategy and wealth creation if an investor wants to diversify and leverage equity for other purposes, nor does it move into areas where those prepared to take some risks for greater growth might want to go.

So to attack other's ideas and strategies with your only option "do nothing" or "read Jan Somer's book" seems to me to belittle your (obvious) intelligence. Why don't you share some of the results of your strategies and offer alternatives when ripping apart other's suggestions ? That would help balance out your skepticism and make your aruments a lot more effective.

I don't think anyone is saying you should do "this course or that course", just that you should fully understand exactly * what * you're knocking, before vehemently pursuing people as though they must be mentally deficient or liars.

Have fun (please)
TryHard

 

[Sultan of Swing]

I also enjoy your comments, particularly on share trading which is my current main area of focus.

I might just say though, when asking touchy questions, perhaps - like in all those TV court case programs - they would be better asked in a manner that doesn't "lead the witness" (ie. carry an implied answer - a statement dressed up as a question). Otherwise it can sound a bit like a Sixty Minutes reporter barging in the door.

Hi Bill

I have to agree with GP and some of the posts in this thread.

You certainly kept Steve N busy in the recent LOE threads and its not so much what you said but how you said it (and kept saying it).

I too would hate to see you stop posting and would love to hear all about your investing life. If you've been investing for 25 years I'm sure you have a lot to offer in the way of advice and pitfalls too look out for.

I agree with Keithj when he says that a lot of investors haven't lived through the down/stagnant times and these issues need to be addressed. I for one know what its like, having had 2 IPs from the early 1990's till 2002, selling right before the boom and both doubling in value in the next 12 months.

We sold one for less than we paid for it and the other barely broke even. We endured interest rates higher than they are today. I fixed one loan's interest rates at 10.75% for 5 years because sentiment at the time said there was no way they were going to get any lower and they were on the rise. What a money pit that property was. I'd estimate it cost us between $200 and $300 per month for 10 years and then still made a loss selling for less than original purchase price in 1992.

If I knew then what I know now it could have had a different outcome. But that's hindsight and that's life.

SANF was a big issue back then. Mrs SOS vowed never to get into IPs again. Its only recently that she's agreed to buying more, and its still a little reluctantly. She does however acknowlege that we need to do something to secure a comfortable financial future. The positive side of that is, it'll make me do my due diligence a whole lot better as the negative experiences are great teachers. (They also suck )

These are the sort of issues that we should all be aware of, not to be negative but to be realistic and to be prepared. For those that haven't lived it, its worth thinking about.

Bill, you mentioned you've made some classic mistakes. I'd love to hear about them because I'm sure we can all learn a lot from them.

Cheers

 

[quiggles]

Bill,

I'd lost interest in the thread which caused the storm (too far away from my present strategic concerns) before it happened. So I didn't see and haven't followed up on the technicalities of who said what.

There are a number of valuable viewpoints on the forum, and yours is one of them. It's not the only one, however, and I get worried when I see flamewars erupt, despite the fact that the motivation is sincerely held personal beliefs rather than trolling. It's especially worrying when newbies post that they are afraid to ask stupid questions for fear of the sarcastic reprisals.

So I'm adding a request for tone to be a major consideration. Content is and should be king, but every king requires a certain amount of noblesse oblige.

We have a rule in my family that sentences at the dinner table are not to begin with the word "No!", and that direct contradictions of others are bad manners. Beliefs can and should be firmly stated. "I believe you're wrong" skates the edges, but living with argumentative pedants (myself included) it's about as good as I can hope for. I'd hope that the community here could observe similar standards.

I think we've seen what happens when the fight takes over from the analysis, for example in the threads relating to The Company That Shall Not Be Named. Information dropped to zero and castigation peaked.

You've been doing stuff for two decades longer than I and have gone through a number of property cycles. Plus you are an active contributor here. Dismissing your opinion out of hand would be foolhardy and I for one listen when you speak. I don't always agree, but I do watch for what you say.

So I hope you (and others!) will listen to this as well.

Thank you for posting this topic - I think it's a good way to clear some of the air.

 

[plainsong]

Bill ,thank heavens for balancing viewpoints, Those of us who are older have been through some grim property cycles- From time to time various posters
here have tried to put forward an opinion that isn't necessarily
100% rah rah positive, and really they do get shot down in flames a lot of the time. Its a pity because when a forum becomes a support group for one viewpoint then its no longer a forum. I saw the same thing happen on stockmarket forums when the tech boom was on, anyone who put forward a cautious warning was met with howls of scorn and derision,
If sucessful investing is about anything it's about managing risk, thats a biggie.
just my thoughts,
Cheers,

 

[austini]

Bill

There's also a potential double standard occuring on the forum. It seems ok to keep posting the same ( or variations of ) " positive " message over and over again, but to keep questioning that " positive " message over and over again is not the done thing.
See Change

Hi gang,

As a long time member of this forum I feel SeeChange is right on the money with this issue.

Excessive focus on the potential positive outcomes without someone reminding investors of the possible negative outcomes is what got a lot of Henry Kay followers into serious financial trouble. Unfortunately s**t can happen to even the best traders/investors. It is all about probabilities, not certainties and I think it is important that there are people like Bill who have the courage to draw attention to the downside.

Maybe it is mostly us middle aged to older members who have been through market crashes and high interest rates etc who are raising concerns about the downside risk I'm sure most of us in this category don't let this deter us from continuing to very actively invest and borrow etc but I don't ever let myself forget the lessons of the past.

Cheers - Gordon

 

[Les]

G'day Bill.L,

If the topic is shares, then my approach is to buy what is rising in price, and to have a stoploss point where I get out if I am wrong.

Sounds simple, Bill, and I can immediately see how diametrically opposed you and Steve Navra are !!! (Steve buys when they are falling - for those who haven't followed the other thread)

But it's not really "that simple" is it? e.g. ALL shares will rise at some point - but would you invest in just ANY share? If not, how about a bit more of a "teaser" re HOW you chose the stock.

Then, again, is the stoploss set at 5%? Or 10%? Or where? Does the percentage value depend on WHAT you're buying? Or how far it has gone up already? Or how much it "went up" last time? Or where the resistance points are? Or what??????

I know, I know, this is a property forum - but I'd think that a considerable chunk of readers would have (at least) "dabbled" in shares, so interest is likely to be far from zero.

In the end, the "Bill vs Steve" fight pretty much equates to "positive gearing vs negative gearing". In the end, they BOTH work.

But, in all such debates, we should strive to put "our side" of the argument without simply discrediting the other guy. Sheesh, we really DON'T want a Parliament in here, do we???

State YOUR piece, Bill, and promote your way to all who wish to be involved. I, for one, would like to hear MUCH MORE than the simplistic comment above. It's your thread, Bill - go for it.

Tell me MORE about "my approach is to buy what is rising in price, and to have a stoploss point where I get out if I am wrong." It sounds (to me) a bit like "The way to drive a car is to start the engine, and steer". There's GOT TO BE far more to it than that.....

How about it? I'm all ears (for those who've met me, you're all nodding, smiling )

Regards,

 

[Beach Bum]

I tend to agree with Bill L. most of the time.

His posts are challenged by many people who obviously don't know much about equities trading.

The Navra method is not yet proven, chasing falling stocks has many times proven to be disaster. And I've not seen anywhere an audited track record for his system that goes back 5 or 10 yrs. Not to mention the performance is only average and much below the top performers.

Good onya Bill for posting your points.

 

[see_change]

Maybe it is mostly us middle aged to older members who have been through market crashes and high interest rates etc who are raising concerns about the downside risk I'm sure most of us in this category don't let this deter us from continuing to very actively invest and borrow etc but I don't ever let myself forget the lessons of the past.

Cheers - Gordon

Would be interestig to see a break up on the age of the so called " optomists "and " doom and gloomers" . I bought my practice premesis in 1989 and was really annoyed that the best rate I could get was 13.5 for a non residential rate AND it was fixed... when rates approached 20 % I was very relieved

See Change

 

[see_change]

G'day Bill.L,

But it's not really "that simple" is it? e.g. ALL shares will rise at some point - but would you invest in just ANY share? If not, how about a bit more of a "teaser" re HOW you chose the stock.

Regards,

Les, wrong. HIH is a more prominent member of a long list. Steve does a very thorough job of doing a fundamental screen to ensure the financial stability of the companies he invests in.

Then, again, is the stoploss set at 5%? Or 10%? Or where? Does the percentage value depend on WHAT you're buying? Or how far it has gone up already? Or how much it "went up" last time? Or where the resistance points are? Or what??????

There is no correct answer to these Les. This is where it comes down to back testing . Some figures will give a better long term result , but will be more volotile. Some will have lower drawdowns etc, there are lots of trades offs , and that part of the reason why there are a lot more books written about technical analysis of shares than of property.

In the end, the "Bill vs Steve" fight pretty much equates to "positive gearing vs negative gearing". In the end, they BOTH work.

Maybe I'm wrong , but I thought it had as much to do with timing. I seem to remember that Bill has said that is is happy to gear more aggressively in the market if he thinks that the market conditions are correct. ( please correct me if I'm wrong Bill ).

Tell me MORE about "my approach is to buy what is rising in price, and to have a stoploss point where I get out if I am wrong." It sounds (to me) a bit like "The way to drive a car is to start the engine, and steer". There's GOT TO BE far more to it than that.....

Actually from a trend following point of view , it is that simple in concept ( well at least in my understand). An analogy for trend following I like is that of the fisherman. He baits his hook , casts out and waits. Most of the time when he pulls his line in there's nothing on it ( definitely if it's me . Sometimes he still has his bait , sometimes he looses it in which case he rebates and casts again. Every so often he gets a strick and reels in . Landing the fish is what it makes it worthwhile.

On a practical basis it can be a lot more complex , but again that's why there are so many books written about technical analysis of shares...

See Change

 

[TryHard]

Another young'un

Would be interestig to see a break up on the age of the so called " optomists "and " doom and gloomers" ...

See Change

I guess I would be viewed as one of the 'optimists' as I stuck up for Steve when I felt Bill's comments directed at him were unnecessarily negative, ignorant (as in ill-informed), and inflammatory. This is the last time I will post about it because, like the original post itself, its using up way too much energy with no positive outcome for anyone.

For the record I bought my first property in Brisbane in 1988, on an interest rate of 9% which rose to 17% over 9 months. I have bought and sold a dozen or so properties, most of them through the nothing-happening-in-property years, losing money on most, including selling a Norman Park Queenslander on 2 city view blocks for $140,000 because it seemed like a good idea at the time. I lost most of my wealth, and sometimes the will to try to be something better, to ex-partner(s) who contributed nothing (except, admittedly, some serviceability for the banks ).

I believe, technically, I have as much right to be 'negative' as most of the people here, if we are shallow enough to think losing a bit of money here and there, or being over 30 (70, whatever), is sufficient grounds to complain.

I personally don't pigeonhole people as negative if they have been through a few ups and downs in the market, or life in general. It is the way people share advice that makes a good forum. There's nothing wrong with being cautious. But there are many things wrong with being antagonistic, and baiting and flaming people unreasonably. I don't think any amount of experience or intelligence excuses rudeness or beligerence.

Good luck
TryHard

 

[Bill.L]

Hi all,

Wow , thank you all for those kind words.

To answer a few points.
Firstly on the topic of "hard questions". Yes I can see how I do sometimes go on too hard, but I do tend to get frustrated if I receive the "polititians answer".
I find it amazing how you get really good detailed answers on the positives of a strategy, but the discussion of market risk is much hazier. (and I am not just talking about the latest eruption or with the one person.)
Perhaps I am not as articulate as some, I have noticed other posters asking similar questions to what I was thinking, but in a much more refined manner.

Austini, I think your observation is correct about the age thing. Mind you, when I was in my 20's, the downside was not considered, if it looked good on paper, I would chase it.

Buying more of a "bluechip stock" on the way down is one of my earlier mistakes (and one that I repeated in a different way years later). The companies name was Kemtron Ltd, and as a young person getting into the sharemarket for the first time, all the positive news about the company, the growth prospects, the regular growing dividends, it was a monty. After the price had fallen 50% ( but it paid a good dividend ~8%) I bought more to average down my price. Luckily, I did not compound the mistake any further as it was around the time of us buying our house. It was a long term buy and hold. I still hold the share certificate (how many of us remember those?)
Eventually the liquidators were called in, it changed name, then went totally bust a couple of years later. I held on to the hope that the price would recover.

I bought silver around the same time. But I was "smart " this time. I waited for the price to drop before purchasing. I mean I paid good money to get some report from experts, The Aden Sisters from memory. Silver was going to the moon, and the price had fallen from $40+ to only $15 per oz.
I still have those kg bars as a constant reminder of stupidity.

The culmination of trading/investing disasters taught my to have an "uncle" point, a place where beyond that I was wrong. This by itself has helped in limiting losses in all those "you can't lose" situations. Even so I have managed to let my own rules be superceded by the thought that they are just shooting for my stops. Again this cost plenty.

The old axiom of cut your losses took a long, long time to sink in.

Les, How would I chose a stock. I can start here but not finish. it depends on the time scale I am trading. Currently I have no stocks, because we put our money into property, a joint decision in our houshold. The leverage from property has given us far greater gains than the unleveraged share gain would have given. ( As Seech stated I am not against leveraging up for an investment per se, but I have not had the time I would require to monitor the situation.) I have had some small stock plays in the last couple of years.
What I look for is value, with a strong relative strength. But even then I have noticed that it is the chart action that I follow most. Recently(last couple of years), I have been following the ideas Joseph Piotroski, as a way of defining the "value" side of the equasion.
Simple "donchian" 4 week break out is enough. Put on trade(part of) wait for upside (volatility breakout) and add more.
The stock also has to have a meaningfull place for a stoploss that is outside the bounds of a normal correction. ( whatever normal means)

A bit over a year ago I posted this in a thread, which also sums up my trading style...

"Because I'm a persistent bugger, I never gave up and eventually turned my trading around. What I have learned works best in virtually all markets is written about in most of the good investment books. It just took me a long time to realize it works!!

What works is this;

A/ Buy what is going up in price(not what you think will go up in price)
B/ Sell what is going down in price(not what you think will go down in price)
C/ Cut your losses short (if the price goes immediately against you get out of the position because you are wrong)
D/ Don't overtrade(ie size of a position and stoploss so wide as to cause pain to the overall portfolio).

As an obvious result of the above, you NEVER add to a losing position, you get out of losing positions as quickly as possible.
You only ever ADD to winning positions( and correspondingly raise stoplosses to prevent them from becoming losing positions).

Earlier on(I can't remember if it was this thread or another) I proposed a system that was along the following lines;
1/ Buy on a new 6 monthly high. Place stoploss 10% below buy in price.
2/ Add to position at a certain % rise. Raise stoploss to a break even level.(ie buy 100 shares at $1.00 add 50 at $1.20, raise stoploss to $1.07.) As price rises keep adding to positions and raise stoploss into profitable territory.

I believe this to be almost the opposite of the "Navtrade system" but stand to be corrected. It adds to winning positions and gets rid of losers.

I hear complaints about buying things that have already risen by lots of people, but things going up in price usually do so for long periods of time.

I again ask all those who think they know better to read the book recomended by just about every successful trader ;

"Reminiscences of a Stock Operator" by Edwin Lefevre."
It was in this thread.

http://www.somersoft.com/forums/showthread.php?t=8435&page=8&pp=15&highlight=trading+strategy+Navra

I am certainly not the best trader with the best system that makes the most money, but I keep on learning and keep trying to minimise risk.

Actually I think I've gone "offtopic" in my own thread.

bye