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Realist... you may be right after all

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Rob_ee

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19 December 2006
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For Realist and others of a same mind on how to trade the market ....

Being a newbie (3months) I have never experienced a Bear OR Bull market.

Everything I read, all the great traders past and present (especially 1 on this forum who has taught me so much) seem to advocate strict stop losses trade the trend etc...

What I have seen during the past three months has truly astounded me.
I thought the stock market was supposed to be a level playing field, no manipulation, honest reporting ..blah blah..

How do you explain or logically follow the goings on recently?

DOW down 250 1 day on report of bad loans and 1 Million forclosures etc...

Next day a 200 point swing to close 60 higher even though all the other world indicies finished in a sea of red..

What happened .. did all the defaulters pay of debts overnight and the lending institutions are not going broke after all? I know there are other things driving the market but this seemed the main reason for the sell off.

Our ASX down 100+ yesterday and UP 100+ today.

Its a guessing game where logic and reason does not seem to exist and the massively funded institions run the show playing with our super money and the gullibles new meat $$ who try to guess what will happen tomorrow.

So REALIST you may well be right ... sink everything into CBA and WOW, or something safe collect dividends and be reasonably sure that years down the track you will probably do much better than bank interest.

Who cares about the daily heaving and hoing UP and DOWN.
In the long run you will probably end up in front.

AND NO ... I am not bitter or have been caught out.
I hold nothing at the moment and am watching with amusement the daily goings on.

So I started with 15K now have 15.97K after 3 trades (thanks to SMY)

Any suggestions what I should do with it IF I DECIDE to stay trading shares.

Quite happy to watch for the next 3-6 months to see what develops and learn along the way.

Rob
 
Rob_ee said:
So REALIST you may well be right ... sink everything into CBA and WOW, or something safe collect dividends and be reasonably sure that years down the track you will probably do much better than bank interest.
Click to expand...

Of course I am right.

But don't sink everything into WOW or CBA.

Carefully buy many diversified undervalued companies (essentially companies that consistently make profits and have assets and have a low PER and NTA to price ratio) that pay good dividends (>5%).

And hold them.

No stress, little brokerage, no tax!


Traders must be getting stopped in and out all the time at the moment.
 
So I started with 15K now have 15.97K after 3 trades (thanks to SMY)
Click to expand...

Of which you probably owe $450 in tax.

Indexed with inflation you've broken even... at best.
 

I just posted this on another thread, but strangely enough just after that incredible DOW rally (after the close of the European markets) either Bloomberg or CNN did a spread called 'Phantom Stocks' about how with naked short selling it is possible for %1000 of a company to be traded: ie stocks that do not exist.
 
Realist said:
Of which you probably owe $450 in tax.
Click to expand...

Only if the tax man finds out after all only 3 trades...

Obviously I can't do much with 15.97k I have much more IF needed but the 15k was only to get a feel for the market to see how it works.

It would only buy me 200 RIO shares so what would be the point ?

I was ignorant and gullible when 1st starting out thinking that the share market was a level playing field for all (DUMB what) ?

After all my 15k would only be lunch money for the big boys who run the show.

Like I said quite happy to watch and learn along the way.
MS is a wonderful tool for testing and experimenting and I can always paper trade for a while... after all I have laid down real money 3 times already.

Just feel sorry for some of the new guys trying to make sense of all this.
Rob
 
If you wanna wait and watch for a while - great.

But in the meantime do more and more research, figure out what you want to buy, and wait for the day where you can get it cheap.

Wait for bad news! Not good news.

Westfield has a building disaster. Fosters beer is sabotaged, Commonwealth Bank loses big deal. Whatever.

Then get in when the price drops.

$16K is more than enough to invest.
 
Rob_ee said:
Only if the tax man finds out after all only 3 trades...
Click to expand...

All your trades are recorded in an registered database. If you haven't already received your holdings letters/certificates in the mail, you will soon.
 
Rob_ee said:
Only if the tax man finds out after all only 3 trades...
Click to expand...

The ATO has demanded the IP address of this post from ASF, inturn the ATO has demanded your name and address from the originator/provider of the IP address, you are on a watchlist.

Repeated offences will result in a microchip being placed in your skull that is required to be scanned to complete any future financial transactions.

The internet is a key player in the big brother theory that is a core ingredient of the New World Order.

Be afraid.

 
Come on fellas .... didn't you see the smiley on the end ... Just kidding.

One way out of it ... In june I will reverse my MS exploration to search for new lows instead of my (now) new highs.

I will buy the biggest dog on the ASX , make sure I lose exactly 970 dollars will which mean I made no profit at all ... hence no need to pay tax

Rob
 
I can recommend a dog, a faithful dog for tax purposes, i call him BDG.
 
valmet said:
I can recommend a dog, a faithful dog for tax purposes, i call him BDG.
Click to expand...

Thanks valmet .. I'll keep it in mind ....

Seriously though I would be overjoyed if I had to pay even $5000 in tax for share trading
That would mean I made lots of profit right ?

Any other Dog candidates out there
 
Rob_ee said:
Seriously though I would be overjoyed if I had to pay even $5000 in tax for share trading
That would mean I made lots of profit right ?
Click to expand...

Well it will probably mean you made $5000 in profit (after tax).

But if you invest and do not sell you could make $10,000 in profit including dividends and pay NO TAX!!

People will say "yeah but you gotta pay tax sometime" - absolutely true.

But......

The true advantage of that is you are letting what you theoretically owe in tax compound for you, not for the tax department.
 

Thanks for that Realist, good points to keep in mind. I never traded shares before so wasn't quite sure how much tax was payable.

Can I Claim the cost of Metastock as a tax deduction?
All my purchases were/will be based on what the exploration comes up with, then I'll read anns to see what the company does, how much debt, income etc.... so without MS I would/will never make any profits.

I know a pure chartist will say I shouldn't care what the company does BUT I just can't help myself, I like to know what I am buying.
Especially sectors ... won't touch Telcos or Trusts for example.

One learns so much on a site like this.

Thanks all for the input.

Rob
 
Then of course, oldies can invest under a self managed super fund, and never pay tax (trivial tax) - But only if you can wait that long to get the money lol.

SMSF 's don't let you short of course. Just a thought.
I believe that the old story about "need to have super at $100K+ to make a SMSF worthwhile" is a load of nonsense. .
 
Rob might be worth looking at IPOs for perhaps a lower risk entry,no fees on buying and sign up with Comsec(not sure if offer is still valid but they were offering $600 of free brokerage)
 
2020hindsight said:
I believe that the old story about " need to have super at $100K+ to make a SMSF worthwhile" is a load of nonsense. .
Click to expand...

I agree, it's a load of codsw*****p. I have my own SMSF and have had no such difficulty. regards YN.
 
Can I Claim the cost of Metastock as a tax deduction?
Click to expand...

I do not believe you can.

Someone who is registered as a fulltime trader, ie it is their business, could though.

But I'm no accountant. So I'm not 100% sure.
 
Realist You make so much sense. Been in the game now 10 months. 8 trades. 6 buys and 2 sells. No CGT and things are looking good.

Research is the name of the game.
 
Realist said:
I do not believe you can.

Someone who is registered as a fulltime trader, ie it is their business, could though.

But I'm no accountant. So I'm not 100% sure.
Click to expand...

Isn't it classed as a business expense?

You're running a business, of stock trading.
 
I claim any expenses which can be seen to relate to my capacity to make my SF grow, e.g even magazine subscriptions. Can't see why Metastock wouldn't qualify. Ask an accountant.

Julia
 
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