But how exactly do you get $11 from that chart?
Not saying it won't fall further Bintang but,
"Target: Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and subtracting it from the resistance, (support IMO), breakout."
http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:chart_patterns:descending_triangle_
tech, the knife catching, averaging down brigade don’t believe us. I have stopped trying to get across the fact that risk management makes buying falling shares which have negative market sentiment in a falling market doesn’t make sense, so I just watch, bemused.Then again a serious investor would never put his capital base at such risk.
He'd average up NOT down.
It's about being profitable not clever--or right!
They got ganged up by the analysts at a pretty major support level.
UBS yesterday and Citi and Credit Swiss put the boot in today, all downgrading NCM to sell.
tech, the knife catching, averaging down brigade don’t believe us. I have stopped trying to get across the fact that risk management makes buying falling shares which have negative market sentiment in a falling market doesn’t make sense, so I just watch, bemused.....
So NCM drops an average of $10 per year for the last three years and these guys finally decided that its a sell, amazing !
Scary bit is that they are probably licensed to give financial advice
I think that if you ignore fundamentals thats true, but the factor I would add in is the FA around the share, I am only interested in averaging down if the case for buying the share remains strong on that basis -increasing ROE, good management, likely strong earnings and therefore yield. In that case I dont mind if the market mis-values the share, in fact I welcome it.
In saying that it would have to be a compelling case, otherwise I am happy to retain my original stake, pick up the earnings and wait for growth to return when the price and the value cross paths again.
I hear you.
But if you happily held for dividends say 7% the share has fallen 50% nearly 60% in 12 mths
Say $100K is now worth 40K +7K and to regain your capital you need the stock to return over 100%
Thats one hell of a bullish move in 12 mths or however long it takes.
So at what price Yield???
Arn't you better off sticking these "screaming buys" in a watch list and trading them when
its clear everyone agrees with you? No capital at risk.
Right now the only people agreeing seem to be posting here?
Even the so called "pro's" are deserting the cause.
Sorry. No final dividend. $5-6B write down. No FCF in FY14.
This one is going to bleed badly today (and probably a capitulation low...)
Arn't you better off sticking these "screaming buys" in a watch list and trading them when
its clear everyone agrees with you? No capital at risk.
I wouldn't, when everyone agrees with me the price will likely have crossed the value and the share will be overvalued. My yield will also be lower at that entry point.
If it meets the criteria to be on my watch list then I am looking for opportunities to buy when its under priced by the market.
I dont care where the price goes if the company continues to provide a high income stream, and the fundamentals remain good.
Mind you a company like NCM would never had made my watch list anyway so its probably a poor example for me to use to defend my strategy!
Also remember that those of us investing for the long term intend holding our chosen shares for very long time periods, longer than the average length of market cycles.
Also remember that those of us investing for the long term intend holding our chosen shares for very long time periods, longer than the average length of market cycles
A couple of questions.
If NCM isnt one youd have in your watchlist then how is it that Bintang et'al find it a "screaming buy" and you dont?
How can there be such a wide devide in "Valuation"
I like this.
So if you hold for 10 yrs and you recieve say 6% a year on investment and price slips 40% your up over all.
You have your income stream without thinking that much.
On the flip side though
Would it not be preferable to attempt to purchase more shares and hence increase returns
decrease capital erosion with far less risk than buying on the way down hoping that price will return to at least break even.
Dont get me wrong I can see what your doing---or attempting to.
A couple of questions.
If NCM isnt one youd have in your watchlist then how is it that Bintang et'al find it a "screaming buy" and you dont?
How can there be such a wide devide in "Valuation"
Whilst the bolded part relates to the question of investment philosophy / approach, I believe the actual result as you stated (40% capital depreciation over 10 years) is a most likely result of poor implementation of an investment philosophy.I like this.
So if you hold for 10 yrs and you recieve say 6% a year on investment and price slips 40% your up over all.
You have your income stream without thinking that much.
On the flip side though
Would it not be preferable to attempt to purchase more shares and hence increase returns
decrease capital erosion with far less risk than buying on the way down hoping that price will return to at least break even.
These guys have destroyed shareholder value on a grand scale. It was only 3 years ago they paid $10b for Lihir. Now the combined entity has a mc of $10b. And that's before it gets routed today.
There's going to be ramifications from this - insider trading? That is, if ASIC is not asleep at the wheel, again!
There's a guy over at Hotcopper called Camden, a very experienced Fundamental Analyst, who has what he calls the "5-4-1 rule" for acquistions. He believes that roughly 5 acquisitions destroy value, 4 are roughly value neutral in the long term (ie. they don't really add anything) and 1 actually adds value.Most business textbooks will tell you how major M&A have a much higher chance of value destruction than value creation.
Whilst the bolded part relates to the question of investment philosophy / approach, I believe the actual result as you stated (40% capital depreciation over 10 years) is a most likely result of poor implementation of an investment philosophy.
I actually think if you held something for 10 years and it was still 40% under your buy price then one of two things has probably happened:
- You picked the wrong company (ie. the value of each $1 that the company re-invested in its operations is now worth less than a $1)
- Your assumptions were wrong in the first place; which means you paid over the odds
It would be very unlikely, but not impossible, for the market to be still divergent from current intrinsic value a decade later.
Ten years is a long time - the idea of investing should always be based around making sure the $1 you invest today is worth a lot more in the future.
At what point do you say Im wrong.
- You picked the wrong company (ie. the value of each $1 that the company re-invested in its operations is now worth less than a $1)
- Your assumptions were wrong in the first place; which means you paid over the odds
Probably the same reason that one person's tea leaves are another person's pattern
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