CASH is King

[pilots]

Now let's have a reality check here: I don't think anyone would be buying BHP for its dividend at about 3%. I merely made mention of it in comparison to what deposit rates are likely to be very shortly.


Another reality check: I'm doing this with a very small proportion of my capital, such that I'd be entirely happy to keep in BHP for the next couple of decades. Most of it will remain unprofitably tucked away in the bank.


I'm very conservative but believe in these times we need to be prepared to look outside our traditional views and practices.

And thanks for the good luck wishes (whether sincere or not). I've never been much of a believer in luck actually, and doubt that it was luck that allowed me to be self funded many years before most people are starting to think about retirement.

And btw, nun, what's your own survival strategy in these times?

Julia, you say you believe in LUCK, we went to the USA 26 June, sold up our WPL at $55, our dollar was about 92c to the US, came home three months later to see WPL way down, and our Dollar down, LUCK is a big part of trading I believe. Our money is in the bank getting only 5.55% and 5.75%, but we still have all our money. You think things are bad here go the states and see how bad things are, we are VERY VERY Lucky to be living here.

 

[MR.]

Julia, you say you DON'T believe in LUCK, we went to the USA 26 June, sold up our WPL at $55, our dollar was about 92c to the US, came home three months later to see WPL way down, and our Dollar down, LUCK is a big part of trading I believe. Our money is in the bank getting only 5.55% and 5.75%, but we still have all our money. You think things are bad here go the states and see how bad things are, we are VERY VERY Lucky to be living here.

Correction think "Pilots" left out DON'T

Julia, I know what you are saying and Pilots yes IMO "Luck is a big part of trading!"

 

[nunthewiser]

And thanks for the good luck wishes (whether sincere or not). I've never been much of a believer in luck actually, and doubt that it was luck that allowed me to be self funded many years before most people are starting to think about retirement.

And btw, nun, what's your own survival strategy in these times?

was sincere.

my portfolio is comprised of cash , physical gold , yen and a small handful(% of stock)

i got lucky in march 07 when seeing the writing on the wall and shifted from stock to majority cash (i still hold a small investment stock portfolio of which i add to on panicked dips BUT none at stoploss points with the exception of TRY which i resigned myself to being a silly move as capital been tied up with them at a loss for over a year now and still not looking at break even scenario (for some time)unless something extraordinary happens)

i trade on a monthly/weekly to day basis for my income BUT not gunna hold past my stoploss points and sit there and wait an indefinate time to recoup my capital unlike others .

i also have other business intrests that supply me an income

i am also self funded and have been for a long time , i rely on no handouts, benefits, charity or any other form money that MYSELF has not provided .

just because i dont agree with your methods re BHP and holding regardless of losses doesent mean it cant be right for you

ps. just because i may not agree with your strategy on BHP does not mean i am correct

takes allsorts of plans to make a market work

 

[nunthewiser]

I also hold property but thats for another thread

 

[nunthewiser]

Just on a side note


i wonder if those holding " blue chips" or whatever there called in japan feel the same way about there long term investments now from there dizzy heights or even if they bought 1 year after the crash

long time to sit on a loss waiting hey

could never happen in oz tho hey ?

but each to there own

 

[MR.]

I also hold property but thats for another thread

Perhaps, wouldn't want to fill this thread with all those opinions. But property is a very interesting subject. Is property better than cash?
Is your property for pure investment? Or is it your home/home investment?

I've made my decisions there and sold not long ago. Not at the best time either, was in the middle of advertising when the s--- hit the fan.
Now,.... that decision was hard.

now calm down robots, bee???
-------
Hard to understand how Japanese hold term deposits in the last decade at 1-2% interest. Something made so many of them completely flee to cash. Ahhh No not here. If we are the United States "It will not happen to us either we just flooded the markets with cash" Is that what Japan did wrong?

 

[nunthewiser]

Perhaps, wouldn't want to fill this thread with all those opinions. But property is a very interesting subject. Is property better than cash?
Is your property for pure investment? Or is it your home/home investment?

I've made my decisions there and sold not long ago. Not at the best time either, was in the middle of advertising when the s--- hit the fan.
Now,.... that decision was hard.

The propertys i have remaining have all been previous homes which were bought some time ago . they are all were bought in the cheaper price ranges at the time with the exception of a hobby farm adjacent to the proposed "oakagee development" just north of geraldton.This place i now reside in but have rented out previously whilst away from wa

i am in a different position to those that want to invest now up here as my property owned is with a negligable mortgage which was actually only got to further a small development in southern tasmania

as far as property being a better current investment than cash ??
i think NO , not currently

but for me and the returns to purchase price paid and capital growth to that purchase price .definately outperformed

i also have sold property within the last 12 months and yes with the exception of some riverfront blocks i had(which are not actually settled as yet , only sold as the huon valley council is a little bit slow in the release of separate titles) , it was definately no picnic and took a 20% discount to my original asking price just to get it gone

 

[MR.]

The propertys i have remaining have all been previous homes

i am in a different position to those that want to invest now up here as my property owned is with a negligable mortgage which was actually only got to further a small development in southern tasmania

as far as property being a better current investment than cash ??
i think NO , not currently

but for me and the returns to purchase price paid and capital growth to that purchase price .definately outperformed

i also have sold property within the last 12 months and yes with the exception of some riverfront blocks i had , it was definately no picnic and took a 20% discount to my original asking price just to get it gone

Your money has to find a "home" somewhere. Low cost housing. Would keep as well if I owned some if with little debt.

An interesting thought which you no doubt have considered:
Are your houses that much different to Trevor_s's BHP or WBC.
All purchased a long time ago?

so we both nun the wiser?

I hold no property other than the family home. But will buy perhaps in "3 years" Geez my fingers stink!

 

[beerwm]

Hubris; Excessive pride, presumption or arrogance which usually leads to the downfall

3 years... in a term deposit

when you decided to do this, did you consider the alternate at all?
how things may turn out in the future, if what you have predicted are not correct?

-I'm not saying that you are or arent correct.

 

[nunthewiser]

An interesting thought which you no doubt have considered:
Are your houses that much different to Trevor_s's BHP or WBC.
All purchased a long time ago?

Good luck to trev with his WBC and BHP holds , i have never queried why or how on his holds and actually can see why he is no rush to let go of WBC regardless of how high its been as others have pointed out everything wrong wih him holding but neglected to mention his tax implications if he sold , and where else would he get the current yield he is getting again , not like WBC gunna see 3 bucks again ...... bhp tho MAY see 18 agin before this correction finished but thats pure speculation and nothing to do with current topic really

i too hold MTS at a much lower average than current prices and with the divvies paid over the years , its turned out to be a nice lil earner

and to answer the question .NO its no differrent

 

[MR.]

Hubris; Excessive pride, presumption or arrogance which usually leads to the downfall

Does it?

3 years... in a term deposit

when you decided to do this, did you consider the alternate at all?

No... fly by the seat of my pants.... thats why it is going to return 5.5% Government Backed and sleep soundly at night.... Ofcoarse I did!

how things may turn out in the future, if what you have predicted are not correct?

Ahhh "we wouldn't want to be left behind now, would we"
Is that not exactly why so many people are and will be in finiancial trouble!

Your remark can be used in so many contexts as well. Why make any decision (for it could be wrong) Funny how a simple 3 year term deposit is of such concern of "losing money". So this money could have been better spent? Maybe! What are the answers then?

Not buying the yen is my only real regret of late. I really do not think locking into a term for 3 years is going to be one of my worst regrets in the future. Remember it is 40% not 100%. Perhaps my regret will be not locking more in???
Perhaps by keeping the rest "liquid" (the 60%) "in a cash deposit account" sets you ready for a pounce as which most seem to agree with. And thus why 40% is in not 100%

 

[Julia]

Julia, you say you believe in LUCK, we went to the USA 26 June, sold up our WPL at $55, our dollar was about 92c to the US, came home three months later to see WPL way down, and our Dollar down, LUCK is a big part of trading I believe. Our money is in the bank getting only 5.55% and 5.75%, but we still have all our money. You think things are bad here go the states and see how bad things are, we are VERY VERY Lucky to be living here.

Pilots, obviously you meant to include "don't" in your initial sentence.
OK, that might seem lucky, but didn't you think about what best to do and then make a reasoned decision to take your profit on WPL?
Congratulations on such a good decision.
Perhaps it's about how you define 'lucky'? I'd say you'd be lucky if an out of control aircraft crashed to the ground and just avoided you and your property.
Ah but then you could say you'd have been unlucky to have even been in the vicinity of a crashing aircraft!
But hopefully I've made a bit clearer what I mean.

On living in Australia, I couldn't agree more.

 

[Julia]

Hubris; Excessive pride, presumption or arrogance which usually leads to the downfall

3 years... in a term deposit

when you decided to do this, did you consider the alternate at all?
how things may turn out in the future, if what you have predicted are not correct?

-I'm not saying that you are or arent correct.

Let's remember that MR can always break the term deposit, forfeiting some of the interest.
So I can quite see why he'd have locked in a rate so much better than what will be available in a few months' time. If the market fails to recover in the next three years then he will be very much better off. And if there is a clear recovery, and he judges he can derive more profit from investing/trading then he can choose to release the money.

 

[Julia]

i got lucky in march 07 when seeing the writing on the wall and shifted from stock to majority cash

Interesting. The market continued to rise until about November of that year. Can you say a bit more specifically what 'writing on the wall' in March prompted you to sell in a rising market?

 

[beerwm]

Does it?



No... fly by the seat of my pants.... thats why it is going to return 5.5% Government Backed and sleep soundly at night.... Ofcoarse I did!



Ahhh "we wouldn't want to be left behind now, would we"
Is that not exactly why so many people are and will be in finiancial trouble!

Your remark can be used in so many contexts as well. Why make any decision (for it could be wrong) Funny how a simple 3 year term deposit is of such concern of "losing money". So this money could have been better spent? Maybe! What are the answers then?

Not buying the yen is my only real regret of late. I really do not think locking into a term for 3 years is going to be one of my worst regrets in the future. Remember it is 40% not 100%. Perhaps my regret will be not locking more in???
Perhaps by keeping the rest "liquid" (the 60%) "in a cash deposit account" sets you ready for a pounce as which most seem to agree with. And thus why 40% is in not 100%

Woah!! 5.5%... aren't your ambitions high!!

The exact reason people are in financial trouble now is because they didnt react to what was happening. A firm buy & hold strategy where they locked the money in.... sound familiar?

I'm not knocking your decision to go into cash, but its a tad narrowminded to suggest 'CASH IS KING FOR 3 YEARS!!'

-so you've basically told yourself,
;there will not be any good investing /recovery opportunities for atleast 3 years
;interest rates will not reach 5.5% on a savings account until 3 years
;a 1-4% premium of that money [in comparison to a variable savings account] is worth the risk of the 2 above.

my

Fair point Julia, but isnt the rate like >2.00% if you pull out?

 

[MR.]

And if there is a clear recovery, and he judges he can derive more profit from investing/trading then he can choose to release the money.

And the bank, more likely then not, will release me from my term if things are looking alot better. Will add I should have divided into smaller parcels at the same rates. Have 2 or 3 instead of 1. Now that I didn't give enough thought.

i have never queried why or how on his holds and actually can see why he is no rush to let go of WBC regardless of how high its been as others have pointed out everything wrong wih him holding but neglected to mention his tax implications if he sold.

Ok... my post did seem to imply these were your thoughts which they are clearly not.

I seem to have a tremendous amount of speculation with regards to Property and Shares and think times will be better for buying these assets at a later date.

 

[nunthewiser]

Interesting. The market continued to rise until about November of that year. Can you say a bit more specifically what 'writing on the wall' in March prompted you to sell in a rising market?

Yes i definately missed the cream of the top and really regret not being as good as most here who seem to buy at the very bottom and sell at the very top

my reasons for selling was because of the influx of hype , parabolic trends and the fact that every man and his dog reckoned the stock market was a guarenteed win situation .LOL ......my reason for selling probably very diffrent to your reasons but either way im happy i excited where and when i did as i live to play again unlike some of the more unfortunate newer bright eyed bushy tailed punters that thought markets only went up

again im glad so many were able to sell at the very top unlike myself and have placed a stickitt note on my screen to become a better trader/investor so i can keep up with others here

have a niceday

 

[nunthewiser]

I seem to have a tremendous amount of speculation with regards to Property and Shares and think times will be better for buying these assets at a later date.

Totally agree re better buying .not on all but on most........... personally dont think theres any hurry for much as yet

these cycles take there own sweet time

 

[Julia]

Yes i definately missed the cream of the top and really regret not being as good as most here who seem to buy at the very bottom and sell at the very top

Clearly you're being sarcastic. I don't think there would be a single person on ASF who would claim they always sell at the very top and buy at absolute bottom.

my reasons for selling was because of the influx of hype , parabolic trends and the fact that every man and his dog reckoned the stock market was a guarenteed win situation .LOL ......my reason for selling probably very diffrent to your reasons but either way im happy i excited where and when i did as i live to play again unlike some of the more unfortunate newer bright eyed bushy tailed punters that thought markets only went up

Thanks for explanation. As you say, pity more didn't follow your example.

again im glad so many were able to sell at the very top unlike myself and have placed a stickitt note on my screen to become a better trader/investor so i can keep up with others here

have a niceday

I think most of us are just trying to have a constructive discussion here. I'm unaware of anyone who has claimed to have a superior strategy or to have sold at the top, so I'm not sure that sarcasm really furthers anyone's knowledge or understanding.

 

[nunthewiser]

Thanks for explanation. As you say, pity more didn't follow your example.




.

People dont want to listen 90% of the time when the going is good . but some view that as a warning when the going is TOO good.

just on a side note a few ppl close to me DID follow the exit signs , and actually sold rather nearer the top than me but hey they had been of the notion that the market was overcooked when we breached 5000 but just trailed along there stops.


MY trading /investing plans/actions are of no use to anyone BUT me .. ppl would have (and did) scoffed at me for saying we had hit close to the top around march and it was time for care .

like i said ppl only wanna hear what they want to hear and after the facts are proven ONLY then do they look back and wonder why they didnt act sooner