Robusta fundamental, leveraged investments

[robusta]

...Can't be bothered anymore.

+ 1 while I am learning something, but one side saying it's black while the other it's white.
Enough allready.

 

[tech/a]

+ 1 while I am learning something, but one side saying it's black while the other it's white.
Enough allready.

Was crook last night and now at the office.
I think if anything my brevity has caused issues
within the topic. I intend to answer all comments relative
in more detail tonight.

I will open a seperate thread as this only losely
relates to robustas thread.

 

[jancha]

Bert Forget the Squiggly line bit but I think the question is quite relevant. He's simply asking a question on Techs seriousness with retirees solution to learn to trade in shares in order to get ahead.
I find that a rather bizzar statement.
It would be good for the market but seriously how many of those advised to trade shares with their retirement money will lose more than they gain? Unless you've had years of experience which most retirees dont have. Bad advise imo.

This is probably better explained in what i'm saying Berty.

Technical analysis and systems to exploit the results of that analysis with consistent results takes years to accomplish - if ever - some people never achieve a consistent system. I've been doing technical analysis for a while now and I'm still learning and will probably do so until they put me in the ground. What may work and be extremely successful for one person may fail abysmally for the next person. (It's a bit like Schrodingers Cat for the stock market - your OWN emotional state can have an effect on the way that you perceive the information you are trying to extract.)

 

[jancha]

Was crook last night and now at the office.
I think if anything my brevity has caused issues
within the topic. I intend to answer all comments relative
in more detail tonight.

I will open a seperate thread as this only losely
relates to robustas thread.

Hope your feeling better Tech too much whiskey in your coffee will have that effect.lol
Looking forward to your new thread.

 

[Julia]

jancha,

Currently nearly all self funded retirees have money in the stockmarket, often with managers that charge a fee to invest in pretty much the indexes, with a prerformance that lags the indexes. Learning to take care of their own money is what I would recommend as nobody will care as much as themselves.

+1. It is, however, pretty hard to persuade people of this. Despite the high stakes, there seems an astonishing level of inertia when it comes to acquiring some basic financial literacy.

A fund that hugs the index minus fees, although not an ideal solution, is a much, much better solution then having gramps day trading to provide money to support himself.

This rather rude comment seems to suggest that anyone over 30 lacks the intellectual and practical capacity to appropriately invest on their own behalf. I know a number of people - retired - who are way more successful than most fund managers, so maybe reconsider your pejorative remarks about older people.

...Can't be bothered anymore.

Imo there's plenty to learn from one another. I don't see why so many have such fixed views about only one approach being valid. The discussion should be useful to us all, rather than the inevitable slanging match where someone always gets offended and huffy.

 

[McLovin]

Imo there's plenty to learn from one another. I don't see why so many have such fixed views about only one approach being valid. The discussion should be useful to us all, rather than the inevitable slanging match where someone always gets offended and huffy.

I don't disagree. In reality, the sledging seems to be fairly one sided. Every now and then you get the first time poster who says things about squiggly lines, or how retarded FA is, they're easy to ignore. It's the constant attitude of certain posters that anyone who doesn't follow their methodolgy is wrong and couldn't possibly be making money and is basically a moron.

Of the regular FA posters on here (skc, Ves, craft, ROE, robusta, myself and others) I have not seen disparing remarks about TA being made, but we're constantly having to defend ourselves. It gets a bit tiring when you're basically called idiotic for doing something different, that does work.

craft is absolutly right that this is the straw that broke the camel's back.

 

[PinguPingu]

+1. It is, however, pretty hard to persuade people of this. Despite the high stakes, there seems an astonishing level of inertia when it comes to acquiring some basic financial literacy.

Inertia and time constraints, Julia. My Dad in his mid 50's is very intelligent and capable in his medical field, but lacks a lot of investment knowledge. The SMSF adviser he pays something around 5,500 a year to see him twice a year where all he does is tell him to put more money in cash or maybe some Australian bond fund. At the start he was given a 'stock standard' package of ASX100 shares that included arguably terrible companies to invest at the time including LEI, DJS and QBE.

However, he just doesn't have the time to really 'learn' how to trade or even invest as he works 6 days a week, 8-9 hours a day most weeks. For a birthday present I've bought a years subscription to the Eureka report but he hardly gets time to even glance over that. It's just awful watching this guy who couldn't give two ****s about how my Dad's super is going and half the time in there investment meeting catch ups boasts how his trades are going.

He's definitely gotten sick of it and will be moving to Dixon's I think, although I'm not sure about how good they're gonna be either - he just wants someone competent who actually cares about the performance of his fund.

But then I look at people around my own age of young 20's with plenty of time on their hands and not many people apart from those in Commerce related educations seem to care enough to get interested in about their Finances either and probably wont anytime in the future.

Back to Robusta, good to see things are back on top mate, love your thread.

 

[RottenValue]

It's still working, even robusta would be ahead if it wasn't for his leverage.

There are plenty of people on here using fundamentals and making money, myself included (25% ytd, on a decent amount of capital, without going into detail it's seven figures). In my experience, it's become easier to find value and make money post GFC than in the years 2003-2007, when the king tide lifted everything, regardless of how rubbish it was.

You seem to attribute poor analysis as being the result of FA being flawed, which is wrong.

Fundamentals working fine for me as well, just checked to see that up 22% ytd which equates to a bit over $150K. Good market for me but I have been averaging 15% over the past 3 years so struggle with the "only works in good market" comment.

I admit to having no understanding, or interest, in TA as the concept makes no sense to me. As a mathematician, engineer and later in life IT consultant, I laugh when I hear discussion about Elliiot Waves, Fibonacci retracements and other pseudo science on YMYC but hope that the guest actually uses the system rather than just sells it.

The worst thing about FA is that it can be very boring, do the work, select the stock, be committed and then wait until it reaches a point where it is over priced. Sell and then repeat. Process and patience. If you dont have the temperament, then trading is probably the alternative.

So maybe just separate the two teams and have them play their own sport - the FA guys know that it works and can sleep at night. Maybe the same is true of the TA guys

 

[tech/a]

My reply is in the thread

In the interests of Clarity.

 

[Julia]

Inertia and time constraints, Julia. My Dad in his mid 50's is very intelligent and capable in his medical field, but lacks a lot of investment knowledge. The SMSF adviser he pays something around 5,500 a year to see him twice a year where all he does is tell him to put more money in cash or maybe some Australian bond fund. At the start he was given a 'stock standard' package of ASX100 shares that included arguably terrible companies to invest at the time including LEI, DJS and QBE.

However, he just doesn't have the time to really 'learn' how to trade or even invest as he works 6 days a week, 8-9 hours a day most weeks.

Reaperman, your dad doesn't lack time. We all have a given amount of time after work commitments have been met. It's like people who say "oh, I can't help being overweight: I don't have time to exercise."

Rubbish. If something is a priority for you - and I'd have thought securing our financial future would be a priority for most of us - you allocate the appropriate amount of time.
Watch a few hours less of television. Do without yet another dinner party with its mindless chit chat.
I have no idea of your father's circumstances, but perhaps making more money simply isn't important to him?
Perhaps he has decided that he has sufficient super already and/or can continue to work into his 70's, so he just doesn't see any real need to change what he's doing now.

For a birthday present I've bought a years subscription to the Eureka report

Well, good luck with that. The same goes for most of the tip sheets.
Nothing will replace acquiring your own education and doing your own research.

but he hardly gets time to even glance over that. It's just awful watching this guy who couldn't give two ****s about how my Dad's super is going and half the time in there investment meeting catch ups boasts how his trades are going.

He's definitely gotten sick of it and will be moving to Dixon's I think, although I'm not sure about how good they're gonna be either - he just wants someone competent who actually cares about the performance of his fund.

As you've observed, most of these 'advisory' services have their own profitability as their main focus.
If your dad is happy to provide them with their lucrative fees, there's probably little you can do about it.

Nice that you're interested, however.

But then I look at people around my own age of young 20's with plenty of time on their hands and not many people apart from those in Commerce related educations seem to care enough to get interested in about their Finances either and probably wont anytime in the future.

No. They will wait until they are approaching retirement age and then start whining that "super is a great con", "it just doesn't work" etc etc.

Your experience endorses what I see all the time. Perfectly intelligent people who otherwise manage their lives well seem to have some sort of extraordinary blank spot when it comes to money. They inexplicably seem disposed to continue allowing some incompetent person to manage their future rather than take a few hours a week to learn how to do it themselves.
Beats me.

 

[Boggo]

Your experience endorses what I see all the time. Perfectly intelligent people who otherwise manage their lives well seem to have some sort of extraordinary blank spot when it comes to money. They inexplicably seem disposed to continue allowing some incompetent person to manage their future rather than take a few hours a week to learn how to do it themselves.
Beats me.

Simple and concise summary, well put

 

[Julia]

Reaperman, here is something for your father to ponder. It's from Superguide.com.au

The Ripoll Report provides some key facts:

There are just over 18,000 financial advisers.
These advisers work for 749 advisory groups operating via 8000 financial planning practices.
The most common method for providing such advice is via one of the 160 or so dealer groups operating in Australia. The largest 20 dealer groups hold around 50% of market share.
Around 85% of financial advisers (that is, more than 15,000 of the 18,000-odd advisers) are associated with product manufacturers in two ways:
The adviser works within the dealer group and uses the dealer’s support services
The adviser is directly employed as an authorised representative under the corporate entity’s Australian Financial Service Licence (AFSL).

From this information (extracted from the Ripoll report, Chapter 2, para 2.4), you can discern that only around 3,000 (18,000 less 15,000) financial advisers in Australia are not associated with product manufacturers (that is only 16-17% of advisers).

In short, the bulk of the financial advisers in Australia are selling product rather than primarily providing financial advice – operating as salespeople rather than true professionals.

It is not clear from the information available, how many of those 3,000 advisers who are not associated with product manufacturers, can be considered independent.

I find it unbelievable that the only list of independent advisers that currently exists is the one that SuperGuide creates and publishes in the article, Financial advice: Only 15 (10 +3 + 2) independent financial advisers in Australia.

Obviously, I am not convinced that there can only be 15 truly independent financial advisers in Australia but until someone builds a comprehensive list of independent financial advisers, this list of 15 is all that consumers can rely upon. Our aim at SuperGuide is to grow this list of independent advisers until we have hundreds (if not thousands) of independent advisers on the list.

 

[PinguPingu]

Thanks Julia, that article and list I got from the site is very helpful. Amazing, I skimmed over Dixon's fees and they charge ~$82!!! for every listed security bought or sold under them.

He always seems stressed about his Super and our talks usually turn to what he should do about the situation. I'm sure he can find probably find the time, more he doesn't want to take the responsibility of his actions There's always someone to blame if things go pear shaped if you're in an industry fund or under an advisor...

 

[kermit345]

Hi guys,

I haven't posted here in some time as been busy with other things, but read through the last few pages and found it very interesting. I'm not going to touch the FA/TA thing as i've discussed it before, both can AND do work, but it depends on the mentality of the person implementing their strategy and what exactly they are implementing.

In reference to the retirees discussion in the last few posts I just wanted to touch on some points. I work in the financial services industry as a paraplanner and our dealer group is non-aligned to the banks. Of our client base I would hazard a guess that maybe 1-10% of our clients take a true interest in what is within their portfolio's, and this is high, pre-GFC that % was even lower as people took less interest. I'm not saying this is the right approach, I firmly believe everyone should take interest in their finances - money makes the world go around. No matter what age you are, having an idea of your budget is a #1 priority, basically all financial strategies revolve around whats coming in and whats going out.

However when it comes to actually being knowledgeable about investments and whats inside their portfolios, its not something people want to think about. I know Julia you say watch a little less TV or have 1 less dinner party but I don't believe its that simple. Investment knowledge is not easy to gain in the first instance, but for pre-retirees AND retirees to do additional education on investments or markets we've found really isn't a priority for many people. Most wish to enjoy their children's lives, grandchildren, travelling or simply being in retirement and this is what they pay a planner for. Not just to maximise returns, but for peace of mind that your not erroding their money either - most people are simply happy with index returns if it means their retirement goals can be met as you've implemented the right strategies pre-retirement to maximise their wealth.

Retirement should be about enjoying what you've built over a lifetime of working and this is what most people do. Complicating that with learning about how to trade securities is something most simply do not want to do as it takes the relaxation out of their retirement.

Again, i'm not advocating that being ignorant of markets/investments is the right way to go, it would be great in an ideal world that everyone was educated on wealth and finance in some shape or form, but its simply not something most aspire to learn.

The problem then becomes the scum that take clients money or use bad investments for kickbacks etc in the finance industry that tarnish it for the rest. But if you do your research and actually interview financial planners rather then them interviewing you, there are plenty of good, honest and hard working individuals out there who can help put peoples mind at ease so they can concentrate on enjoying their life.

Sorry for the off-topic post robusta, i'll leave it at that, just wanted to provide some perspective from someone inside the industry.

Cheers

 

[Julia]

In reference to the retirees discussion in the last few posts I just wanted to touch on some points. I work in the financial services industry as a paraplanner and our dealer group is non-aligned to the banks. Of our client base I would hazard a guess that maybe 1-10% of our clients take a true interest in what is within their portfolio's,

Yes. This is why they are clients of a financial adviser. They lack the interest so choose to trust an adviser.
Fine. Just don't then whine about Super being a con, etc.

However when it comes to actually being knowledgeable about investments and whats inside their portfolios, its not something people want to think about. I know Julia you say watch a little less TV or have 1 less dinner party but I don't believe its that simple. Investment knowledge is not easy to gain in the first instance, but for pre-retirees AND retirees to do additional education on investments or markets we've found really isn't a priority for many people.

Again, you are considering a biased sample. Most retirees - and there are plenty - who are competently running their own financial affairs have had no prior training in any financial field. They have simply understood that acquiring understanding about investments is much less arcane than self interested advisers would wish us to believe.

Most wish to enjoy their children's lives, grandchildren, travelling or simply being in retirement

Oh, please. They can still do that and spend a few hours a week maximising their financial situation.

Retirement should be about enjoying what you've built over a lifetime of working and this is what most people do. Complicating that with learning about how to trade securities is something most simply do not want to do as it takes the relaxation out of their retirement.

Again, you're quoting what you've seen in your biased sample and extrapolating this to the general population.
In so doing you're painting people over 60 as dopey and uninterested in keeping their minds alive.

The problem then becomes the scum that take clients money or use bad investments for kickbacks etc in the finance industry that tarnish it for the rest.

Quite so. If people had even basic financial literacy they would have more chance of avoiding such shonks.

I appreciate your posting your point of view, and likewise apologise to Robusta for further diverting the thread.

 

[kermit345]

Again, you are considering a biased sample. Most retirees - and there are plenty - who are competently running their own financial affairs have had no prior training in any financial field. They have simply understood that acquiring understanding about investments is much less arcane than self interested advisers would wish us to believe.


Oh, please. They can still do that and spend a few hours a week maximising their financial situation.


Again, you're quoting what you've seen in your biased sample and extrapolating this to the general population.
In so doing you're painting people over 60 as dopey and uninterested in keeping their minds alive.

In reference to quotes above, i'm certainly not saying people over 60 are dopey or uninterested in keeping their minds active, more just that they are uninterested in finance/investments. The knowledge that many people over 60 have is amazing, i'm just saying their is a general lack of interest in finance/investments and while it is growing its still quite small - not just in the sample size of our office but of many offices as i've talked to a lot of advisers at national conferences etc. This is why financial planning is such a new industry relative to painters, builders, accountants, doctors etc, the interest is growing but its still something many don't want to understand or find it hard to understand.

Maybe where you live its quite different which is fair enough, you may be in a well educated suburb of a major capital city - big stereotype there by me but i'll put down a hunch that i'm right haha.

If people want to take it on board to handle their wealth personally and spend that time a week educating themselves AND playing with their investments then more power to them, I just don't believe its something the majority do currently, although a lot more do it now then 10-20 years ago.

 

[tech/a]

I have 3 mates who are Financial advisers.

Through them I have met many others at functions.
I have in the past also asked for advise on my own portfolio.

I have found in general that the Average person will have less than $100K to retire on so the help of an F/A is pretty limited. Joe Average at this level has little or no interest in his finances--he doesnt have a lot to be interested in.

However the F/A's all want the Whales.
High nett worth inividuals with more than $500K capital for investment.
These guys are pretty rare. They also (In General) know exactly what their capital is doing and where it came from.

More importantly those financial advisers who are falling over themselves to get their business
are doing all they can to get themselves in a financial position their Whale Clients are in!

Leased BM'S Mega mortgages in the best suburbs and little disposable income.
Live week to week.

Needless to say I have my own SMSF
and I agree with Julia.

 

[Ves]

Oh, please. They can still do that and spend a few hours a week maximising their financial situation.

If I did not have the time or inclination I would set-up something similar to the "permanent portfolio" which only requires rebalancing at lengthy intervals.

I won't write about what this actually entails, but if you are interested plug it into Google - there is plenty there to read.

I guess that might disappoint some people (and give people at dinner parties something to have over you), but for most people the passive alternative is the best course of action and should still result in them preserving their wealth from the hidden erosion of inflation.

I find it more common that people who have put fanciful amounts of hours into investing over the years still fail to do better than many of the passive alternatives available to them. Time and education alone do not gaurantee results and a lot of it comes down to temperament - which cannot be taught.

Financial planners create diversification not wealth. This is a common misconception - by both the industry and the public in general.

 

[McLovin]

If I did not have the time or inclination I would set-up something similar to the "permanent portfolio" which only requires rebalancing at lengthy intervals.

I won't write about what this actually entails, but if you are interested plug it into Google - there is plenty there to read.

I guess that might disappoint some people (and give people at dinner parties something to have over you), but for most people the passive alternative is the best course of action and should still result in them preserving their wealth from the hidden erosion of inflation.

I find it more common that people who have put fanciful amounts of hours into investing over the years still fail to do better than many of the passive alternatives available to them. Time and education alone do not gaurantee results and a lot of it comes down to temperament - which cannot be taught.

Financial planners create diversification not wealth. This is a common misconception - by both the industry and the public in general.

+1.

Especially the bolded part.

 

[kermit345]

I have 3 mates who are Financial advisers.

Through them I have met many others at functions.
I have in the past also asked for advise on my own portfolio.

I have found in general that the Average person will have less than $100K to retire on so the help of an F/A is pretty limited. Joe Average at this level has little or no interest in his finances--he doesnt have a lot to be interested in.

However the F/A's all want the Whales.
High nett worth inividuals with more than $500K capital for investment.
These guys are pretty rare. They also (In General) know exactly what their capital is doing and where it came from.

More importantly those financial advisers who are falling over themselves to get their business
are doing all they can to get themselves in a financial position their Whale Clients are in!

Leased BM'S Mega mortgages in the best suburbs and little disposable income.
Live week to week.

Needless to say I have my own SMSF
and I agree with Julia.

Obviously F/A's want HNW clients because they are the ones willing to pay for the advice, and I don't just mean investment advice, I mean strategic advice. However if you have someone that only has $50k in super and minimal investments but is still willing to pay for the advice, F/A's wont turn them away anymore. With the regulations changing towards Fee For Service rather then a % of FUM, Advisers don't really care as much how much you currently have, its more about if your willing to pay for their advice that covers the full range of your financial position (Estate Planning, tax reduction, superannuation, investment, financial goals, risk insurance etc etc.)

HNW clients are always going to be preferred by F/A's cos they are typically more willing to fork out for quality advice.

BTW, I don't disagree with Julia that people, particularly those aged over 40 need to take a vested interest in their finances and at least attempt to understand their superannuation (i.e. most people just select the balanced option on their industry fund and never think of it again). I'm just saying that majority do not do this at the moment and that while the landscape is changing, its a slow process because the old adage that accounting/finance/numbers are dry and boring means people take a hands off approach and leave it to the 'professionals'. Note professionals is in quotes as finding an honest and quality financial planner who is actually a professional isn't as easy as many would hope, mind you many are trying to rectify it.