The Reverse Somersoft Leading Indicator

[oc1]

I realise you're looking for a leadinf indicator but i dont think it's there.

The hype for Sydney property related threads may be one?

Not desperate, merely musing.

We are herd animals and Ive noticed a movement in the herd.
It may be random nothing.....or not...

there may exist a causality

of so then....
I do think that the time to take risks is not now.
Im not pulling out of the markets and buying a bomb shelter and a gun.

but Im paying down debt, the margin loan is gone. Im still feeding my shares and Ips with cash.

but Im not putting so much in the shares portfolio, its going more to the offsets.

 

[westminster]

Possible the reverse leading indicator is when you see the number of pond dwellers increase posting.

If we see more and more of the people Darwin should have taken care of getting into property then you know it's time to get out. Smart ones get in, wait for the rise then bail before the Darwinism cheaters arrive.

 

[turk]

.

I've spent a lot of time studying shares and have done some trading and lost , but when I later back tested my system over the period I traded , it was the only time frame i could find where the system lost ... not sure what that meant.

Intellectually I'd like to master share trading for the challenge , but I'm now getting to the point where I don't think I'll worry as I have been ( so far ) made money fairly consistently on property .

cliff

Hi Cliff

Over the last few years I've fiddled with trading and not damaged the balance sheet.

This year I decided have a good crack at trading, results over 8 weeks have been positive, but way, way to early to draw any conclusions.

The plan I'm trading only uses weekly charts and requires around 2 hours a week to execute(no watching screens).

 

[xactly]

Because this person is comparing a property buy and hold investor to a sophisticated trade share trader, but they ignore that most can not share trade successfully. majority of people who own shares are mum and dad investors who hold forever

No Im not
I'm looking at a property investor who is now branching out and dipping their toe in another asset class.

As indeed, you have done when you started the High yield thread.
Thanks BTW, it was a great read, and allowed for many insightful posts from the spark you lit.

 

[oc1]

Possible the reverse leading indicator is when you see the number of pond dwellers increase posting.

If we see more and more of the people Darwin should have taken care of getting into property then you know it's time to get out. Smart ones get in, wait for the rise then bail before the Darwinism cheaters arrive.

Can you say that in blunt, plain English?

 

[westminster]

Can you say that in blunt, plain English?

 

[MTR]

No Im not
I'm looking at a property investor who is now branching out and dipping their toe in another asset class.

As indeed, you have done when you started the High yield thread.
Thanks BTW, it was a great read, and allowed for many insightful posts from the spark you lit.

Thanks, got it.

I see, I am way off the mark.

So why is the high yielding share thread so popular on a property forum

 

[turk]

Thanks, got it.

I see, I am way off the mark.

So why is the high yielding share thread so popular on a property forum

Cash Flow....

 

[charttv]

If I had access to the analytics of this forum I would be scouring them for possible insights.

For e.g. is there a spike in the # of visits and sign ups from a particular state/town just before a price peak? What do the lulls look like? Did they prove to be good times to buy?

 

[MTR]

OK, got it but if it is for cash flow what is your target, I still want to know is it 6% fully franked?????
I can not really get a straight answer with this. Also am told cash flow is not everything, quality of stock - growth, can we expect this moving forward in Australia, are the savvy investors looking at stocks in US as was mentioned,???

 

[westminster]

Cash Flow....

And any money is good money.

Anything with a good yield is tempting to everyone. But just like IPs it's not about luck and throwing a dart at a map (or stock exchange). It takes research, knowledge and commitment.

I don't have any of those 3 for shares so I stay out of it

 

[turk]

OK, got it but if it is for cash flow what is your target, I still want to know is it 6% fully franked?????
I can not really get a straight answer with this. Also am told cash flow is not everything, quality of stock - growth, can we expect this moving forward in Australia, are the savvy investors looking at stocks in US as was mentioned,???

Not that different to property, and as such there is no straight answer.

You need to decide if you are trading or holding the asset, set your parameters to suit then do your DD.

 

[The Falcon]

OK, got it but if it is for cash flow what is your target, I still want to know is it 6% fully franked?????
I can not really get a straight answer with this. Also am told cash flow is not everything, quality of stock - growth, can we expect this moving forward in Australia, are the savvy investors looking at stocks in US as was mentioned,???

MTR, VHY which I suggested to you yesterday has returned distributions of 6.11%franked at 80% since inception in May 2011. This is grossed up dividend yield of 8.19%. With risk assets (ie.stocks and property) yield is a function of the underlying asset price. So, dividend yield cannot be considered in the same way as interest on cash.

Now, lets look at the value of capital. Since inception, VHY has had 7.62% capital growth. On $100 invested, returns smoothed, divs reinvested as above ;

YEAR 1
$100
Div $8.2
Gro $7.6
Total $115.8

YEAR 5
$179.8
Div $14.7
Gro $13.6
Total $208.1

This is why growth is important. You cant just consider the current yield....what is the asset price doing? You can apply the same on falling asset price for the opposite result.

Note; this is not a recommendation of VHY or otherwise. There are no guarantees with regards to future performance. You must do your own research so that you have conviction in the positions you take, all the more important with stocks as you can make a decision exit your position within a minute, which may result in permanent loss of capital.

 

[MTR]

Erko
Thank you, I see what you mean.

MTR

 

[Sim]

If I had access to the analytics of this forum I would be scouring them for possible insights.

For e.g. is there a spike in the # of visits and sign ups from a particular state/town just before a price peak? What do the lulls look like? Did they prove to be good times to buy?

Interesting idea.

Unfortunately, the data I've seen doesn't provide anything which I would consider reliable in this manner.

Given that up to 80% of the traffic on the forums is from non-registered guests (even ignoring search spiders!), I think the volume of random visitors will mask any meaningful movements in data.

There's no real way of determining the intentions of those non-registered users on any meaningful scale - are they just visiting one page from a search result and then leaving? are they actual lurkers? are they actually intending to buy or sell in the near future? Very difficult questions to answer based on a couple of web pages visited.

If you could perhaps distil out the traffic from those people searching for information not directly related to "I'm about to buy" type topics, you might find some more meaningful underlying data - but from what I've seen, anything specific like that is always masked by the noise.

I guess we could identify some specific search terms and then track the frequency of those being used - but again, the actual volumes for any specific set of terms is relatively low (there are a very large list of terms - long tail), so it would be difficult to differentiate between an actual change in volume vs random noise.

 

[willair]

A prominent poster* has talked about the somersoft leading indicator as a secret ingredient to his realestate success.

The theory being, people talk before they buy and so increased buzz on SS pre-empts the boom.
Seems to have worked for Sydney, not so much for Brisbane.

So.... I was wondering, given the massive Shares threads and the monster that is the high yielding thread, whats it foreshadow?

actually the last time this happened, the crash followed shortly after some of the the property nouveau riche SSoftians moved into shares, heavily share margined their heavily margined property and crashed and burned.

So I have been wondering over the last couple of weeks:

all the chatter on US stocks, and shares in general and a thread on a short but disastrous foray of a SS poster trading the Forex......

Is the reverse somersoft leading indicator here again?

watch out folks......



*OK, See Change, but i was trying to be mysterious

All one can do is use this site as a Barometer on what how people invest,and if one reads the various posts on share investing I don't think there would be many day traders inside this site,once one read between the lines looks at some of the returns posted, $$$ returns then work out the holding cost numbers"nothing free in life" people must be hold massive equities holding,and depending on the risk levered you could be sitting on a pile of dynamite,and be margined called within 36 hours,but I think once greed overtakes fear in equities markets it will run right into the 7000 mark
then who knows..imho..

 

[see_change]

Those two statements are interesting.

I would have thought share trading is more of an emotional challenge than intellectual.
Warren buffet had some thoughts in the latest berkshire annual letter
See point #3 below

http://cuffelinks.com.au/ten-great-quotes-buffetts-annual-letter/

BTW I HIGHLY recommend the free cufflinks newsletter, its a thoughtful read.

and your other comment is something i have been mulling on lately:
Property is more of a fiddle than the share quality trust dividend collecting game.
what happens as one get older and more decrepit?? what is the 'out" for an illiquid high maintenance asset class?

please note Seech, Im not suggesting your faculties aren't keen, but you must look after a number of gently failing oldies in your practice, who aren't as sharp as they were and might not realise it yet.

How you plan for inevitable physiological decline as an investor?
we aren't all going to be as sharp as a tack at 92.

a property portfolio takes as much watching and maintenance as a real property.

I'm aware that share trading is as much about taking the emotions out of your decision making .

It terms of managing my portfolio . That is exactly one of the reasons why most of our long term portfolio is one of nice properties in nice areas , such as Mosman , manly ( Sydney and Brisbane ), New town ,( Hobart ) Wynnum and Tenerife . Smaller number of properties to manage and nicer tenants .
The new town property is out lowest level property being a house split into four units , but for a purchase price of 220 around ten years ago , the rent is around 800 / week .

We sold all our Logan and rocky properties , however we plan to buy more lower end properties , but they will be for a shorter term with the aim to sell them off to clear debt on the nice ones .

Cliff

 

[xactly]

This is why growth is important. You cant just consider the current yield...

investment writer Ray DeVoe's observation,
"More money has been lost reaching for yield than at the point of a gun."

This should probably go in the high yield thread but it fits here as well.

A nice little succinct warning.