CASH is King

[wayneL]

Yes my opinion is of the same. However did even wayne disappear for a while just lately? With a final post "You think you lost money"

Yes, with a reference to several high fliers who lost billions between them. It was not a reference to me.

Losing money is part of making money in any trading plan. I lose money all the time.

I took a break to psychologically re-center myself after a few bruising encounters on the forum (AKA a dummy spit .

 

[nunthewiser]

Haha! Point taken. But for $5,000, you can buy my e-book, How To Be As Rich As Warren Buffett By The End Of The Month.

So you gunna teach me how to make some losses ?

 

[Julia]

Alot strongly believe a term deposit rate at 5.5% is laughable! Maybe they have had it too good?

When rates drop to 0% I guess you'll be the one who is laughing, MR.

MR.


i think it was julia who said she had her cash in 3/6 month term deposits, which rotated her availability - which i consider a better approach

Yes, I did, but when the present deposits at 7.5% mature, my option to roll over will probably be at 3% or less. This is where MR's 3 year locked in option will look a lot healthier.

Yes but to beat cash you have to put ALL your cash into trading, a bit risky eh ?

Maybe I'm missing something here? If e.g. you had, say $500K in term deposit earning 3% (lucky to get that after RBA cuts rates again on Tuesday)
that's just $15,000 p.a. on the whole balance.

But if you took just $100K of your $500K and traded it as per my earlier example of 10% per trade profit and did that several times a year, you've already exceeded for just that $100K what you'd be getting on the entire $500K in cash.

I might be missing your point, in which case I'm happy to be corrected.

Self funded retires on the other had.. low interest rates typically = crappy income. When interest rates where high, they were happy, nice income stream, those paying off mortgages, whoa is me... shrug.... turns and round-a-bouts.

I'm finding it a bit hard to understand what you mean here, Trevor.
Firstly, I wouldn't think too many self funded retirees would depend on bank interest for their income.
Secondly, if they were, then interest rates until the last few months have been high (8 - 9%).
You might like to clarify this?

But for $5,000, you can buy my e-book, How To Be As Rich As Warren Buffett By The End Of The Month.

Whacko!! How cheap is that for such a reward! Sign me up, Wayne.

(Maybe you have a move to Nigeria planned - that sounds like the perfect offer to garner all the suckers. I understand that - despite all the publicity about these scams - Australians are still outlaying many millions every month on these too good to be true offers.)

 

[nunthewiser]

But if you took just $100K of your $500K and traded it as per my earlier example of 10% per trade profit and did that several times a year, you've already exceeded for just that $100K what you'd be getting on the entire $500K in cash.

I might be missing your point, in which case I'm happy to be corrected.

um ..thats taking for granted that EVERY trade you enter is a winner and like you said previously you said that you would not use a stoploss on the likes of BHP that means it only takes FIVE wrong trades to kill this idea in one swoop.

personally yet to meet ANY trader that can say they never have a loss and if one is being sincere one would know that losses are part of the game

i could be wrong

 

[wayneL]

So you gunna teach me how to make some losses ?

Well, for only an extra $3000, I'll throw in my "You Idiot" file. 547 jam packed pages of amusing and novel ways of losing money. Each pearly anecdote is guaranteed to have you exclaiming the exact self deprecating words of the author - "YOU IDIOT".

 

[Stormin_Norman]

cash might be king. but what currency???

 

[nunthewiser]

Well, for only an extra $3000, I'll throw in my "You Idiot" file. 547 jam packed pages of amusing and novel ways of losing money. Each pearly anecdote is guaranteed to have you exclaiming the exact self deprecating words of the author - "YOU IDIOT".

hahahahah you didnt get my subtle meaning that i needed a few losses to be as rich as wozza

ooops i just woke up

 

[wayneL]

hahahahah you didnt get my subtle meaning that i needed a few losses to be as rich as wozza

Ahhhhh!

Well my "You Idiot" file will come in handy then.

(and the price has just gone up)

 

[Julia]

um ..thats taking for granted that EVERY trade you enter is a winner and like you said previously you said that you would not use a stoploss on the likes of BHP that means it only takes FIVE wrong trades to kill this idea in one swoop.

How is it taking every trade being a winner for granted? Where did I say that?
I haven't specified how many trades per year.

personally yet to meet ANY trader that can say they never have a loss and if one is being sincere one would know that losses are part of the game

Nowhere have I claimed never to have losses. Don't be bloody silly.
But what matters is that ultimately you have either more wins than losses or the amounts of your wins considerably exceeds that of your losses.

 

[nunthewiser]

How is it taking every trade being a winner for granted? Where did I say that?
I haven't specified how many trades per year.





Nowhere have I claimed never to have losses. Don't be bloody silly.
But what matters is that ultimately you have either more wins than losses or the amounts of your wins considerably exceeds that of your losses.

Excuse me!

i am only commenting on what you posted earlier when i asked if you would use a stoploss on bhp .YOU said NO .IF that was the case like i just said it would only take 5 bad trades to tie up ALL your capital until they either broke even OR turned a profit

i do apologise if my tone sounds annoyed but geez you asked for comments i gave them , you dont like them TUFF

have a niceday

 

[Julia]

i do apologise if my tone sounds annoyed but geez you asked for comments i gave them , you dont like them TUFF

At no stage did I ask for comments.

The thread is about cash being King.
There have been thoughts exchanged for and against this philosophy, in the context of a useful and constructive discussion, barring your own contributions which seem designed to be primarily provocative.

All I did was offer a possible alternative to holding one's entire asset base in cash, in putting a small amount of that capital into the market.

I used BHP as an example because I believe it's a company that will still be profitable in decades to come and if what I have suggested doing as an interim measure doesn't work out, I would simply hold the shares for the long term.

To make it really simple for you, think of it as buying BHP shares for the purpose of a long term hold (at what many would say are bargain prices at present), but then - if the opportunity presents itself during that hold - selling at, say, 10% profit, then re-investing on the next dip, and so on.

Now, you may continue to raise all the objections you like. It's immaterial to me. I don't propose to continue to respond to your goading.

As Robots would say:
Thank you.

 

[beerwm]

fixed interest rate, variable interest rate, 5%, 7%, 3%, 2.5%...

lets put things in perspective...

correct me if im wrong but a trader can quite comfortably make a 10% gain on his capital in a year with a right know-how, and i would stress MUCH more if he/she knows what he/shes doing.

TRADING IS KING!

 

[nunthewiser]

Maybe I'm missing something here?
I might be missing your point, in which case I'm happy to be corrected.

now if thats not inviting comments i dont know what is !

Don't be bloody silly.
.

i view your previous post regarding constructiveness as highly hypocritical and i wish you well in all future endeavours

thankyou

darl

 

[noirua]

There is a tendency for most to want to be seen in a sensible light and by that pretend to have done well. Basically though, to have cash in Australia in the last 6 months was a poor decision, and as I have a lot of mine in Aussies that answers that.
I have quite a lot in US Dollars and that sounds good, but I put the money in as the greenback tumbled and therefore made little out of it.
Quite a lot is in £sterling and the least said about that the better.
On stocks, "I'm holding for the long term" usually means "failed in the short term".

 

[nulla nulla]

IMO this thread is starting to sound like a peeing competition between some of the posters. Every investor would have read or heard at some time that the best investment portfolio is made up of "Cash, Property and Shares".
The idea is that you can change the weighting between the categories as the prevailing economic conditions merit. Right now Gold looks more secure than volatile shares or retracing property prices, so it may be a good cautionary move to rearrange the weighting of your portfolio if you haven't already done so.
However, cash is only returning minimal interest rates. Investing in some of the so called Blue chips paying in excess of 10% yield with 100% franking gets a better return rate on your capital, the only down side being the requirement to 'take the risk' that the share price may fall further in the short term before it recovers in the long term.
Bricks & mortar, dirt, always appreciates with time, the key being location, location, location. And you need to be prepared to hang in for the long term.
The Cany investor that moves his/her portfolio weighting arround as the economic conditions change, will outperform the investors that are reactive rather than proactive.
Time heals all wounds (one way or the other) if you are down in the market, it is likely you will recover, it will just take time.

 

[MR.]

correct me if im wrong but a trader can quite comfortably make a 10% gain on his capital in a year with a right know-how, and i would stress MUCH more if he/she knows what he/shes doing.

TRADING IS KING!

IMO lets play "black or red" on Roulette wheel. We will put a dollar on black. It loses so we will put 2 dollars on black. (one for the one we just lost and one for that dollar I'm going to win) If we lose a second time lets just keep doubling and when black comes up we win. You can't lose!

But what happens when one day you find yourself putting the house on the line just to make that single dollar? "how can so many reds keep coming up" So you put the house on the line because you don't except losing half the value of the house. And red still turned up!
(and the colours are correct)

There is a tendency for most to want to be seen in a sensible light and by that pretend to have done well. Basically though, to have cash in Australia in the last 6 months was a poor decision, and as I have a lot of mine in Aussies that answers that.

So we didn't optimise our investments? Was it such a poor decision to keep AUD? This is what nunthewiser was referring to. You don't have to pick exact highs and lows somewhere close is just fine. The point you had cash would be better than your long termers at present.

 

[MR.]

Is Cash still king?

Have any cash? If it’s in a term deposit what term is it on? 3mths or maybe 6?
Either people want to keep their funds not far from reach (to re-enter markets) or (they just haven’t thought that far ahead) I wonder what rates the banks will offer in just 3 months time!

If you are just waiting “short term” to re-enter the markets just be aware there appears to be many of you.... That spells Volatility!

Have you held cash for several years waiting for this moment? Several years ago didn’t you decide not to invest in shares and hold cash “await a crash perhaps” now tempted back in because of the massive drop? Are shares that much lower than when you decided not to buy them “several years ago?” Don’t miss out!

Cash is not King anymore! Don’t miss out! .... Did you think of that yourself? Is a Financial Planner behind it? Financial Planners could have never made everyone rich? What is the use of cash if you don’t use it when the time is right, like NOW!

So the ones who saved some cash or were lucky enough to bail back in September all flood back into the share market sooner rather than later. Maybe finally buy some property as well as its down a little and when interest rates go down property goes up! I'm told! The share market is at the lowest for years. Shares are half price and dividends outweigh bank interest. The charts are looking so attractive, just need a change in direction perhaps!

Another simplistic question which we will all ignore:
Is everyone now anywhere near being out of debt?
The government has not written off a part of everyone’s debt just yet! And I don’t think people have worked it off yet.

Back to the beginning.

My point is: while the masses carry heavy debts CASH must be king.

Perhaps the majority agree, alot are holding cash but (short term)???
To make an example of the point, I put 40% locked in for 3 years.
and I told you about it.

Will be very happy to outperform Buffet. (in the way he referred to buy the market S&P OR DOW)
Now....... what to do with the other 60% ?????? ummmmmm gold? my own un-leveraged business.

good luck people.

ps: I do not need to take high risks with my money, although my super supplier T____ seems to think I should have according to their books. And they stuffed that up good and proper. Wonder why I didn't / don't give them more?

 

[Julia]

now if thats not inviting comments i dont know what is !

You are taking extracts completely out of context. My "happy to be corrected" comment was in response to Mr Burns' remark below:

Yes but to beat cash you have to put ALL your cash into trading, a bit risky eh ?

I might be missing your point, in which case I'm happy to be corrected.

 

[Bushman]

IMO this thread is starting to sound like a peeing competition between some of the posters. Every investor would have read or heard at some time that the best investment portfolio is made up of "Cash, Property and Shares".
The idea is that you can change the weighting between the categories as the prevailing economic conditions merit. Right now Gold looks more secure than volatile shares or retracing property prices, so it may be a good cautionary move to rearrange the weighting of your portfolio if you haven't already done so.
However, cash is only returning minimal interest rates. Investing in some of the so called Blue chips paying in excess of 10% yield with 100% franking gets a better return rate on your capital, the only down side being the requirement to 'take the risk' that the share price may fall further in the short term before it recovers in the long term.
Bricks & mortar, dirt, always appreciates with time, the key being location, location, location. And you need to be prepared to hang in for the long term.
The Cany investor that moves his/her portfolio weighting arround as the economic conditions change, will outperform the investors that are reactive rather than proactive.
Time heals all wounds (one way or the other) if you are down in the market, it is likely you will recover, it will just take time.

Spot on mate.

For what its worth:
- cash is likely to deliver negative real returns going forward;
- property is a good inflation hedge so when all the bleaters stop fretting about [whisper] deflation it will pay off. However if you buy a bulky goods centre in west Sydney you deserve to be boiled alive. To quote Mr Nulla, it is 'location, location, location' in the long-run, nasty deleveraged valuation correction in the short-term.
- fixed interest lookin' good for solid blue-chip citizens; my rule is if they were going to struggle debt-wise, the stress would now evident.
- blue chip industrial and financials - fully franked +10% divvies looking good. Two things to watch out for - 1. the earnings recession; and 2. can they pay the divvies out of accounting profit that will be whacked by one-off write-offs of intangibles. Long-term, looking sweet mate; short-term will still be volatile.
- gold & treasuries - what is you long-term outlook for USD, Euro and the Aussie.

so yep, tweak those portfolio. Then again if you cannot stomach risk anymore (ie losing your dosh), stay in those term deposits. Just don't lock them in for too long as inflation looms and you will get spanked in real terms; so, like deciding for or against a vasectomy, you might want the option of being able to change your mind again in the future due to a change in circumstance.

Summary - cash - A man or woman can only bear what he or she can bear. At least with cash you don't have to subscribe to the Eureka Report

My 2c again....

 

[robots]

hello,

great work bushman,

as the example of WBC indicates 310k down to 160k, now it "may" take 10yrs to get back to 310k,

and then as you track cash returns vs others, the preservation of capital is looking the major issue,

ps i wouldnt have a clue

thankyou
robots