lizie, I wouldn;t dissmis what sunfish said... this is the advice you probably need to , the hard stuff and try to understand ....
smsf shares to buy?
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lizie, I wouldn;t dissmis what sunfish said... this is the advice you probably need to , the hard stuff and try to understand ....
why are you interested in the price comparison chart?
Isnt this the mistake many people made in pre GFC times, they invested (as opposed to trading) using charts.
For investment purposes, I would be more interested in the risk adjusted return going forward. To do this one would need to look at both the investment philosophy of the LIC, their holdings, and their discount/premium to NTA.
If i was trading, then sure i would be going with WAM and using stop losses to protect my position. As a trader, the trend is your friend, one is not an allicator of capital, but a speculator. You participate more in price action that is showing an upswing, and you cut positions to those that are showing a downswing. You buy that which is showing strength, and you sell that which is showing weakness. The rule of survival is not to 'buy low' and sell 'high', but to buy high and sell higher. You add to positions on minor corrections, so long as the major trend is intact. A break in the major trend dictates selling, and moving to the sidelines.
Notice the difference in mentality between my discussions as a trader (which i dont do, because i am better as an 'allicator of capital') and as an investor.
Hi IV,
I've been watching these for a while as per the above, the chart was a historical indicator of what they've done over that time period?
I'm a bit confused on your above post though and your previous comments as a value investor??
Intrinsic Value makes my head hurt
Hi IV,
I've been watching these for a while as per the above, the chart was a historical indicator of what they've done over that time period?
I'm a bit confused on your above post though and your previous comments as a value investor??
Intrinsic Value makes my head hurt
I am a value based investor, nothing has changed. I believe i am reasonably good at it, so why change teams.
My underlying point, is that ones actions should be dictated by whether one is an investor or a trader.
If i am trader (which i am not), then focus should be on market pricing.
If i am an investor, then ones focus should be on intrinsic value (ie market pricing is irrelevant). The market price is the last part of an investor's buy/sell decision. First an estimate of intrinsic value is formed, after that, once an estimate is created then one looks to the market price to see whether its a good opportunity to buy/sell based on intrinsic value vs market pricing.
You provided a yahoo historical price chart of several different LICS.
If i put my 'investor hat on':
*the only thing this price chart shows me is that WAM has a potentially superior management style. But i need to investigate further. is that pricing due to superior long term management style, or because their specific management style is popular in the current environment.
ie what is WAM's risk adjusted return.
Let me posse this from a completely different point of view, from a point of view that will resonate better with a property forum.
If i start talking about capital gains on a residential property, if i start talking about rental yld on a residential property, there will be plenty of views on this forum. is it a high growth area, is it a remote town with a one trick industry supporting it, is it a low income area, are there high vacancy rates, etc etc
This is because people are analysing the comments from a fundamental viewpoint. They are actually trying to get some determination of intrinsic value.
But post GFC, you dont see to many posts on this forum, whereby everyone says by golly, this property has gone up by x%, i had better buy in the neighberhood, regardless of any form of fundamental analyse.
By the way i have never looked at WAM.
I am posting in a 'general nature'.
by the way i paid my tuition fee to mistress market the hard way on this.
In many years gone by, before i invested directly in shares, i used to go through LICS and listed unit trusts. I used to allocate my money based on who had achieved the highest 3 & 5 yr returns, figuring that i could extropolate this into the future.
I learnt the hard way.
In many years gone by, before i invested directly in shares, i used to go through LICS and listed unit trusts. I used to allocate my money based on who had achieved the highest 3 & 5 yr returns, figuring that i could extropolate this into the future.
I learnt the hard way.
Forgive me for butting in with a bit of a noob question, but would the intrinsic value of LICs be largely determined by the value of their NTA? Or have I mixed up the terms somewhat?
you would be correct if the underlying stocks were trading at their intrinsic value as well.
Let me give you some examples.
Example A:
10 shares in the LIC each share $10, so market value of LIC $100.
Market value of shares $100. So yes NTA= market value of LIC.
Example B:
But now we start to investigate what are the actual instrinsic value of the underlying shares in the LIC.
What if the market value of the shares were $100, but the underlying intrinsic value of the shares was only $60.
Then even though the LIC is trading at NTA, there is a risk that the underlying shares are trading significantly above their intrinsic value.
This is why its important to look at the major list of investments in the LIC. Most LICS will update the market on their top 10 holdings together with the proportion of total portfolio that the top 10 holdings represent. Some will go into more detail.
Sometimes there are periods when both the LIC is trading under NTA, and the underlying shares are trading under intrinsic value. This is the best time to buy a LIC. This usually only happens when the market is very fearful.
AFI and ARG are regarded as being the 'best' LICS on the Australian market, with high quality management and low turnover of underlying stocks (which means less capital gains tax being paid). They are very popular with retail investors so they often trade at a premium to NTA. Rare to trade at a discount. The premium paid is justified by some because of that quality management. Since their turnover is low, a smart retail investor can try to replicate their underlying portfolio by buying the same shares in the same proportion, this way you get the 'quality aspect' of the portfolio without paying both the premium and the running cost of the maintaining the portfolio.
For myself i have been in and out of MFF (Magellen Flagship) Lic. They run an international warren buffett type portfolio. Because international shares have not been popular (and also because this listed just before the GFC hit), it often trades at a discount to NTA. Sometimes i have been able to buy in at 30% discounts to NTA, and the underlying shares have trading under intrinsic value as well. Unfortunately because they dont hedge, the overal portfolio has been dragged down by the increase in the AU$. Still a quality (but not popular) LIC to put on ones screen.
You can read more about MFF here:
http://www.asx.com.au/asx/statistics/announcements.do?by=asxCode&asxCode=mff&timeframe=D&period=M6
Thanks for the advice guys ... I have a list of nine plus cash ... and of those nine, five are below the 12 month average and the rest range from within a few cents - so might be a straight up buy for those and orders for the rest.
Or - considering the rest are within $1 on share worth up to $49 (some only 2-9c) should I just buy them all?
The super expert (acct who does nothing but super) comes for a home visit on Tuesday so I'm looking forward to getting started.
Or - considering the rest are within $1 on share worth up to $49 (some only 2-9c) should I just buy them all?
The super expert (acct who does nothing but super) comes for a home visit on Tuesday so I'm looking forward to getting started.
Would it be ok to disclose the 9 shares you selected? This may provide you with better feedback on specifics and i wouldn't consider it ramping.
That's cool. They are mentioned earlier in the thread.
WOW
CBA
WBC
QBE
CSL
BHP
COH
CCL
RIO
But remember - this is a super fund, so we are purely looking at shares/industries that will still be around and profitable (as much as one can predict) in 10+ years time, and dividend return/reinvestment is more important to us than growth and speculation.
WOW
CBA
WBC
QBE
CSL
BHP
COH
CCL
RIO
But remember - this is a super fund, so we are purely looking at shares/industries that will still be around and profitable (as much as one can predict) in 10+ years time, and dividend return/reinvestment is more important to us than growth and speculation.
looks good to me given that since its in a superannuation fund its ment to be a long term portfolio. All quality 'best of breed' stocks in their sector
You probably didn't understand my previous post regarding insurance premiums. Let me give you an example, if I know QLD has floods once every 3 years and the approx payout is $1000 when it floods else it's $500 and I am insuring 10 houses.
The year before it floods, insurance premiums were $80 per house thereby giving me total premium of $800. Floods come, payout $1000, making a loss of $200.
Next year premiums go up to $150 per house. Yes, premiums can double. Ask ppl whose houses have been flooded, or are living in a flood zone. Total premiums received $1500 from 10 houses. But wait, floods only occur once in 3 years so next year no floods which mean payout is back to $500. Let's see what happens to my profits. Last year I made a $200 loss but this year, its Christmas! Profits are $1000
Now even when floods come and payout goes from $500 to $1000 because you are earning $1500, you are still making a profit.
So I repeat, there is no such thing as bad insurance, only bad premium rates. For the right premium rates insuring QLD houses from floods can still be profitable.
Cheers,
Oracle.
Just received renewal notice for landlord insurance on one of my ip's in Sydney.
40% increase in premium rates compared to last year
Mind you I have never made a claim and the property is not in a flood zone.
Insurance is with NRMA. They were really competitive price wise last year.
Looks like insurance companies are taking full advantage of the opportunity to raise premium rates after all the loses they experienced last year.
May be I should inquire and switch to QBE since I am a shareholder, so atleast some of that premium money comes back in dividends.
Cheers,
Oracle.
Just received renewal notice for landlord insurance on one of my ip's in Sydney.
40% increase in premium rates compared to last year
Mind you I have never made a claim and the property is not in a flood zone.
Insurance is with NRMA. They were really competitive price wise last year.
Looks like insurance companies are taking full advantage of the opportunity to raise premium rates after all the loses they experienced last year.
May be I should inquire and switch to QBE since I am a shareholder, so atleast some of that premium money comes back in dividends.
Cheers,
Oracle.
Our RACV policies went up about 20%. "Automatic flood cover". When I asked if I could opt out of flood, of course, I could not.
Opportunistic, methinks.hence why i am im happy with my QBE position.
Many industries are going through structural change. Insurance is not one of them. This is a cyclical issue not a secular one.
Therefore buy when the cyclical issues are depressing share prices.
Secular issues are much more difficult because of potential value traps.
Many industries are going through structural change. Insurance is not one of them. This is a cyclical issue not a secular one.
Therefore buy when the cyclical issues are depressing share prices.
Secular issues are much more difficult because of potential value traps.
What's the relevance of this chart redwing?
I use these LICs mainly for passive dividends and buy when below NTA or at market corrections, easy as...
They were just a couple I had been interested in some time ago after reading KeithJ's post and I still had the comparison chart link, along with a couple of REIT or LPT's
Looking back WAM may have been a good option, not so sure about the others, maybe the dividends have made up somewhat for the loss in value?
As far as actual involvement with our SMSF there are some long term and short term stocks in play over the last 3-4 months
Bought AGO and sold at +10% profit target shortly thereafter
Bought NRW and still holding, but the trigger fingers itchy at +42.48%
Bought SOL and still holding at -1.21%
Bought STW and still holding at +5.55%
Bought WOW and still holding at -1.75%
There should be an FMG trade in there somewhere also
Our RACV policies went up about 20%. "Automatic flood cover". When I asked if I could opt out of flood, of course, I could not.
Just had a letter from AON Insurance re: immediate "Automatic Flood Cover" now included; no cost if you are outside of the flood zone....this time, wait until policy renewal though
Lizzie thank you for this thread.
I have noted down what everyone has said. I am starting my etrade acct through the trust and I will be purchasing in lots of $1000 to start myself off.
In May i will have my first lot of employee share plans allocated. Thank goodness for the strong AUD, might get a few - maybe 10 shares!
I have noted down what everyone has said. I am starting my etrade acct through the trust and I will be purchasing in lots of $1000 to start myself off.
In May i will have my first lot of employee share plans allocated. Thank goodness for the strong AUD, might get a few - maybe 10 shares!
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