What determines if the All Ords is up or down today?

[Joe Blow]

Well I did ramp CQT I admit, not for self gain though, more for fun.

Realist, I'll be frank - ramping is not something I wish to encourage around here. Whether it is for self gain or fun the point is, it is still ramping. Many ASF members come here to avoid the kind of rubbish that goes on at other forums and I understand why they do. Ramping is ugly, self-interested and is a scourge that afflicts stock market forums the world over. Trust me, it irritates many more than it amuses, as funny as it may seem to you at the time.

 

[Knobby22]

Well I'm guessing SYM and MPH must have announced future earnings will be down? A profit warning or something.

So investors calculate future earnings against the current price and they value it less, so the current PER may be 5 or 10 but they are bargaining on future earnings being lower not higher.

Companies with good future earnings have a high current PER and companies with poor future earnings have a lower current PER. Again the pass mark is around 15.

Try and find a company with excellent future earnings prospects and a lowish current PER - you wont!!

They are my two worst stocks from last year.Both bought under PEs of 10 and both coming out later with surprise profit warnings. The point is evident.

 

[Joe Blow]

(Just had to have an excuse to use that emoticon )

I've been looking for an excuse to use this one. Perhaps this is what I should do to rampers?

:burn:

 

[Realist]

They are my two worst stocks from last year.Both bought under PEs of 10 and both coming out later with surprise profit warnings. The point is evident.

If you bought them with a PER of under 10 and they came out with "surprise" profit warnings, I'd suggest many people were not surprised by this. In other words you did not know what others did.

I'd also suggest they are not bad buys, and without looking at them closely I would continue to hold, a company that makes profits and has a low average PER based on their last 5 years earnings, assuming each year was profitable could be an excellent longterm prospect.

I always look at 5 years worth of earnings not 1 for this very reason.

 

[Realist]

Yes indeed!

Meanwhile :hide:

(Just had to have an excuse to use that emoticon )

Well Wayne, I fully agree we are in for a large correction if not crash, I know it, you know it, almost everyone agrees.

But no-one knows when.

The great man himself, Ben Graham acknowledged this very problem.

What do you do when the market is overvalued?

Do you pull out and wait until it crashes?

NO!!!

Because you may be right the market is overvalued, but it can remain overvalued for years and still increase.

If you pull out and wait one year but it increases more, two years it increases even more, three years and it goes up again. Maybe 4 or 5 or 6 years. It is overvalued but still increases.

What are you going to do? Human instinct is to admit you were wrong and you jump back in. Guess what you were right and it crashes - not only did you miss out on the gains but you caught the huge losses.

The market will correct itself, but no-one knows when, the safest thing to do is to always stay in the market, and always be incredibly careful. Always have money in the bank, and always think about undervalued stocks that pay dividends. There is no way of timing the market despite all the rumours and stories you hear. It is NOT about timing the market, it is about time in the market. The longer you are in the more chance your increases outweigh any crashes.

You are totally correct a crash/correction will happen. But neither of us know when. The smartest thing to do is to proceed cautiously.

Pulling out and watching will only cost you money.

 

[wayneL]

Pulling out and watching will only cost you money.

Not necessarily, but agree it is an unknown.

Hence trading.

Haven't made an "investment" for a long time. But have traded the crap out of it though.

No sitting on hands here.

 

[nizar]

Still for a punt I think the odds are slightly better than other punts. I'll hold and hope simple as that. I'll risk losing some money in the hope this is a 5 to 10 bagger, the upside potential is good enough for me to hold. Unfortunately I did not buy many in the first place, so I decided instead of taking profits to pump even more money in at what I deem to be a reasonable price considering their results so far, it could be a stupid mistake or I could have a real winner, I'll wait and see (and pray).

Yes im sure this is the Buffet and Graham investment philosophy!!!
Just buy a spec and wait and hope and pray

 

[nizar]

I always look at 5 years worth of earnings not 1 for this very reason.

Ah yes; CQT has 5 years worth of earnings!

 

[michael_selway]

It seems that the media is setting the confidence or fear of the public every day.

See a few weeks ago, when the US rate rose, 1 week before on a day the fell tumbled "because of worries of rate rise". Then the next 2 days it shot up. Then 3 days before rate actually rose, the news said people were scared again. BUt 2 days before the rate rose, it went up. And on the day of the rate rise, it went up.

And in Australian side, when they announced rate could rise on Tuesday, stocks went up because USA went up. BUt on Wedmesday, even when USA went up, the news in Australia says "Australians panic over rate rise" right in the morning. It made the All Ords tumble.

Anyone agree with this?

Well for All Ords in order of the effect:

1) Australian Economy - future Interest Rate direction
2) US Economy (Dow Jones) - http://money.cnn.com/data/premarket
3) Base & Prescious Metals - http://www.kitcometals.com
4) World Events (indices) & Oil - SARS, Terror, War
5) Exchange Rates - USD tanking?

thx

MS

 

[michael_selway]

I always look at 5 years worth of earnings not 1 for this very reason.

Yes not only this years NPAT (EPS) but forecast EPS for the next 5 years?

thx

MS

 

[Realist]

Yes im sure this is the Buffet and Graham investment philosophy!!!
Just buy a spec and wait and hope and pray

I play Blackjack, I bet on horses, I bet on sports, and I'll take a punt on the share market. You gotta problem with that?

In the above cases they are always relatively small amounts.

I invest with relatively large amounts.

I've said it once and I'll say it again, even Ben Graham believes gambling with a small proportion of your money is wise, because it can be fun, and it takes your focus off worrying about your investments - they are best left alone. He does not believe you will make much money from gambling. Nor do I. But it sure is fun.

 

[Realist]

Yes not only this years NPAT (EPS) but forecast EPS for the next 5 years?

thx

MS

It is worth looking at of course, it is only a forecast though, a prediction, which is just as likely to be wrong as it is to be right.

 

[michael_selway]

It is worth looking at of course, it is only a forecast though, a prediction, which is just as likely to be wrong as it is to be right.

Yeah thats where the risks come into it, so depends on the business, some companies have lower risk than others, eg Banks have relatively lower risks and have steady forecast growth of about 10% pa, see below:

WBC- Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 143.3 167.3 181.9 194.5
DPS 100.0 114.0 124.0 133.0

EPS(c) PE Growth
Year Ending 30-09-06 167.3 13.2 16.7%
Year Ending 30-09-07 181.9 12.1 8.7%

Also there can be upside risks to forecast EPS as well as downside, results that are better than market expectations

You have the choose the right company

thx

MS

 

[Realist]

Hi Michael,

Yes banks are probably the most accurate with their predictions.


What do you think of PRG - you like it? To me it has exactly the sort of financials and slow consistent growth I like. And for you it has the future EPS growth forecasted.

 

[michael_selway]

Try and find a company with excellent future earnings prospects and a lowish current PER - you wont!!

What do u consider excellent? indefinite low risk growth?

GTP - Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 44.8 54.0 58.7
DPS 14.0 15.0 19.0 18.0

EPS(c) PE Growth
Year Ending 30-06-06 44.8 5.2 7.5%
Year Ending 30-06-07 54.0 4.4 20.5%

Previous Close 52 week high 52 week low
2.35 4.20 2.29
P/E Ratio 5.25
Sector Diversified Financials
Market Capital $728 million

See the above forecasts were updated 30days ago, so not too old

But anyway GTP currently has a low PE 5.25, and good forecast growth, however risk is sky high?

thx

MS

 

[michael_selway]

Hi Michael,

Yes banks are probably the most accurate with their predictions.


What do you think of PRG - you like it? To me it has exactly the sort of financials and slow consistent growth I like. And for you it has the future EPS growth forecasted.

it looks good actually, steady indefinite growth of about 10%pa looks like it

Agaian are there any Risks and potentila Risks with PRG, im not familar with this company. Thanks

EPS(c) PE Growth
Year Ending 30-03-07 31.3 13.5 10.2%
Year Ending 30-03-08 34.8 12.1 11.2%

PRG - Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 28.4 31.3 34.8 37.7
DPS 17.0 18.3 20.5 21.0

Previous Close 52 week high 52 week low
4.21 4.29 2.99
P/E Ratio 14.35
Sector Commercial Services & Supplies
Market Capital $300 million

Business Description
Programmed Maintenance Services Limited (PRG) is a specialty commercial painting business. It is the market leader in the long-term painting maintenance market in Australia and New Zealand. Since 1993, PRG has expanded into a range of complementary maintenance businesses including grounds maintenance, engineering and industrial services.

 

[chennyleeeee]

Does anyone still remember what this post started of as? ~~~


CHEN

 

[Bobby]

Does anyone still remember what this post started of as? ~~~


CHEN

Good one Chen !

bob