Your Investment IQ

[wayneL]

So, given the above, would you (or anyone else who wants to offer their 2c worth) say TA would materially alter my profitability?

I would say not. Fundamentals are the go for long term, low time input, investment.

In fact companies like NAB and so on...the blue chips... are nearly impossible to trade and beat long term holding given equal position sizing.

A trader is either looking for something more volatile, or cranking up leverage on slower movers (Taking care not to break money management rules !!!!!!!!!!)

If I had an altennative income, I would either do it your way or Techs way. (but co. reports make my eyes glaze over :goodnight )

But even a trader should have some sort of long term portfolio in place, either in shares, property or sumth'n.

Tech

If I ever do trade for income then it will be longer term and fully capitalised,not buzzing in and out.
I personally believe that MOST "traders" trade quickly in and out as they cannot capitalise trades to an extent that would allow a different more passive style.

Paradoxically, it has nothing whatever to do with capitalization, unless there is a lack thereof, because:

There are times when you should not be long in a stock just as there are times you shouldnt be long in a market.

In commodities markets this point is so blatantly obvious that it is rarely mentioned.

I the stock market this point is so feared that it is rarely mentioned

In the stock market, I think that time approacheth. (When, I have no idea, but there will always be a bear lurking around somewhere) Even Buffet, has intimated that he believes this to be inevitable.

The mathematics of long term trend following does not favour short selling in stocks. As someone who trades for a living, short selling is a necessary strategy for continuity of returns. Th 25-30% drawdowns with long term trend following are NOT an option.

Looking back at my results for this calendar year. It would have been a very ordinary year indeed, if it had not been for my short sold profits. The US market has not had the bull run the ASX has had.

For me its simple.

I take control of my decisions,I keep trading simple and I know the Numbers.
I track NUMBERS.

Indeed! And this is exactly the point. The full time trader has to skew the numbers in a slightly different way. Part of this is psychological of course.

But the way I want the number to work is this: I would prefer x at the end of every month rather than 24 * x at the end of 2 years.

Thats my reality, so I trade to it.

But it is a folly to inflict my reality on someone else.

Cheers

 

[mit]

Depends what u consider rich!

Whats your NET GAIN before any taxes in shares so far, excluding dividends & interest foregone, but including Brokerage Charges

I was being a little tongue-in-cheek. Why exclude dividends? My main $ return is from a dividend system so not including the benefit of the tax credits, dividends form about 30% of my profit.

Also $ returns don't matter % returns are what matters, its how well you use your money.

MIT

 

[tech/a]

I was being a little tongue-in-cheek. Why exclude dividends? My main $ return is from a dividend system so not including the benefit of the tax credits, dividends form about 30% of my profit.

Also $ returns don't matter % returns are what matters, its how well you use your money.

MIT

Hmm

30 % in dividends then a nett return of around 10% P/A on investment.

Not much room for a down turn.

 

[mit]

Hmm

30 % in dividends then a nett return of around 10% P/A on investment.

Not much room for a down turn.

Eh? I hold for around 35 business days. So I turn over my capital 7.1 times a year. I only take dividends that are 2%+ so at a minimum my Dividends are 14.2% of the total position. I use margin lending at 60% LVR so 100/40 * 14.2%
which is 35% return on my input capital for Dividends alone. Which is nice in itself but my capital also increases and don't forget all those lovelly franking credits..

MIT

 

[tech/a]

Eh? I hold for around 35 business days. So I turn over my capital 7.1 times a year. I only take dividends that are 2%+ so at a minimum my Dividends are 14.2% of the total position. I use margin lending at 60% LVR so 100/40 * 14.2%
which is 35% return on my input capital for Dividends alone. Which is nice in itself but my capital also increases and don't forget all those lovelly franking credits..

MIT

That explains it.Thanks

 

[mit]

That explains it.Thanks

not a problem
MIT

 

[michael_selway]

The reason I bought it back is that I regretted selling it. (I can hear you blokes out there sighing and saying "bloody women!".) This is something I've never done before but on honest reflection realised I had made a mistake. I am quite happy to admit the mistake and correct it by buying more shares.

Weren't there other shares at the time that I thought had better potential?
No. With the exception of very speculative ones which don't interest me these days.

Why did I buy more of RCD? Partly because I am trying to consolidate my portfolio which contains too many stocks, and partly because I believe the company and its prospects deserve that percentage allocation of my investing capital.

I have since more than recovered the interim loss by the increase in the share price so am happy.

I agree that I would benefit from some better understanding of a technical approach, though essentially being a fundamental investor.

However, (and this should be a separate thread if we pursue it), it would be interesting to see two identical portfolios of, say, 20 stocks, and look at the results of both at the end of a year or perhaps two when one is traded purely on the basis of fundamentals and one purely by technical analysis.

Julia

Hi well looking at hindsight, there may have been better opportunies than RCD at that point in time (28/11/05 for 8.40), eg TBC, MGQ, ZFX, just to name a few. Maybe more as time goes by

Yes also maybe u should have bought more per stock earlier so now u dont end up with heaps of stocks with lower amounts in your portfolio which may lower your average gain (although diversification is very important, just do over do it) eg RCD maybe buy 4000 instead of 2000 as you said in Oct 04 for $4.96

 

[Julia]

Hi well looking at hindsight, there may have been better opportunies than RCD at that point in time (28/11/05 for 8.40), eg TBC, MGQ, ZFX, just to name a few. Maybe more as time goes by

Yes also maybe u should have bought more per stock earlier so now u dont end up with heaps of stocks with lower amounts in your portfolio which may lower your average gain (although diversification is very important, just do over do it) eg RCD maybe buy 4000 instead of 2000 as you said in Oct 04 for $4.96

Michael,

I am deeply indebted to you for taking such a persistent interest in my investments.

However, I would point out that what may seem like "better" opportunities to you may not necessarily fit into my investing criteria, one of which is a good and reliable yield.


For example in the stocks you mention:

TBC: Simply just not "up there" with the stocks I want to be in.
With a dividend yield of 3% it is well below the sector average of 4.9%.

MGQ: There are other property trust type vehicles with much better yield
than 4.5% - the sector is 7.2%.

ZFX: I do not want any more resource stocks in my portfolio.

RCD: (the stock which seems to have attracted so much of your interest)
I'm quite happy with 2000.
It has a dividend yield of 4.1% compared to the sector at 3.7%.

Julia

 

[michael_selway]

Michael,

I am deeply indebted to you for taking such a persistent interest in my investments.

However, I would point out that what may seem like "better" opportunities to you may not necessarily fit into my investing criteria, one of which is a good and reliable yield.


For example in the stocks you mention:

TBC: Simply just not "up there" with the stocks I want to be in.
With a dividend yield of 3% it is well below the sector average of 4.9%.

MGQ: There are other property trust type vehicles with much better yield
than 4.5% - the sector is 7.2%.

ZFX: I do not want any more resource stocks in my portfolio.

RCD: (the stock which seems to have attracted so much of your interest)
I'm quite happy with 2000.
It has a dividend yield of 4.1% compared to the sector at 3.7%.

Julia

Hi Julia, im kind of newish to investing so just curious about many ideas people had etc

Yep, those stocks i mentioned were ones that performed better than RCD since 28/11/05, but obviously in the further future who knows

Btw do you (or others) know any other shares that have pretty good sustainable yield compared to their sectors averages?

Thanks

 

[Julia]

Hi Julia, im kind of newish to investing so just curious about many ideas people had etc

Yep, those stocks i mentioned were ones that performed better than RCD since 28/11/05, but obviously in the further future who knows

Btw do you (or others) know any other shares that have pretty good sustainable yield compared to their sectors averages?

Thanks

Michael:

I guess we all have different investing philosophies depending on our goals, investment capital, age and a variety of other factors.

I'm not interested in what a bunch of stocks do during the course of a couple of weeks, rather what they will do in a couple of years. Obviously the short term trader is going to take the opposite stance.

ASF guidelines suggest we don't " offer advice " on the forum for good and obvious reasons and I wouldn't be comfortable anyway making any recommendations on shares, whether for their yield or anything else.

See your PM's.

Julia