Author Topic: Australian Investing Thread  (Read 892657 times)

sully1985

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Re: Australian Investing Thread
« Reply #3800 on: January 29, 2018, 07:24:38 PM »
The Sydney market is crazy.

Prices are dropping. Since the peak back in June last year my place has dropped in value by $100,000 or so, say 5%. I do think that prices will continue to retreat through 2018.

Yes, this is kinda my gut sense and why Iím thinking we might be better off just waiting for 18 months?  Hereís whatís crazy: we currently pay a lot in rent. We could move to a 2 bedder for $600/week, but if we buy the 1 bedder, our mortgage would be around $600/week, so paying the same for less, although weíll own it. Decisions! Decisions!

Mine has held up in value, though I'm in the outer suburbs. But yes I do expect prices to come back a little bit through this year, especially if interest rates go up.

Which suburb are you looking to buy in?

Roseberry, Moore Park and Alexandria. I looked at a lot of homes and there didnít seem to be much interest. I think lots of people are waiting to see what happens and if our worst case is renting something slightly smaller, having an extra $10k not going to rent and investing, weíre still ok.

FYI I live in the Rosebery/Zetland area and seriously, I would not buy anything (apartment-wise) in that area, I'm living in a 2 bed place that was built around 7-8 years ago and it's not aging well (Meriton). Thank God I don't own the place.

Funny you say that, we looked at the place and they just had some water damage fixed. Do you not like the area?

I would not go anywhere near Alexandria/Zetland either. For the same reasons - crappy construction and mega strata fees. And down the track do you really think you'll be able to rent it with all the supply going up? There's literally 10's of thousands of identical shoeboxes going up in that whole corridor bounded by the CBD, Airport, Southern Cross Drive and the Eastern Suburbs/Illawarra Railway line between Wolli Creek and the city.

Renters will do exceptionally well with all the negotiating power.

I'd look around Edgecliff / Waverley if I were going to spend $600k on a 1 bedder. Much more likely to hold value.

MrThatsDifferent - I have no issue with the area, lots of services and close to the CBD and Airport (although the occasional fly-over/by can be annoying - depends on the wind direction though), but I wouldn't want to live there and drive, lots of apartments going up and no real investment in the infrastructure.

marty998 - Nail on the head (shame the tradies can't seem to do that)... I'd also add that I have some friends who live down in Matraville, and even though it's close to the airport they hardly hear anything (no direct flight path), so might be worth looking around there?

Suppose it all depends on plans in the future (and all that Jazz), I certainly wouldn't be looking to buy in Sydney at the moment but that's just my 2 cents.

Fresh Bread

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Re: Australian Investing Thread
« Reply #3801 on: January 30, 2018, 12:13:35 AM »
I just read this article but I don't follow it, can anyone shed any light?

http://www.smh.com.au/money/investing/market-momentum-has-never-been-higher-but-the-risk-of-a-crash-is-high-20180129-h0pumd.html

The author talks about how you don't achieve average returns unless you stay in the market, but then talks about selling. He says he intends to sell at the start of the crash, but doesn't say what happens next - would he buy in again at the bottom a day later? Who the fuck's got time for these shenanigans? I'll just stick with the average.

FFA

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Re: Australian Investing Thread
« Reply #3802 on: January 30, 2018, 01:52:54 AM »
Yeah I agree Fresh Bread, I think it's rubbish advice and will lead most people to screw up. Sit on the edge of your seat, watch your screen, start selling quietly in the night. Was he selling everything quickly during the brexit or trump surprise victory, only to quietly buy it all back a few days later at higher prices. Or worse just stay out and still waiting for the price to come down. For most people the best thing is to make a plan that fits your situation/personality and stay the course. Turn the screen off and save yourself the anxiety.

That said he has a point in that markets are quite high. So people should pay attention if portfolios need a rebalance. Those still making regular contributions might want to slow them down and build up more cash to get your asset allocation back to where it is desired.

itchyfeet

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Re: Australian Investing Thread
« Reply #3803 on: January 30, 2018, 05:55:33 AM »
Agreed. Ridduclous article and stupid advice.

What will trigger this quiet selling deep in the night? A 1% selloff, 5%, 10%? In which country?

Trading when the markets are closed is generally a bad idea. What happens if the market drops 80% at the opening. Placing your sell order in the depths of the night means you have no control. Maybe you wouldnít sell if you knew most of your wealth was already gone. Yes, You could put a limit on the trade, but how do you set that Limit (1% lower, 10% lower)?

When do you buy back in?

 If you are going to trigger massive amounts of CGT, shouldnít this be a consideration?

I think better advice is to Just stick to your investment plan.

Stay the course and rebalance periodically. Forget timing the market. If you donít like the risk of a security donít buy in the first place.

Choose an asset mix that letís you turn your Computer off and get a proper nightís sleep.

Abundant life

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Re: Australian Investing Thread
« Reply #3804 on: February 02, 2018, 07:56:04 PM »
Here is probably another set of dumb questions:

I decided to sell a large parcel of shares in IOO ETF. I use Direct Shares' market depth to track the prices and quantities of buy and sell orders, plus the cost and amount of the last ten trades to get a feel for the way the market is trading at that time.

I put in my sell order for a certain price, and I can see it in line with the other sell orders. There seems to be someone selling over 6000 shares for a certain price and I wanted to get ahead of them and sell today as the total number of shares traded is usually about 11,000 to 15,000 per day, and it will take a while to sell 6000+ shares.

But some strange things (to me) seem to be happening. 6000 shares is worth about .75 million A$ - that's a lot! Then suddenly there is another 6000+ order ahead of me. These large amounts seem to jump in and out of the selling line. I know people can submit and cancel orders, but is someone playing silly buggers?

Also the speed at which they sell is not constant, so there might be up to 10 minutes without any trades. Then there will be a sale of 1 share? Who would sell or buy one share when the cost to trade would be prohibitive, or is this a way the ASX keeps things moving?

And I can't understand why trading takes place outside of trading hours. Suddenly after 4pm the shares jump in price? Also one would think yesterday's closing price would be today's opening price?








deborah

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Re: Australian Investing Thread
« Reply #3805 on: February 02, 2018, 08:20:40 PM »

mjr

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Re: Australian Investing Thread
« Reply #3806 on: February 02, 2018, 08:24:48 PM »
What you're seeing is the market maker.  Look it up.

Abundant life

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Re: Australian Investing Thread
« Reply #3807 on: February 02, 2018, 09:13:55 PM »
Thanks Deborah and mjr, you learn something everyday! Seems a bit underhanded and manipulative in a 'free-market'.

mjr

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Re: Australian Investing Thread
« Reply #3808 on: February 02, 2018, 09:30:26 PM »
Not really.  The bid-ask spread is the price we pay for liquidity when trading shares, especially ones with low volumes compared to the heavily-traded ones.

Stewart

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Re: Australian Investing Thread
« Reply #3809 on: February 03, 2018, 01:06:32 PM »
Hi everyone, I'm new here.
I just read this entire thread (took me 2 months).
As a 50 year old touring musician with minimal investing experience, I really appreciate the knowledge and insight provided here!
SK

Little Aussie Battler

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Re: Australian Investing Thread
« Reply #3810 on: February 04, 2018, 09:20:36 PM »
Anyone buying today?

hm520

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Re: Australian Investing Thread
« Reply #3811 on: February 04, 2018, 10:14:43 PM »
Anyone buying today?

I would be but am in the process of transferring between brokers. Not a huge urgency for me though. Glad someone could take advantage of it!

Llewellyn2006

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Re: Australian Investing Thread
« Reply #3812 on: February 04, 2018, 10:17:05 PM »
Anyone buying today?

Bought some WAM Capital the other day. Only wish I'd waited because I could have got more for my money. Could be the start of some good buying opportunities if the correction really is starting. Poor old Wesfarmers copped a thumping (yep, I've got 'em)

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #3813 on: February 05, 2018, 01:22:15 AM »
Not sure what to do, need some advice: thinking about buying a place next year. Is is better so save the cash in a HISA or keeping investing in Vanguard and pull out the deposit next year?

itchyfeet

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Re: Australian Investing Thread
« Reply #3814 on: February 05, 2018, 01:36:13 AM »
Not sure what to do, need some advice: thinking about buying a place next year. Is is better so save the cash in a HISA or keeping investing in Vanguard and pull out the deposit next year?

Are you feeling lucky?..... donít answer this.

How would you feel if the ASX dropped 20% between now and when you want to draw down the cash?
Is the home deposit a big portion of your stash?
Are you certain you will need the cash next year?

I think, if it was me I would go with the HISA and know that I will have the cash when I want it.

Itís annoying taking a less risky position and get the low return that matches the risk you are taking, but sometimes it needs to be done.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #3815 on: February 05, 2018, 02:26:37 AM »
Not sure what to do, need some advice: thinking about buying a place next year. Is is better so save the cash in a HISA or keeping investing in Vanguard and pull out the deposit next year?

Are you feeling lucky?..... donít answer this.

How would you feel if the ASX dropped 20% between now and when you want to draw down the cash?
Is the home deposit a big portion of your stash?
Are you certain you will need the cash next year?

I think, if it was me I would go with the HISA and know that I will have the cash when I want it.

Itís annoying taking a less risky position and get the low return that matches the risk you are taking, but sometimes it needs to be done.

Thanks for that. Thatís what I was thinking.

mjr

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Re: Australian Investing Thread
« Reply #3816 on: February 05, 2018, 04:31:06 AM »
Anyone buying today?

Nope.  Will wait and see what the US does overnight and then I might think about it.

marty998

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Re: Australian Investing Thread
« Reply #3817 on: February 05, 2018, 05:24:45 AM »
Thanks Deborah and mjr, you learn something everyday! Seems a bit underhanded and manipulative in a 'free-market'.

As mjr said, those big bid and offer orders are the market maker. It gives you a pointer to the actual NAV of the ETF (hint: it's smack bang in the middle of the spread). A bot is usually working to move those orders in line with the index being tracked through the day, so you are always getting a reasonably accurate price.

Anyone buying today?

I dropped $10k on VAS just after lunch. Figure the market is probably in for some pain over the next three months, but I can always buy again then too.

CBA results on Wednesday will provide the market with some direction, however the underlying result (broker consensus $5.1-$5.2bn) might get lost in the noise of AUSTRAC and other regulatory problems.

A cut to the divvy if provisions are made for regulatory penalties could be a pointer to further falls, coupled with both TLS and WES also flagging impairments on parts of their businesses.

Shaping up to be a difficult start to reporting season...

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #3818 on: February 05, 2018, 12:15:33 PM »
Anyone buying today?

Nope.  Will wait and see what the US does overnight and then I might think about it.

I thought we were supposed to buy when the market dipped? Thatís when you get the bargains?

mjr

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Re: Australian Investing Thread
« Reply #3819 on: February 05, 2018, 12:46:18 PM »
For sure and the market looks like dipping again today

marty998

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Re: Australian Investing Thread
« Reply #3820 on: February 05, 2018, 01:23:30 PM »
Dow down 1000+. Shades of 1987... big run up over 12-18 months followed by a violent sell down.

misterhorsey

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Re: Australian Investing Thread
« Reply #3821 on: February 05, 2018, 01:37:42 PM »
Anyone buying today?

Nope.  Will wait and see what the US does overnight and then I might think about it.

I thought we were supposed to buy when the market dipped? Thatís when you get the bargains?

I'd rephrase that slightly. Intentionally buying the dips is a fools errand.  The ASX dropped approximately 1.6% yesterday, and following Wall St's drop of 3.6% (Dow Jones), 2.6% (S&P) overnight it will probably get hammered again today. Buying the dip, particularly the first dip of many, won't feel so great if this is the start of a proper correction (say a 10-30% drop).  Of course, no-one knows if it will be or won't be.

I prefer to take the approach of thinking - If there's dips or even big falls, it's not a time to worry. Hold steady as it will recover... eventually. It's certainly not a time to sell.  But if you do have spare cash lying around, it's not the worst time to buy more as you can pick up some bargains, relative to the most recent price, knowing that if may fall even further after your bought your 'bargain'.

Lastly - bargains are relative.  Even if the ASX drops by 5% to 10%  over the next few days, we are up around 10% from the past year (not including dividends).  The US Market is up more bigly, and arguably has greater to fall.

Stay chill everyone!


misterhorsey

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Re: Australian Investing Thread
« Reply #3822 on: February 05, 2018, 04:25:49 PM »
WOAH!

SP ASX 200 down 2.7% as at 10.18am. My own portfolio down about 3.4% (as it includes VGS). All I can say is LOLs!

actionjackson

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Re: Australian Investing Thread
« Reply #3823 on: February 05, 2018, 05:12:10 PM »
I mean, the run up in the past few months has been pretty nuts, can't say I'll be losing much sleep over these dips. Might blink a bit if it goes down another 20%.

steveo

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Re: Australian Investing Thread
« Reply #3824 on: February 05, 2018, 05:51:42 PM »
WOAH!

SP ASX 200 down 2.7% as at 10.18am. My own portfolio down about 3.4% (as it includes VGS). All I can say is LOLs!

It's going to hit me as well but I honestly expect this and I'm not stressing. Markets don't keep going up non-stop.

misterhorsey

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Re: Australian Investing Thread
« Reply #3825 on: February 05, 2018, 06:01:17 PM »
I'm not stressed either.  It's interesting to see all that paper profit vaporize, and fun to not feel any concern about it. These are just bumps.

I don't have any significant active income at the moment, but if it is the beginning of  a steep decline, and blue chips start showing50% losses, that's probably when I'll feel a bit tempted to reduce my emergency stash and buy me some index.

steveo

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Re: Australian Investing Thread
« Reply #3826 on: February 05, 2018, 06:44:57 PM »
I'm not stressed either.  It's interesting to see all that paper profit vaporize, and fun to not feel any concern about it. These are just bumps.

I don't have any significant active income at the moment, but if it is the beginning of  a steep decline, and blue chips start showing50% losses, that's probably when I'll feel a bit tempted to reduce my emergency stash and buy me some index.

I invest all the spare money I get. I won't change my behaviour at all even though a 50% drop would make it tempting to take out another loan on the mortgage and invest more into the market. I won't do that though even if it is tempting.

In some ways I want it to drop. I have about 3 years to becoming FI and it has to drop now or soon after I retire. I think now would be preferable to in 5 years time but either way the market is going to do what it is going to do.

Heaps of people at my work have invested in Bitcoin. They would be feeling worse.

misterhorsey

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Re: Australian Investing Thread
« Reply #3827 on: February 05, 2018, 07:06:27 PM »
I invest all the spare money I get. I won't change my behaviour at all even though a 50% drop would make it tempting to take out another loan on the mortgage and invest more into the market. I won't do that though even if it is tempting.

In some ways I want it to drop. I have about 3 years to becoming FI and it has to drop now or soon after I retire. I think now would be preferable to in 5 years time but either way the market is going to do what it is going to do.

Heaps of people at my work have invested in Bitcoin. They would be feeling worse.

Ouch, your bitcoiners must be feeling it - assuming they bought relatively recently.

I'm now down 4.63%, with the broader market 3.6%  Still no stress. 

I recall there was a period around 2009-2010 when the ASX when through days of jumping up and falling down around 2-3% per day. I think I had a lot invested in individual stocks, which get whiplash in the ups and downs.  Now most of my holdings are in indexes i just feel like I'm going to go out with the tide, but I'll come back into shore with everyone else.

limeandpepper

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Re: Australian Investing Thread
« Reply #3828 on: February 05, 2018, 10:11:00 PM »
I don't have any significant active income at the moment, but if it is the beginning of  a steep decline, and blue chips start showing50% losses, that's probably when I'll feel a bit tempted to reduce my emergency stash and buy me some index.

I don't have any significant active income right now either, just came back from a sabbatical and also moving interstate in late March so can't properly look for a job till then.  I would love to have nice chunks of ongoing cash to throw into the market now. I'm already a bit tempted to take money out from my emergency stash to buy some ETFs too but I'll wait a bit. I have about 2 years of living expenses in cash and if shares drop even more I can probably afford to throw 1 year's worth at the market and hope that I'll definitely get a job within a year?

11ducks

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Re: Australian Investing Thread
« Reply #3829 on: February 06, 2018, 12:45:14 AM »

Aargh, I bought shares 5 days ago, settlement today - only to watch prices take a dive! I know it doesn't matter in the long game, but I only have a few grand to invest, twice a year or so, and it was a little sad to see it drop directly after I purchased it (Nooo! my tiny net worth is even tinier! :)
Cheaper beans...CHEAPER BEANS! - dagiffy1

turboslob

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Re: Australian Investing Thread
« Reply #3830 on: February 06, 2018, 01:32:27 AM »

Aargh, I bought shares 5 days ago, settlement today - only to watch prices take a dive! I know it doesn't matter in the long game, but I only have a few grand to invest, twice a year or so, and it was a little sad to see it drop directly after I purchased it (Nooo! my tiny net worth is even tinier! :)

I did a bunch too recently. Iím going to see what happens in the next few days, and add a bit more in while itís down.

Little Aussie Battler

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Re: Australian Investing Thread
« Reply #3831 on: February 06, 2018, 01:46:52 AM »
Add me to the list of people who timed this correction perfectly by rebalancing out of cash and into equities last week!

Luckily I kept some cash aside, and will be buying again tomorrow (I would have bought today, but ran out of time before the market closed).

mustachepungoeshere

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Re: Australian Investing Thread
« Reply #3832 on: February 06, 2018, 01:56:40 AM »
I bought more VAS three weeks ago.

Moved some money around today, will see how the market opens tomorrow.

actionjackson

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Re: Australian Investing Thread
« Reply #3833 on: February 06, 2018, 02:27:50 AM »
Given the market movements at the moment, I did some analysis on 25 years of ASX data and various timing the market strategies. None of them beat out on just putting the money in religiously each month.

I'd love feedback on the assumptions and methods I used - more info where I posted it over on r/ausfinance

There is a link to the google spreadsheet with all the data.

https://www.reddit.com/r/AusFinance/comments/7vm632/timing_the_market_using_25y_of_asx300_data_aka/

limeandpepper

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Re: Australian Investing Thread
« Reply #3834 on: February 06, 2018, 02:52:15 AM »
Sigh I would have so much money to pour into shares this year if I hadn't bought a flat last year. :p  Quite happy with the flat itself though so there's that!

potm

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Re: Australian Investing Thread
« Reply #3835 on: February 06, 2018, 03:18:02 AM »
Guys, weíve hardly moved down at all after a big run up.
Talk here sounds like weíve dropped 20%.
What will it be like if we actually get a 20% drop?

limeandpepper

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Re: Australian Investing Thread
« Reply #3836 on: February 06, 2018, 03:28:35 AM »
What will it be like if we actually get a 20% drop?

Shop for shares like it's going out of style. :D

(If I have the money that is. Please let me have the money to do it!)

marty998

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Re: Australian Investing Thread
« Reply #3837 on: February 06, 2018, 03:48:57 AM »
Guys, weíve hardly moved down at all after a big run up.
Talk here sounds like weíve dropped 20%.
What will it be like if we actually get a 20% drop?

20% drop will get us back to 5000 points, which is about where I mortgage my ass and go all in. At the very least I'll rebalance my super into all ASX & maybe a little international if the conditions are right.

potm

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Re: Australian Investing Thread
« Reply #3838 on: February 06, 2018, 05:23:25 AM »
We were at this level back in December, no one was rushing to buy then.
Just giving a little perspective before everyone rushes out to spend all their spare cash on shares.
I have always tended to buy too early in these events. Although there are other times where it bounces back quickly.

I'm pretty happy for prices to get cheaper so I can make some purchases, having decreased my leverage for the past year or so. At the time time, I'm still over 100% invested so don't mind if prices bounce back again either.

Reporting season is the best time for a crash I think. Cheap prices plus updated information is the best time for buying.

limeandpepper

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Re: Australian Investing Thread
« Reply #3839 on: February 06, 2018, 06:00:15 AM »
I'm definitely not rushing to buy as I don't have good steady income at the moment and need to ration my cash reserves out carefully as I need to keep some to tide me through an indefinite time of unemployment/underemployment. Just hope I can find a job quickly in April and be in a good position to pick up bargains if this turns out to be a big correction year.

chasingthegoodlife

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Re: Australian Investing Thread
« Reply #3840 on: February 06, 2018, 12:52:15 PM »
I’m overdue to buy a parcel (busy time of year! My spreadsheets are missing me) so will do that today. Will have more cash on hand soon if prices drop further.

misterhorsey

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Re: Australian Investing Thread
« Reply #3841 on: February 06, 2018, 04:19:53 PM »
If I wanted to buy more shares the reality is I will need to go searching behind the couch cushions for loose change as I'm about 96% invested, the rest is about 1 and a bit years living expenses.

Or maybe I can start a lemonade stand?

Index investing is, thankfully, so boring that little falls and jumps like this is what keeps it interesting!


bigchrisb

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Re: Australian Investing Thread
« Reply #3842 on: February 06, 2018, 06:11:31 PM »
We were at this level back in December, no one was rushing to buy then.
Just giving a little perspective before everyone rushes out to spend all their spare cash on shares.
I have always tended to buy too early in these events. Although there are other times where it bounces back quickly.

I'm pretty happy for prices to get cheaper so I can make some purchases, having decreased my leverage for the past year or so. At the time time, I'm still over 100% invested so don't mind if prices bounce back again either.

Reporting season is the best time for a crash I think. Cheap prices plus updated information is the best time for buying.

I'm in the same camp. A few percent in a day looks violent, but mostly because the last six months has been a slow increase. Look at the movement in the last couple of days on a 5 or 10 year chart and it looks like noise - and small noise at that.  I'm leaving things sit as they are. Another 10-15% fall and I'd start deploying some extra cash.

However, like Potm, I'm effectively over 100% stocks at the moment due to leverage, so when I say deploy cash, its really borrow more to invest.

itchyfeet

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Re: Australian Investing Thread
« Reply #3843 on: February 06, 2018, 08:16:33 PM »
We were at this level back in December, no one was rushing to buy then.
Just giving a little perspective before everyone rushes out to spend all their spare cash on shares.
I have always tended to buy too early in these events. Although there are other times where it bounces back quickly.

I'm pretty happy for prices to get cheaper so I can make some purchases, having decreased my leverage for the past year or so. At the time time, I'm still over 100% invested so don't mind if prices bounce back again either.

Reporting season is the best time for a crash I think. Cheap prices plus updated information is the best time for buying.

I'm in the same camp. A few percent in a day looks violent, but mostly because the last six months has been a slow increase. Look at the movement in the last couple of days on a 5 or 10 year chart and it looks like noise - and small noise at that.  I'm leaving things sit as they are. Another 10-15% fall and I'd start deploying some extra cash.

However, like Potm, I'm effectively over 100% stocks at the moment due to leverage, so when I say deploy cash, its really borrow more to invest.

I am in exactly the same boat. I was working on deleveraging a little before this blip, and will continue down that path unless something dramatic happens.

Gremlin

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Re: Australian Investing Thread
« Reply #3844 on: February 06, 2018, 08:30:50 PM »
Iím surprised at the number of people who are leveraged into shares on this thread.  Wouldíve thought it might not align to principles.  Not my thing but interesting nevertheless...

actionjackson

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Re: Australian Investing Thread
« Reply #3845 on: February 07, 2018, 05:15:38 PM »
Iím surprised at the number of people who are leveraged into shares on this thread.  Wouldíve thought it might not align to principles.  Not my thing but interesting nevertheless...

Yeah, my father would have retired more than 5 years ago if he wasn't leveraged in 2008. He lost his entire portfolio on a margin call.

itchyfeet

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Re: Australian Investing Thread
« Reply #3846 on: February 07, 2018, 06:47:05 PM »
Iím surprised at the number of people who are leveraged into shares on this thread.  Wouldíve thought it might not align to principles.  Not my thing but interesting nevertheless...

Yeah, my father would have retired more than 5 years ago if he wasn't leveraged in 2008. He lost his entire portfolio on a margin call.

The debt I borrowed was for property, and not shares. But this is leverage none the less, although not subject to margin calls. I donít see my position as overly risky. Sure, more risky than no debt, but not scary risky for me anyhow.

 If interest rates skyrocket, and I lost my job, and I had no tenants, then when I run out of cash in my redraw in a few years time I will be forced to sell the properties or to sell some shares. I can live with this risk.

I would, however, like to reduce the amount of debt I am carrying before FIRE. Probably not to zero, but far less than I carry now.

bigchrisb

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Re: Australian Investing Thread
« Reply #3847 on: February 07, 2018, 07:36:56 PM »
If you have a mortgage on your home, and buy shares rather than pay down the mortgage, you are in the same position of debt and market exposure (but probably a worse tax position) as borrowing to buy shares. I suspect a high proportion of people in this thread are in exactly that position, but don't realise it.

middo

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Re: Australian Investing Thread
« Reply #3848 on: February 07, 2018, 08:17:19 PM »
If you have a mortgage on your home, and buy shares rather than pay down the mortgage, you are in the same position of debt and market exposure (but probably a worse tax position) as borrowing to buy shares. I suspect a high proportion of people in this thread are in exactly that position, but don't realise it.

While I understand what you mean, and you are correct, the reality is that you don't get margin calls on your home, but you can on shares.  That is why the behaviour may not be totally rational, but safer for the individual.

marty998

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Re: Australian Investing Thread
« Reply #3849 on: February 08, 2018, 04:24:31 AM »
I want to provide a reflection/update on several posts I made regarding shares in Amaysim that I bought in February last year. (Yes I'm a naughty stock picking boy). Back then it was a bog standard mobile retailer, chasing the bottom end of the market (cheap light users, great customer service).

Purchase $1.83, Sold in Jan 2018 $2.00, collected 9c in divvies, made a reasonable gain on 4000 shares, pocket money really.

In the past year they've expanded from mobile to broadband to energy retailing.

Shares went up to $2.23 earlier this week on a rumours of a takeover bid from TPG. Shares fell heavily today on news of a trading update ahead of results release on 28 Feb.

I sold partly because of the competition in mobile is getting crazy intense, and Amaysim are being undercut by Coles and Kogan.

The other reason I sold is that the business model (debt fuelled acquisitions) reminds me increasingly of a company that I had shares in that crashed and burned in the GFC called Transpacific Industries (TPI).

Too many acquisitions, management too optimistic in integrating the businesses and cross selling, too much spin, not enough substance.

The parallels were there and so I sold AYS last month.

Personally it was a great lesson to have learned at a young age (notwithstanding it cost me a bucket of money). If you want to stock pick you really need to DYOR, and draw from your own experience.

If you have any stocks in your portfolio where debt ratios have expanded, where takeovers have stretched balance sheets, and where cashflow is tightening due to competition or margin contraction then you may want to do the same and sell up before interest rates start to bite and credit markets get spooked.

Stick to your guns and trust your gut. If shit doesn't feel right it is ok to sell up. I'll bet many holders of AYS today will deny the obvious and put it in the bottom draw. I used to be one of those people, glad I've changed.
« Last Edit: February 08, 2018, 04:26:47 AM by marty998 »