# When do YOU sell?



## ChaoSI (17 February 2011)

okay i realise that everyone has their own selling system and what not...
for those who are willing to share I was just curious.
at what point do you sell? 
-do you reach a certain percentage? (and if so .. what percentage?)
-certain price?
-certain point on a chart?

i'm just asking... i've got a stock that i think i'll sell, and hopefully when it returns to a more orderly oscillation i'll do ssomething else.

but it's sitting at around 30%+ so yeah hence my thought to sell..

just a simple question  ( which i realise may not have simple answers)


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## burglar (17 February 2011)

ChaoSI said:


> okay i realise that everyone has their own selling system and what not...
> for those who are willing to share I was just curious.
> at what point do you sell?
> -do you reach a certain percentage? (and if so .. what percentage?)
> ...




I first asked this question of my mentor a decade ago!
He said that shares would regularly double before the days of laptops and day-traders.
What does it do since? He said maybe 40% with increased volatility!
Rene Rivkin said if a share hasn't done what you want within 6 weeks, you've picked the wrong one!
Further to this, if you compound 41.2% twice you get doubling.
Hope this helps!?


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## ChaoSI (17 February 2011)

burglar said:


> I first asked this question of my mentor a decade ago!
> He said that shares would regularly double before the days of laptops and day-traders.
> What does it do since? He said maybe 40% with increased volatility!
> Rene Rivkin said if a share hasn't done what you want within 6 weeks, you've picked the wrong one!
> ...




that is an interesting point... 2 x 20% jumps would earn more than 1 40% wouldn't it because you re-enter with more money.

but yeah basically the way i see it (through these bright naive eyes ) is that.... regular profits of 10-15% is better than a 40% that takes a couple of months ..... right?
(lol i love posting these little theories i have in my head... i always have a little fear inside that says "you're totally going to get smacked for asking that" haha:


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## burglar (17 February 2011)

ChaoSI said:


> that is an interesting point... 2 x 20% jumps would earn more than 1 40% wouldn't it because you re-enter with more money.
> 
> but yeah basically the way i see it (through these bright naive eyes ) is that.... regular profits of 10-15% is better than a 40% that takes a couple of months ..... right?
> (lol i love posting these little theories i have in my head... i always have a little fear inside that says "you're totally going to get smacked for asking that" haha:




in real life you may get a smack but here, ...
You are anonymous, hiding behind an avatar!


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## Tysonboss1 (17 February 2011)

I sell a share for three main reasons,

1, Somthing changes at the company that impacts it's ability to generate cash in a negative way.

2, Speculation from other investors pushes the price well above what I believe to be fair value making the stock dangerously high and due for a correction.

3, I have to sell somthing thats done it's job to free up cash for a new better opportunity


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## Gringotts Bank (17 February 2011)

What's the stock?


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## Tysonboss1 (17 February 2011)

ChaoSI said:


> but yeah basically the way i see it (through these bright naive eyes ) is that.... regular profits of 10-15% is better than a 40% that takes a couple of months ..... :




Warren Buffet made billions on a compounded return of 23% per year, So a 40% gain that takes a couple of months should not be seen as tying your capital up to long.

The main thing is to never have any big loses, you can accumulate enormous amounts of money earning 10 - 15% per year so long as you don't suffer any terrible loses.


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## ChaoSI (17 February 2011)

Gringotts Bank said:


> What's the stock?




CBA



Tysonboss1 said:


> Warren Buffet made billions on a compounded return of 23% per year, So a 40% gain that takes a couple of months should not be seen as tying your capital up to long.
> 
> The main thing is to never have any big loses, you can accumulate enormous amounts of money earning 10 - 15% per year so long as you don't suffer any terrible loses.




excuse the stupid question .. i know what compounded means when it comes to interest... so for that statement you mean that he gained 23% every year which he no doubt reinvested... and then ended up with billions?


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## burglar (17 February 2011)

ChaoSI said:


> ... you mean that he gained 23% every year which he no doubt reinvested... and then ended up with billions?




Warren Buffett is currently the second richest man in the world behind a Mexican Drug Lord!

You could Youtube then search for Warren Buffett, I would suggest it is mildly entertaining and very illuminating.


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## burglar (17 February 2011)

ChaoSI said:


> CBA ...




So your fundamental is the bounce in financial sector, post GFC I

Where do you see it going?


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## Tysonboss1 (17 February 2011)

ChaoSI said:


> CBA
> 
> 
> 
> excuse the stupid question .. i know what compounded means when it comes to interest... so for that statement you mean that he gained 23% every year which he no doubt reinvested... and then ended up with billions?




yes, thats right and with very little "trading" and zero "Day Trading", He is a value investor.


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## Tysonboss1 (17 February 2011)

ChaoSI said:


> okay i realise that everyone has their own selling system and what not...
> for those who are willing to share I was just curious.
> at what point do you sell?
> -do you reach a certain percentage? (and if so .. what percentage?)
> ...




Are you an investor or a trader


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## ChaoSI (17 February 2011)

sorry guys... all these questions coming at me like i actually know something..

Trader or an investor...
i guess i'm neither tbh i'm just flat out clueless.

it depends i suppose i mean i'm definitely not a day trader... and most of my stocks i have held for quite some time. But ultimately I would honestly say I'm neither, I'm assuming the main difference between the two would be the time scale that they hold their stocks for. If that's the case then atm i'm an investor... but then i also hope that i'll do more than 1 trade a year (especially seeing as my portfolio is small atm)

"So your fundamental is the bounce in financial sector, post GFC I"

i don't know what fundamental means in this context sorry (still working my way through the terminology here..) but i'm guessing you're saying that I'm ... using the up and downing of the banks to make money during the period? In that case I would .. suppose so. As for where I think CBA's going? I reckon (for what that's worth based on my tiny knowledge of charts) that it's nearing resistance at this point. So I'm trying to sell it now at a level that I'm happy with the profits. (i hope that was a good answer)



another question for you guys. I've never been checking my stocks constantly when the market closed and i noticed something rather odd.
I was looking at the quote for CBA on commsec keeping an eye on the prices cos it was nearing my sell point
sell was roughly 53.93 and buy was 53.92 
and after the market closed all of a sudden i noticed that the buy price was 56 all of a sudden .. (it's since .. changed back to 53.something)
sorry my question is all over the place but just wondering what I saw that's all

thanks.


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## Tysonboss1 (17 February 2011)

ChaoSI said:


> sorry guys... all these questions coming at me like i actually know something..
> 
> Trader or an investor...
> i guess i'm neither tbh i'm just flat out clueless.
> ...




Oh Dear, 

So what sort of analysis to you conduct to determine which stocks you should buy and and what price.

The main difference between an investor and a trader is that a trader looks to other people to generate the profit by buying somthing and hoping in a relatively short time frame he can sell that same thing for a higher price. 

Where as an investor looks to the asset it's self generate the return, A true investor goes about investing in a single stock just as they would go about buying the whole company.


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## burglar (17 February 2011)

ChaoSI said:


> sorry guys... all these questions coming at me like i actually know something..
> 
> Trader or an investor...
> i guess i'm neither tbh i'm just flat out clueless.




"Baby steps" .... read that somewhere ... great, isn't it .... I LIKE IT!
You are in a beginners forum no need to admit to anything!



ChaoSI said:


> "So your fundamental is the bounce in financial sector, post GFC I"
> 
> i don't know what fundamental means in this context sorry (still working my way through the terminology here..) but i'm guessing you're saying that I'm ... using the up and downing of the banks to make money during the period? In that case I would .. suppose so. As for where I think CBA's going? I reckon (for what that's worth based on my tiny knowledge of charts) that it's nearing resistance at this point. So I'm trying to sell it now at a level that I'm happy with the profits. (i hope that was a good answer)
> 
> thanks.



It was a good answer but not the only answer
Quoting Tysonboss1 from a previous post.
√ "Speculation from other investors pushes the price well above what I believe to be fair value"

I don't know what is fair value for CBA, but I would want to know if I was holding or selling.

My fundamental is the Chinese fuelled commodity boom. In particular, anything associated with stainless steel e.g. nickel, manganese, iron ore, molybdenum etc.

Energy is another wonderful "Fundamental" !


Cheers,
burglar


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## Gringotts Bank (17 February 2011)

ChaoSI said:


> but it's sitting at around 30%+ so yeah hence my thought to sell..




What you're saying is that you feel it's lost momentum, and that might be a good reason to sell.  Losing momentum is a very good reason to sell.  What you're really wanting to know is the future, which is unknowable, so you have to guess somehow.

ie.  If I sell now, will it go up and I miss out on gains?
or If I hold on, will it remain at +30% for another 5 years (lost opportunity).

So all you need to do is try to predict what will happen in the future.  What do you think?


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## ROE (17 February 2011)

This is the only time I sell stocks that I hold as long term investment

1. When I realise I made a mistake, I get out even at a loss

2. The stock no longer stack up to my expectation (management, balance sheet etc..)

3. When a better opportunity arise and I need the fund for it 

4. When I need the money for worthwhile causes
 (buying a new car or holiday isn't one of those,paying for my kids degree would be...)

5. I rarely sell because it gone up 100% or 500% ...CCP gone up 500% and I haven't sold....CCV up 100% still no sale but buy more...

I do trading here and there and these trading stocks as soon as I think I have enough profit I get out (could be a week, a day or a month) but that only 10-20% of my portfolio...

GFC hasnt change anything for me regarding whether I should time the market and get in/out still compounding nicely at 15% a year.


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## ChaoSI (17 February 2011)

well.. analysis... hmm.. lessee.. well i've had the stock for 3 years already (bought it when the gfc just happened so i got it cheeeep
so, I guess i'm an investor i hold middle term? though i've decided that i wanna keep a better eye on stocks that might show an orderly pattern... can't hurt i figure


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## ChaoSI (17 February 2011)

Gringotts Bank said:


> What you're saying is that you feel it's lost momentum, and that might be a good reason to sell.  Losing momentum is a very good reason to sell.  What you're really wanting to know is the future, which is unknowable, so you have to guess somehow.
> 
> ie.  If I sell now, will it go up and I miss out on gains?
> or If I hold on, will it remain at +30% for another 5 years (lost opportunity).
> ...




hahaha is that all i have to do? well.. THANKFULLY i can do that so PHEW!

um... i think that even if it hasn't lost momentum it will max out soonish, but i don't know when, and i think it'll head back down soon, so i'll cash in my fortune (such as it is) and when it returns to a level i'm happy with i'll use the extra money to reinvest again.

that's just a feeling and yes i know that you research gurus are gasping in horror and disgust but that's just the way i think..... i would usually hold out for more but i find that i always hold too long and am too greedy so this time even if i miss out on a couple more dollars i'll decide to take my profits now.




ROE said:


> This is the only time I sell stocks that I hold as long term investment
> 
> 1. When I realise I made a mistake, I get out even at a loss
> 
> ...





that's... an interesting way of things..

i've noticed a lot of you big players here have much deeper pockets... much like a trenchcoat...
whereas i'd be closer to a pair of boardies....


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## VSntchr (17 February 2011)

ROE said:


> GFC hasnt change anything for me regarding whether I should time the market and get in/out still compounding nicely at 15% a year.




With CCV, FGE and CCP your going to be able to book in a lot more than 15% for FY11 ROE 

Its the big gains like this that allow value investors to be patient...who knows, the next few months may involve sitting on cash until an opportunity arises..but because of these big gains...the average return over a number of years is sure to be pleasing!


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## robusta (17 February 2011)

ChaoSI said:


> i've noticed a lot of you big players here have much deeper pockets... much like a trenchcoat...
> whereas i'd be closer to a pair of boardies....




A lot of bigger players here (and no I am not one of them yet) started out with not much at all. 

Just get that compounding working for you and you will get there.


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## Bill M (17 February 2011)

ChaoSI said:


> another question for you guys. I've never been checking my stocks constantly when the market closed and i noticed something rather odd.
> I was looking at the quote for CBA on commsec keeping an eye on the prices cos it was nearing my sell point
> sell was roughly 53.93 and buy was 53.92
> and after the market closed all of a sudden i noticed that the buy price was 56 all of a sudden .. (it's since .. changed back to 53.something)
> ...



You need to learn about the pre market open and close, a good place to start is here:
http://www.asx.com.au/products/calclate-open-close-prices.htm

About CBA, I bought them originally in 1996 for around $10.45. Since then they have been to $66 and then through the GFC it crashed down to $26 but instead of panicking and jumping all over the place I bought more at $26, fast forward 2 years and they have doubled and throughout that whole time I got nice big juicy dividends.

I currently hold CBA and I won't be selling for a while yet. I think it has the potential to hit $60 but in reality anything can happen so in your case you must do what you feel is right. I can afford extreme ups and downs and maybe you can not.

As for selling in general, I have sold after 2 days at times because the stock went up for no reason at all and it was too easy to pick up a profit so I sold. I also sell for the same reasons as ROE, please refer to his post here. I wish you luck.


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## Julia (17 February 2011)

ChaoSI said:


> hahaha is that all i have to do? well.. THANKFULLY i can do that so PHEW!



Don't imagine you have to complicate everything to be successful.


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## ROE (17 February 2011)

VSntchr said:


> With CCV, FGE and CCP your going to be able to book in a lot more than 15% for FY11 ROE
> 
> Its the big gains like this that allow value investors to be patient...who knows, the next few months may involve sitting on cash until an opportunity arises..but because of these big gains...the average return over a number of years is sure to be pleasing!




Gain like that guarantee I get decent compounding return on the whole portfolio even during the darkest day of the market ...

I'm not really into getting massive return or get rich fast in the market, compounding will take care of that for me...

I care about capital preservation with reasonable return.... 

The Great General Sun Tsu used to say
“Invincibility lies in the defence; the possibility of victory in the Attack.”

so sit on cash and defense when there is nothing great to buy and you are invincible
when you are sure of Victory go and buy stocks


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## ROE (17 February 2011)

robusta said:


> A lot of bigger players here (and no I am not one of them yet) started out with not much at all.
> 
> Just get that compounding working for you and you will get there.




"A journey of a thousand miles begins with a single step."

Very true, most people dismissed compounding because they are too impatient
you can only start to see the real crazy effect of compounding after 10 years.

Let me demonstrate this simple concept for you  it work for me to perfection
let say your family earn 100K a year ..you can use any number... but nice round figure easy to calculate.

you stack 12% away for investment and saving...first year 12K save and assume you get average return of 7.5% a year ... most people can do better than 7.5% if they put in a bit of effort...so the journey start, by the next year you have $12,900 in saving..not hell of a lot and at this first few years your saving is far more important than your return....

fast forward 10 years, you end up with around 200K at 7.5% compound a year
now this is where the magic happen 

200K is about 2 times your income .. you need to get to two times of your family income....what's 7.5% of 200K ? that is around $15,000..

hello $15,000 is $3000 more than you save annually from 12% of your 100K
so if you keep that up you save $27,000 a year from year 11 and more than half of that come
from return on investment...if you can save more well the sky is the limit...

that why capital protection is very important, compounding don't work well with negative number 

do start small and start soon, the more time you have the better uncle compounding like you


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## So_Cynical (17 February 2011)

I sell when im comfortable selling...keeping in mind my goals, limited funds, financial objectives and tax implications...i follow my discretionary plan, im surprised that stator says that my net closed profit is only 9.16%. 

i probably shouldn't be surprised as im usually exiting at around that level....still stator also says my open profit is 23.21% so after the end of this financial year some of that open profit will get closed and bring up the closed average.

I'm planning on getting reasonably wealthy slowly...lol and its working.


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## Tysonboss1 (17 February 2011)

ROE said:


> Gain like that guarantee I get decent compounding return on the whole portfolio even during the darkest day of the market ...
> 
> I'm not really into getting massive return or get rich fast in the market, compounding will take care of that for me...
> 
> ...






ROE said:


> "A journey of a thousand miles begins with a single step."
> 
> Very true, most people dismissed compounding because they are too impatient
> you can only start to see the real crazy effect of compounding after 10 years.
> ...




Amen,

When it comes to Investing the Crock Pot Method Beats the Microwave Method.


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## ChaoSI (17 February 2011)

Bill M said:


> You need to learn about the pre market open and close, a good place to start is here:
> http://www.asx.com.au/products/calclate-open-close-prices.htm
> 
> About CBA, I bought them originally in 1996 for around $10.45. Since then they have been to $66 and then through the GFC it crashed down to $26 but instead of panicking and jumping all over the place I bought more at $26, fast forward 2 years and they have doubled and throughout that whole time I got nice big juicy dividends.
> ...




i bought it at 27... looking to sell at 54.
i only have a very tiny number of sharesso i figure i'll sell and get the profit and then just keep an eye out for anything worth getting.

i envy you the 10.45 shares dude, if i had a stash of those then yeah i'd definitely be jsut sitting on them and adding it with every dip... but then... if i had a stash of shares at that price... i would've been one seriously savvy 12 year old 

thanks for the responses guys! given me a lot to think about..
and thanks for the buffet vid too, it's brilliant how he distills his knack for it down to very simple key concepts...


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## Tysonboss1 (18 February 2011)

ChaoSI said:


> .
> 
> i envy you the 10.45 shares dude, if i had a stash of those then yeah i'd definitely be jsut sitting on them and adding it with every dip... but then... if i had a stash of shares at that price... i would've been one seriously savvy 12 year old




Would you you have had the patience to keep the shares and not sell them for 14 years.
Or when they got to $20 would you have sold them because they had gone up 100%. 

Maybe in another 14 years they will be worth $250, and you can tell people the story how you once bought CBA shares for $27, But you sold at $54 cause you doubled your money. Who knows what the future will bring.

But to me selling just because the shares have gone up ( if that is your only reason ) is a poor reason to sell.


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## burglar (18 February 2011)

ChaoSI said:


> ... (bought it when the gfc just happened so i got it cheeeep ...




I've so enjoyed this thread, I read it more than once!! Hint.

Since you got them so cheeeep, and the yield is on the purchase price, how did you do on dividends? 
They must be really good, I'm guessing!
And did you reinvest them???


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## Wysiwyg (18 February 2011)

Tysonboss1 said:


> Where as an investor looks to the asset it's self generate the return, A true investor goes about investing in a single stock just as they would go about buying the whole company.



I notice the day after you posted a Roger Montgomery video about the bad business of Qantas, Qantas posted "underlying earnings before interest and tax  rose 175 per cent on last year’s first half". Would a value investor consider Qantas now or perhaps wait to see if consistent year on year profits roll in? The latter meaning paying probably much higher prices if awaiting confirmation. Can a value investor ever buy into a bad company and if so what would be the stop out criteria. A percentage loss or maybe one, two or three bad reports for example.


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## AlterEgo (18 February 2011)

ROE said:


> you stack 12% away for investment and saving...first year 12K save and assume you get average return of 7.5% a year ... most people can do better than 7.5% if they put in a bit of effort...so the journey start, by the next year you have $12,900 in saving..not hell of a lot and at this first few years your saving is far more important than your return....
> 
> fast forward 10 years, you end up with around 200K at 7.5% compound a year
> now this is where the magic happen
> ...




Sorry, but these simplistic calculations are simply not achievable in the real world. It really annoys me when I see calculations such as this to show how great compounding interest is. Everyone always forgets to include *tax *and *inflation *in their calculations. If you include tax and inflation, your 7.5% return would be more like 1.5%.

7.5% of 200K is 15K, as you say, but you have to pay tax on that, so lets say you're on the 38% tax bracket, that only leaves you with $9,300 of that 15K. So you're only really making 4.65% on your 200K. But wait, there's more - don't forget inflation. Lets say long term inflation is around 3%, so that leaves you with an effective return of only 1.65%. Doesn't look so good now, does it?


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## Tysonboss1 (18 February 2011)

Wysiwyg said:


> I notice the day after you posted a Roger Montgomery video about the bad business of Qantas, Qantas posted "underlying earnings before interest and tax  rose 175 per cent on last year’s first half". Would a value investor consider Qantas now or perhaps wait to see if consistent year on year profits roll in? The latter meaning paying probably much higher prices if awaiting confirmation. Can a value investor ever buy into a bad company and if so what would be the stop out criteria. A percentage loss or maybe one, two or three bad reports for example.




I would want to see evidence of consistent profitability and a decent return on equity.

The airline business by it's very nature is a boom bust industry, Fluctuating passenger Volume and Oil Prices, Constant Price Wars and increased competition. I can't see any airline having a durable competitive advantage. I personally avoid this sector, I would be much more likly to buy the airport rather than the airline.


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## Tysonboss1 (18 February 2011)

AlterEgo said:


> Sorry, but these simplistic calculations are simply not achievable in the real world. It really annoys me when I see calculations such as this to show how great compounding interest is. Everyone always forgets to include *tax *and *inflation *in their calculations. If you include tax and inflation, your 7.5% return would be more like 1.5%.
> 
> 7.5% of 200K is 15K, as you say, but you have to pay tax on that, so lets say you're on the 38% tax bracket, that only leaves you with $9,300 of that 15K. So you're only really making 4.65% on your 200K. But wait, there's more - don't forget inflation. Lets say long term inflation is around 3%, so that leaves you with an effective return of only 1.65%. Doesn't look so good now, does it?




I am sorry but you sir are wrong and have used simplistic calculations.

If you include franking on dividends and the fact that capital gains tax is differed until the sale and then discounted by 50%, you tax figure is much lower.

And secondly, the 7.5% figure is already such a conservative figure that you could suggest it allows for inflation already.


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## MACCA350 (18 February 2011)

Tysonboss1 said:


> I am sorry but you sir are wrong and have used simplistic calculations.
> 
> If you include franking on dividends and the fact that capital gains tax is differed until the sale and then discounted by 50%, you tax figure is much lower.
> 
> And secondly, the 7.5% figure is already such a conservative figure that you could suggest it allows for inflation already.



 Pretty sure the example was referring to a bank interest account, not shares, in which case it's a reasonable statement.

Cheers


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## Tysonboss1 (18 February 2011)

MACCA350 said:


> Pretty sure the example was referring to a bank interest account, not shares, in which case it's a reasonable statement.
> 
> Cheers




The original example given by ROE, on which he was commenting on was actually refering to a share investment. Roe was using an index average gain in his example.


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## AlterEgo (18 February 2011)

MACCA350 said:


> Pretty sure the example was referring to a bank interest account, not shares, in which case it's a reasonable statement.
> 
> Cheers




Yes, that's how I read it - that he was referring to bank interest.


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## AlterEgo (18 February 2011)

Tysonboss1 said:


> The original example given by ROE, on which he was commenting on was actually refering to a share investment. Roe was using an index average gain in his example.




Well even if that's the case, he has still failed to take tax and inflation in to consideration. Even if the tax paid is less than in my simple calculations, it should still not be overlooked as it can make a considerable difference to the results.


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## Buckfont (18 February 2011)

ChaoSI said:


> i bought it at 27... looking to sell at 54.
> i only have a very tiny number of sharesso i figure i'll sell and get the profit and then just keep an eye out for anything worth getting.
> 
> i envy you the 10.45 shares dude, if i had a stash of those then yeah i'd definitely be jsut sitting on them and adding it with every dip... but then... if i had a stash of shares at that price... i would've been one seriously savvy 12 year old
> ...




ChaoSI, I know it a temptation to want to sell, but if you can hang in there, there can be rewards. A 27c share can reach A $1.00 or more if its a solid company with potential upside.

As an example my av. buy on BHP is $3.04, RIO, $17.81 and CBA $8.93. So over many years and through all the financial fluctations all is well. Best of luck.


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## kermit345 (18 February 2011)

AlterEgo said:


> Well even if that's the case, he has still failed to take tax and inflation in to consideration. Even if the tax paid is less than in my simple calculations, it should still not be overlooked as it can make a considerable difference to the results.




If your going to take Inflation into account, then what about inflation of the amount that the family is putting in as well? Their Income is going to increase over time so if they maintain 12%, even if their wages only go up by inflation, your partially counter-acting the inflationary effect on your returns within the account.

Also note, he said family, so you could take this any way you like, which means they could possibly earn 50k each as a mum and dad, lowers the tax bracket slightly. I agree the example was simplistic, but there is also no limitation to the complexity that you can take with it as well. At the end of the day ROE is simply expressing that compounding interest or a return can make a difference over the long term. Also, correct me if i'm wrong, but isn't there now a tax-free portion of interest earned in a bank account to encourage people to have some savings? From memory I believe it was the first $1,000 of interest is tax-free, however I could be wrong here, anyone able to clarify?


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## ROE (18 February 2011)

Wysiwyg said:


> I notice the day after you posted a Roger Montgomery video about the bad business of Qantas, Qantas posted "underlying earnings before interest and tax  rose 175 per cent on last year’s first half". Would a value investor consider Qantas now or perhaps wait to see if consistent year on year profits roll in? The latter meaning paying probably much higher prices if awaiting confirmation. Can a value investor ever buy into a bad company and if so what would be the stop out criteria. A percentage loss or maybe one, two or three bad reports for example.




This is an advice I gave to one of my friend...some years ago when private equity try to take over  qantas and they are making record profits....

I told him dont tempt by short term profit, long term you WILL pay

Here are my reasons ... 

1. Cost of labour up 

2. Cost of fuel up 

4. Fix cost are extremely high

3. Very sensitive to hundred of disaster (weather, terror, down turn, accidents)
   and this will kill your earning...

5. The only thing that make its money is ticket price and it going down each year 

there is serious flaw in the business model

lucky for my friend he didnt buy any Airlines and he never will either.

I rather own business where they have the power to increase price and bring cost down 

I never own airlines I dont care if you are uncle monopoly and have the world cover 
the business model is flaw


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## ROE (18 February 2011)

AlterEgo said:


> Sorry, but these simplistic calculations are simply not achievable in the real world. It really annoys me when I see calculations such as this to show how great compounding interest is. Everyone always forgets to include *tax *and *inflation *in their calculations. If you include tax and inflation, your 7.5% return would be more like 1.5%.
> 
> 7.5% of 200K is 15K, as you say, but you have to pay tax on that, so lets say you're on the 38% tax bracket, that only leaves you with $9,300 of that 15K. So you're only really making 4.65% on your 200K. But wait, there's more - don't forget inflation. Lets say long term inflation is around 3%, so that leaves you with an effective return of only 1.65%. Doesn't look so good now, does it?




I just demonstrate a simple concept of compounding and saving and 7.5% is fairly conservative figure....

of course there are many reasons you can come up with not do it

tax, inflation, recession, down turn, market crash, properties market goes no where
the boom is over, the bear is here to stay 

10 years ago I have the same argument with a friend regarding rents and owning your own home 

I went ahead and bought my place, he rent (cheaper, no rate, can move any where he want, can get better return from spare money not paying into the mortgage, the list is endless of possibilities)

10 years later he got nothing but face increase rental cost....I live rent free for the rest of my life ....

From my experience the guys that has very little clue about finance and take conservative approach usually win out against the highly 

knowledgeable people with high income because they can come up with many ways to save on tax, invest in different assets for better return 

I know a bunch of people on extremely ordinary salary, yet they own their own place and have got a fair bit in saving... they aren't too smart with come up with many scheme to get better return.

they just slug away 10-15% of their pay each month and let the world take care of itself...


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## Sir Osisofliver (18 February 2011)

ChaoSI said:


> i bought it at 27... looking to sell at 54.
> i only have a very tiny number of shares so i figure i'll sell and get the profit and then just keep an eye out for anything worth getting.
> 
> i envy you the 10.45 shares dude, if i had a stash of those then yeah i'd definitely be jsut sitting on them and adding it with every dip... but then... if i had a stash of shares at that price... i would've been one seriously savvy 12 year old
> ...




This is a very telling statement Chaosi - I think you need to become more aware of the cyclical nature of the share market and economic cycles.  This might make your brain more squishy but I hope it will help. Cycle analysis is a topic all of it's own and I one I really should put into the newbie thread when I get some time, but here is a quick flyover...


You are holdng CBA which you purchased at a good price *after* a major corrective cycle of the market.  Notice I used the word *cycle*...because corrective cycles are regular events. I can say with 100% confidence that *It'll happen again at some point in the future.* If you were to look at our market over the extreme long term you will notice that, on average, corrective cycles happen every 6.8 years with varying degrees (or amplitudes) of correction. Some corrections are deeper than others. Some bull runs are longer than others.

So what causes the cycles to look different? Why aren't they as regular as clockwork? Why can't we predict them precisely?

The market is an expression of the aggregate of several* different *cycles. These individual cycles which are correlated to the broader cycle in varying amounts have their own degrees of amplitude phase and period. (Amplitude is the depth of swing, Phase is the midpoint of the sine wave, Period as the name suggests is the overall length of the cycle). Examples are the interest rate cycle, exchange rate cycle, commodity cycle, unemployment cycle etc etc. With the market being an *aggregate* expression of these individual cycles it's only when *most or all* of these cycles move in the same negative direction that a correction in the broader market and economy occurs.

This means that each cycle looks *slightly different* to all other cycles, but doesn't change the *fact* that the cycle will go through a period of boom and bust. Our market rises 80% of the time, leaving 20% of the time for corrective patterns to occur.

Why do I mention this?

You've purchased a stock I would consider to be a blue chip core portfolio stock *early in the cycle.* If you agree with the assumptions that... *if* the average length of the cycle is 6.8 years, *and* the bottom of the market was March 2009... we are only two years into the cycle which has an average length of 4.8 years left to run before the next correction.

Here's the kicker...because of the nature of the cycle, the greatest increase in price occurs in *the last third of the cycle*. (This is a general rule - not an absolute - Individual stocks can always have variations in price caused by individual circumstances). 

So the question becomes...what does continuing to hold CBA COST you? Perhaps continuing to hold CBA may cost you the opportunity to invest in a stock that will return significantly higher (because growth stocks that are sensitive to these cycles *really* kick on in the last part of the cycle). You need to decide whether this opportunity cost is worthwhile to you - and this will determine whether you are an *investor* or a *trader*.

Hope that helps.

Cheers

Sir O


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## tech/a (18 February 2011)

*Sir O*

Been watching the thread with great interest and havent/dont at the moment ---have the time to devote to a proper response from a technical stand point.

However some terrific comments re long term holding and the resultant excellent profit opportunity and the prospect of using the power of Compounding---leverage is also not to be over looked. I am in complete agreeance on these.

Comments on cycles also pertinent.

But I cant help but ask WHY it seems that there need to be a distinct catagorisation of "Trader" or "Investor"

For the life of me *I cannot understand why *an experienced investor would not maximise his investment by taking control of it and *Trading that investment.*

CBA clearly demonstrates and has demonstrated this possiblility for months---as an example.


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## ChaoSI (18 February 2011)

burglar said:


> I've so enjoyed this thread, I read it more than once!! Hint.
> 
> Since you got them so cheeeep, and the yield is on the purchase price, how did you do on dividends?
> They must be really good, I'm guessing!
> And did you reinvest them???




hahah yes burg, i did and have reinvested... and i guess i'm going to be doing that a lot more  judging by the input i've been getting, Some serious thinking needing to be done.. I guess i'm just a bit too enthusiastic about getting into it... and of many things.. getting into this game is something that cannot be rushed at all...
it's nice to be brought up short and i'm seriously thankful for the feedback to keep me grounded.



Tysonboss1 said:


> But to me selling just because the shares have gone up ( if that is your only reason ) is a poor reason to sell.






Buckfont said:


> ChaoSI, I know it a temptation to want to sell, but if you can hang in there, there can be rewards. A 27c share can reach A $1.00 or more if its a solid company with potential upside.
> 
> As an example my av. buy on BHP is $3.04, RIO, $17.81 and CBA $8.93. So over many years and through all the financial fluctations all is well. Best of luck.




Edit: With your shares for these holdings, i'm guessing that altho the original buy price is that, you've accumulated more during the gfc and other troughs and that the avg price is higher now? (if you don't mind me asking)



Sir Osisofliver said:


> So the question becomes...what does continuing to hold CBA COST you? Perhaps continuing to hold CBA may cost you the opportunity to invest in a stock that will return significantly higher (because growth stocks that are sensitive to these cycles *really* kick on in the last part of the cycle). You need to decide whether this opportunity cost is worthwhile to you - and this will determine whether you are an *investor* or a *trader*.
> 
> Hope that helps.
> 
> ...




i do have some notion of the cyclic nature of economies in general, but yeah i wasn't thinking in the long term, and you're right holding and watching the price rise costs me nothing... and in reality (i'd like to think) that i'll be around for the trough in the cycle..

Anyway, i sense that these are all linked. A lot is dependent on whether I decide to be and Investor or a trader it seems. I'm guessing that this is large part due to the share i'm talking about.. "blue chip" and all and the fact that , really it's not going to be going anywhere except up over the long term (hopefully).

okay i'm not asking for advice so i'll phrase it this way, 
the general impression that i'm getting is that, as an alternative option for me selling, (which in my ignorance i've down previously, so that the avg price is now actually $40)
 is to hold onto this particular stock use the DRP and buy more when the opportunity arrives and basically amass an increasingly large holding in this stock with the view of selling only if i should need the funds at a much later date? because if i sell now at double, i'll be kicking myself in x years time when it could potentially be worth many times over that?


considering the type of company i'm talking about here, i can see why the numerous points about not selling.

at this stage then. financials account for about 85% of my entire portfolio, seeing as ANZ is in the same boat as CBA ... quantities for those two really shouldn't be decreased, just increased... the other being MQG

the remaining portion is in older stocks that are seriously in the red at the moment. so really all things considered there's really not much i can do with portfolio at the moment, would that be a correct surmise?


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## kermit345 (18 February 2011)

ChaoSI said:


> hahah yes burg, i did and have reinvested... and i guess i'm going to be doing that a lot more  judging by the input i've been getting, Some serious thinking needing to be done.. I guess i'm just a bit too enthusiastic about getting into it... and of many things.. getting into this game is something that cannot be rushed at all...
> it's nice to be brought up short and i'm seriously thankful for the feedback to keep me grounded.
> 
> 
> ...




Theres not really a straight up and down answer with regards to what you should do. There is absolutely nothing wrong with selling, remember if you just hold onto your shares that whole time and simply accumulate on the dips, then your missing out on possibly selling high and re-investing all your capital on a dip which will then provide you even more shares then just accumulation.

Theres no perfect answer, you need to find what suits your style and how much time you can devote to it as well. I don't really have the time to give the long winded version, but you can't just let it sit in CBA because its a good company now, things could change at any stage.


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## tech/a (18 February 2011)

tech/a said:


> *Sir O*
> 
> But I cant help but ask WHY it seems that there need to be a distinct catagorisation of "Trader" or "Investor"
> 
> ...




Which leads to *EXACTLY* my point.



> the remaining portion is in older stocks that are seriously in the red at the moment so really all things considered there's really not much i can do with portfolio at the moment, would that be a correct surmise?




A situation which I really feel you shouldnt "think" your in.
The market is in complete control and you are sacraficing control of your investments to the market---after all a loss isnt a loss until you sell it----*RIGHT??*


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## Sir Osisofliver (18 February 2011)

tech/a said:


> *Sir O*
> 
> Been watching the thread with great interest and havent/dont at the moment ---have the time to devote to a proper response from a technical stand point.
> 
> ...




I can think of a couple of reasons..

1) Time? I mean you and I like this stuff. We have time to invest in the markets because our employment allow us to do so. If you were a Doctor or any other professional working an 80 hour week however - how much time do you have to devote to a *trading* system and plan, yet alone spend the time in learning *how* to do it, plus actually have a life, plus be free and able to trade when the market is open? When do you learn the importance of the activity or do you think it is all too hard and the "I'll just pay someone to do it for me?" mentality sets in.

I set up my core portfolio early in the cycle, ensure it's cash flow positive, maybe look at increasing my core positions once or twice and then I *leave it alone*. It doesn't need me to do anything with it and its a waste of my time to try and look over all those positions to see if I could squeeze some extra out of it given that the average performance of the market is 220% from trough to peak over the last six cycles of our market. It'd be a waste of my time, which could be better spent concentrating on on my non-core and trading positions.

2) Mentality - As you are aware I have property and equity investments. For the equities I have core - non-core - and trading.  The core assets I have are "blue chip" core portfolio stocks that I intend on holding for an extremely long term - over multiple cycles. I barely need to look at these stocks and can glance over them or do a bit of research on them every six months and be reasonable satisfied that I am taking as little risk as possible in the positions.  <- These stocks I think of investments, therefore I am an Investor. 

If you think of a scale with Investor on one end and trader on the other... non-core stocks sit in the middle.  I'll watch them with much greater diligence than the core stocks, and depending on analysis I *may* actively move into and out of the position based on that analysis. <- These I think of as Active Investing

Trading stock - Short term, systematic trading. I have the potential to earn significant percentage returns in this sections. A LOT more than non-core or core. Compounding at 10%-15%-20% a month in here means that the funds grow quickly - but if I were to put *all* my eggs into this basket I would do nothing but do this. I know it seems that using a million dollars with leverage in here is no different to using 10+ million with leverage but that is not how my trading system works. My system is more efficient with less funds in it, I don't have issues with slippage or liquidity which erode my consistency and turn my positive expectancy system into a neutral one. (It took me a while to figure out why my equity curve plateau'd). Trading for a living (Whilst I know a lot of people strive to learn how to do this)... is boring, repetitive, lonely and gives me no job satisfaction. <- these I think of as Trading, therefore I am a trader.

Clear?

Cheers 
Sir O


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## Julia (18 February 2011)

tech/a said:


> [
> But I cant help but ask WHY it seems that there need to be a distinct catagorisation of "Trader" or "Investor"
> 
> For the life of me *I cannot understand why *an experienced investor would not maximise his investment by taking control of it and *Trading that investment.*
> ...



Agree.  The determination of many to need to classify as trader or investor simply seems unnecessary.   



kermit345 said:


> remember if you just hold onto your shares that whole time and simply accumulate on the dips, then your missing out on possibly selling high and re-investing all your capital on a dip which will then provide you even more shares then just accumulation.



Exactly.


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## Sir Osisofliver (18 February 2011)

tech/a said:


> Which leads to *EXACTLY* my point.
> 
> 
> 
> ...






ChaoSI said:


> Anyway, i sense that these are all linked. A lot is dependent on whether I decide to be and Investor or a trader it seems. I'm guessing that this is large part due to the share i'm talking about.. "blue chip" and all and the fact that , really it's not going to be going anywhere except up over the long term (hopefully).



 Two things. 1) *Any* stock is 12 bad news items away from bankruptcy. 2) Those are only the way I define them. Get it clear in your head and define them how you want.







> okay i'm not asking for advice so i'll phrase it this way,
> the general impression that i'm getting is that, as an alternative option for me selling, (which in my ignorance i've down previously, so that the avg price is now actually $40)
> is to hold onto this particular stock use the DRP and buy more when the opportunity arrives and basically amass an increasingly large holding in this stock with the view of selling only if i should need the funds at a much later date? because if i sell now at double, i'll be kicking myself in x years time when it could potentially be worth many times over that?



 I generally don't like DRP's - I like to control when I put money into something and prefer to use the dividend stream to pay the leveraging cost.


> the remaining portion is in older stocks that are seriously in the red at the moment. so really all things considered there's really not much i can do with portfolio at the moment, would that be a correct surmise?




With the one's in the red...are they "core" stocks? If they are, what you lacked during the GFC was risk management. With the loss of the opportunity to protect these assets, it's up to you whether you think actively trading them will result in a better outcome for you. It *may* be worthwhile to liquidate and use these funds to select stocks lower that are non-core and can be actively traded.

Cheers

Sir O


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## tech/a (18 February 2011)

*Sir O*

The question was not one directed at you and your investments.
More so to those who are not as Savvy as yourself.
Your reply does answer to some degree the feelings of some.

I would however question (after the GFC and the resultant recovery) the wisdom in leaving it in the hands of "some" professionals.

If your putting your financial future at risk through others particularly at the time when you wont be in a position to replenish it---late in life---I really question this wisdom---regardless of hrs worked!


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## Tysonboss1 (18 February 2011)

tech/a said:


> *Sir O*
> 
> But I cant help but ask WHY it seems that there need to be a distinct catagorisation of "Trader" or "Investor"
> 
> ...




You can Be both, But I do think you have to have different accounts for the two operations and wear different caps when making dicisions regarding each account.


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## Tysonboss1 (18 February 2011)

Julia said:


> Agree.  The determination of many to need to classify as trader or investor simply seems unnecessary.
> 
> 
> .




Considering that Trading and Investing are two completely different things, why would you not make the distinction. I think it is very applicable to this thread, which is about when to sell.


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## ChaoSI (18 February 2011)

i was wondering when somebody would point out the 'other' side.

so really as a trader i would sell the stock ( not necessarily CBA say) take the profit and use the extra capital to reinvest at a later date (even if it might be at a higher price) because you're not playing for large point gains over a long term, more likely just short gains over the short term compounding more regularly. yes?

vs and investor who will continue to add to the quantity of stock that they have and then when the time is right sell ( for whatever reasons it may be, i'm just saying sell cos otherwise there's no change and the stock continues to be held) making a large profit because of the price difference several cycles ago vs the price now (eg the $2 1992 price vs the blah.. 2020 $80 price)


i understand the logic behind both of these positions and naturally Sir O has the right in saying that doing it properly no doubt takes a much higher level of effort, vigilance and competence to pull off correctly. But just in my situation one of the reasons why I was looking at the sell in the first place was because I have so few shares at this point in time.

so for you guys who have ... i dunno.. several thousand of (continuing with ) CBA the having a change from the average purchase price of say $22(?) dollars and then a (whenever) sell price of say $62. Then that's your glorious profit of $40 per share equalling a person's yearly income in a single sale. However i have less than 50 right now.. and even if the price were to blow out to the same level, with my entry price, that's a gain of $22 per share, meaning... a gain of ... less than $1k ?
Had i the savvy earlier in life to purchase and play with stocks back then.. and accumulate say several hundred of these, I'd no doubt be thinking to hold etc. But with so few right now .... i'm not so sure (which is what prompted the post in the first place)

see for anz i have a few more shares, 3 digits at least, so holding them to me doesn't sound that bad at all.
I'm not saying that now is the best time in the cycle or whatever to sell because really I'm barely a novice right now, I'm asking this from a practical standpoint....



tech/a said:


> A situation which I really feel you shouldnt "think" your in.
> The market is in complete control and you are sacraficing control of your investments to the market---after all a loss isnt a loss until you sell it----*RIGHT??*



Naturally i don't want to be in this situation of being in the red, and I have considered the dilemma or whether I should just take the loss ( a rather large one considering the size of my portfolio) and make the paper loss a real loss, reinvesting and using the money elsewhere. However the true dilemma here would be whether I have the skill, or the time in order to use this money to the best of its ability. My verdict on this has been, the money's been there so long anyway, and because my knowledge is completely insufficient at this stage there's no point in taking the real loss when I can't be sure i can do anything productive with it yet.



Sir Osisofliver said:


> With the one's in the red...are they "core" stocks? If they are, what you lacked during the GFC was risk management. With the loss of the opportunity to protect these assets, it's up to you whether you think actively trading them will result in a better outcome for you. It *may* be worthwhile to liquidate and use these funds to select stocks lower that are non-core and can be actively traded.



to this i will disagree, not because i'm some closet whizz kid but I'm not going to be hard on myself here. What i lacked was a/ knowledge and b/ interest in these things during this time. These were bought by someone else for me then, and i had no interest in keeping with it or anything to do in the share market.


sorry for the massive post.
I'm really enjoying this discussion though.


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## burglar (18 February 2011)

ChaoSI said:


> ... I'm really enjoying this discussion though.




  ... Me too!


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## Tysonboss1 (18 February 2011)

ChaoSI said:


> But just in my situation one of the reasons why I was looking at the sell in the first place was because I have so few shares at this point in time.
> 
> However i have less than 50 right now.. and even if the price were to blow out to the same level, with my entry price, that's a gain of $22 per share, meaning... a gain of ... less than $1k ?




At your Stage your best effort should be put into managing your personal finances and creating a situation where you can spend less than you earn and grow your capital base through savings, in the early stages this will provide much better results than micro managing your investments.


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## tech/a (18 February 2011)

> and make the paper loss a real loss




I'm afraid that it is a real loss---right now.
It is the liquidated value of your portfolio at this instant.
Just as open profit *IS* your money.---I often here---I'm playing with "Their" money---!!

Illt a chart tonight and mark up what I mean.
I'm certainly* NOT *talking short term trading in an investing situation.



> Considering that Trading and Investing are two completely different things, why would you not make the distinction. I think it is very applicable to this thread, which is about when to sell.




Could do but dont think you have to.
Ill explain tonight.


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## Sir Osisofliver (18 February 2011)

tech/a said:


> *Sir O*
> 
> The question was not one directed at you and your investments.
> More so to those who are not as Savvy as yourself.
> ...




Well you know I'm detail orientated (read anal retentive) and like to have control. You also know my opinion of most "professionals" so we are in agreement there. But my feeling is that it doesn't require a great degree of education or time to manage a portfolio of core assets. 


> If your putting your financial future at risk through others particularly at the time when you wont be in a position to replenish it---late in life---I really question this wisdom---regardless of hrs worked!




Yeah *always* maintain control - its one of the things I tell people is to how to recognize good advice from bad, but trying to do everything yourself can be tricky - especially for newbies.


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## tech/a (18 February 2011)

Sir Osisofliver said:


> Yeah *always* maintain control - its one of the things I tell people is to how to recognize good advice from bad, but trying to do everything yourself can be tricky - especially for newbies.




I'll demonstarte what I believe to be a very simple way of controlling your investment and Minimise risk while Increasing reward.

It works really well with BOTH leverage AND Compounding.

Will use CBA as an example.
I agree with those who look at Core and Non core investments--In the SAME stock--but with a twist.

Until later.
Have to DUCK out!


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## ChaoSI (18 February 2011)

Tysonboss1 said:


> At your Stage your best effort should be put into managing your personal finances and creating a situation where you can spend less than you earn and grow your capital base through savings, in the early stages this will provide much better results than micro managing your investments.




That's assuming 2 things
1/ that i have an income ( i do but just pointing it out)
2/ that i don't already spend less than i earn ( which i do)

so if that's the case then *hypothetically* wouldn't it be reasonable to try and earn more money if there's a chance?



tech/a said:


> Until later.
> Have to DUCK out!




oh gawd.....so horribly awesome


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## Sir Osisofliver (18 February 2011)

ChaoSI said:


> i was wondering when somebody would point out the 'other' side.
> 
> so really as a trader i would sell the stock ( not necessarily CBA say) take the profit and use the extra capital to reinvest at a later date (even if it might be at a higher price) because you're not playing for large point gains over a long term, more likely just short gains over the short term compounding more regularly. yes?




Close enough. Don't forget that compounding can be negative as well (Ie a string of losses - can't get em right all the time). 







> vs and investor who will continue to add to the quantity of stock that they have and then when the time is right sell ( for whatever reasons it may be, i'm just saying sell cos otherwise there's no change and the stock continues to be held) making a large profit because of the price difference several cycles ago vs the price now (eg the $2 1992 price vs the blah.. 2020 $80 price)



 Yeah thats how I like to conceptualize it.







> i understand the logic behind both of these positions and naturally Sir O has the right in saying that doing it properly no doubt takes a much higher level of effort, vigilance and competence to pull off correctly. But just in my situation one of the reasons why I was looking at the sell in the first place was because I have so few shares at this point in time.



 30% on a $1000 investment is still 30% whether that investment is made holding 50 shares or 50,000 shares of the underlying. I wouldn't get hung up on the number of shares you have, just think of it as the size of the position and whether it is weighted to do what you want to achieve. Berkshire Hathaway shares trade at $127,440 USD - do you think you need lots of them to make a profit? 







> to this i will disagree, not because i'm some closet whizz kid but I'm not going to be hard on myself here. What i lacked was a/ knowledge and b/ interest in these things during this time. These were bought by someone else for me then, and i had no interest in keeping with it or anything to do in the share market.
> 
> sorry for the massive post.
> I'm really enjoying this discussion though.




So move forward with education. Don't deride yourself about the past - you can't change it, just move on - but move on *knowing* the reasons why you are making your decision.

Cheers

Sir O


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## ChaoSI (18 February 2011)

Sir Osisofliver said:


> 30% on a $1000 investment is still 30% whether that investment is made holding 50 shares or 50,000 shares of the underlying. I wouldn't get hung up on the number of shares you have, just think of it as the size of the position and whether it is weighted to do what you want to achieve. Berkshire Hathaway shares trade at $127,440 USD - do you think you need lots of them to make a profit?
> 
> Sir O




naturally 30% remains constant regardless. but 30% of 1000 is a lot different from 30% of 100 000. and just looking at it in terms of time held vs amount gained.

my goal this year is to increase the portfolio (through profits, not counting me putting say my piggy bank money in)

and i'm not berating myself over the lack of education just acknowledging it that's all


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## Tysonboss1 (18 February 2011)

ChaoSI said:


> That's assuming 2 things
> 1/ that i have an income ( i do but just pointing it out)
> 2/ that i don't already spend less than i earn ( which i do)
> 
> so if that's the case then *hypothetically* wouldn't it be reasonable to try and earn more money if there's a chance?




So if your spending less than you earn, your generating savings, why is your portfolio so small.

All I am saying is when you have a really small portfolio, you may get ahead quicker by tweaking your earning/spending habits rather than your investment habits.


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## Tysonboss1 (18 February 2011)

ChaoSI said:


> naturally 30% remains constant regardless. but 30% of 1000 is a lot different from 30% of 100 000. and just looking at it in terms of time held vs amount gained.
> 
> my goal this year is to increase the portfolio (through profits, not counting me putting say my piggy bank money in)
> 
> and i'm not berating myself over the lack of education just acknowledging it that's all




The dividends are a continuous profit stream, to me it's ok if the capital gains are lumpy. If fact all though it is pleasing to see the share price of companies I own rise because it gives me positive feed back that I was right in my ideas about the company, 

I would much rather see lower prices, I over time I would do better if the stock price fell, or atleast stagnated for a longer period.

Your goal might be to increase your portfolio through profits, but the stock market doesn't care what your plan is. A portfolio of Good Businesses bought at good prices *WILL* produce good returns, without fail over time. But in such a short period as 1 year very little changes compounding takes time. 

Remember compounding has to happen inside the company before you lasting results in the shareprice.


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## ChaoSI (18 February 2011)

Tysonboss1 said:


> So if your spending less than you earn, your generating savings, why is your portfolio so small.
> 
> All I am saying is when you have a really small portfolio, you may get ahead quicker by tweaking your earning/spending habits rather than your investment habits.




Like I said before I wasn't interested until recently. Besides just cos there's savings doesn't mean I wanna put it all into shares no? Right now I've put in what I've wanted to with a view of maybe adding more later. The question isn't about what I wann add to it now it's about deciding what to do with what I already have. The impression that I'm getting is that you're saying if I have a small portfolio there's nothing I can do with it.... Which isn't true of course. What may be too small for you might just be what I can manage?


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## Market Depth (18 February 2011)

Nothing wrong with sellng a stock for a profit, no matter what the stock is, or what the profit amount is. You'll never go broke whilst making a profit. You could for example, just sell your initial purchase amount, and leave the remaining on the table, and use the money to buy into another opportunity, and it may well do well, and you can do it again. The flip side is it may not do so well, hence you'll need to make another decision about selling. The more stock you have the more selling decisions you'll have to learn to make.

Selling can be the hardest decision to make. Theres's no 'Black and White' answer to say when, everybody will be different. There's only one person you need to make happy about the decisions and that's yourself.


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## Myse (18 February 2011)

This is a commonly asked question, but generally, in my opinion, if you are satisfied with your profit margin on your stock, I'd realise that profit straight away and either wait for another opportunity to come by or use your increased capital and trade other stocks you've had an eye on. 

You should consider that, even though you're up 20% or 30% etc. it's all JUST on paper, your profit has not been realised yet! Always consider that. 

Hope that helps.


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## Tysonboss1 (18 February 2011)

ChaoSI said:


> Like I said before I wasn't interested until recently. Besides just cos there's savings doesn't mean I wanna put it all into shares no? Right now I've put in what I've wanted to with a view of maybe adding more later. The question isn't about what I wann add to it now it's about deciding what to do with what I already have. The impression that I'm getting is that you're saying if I have a small portfolio there's nothing I can do with it.... Which isn't true of course. What may be too small for you might just be what I can manage?




The reason I brought up about working on your saving habits is that I have seen friends of mine decide to get into the stock market with the aim of building wealth, They get a $1000 tax refund and buy some shares and then sit back and think thats it, they are set they own shares and in a few years life should be all cheese and biscuits.

The point I was trying to make, is the same point I try and make with them. if you only have a small portfolio of say $1,000 - $10,000. You are going to get ahead much quicker by just saving and adding more funds into the portfolio.

For example if you portfolio is $1000 you could spend a couple of years micro managing your portfolio taking larger risks and all that will happen is ( if your lucky ), you'll turn $1000 into $3,000 (and maybe teach your self some bad habits along the way).

 but if you just decided to save an extra $250 a week you would be at $3000 in just 8 weeks.

I don't know the ins and outs of your situation, but that was the point I was trying to make.


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## Julia (18 February 2011)

Tysonboss1 said:


> Considering that Trading and Investing are two completely different things, why would you not make the distinction. I think it is very applicable to this thread, which is about when to sell.



It probably depends on your semantic definition of both 'trading' and 'investing'.
You are very specific in your quest to buy what you consider to be undervalued companies and (I might be wrong here) you seem to consider that the only definition of an 'investor'.   
I, on the other hand, am happy to consider myself an investor in a stock for as long as it's going up, i.e. I will let the profits run, but that wouldn't stop me trading in and out amongst dips and rises.  Nor would it stop me selling in a downtrend.
It's still a valid form of investing.
Probably best not to get too hogtied to labels.





Market Depth said:


> Selling can be the hardest decision to make. Theres's no 'Black and White' answer to say when, everybody will be different. There's only one person you need to make happy about the decisions and that's yourself.




Yep.  And, whilst you're very focused on what you might do with the profits, Chaos, you don't seem to have made any decision about what to do about those stocks in the red.  What's your thinking there?


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## Synergy (18 February 2011)

This has been great reading. Interesting to get ideas from people with various strategies and viewpoints on the market.

My views on selling in the simplest form...

1) Sell if the price has fallen (or you think the price is going to fall) to a point that doesn't fit your strategy. 

2) Sell if you need funds for what you think is a better opportunity.

Both rely on having an opinion on price direction.

For me, I hide behind and trust a mechanical strategy. Something I've developed, understand and am comfortable trading. The decisions are made for me, but at the same time by me when i created the rules of the system. Selling is pretty much a case of doing what i'm told - because I know that's what works over the long term, hopefully.

In your case - you don't know what does and doesn't work for you. Holding CBA forever will probably work to some extent, but I suspect that you're looking for more than this, or you wouldn't be thinking about selling. 

I'd suggest thinking about tolerances and timeframes. Some people will hold CBA through a 20% downturn and not be concerned. Some will hold over a 3 year downturn and not be concerned. For others, 5% and 2 weeks would be enough to have them feeling uncomfortable. Where do you fit here? I think this is probably something that most people have a natural sweetspot for. Somewhere they just naturally fit, and finding it will probably help you find a method of some sort. What ever your method,  you need to be comfortable.

A couple of other ideas,

Try to look to the future in your trades. Past performance is often an indicator to future performace, but it's the future that counts for you. Thats what you can control. A trade might be well in the red or well in profit, but if it's about to rise for some reason there's no point selling.   

If you have a very small amount of funds to play with, consider adding any savings you have. I think you need to be dealing with enough money that you consider each decision as important + minimising the effects of brokerage. Your attitude seems good here though.

Either way, I think you need to have some beliefs about the market (and a general plan to trade those beliefs) to make decisions. Gut feels can be ok, but they normally come with experience. 

As for CBA, it's certainly at an interesting point.


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## Tysonboss1 (18 February 2011)

Julia said:


> It probably depends on your semantic definition of both 'trading' and 'investing'.
> You are very specific in your quest to buy what you consider to be undervalued companies and (I might be wrong here) you seem to consider that the only definition of an 'investor'.
> I, on the other hand, am happy to consider myself an investor in a stock for as long as it's going up, i.e. I will let the profits run, but that wouldn't stop me trading in and out amongst dips and rises.  Nor would it stop me selling in a downtrend.
> It's still a valid form of investing.
> Probably best not to get too hogtied to labels.




No Julia, your capital management operation in which you descibed it pure trading.

What this video it explains some of my mindset, skip the first 1min


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## Julia (18 February 2011)

Tysonboss1 said:


> No Julia, your capital management operation in which you descibed it pure trading.



Let's just agree that that is your opinion, Tyson.

Definition of investing:


> the act of investing; laying out money or capital in an enterprise with the expectation of profit




Simple as that.  No need to complicate it any further.
By all means define yourself with your favoured term of 'value investor', but please don't tell others that if their approach differs somewhat they are therefore 'not investing.'


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## Tysonboss1 (18 February 2011)

Synergy said:


> .
> 
> I'd suggest thinking about tolerances and timeframes. Some people will hold CBA through a 20% downturn and not be concerned. Some will hold over a 3 year downturn and not be concerned. For others, 5% and 2 weeks would be enough to have them feeling uncomfortable. Where do you fit here? I think this is probably something that most people have a natural sweetspot for. Somewhere they just naturally fit, and finding it will probably help you find a method of some sort. What ever your method,  you need to be comfortable.




The first 1 Min of this video is on this topic exactly.

.


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## Wysiwyg (18 February 2011)

Tysonboss1 said:


> What this video it explains some of my mindset, skip the first 1min



The lady in the video said "It's simple but it's not easy". In other words just anyone isn't allowed through. Why aren't there millions of Buffet's manifesting?


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## Tysonboss1 (18 February 2011)

Julia said:


> Let's just agree that that is your opinion, Tyson.
> 
> Definition of investing:
> 
> ...




Value Investor is just one class or sub catergory of investor,

Just as a trend follower is just one form of trader.


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## Julia (18 February 2011)

Tyson, I have no idea why you seem so determined to insist your definition is the only correct one.  Or why labels mean so much to you.

I disagree with you.  And I have nothing more to say about it.


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## Boggo (18 February 2011)

Tysonboss1 said:


> Value Investor is just one class or sub catergory of investor,
> 
> Just as a trend follower is just one form of trader.




Which class are long term TLS holders in Tyson ?


My KISS principle understanding...

An investor is someone who trusts others (company boards/managers/accountants etc) to manage their money, their only decision is which company will do it by buying a portion of the company (eg Telstra "investors") and then hoping for the best.

A trader is someone who takes responsibility for their money and has the ability to make decisions that may be influenced by, but are not dependant on the ability (or inability in the case above) of others to act in their best interests.

I don't think that it is any more complicated than that.


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## burglar (19 February 2011)

Sir Osisofliver said:


> Berkshire Hathaway shares trade at $127,440 USD - ...
> Cheers
> 
> Sir O




Warren Buffett, realising not everyone can afford Berkshire Hathaway shares, started Berkshire Hathaway ordinary shares, Class B, at a fraction of the price!

BRK.B USD$84.74


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## Tysonboss1 (19 February 2011)

Boggo said:


> Which class are long term TLS holders in Tyson ?




I don't know I haven't interveiwed the majority of them to ask them the reasons they bought. Maybe longterm internet boom speculaters banking on telstras profit sky rocketing as we headed into the internet age. or people that had no clue and were buying somthing thinking they were making a wise investment but really they were over paying by almost 3x.

Telstra is the perfect example of my you must conduct some analysis about what you are buying before you buy. It is a perfect example that value investment theory works, and that over time stocks revert back to fundamental value.

They are not value investors thats for sure, No true value investor would have paid such a premium for such low returns on equity, Alot of value investors may have taken a position in recent times though.


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## ChaoSI (19 February 2011)

lol never thought this thread would get so big 



Julia said:


> Yep.  And, whilst you're very focused on what you might do with the profits, Chaos, you don't seem to have made any decision about what to do about those stocks in the red.  What's your thinking there?




at this point i have no definite plan that i reckon would recoup the losses in the short term so I lose nothing by leaving them as they are, for now anyway. Should an opportunity that i feel would help even things out come along then yeah i'll probably sell for whatever price and jump ship as it were. 



Tysonboss1 said:


> Value Investor is just one class or sub catergory of investor,
> 
> Just as a trend follower is just one form of trader.



 does it really matter what the label is? end of the day you all earn money buying and selling shares regardless of time spent holding them or methods employed?



Market Depth said:


> Nothing wrong with sellng a stock for a profit, no matter what the stock is, or what the profit amount is. You'll never go broke whilst making a profit. You could for example, just sell your initial purchase amount, and leave the remaining on the table, and use the money to buy into another opportunity, and it may well do well, and you can do it again.




this is what you were talking about in that other thread i asked questions right M D ?
if i removed the initial that would be 3/4 of the 45 shares... leaving me with like... 12
would that be worth it? I really like and understand that principle and it is an excellent way of using "their money" similar to only using your winnings at the casino to gamble. 
Do you think that it is still effective that way irrespective of the scale?


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## Tysonboss1 (19 February 2011)

ChaoSI said:


> l
> 
> 
> does it really matter what the label is? end of the day you all earn money buying and selling shares regardless of time spent holding them or methods employed?
> ...




Yes it does matter, Because the two types operate in completely different ways. You asked the original question " When do you sell". I guess you were trying to gain some insights or some ideas so that you would know when was the right time to sell.

The reason I asked whether you were an investor or a trader is because the two classes will have different buy and sell trigger.

Traders are largely mechanical, using varying types of charts and market movement data, and somtimes wild speculation on investor attitudes. If you had said you were a trader who knew nothing about the underlying security, I would have said you should sell as soon as you see a decent profit, or the data you used for you entry signal has reversed or the stock has started to trade down.

However if you said you were an investor with a good understanding of the business I would have said you should sell when the stock has become priced dangerously high compared to it's underlying value, or the company earning power is changing fundmentally or you can see better oppotunities else where. etc,etc.

I would suggest knowing the difference between intelligent investing, intelligent trading and out right speculation is very important, But if you don't think so thats fine too.


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## Tysonboss1 (19 February 2011)

ChaoSI said:


> at this point i have no definite plan that i reckon would recoup the losses in the short term so I lose nothing by leaving them as they are, for now anyway. Should an opportunity that i feel would help even things out come along then yeah i'll probably sell for whatever price and jump ship as it were.




I would go back and look at each stock and weigh it up on it's own merits and ask myself "would I be willing to put fresh capital into this stock as it stands" if the answer is no, then sell them. 

I don't know what the companies are, but you may find they are good businesses, that you just unfortunatly through lack of knowledge over paid for, and at their current levels may see solid returns over time and it is worth while keeping them.

If you look back through them and find they are rubbish, then you have to sell them.

You don't want to fall into the trap of selling the flowers and keeping the weeds.


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## burglar (19 February 2011)

ChaoSI said:


> does it really matter what the label is?




Since I came to ASF I have learnt many labels. I don't want to be fixated by any of them.

Here is what's good about labels. 
You can define them. 
You can discuss them, agreeing or disagreeing. 
You can convey a lot.

You can google them.

Here is one I Googled earlier (I learnt it from nunthewiser)
"zero cost averaging"
http://thepatternsite.com/ZeroCostAverage.html


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## So_Cynical (19 February 2011)

burglar said:


> Here is one I Googled earlier (I learnt it from nunthewiser)
> "zero cost averaging"
> http://thepatternsite.com/ZeroCostAverage.html




Thanks for the link Burglar...up until today i didn't know that i have been trading a very similar strategy to zero cost averaging for almost 2 years.  i use the multiple trade strategy, however my plan was never to get my cost to zero as im happy to have some capital left in the stocks i hold.

My longer term plan is to reduce my capital per share to around 20% with anything from 3 to 6 trades per stock over many years..eventually building a portfolio of over 35 stocks, im 2 years into a 8 to 10 year plan.


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## breaker (19 February 2011)

IMHO 35 stocks is to many why tie up capital in that many stocks when you can just have 3,4,5 good performers and they are eaisier to watch


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## Tysonboss1 (19 February 2011)

Boggo said:


> Which class are long term TLS holders in Tyson ?


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## Market Depth (19 February 2011)

ChaoSI said:


> lol never thought this thread would get so big
> 
> this is what you were talking about in that other thread i asked questions right M D ?
> if i removed the initial that would be 3/4 of the 45 shares... leaving me with like... 12
> ...




It's a start. The 12 shares are worth around $600. You could then use the funds from the sale of CBA to speculate on some growth stocks, taking profits and placing them into a cash management account, to buy more CBA when the time is right. That's what I've always done. You'd be surprised how quick you can build up a holding in a company, that essentially costs you nothing. The only caveat is you must pay attention to your target stock for the longer period of time, and have funds available to take advantage of a buying opportunity.

Some people collect things, I collect stock My latest collection addition is Toll Holdings, and thus far it's doing quite well. And so far a worthy addition to the collection.


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## TabJockey (19 February 2011)

At the top!.

Just kidding. Start selling at my DCF per share number. Usually finish selling when its 10% up on that number. Usually drops after that but not always.


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## ChaoSI (19 February 2011)

Market Depth said:


> It's a start. The 12 shares are worth around $600. You could then use the funds from the sale of CBA to speculate on some growth stocks, taking profits and placing them into a cash management account, to buy more CBA when the time is right. That's what I've always done. You'd be surprised how quick you can build up a holding in a company, that essentially costs you nothing. The only caveat is you must pay attention to your target stock for the longer period of time, and have funds available to take advantage of a buying opportunity.
> 
> Some people collect things, I collect stock My latest collection addition is Toll Holdings, and thus far it's doing quite well. And so far a worthy addition to the collection.




i think i'll lean towards this method.. i my head it seems like a happy medium or holding and of acquiring profits.

but i meant i would have 12 LEFT out of 45so i'd be selling 33


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## burglar (20 February 2011)

breaker said:


> IMHO 35 stocks is to many why tie up capital in that many stocks when you can just have 3,4,5 good performers and they are eaisier to watch




breaker,
I believe what So_Cynical has done is micro manage 3-6 shares at a time until they owe him very little, then accumulate 3-6 more.

In 10 years, he plans to accumulate 35 shares which he need not watch at all closely ... because they will each owe him next to nix.

Did I get that right?


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## skc (20 February 2011)

burglar said:


> Since I came to ASF I have learnt many labels. I don't want to be fixated by any of them.
> 
> Here is what's good about labels.
> You can define them.
> ...




Zero cost averaging... that has be the stupidest way of thinking.

'Even if the company goes bankrupt it has cost you nothing'.

Money is money. Whether they come from your bank account or the market. You need to treat them the same way. 

If you think the share will go up, you won't sell. If you think the share will go down, you don't hold. If you think the share will do very little, then you should probably sit on the sideline. 

In no scenario does it warrant 'zero cost averaging'.


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## So_Cynical (20 February 2011)

breaker said:


> IMHO 35 stocks is to many why tie up capital in that many stocks when you can just have 3,4,5 good performers and they are eaisier to watch




i have no problem watching 100 stocks, also because im low cost averaging im buying (or at least trying to) buy significant bottoms in the price cycle....watching for big bottoms in only 5 stocks would be about as taxing and exciting as watching paint dry.



burglar said:


> breaker,
> I believe what So_Cynical has done is micro manage 3-6 shares at a time until they owe him very little, then accumulate 3-6 more.
> 
> In 10 years, he plans to accumulate 35 shares which he need not watch at all closely ... because they will each owe him next to nix.
> ...




I'm adding 1 stock to the portfolio every 3 or 4 months, when i see an opportunity (significant bottom) to LCA (low cost average) into a stock that i already hold (portfolio stock) i do it in preference to adding a totally new stock, as my portfolio grows (23 stocks now) it gets easier and easier to find opportunitys to LCA into portfolio stocks.

I figure that by the time i have about 35 portfolio stocks (2013/14) there will always be 1 portfolio stock at a low enough price to warrant a re-entry, thus no need to add any new stocks to the portfolio.


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## ROE (20 February 2011)

Tysonboss1 said:


>





Funny how everyone using tls as an example of long term holder and ignore other greater stocks.

Let me put it in perspective .. Say you bought tls at the beginning and hold all the way to today

If you do that you are also likely to pick up cba csl and almost all other government sell off

Say your portfolio has 10 to 15 stocks, even if tls goes to zero you still make a truck load of money.. Here is something I pickup get feed into my iPad about finance and stuff I dont know the URL so I cut and paste for other benefit of an ordinary investor
who buy and hold...

"I start ed at 22 with investing/saving over 10%+ of my check, increased to 15%+ by age 23 1/2 and 20%~ by age 27. Those today who invest will mimic the investors who con tin ued through ("the death of equi ties") times of 70s and early 80s RICH!

I retired at 47 with $2.85M. When I start ed after col lege [I had] no debt, 2 old (11+ years old) cars and $1.5K saved by grad u a*tion with BS in 1982. [I made it through the] crash of '87, Gulf war mar ket drop, reces sion of 92-93 and high unem ploy ment (includ ing me!) , the dive of 2000, equi ties crash of late 2001, crash of 2008. Yep, still here, finan cial ly inde pen dent and worth every penny!

The tur tle always beats the rab bit. If you're not con fi dent PAY a finan cial plan ner the com mis sion or fees but, even the "poor est" (there are no "poor" with cell phones, cable TV, cars, etc., in Amer i ca today) can START with 5% or more (like ly 10%) and the mid dle class should have NO prob lem sav ing invest ing 15-20%. It's time to do what's right and what's REAL LY worth it for your future and some small sac ri fices -- like the cable TV, ther mo stat at 70'F+, cell phone extend ed plans, data plans, pre*mi um gas, etc.,...."


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## breaker (20 February 2011)

It would still be a lot off money in 35 stocks
Would you buy, say TOL,VBA,NUF to me seem to be at bottoms and just leave them,is that the plan ? do your main stocks pay dividends ?


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## ROE (20 February 2011)

breaker said:


> It would still be a lot off money in 35 stocks
> Would you buy, say TOL,VBA,NUF to me seem to be at bottoms and just leave them,is that the plan ? do your main stocks pay dividends ?




I don't hold more than 15-20 stocks doesn't matter how much money I have

if I have 10m, 10m will still be allocated to 15-20 stocks.

I usually prefer stock that pay dividend whether it's 3%, 5% or 8%

in my opinion paying dividend is a good way for business not do do stupid things
with excess cash...That why I like FLT and ARP ... and recently CCP...

They are expanding slowly but when they have excess cash they pay a special dividend to their shareholders as well as regularly dividend.... 

CCP got so much cash now it doubling and tripling dividend payout and suspend DRP ..they still growing just not using that excess cash and make stupid purchase...

I prefer companies give me my excess cash because rather than them wasted on the bankers fee and acquisition spree I can turn that excess a return of 15% a year by allocating that capital to other business on my purchase list.

also with dividend it easy for me to spot how the companies doing with money and cash flow 

Companies that don't fit my ideology I say no thank you and look for those that do...

VBA or QAN or XXX airline I never look at them and I never put a cent into them
because I don't like their business model as a long term investment...

NUF a stupid stock that I make an 10% loss, I realise the mistake and I got out and will never be back...doesn't mean it wont go up....Just me wont invest in it no more 

TOL never really look at it either just glancing over the business some years ago doesn't interest me either....

I only like business where I have confident I can hold for a long time without too much worries about wordly events and one day I can live off its pay cheques come twice a year....


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## So_Cynical (20 February 2011)

breaker said:


> It would still be a lot off money in 35 stocks
> Would you buy, say TOL,VBA,NUF to me seem to be at bottoms and just leave them,is that the plan ? do your main stocks pay dividends ?





TOL is a stock i like, tried to buy it a couple of times in early/mid 09 and didn't get filled.i don't hold.
VBA i don't like airlines...i don't hold.
NUF ive watched for a long time, but cant see a competitive advantage for NUF...i don't hold. 

Of the 23 stocks i hold 16 pay dividends and 5 pay distributions, 1 has no potential to ever pay a dividend and the other 1 should be announcing a return to dividends next week. 

I'm building a portfolio to provide me with a dividend stream that will hopefully be sufficient to allow me to move to a low cost country with a suitable foreign earnings tax regime...moving in 6 to 8 years time.


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## Tyler Durden (20 February 2011)

So_Cynical said:


> I'm building a portfolio to provide me with a dividend stream that will hopefully be sufficient to allow me to move to a low cost country with a suitable foreign earnings tax regime...moving in 6 to 8 years time.




I have a similar goal in that I want a steady dividend stream, but I find it hard as a lot of companies pay dividends in the same month. As I want to receive dividends every month, it's almost impossible to find a blue chip company that pays in certain months like June.


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## So_Cynical (20 February 2011)

Tyler Durden said:


> I have a similar goal in that I want a steady dividend stream, but I find it hard as a lot of companies pay dividends in the same month. As I want to receive dividends every month, it's almost impossible to find a blue chip company that pays in certain months like June.




Agree...but what can we do about it :dunno: alot of the REITs and infrastructure stocks pay in June/July and Dec/Jan but they don't have any franking credits....im finding that with the 23 stocks i have now there is a fair spread of actually payment dates....however June is a lean month.

Not exactly blue chip for some :dunno: but HVN have a pay date of May and CSR in early July.


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## Tyler Durden (20 February 2011)

So_Cynical said:


> Agree...but what can we do about it :dunno: alot of the REITs and infrastructure stocks pay in June/July and Dec/Jan but they don't have any franking credits....im finding that with the 23 stocks i have now there is a fair spread of actually payment dates....however June is a lean month.
> 
> Not exactly blue chip for some :dunno: but HVN have a pay date of May and CSR in early July.




Thanks - just wondering, why do you have a roulette wheel as part of your avatar?


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## BrightGreenGlow (20 February 2011)

I'm a strong believer that if you have made a gain of over 20grand never sell before the year is up. I hate to give the government 40 odd % of that I gained from smart investing.


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## Julia (20 February 2011)

Tyler Durden said:


> I have a similar goal in that I want a steady dividend stream, but I find it hard as a lot of companies pay dividends in the same month. As I want to receive dividends every month, it's almost impossible to find a blue chip company that pays in certain months like June.



 Why do you need to receive dividends monthly?  What difference does it make?
Income is income on a p.a. basis.  Just put the funds in an online at call a/c and draw on it as you need to.

The majority of my income at present is paid once a year.   I don't see how that's any different from having it divided by 12 and paid monthly.


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## burglar (20 February 2011)

So_Cynical said:


> ... no need to add any new stocks to the portfolio.




I do that, it saves on homework.


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## ChaoSI (21 February 2011)

burglar said:


> I do that, it saves on homework.




lol school ingrained that into you huh? avoid hw at all costs.

btw.. awesome thread... kudos to the guy who started it


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## burglar (21 February 2011)

ChaoSI said:


> ... avoid hw at all costs. ...




A bit off topic:

We'd often get 10 words for spelling homework.
I wouldn't bother to learn them, managed 8 or 9 out of 10, as they were read out.

One day the nun comes to class and doesn't read out the words!
Instead she says "Write down the ten words you learnt for homework."
Gulp!!


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## burglar (21 February 2011)

BrightGreenGlow said:


> I hate to give the government 40 odd % of that I gained from smart investing.




I like to give the Gov't 40 odd %, because 60 odd % comes to me!
I like to do it 3,4 or five times a year, then it is called compounding!
It's my way to make a fortune!


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## breaker (21 February 2011)

and at the end of the year when you,ve got FA left.


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## Tysonboss1 (21 February 2011)

Tyler Durden said:


> I have a similar goal in that I want a steady dividend stream, but I find it hard as a lot of companies pay dividends in the same month. As I want to receive dividends every month, it's almost impossible to find a blue chip company that pays in certain months like June.




That seems a bit silly, Surly you can manage your money yourself and just pay yourself monthly, fornightly, weekly or daily. I wouldn't mind getting dividends once a year.


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## ChaoSI (21 February 2011)

burglar said:


> A bit off topic:
> 
> We'd often get 10 words for spelling homework.
> I wouldn't bother to learn them, managed 8 or 9 out of 10, as they were read out.
> ...




busted 



Tysonboss1 said:


> That seems a bit silly, Surly you can manage your money yourself and just pay yourself monthly, fornightly, weekly or daily. I wouldn't mind getting dividends once a year.




different strokes for different folks


edit:
i have a stock that when i ask for a quote  comes up with "invalid" what's with that?


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## ChaoSI (21 February 2011)

so.. just sold a small portion off... 
now we see if i made a terrible decision  but hopefully i'll find something else to put this money into... =)

thanks for the suggestions guys! HUGE help and EPIC learning experience.


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## burglar (21 February 2011)

breaker said:


> and at the end of the year when you,ve got FA left.




Yeah!! I know the answer to this one, 'cos I been there!
You put some money in a contingency fund (aka Piggy bank)


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## Wysiwyg (21 February 2011)

BrightGreenGlow said:


> I'm a strong believer that if you have made a gain of over 20grand never sell before the year is up. I hate to give the government 40 odd % of that I gained from smart investing.



 Hmmm. One particular gain I made peaked at 35k after 3 months and began declining. As it was I held on for further gains too long and that peak 35k was banked for a 15k gain.  was me. After 12 months the share price was less than my initial entry.


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## burglar (21 February 2011)

ChaoSI said:


> edit:
> i have a stock that when i ask for a quote  comes up with "invalid" what's with that?




Which one?


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## So_Cynical (21 February 2011)

Tyler Durden said:


> Thanks - just wondering, why do you have a roulette wheel as part of your avatar?




Because i don't kid myself that what im doing in the market is not gambling, many many punters on this forum like to kid themselves that they are traders and investors etc, not gamblers....i don't have the need to hide behind a legitimate label of some kind.

Irony is that i was in star city casino recently (with work some mates) my first time in a casino for maybe 5 years and i didn't have even 1 bet, i was amazed that i had no desire whatsoever to play anything, one of the guys asked me why i wasn't playing anything and i thought about it and told him the truth about how i felt.

I told him "i have ***k in the stock market, i gamble every day and a couple of hundred at high risk in a blackjack game doesn't do it for me any more...and that's really exactly how i felt...the first time in my life that i have spent 3 or 4 hours in a casino and not gambled.


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## TabJockey (21 February 2011)

So_Cynical said:


> Because i don't kid myself that what im doing in the market is not gambling, many many punters on this forum like to kid themselves that they are traders and investors etc, not gamblers....i don't have the need to hide behind a legitimate label of some kind.
> 
> Irony is that i was in star city casino recently (with work some mates) my first time in a casino for maybe 5 years and i didn't have even 1 bet, i was amazed that i had no desire whatsoever to play anything, one of the guys asked me why i wasn't playing anything and i thought about it and told him the truth about how i felt.
> 
> I told him "i have ***k in the stock market, i gamble every day and a couple of hundred at high risk in a blackjack game doesn't do it for me any more...and that's really exactly how i felt...the first time in my life that i have spent 3 or 4 hours in a casino and not gambled.




Well there are few games in a casino where there is an odds advantage to exploit and you need some serious capital to do it.

Its easy to get a result in the market that gives good risk/return. Your return is still governed by chance, and you are still playing the odds over a period of time for a gain, similar to gambling, but the standard error of your returns is small if you want it to be (ie you can get a OK rate of return with relative certainty).

People often tell me that the sharemarket is essentially gambling, and if you look at it that way you will certainly turn it into your own private casino! But nothing in this world is certain, every time you cross the road you are gambling, every time you cook dinner you are gambling that its going to be a better option than buying it somewhere else.

Risk and return is not a law of finance and casinos, its a universal law.


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## Tysonboss1 (22 February 2011)

So_Cynical said:


> Because i don't kid myself that what im doing in the market is not gambling, many many punters on this forum like to kid themselves that they are traders and investors etc, not gamblers....i don't have the need to hide behind a legitimate label of some kind.
> 
> Irony is that i was in star city casino recently (with work some mates) my first time in a casino for maybe 5 years and i didn't have even 1 bet, i was amazed that i had no desire whatsoever to play anything, one of the guys asked me why i wasn't playing anything and i thought about it and told him the truth about how i felt.
> 
> I told him "i have ***k in the stock market, i gamble every day and a couple of hundred at high risk in a blackjack game doesn't do it for me any more...and that's really exactly how i felt...the first time in my life that i have spent 3 or 4 hours in a casino and not gambled.




If you feel like you are gambling you are doing it wrong,

Investing with a margin of safty along with diversification eliminate the risk of a net loss.

Listen to this video from the 5.10 mark, Graham talks about this topic and compares it to roulette.


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## So_Cynical (22 February 2011)

TabJockey said:


> Well there are few games in a casino where there is an odds advantage to exploit and you need some serious capital to do it.
> 
> Its easy to get a result in the market that gives good risk/return. Your return is still governed by chance, and you are still playing the odds over a period of time for a gain, similar to gambling, but the standard error of your returns is small if you want it to be (ie you can get a OK rate of return with relative certainty).
> 
> ...




Yep that's pretty much the way i see it....i chose to do my gambling in the stock market because i gamble to win and in the stock market i have a clear advantage, i get an ok rate of return with relative certainty...and every so often i still get a little gamblers rush.

Like the other day when MRE announced a return to dividends...i predicted it maybe a year ago in the MRE thread, took a big average down about 6 months ago (at what turned out to be a significant bottom) and got my pay-day with the div announcement...now looking at a gross yield of around 13% and my whole MRE position now very close to going into profit.


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## burglar (22 February 2011)

So_Cynical said:


> ....i chose to do my gambling in the stock market because i gamble to win and in the stock market i have a clear advantage, ...




The turn of the card ... 
the spin of the wheel ... 
first horse past the post ... and it's over!!

But with shares, you decide when it's over!


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## GumbyLearner (22 February 2011)

when you know the system is not in your favour


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## So_Cynical (22 February 2011)

burglar said:


> The turn of the card ...
> the spin of the wheel ...
> first horse past the post ... and it's over!!
> 
> But with shares, you decide when it's over!




Yep that's a big part of it...the other part/half of the equation is at the beginning, you decide the odds you want to take, the ticket price...do you pay $5 or $3 or $1 to get in/on...i like to pay $1 or at least under $3, under the average.


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## ChaoSI (22 February 2011)

burglar said:


> Which one?




csr


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## AlterEgo (22 February 2011)

ChaoSI said:


> csr




CSR has had a share consolidation and is trading on a deferred settlement basis under code CSRDA at the moment.


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## ChaoSI (22 February 2011)

AlterEgo said:


> CSR has had a share consolidation and is trading on a deferred settlement basis under code CSRDA at the moment.




OOOOH thank you!


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