Fundamental Analysis

[stockman]

Does anyone here just buy and hold stocks?

Any rules.

It seems that if you can get a good company that can keep increasing dividends you don't really need to use tech analysis.

All the banks, perpetual trustees are all good examples.

Perpetual has risen from $27 to $55 many people may say sell the stock however dividend is now $3.00 that is more than 10% fully franked who cares if the share price moves up and down and bit.

Just my thoughts comments very welcome.

Stocks I think i will buy and TCL, CCL, MIG.

Tell me your thoughts.

 

[nhojmabon]

People should focus more on the share price than the dividends, you can earn a larger amount of money on prices but if you aren't a confident trader your best leaving your shares to make you money.
I personally wouldn't trade a share with upcoming dividends or any form of news, I prefer to follow short term trades although it does require alot of skill and discipline but the returns are incredibly larger.
(these are only my opinions)

At the end of the day it all comes down to a personal choice.

(I will get my charting software out later and have a look at your questioned stocks)

 

[nhojmabon]

Hi again, hmmm I looked at a chart and i really can't see a good reason to buy the shares although they aren't going to bad.
My guess is you are choosing them because they had good reports or good dividend rates?

I noticed that not much technical analysis had been used, example:
You should have bought into MIG about half a month ago when it broke out of it's long term trend, that would have resulted in a good profit.

I'm real interested in hearing how you chose your three stocks.

 

[It's Snake Pliskin]

Hi again, hmmm I looked at a chart and i really can't see a good reason to buy the shares although they aren't going to bad.
My guess is you are choosing them because they had good reports or good dividend rates?

I noticed that not much technical analysis had been used, example:
You should have bought into MIG about half a month ago when it broke out of it's long term trend, that would have resulted in a good profit.

I'm real interested in hearing how you chose your three stocks.

Technical analysis is perfect in hindsight.

 

[bvbfan]

Who says it has to be a big company with high market caps.

There are quite a few juniors that have made significant returns to people able to see the upside and take on a little risk

examples
OXR 6c-10c area in 2000-1
PNA 4-5c area in 2001-2
AQP was like 25c i think in the mid 90's
ZIM was 25c in 2000
CTX under $1 in 2001

I'm happy to have bought and held OXR and PNA from those areas although wish I didn't sell some when I had
PNA at 5c area

Off course all these were good investments when their respective markets were in the doldrums, that is one of the keys, try to find undervalued areas and the best prospects in those

 

[ob1kenobi]

Does anyone here just buy and hold stocks?

Any rules.

It seems that if you can get a good company that can keep increasing dividends you don't really need to use tech analysis.

All the banks, perpetual trustees are all good examples.

Perpetual has risen from $27 to $55 many people may say sell the stock however dividend is now $3.00 that is more than 10% fully franked who cares if the share price moves up and down and bit.

Just my thoughts comments very welcome.

Stocks I think i will buy and TCL, CCL, MIG.

Tell me your thoughts.

I guess that's the difference between an investor and a trader! Having said that, both Technical Analysis and Fundamental Analysis has its place and neither rely soley on raw data. Looking at CCL, it has been trading on a downward trend for awhile and is now starting to test the resistance line of about $8.25 have tested the support line at $7.25. This a huge variation and suggests a lot of volatility in this stock. If value for money is what I was looking for, I'd wait and see on CCL. On MIG, it has been trading sideways for awhile and has suddenly broken its pattern to make sharp increase from $3.50 - $4.25. Look for the reason behind this increase and the one for CCL also. Keep in mind that MIG dividends are unfranked, so the gain you see yourself making there won't happen! Compare it to the parent company MBL! As for TCL it's clearly moving sideways hovering between $7.00 - $7.50. Why is this happening? Keep in mind that even as an investor you will one day want to sell the shares, you therefore want to buy something that is likely to increase in value or remain of value to another potential buyer. Personally, I wouldn't buy any of these at present. If you're going to hold them medium to long term then you can afford to be choosey. Anyway, these are merely my meandering thoughts for what its worth. Good Luck!

 

[Knobby22]

I generally just buy and hold.
If you pick well, you will do just as well as most traders. If you buy and sell within a year you have to pay the full capital gains tax. Unless you have serious time, I don't think you can make much trading.

The dividends you receive allow you to buy more stocks over time.

My minimum time frame is around three years. Patience wins!

Though I have owned 2/3 of my Woodside shares for 14 (I think) years (bought at $2.88). I bought my other third about two years ago for $15. Stockbrokers were saying sell as the new oil and gas projects would not flow for two and a half years. If you have a long term view then this is a signal to buy.

Nearly as long CSL (bought $3.20). I think both stocks have still got plenty of upside so will not be selling soon.

I would be trying to pick a mix of stocks that does not include too many financials as the ASX is overweighted this way. The financials I own are CBA (bought when they first floated) and Oamps (and insurance stock). I personally hate retail stocks and look for stocks with lots of upsides and income streams. You need to study the annual reports and understand the company. You need to see where the profit comes from and be clear in your own mind that it will continue and increase.

Look at RDF, BMX, ABI. I own these stocks also.

Try to be slow to sell and slow to buy. Ignore the short term fluctuations that most of the guys here try to skim off.

 

[It's Snake Pliskin]

My minimum time frame is around three years. Patience wins!

Unless your stock goes belly up or there is a market crash. Buying and holding is not good practice. Buying and holding with good money management is better. Just holding for 3 years minimum doesn't guarantee you'll make money.

 

[Knobby22]

When I say 3 years, I mean look three years ahead to where the company will be.

Also, if what you are saying is true, then Warren Buffett must be losing money hand over fist.

Finally, you do need to review your investment. If it is not working out or you can see a crash coming, sell.

There are many advantages to a long term view. Tax, buying and selling costs. Not being up against traders.

 

[TjamesX]

Everyone tends to have their own reasons for buying/selling. I am still developing my strategy (only been in the game for about 9 months) - but I am basing it around fundamentals, but I do some technical analysis as well. The factors I look at (in general order) from a fundamental point of view;

1) The general economy present and future (depression, recession, boom etc), this is usually pretty easy to analyse and changes very slowly.
2) Industry company is involved in, where revenues come from and major costs - how do these releate to general economic conditions in 1, this also does not change quickly.
3) Specific company structure/financials.
4) Integrity/Ability of management (crucial!!!!)

All of the above are elements that do not really change quickly and provide as a filter usually for the types of stocks I will consider and not consider - but does not tell me when to buy. For specific entry, I will consider more volatile factors;

a) Sentiment of overall market
b) Value of co relative to overall market
c) Directors/managed funds/LIC's buying/selling company
d) shorter term TA
e) any other info I can get about the company/industry

When selling I will also consider the above volatile factors (a-e), as well as fundamental shifts (1-4). I do not religiously hold on fundamentals if I think I can do better in a different area or price is not preforming (preseravtion of capital). I am also happy to take profits if there has been a significant move shorter term or on volatile factors a-e (preservation of profits)

I am definitly a more fundamentally inclined but after having 30 odd contract notes in 9 months and HSBC dropping my broking rates maybe I should consider my self a trader

I think the reason I also weight the more volatile factors is I am actually bearish towards the Australian economy and world in general over the next 10 or so years (I think the credit real estate boom will take a long way to play out) - which makes it hard to rely on buy and hold.

There is no doubt buy and hold has been an unbelievable strategy over the last 20 years, but I don't think the next 20 will be the same;

https://www.aussiestockforums.com/forums/showthread.php?t=1155&page=1&pp=10

PS: i also keep an eye on;

X) The X factor of the global economy (particularly the US)

Cheers
TJ

 

[Knobby22]

Generally, I agree with you.
There are stocks that will do well despite a flat market.
It's finding them that's hard.

I would trade 10 times a year. On more speculative stocks, it's good to lock in part of the gains and sometimes you realise it is time to sell.
I agree we are in for interesting times but I think this stockmarket has one more big boom in it.

 

[Milk Man]

I can't get my head around a true "buy and hold" strategy. Why hold something that is going down in value (or at least percieved value)? To use an old analogy it's like 'watering the weeds and pulling out the flowers'.

I've got nothing against funny mental analysis - you just have to look at Buffet to realise how good it can be. That said- Buffet takes over whole companies! If I was going to buy on a funny mental basis i'd buy a small-fry with a good repeatable formula. If you buy a stalwart in the aussie market one of the big cheifs will most likely get a god complex and try to take on the world. We all know what happens then

I'd rather be a flea on the elephant and just jump on and off when it suited me.

 

[It's Snake Pliskin]

When I say 3 years, I mean look three years ahead to where the company will be.

Also, if what you are saying is true, then Warren Buffett must be losing money hand over fist.

Finally, you do need to review your investment. If it is not working out or you can see a crash coming, sell.

There are many advantages to a long term view. Tax, buying and selling costs. Not being up against traders.

Please don't misinterpret what I was saying. I was not having a go at you. Why choose 3 years as opposed to 2 or 5 years? I agree look ahead, though.

With regards to My Buffett the legendary investor, who has made most of his money investing in only 10 companies over 40 years, and the often emulated and copied demigod of stock investing; why bring him into the equation when it is apparent that conditions do not always allow his ways of investing be practised due to a lack of undervalued stocks? He for one cannot find any opportunities in the markets these days. It is possible that his theory and stock investing practises are at times irrelevent. Not only because of changing markets, but changing political and technological forces that pervade this society we live in. I do respect fully and maintain a knowledge of his ways, but have no desire trying to be like him. :goodnight

I fully agree with the advantages of long term investing, and reviewing your investments as you stated.

 

[It's Snake Pliskin]

That said- Buffet takes over whole companies!

Which is why most of us want to be's will never achieve what he has!

 

[Knobby22]

Funny thing is - I am not a Buffetologist and have never read a book on him.
I think his viewpoint is valid but as you say less relevant in the modern world.

Being a fundamental investor means understanding the company and where it is going. On time frames - if you look at Comsec on the growth charts -they only ever look ahead two years, most people in the stockmarket have short term views. If you can look past that you have a different viewpoint and can do well.

I was reading hotcopper and watched half the investors sell WPL who bought at around $18 when the price got to $22, now it is $26 and they have missed out plus as they have held the stock for less than a year they will pay full capital gains tax.

Technical analysis is useful to try help work out entry and exit points and to tell if something is wrong that you don't know about but I find I enter against the market sometimes. There is a place for setting stops sometimes. I recently sold out of a company because I fell that it had risen too fast 40%, it came back and I bought back in, it has since risen about 30% (BMX).

Look, I am not a stockmarket legend and have made many mistakes over the
years but I am doing OK and am improving. I think there are too many traders at present. Traders compete against each other and they can't all be winning.

I am a trader in reality, I just trade less than many.

 

[sam76]

Imo, a diversified balanced portfolio is the key. There should be a mix of long term holdings based upon solid fundamentals, proven management with a clear future direction and technical analysis

Depending on your age, these should be the "fall back upon" stocks.

I'm 28, I have a solid foundation to my portfolio consisting of long termers (NAB, TCL, etc...)

I'm also single and without a mortgage. So I can afford to have a "punt" on some more speculative stocks (VSG, MSC etc...)

Hopefully, all goes up, BUT, If not, then all is not lost (again... hopefully)

it's the classic 'risk v's reward' scenario.

for day trading, cfd's etc... (higher risk, higher rewards) you need bigger kahoonas (for lack of a better word )

sorry, I'm all over the shop ( too many coffees this morning!!)