Dump it Here

[Captain_Chaza]

@ducati916, your posts are always inciteful and they are always intertwined with subtle questions. Before I attempt to respond I want to relate a true story about a large investor.

In August 2016, I was a year into my trading journey and doing quite well. One day, I found myself conversing with a man named Big AL, who stood 5 feet tall but had a towering presence. He was part of a wealthy family, and his three brothers were all big investors. As we talked, Big AL recounted how during the Global Financial Crisis (GFC), his brothers had all sold their investments at the bottom of the market, unable to stomach the losses. But Big AL had taken a different approach. Despite the pain and pressure to sell, he held his nerve and refused to give up on his investments.

Big AL's family regarded him as a genius for his ability to weather the storm, but what he said next surprised me even more. "I didn't need the money," he said with a shrug. Those words have stayed with me ever since. It was a moment of realisation that sometimes, the best investment strategy is not about making a quick profit, but about having the courage and conviction to hold onto your beliefs, even when everyone else is running for the hills.

Big AL's story taught me that sometimes, the most important thing in investing is not the money, but the mindset. It's about having the strength to stick to your guns, even when the market is screaming at you to do otherwise. It's a lesson I've carried with me ever since, and I hope to pass it on to others.

Skate.

I would not call Big AL a genius
I would call him a Skipper who was Frozen at the Helm In Sailor's Shock
That type of strategy only works if you have an Insurance Company at your back IMHO

 

[Skate]

I would not call Big AL a genius
I would call him a Skipper who was Frozen at the Helm In Sailor's Shock
That type of strategy only works if you have an Insurance Company at your back IMHO

@Captain_Chaza it seems like you have a different perspective on Big AL's investment strategy compared to mine. In his family circle, he was considered a genius but in his own words, it was a matter of simply "not needing the money" that was tied up in his investments.

While Big AL's decision may have been influenced by "not needing the money", it's also possible that he had a long-term investment strategy in place and believed in the potential of his investments to recover over time.

Many individuals have successfully weathered market downturns by sticking to their investment plans and having the discipline to ride out temporary losses.

Ultimately, the assessment of Big AL's investment strategy and the factors that influenced it is "subjective" as you have pointed out. When members have input it's important to consider different perspectives to understand that there can be various ideas and approaches to investing based on individual circumstances.

Skate.

 

[qldfrog]

Major companies or tiddlers at the dodgy end of the spectrum?

Just saying.

I just filled in the last year forms for class actions against among others WOW..so wrong purposely misleading fin. reports
I think I have 4 pending just because I happened to own shares in these companie at the critical time
But wow..among so many others is just a tiddler at the dodgy end of the spectrum.;-)
Ohh sorry, the settlement is usually linked to an acknowledgement of " not acknowledging guilt" so sure they were clean errors or the PA typed it wrong...

 

[ducati916]

jog on
duc

 

[divs4ever]

@Captain_Chaza it seems like you have a different perspective on Big AL's investment strategy compared to mine. In his family circle, he was considered a genius but in his own words, it was a matter of simply "not needing the money" that was tied up in his investments.

While Big AL's decision may have been influenced by "not needing the money", it's also possible that he had a long-term investment strategy in place and believed in the potential of his investments to recover over time.

Many individuals have successfully weathered market downturns by sticking to their investment plans and having the discipline to ride out temporary losses.

Ultimately, the assessment of Big AL's investment strategy and the factors that influenced it is "subjective" as you have pointed out. When members have input it's important to consider different perspectives to understand that there can be various ideas and approaches to investing based on individual circumstances.

Skate.

but many wealthy folk are the ones who go out and over-leverage ( and hire lots of stuff on leases ) Big AL was wise to avoid that whether he was a millionaire or a trillionaire ,

an old banking joke was Q. how do you borrow a million dollars

A. have three million in the bank

more a question of living within their means rather than actual assets under management ( but loans/mortgages on those assets )

now many investors expect downturns on the average to happen ( many investors are planning 20 years plus )

but are those downturns opportunities to add ( or buy something else in the retrace ) the 'quality stocks ' have had some changes even in the last 12 years , some have gone from darling to dog ( and even the odd dud )

 

[dyna]

those downturns opportunities to add

Truth in that alright . I too , have that " don't need the money " approach . Just hold a significant cash reserve for those inevitable market pull backs.
This week's posts have been quite the surprise . Never thought our much respected member , Mr . Skate would go over to the dark side ( Passive investing ) . Well , there you go . People do change .
Let's hope he keeps some cash for future shorter term trades . One needs that fun and stimulation , I believe.
And we all need this thread to keep on ...keeping on !

 

[divs4ever]

Truth in that alright . I too , have that " don't need the money " approach . Just hold a significant cash reserve for those inevitable market pull backs.
This week's posts have been quite the surprise . Never thought our much respected member , Mr . Skate would go over to the dark side ( Passive investing ) . Well , there you go . People do change .
Let's hope he keeps some cash for future shorter term trades . One needs that fun and stimulation , I believe.
And we all need this thread to keep on ...keeping on !

well i would do some trading if my equipment/internet connection was up to it . but for whatever reason Iress overwhelms the computer/internet if you haven't got ( relatively ) live data what chance of a reasonable profit even if trading a weekly time-frame ( pennies count ) , trading trends night be possible but would it be profitable

and @Skate is also time poor if time poor the other obvious option is a complete retreat from the stock-market , losing value in a money-market instrument

i have been a big fan of flexibility but don't have the professional's toolkit

 

[ducati916]

1. Firstly, I appreciate your recognition of the importance of investing in fundamentally sound companies, especially during times of market stress. While it's true that no company is immune to market downturns, investing in companies with strong financials, competitive advantages, and a proven track record of success can help to mitigate some of the risks associated with investing in the stock market.

2. Regarding your concerns about the potential for market collapses and the impact on your portfolio, it's important to remember that no one can predict with certainty what will happen in the future. However, it's precisely because of this uncertainty that diversification and risk management are so important. Spreading my investments over 6 positions and across 3 asset classes may help to reduce my exposure to any one particular company or market segment.



3. In conclusion, while investing always carries some level of risk, I believe that a well-diversified portfolio of fundamentally sound companies can help to mitigate some of these risks. By staying informed, being patient, and avoiding emotional decision-making, you can help to ensure that your investments have the best chance of success over the long term.

Skate.

1. If you haven't broken down the financials, which takes time, skill and access, how do you know that they are sound? Access is not an even playing field. Without good access to the numbers and I'm referring to the off balance sheet numbers for banks, you actually have no idea what is going on. If you are really good with banks, even without access you can get a bit of a picture, but it will only show up once it is pretty late in the day.

2. Now this isn't meant in a nasty way, but 6 holdings is not diversified. It is about as concentrated as you can get. You mention risk management. What risk management? You have zero analysis of their financials. In later posts you have simplified diagrams of how the business is supposed to work. Fine. Do they actually? The only way to check is via the financials. In your technical trading, you had a myriad of indicators cross-referencing the same variables, multiple exits etc. Here you have nothing.

3. It is all RISK. You have placed your money into the market where now you have zero control. You only regain control when you exit. Your risk management hinges on those 2 decisions: entry, exit. Both of those decisions are based on whatever analysis you undertake. With a fundamental approach, that is an analysis of the fundamentals. And because you are so concentrated you have to break down every release these companies make. You thought technicals were time consuming? LOL. You will spend more time on the fundamentals than you ever did with the technicals. Why do you think so many go to the technicals? Because it is so easy and fast.

Now I see your yield is +/- 7%.

Here is an ETF I hold:




It holds all 100 but these are the top 15.

Yields: 12% paid monthly for ease of cash-flow



No analysis of financials required. Manage it on a technical basis, 10 mins month. Tracks the QQQ NASDAQ. Rebalanced for you.

The risk is now market risk. Credit risk is more or less eliminated.

jog on
duc

 

[divs4ever]

1. If you haven't broken down the financials, which takes time, skill and access, how do you know that they are sound? Access is not an even playing field. Without good access to the numbers and I'm referring to the off balance sheet numbers for banks, you actually have no idea what is going on. If you are really good with banks, even without access you can get a bit of a picture, but it will only show up once it is pretty late in the day.

absolutely , it was a secondary reason i initially avoided the big 4 banks , sure i added WBC and ANZ later but they were mistakes , not capital losses but most likely losses in opportunities as the cash may have been deployed better ( ANZ since has been exited and WBC has been reduced to a trivial legacy hold )

 

[Belli]

I just filled in the last year forms for class actions against among others WOW..so wrong purposely misleading fin. reports
I think I have 4 pending just because I happened to own shares in these companie at the critical time
But wow..among so many others is just a tiddler at the dodgy end of the spectrum.;-)
Ohh sorry, the settlement is usually linked to an acknowledgement of " not acknowledging guilt" so sure they were clean errors or the PA typed it wrong...

To be honest, as I do not invest directly in specific companies, I don't follow them and am usually unaware of who is doing what. If it's no bother can you let me know what that class action is about.

Also the point I was tying to make in a very clumsy way is if it is alleged a company is fudging the books in some way, it should be shown where the company isn't complying with the required accounting standards to which I provided that link. Expressing an opinion the company isn't playing the game properly according a person's view of the world doesn't show that. Hope I am making some sense there.

As an aside, it's funny (almost) when I hear outrage about companies underpaying staff. I have done audits on payrolls and most of the errors are the result of a combination of a multitude of awards together with the lack of on-going training. None were intentional really.

 

[Skate]

1. If you haven't broken down the financials, which takes time, skill and access, how do you know that they are sound? Access is not an even playing field. Without good access to the numbers and I'm referring to the off balance sheet numbers for banks, you actually have no idea what is going on. If you are really good with banks, even without access you can get a bit of a picture, but it will only show up once it is pretty late in the day.

2. Now this isn't meant in a nasty way, but 6 holdings is not diversified. It is about as concentrated as you can get. You mention risk management. What risk management? You have zero analysis of their financials. In later posts you have simplified diagrams of how the business is supposed to work. Fine. Do they actually? The only way to check is via the financials. In your technical trading, you had a myriad of indicators cross-referencing the same variables, multiple exits etc. Here you have nothing.

3. It is all RISK. You have placed your money into the market where now you have zero control. You only regain control when you exit. Your risk management hinges on those 2 decisions: entry, exit. Both of those decisions are based on whatever analysis you undertake. With a fundamental approach, that is an analysis of the fundamentals. And because you are so concentrated you have to break down every release these companies make. You thought technicals were time consuming? LOL. You will spend more time on the fundamentals than you ever did with the technicals. Why do you think so many go to the technicals? Because it is so easy and fast.

Now I see your yield is +/- 7%.

Here is an ETF I hold:

View attachment 167194
View attachment 167195

It holds all 100 but these are the top 15.

Yields: 12% paid monthly for ease of cash-flow

View attachment 167196

No analysis of financials required. Manage it on a technical basis, 10 mins month. Tracks the QQQ NASDAQ. Rebalanced for you.

The risk is now market risk. Credit risk is more or less eliminated.

jog on
duc

@ducati916, thank you for sharing your insights and concerns about my investment strategy. I appreciate your input and understand your points. You're right that access to financial information can be limited, and it's important to have a comprehensive understanding of a company's financials before investing. At the end of this post, I have the (ANZ) hyperlinks to the websites that I relied on when making my investing decisions. It was the same process for the other 5 positions in the investment portfolio.

Regarding my concentration of holdings, I understand your point that six holdings may not be considered diversified. However, I'm actively working on expanding my portfolio to include more diverse holdings, as there have been some suggestions thrown my way already from other members. I'll be checking out every suggestion to ensure that each investment meets my criteria for fundamental soundness, dividend yield and most importantly, franking credits.

I also appreciate your reminder about the importance of risk management. You're right that exiting a position is just as important as entering it. I understand your point that fundamental analysis can be time-consuming and it has been for me, and it was essential to making, what I believe my "informed investment decisions". I was very committed to putting in the time and effort necessary to thoroughly analyse each company's financials with the information available to me from many websites to ensure that my investments align with my values and goals.

Research Hyperlinks for ANZ (it's the same format for the other 5 positions in my investment portfolio

Duc, thank you again for your input. I value your feedback and will consider your points as I continue to develop my investment portfolio.

EDIT
The Active hyperlinks were removed as they didn't post as expected.

Footnote
I'll be boosting WDS shortly to ensure the initial position is over $100k

Skate.

 

[Skate]

I recommend the Intelligent Investor. The analysis of companies they provide is excellent and in depth. They have consistently outperformed the market over a very long time, which is not common. @Skate I have a sub to Intelligent Investor. I don't want to violate their copyright, but just to give you a heads up. They cover ANZ and WDS - both are holds. But the Buy price for ANZ is below 19.00 and WDS below 25.00.

Each of us is responsible for our actions and decisions
It’s important to remember that our decisions can have far-reaching consequences, and have the potential to impact not only myself but also those around me. I exercised thoughtful action by taking the time to weigh the potential consequences of my decision and consider alternative options before making my investment choices. By doing so, I was able to make a well-informed decision (IMHO) that aligns with my long-term goals.

In the next post
I'll post a few screen captures of the positions I've taken as they display an overview of the 6 positions in my investment portfolio.

Skate.

 

[Skate]

#1. ANZ



Skate.

 

[Skate]

#2. BHP



Skate.

 

[Skate]

#3. CBA



Skate.

 

[investtrader]

1. If you haven't broken down the financials, which takes time, skill and access, how do you know that they are sound? Access is not an even playing field. Without good access to the numbers and I'm referring to the off balance sheet numbers for banks, you actually have no idea what is going on. If you are really good with banks, even without access you can get a bit of a picture, but it will only show up once it is pretty late in the day.

2. Now this isn't meant in a nasty way, but 6 holdings is not diversified. It is about as concentrated as you can get. You mention risk management. What risk management? You have zero analysis of their financials. In later posts you have simplified diagrams of how the business is supposed to work. Fine. Do they actually? The only way to check is via the financials. In your technical trading, you had a myriad of indicators cross-referencing the same variables, multiple exits etc. Here you have nothing.

3. It is all RISK. You have placed your money into the market where now you have zero control. You only regain control when you exit. Your risk management hinges on those 2 decisions: entry, exit. Both of those decisions are based on whatever analysis you undertake. With a fundamental approach, that is an analysis of the fundamentals. And because you are so concentrated you have to break down every release these companies make. You thought technicals were time consuming? LOL. You will spend more time on the fundamentals than you ever did with the technicals. Why do you think so many go to the technicals? Because it is so easy and fast.

Now I see your yield is +/- 7%.

Here is an ETF I hold:

View attachment 167194
View attachment 167195

It holds all 100 but these are the top 15.

Yields: 12% paid monthly for ease of cash-flow

View attachment 167196

No analysis of financials required. Manage it on a technical basis, 10 mins month. Tracks the QQQ NASDAQ. Rebalanced for you.

The risk is now market risk. Credit risk is more or less eliminated.

jog on
duc

What about currency risk? Also, you are just a trader if you are skipping in and out so you may as well trade BHP,WDS etc

 

[Skate]

#4. FMG



Skate.

 

[Skate]

#5. MFG



Skate.

 

[Skate]

#6. WDS



Skate.

 

[investtrader]

Each of us is responsible for our actions and decisions
It’s important to remember that our decisions can have far-reaching consequences, and have the potential to impact not only myself but also those around me. I exercised thoughtful action by taking the time to weigh the potential consequences of my decision and consider alternative options before making my investment choices. By doing so, I was able to make a well-informed decision (IMHO) that aligns with my long-term goals.

In the next post
I'll post a few screen captures of the positions I've taken as they display an overview of the 6 positions in my investment portfolio.

Skate.

Hey @Skate . Not trying to advise you what to do. I have followed Intelligent Investor for a long time and the analysis they provide is first rate. Like TA there are lots of ways to skin a cat. I personally am invested mainly in managed funds (mostly wholsesale) as I am no expert. The managed fund industry has a bad wrap, but there are some really good managers in Australia. US based managers can't seem to beat the index, but it is different here. Lots of opportunity also in private credit funds, alternatives etc also.