# Sell Everything



## brianwh (23 December 2011)

On at least two occasions this week, on Your Money Your Call, a reference was made to a newsletter which advised clients/subscribers to sell all their equity holdings. Does anyone know which newsletter this was?

My interest in this comes from my increasingly contemptuous view of the ability these highly paid people to provide information that is any better than you can get from race horse tipsters about Saturday's likely winners. And these "tipsters" have forecast just about every possible eventuality, so sooner or later some of them are right - and that makes them a "guru", at least for a while. To me some of the silliest ones are the technical analysts on YMYC who say things like "if it goes down to $3.51 it could go all the way down to $2.95". Please!

I guess a lot of people on this forum will just yawn and say something along the lines of "how long did it take you to work this out?" but perhaps there is some way forcing accountability.


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## Ves (23 December 2011)

brianwh said:


> On at least two occasions this week, on Your Money Your Call, a reference was made to a newsletter which advised clients/subscribers to sell all their equity holdings. Does anyone know which newsletter this was?



This was in Alan Kohler's "Eureka Report." 



brianwh said:


> To me some of the silliest ones are the technical analysts on YMYC who say things like "if it goes down to $3.51 it could go all the way down to $2.95". Please!



Think of this not as a prediction, but merely a possibility that the chart trend is showing the analyst.


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## Garpal Gumnut (23 December 2011)

brianwh said:


> On at least two occasions this week, on Your Money Your Call, a reference was made to a newsletter which advised clients/subscribers to sell all their equity holdings. Does anyone know which newsletter this was?
> 
> My interest in this comes from my increasingly contemptuous view of the ability these highly paid people to provide information that is any better than you can get from race horse tipsters about Saturday's likely winners. And these "tipsters" have forecast just about every possible eventuality, so sooner or later some of them are right - and that makes them a "guru", at least for a while. To me some of the silliest ones are the technical analysts on YMYC who say things like "if it goes down to $3.51 it could go all the way down to $2.95". Please!
> 
> I guess a lot of people on this forum will just yawn and say something along the lines of "how long did it take you to work this out?" but perhaps there is some way forcing accountability.




This is not bad advice, you omit to mention, and so probably did YMYC  that one can buy back in if one is wrong, and that using a stop buy or stop loss can limit damage to one's wealth.

Furthermore investors in HIH insurance in the late 90's would not agree with you.

gg


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## Bill M (23 December 2011)

brianwh said:


> a reference was made to a newsletter which advised clients/subscribers to sell all their equity holdings.
> 
> My interest in this comes from my increasingly contemptuous view of the ability these highly paid people to provide information that is any better than you can get from race horse tipsters about Saturday's likely winners.




In March 2009 when the All Ords hit rock bottom there was one of these high profile gurus on national TV recommending all investors sell their portfolios. What a first class Turkey he was, 6 Months later the market was up 30%. If investors followed that lead they would have lost massive amounts of money. The majority of these tipsters get it wrong time and time again. I stick to my own investment style and I survived the GFC, still retired. Those gurus are all trying to flog something, be it a newsletter, book or just brokerage fees, make your own decisions is best I reckon, cheers.


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## Whiskers (23 December 2011)

Bill M said:


> Those gurus are all trying to flog something, be it a newsletter, book or just brokerage fees, make your own decisions is best I reckon, cheers.




Yes, ain't that the truth.

It's all about turnover. They make their positive cash flow from real estate or shares no matter what price you turnover stock at and pick your pockets for a bit more with their newsletters and books etc along the way.

The point is if enough people get too engrossed in seeking and following someone else's information, news, opinion and recommendations, it tends to become a self fulling prophecy to some extent.


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## robusta (23 December 2011)

I do like to listen to these pundits however - when they say sell everything i get very interested in buying.


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## notting (23 December 2011)

I remember when Rivkin said that if you are still in the market you are a moron!
It was in a news letter that came out weekly and that week turned out to be a bottom that was followed by the 10 year bull market!


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## ROE (23 December 2011)

That is their main job, create actions

sell, buy, go with the flow, never stop pumping out news good or bad as long as they get people to do something ...

Imagine some dude buy a stock and sit on it for 5 years ...they wont be able to sell any newsletter  because this guy probably doesn't care what happen from now for the next few years...

They have to pump out stories, create confusion, make people nervous, indecisive so they can buy the next month newsletter and see what in store 

There are these people around...first they bear on Banks, then nothing happen, they bear a bit more then nothing happen, now they pro-banks  WTF


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## brianwh (25 December 2011)

Garpal Gumnut said:


> This is not bad advice, you omit to mention, and so probably did YMYC  that one can buy back in if one is wrong, and that using a stop buy or stop loss can limit damage to one's wealth.
> 
> Furthermore investors in HIH insurance in the late 90's would not agree with you.
> 
> gg




Without knowing what the context of this "sell everything" advice was, it is a bit hard to comment. But unless you could be very confident you will recognise the beginning of the next major uptrend when (if?) it comes, you will miss out on on major gains. Of course if you have the view that next year will see cataclysmic falls across the board in equities this might make sense. Otherwise, a portfolio of well managed businesses with low debt and a strong track record makes more sense to me.

But also there is the issue of commentators making these more extreme calls and then when it turn out to be wrong or bad advice, the call just slips into obscurity. Of course, if it turns out to be right (or more likely a lucky guess!) then this can be pointed to as evidence of the commentators superior insight.

I have jotted down a few of what I see as big calls and am watching what happens. This will be one of them. Another was Steve Keen's forecast of a 40% fall in house prices. And also Bill Evans' call of 1% cut in interest rates by the RBA.


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## Timmy (9 February 2012)

Great thread Brian. 

Funny to think these clowns get paid to write their garbage. Funnier still are the clowns that do it for free (ego?) ... plenty of them have been calling for new post 2009 lows in the US for nigh on three years now (wrong for _three _years ... and still c rapping on).

Along such lines, great post at *The Reformed Broker* blog:

*No One Is Ever Wrong Anymore*


> He torched his shareholders and lost billions of dollars juat as his fund had raised record levels of assets under management, a total ****-show. And yet, you read his just-released letter to investors and it almost reads like he’s saying “I wasn’t wrong, the market was.” It really is an astonishing piece of writing…
> 
> Earlier this week I was on CNBC’s Fast Money and they had the most ridiculous human being I’ve ever seen on financial television discuss his current short call on Apple stock – originally made two years ago. I know. But ACI Research CEO Edward Zabitsky is “sticking to his guns” and maintaining his $270 target (a 50% haircut from the current price above $450). His short thesis has now changed. Of course it has – the original one was invalidated. This guy just looks and sounds like a walking margin call. And then, unbelievably, someone says that “at least he has the convictions to stick with his call” and my ****ing head almost explodes. *“Conviction” is stupidity when new evidence presents itself or circumstances change.*



(My bolding).
http://www.thereformedbroker.com/2012/02/02/no-one-is-ever-wrong-anymore/


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## Logique (10 February 2012)

27 out of 29 prominent economists predicted an interest rate cut by the Reserve Bank this week.


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## Uncle Festivus (10 February 2012)

> Earlier this week I was on CNBC’s Fast Money and they had the most  ridiculous human being I’ve ever seen on financial television discuss  his current short call on Apple stock




I guess AAPL will be a short one day - perhaps today @ $500??


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## Timmy (10 February 2012)

Uncle Festivus said:


> I guess AAPL will be a short one day - perhaps today @ $500??




That may well be his hope (sorry for the four-letter word) - so he can eventually be 'right' (after being wrong for years and seeing a 100% rise).

Here is a simple guide for the clowns (I would only add, having formed a view, stick with it regardless of developments & keep repeating ... eventually there has to be some sort of fall - stopped clocks etc.):



http://www.businessinsider.com/how-...tm_campaign=Feed:+clusterstock+(ClusterStock)


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## brianwh (20 February 2012)

brianwh said:


> I have jotted down a few of what I see as big calls and am watching what happens. This will be one of them. Another was Steve Keen's forecast of a 40% fall in house prices. And also Bill Evans' call of 1% cut in interest rates by the RBA.




I have another "big call" to add. Last Thursday on YMYC Gary Glover from Novus Capital gave his "conviction" tip as BHP going to $20-$24 this year (first half I think)


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## Tysonboss1 (20 February 2012)

brianwh said:


> I have another "big call" to add. Last Thursday on YMYC Gary Glover from Novus Capital gave his "conviction" tip as BHP going to $20-$24 this year (first half I think)




Not as long as iron ore is over $100 a tonne it won't,


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## Mofra (21 February 2012)

Tysonboss1 said:


> Not as long as iron ore is over $100 a tonne it won't,



 ... and worldwide copper prices have stabilised/recovered since Nov 11

I should just make up opinions too and pay some marketing guru to get my name out there.


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## Tysonboss1 (21 February 2012)

Mofra said:


> ... and worldwide copper prices have stabilised/recovered since Nov 11
> 
> I should just make up opinions too and pay some marketing guru to get my name out there.




Yeah, and I guess he forgot to check the oil price aswell.


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## brianwh (24 December 2012)

With 12 months having elapsed since I first posted in this thread, I thought it might be good to look at how the "big calls" identified have panned out.

Alan Kohler - "sell everything and move to cash". You'd have missed out on a near 20% (includes dividends) gain in equities off set by a gain of 4-6% return in TD's
Steve Keen - house prices to fall by 40%. They've still got a long way to go before they reach negative 40%
Gary Glover - "conviction" call for BHP to fall to $20-$24.
Bill Evans - interest rates to fall by 1%. Good call - they actually fell by 1.25%

And these were just some of the more extreme calls.


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## notting (24 December 2012)

brianwh said:


> Alan Kohler - "sell everything and move to cash". You'd have missed out on a near 20%




I'll be waiting for his next call. "Buy a well balanced mix of the top blue chips and hold, as clearly the wolrd is set to boom."
That will be the time to sell everything.


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## Bill M (24 December 2012)

brianwh said:


> With 12 months having elapsed since I first posted in this thread, I thought it might be good to look at how the "big calls" identified have panned out.
> 
> Alan Kohler - "sell everything and move to cash". You'd have missed out on a near 20% (includes dividends) gain in equities off set by a gain of 4-6% return in TD's
> Steve Keen - house prices to fall by 40%. They've still got a long way to go before they reach negative 40%
> ...




I really don't know what to say Brian other than these jokers make me sick. Just goes to show, those so called super intelligent, well educated, get it wrong most of the time. The worst part about it is they sucker people into buying their newsletters, maybe that's what it's all about. Shame on them.


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## notting (24 December 2012)

How about TLS.
Every expert was watching it saying it was a dead dog.
The worst was what David Murray did to us all. 
He screamed the stock down from the top of Kosiosko, got the board sacked, then watched it tank, then sold it out of the future fund.
That was one of the most stupid things I have ever seen and I said so at the time.
The result is on the board as to what TLS has done since.
I guess being unemployable and academically retarded makes you better qualified than our most qualified, perhaps I should ring Swany and ask if I can run the futurefund.
OK I'll see if I can do better from this point as well.
Hmmmmm what would I do first?
Nothings coming, but DJs did flash into my head over the weekend, without any interest from my conceptualisation or speculative contemplations, it was just rising up.
That seemed interesting.  I actually forgot about it till just now.
OK, I'll buy that if it comes back to 2.22 on declining volume.
QBE for a medium ill take that now.
NAB for Longer if the cliff can give me a bit of a discount from here.
Clearly not a cat person.


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## nulla nulla (24 December 2012)

notting said:


> How about TLS.
> Every expert was watching it saying it was a dead dog.
> The worst was what David Murray did to us all.
> He screamed the stock down from the top of Kosiosko, got the board sacked, then watched it tank, then sold it out of the future fund.
> ...




Actualy if nab got rid of the current ceo with his preocupation with british banks I reckon they would soar from their present level. Until then I won't touch them.


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## Julia (24 December 2012)

Bill M said:


> I really don't know what to say Brian other than these jokers make me sick. Just goes to show, those so called super intelligent, well educated, get it wrong most of the time. The worst part about it is they sucker people into buying their newsletters, maybe that's what it's all about. Shame on them.



Not sure where anyone would get the idea that Kohler et al are super intelligent or well educated.  Aren't most of them journalists who have drifted into commenting on financial matters?

This evening ABC Local Radio had a program on financial forecasts with a panel of guests.  One of the guest "experts" was Ruth Ostrow, a journalist with no particular qualifications who usually does a rather esoteric lifestyle/sexual commentary piece in the Sunday papers.  Why she should be enlisted as qualified to comment on financial matters is beyond me, but that didn't stop her and various others making utterly silly pronouncements.

Anyone who puts their faith (and money) in what any of these people say is their own worst enemy.

Heavens, even most of the country's best qualified economists get it wrong much of the time.


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## So_Cynical (25 December 2012)

Julia said:


> Not sure where anyone would get the idea that Kohler et al are super intelligent or well educated.  Aren't most of them journalists who have drifted into commenting on financial matters?




Kohler and his partners at Business Spectator sold out to News earlier this year for a reported 25 million, i don't know how intelligent or well educated he is but i do know he's rich.


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## notting (25 December 2012)

nulla nulla said:


> Actualy if nab got rid of the current ceo with his preocupation with british banks I reckon they would soar from their present level. Until then I won't touch them.




Clyne inherited the E banks and from what I can see, he hates them.
They are a pittance compared to the size of the rest of NAB.
The whole thing is overplayed by the exact type of big dick buisness wankers we are discussing here.

Stupid thing is everyone seems to just agree with them.

I actually like Cameron.
He's just a practical no nonsense bloke.
OK, Mike Smith is a visionary and is really taking a shot.  Which is gutsy and admirable given it's backed by intelligence and he's doing it in an organic way. So he's my favourite.  He's funny too.

If you don't have that creative vision, then just run what you do have well, don't try to force growth in over crowded markets like the pre Clyne NAB CEOs who all did that and just made a mess.
Know your strengths, play within them and it's amazing how things will work out, when you are a well regulated busness in the best economy in the world.

NABs my pick. One good reason is that no one els is picking it and everyone is saying "Oh the banks have no growth prospects." Gimmy a fricken break.
What, we are going into a recession?

UK isn't doing all that badly relative to Euroland and even that is becoming fashionable for today.

I will go for NAB with eye watering leverage if the stars lines up.

Bull markets they are just so stupid, but one thing I’ve learnt is that when stupid starts it's the most unprofitable time to be intelligent about it.


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## burglar (25 December 2012)

notting said:


> ... NABs my pick. One good reason is that no one els is picking it ...




+100


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## ROE (25 December 2012)

So_Cynical said:


> Kohler and his partners at Business Spectator sold out to News earlier this year for a reported 25 million, i don't know how intelligent or well educated he is but i do know he's rich.




+1 dont need to be highly educated to know about money, all common senses really.
How and why they get there doesn't really matter, what matter is that they got there.

Most the people I know has no financial education background yet they acquire a fair bit of wealth.

For most people economy and money is just common senses what made it complex is not the topic but the people


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## notting (25 December 2012)

So_Cynical said:


> Kohler and his partners at Business Spectator sold out to News earlier this year for a reported 25 million, i don't know how intelligent or well educated he is but i do know he's rich.




Lucky.

Guess we leave the softer title of unlucky to those who read it, as they sell everything at the birth of a bull market.
I guess it's a kind of service.
We need someone to buy from!

Yet another great NWS purchase to add to it's repertoire of community services.

Better go up date My Space. Kermi is courting.


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## willstor (25 December 2012)

Unless a meteor heads towards earth selling everything is just dumb. Certain stocks can still deliver even in bear markets. All about diversifying.


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## Julia (25 December 2012)

willstor said:


> Unless a meteor heads towards earth selling everything is just dumb. Certain stocks can still deliver even in bear markets. All about diversifying.



And that's a rather dumb generalisation.  There are circumstances where cashing out before it all turns to chaos can leave you in the better position.
And I'm somewhat puzzled as to why a meteor heading toward earth would, in your view, make it appropriate to sell everything.  Pretty weird thinking all round.


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## Sir Burr (25 December 2012)

Sell everything - including the banks!

http://www.scribd.com/doc/117494670/117438327-document-1005619251


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## So_Cynical (25 December 2012)

Watched the classic old movie "its a wonderful life" this afternoon...great show, one of the classic scenes is the run on the bank scene..later the old rich guy potter is gloating about how he was buying at 50c in the dollar while the panicked masses just wanted to sell at any price.

Got me thinking that during the great market sell off in the GFC its was the non panicked that actually come out in front (to a large degree) the people selling everything near the bottom lost out to the people buying everything, someone was on the other side of all those trades, the comfortable, non panicked.


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## Julia (25 December 2012)

So_Cynical said:


> Got me thinking that during the great market sell off in the GFC its was the non panicked that actually come out in front (to a large degree) the people selling everything near the bottom lost out to the people buying everything, someone was on the other side of all those trades, the comfortable, non panicked.



That's rather a coloured description isn't it?  I know you love to justify your own position, as probably do most of us, but let's remember that the market is still very substantially below its preGFC high.  So people who went to cash when the GFC began, protecting their capital, are still likely to be ahead of those who stuck with the downward trend and are still waiting to get back to where they were.  Obviously there will be stocks that will be excepted from this.


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## So_Cynical (26 December 2012)

Julia said:


> That's rather a coloured description isn't it?  I know you love to justify your own position, as probably do most of us, but let's remember that the market is still very substantially below its preGFC high. * So people who went to cash when the GFC began, protecting their capital, are still likely to be ahead of those who stuck with the downward trend *and are still waiting to get back to where they were.  Obviously there will be stocks that will be excepted from this.




Sure but the people who sold at the start are in the minority, im talking about the transfer of wealth that happened at the height of the panic, stocks selling for less than cash backing etc, liquidation at any price as an expression of fear and panic.

I was very new to the scene back then and i thought that i was safe being mostly invested in gold stocks, big picture i was right and had picked the right trend to back but in the short term the gold stocks got smashed too, my portfolio value fell by about 45% and yet i held and continued to buy into the carnage.

Myself and many others saw compelling value, opportunity to profit down the line in spite of the near overwhelming fear that the media and markets projected...i was afraid a little and certainly had doubts and was stunned by the prices and falls that were taking place.

Contrarian investment in general is something that only a small minority can do with conviction.


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## willstor (26 December 2012)

Julia said:


> And that's a rather dumb generalisation.  There are circumstances where cashing out before it all turns to chaos can leave you in the better position.
> And I'm somewhat puzzled as to why a meteor heading toward earth would, in your view, make it appropriate to sell everything.  Pretty weird thinking all round.




No it's not. If you hold a selection of stocks from various sectors in profitable companies paying dividends you don't need to sell everything. Ever. When I invest in shares I have an entry and and exit strategy, however if I bought a stock that underperformed I am more than happy to hold for as long as it takes to make money - if that means the grandchildren get the spoils then so be it. 

To sell everything is to take a gamble that the market will fall heavily in every sector. If you can accurately predict that then, well...


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## Bill M (26 December 2012)

So_Cynical said:


> Sure but the people who sold at the start are in the minority, im talking about the transfer of wealth that happened at the height of the panic, stocks selling for less than cash backing etc, liquidation at any price as an expression of fear and panic.
> 
> I was very new to the scene back then and i thought that i was safe being mostly invested in gold stocks, big picture i was right and had picked the right trend to back but in the short term the gold stocks got smashed too, my portfolio value fell by about 45% and yet i held and continued to buy into the carnage.
> 
> ...




I remember this time well. I was heavily invested in the big 4 banks. All of them did capital raisings that were well under the market price, I took the lot, as much as I could get. I had one friend who had some CBA and asked me what to do. I told him that I would buy as much as I could, he said he didn't have any money. I said to him ok, what you can do is sell CBA at todays price of $29 and buy back from the capital raising the same $$ amount at $26. He sold all of CBA at $29 and didn't buy back at $26. He was that panicked he made a bad decision. I don't need to tell anyone where CBA is today.


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## cynic (26 December 2012)

willstor said:


> ...To sell everything is to take a gamble that the market will fall heavily in every sector. If you can accurately predict that then, well...




To buy or hold is also a gamble. For those that are yet to realise this, unfolding events will make my meaning increasingly apparent. 

As for end of days scenarios, there is simply no upside to selling if it's the end of human life on earth because you won't be alive to benifit from the salvaged capital! I believe that was what Julia was driving at when commenting on your earlier post.


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## willstor (26 December 2012)

cynic said:


> To buy or hold is also a gamble. For those that are yet to realise this, unfolding events will make my meaning increasingly apparent.
> 
> As for end of days scenarios, there is simply no upside to selling if it's the end of human life on earth because you won't be alive to benifit from the salvaged capital! I believe that was what Julia was driving at when commenting on your earlier post.




Buying and holding a blue chip stock is not a gamble at all.

If it's the end of human life sell up and get drunk


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## cynic (26 December 2012)

willstor said:


> Buying and holding a blue chip stock is not a gamble at all.
> 
> If it's the end of human life sell up and get drunk




Let me see now, HIH, Lehman Bros, Enron, World Com, Freddie Mac, Fannie Mae, GMH. You would of course agree that these were all blue chip stocks once upon a time, wouldn't you?


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## explod (26 December 2012)

willstor said:


> Buying and holding a blue chip stock is not a gamble at all.
> 
> If it's the end of human life sell up and get drunk




HIH was regarded once as a blue chip, its gone.  And all the advisers were saying Great Southern Plantations, gone. Blue Scope Steel another, nearly gone.

Rio Tinto used to be over $120 per share, Macquarie Bank over a $100, Telstra $8, even NAB towards $50, dividends sure but when you have lost that much ? hey, and they will probably never return! whewh.

they were saying Fortesque Metals was one when hitting $14 per share (not long back either), look at them now.

The days of just casually buying and holding blue chips are far gone.

The world scene is very dodgy at the moment and in my view the wise will be sitting on the sidelines in cash and probably pick up some bargain blue chips off the cutters floor too.


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## tech/a (26 December 2012)

+1
Explod.

For me if you really MUST trade stock then 
Day trade or very short term hit and run.

It been FTSE for me but even that is struggling
---when volatility goes so does a lot of he profit.


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## willstor (26 December 2012)

cynic said:


> Let me see now, HIH, Lehman Bros, Enron, World Com, Freddie Mac, Fannie Mae, GMH. You would of course agree that these were all blue chip stocks once upon a time, wouldn't you?




I wasn't invested in any of t he above however if those stocks were 100% of your portfolio selling everything makes sense. Unlikely scenario though to be fair.


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## notting (26 December 2012)

explod said:


> Rio Tinto used to be over $120 per share, Macquarie Bank over a $100, Telstra $8, even NAB towards $50, dividends sure.
> The days of just casually buying and holding blue chips are far gone.




Now that's a buy signal!


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## willstor (26 December 2012)

I only buy when everyone sells and vice versa. Feel free to sell your Westpac and an shares down 20% so I can buy them!


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## Julia (26 December 2012)

willstor said:


> No it's not. If you hold a selection of stocks from various sectors in profitable companies paying dividends you don't need to sell everything. Ever. When I invest in shares I have an entry and and exit strategy, however if I bought a stock that underperformed I am more than happy to hold for as long as it takes to make money - if that means the grandchildren get the spoils then so be it.



That makes no sense.  You should be investing/trading for yourself, not your grandchildren.  Investigate the concept of opportunity cost.



> To sell everything is to take a gamble that the market will fall heavily in every sector. If you can accurately predict that then, well...



Then, well, what?


cynic said:


> To buy or hold is also a gamble. For those that are yet to realise this, unfolding events will make my meaning increasingly apparent.
> 
> As for end of days scenarios, there is simply no upside to selling if it's the end of human life on earth because you won't be alive to benifit from the salvaged capital! I believe that was what Julia was driving at when commenting on your earlier post.



Thank you, cynic.  Exactly right on both counts.



cynic said:


> Let me see now, HIH, Lehman Bros, Enron, World Com, Freddie Mac, Fannie Mae, GMH. You would of course agree that these were all blue chip stocks once upon a time, wouldn't you?






explod said:


> HIH was regarded once as a blue chip, its gone.  And all the advisers were saying Great Southern Plantations, gone. Blue Scope Steel another, nearly gone.
> 
> Rio Tinto used to be over $120 per share, Macquarie Bank over a $100, Telstra $8, even NAB towards $50, dividends sure but when you have lost that much ? hey, and they will probably never return! whewh.
> 
> ...



Good examples.  Agree absolutely.


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## So_Cynical (26 December 2012)

willstor said:


> Buying and holding a blue chip stock is not a gamble at all.




As a blanket statement that's a silly and comprehensibly the wrong thing to say.

Buying stocks puts your money AT RISK, the future is not known, the future price of XYZ is not known therefore there is an element of risk, thus a gamble....the price you pay for XYZ matters A LOT...time can be your investment friend but it is a 2 way street.


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## Julia (26 December 2012)

So_Cynical said:


> Sure but the people who sold at the start are in the minority, im talking about the transfer of wealth that happened at the height of the panic, stocks selling for less than cash backing etc, liquidation at any price as an expression of fear and panic.



Certainly those people had left it too late.  There was a general sense of the possibility of "losing everything".



> I was very new to the scene back then and i thought that i was safe being mostly invested in gold stocks, big picture i was right and had picked the right trend to back but in the short term the gold stocks got smashed too, my portfolio value fell by about 45% and yet i held and continued to buy into the carnage.



I read this sort of statement all the time.  If you "continued to buy into the carnage", for it to be meaningful you'd have had to have a considerable amount of cash sitting around for that purpose.

When you are actually generating a living from your investing, having no other source of income, that's when you'll find more people accepting that your principle of holding through a downturn is the best option. 



Bill M said:


> I remember this time well. I was heavily invested in the big 4 banks. All of them did capital raisings that were well under the market price, I took the lot, as much as I could get. I had one friend who had some CBA and asked me what to do. I told him that I would buy as much as I could, he said he didn't have any money. I said to him ok, what you can do is sell CBA at todays price of $29 and buy back from the capital raising the same $$ amount at $26. He sold all of CBA at $29 and didn't buy back at $26. He was that panicked he made a bad decision. I don't need to tell anyone where CBA is today.



Using the same principle you're outlining here, you could have sold your CBA when the GFC began, then had all that additional capital available to buy it back in increased quantity (thus also increasing your dividend yield and franking credits) after the downturn was over.
And yes, of course few people are smart enough to sell at the exact top and buy at the exact bottom.  That's a given.


----------



## Ves (26 December 2012)

Julia said:


> Using the same principle you're outlining here, you could have sold your CBA when the GFC began, then had all that additional capital available to buy it back in increased quantity (thus also increasing your dividend yield and franking credits) after the downturn was over.
> And yes, of course few people are smart enough to sell at the exact top and buy at the exact bottom.  That's a given.



Can you run me through your sums for this comparison?

Is it fair to assume that the hypothetical person purchased at the end of 2003 for $30 (since the market started looking better at that point or so).

Should we assume that a normal person would have missed the CBA top by about 15% this scenario (is that too high or low for margin for error?).  Let's say they purchased for around $30 on the way back up.  (Should it be higher or lower?)

Including dividends, brokerage, taxes (assume 45% because we're all rich here - and 50% discount if applicable) how far does the market timing strategy come out in front of buy and hold for this period?

If my assumptions are different to your own what would they be?  I'm curious to see how far the market timer comes out in front given realistic and achievable assumptions.

edit: I realise that Julia is not the only one advocating this approach, so anyone can feel free to answer, I am being lazy and quoting her as it is the most recent.


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## explod (26 December 2012)

http://bigcharts.marketwatch.com/ad...rsToggle=false&chartStyleToggle=false&state=9

The picture helps.

The top traders and investors on here would do something like this.  First they follow the sentiment and that is reflected in a chart.

At the end of 2007 it was clear that something was wrong on the chart and in the discussions on ASF, so most of the savvy would have been out of CBA at or before $58.

Just a year later, Ben Benanke said we were saved and the markets looked oversold.  It's clear too if we look at the chart so Savvy is back in around $28.

Towards the end of 2010 there were some doubts creeping back in and then right at the end of the year we have a huge reverse fomation, so ole Savvy is back out again at around $28.

Now from my observations on this forum and the arguments that we have had I think that ole savvy has been a bit uncertain ever since, there is no convincing move and there is a lot of vehement argument coming from all quarters.

Some sold to buy gold and silver, others have sat on cash and some have made a lot trading the volatility in the last year or so.  Of late even that is looking a bit  funny (See tech/A's post above) , and Savvy thinks we may be about to fall off the cliff.

We will see, but not with my hard earned we won't.


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## Ves (26 December 2012)

Explod - unfortuntely that doesn't help me, I'm well aware to bring up a chart.

I'll add an additional question to my previous post - what indicators are you using to make these assumptions of $28 and $58? Is this merely hindsight talking or is there more to it?  I really can't tell from your post!

I will disclose that I bought at $44 and sold at $59 recently.  No longer holding or wanting to hold.


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## So_Cynical (26 December 2012)

explod said:


> The picture helps.
> 
> The top traders and investors on here would do something like this.  First they follow the sentiment and that is reflected in a chart.
> 
> ...




With respect...i think your dreamin.

The Jan 2008 bottom trend line was $56 i imagine some support buyers mite of been interested at that level and the savvy had been stuffing their pockets with profits for the last 6 years and were keen to see it continue, most of the volume for 2008 happened at around the $43 mark..were these buyers savvy?

Savvy Back in at $28  some perhaps, someone was on the other side of all those cheap trades and it wasn't momentum followers....you make it all sound to easy explod..it certainly wasn't easy for me, i agonised over many decisions mostly due to my limited funds, i had to get bang for my bucks.

CBA has gone from 24 to 62, i bought ILU at 2.95 and sold at 12.30 i got bang for some of my bucks.  a lot more bang than the bank buyers got.

https://www.aussiestockforums.com/forums/showthread.php?t=6067&page=3&p=421212&viewfull=1#post421212


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## explod (26 December 2012)

Ves said:


> Explod - unfortuntely that doesn't help me, I'm well aware to bring up a chart.
> 
> I'll add an additional question to my previous post - what indicators are you using to make these assumptions of $28 and $58? Is this merely hindsight talking or is there more to it?  I really can't tell from your post!
> 
> I will disclose that I bought at $44 and sold at $59 recently.  No longer holding or wanting to hold.




The moves are based on what is now almost a science but to the newcomer unfortunately that is subjective.  

Technical analysis is most certainly accurate if one follows exactly what the market is telling through the charts and we unemotionally stick to our set rules of stops and entry points combined with volume variations.

Fundamental analysis is traditionally what is going on with the Company and the Sector, movement of product etc.

A most important influence, perhaps the most if we look at 2007 through 2009 is what the overall mood of the market is on a world scale.  This to me has involved my learning the basics of economics and then in particular its history and those matters that influence the cycles.

That last para., encompasses the most important as iterated and is the nearest to the topic (or intent in my view) of this thread.   A good start to a clear understanding of overall market cycles are the writings of W. D. Gann.  I have his text "How to Make Profits in Commodities" 1951.  Gann traded the floors of the New York Rubber Exchange, the New Orleans Cotton Exchange and the Chicago Board of Exchange.  Offers very good first hand takes on the market collapses from 1929 through the depression.

The other area is to understand the philosophy of Maynard Keynes as against Austrian Economics, and that most economist today, to their detriment in my view, only follow the Keynesian concept of stimulus.

It was interesting that Ben Benanke before a Senate Committee in NY, a year or so back, stated (with head bowed I might add) that gold is not money.  In 1912, J. P. Morgan stated that "gold is the only money, everything else is just credit."

Good investing and trading is based on intuition.  Intuition does work but it needs to be fed by all the leaning that you can do.   A must book I have on that is called "The Intuitive Edge" by Phillip Goldberg.

There are no shortcuts when it comes to making the right decisions of protecting your hard earned but the trip has been a very interesting one for me and made me realise how little I know and why I lost a lot of money in the early days.


----------



## explod (26 December 2012)

So_Cynical said:


> With respect...i think your dreamin.
> 
> The Jan 2008 bottom trend line was $56 i imagine some support buyers mite of been interested at that level and the savvy had been stuffing their pockets with profits for the last 6 years and were keen to see it continue, most of the volume for 2008 happened at around the $43 mark..were these buyers savvy?
> 
> ...




Agree, a bit flippant but just using the stock as the example put up by Ves.

Did own them once from $8 near 20 years ago and cashed them at around $26 to put into some land at the time, horrified to see them a bit later at about $36.

Apologies as looking back without involvement in the stock was unfair.


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## Julia (26 December 2012)

Ves said:


> Can you run me through your sums for this comparison?



No, Ves.  You can do the sums for yourself.
Let's just look at the broad picture, taking the start of 2008 as our beginning.  By this time, if you'd been following world events (much of this is referred to above by Explod), and formed the clear view that the global financial situation was unravelling from its artificially induced highs, let's say you sold here when CBA was around $60.
Then you sat out in cash and watched the market fall, and fall, until CBA reached $25.
It's pretty obvious, isn't it, that by at that stage (or close to it) you used your cash accumulated from selling at $60 to buy far more shares at $25 ish?   And clearly, given the yield is expressed in so many cents per share, you would pretty obviously be pulling in a higher dividend yield and franking credits.



> Is it fair to assume that the hypothetical person purchased at the end of 2003 for $30 (since the market started looking better at that point or so).



No idea and not especially relevant to the point I'm making which is that it was beneficial to sell at or close to the high for some years *given the clear disaster on the way globally* and, if you still regarded the stock as worth buying, then buy in at a much lower price.

You seem to want to complicate what is essentially a very simple proposition.  

I wonder how much notice fundamental investors - whose premise is buying on the basis of the value they put on an individual company - include in their calculations global trends, political and financial.  Imho, if you ignore these in your decisions you are incurring unnecessary risk.


----------



## So_Cynical (26 December 2012)

Julia said:


> No, Ves.  You can do the sums for yourself.
> Let's just look at the broad picture, taking the start of 2008 as our beginning.  By this time, if you'd been following world events (much of this is referred to above by Explod), and formed the clear view that the global financial situation was unravelling from its artificially induced highs, let's say you sold here when CBA was around $60.
> Then you sat out in cash and watched the market fall, and fall, until CBA reached $25.
> It's pretty obvious, isn't it, that by at that stage (or close to it) you used your cash accumulated from selling at $60 to buy far more shares at $25 ish?   And clearly, given the yield is expressed in so many cents per share, you would pretty obviously be pulling in a higher dividend yield and franking credits.




I just had a look at the CBA annual report, a touch over 800000 shareholders..now how many do you think did the above or even close to it??

Seriously...its a fantasy that sort of perfect in out and in timing.


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## Julia (26 December 2012)

So_Cynical said:


> I just had a look at the CBA annual report, a touch over 800000 shareholders..now how many do you think did the above or even close to it??
> 
> Seriously...its a fantasy that sort of perfect in out and in timing.



I have made it clear that I wasn't suggesting many people are going to judge the absolute top or bottom.  I certainly didn't.  But I sold at $56.

 The gap between $60 and $25 is pretty damn huge, isn't it?
You don't have to hit the exact top to sell to make a very decent profit.

The question is not how many did it, but rather that it can be done.
If you judge everything by what the masses do, you'd never get anywhere, fergawdsake!


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## Ves (27 December 2012)

Hey Canoz or Joe or another admin that sees this thread can I please request that my previous posts in this thread are deleted?

To Julia and Explod I am sorry to have started this discussion. I am inable to communicate what I really want to say. I get the concept of selling at the top of the peaks and buying at the bottom again (it's obvious that this is the ideal strategy).  But the whipsawing, tax, transactional costs and everything else in between that make the market a zero-sum game convince me that this is much easier to pull off in hindsight.  

I'm not arguing that it is impossible - I'm just saying it's much harder that people think it is - hence why not many people out-perform the market indices.

Maybe it's just the fact that I'm dumb.


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## willstor (27 December 2012)

Julia I'm totally with you on the selling at the top principal. What I was trying to say in a very non coherent way was that selling everything isn't the best thing unless something insane is going on. I made a few huge generalisations along the way too however!


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## Bill M (27 December 2012)

Ves said:


> Hey Canoz or Joe or another admin that sees this thread can I please request that my previous posts in this thread are deleted?
> 
> To Julia and Explod I am sorry to have started this discussion. I am inable to communicate what I really want to say. I get the concept of selling at the top of the peaks and buying at the bottom again (it's obvious that this is the ideal strategy).  But the whipsawing, tax, transactional costs and everything else in between that make the market a zero-sum game convince me that this is much easier to pull off in hindsight.
> 
> ...




Nah, don't do that. It has been a fair thread with fair opinions and your argument is just as good as anybody else's. This is what I have gathered from the thread. Using CBA is a good example. There seems to be 6 types of people out there. From top, being the best and the bottom being the worst.

*1.*There are those that saw a top and decided that was it, it's coming down and I am out, it's over valued. Then in March 2009 they saw that it had reached bottom and they repurchased the lot, at rock bottom at $25. (Very few people would fall into this group)

*2. *Then there are those that saw the top in November 2007 and sold all, they are out and the money is in the bank. But due to on going problems in the world never repurchased. (Probably more people in this group than the first)

*3. *Then there are those that held CBA all the way through but they topped up on the way down down and then bought even more in the $26 range. They are long term investors looking for income and saw an opportunity to buy more very cheaply. (I am in this group, not the best and definitely not the worst)

*4. *There are those that had some CBA at the peak in 2007 and still hold them today, price is roughly the same. They did nothing, they did not sell or buy anymore, they just sat back and got paid their fully franked dividends. 

*5. *Then there is the majority of the population who don't hold any CBA at all. This is the biggest group of all.

*6. *This group is the worst of all. They held CBA and then just watched it go down to $25 and then took bad advice from the guru clowns and sold everything at massive losses at the exact wrong time. These people lost the most. They never repurchased and are still blaming the rest of the world for their losses.

We are all just expressing opinions, it's all about which group you fall into. Unfortunately I can't make group 1 yet but I am happy where I am, I certainly can't pick the absolute highs or lows, cheers.


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## tech/a (27 December 2012)

So_Cynical said:


> I just had a look at the CBA annual report, a touch over 800000 shareholders..now how many do you think did the above or even close to it??
> 
> Seriously...its a fantasy that sort of perfect in out and in timing.




RUBBISH

In 2008 I had portfolio in high 6 figures.
It's logged here and on another forum that 
I closed the lot a few months before the GFC.
Haven't bought back a portfolio either---yet.
Freeholded an Industrial property and collect 
a 5 figure passive income into my super--

Take a look at the PEN thread a punter there was
Given the heads up when ( evidently ) he held over
2 million shares at 15 c ( average buy 3.6 cents )
That 12 c was a good place to liquidate and do EXACTLY
what Julia suggests.
Needless to say he didn't in fact he kept buying.
It's now 2.6 cents.

You don't need to be perfect either!.
You don't see any benefit in Julia's suggestion?

Oh I'm pretty sure she is speaking from experience.


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## herzy (27 December 2012)

Tech-A, I'm sure you would be the first to recognise the difficulty of technical analysis. 

I believe all Ves, SC et al are trying to say is that it is nigh on impossible/very difficult to accurately time markets. Obviously, selling at highs and buying lows (generally) would be great - Obviously, as Julia suggested, recognising the impact of global financial events (specifically) would also be great. But who knows when there is a peak and impending crash (such as $60 at CBA), or just a 5% dip worth riding out? At $26, who knows it's not going to drop to $13? The top and the bottom are very difficult to pick (at least for me).

I don't have much to add, just wanted to summarise how I see the arguments - I see myself as a value investor, but the one thing I struggle the most with is timing: when to sell, when to buy, whether to have a stop loss, whether to average down. Tough questions everyone has a different answer for. 

Personally, the easiest way for me to have an approach that I am confident in, is to decide on a price that I think represents good value for a company, with the assumption it will eventually achieve (closer to) fair value. This may be encouraged by a few things (upcoming market releases, etc), and may be affected by external market factors. If the price were to drop another say 30% (assuming no fundamental reason), I would average down, as this now represents 30% greater value than it did before. 

If anybody else would be interested in outlining their approaches, I would be more than interested. MOD: please don't delete Ves's posts (with his permission of course).


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## tech/a (27 December 2012)

*Herzy*

I haven't the time to reply in full ---a tee time is beckoning.
But Julia and I aren't talking about* ANY* high or low
we are talking of *SIGNIFICANT* highs and lows.

These are much easier to spot and help dramatically with "timing".


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## explod (27 December 2012)

http://bigcharts.marketwatch.com/ad...rsToggle=false&chartStyleToggle=false&state=9

I have attached the two weekly chart for NST Northern Star Resources.  Have held this stock but not at the moment.

This I consider to be now close to a blue chip.

On the chart it is volatile and reflects that of the gold price.  But overall it is in a nice uptrend.  Its grades of gold to the tonne and output continues to improve, all mines are in Australia (hate sovereign risk) and as it has a few of them it is diversified.

You will also note that on new highs the pullbacks continue to make higher support lines. (Guppy's boxes would look good on it).  In my view it is on one now and will rise from here, would set a 5% (always adhere to a stop) stop but feel pretty good that one could hold this to the next top (on the ATR, average trading range) at $1.50 to $1.65.

But, I would be watching and governed also by, the price of gold, what the market is doing, economics (ie. news and the banter on money printing) what I think the company is doing and my gut (intuition) which is really the compilation of everything I have just stated.  And note the volume on the chart, huge when it recently dropped into the $1.30 area, for every seller there is a buyer and they soaked it up four weeks back.

So lets watch NST, perhaps someone can suggest another thread to hold the exercise together.

Proviso, I am not qualified to make recommendations or to give advice.  If I could I would not recommend it as I do not hold it for the reasons stated in previous posts and my support of this thread "Sell Everything"


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## Boggo (27 December 2012)

herzy said:


> Tech-A, I'm sure you would be the first to recognise the difficulty of technical analysis.
> 
> I believe all Ves, SC et al are trying to say is that* it is nigh on impossible/very difficult* to accurately time markets. Obviously, selling at highs and buying lows (generally) would be great - Obviously, as Julia suggested, recognising the impact of global financial events (specifically) would also be great. But who knows when there is a peak and impending crash (such as $60 at CBA), or just a 5% dip worth riding out? At $26, who knows it's not going to drop to $13? The top and the bottom are very difficult to pick (at least for me).
> 
> ...




It is not impossible and sometimes not that difficult.
There are many examples where potential turning points are predictable and there are many methods of highlighting those potential points.
Its not easy and probably works 50% of the time on 50% of the candidates. The trick is being in or out of the candidates where it is working.
There have been quite a few examples just in the last year, this TGA thread (link below) is one recent example. Compare your current chart with the 11th Oct chart and commentary on here and you will see an example of where one of the many methods can predict to within a few cents.
https://www.aussiestockforums.com/f...=18617&page=47&p=732749&viewfull=1#post732749


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## Julia (27 December 2012)

Ves said:


> Hey Canoz or Joe or another admin that sees this thread can I please request that my previous posts in this thread are deleted?



I hope you've reconsidered this request, Ves.  It has not been an acrimonious argument imo.  Rather a fairly reasoned discussion amongst a group of people who undoubtedly are in widely different circumstances.  Some of you are very young, yet to build what you will have when you reach retirement age, and some of us have been lucky enough to retire reasonably early.  We will, because of these different circumstances, each have a different focus.  Mine is on preserving capital as an absolute first priority because I have no wish to return to the work force and am dependent on that capital to generate a living.  That is quite different, obviously, from eg yourself who is in the pretty early stages of your career, and earning a living from your work.  Others will be at various other points in their lives and wealth building.



> To Julia and Explod I am sorry to have started this discussion. I am inable to communicate what I really want to say. I get the concept of selling at the top of the peaks and buying at the bottom again (it's obvious that this is the ideal strategy).  But the whipsawing, tax, transactional costs and everything else in between that make the market a zero-sum game convince me that this is much easier to pull off in hindsight.



That's a fair point.  When I sold everything, it was not with 100% confidence at all.  I didn't know what would happen.  We can only make any decision with the information we have at the time and what we believe is most likely to occur in the immediate and longer term future.  My decision was made more on the global unfolding mess than any clever analysis of a chart.
Remember that not everyone is paying tax and if your profits are OK, then tax is the last reason not to preserve them imo.  To lose a few hundred thousand in profit because you object to the tax involved seems faulty thinking to me.



> Maybe it's just the fact that I'm dumb.



You know, and we know, you are not dumb.  That's just silly.  I'm just suggesting that, instead of being dogmatic about an approach, it's sometimes worthwhile considering some alternatives, or even just broadening that approach to maybe apply more consideration of factors outside of just what you think a company is worth.



willstor said:


> Julia I'm totally with you on the selling at the top principal. What I was trying to say in a very non coherent way was that selling everything isn't the best thing unless something insane is going on. I made a few huge generalisations along the way too however!



Thanks, willstor.  I guess it depends how we determine what is 'insane'.  It's not an expression I'd have chosen, but maybe I'd say 'dramatic' in terms of how the GFC was clearly beginning to unfold.




Bill M said:


> *2. *Then there are those that saw the top in November 2007 and sold all, they are out and the money is in the bank. But due to on going problems in the world never repurchased. (Probably more people in this group than the first)



Yep, I fall into this group.  Comfortably in cash.  If I needed to grow the capital, however, I'd have to acknowledge that this wouldn't be a long term solution.  I'm happy with the decision to take high deposit rates when they were available.  In so doing I've not taken advantage of the recent rise in the market.  
I still can't see any real evidence for confidence in the market.  Nothing has been actually solved in the US or Europe.  Our Australian economy is faltering and political uncertainty along with fiscal policy is not helping.
All this, of course, just inho.  Others will see everything differently.


----------



## notting (27 December 2012)

Julia said:


> I still can't see any real evidence for confidence in the market.




Perhaps some of this confidence comes from the *real world fact* that there has been a massive and very successful deleveraging process in the listed universe, making most companies far safer to invest in than prior to the GFC reality check.


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## George Washingto (27 December 2012)

Ves said:


> Hey Canoz or Joe or another admin that sees this thread can I please request that my previous posts in this thread are deleted?
> 
> To Julia and Explod I am sorry to have started this discussion. I am inable to communicate what I really want to say. I get the concept of selling at the top of the peaks and buying at the bottom again (it's obvious that this is the ideal strategy).  But the whipsawing, tax, transactional costs and everything else in between that make the market a zero-sum game convince me that this is much easier to pull off in hindsight.
> 
> ...




Great post. 

Keep in mind the GFC dip was a once in a life time event, so trying to pick the tops and bottoms of much lesser falls will give smaller potential returns, meaning tax, transactional costs etc will take a bigger chunk.

You would also have to factor in the % of picks you get wrong and the losses incurred.

If you are constantly buying and selling the tops and bottoms you are also constantly giving your profits back in tax. The investor who holds will be earning dividends on the governments money.


----------



## explod (27 December 2012)

George Washingto said:


> Great post.
> 
> Keep in mind the GFC dip was a once in a life time event,




Would you care to qualify that George?

As from 1929 through to the mid 1930's many would posture for good economic reasons that 2008 was just the first ripple in much greater falls to come.  Some very qualified pundits are also saying that the economic mix has never in history looked so bad as it appears to be this time.


----------



## Julia (27 December 2012)

Bill M said:


> *3. *Then there are those that held CBA all the way through but they topped up on the way down down and then bought even more in the $26 range. They are long term investors looking for income and saw an opportunity to buy more very cheaply. (I am in this group, not the best and definitely not the worst)



I've previously made the point that, for this to have any meaningful impact, you'd have to be constantly sitting on substantial amounts of cash in order to do all this 'topping up'.  



> *4. *There are those that had some CBA at the peak in 2007 and still hold them today, price is roughly the same. They did nothing, they did not sell or buy anymore, they just sat back and got paid their fully franked dividends.



Thus missing the chance to considerably increase their position down the track.



> *5. *Then there is the majority of the population who don't hold any CBA at all. This is the biggest group of all.



I'd say much of the population will indirectly hold CBA in their public Super funds.
Most of these would fall in to the category of vaguely becoming aware of how much the market had dropped when it was down about 15% and who watched on - often not even knowing which option their Super was in - until they finally cried that they'd lost half the value of their Super.



herzy said:


> Tech-A, I'm sure you would be the first to recognise the difficulty of technical analysis.
> 
> I believe all Ves, SC et al are trying to say is that it is nigh on impossible/very difficult to accurately time markets. Obviously, selling at highs and buying lows (generally) would be great - Obviously, as Julia suggested, recognising the impact of global financial events (specifically) would also be great.



There is nothing mysterious about following what's going on in the world and doing a bit of research into the likely repercussions of the credit bubble.



> But who knows when there is a peak and impending crash (such as $60 at CBA), or just a 5% dip worth riding out? At $26, who knows it's not going to drop to $13?



A basic chart will make the trend clear.  Most trend followers will only buy back in when they can see an uptrend recur.  So, again, obviously this means you're going to miss the absolute bottom if you want to get back in with that cash you've released a little below the top.



> The top and the bottom are very difficult to pick (at least for me).



Of course they are, herzy, if you - determining yourself as a value investor, whatever that actually means - decline to investigate even a simple trend following approach.  



> I don't have much to add, just wanted to summarise how I see the arguments - I see myself as a value investor, but the one thing I struggle the most with is timing: when to sell, when to buy, whether to have a stop loss,



This is where a simple trend following approach would help you.  You don't have to get involved in complex, esoteric technical analysis, just learn how to follow some basic rules. 



> Personally, the easiest way for me to have an approach that I am confident in, is to decide on a price that I think represents good value for a company, with the assumption it will eventually achieve (closer to) fair value. This may be encouraged by a few things (upcoming market releases, etc), and may be affected by external market factors. If the price were to drop another say 30% (assuming no fundamental reason), I would average down, as this now represents 30% greater value than it did before.



Well, if you're happy with that approach, that's all that matters I guess.
All that some of us are suggesting is that it's possible to increase your profitability by broadening that approach.
Re the averaging down representing greater value than it did before, Cynic posted this earlier:


> Let me see now, HIH, Lehman Bros, Enron, World Com, Freddie Mac, Fannie Mae, GMH. You would of course agree that these were all blue chip stocks once upon a time, wouldn't you?



Then there was a string of companies, all market darlings, in Australia, e.g ABC Learning, who sank into oblivion.
Didn't represent much value then, did they?
(My mind has gone blank on some of the others.  Someone will be able to remind me.)



> If anybody else would be interested in outlining their approaches,



The reason many do not detail their approach is the dogmatic rejoinder from some people that what is outlined is impossible, that 'value investing' is the only way etc etc.  This then leads to ill tempered arguments and no one wins.
It is unhelpful, for example, for So Cynical to repeatedly state that an outlined approach is 'fantasy' when several of us have done it



George Washingto said:


> Keep in mind the GFC dip was a once in a life time event,



Well, that would be a pretty short life.  The 1987 crash is not so long ago and there are people still alive today who can well remember the Great Depression after that crash.



> so trying to pick the tops and bottoms of much lesser falls will give smaller potential returns, meaning tax, transactional costs etc will take a bigger chunk.



Try to understand that not everyone is paying tax.  Anyone who is retired and still paying tax needs to get advice.



> You would also have to factor in the % of picks you get wrong and the losses incurred.



Therefore the oft quoted maxim  "Cut your losses quickly and let your winners run".



> If you are constantly buying and selling the tops and bottoms you are also constantly giving your profits back in tax. The investor who holds will be earning dividends on the governments money.



Again, see above.
Further, if your profits are significant enough, avoiding tax should be less of a consideration than protecting those profits.


----------



## George Washingto (27 December 2012)

explod said:


> Would you care to qualify that George?
> 
> As from 1929 through to the mid 1930's many would posture for good economic reasons that 2008 was just the first ripple in much greater falls to come.  Some very qualified pundits are also saying that the economic mix has never in history looked so bad as it appears to be this time.




I meant that you will only have the opportunity to pick the top of a 50% fall, at best a handful of times in your life.

The other tops you pick might only be 10 or 20% drops, which means the other costs Ves mentioned take a much bigger slice of the pie, not to mention the losses incurred when you pick wrong and have to buy back in at a higher price.

Basing your hindsight scenario around picking the perfect top and perfect bottom of the GFC is a bit far fetched.


----------



## Julia (27 December 2012)

George Washingto said:


> Basing your hindsight scenario around picking the perfect top and perfect bottom of the GFC is a bit far fetched.



Has anyone claimed to do this?
Have you actually read the last several pages?


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## George Washingto (27 December 2012)

Julia said:


> Has anyone claimed to do this?
> Have you actually read the last several pages?






Julia said:


> Using the same principle you're outlining here, you could have sold your CBA when the GFC began, then had all that additional capital available to buy it back in increased quantity (thus also increasing your dividend yield and franking credits) after the downturn was over.






explod said:


> At the end of 2007 it was clear that something was wrong on the chart and in the discussions on ASF, so most of the savvy would have been out of CBA at or before $58.
> 
> Just a year later, Ben Benanke said we were saved and the markets looked oversold.  It's clear too if we look at the chart so Savvy is back in around $28.





To clarify my points from above, I think trying to pick tops and bottoms based on trends is a good way to lose money. Sure, looking back in hindsight it looks easy to pick up a 50% gain during the GFC, but if it's so easy, why didn't everyone do it?

Unless you are an investing genius holding through good and bad entails much less risk imo.


----------



## Julia (27 December 2012)

George Washingto said:


> To clarify my points from above, I think trying to pick tops and bottoms based on trends is a good way to lose money. Sure, looking back in hindsight it looks easy to pick up a 50% gain during the GFC, but if it's so easy, why didn't everyone do it?
> 
> Unless you are an investing genius holding through good and bad entails much less risk imo.



In the face of such brilliant deductive reasoning, I give up.

And herzy, you wonder why people are reluctant to take the time and trouble to detail their approach.


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## George Washingto (27 December 2012)

Julia said:


> In the face of such brilliant deductive reasoning, I give up.
> 
> And herzy, you wonder why people are reluctant to take the time and trouble to detail their approach.




Julia, I gather from your posts that you 'picked' the top of the GFC and currently 100% in cash?

Do you plan on re-entering the market? Or hope that the income from your TD's will last for the rest of the your life?


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## So_Cynical (27 December 2012)

So_Cynical said:


> I just had a look at the CBA annual report, a touch over 800000 shareholders..now how many do you think did the above or even close to it??
> 
> *Seriously...its a fantasy that sort of perfect in out and in timing.*






tech/a said:


> RUBBISH
> 
> In 2008 I had portfolio in high 6 figures.
> It's logged here and on another forum that
> ...




Rubbish hey???

And yet you didn't buy back in, same as Julia didn't buy back in....Bill touched on the subject of personality's and broke the buyers and holders into groups with reasonable accuracy...and now your statement supports my understanding.

Momentum and trend followers are great at protecting capital, running with the pack etc but hopeless at buying value and taking advantage of fear and the falling knife....supports my theory that people cant be true trend followers and bottom buyers, the 2 quality's simply don't go together. 

I mean one cannot be super protective of their capital and yet take great risks...one works against the other.

----

The people selling CBA near the top were mostly trend followers that jumped when the $56 support line was broken and the capital preservation aware, the sharp fall that followed was a mixture of panic and stop losses by individuals, punters and managers, and the withdrawal of foreign investors.


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## Bill M (27 December 2012)

Julia said:


> I've previously made the point that, for this to have any meaningful impact, you'd have to be constantly sitting on substantial amounts of cash in order to do all this 'topping up'.




Yes I do sit on a reasonable amount of cash (not more than 5 figures though). Generally what I do is bank all dividends, interest and rental income and it builds up over time. I keep it ready for market corrections, share purchase plans, capital raisings or personal emergencies. During the GFC I averaged down into my favourite stocks, many of them in fact. I just kept buying until my cash was almost gone and it had paid off well. Make no mistake, I bought as much as I could with what I had stashed away ready for this time. Here is what I wrote on this forum on 11 March 2009
---


Bill M said:


> Plenty of good news around for non gloom and doomers. Currently there are plenty of share purchase plans around for those long term holders. Time to get involved if you can.
> 
> WES offered at $13.50, today $17.50.......kerchinck!
> 
> ...




Link here: https://www.aussiestockforums.com/forums/showthread.php?t=8130&page=9&p=407626&viewfull=1#post407626
---


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## willstor (27 December 2012)

If I'd have been in on CBA at the time of the GFC I'd have probably sold at 52ish and bought back at 45 thinking I was smart. I'd then have bought tranche 2 at 38 and 3 at 30ish. Mixed with divs id probably be OK overall however I would only do this on the complete faith that I wasn't risking losing my knickers... During the GFC there was a stage when that seemed possible on all banking stocks!


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## MrBurns (27 December 2012)

In 06' I was surrounded by advisors telling me what shares to invest in, a reasonable 7 figure sum.

I had a gut feel something wasnt right so I didn't and the the market crashed, if I had taken their advice I would have lost half the money.

Since then I've dabbled and lost a little and now have a little in TLS which has been good the past month or 2

I will probably go into TabCorp in the next few months and I was in Bunnings today and I feel that place can only get busier as things get worse so I might go in there too but I'm very wary and don't trust the markets at all, I trust financial advisors even less.

Spoke to a neighbour today who runs a reasonably sized insolvency company, he says dont believe the hype that it's good out there because it isn't ..........and he's very busy as proof.


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## explod (27 December 2012)

So_Cynical said:


> Rubbish hey???
> 
> and taking advantage of fear and the falling knife....supports my theory that people cant be true trend followers and bottom buyers, the 2 quality's simply don't go together.




Trend following also includes the falling knife, to know when the bottom hits, cant think of the name on the spot, but they made poker machines and hit a glitch about 10 years ago, went down like a stone, purchased some at $1.20 then doubled up at 80cents because I was scared now, sold them all the next day on the rebound at $1.30 and blow me they hit $6 a year later.  

What the names of those one arm  bandits, too much red ,,Oh I know Aristocrat.

Trend followers have insights you would not read about ole pal.

ps. I had 40 bl..dy g in the bas.ards


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## Bill M (27 December 2012)

MrBurns said:


> Since then I've dabbled and lost a little and *now have a little in TLS* which has been good the past month or 2




Hello Burnsy, I have a question for you and I am not singling you out so please don't take it as an attack, it is not. You were talking about Telstra some time ago, probably even as long as 2 years ago. Can you tell my why didn't buy Telstra at $2.55 (2 years ago) but you bought Telstra at over $4? Nothing has changed with this company yet you chose to pay 70% more? I can't get my head around this.


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## CanOz (27 December 2012)

explod said:


> Trend following also includes the falling knife, to know when the bottom hits, cant think of the name on the spot, but they made poker machines and hit a glitch about 10 years ago, went down like a stone, purchased some at $1.20 then doubled up at 80cents because I was scared now, sold them all the next day on the rebound at $1.30 and blow me they hit $6 a year later.
> 
> What the names of those one arm  bandits, too much red ,,Oh I know Aristocrat.
> 
> ...




ALL


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## MrBurns (27 December 2012)

Bill M said:


> Hello Burnsy, I have a question for you and I am not singling you out so please don't take it as an attack, it is not. You were talking about Telstra some time ago, probably even as long as 2 years ago. Can you tell my why didn't buy Telstra at $2.55 (2 years ago) but you bought Telstra at over $4? Nothing has changed with this company yet you chose to pay 70% more? I can't get my head around this.




Cant remember if I was interested 2 years ago, but lately I've just woken up that they were/are a bargain, the dividend plus they have no real competition, I should have bought 6 months ago but didn't trust my own judgement, I also should have put far more in than I have but once again, gun shy..........


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## explod (27 December 2012)

Bill M said:


> Hello Burnsy, I have a question for you and I am not singling you out so please don't take it as an attack, it is not. You were talking about Telstra some time ago, probably even as long as 2 years ago. Can you tell my why didn't buy Telstra at $2.55 (2 years ago) but you bought Telstra at over $4? Nothing has changed with this company yet you chose to pay 70% more? I can't get my head around this.




Actually for the conservative follower $3.25 was the real brake of the down trend if one looks at the five year weekly chart.


It is now starting to eat into resistance at the $4.30 area so is worth watching.   Any weakness yes a sell but if we break $5.50 the next target could go all the way to the old $8 dollar area.  For the last comments look at the monthly chart back to 1999


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## tech/a (27 December 2012)

Cynical

You really only have a singular train of thought.

The investment in industrial property has returned $52k a year
X 4 
Into my super
I've been short term trading The FTSE since with enough to satisfy
The bosses spending habits.

Not as if I've been sitting twiddling thumbs.


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## Bill M (27 December 2012)

MrBurns said:


> Cant remember if I was interested 2 years ago, but lately I've just woken up that they were/are a bargain, the dividend plus they have no real competition, *I should have bought 6 months ago but didn't trust my own judgement, I also should have put far more in than I have but once again, gun shy*..........




Fair enough mate, thanks for the answer.


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## Smurf1976 (27 December 2012)

In terms of the broader economic issues, there are plenty of people in the "real economy" (that is, running businesses etc but not associated with the financial markets) who would confidently say that in December 2012 we are still very much in the GFC. Financial markets may have rebounded, but a lot of other things haven't (and it's not hard to find stocks that haven't come back up either).

Looking at non-market things, the general mood of society seems to have shifted to one of uncertainty and caution. With economic doom and gloom overseas and things like soaring household expenses, Australians have become more cautious I feel. BBQ conversation is no longer about flipping houses and which plasma TV to buy. Now it's more about someone's son/daughter who is out of work because their employer went broke or things like power bills. In other words, it's shifted from unbridled optimism to caution and a sense of gloom. Talk to anyone who works in discretionary retail or the public service and their perception is likely to be even worse.

For all those who sold their stocks in 2008 because they "knew" something was wrong, I'm just wondering why you'd buy back in if the underlying issues haven't really been fixed? Is it simply because at a lower price you feel the risk is justified? Technicals on the stocks and/or the entire market? Faith in the ability of central banks to inflate?

I'm not intending to be critical here, about a third of my portfolio is currently in stocks, but I'm just questioning the underlying thinking. As I see it, things aren't much better in late 2012 than they were in late 2007 so far as economic fundamentals are concerned.


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## explod (27 December 2012)

tech/a said:


> Cynical
> 
> You really only have a singular train of thought.
> 
> ...




First we are all learning.

We take it serious, *it is B serious.*

Recognition of those with the head down keeps us here.

Your breadth tech is one of the souls that keeps us going.

ASF should have a tick box so that there is no embarrassment.

Anyhow its boxing day, one of my Brother,s Birthdays got a bit p.....sed with another. and blow me I have three other brothers.  Me Dad long gone was on a trend but my Sister came in at number six.   And bless her she brought me a new fangled phone with a smart screen for xmas which I cannot use because it is very strange indeed.

Maybe time for the Gobbldegook thread.


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## Ves (27 December 2012)

Guys and girls - it is fine to leave my posts in this thread active.  I felt overwhelmed and a bit depressed when I wrote that last night.  Unfortunately I wasn't sure why at the time - but it turns out (from my symptoms today) that I've had a bout of food poisoning.  

Thanks for the civil and interesting discussion so far.

Perhaps tech/a has explained some of my doubts by suggesting that it is the significant highs and lows that made the GFC easier to read for those who acted on their research as compared to markets where the price action isn't as volatile.


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## explod (27 December 2012)

explod said:


> First we are all learning.
> 
> We take it serious, *it is B serious.*
> 
> ...




That should have read, "three other Brothers" six altogether. Sister and I make 8 altogether, jeez nothing: lotta the good Shepherds back then had 12+ children to bring unto the Lord: 

for the  Pedo p  cks. ....................Hey JMHO of course on this sacred festive.

Lucky wayneL, that most of them seem to talk and think the way you do.  Back to the garden in which I keep a soft spot for the fallen.


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## wayneL (27 December 2012)

explod said:


> Lucky wayneL, that most of them seem to talk and think the way you do.




You seem to be obsessed with me Mr Plod; but BTW, I don't think you really know how I think. As with everyone here, what you see is what I want to show, not the whole enchilada.

However, if they truly think like me, then I admire them.


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## Julia (27 December 2012)

George Washingto said:


> Julia, I gather from your posts that you 'picked' the top of the GFC and currently 100% in cash?



Do not distort what I have said.  No, I did not pick the top at all.  I gave back a small amount of profit before going completely to cash, taking advantage of 8% interest rates.  Yes I remain in cash.  See Smurf's very sensible post above.  He very accurately sums up how I feel about the global and local situation.



> Do you plan on re-entering the market? Or hope that the income from your TD's will last for the rest of the your life?



I don't 'hope' for anything.  I make decisions on carefully calculated assessments.  
I have no intention of detailing my entire financial situation here.




So_Cynical said:


> Rubbish hey???
> 
> And yet you didn't buy back in, same as Julia didn't buy back in....Bill touched on the subject of personality's and broke the buyers and holders into groups with reasonable accuracy...and now your statement supports my understanding.
> 
> Momentum and trend followers are great at protecting capital, running with the pack etc but hopeless at buying value and taking advantage of fear and the falling knife....supports my theory that people cant be true trend followers and bottom buyers, the 2 quality's simply don't go together.



Oh god, SC, you talk some bloody rubbish at times.
You also seem incapable of comprehending that anyone could be in a position to not have to constantly strive to make more money.

As I've said before, when you are in a position to generate a living from your capital, instead of stuffing about with a few hundred dollars here and there, I'll be more interested in listening to you.
You have even conceded that you have always been poor and you are still poor.
Why on earth would anyone take advice from you?



tech/a said:


> Cynical
> 
> You really only have a singular train of thought.
> 
> ...



+1.  



Smurf1976 said:


> In terms of the broader economic issues, there are plenty of people in the "real economy" (that is, running businesses etc but not associated with the financial markets) who would confidently say that in December 2012 we are still very much in the GFC. Financial markets may have rebounded, but a lot of other things haven't (and it's not hard to find stocks that haven't come back up either).
> 
> Looking at non-market things, the general mood of society seems to have shifted to one of uncertainty and caution. With economic doom and gloom overseas and things like soaring household expenses, Australians have become more cautious I feel. BBQ conversation is no longer about flipping houses and which plasma TV to buy. Now it's more about someone's son/daughter who is out of work because their employer went broke or things like power bills. In other words, it's shifted from unbridled optimism to caution and a sense of gloom. Talk to anyone who works in discretionary retail or the public service and their perception is likely to be even worse.
> 
> ...



Thank you for a thoughtful and accurate summary, Smurf.  Agree with all your conclusions.



Ves said:


> Guys and girls - it is fine to leave my posts in this thread active.  I felt overwhelmed and a bit depressed when I wrote that last night.  Unfortunately I wasn't sure why at the time - but it turns out (from my symptoms today) that I've had a bout of food poisoning.



Nasty.  Hope you're feeling better now.



> Thanks for the civil and interesting discussion so far.



I will echo this, with a couple of exceptions.   We all benefit when it's possible to exchange views in a civil fashion.


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## explod (27 December 2012)

wayneL said:


> You seem to be obsessed with me Mr Plod; but BTW, I don't think you really know how I think. As with everyone here, what you see is what I want to show, not the whole enchilada.
> 
> However, if they truly think like me, then I admire them.




What does BTW mean.

My elder Brothers (I am the oldest by the way) think us alarmists (your term) are a joke.  The younger ones, lefties smoke that grass stuff which leaves me to try and save everyone as well as you w/L 

because you are all natures Children.

Someone tell me to p... off to bed.   Gumby where are you?

Sell, because the sun does not shine like it used to in my view.  NQTGA.


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## burglar (27 December 2012)

explod said:


> ...  What does BTW mean. ...




By the way, what does BTW mean?



explod said:


> ...  NQTGA.




No matches for NQTGA


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## explod (27 December 2012)

burglar said:


> No matches for NQTGA




Not Qualified To Give Financial Advice.


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## So_Cynical (28 December 2012)

Julia said:


> Oh god, SC, you talk some bloody rubbish at times.
> You also seem incapable of comprehending that anyone could be in a position to not have to constantly strive to make more money.
> 
> As I've said before, when you are in a position to generate a living from your capital, instead of stuffing about with a few hundred dollars here and there, I'll be more interested in listening to you.
> ...




I probably should just let this go....oh its xmas WTH

Your right about the _"constantly strive to make more money"_ bit, probably has something to do with the later comment of _"You have even conceded that you have always been poor and you are still poor."_ being poor and not being happy about it has tended to focus my activity's on doing something about it.

Lucky for me i have developed a strategy that has returned me 20%+ PA over the last 2 years..a strategy that requires me to take risks, risks that i have to take because i don't have a lot of capital and a life style to protect, its a different mind set acquiring money and protecting money.

Advise is something we are not allowed to give on a financial forum  i think its fair to say that you don't have to much to contribute when it comes to needing money and taking risks...not lately anyway...and that's a good thing hey, a position i would love to be in.


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## qldfrog (28 December 2012)

Smurf1976 said:


> In terms of the broader economic issues, there are plenty of people in the "real economy" (that is, running businesses etc but not associated with the financial markets) who would confidently say that in December 2012 we are still very much in the GFC. Financial markets may have rebounded, but a lot of other things haven't (and it's not hard to find stocks that haven't come back up either).
> xxxx
> I'm not intending to be critical here, about a third of my portfolio is currently in stocks, but I'm just questioning the underlying thinking. As I see it, things aren't much better in late 2012 than they were in late 2007 so far as economic fundamentals are concerned.



+1
And I work(ed) in mining and in qld, a supposed booming state:
you all  remember the two speed economy mentioned ad nauseum in the last few years ;
I am afraid it is down to one speed and that might be reverse

My own company is now getting tax refund for the first time since i founded it in 2000..Nice feeling to get money back but obviously will not help the treasury and it means I am making losses;
I am amazed at the actual one year gap between government awareness and real economy status.

This shows how far away from the real Australia our governments have become.Anyone for a nice little revolution?

As for the argument about getting the top/bottom of the market: a stop loss is not that hard to design and implement and would have prevented anyone from massive GFC loss.
So I still trade a lot but day to day with SL and do not believe in any actual recovery story at the current stage, I see more doom and gloom ahead than sunshine


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## DocK (28 December 2012)

Smurf1976 said:


> In terms of the broader economic issues, there are plenty of people in the "real economy" (that is, running businesses etc but not associated with the financial markets) who would confidently say that in December 2012 we are still very much in the GFC. Financial markets may have rebounded, but a lot of other things haven't (and it's not hard to find stocks that haven't come back up either).
> 
> Looking at non-market things, the general mood of society seems to have shifted to one of uncertainty and caution. With economic doom and gloom overseas and things like soaring household expenses, Australians have become more cautious I feel. BBQ conversation is no longer about flipping houses and which plasma TV to buy. Now it's more about someone's son/daughter who is out of work because their employer went broke or things like power bills. In other words, it's shifted from unbridled optimism to caution and a sense of gloom. Talk to anyone who works in discretionary retail or the public service and their perception is likely to be even worse.






qldfrog said:


> +1
> And I work(ed) in mining and in qld, a supposed booming state:
> you all  remember the two speed economy mentioned ad nauseum in the last few years ;
> I am afraid it is down to one speed and that might be reverse
> ...




+2

We've owned and run our own business on the Gold Coast for the past 12 years, manufacturing/construction industry, and the past year is the toughest we've ever seen.  We're keeping our heads above water, thanks largely to having no debt, but where we'd normally be replacing aging equipment and extending our capability by purchasing new technology - we're just hunkering down and waiting it out.  Most of our customers, at least those that haven't had to shut their doors and walk away from their businesses, are likewise treading water.  Unemployment stats do not show the numerous people working drastically reduced hours.  I or any one of the small business people I know could have told Swanny that tax receipts would be drastically reduced - if anyone was actually listening to small business 

There are quite a few of us doing lots of quotes, and large projects are being costed and planned, but these jobs seem to stall at the final hurdle due to "uncertain economic times" and are put on the shelf to be started down the track.  I'm desperately hoping that an Australian election may provide some much-needed impetus - but that's a discussion for another thread.

As to the trading/investing:  I've been deploying personal capital steadily since late 2011 and am now nearly fully invested.  The markets tend to be forward-looking rather than a reflection of what's happening right now in my neck of the woods, and I adhere to a trend following strategy - and over this period the trend has been (mostly) up.  I believe the market can be completely irrational for quite a good period of time, and I want to profit from that time if I can.  I'd rather just follow the charts in front of me than sit out due to my own beliefs about what's likely to happen - but I'm in a position of needing to grow my capital, rather than just protect it.  My finger is poised to hit the "sell" button however as I have no wish to give back my open profits when the inevitable correction comes (imo).


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## Julia (28 December 2012)

So_Cynical said:


> Your right about the _"constantly strive to make more money"_ bit, probably has something to do with the later comment of _"You have even conceded that you have always been poor and you are still poor."_ being poor and not being happy about it has tended to focus my activity's on doing something about it.
> 
> Lucky for me i have developed a strategy that has returned me 20%+ PA over the last 2 years..a strategy that requires me to take risks, risks that i have to take because i don't have a lot of capital and a life style to protect, its a different mind set acquiring money and protecting money.
> 
> Advise is something we are not allowed to give on a financial forum  i think its fair to say that you don't have to much to contribute when it comes to needing money and taking risks...not lately anyway...and that's a good thing hey, a position i would love to be in.



Fair enough and I should not have been so testy in my post last night.
And no, I am not at all attracted to risk taking when it's quite unnecessary. 

I had to start over from scratch with nothing, no assets of any kind, in my mid 30's, so I understand what it's like to be without the sense of security that money can offer.   For me, creation of a decent asset base has been more a question of timing and taking  opportunities, than engaging in risks with speccie small investments.   

I don't know what sort of job you have, but if you can increase your capacity to earn good money from an employer, maybe via additional education/training etc., that's going to be of more benefit to you overall imo than small gains on the stock market.  That's not advice, obviously, just a suggestion.


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## Julia (28 December 2012)

DocK said:


> The markets tend to be forward-looking rather than a reflection of what's happening right now in my neck of the woods,



How much do we all remember in the time prior to the GFC, when the subprime mess was unfolding in the US, how all the pundits (and many on this forum) assured themselves and the rest of us that Australia was 'decoupled' from the US.  Do we still think so?

Apparently so, given the rise in the XAO over recent days, despite the extremely dangerous position in the US, where no sign is apparent that they are going to avoid going over the fiscal cliff.

"7.30" this evening had an interview on this with Adam Rosen from the US who details the potential ramifications for Australia if this does happen.  http://www.abc.net.au/7.30/

So if our markets are forward looking, imo they're so inclined because they're wearing blinkers.

Glad to hear you're finding a trend following approach useful, DocK.  How do you select your stocks?
(If you're disposed to share this, of course.)


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## Julia (28 December 2012)

More on the above:
http://www.smh.com.au/business/fiscal-cliff-risk-now-nontrivial-for-australia-20121228-2byr3.html


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## burglar (29 December 2012)

Julia said:


> ... where no sign is apparent that they are going to avoid going over the fiscal cliff. ...




Just my opinion, mind!

American Politicians will try to wring maximum 
political points from the approach of the Fiscal Cliff.

It will go to the edge!!
Just like the Debt Ceiling Crisis in 1995:

http://www.tnr.com/article/politics/93043/obama-clinton-debt-ceiling-crisis


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## DocK (1 January 2013)

Julia said:


> How much do we all remember in the time prior to the GFC, when the subprime mess was unfolding in the US, how all the pundits (and many on this forum) assured themselves and the rest of us that Australia was 'decoupled' from the US.  Do we still think so?
> 
> Apparently so, given the rise in the XAO over recent days, despite the extremely dangerous position in the US, where no sign is apparent that they are going to avoid going over the fiscal cliff.
> 
> ...




Sorry, just noticed I hadn't replied to this.  Have been entertaining a dozen visitors over the weekend, who have not long ago departed.

I subscribed some time ago to Nick Radge's Chartist service and have learnt a lot from the way he trades and the systematic portfolios he runs - live.  I have followed most of the recommendations in his Growth Portfolio that fit my criteria, along with some stock picks of my own using the most basic technical analysis.  I run a few very simple scans eod using Incredible Charts (based on breakouts from basing patterns with volume, and % price and volume increases over various periods), restricted to the asx300 only, and then research those companies that show the signs of being at the beginning of what could be a new upwards trend.  All very simple and basic, based on Weinstein's book, Radge's methods etc.  Quite often I've picked a share that has later come up as an entry on The Chartist's long-term system, which pleases me greatly as I take it as a sign that I'm learning to identify the potential new break-outs.  I'm quite ruthless at cutting the duds early and have had some lovely runners.  Nothing fancy or clever, just very simple and basic stuff that works well if the market will play along and trend nicely - as it has over the last few months.  I don't waste too much time in trying to predict what may or may not happen in the future - politicians, economists, commentators and taxi drivers have many various and conflicting opinions on whether the world is about to go to hell in a handbasket or whether a slow recovery may have commenced or be imminent.  I'm just prepared to go with the flow and react to what happens on the chart - if trends falter I'll sell without hesitation.


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## tech/a (1 January 2013)

Well done Doc


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## Julia (1 January 2013)

Thanks DocK.  You've come a long way since the Storm debacle.


----------

