XAO Banter Thread

[Porper]

Small traders (like us) recognise the trend is down and have done something about it. We've recognised the increase in the daily volatility and have done something about it. A haircut is much better than hair removal.

Exactly right. Reducing risk is key at times like these.

In fact finding ways of reducing risk is of paramount importance at all times as far as I am concerned.

 

[Wysiwyg]

Risk assessment:
Hours of sleep lost: 2. Blood lost: None. Cold sweat perspired: 1/4 tea spoon. Tears shed: None.
Outcome: Within tolerances.

Where are the balls of steel buyers??? 15%+ Peak to trough. Big statements when markets are up. Silence now.

Thank you for sharing this. Not miserable myself but trading solo I have no contact with other market participants and no one ever mentions their drawdown on forums. The ASX has been tumultuous since August and buying stocks too soon has increased my drawdown. Remaining optimistic.

 

[Wysiwyg]

Small traders (like us) recognise the trend is down and have done something about it. We've recognised the increase in the daily volatility and have done something about it. A haircut is much better than hair removal.

Yes you are right there. Read your breakout thread daily and am astounded the portfolio has remained positive through all this. Top stuff.

 

[craft]

Thank you for sharing this. Not miserable myself but trading solo I have no contact with other market participants and no one ever mentions their drawdown on forums. The ASX has been tumultuous since August and buying stocks too soon has increased my drawdown. Remaining optimistic.

If its drawdown’s you want to see then no need to go further than a long term stock picker – I specialise in drawdown – spend ~90% of my life in drawdown.

In draw down since 1st June, Max to date in this drawdown has been 13.4% currently down 8.3%




Business as usual as far as I’m concerned.

 

[Bill M]

Wasn't Bill M buying a few parcels too?

Yes I did, I bought 2 parcels at the 5.100 level, I have 4 more to buy. Monday, Tuesday and Wednesday were travel days so I did not do anything. The lower levels (sub 5,000) have not come yet, so still waiting. I pick up a nice distribution for the first 2 parcels in a couple of weeks too.

 

[Bill M]

Strategic rebalancing. Always suspected you had good discipline.

Bill M has not yet deployed from what has been disclosed. Still, a good call to have exited some positions at better levels. Not sure how he liquidates everything yet still has a bunch of ETFs going ex-div. Perhaps they are non-equity underlying like some of mine.

2 of my ETF's are bond funds.

There are 2 other ETF's that I bought at the end of last year, they are showing losses and I will continue to hold them.

The ETF I am buying now is the one where I intend to buy 4 more parcels of, I just have that feeling that those lower prices are not going to happen.

The ETF's are all ex distribution today, even though we might have an up day today, they will show losses which is expected.

 

[CanOz]

If its drawdown’s you want to see then no need to go further than a long term stock picker – I specialise in drawdown – spend ~90% of my life in drawdown.

In draw down since 1st June, Max to date in this drawdown has been 13.4% currently down 8.3%

View attachment 64541


Business as usual as far as I’m concerned.

Hi craft, Curious as to your pain threshold? I've been through over 30% but not keen to repeat....

 

[CanOz]

FWIW, my target is 4700 based on the consolidation pattern and the low volume area.

I think we're headed to 5100 ish...that's the problem with pattern analysis, they change.

 

[CanOz]

I think we're headed to 5100 ish...that's the problem with pattern analysis, they change.

Talk about a well bid market....the SPI

If the SPI can get through this resistance here between 5080 and 5100, we might see 5225 tested.

 

[craft]

Hi craft, Curious as to your pain threshold? I've been through over 30% but not keen to repeat....

I don’t know for sure. I think I could handle anything that the ASX history has thrown up but it’s also likely my tolerance is not as high as I think it is.

I’m more likely to feel pain if my perception of the performance and cash flows of the companies I’m holding accompanies the market downturn; however that would also be my trigger to risk manage.

To date, care factor on this pull back has been nil and I had to pull up my equity chart in response to WYSIWG post to see where exactly I was at. Much prefer to read the company releases on how they are going than count my money each day.

What drives my investment return is the buy price, a series of cash flows over maybe(hopefully) a long period of time and ‘perhaps’ an eventual sale price who’s present value is probably not that material to the eventual rate achieved. Intermediate mark to market pull backs tend to induce excitement about opportunities to re-invest the dividend stream as seeds for increased future returns rather than induce pain. But I could be deluded – most think I am..

 

[shouldaindex]

My strategy of the past 2 years relies on the premise:

- That cycles end within 5 years and with a -20% drawdown (minimum). This has happened 15 times in a row since 1960 with no exception.

I didn't see the XAO getting to 6800 so that at best the drawdown starting from 2016 (at latest) would end up at 5400. Given the range of the XAO had been 5100-6000 in that time, there wasn't much upside in putting in significant amounts of cash.

So right now, 6 months after peak is still early in a bear phase, the average lasts for about 12 months.

We'll see how it plays out, in the end the magnitude of cycle ending drawdowns is primarily decided by real life economics more than just stock market perceptions, so days that swing a lot aren't really too important, it's the big economic data days that matter in bear markets.

 

[CanOz]

I don’t know for sure. I think I could handle anything that the ASX history has thrown up but it’s also likely my tolerance is not as high as I think it is.

I’m more likely to feel pain if my perception of the performance and cash flows of the companies I’m holding accompanies the market downturn; however that would also be my trigger to risk manage.

To date, care factor on this pull back has been nil and I had to pull up my equity chart in response to WYSIWG post to see where exactly I was at. Much prefer to read the company releases on how they are going than count my money each day.

What drives my investment return is the buy price, a series of cash flows over maybe(hopefully) a long period of time and ‘perhaps’ an eventual sale price who’s present value is probably not that material to the eventual rate achieved. Intermediate mark to market pull backs tend to induce excitement about opportunities to re-invest the dividend stream as seeds for increased future returns rather than induce pain. But I could be deluded – most think I am..

Thanks Craft...Appreciate your POV.

But I could be deluded – most think I am..

I certainly don't!

 

[Porper]

I don’t know for sure. I think I could handle anything that the ASX history has thrown up but it’s also likely my tolerance is not as high as I think it is.

I always remember what my mentor said to me years ago...Whatever number you come up with regarding drawdown tolerance, halve it. I have always thought this to be about spot on for beginners ( I know you aren't in that category Craft). If somebody believes they can cope with 40%, they'll likely get twitchy at 20%.

 

[Gringotts Bank]

Guys, remember craft is worth mega-$$$$$$. This will remove certain stresses and pressures for performance and regularity of profits.

 

[sinner]

Just got in front of a computer after a long day of moving house. No panic selling andalmost 2% up, guess I owe ya a dollar TH

I always remember what my mentor said to me years ago...Whatever number you come up with regarding drawdown tolerance, halve it. I have always thought this to be about spot on for beginners ( I know you aren't in that category Craft). If somebody believes they can cope with 40%, they'll likely get twitchy at 20%.

Severe drawdowns have a serious negative impact on long term geometric returns. You only need a little bit more than 20% returns to make up a 20% drawdown but you need 100% returns to make up a 50% drawdown. Very important consideration in the context of your investments duration, if you're going to need to spend that money on retirement or whatever then making sure risk tolerance is aligned correctly with duration is paramount.

 

[Craton]

Are others taking losses in this market? I am a small trader so surely there are some big haircuts being taken but no one openly admits it. Always the winner. B.S.

While I'm not a trader per se and I'd be called a minnow by any stretch, I'm having a short back and sides currently but that's the nature of the beast. Being a mostly buy and hold contrarian survivor of the dot com bust, 9/11 and the GFC, and seeing what transpired, I just continue to pick up parcels at depressed prices, average down and continue to smile when the div's come in.

I do note that there are stocks that are not hammered so hard and any uptick in the XAO takes those SP's to new highs.

I'd also hazard a guess that this volatility is just what a day trader craves for and they'd be making money hand over fist.

FWIW, currently am 38% in cash.

 

[CanOz]

Guys, remember craft is worth mega-$$$$$$. This will remove certain stresses and pressures for performance and regularity of profits.

How do you know this?

Perhaps some of the guys here that do a fair bit of fundamental research, i mean real solid research, can handle more of a draw down because they know companies they hold so well it gives them extra confidence. Also there is the dividend stream, nice.

 

[Gringotts Bank]

How do you know this?

Perhaps some of the guys here that do a fair bit of fundamental research, i mean real solid research, can handle more of a draw down because they know companies they hold so well it gives them extra confidence. Also there is the dividend stream, nice.

He let it slip once. Not that it matters to me, since I don't understand any of his posts ayway.

 

[Newt]

If its drawdown’s you want to see then no need to go further than a long term stock picker – I specialise in drawdown – spend ~90% of my life in drawdown.

In draw down since 1st June, Max to date in this drawdown has been 13.4% currently down 8.3%

View attachment 64541


Business as usual as far as I’m concerned.

Woo hoo. Glad you're posting again craft. :bier:

I was just wondering the other day about you mindset during these periods, and from your PVFCFs thread expecting you'd be maintaining the long term view. Surprised your portfolio is in drawdown that often, but long term returns damned impressive for sure.

 

[shouldaindex]

Light Green = In Drawdown
Blue = Gains

I'd say it's probably 70/30 and that's just on a monthly basis.

I might do a clearer one if it's a quiet day.