Correction or fall?

[Julia]

Don't get me wrong, I'd like a bit of pullback. I'm twiddling my thumbs, with a pile of cash and nowhere to put it.

That will be my dilemma at the end of this month also when a three year term deposit matures. Certainly won't be renewing the TD at current rates.

 

[tinhat]

I agree.

I even found myself looking at an antique furniture auction catalogue this morning. There was a lovely hutch that caught my eye, and a shiny panther.

I might have to take one of my long bike rides out to La Perouse this afternoon.

It's dangerous, having cashed out a fair bit from the market I was just looking through here before I thought I'd check back in here.

... many people who profess a disregard for what their capital is doing as long as the dividends keep coming. I do not get this, but it's not uncommon.

Up until a few weeks ago I was professing to everyone here that the SMSF would not be selling any CBA and yet I've been selling down over the last couple of weeks. I'm trying to position myself to tweak a bit more performance out of the portfolio and the fact that it ran so fast has made me think that it might be a good time to cash up. I sold some more CBA yesterday - I have now sold down about 50% of the holding. The pessimist in me says that if I am selling the price will go the other way!

That said, I consider it a legitimate strategy to hold for the long term. You could have bought CBA at the top of the market in 2007 and with dividends and franking credits you would be well ahead. I would consider holding a stock like CBA through the cycle to be a legitimate strategy and one that I would expect to yield superior returns than say term deposits or preference shares or corporate bonds.

 

[McLovin]

That will be my dilemma at the end of this month also when a three year term deposit matures. Certainly won't be renewing the TD at current rates.

Have you considered the bond market, Julia? Someone was discussing Sydney Airport inflation protected bonds a few weeks ago that were yielding around 6%, iirc.

 

[tech/a]

Some pretty general statements here.

As can "noone ever goes broke taking a profit",

Of course you can 10 wins X 15% profit and 3 losses x 60% --- Keep that up.

"the trick to profiting in the stock market is to know why you bought a stock and staying disciplined".

You sure about that?
Im pretty sure Total profit exceeding Total loss will be the only way to do it.
But what would a duck know?

 

[tinhat]

Some pretty general statements here.

Of course you can 10 wins X 15% profit and 3 losses x 60% --- Keep that up.



You sure about that?
Im pretty sure Total profit exceeding Total loss will be the only way to do it.
But what would a duck know?

Thus the quotation marks. I was quoting the "wisdom" one often hears. Although you are a trader, I hear what you are saying and it applies just as much to medium or long term investors - cut your losses early.

I sometimes read through Colin Nicholson's newsletters. I don't think he has released anything much to the non-subscribing public but reading his stuff introduced me to the Coppock indicator. His approach, as I understand it says "Wait for the turnaround in the Coppock indicator on a monthly chart and buy into the market before the Coppock crosses above zero". The current bull run seems to have followed this script.

After this reporting season my watchlist has never been longer - the problem is that most of the stocks are above what I would be willing to pay.

As for opportunities, I'm keeping my eye on copper and gold prices and related mining stocks. At some point will an opportunity will present it self. when? I need tech/a or So Cynical to teach me their bottom picking techniques.

 

[CanOz]

Volume is dropping off, we're near the top of the range on the monthly....

 

[tech/a]

I need tech/a or So Cynical to teach me their bottom picking techniques.

Trading and investing is pretty easy.
Its the nature of the Human race that makes it complicated
The general consensus is that the more complicated it is the better prepared and the more likely I am to profit.

Well I'm sure that's WRONG.

To pick a bottom you need a bottom to pick
The same with a top.
They will present themselves clearly enough---but not crystal clear.
I'm looking for "a" top it may not be 'the" top.
So when I get a signal I short the index. I do this on fast moving days in my direction.
I've set myself 3 times so far and have been stopped at B/E 3 times.

Not to worry as when I do get it right it will be a very good position trade.
If I had a large portfolio Id be doing exactly what I doing to hedge it.

Oh the next one will be on the FTSE and I might even short the DAX ---- tonight.
That turn around today---looks good.
HSI turning??

 

[Julia]

Up until a few weeks ago I was professing to everyone here that the SMSF would not be selling any CBA and yet I've been selling down over the last couple of weeks. I'm trying to position myself to tweak a bit more performance out of the portfolio and the fact that it ran so fast has made me think that it might be a good time to cash up. I sold some more CBA yesterday - I have now sold down about 50% of the holding. The pessimist in me says that if I am selling the price will go the other way!

That said, I consider it a legitimate strategy to hold for the long term. You could have bought CBA at the top of the market in 2007 and with dividends and franking credits you would be well ahead.

Sure. But it would be one of few you could say that about.

I would consider holding a stock like CBA through the cycle to be a legitimate strategy and one that I would expect to yield superior returns than say term deposits or preference shares or corporate bonds.

Yes, unless you sold out near the top and then bought back in after it had its substantial fall, allowing you more stocks/more dividends/franking for the same $ value.

Have you considered the bond market, Julia? Someone was discussing Sydney Airport inflation protected bonds a few weeks ago that were yielding around 6%, iirc.

Thanks for the suggestion, McLovin. The bonds I've looked at have seemed less attractive than the underlying share. For a 6% yield I'd probably prefer eg NAB et al.

 

[chops_a_must]

Meanwhile, Japan has been going spastic.

Sideways for us is healthy IMO.

Still no reason to fight the trend.

 

[qldfrog]

Sure. But it would be one of few you could say that about.

Yes, unless you sold out near the top and then bought back in after it had its substantial fall, allowing you more stocks/more dividends/franking for the same $ value.



Thanks for the suggestion, McLovin. The bonds I've looked at have seemed less attractive than the underlying share. For a 6% yield I'd probably prefer eg NAB et al.

if looking for income: the Healthscope notes II are released this month 10% or around pa (but unfranked) and quarterly payment
I bought some notes version I at $94 a couple of year ago and sold some yesterday at $106 (to reinvest in version II and postpone the expiry date)while getting 11% on face value...
But not risk free and DYIR....

 

[Julia]

if looking for income: the Healthscope notes II are released this month 10% or around pa (but unfranked) and quarterly payment
I bought some notes version I at $94 a couple of year ago and sold some yesterday at $106 (to reinvest in version II and postpone the expiry date)while getting 11% on face value...
But not risk free and DYIR....

I've just looked through the prospectus for these. I've tried to look at a chart for the performance of HLNG but Etrade isn't bringing this up. Any suggestions for where I can find charts?

 

[sinner]

I've just looked through the prospectus for these. I've tried to look at a chart for the performance of HLNG but Etrade isn't bringing this up. Any suggestions for where I can find charts?

barchart does.



I think it would be very important to work out the implied yield, priced at $108 is a significantly lower yield than 10% surely.

Using a tool like this: http://www.indiainfoline.com/Personalfinance/calculators/InvestmentGuide/Implied-Bond-Yield.aspx

 

[McLovin]

if looking for income: the Healthscope notes II are released this month 10% or around pa (but unfranked) and quarterly payment
I bought some notes version I at $94 a couple of year ago and sold some yesterday at $106 (to reinvest in version II and postpone the expiry date)while getting 11% on face value...
But not risk free and DYIR....

I had a look at this the other day...This should is a huge red flag (and probably explains the interest rate)

. Interest will be suspended if the Debt Service Cover Ratio is equal to
or less than 1.10x (or would be after the payment of interest on Notes I
and Notes II). This ratio tests whether the Healthscope Group produces
enough cash to service its debt obligations (including the payment of
Net Interest Expense, scheduled repayments under the Senior Facility
Agreement and certain payments on fnance leases and hire purchase
agreements over the relevant period).
• As at 31 December 2012, the Debt Service Cover Ratio was 1.41x
as compared to the threshold of 1.10x for the suspension of interest1.
The Adjusted EBITDA of the Healthscope Group would have needed
to be approximately 20% lower before payments of interest would
be suspended.

If you're still not convinced check out the level of cash flow being diverted to service debt...~$300m in cash from ops, ~$170m spent on interest.

The debt issue is being used to repay senior debt.

I've just looked through the prospectus for these. I've tried to look at a chart for the performance of HLNG but Etrade isn't bringing this up. Any suggestions for where I can find charts?

Won't the chart just tell you what's happened to interest rates over the period?

 

[Country Lad]

I've tried to look at a chart for the performance of HLNG but Etrade isn't bringing this up. Any suggestions for where I can find charts?

 

[Julia]

barchart does.

View attachment 51253

I think it would be very important to work out the implied yield, priced at $108 is a significantly lower yield than 10% surely.

Using a tool like this: http://www.indiainfoline.com/Personalfinance/calculators/InvestmentGuide/Implied-Bond-Yield.aspx

Thank you, Sinner.

I had a look at this the other day...This should is a huge red flag (and probably explains the interest rate)

If you're still not convinced check out the level of cash flow being diverted to service debt...~$300m in cash from ops, ~$170m spent on interest.

The debt issue is being used to repay senior debt.

Won't the chart just tell you what's happened to interest rates over the period?

Having read in the prospectus what you have pointed out above, I wanted to see what volume, liquidity is like, as well as the price.
Too much potential downside here for me.

 

[sydboy007]

Some shares in my SMSF have had a big run up. Are they over valued? Hard to say, but even with a 33% and 26% increase they're still both paying 8.7% and 8.5% grossed up.

Since I've not held them over 12 months I'd face a definite 15% tax bill on selling them. Do I think the market will fall by more than 15%. Once again hard to say. At the moment I don't think so. The US does seem to be slowly getting back onto it's knees. US companies are very lean and mean now. Certainly US stocks are running on lower PEs than OZ, though most pay quite low div yields.

I deal with the uncertainty by having a 1/3 of the SMSF in an ILB, another 20% ish in hybrids and the rest in higher yielding shares. I'm 26 years away from tapping into the money so a bit of volatility wont kill me.

I do wish I had some spare cash to tap into the market should there be a 10%+ fall. Suppose if that happens I'll do the investment outside my super.