For Realist

[mb1]

Hi Realist, your posts always catch my attention, so Ive gone through most of your posts in history, and how the trader is compared to the investor.

I totally agree with your strategy.

Im fairly new to the stock market about 1.5yrs. Anyway for my first year holding ANZ, TEN, and GOLD i was up around the 10 to 13% mark, which seems great. But I always looked at my ANZ showing around 6% return for first 9months or so, and I said to myself this pathetic as I compared it to some of the guys on this board showing more than 20-50% on speculative and start up mining companies.

So what did I do, I sold the lot, knowing I shouldnt really do it, and bought Uranium companies, UXA, URA, UXN, and a biotech NAL.

I sold my bread and butter stocks and went invested (traded) what seemed to be like cocaine, getting the highs quickly and now. Analysing charts and breakouts, and other crap is fine if you got the time. I messed around with some other small caps under 10c aswell.

I managed to take profits on most trades, and some losses, but what gets me most, is the freaking brokerage at 20+ trades at 30bucks a pop equates to close $600.

So today after UXA came out with dissapointing results, I sell it for a loss and now hold UXN, URA, NAL.

Im not after advice, but would like hear from you how long you would hold onto a stock that you think is most likely going downhill. Do you sell?

One of your posts said you only sold 1 stock. So when would you sell at all? When you need the cash to buy something, car, house, retire, whatever?

So after my little adventure in the world of trading, ive decided id like to get back to the fundamentals, and stick with solid companies and dividends with a long term outlook.

This is just my story, and not looking to prove anyone wrong.

thanks

 

[coyotte]

You could have Traders wrong here

I hold of my Share Portfolio 1/3 Long Term (investment) 12mths+, 1/3 Medium 1 month, 1/3 "Short Term - of this 1/3 Day Trading, 2/3 3-10 days"

For the Long Term I follow Stan's guidelines as per the last post in the "book review" thread in the Beginner's Section ---- quite a solid approach to Long Term Holdings.


Cheers

 

[YELNATS]

for my first year holding ANZ, TEN, and GOLD i was up around the 10 to 13% mark, which seems great. But I always looked at my ANZ showing around 6% return for first 9months or so, and I said to myself this pathetic as I compared it to some of the guys on this board showing more than 20-50% on speculative and start up mining companies.

That's right, but also consider that blue chip stocks such as ANZ etc. provide a reliable long term "store of value", and they pay attractive and growing franked dividends, so your real % return after tax could be higher. And maybe your expectations were a bit different from what are the real attributes of such blue chips. regards. YN.

 

[Realist]

Im not after advice, but would like hear from you how long you would hold onto a stock that you think is most likely going downhill. Do you sell?

One of your posts said you only sold 1 stock. So when would you sell at all? When you need the cash to buy something, car, house, retire, whatever?

Sorry, I missed this post initially.

Thanks for agreeing with me, that now makes 2 of us on this bored.

I would never hold a stock that "I think is most likely going downhill" would anyone?

I think your question is probably - if you've boght a stock and it has gone up a bit, you've made a profit, and is now possibly overvalued should I sell?

The answer is "First take into account tax, if you've held less than a year, and made a decent profit, you may as well hold till you get past that 1 year as a minimum so your tax on the profit is halved".

Secondly, YES if you are certain a stock is going to go down, then Sell. That is obvious.

One of your posts said you only sold 1 stock. So when would you sell at all? When you need the cash to buy something, car, house, retire, whatever?

Well, if a stock becomes clearly overvalued then sell. If the fundamentals change - ie it's made a loss, or lost market share etc. then consider selling. If you want to buy a house then sell, if you want to retire, then hold don't sell. If you want to buy a car or go on a holiday - don't sell - work harder and save money, cars and holidays are no way to make money.

The important thing with investing is thinking longterm. Do your research first up, buy a great company with longterm prospects for a fair price. Hold, if in doubt hold, reinvest dividends, and hold.

The main advantage of holding is you have no tax, no brokerage, no stress, and the odds are in your favour - longterm the sharemarket goes up, day to day, month to month - who the hell knows?

List which stocks you are intending on holding longterm and I can give you an opinion if you want.

Cheers.

 

[stink]

HI Realist,

Heres a questions for you mate, not after any debate on this just purely after your opinion.

If you were looking to get into the market but were waiting until you had a reasonable capitol to start with say 15-20k how would you approach it?

a) Just open a savings account and keep throwing money in there until you reach your desired amount or.

b) Invest you intial or starting amount into a solid blue chip and then as you save more money you keep adding to your position?

Or neither you would do something else?

Sorry to go off topic mate.

Cheers Stink

 

[coyotte]

Realist:
Jump in here early
my L/T @ the moment !!!
FLX
BKN
TTS
CPU
IBA
SMM
ASB
IRE
SUL
BSL


Would be interesting to see a F/A view on these, as they are all T/A stocks.

Cheers
Coyotte

 

[TheRage]

Fundamental Analysis

FLX
Currently trading on PE ratio of 26 compared with sector of 17 which may hint at an overvaluation. However forcasted earnings in 09 are 32.2 cents per share which would reduce PE to 13.6 on current share price of 4.38 (4.38/0.322). If Sector PE averages 17 then in three year (2009) share price Target for FLX is 17 * .322 = $5.47. Therefore return on share based on forecasted earnings = $5.47-$4.38 = 1.09/4.38 = 24% three year return or 8% annual not including dividends.

This company like most energy stocks is giving back very little of earnings by way of dividend instead favouring to reivest in further projects. Forecasted dividend in 2009 = 0.09, 2008 = .06 and 2007 = 0.05. Total dividends = 20 cents. If we add this back to 1.09 we get total share return of 1.29. therefore 1.29/4.38 = 29% three year return or 9.8% annual return.

NTA of $120 million represent 1/7th of Market Capital which is 852 million. Current Assets are atleast double current liabilities with 70 million in cash. Long term debt is 90 million which could almost be paid off. The company is financially sound.

Upside
Large coal seams which have become profitable to the company in the past three years. Earnings, return on equity and profit margins have all improved over the last three years. The company is in good financial shape with respect to liquidity.

Downside
* The company's share base has been increasing nearly as rapid as the earnings. Shares have gone from 8.8 million to 180 million over 10 years. Perhaps management could buy back some of the shares as part of their capital management strategy.

* The price of coal may change over the next few years thereby affecting profit margin and therefore earnings.

This is no way shape or form financial advice do your own research.

Coyotte I only had time to do F/A on one of your shares perhaps tommorrow I could do a few more.

 

[coyotte]

Thank you for the info Rage

Does a relative high PE indicate a potential growth stock, or is that just broker's talk.

Cheers

 

[Realist]

HI Realist,

Heres a questions for you mate, not after any debate on this just purely after your opinion.

If you were looking to get into the market but were waiting until you had a reasonable capitol to start with say 15-20k how would you approach it?

a) Just open a savings account and keep throwing money in there until you reach your desired amount or.

b) Invest you intial or starting amount into a solid blue chip and then as you save more money you keep adding to your position?

Or neither you would do something else?

Sorry to go off topic mate.

Cheers Stink

Actually the best way to invest is to put smallish amounts of money into the sharemarket each and every month.

If you have $5K now.

Then put $1000 in each month into a different stock, and keep doing it every month for years to come, and reinvest dividends.

After 3 years you'll hopefully have $50K or more worth of stocks in a whole range of different companies.

After 10 years you may have $250K or more.

 

[baikai]

Actually the best way to invest is to put smallish amounts of money into the sharemarket each and every month.

If you have $5K now.

Then put $1000 in each month into a different stock, and keep doing it every month for years to come, and reinvest dividends.
...

Hi,

Could you please clarify a bit on that?

Do you mean to make 1 (maybe 2 ?) portfolio review per month (say sell underperformers/losers and buy more prospective stock) or is it additional + $1000/month to be added into new stock and invested into more stock?

Just trying to come up with the strategy for myself so interested to see what people are doing...

thx

 

[TheRage]

Thank you for the info Rage

Does a relative high PE indicate a potential growth stock, or is that just broker's talk.

Cheers

Hi Coyotte,

There is a thin line between a growth stock and an overvaluation. The line is usually drawn when the company either improves on earnings as suggested or some mishap or overestimation on earnings then causes a sell off on the share which then leads to a more reasonable PE ratio. By the way this is not always the case as many metal start ups are purely valued on potential like biotechs without anyone really knowing what future earnings will be.

In the Case of FLX because they are growing so rapidly it is likely, providing the price of coal and the management of the business is sound, that they will continue to rapidly expand and the earnings will do so accordingly. However if a major incident occured lets say a 12 miners died or the company hedges all of the spare capital in FX, this could potentially be harmful to earnings. However this is unlikely to occur. So the High PE ratio at the moment reflects the next two years growth in earnings. This share is certainly not cheap at the moment as the future growth has largely been factored in. However it is certainly a hold if someone got in earlier as the run will likely continue providing no major catastrophes occur.

 

[Realist]

Hi,

Could you please clarify a bit on that?

Do you mean to make 1 (maybe 2 ?) portfolio review per month (say sell underperformers/losers and buy more prospective stock) or is it additional + $1000/month to be added into new stock and invested into more stock?

Just trying to come up with the strategy for myself so interested to see what people are doing...

thx

I suggest you just keep adding and don't sell.

 

[stink]

Thanks Realist,

Yeah i was thinking the same thing, the only down fall i see is if the price plummets for some reason. To alleviate this you could only consider solid blue chips.

Cheers Stink

 

[coyotte]

Yeah like HIH, TLS, BRY etc, etc

 

[stink]

Yes i see your point Coyote, you obviously never remove the risk completely but i suppose its the risk your willing to take which governs the stocks you buy.

However most people are happy to leave there hard earned super with fund managers that return negative figures each year so?

Cheerc Stink

 

[Realist]

Don't put all your eggs in one basket.

Have 20 to 30 different stocks in many different sectors.

If one goes under (which is unlikely if they are consistently making profits, one of my main criteria) then you'll lose 3 or 4% of your portfolio - claim that against other gains and you've lost 1 to 2%. woop de do.

And blue chips rarely go under. I can't think of one in the past 3 or 4 years.

 

[Garpal Gumnut]

Fundamental Analysis

FLX
Currently trading on PE ratio of 26 compared with sector of 17 which may hint at an overvaluation. However forcasted earnings in 09 are 32.2 cents per share which would reduce PE to 13.6 on current share price of 4.38 (4.38/0.322). If Sector PE averages 17 then in three year (2009) share price Target for FLX is 17 * .322 = $5.47. Therefore return on share based on forecasted earnings = $5.47-$4.38 = 1.09/4.38 = 24% three year return or 8% annual not including dividends.

This company like most energy stocks is giving back very little of earnings by way of dividend instead favouring to reivest in further projects. Forecasted dividend in 2009 = 0.09, 2008 = .06 and 2007 = 0.05. Total dividends = 20 cents. If we add this back to 1.09 we get total share return of 1.29. therefore 1.29/4.38 = 29% three year return or 9.8% annual return.

NTA of $120 million represent 1/7th of Market Capital which is 852 million. Current Assets are atleast double current liabilities with 70 million in cash. Long term debt is 90 million which could almost be paid off. The company is financially sound.

Upside
Large coal seams which have become profitable to the company in the past three years. Earnings, return on equity and profit margins have all improved over the last three years. The company is in good financial shape with respect to liquidity.

Downside
* The company's share base has been increasing nearly as rapid as the earnings. Shares have gone from 8.8 million to 180 million over 10 years. Perhaps management could buy back some of the shares as part of their capital management strategy.

* The price of coal may change over the next few years thereby affecting profit margin and therefore earnings.

This is no way shape or form financial advice do your own research.

Coyotte I only had time to do F/A on one of your shares perhaps tommorrow I could do a few more.

Its a very nice chart, sorry cannot post charts yet, will sit down this w/e and work it out. FLX, beautiful technically, higher highs and lows with good volume.

Garpal

 

[Noskcid]

Hi, Im kinda new to the market too, just wondering what you think about these, I have been reading alot about each of them but was just wondering what you think of them.

SMM
PNN
BMN
MTN
PDN

I currently Hold onto T-3,SGB,BHP, I was thinking about selling some and putting it into some of these? But you did mention to hold on and not sell and start smaller. The main two I was thinking about is PNN and BMN? What other ones do you think I might have missed, just as a suggestion and I can do some research on?

 

[nioka]

Is there a "Judas goat factor" in the current market. I believe there is. Are a lot of investors playing follow the leader instead of carefully examining the fundamentals before making a decision to buy or sell. It is a good market for the brokers' of that there is no doubt, the crash in the system because of overload brought on by the volume of trading proves that.
While the sheep keep following the goat the slaughter will continue. The answer is to think twice about selling and buy if you can.

( Joe. This may not be the best thread for this post. Please change if there is a better one)

 

[Noskcid]

I know you are probually talking about people in general, but for myself and im pretty sure for MANY OTHERS also, HAVE LOOKED INTO IT THEMSELVES then asked others for their opinon. Eg. Alot of people (more experienced traders) on this forum and other forums on trading didn't like TLSCA, I read what they think (on some other forums), but still went in regardless what they said (mainly cause at that time I didn't agree with them, but I would read and research what they say before buying/selling).

So is this Following or Information Sourcing???? If I and others where to follow I would think we not need to ask questions and just read the forums and buy into those ones, that pro traders think are good.

Just like when people ask me about a computer they want to buy (a part time company I run on the side of my full time job with some friends). They ask us, but have prob also done research before they come to ask us for prices, or after we suggest them with something they will go away and look into it before ordering, same thing as here.

The answer 'think twice about selling and buy if you can', personally is just logic, which I think most people know, and doesn't really answer the questions anyway. But all good thanks for your input.

So to brief it, I research before asking and research after asking. Reason I started looking at those is from reading various news and I started looking at it before I joined this forum so following????? Im sure this also stands for OTHERS who ask questions here

Apart from this YES!!! I agree that there are many that just follow, I always tell my friends that this is what I think and like, but you do your own research before going in and whatever happens Im not responsible for!!! I also know a few people that just ask whats good and just buy without reserching or asking WHY??. Which I think is very bad, as you said just following the crowd.

Peace