Author Topic: Australian Investing Thread  (Read 1930974 times)

happy

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Re: Australian Investing Thread
« Reply #4900 on: April 08, 2020, 05:44:40 PM »
the s&p dropped yesterday.
THE TOP IS IN!

Troll ;).  There's a whole thread for that!

paulsta234

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Re: Australian Investing Thread
« Reply #4901 on: April 10, 2020, 07:26:10 PM »
Hey cool to see there is an australian investing thread!

Just reading lots and formulating my plan.
I just want to buy as much VTS as I can.

Just wondering everyones opinion on currency risk investing in US ETF?
Is there even any currency risk as VTS is managed by vanguard australia and is in AUD not USD like VTI?


thanks

Andy R

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Re: Australian Investing Thread
« Reply #4902 on: April 10, 2020, 08:13:09 PM »
I just want to buy as much VTS as I can.

Just wondering everyones opinion on currency risk investing in US ETF?
Is there even any currency risk as VTS is managed by vanguard australia and is in AUD not USD like VTI?

You could always split it with some IHVV (AUD-hedged S&P500). VTS is around 75% S&P500 anyway, so close enough.

mjr

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Re: Australian Investing Thread
« Reply #4903 on: April 12, 2020, 03:28:43 PM »
Just wondering everyones opinion on currency risk investing in US ETF?
Is there even any currency risk as VTS is managed by vanguard australia and is in AUD not USD like VTI?

You'd best do some more reading.

VTS is just NYSEARCA:VTI cross-listed to the ASX.  Although we buy it on the ASX with Australian dollars, it moves in line with the price of VTI in US dollars.  So, yes, there is currency risk.

I personally don't really worry about currency risk - in the long term it all evens out.  That said, I wasn't shovelling money into VTS when the AUD was 57 US cents either.

Plagel

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Re: Australian Investing Thread
« Reply #4904 on: April 13, 2020, 11:50:13 PM »
Hey all, long time lurker, first time poster so please be kind.

Got $5000 to drop on either VGS or VAS. Which would you recommend?

Bloop Bloop

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Re: Australian Investing Thread
« Reply #4905 on: April 14, 2020, 12:07:53 AM »
reckon I got the bottom right a few weeks ago when I called it

Notch

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Re: Australian Investing Thread
« Reply #4906 on: April 14, 2020, 01:31:42 AM »
Hey all, long time lurker, first time poster so please be kind.

Got $5000 to drop on either VGS or VAS. Which would you recommend?

VAS.  It's at 2016 prices, while VGS is at 2019 prices.

mjr

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Re: Australian Investing Thread
« Reply #4907 on: April 14, 2020, 02:18:06 PM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Notch

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Re: Australian Investing Thread
« Reply #4908 on: April 15, 2020, 02:14:16 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?

mrmoonymartian

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Re: Australian Investing Thread
« Reply #4909 on: April 15, 2020, 02:28:21 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?
What do you mean 'or'? You rebalance 'to' maintain an asset allocation.

Notch

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Re: Australian Investing Thread
« Reply #4910 on: April 15, 2020, 02:30:21 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?
What do you mean 'or'? You rebalance 'to' maintain an asset allocation.

Jeez, I was just asking the same kind of question twice, to make a point. 

mrmoonymartian

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Re: Australian Investing Thread
« Reply #4911 on: April 15, 2020, 03:11:15 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?
What do you mean 'or'? You rebalance 'to' maintain an asset allocation.

Jeez, I was just asking the same kind of question twice, to make a point.
Ah I see. Tautology, not exclusive disjunction. Carry on.
« Last Edit: April 15, 2020, 03:16:50 AM by mrmoonymartian »

mjr

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Re: Australian Investing Thread
« Reply #4912 on: April 15, 2020, 05:35:19 PM »
Do you rebalance your investments, or maintain an asset allocation?

I do.  I also look to vary said allocation somewhat if I see evidence of weakness in one of the allocations relative to another.

Dropbear

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Re: Australian Investing Thread
« Reply #4913 on: April 15, 2020, 09:04:43 PM »
Hey all, long time lurker, first time poster so please be kind.

Got $5000 to drop on either VGS or VAS. Which would you recommend?

There's been lots of discussions earlier on in this thread about how Australians might include both Australian and ex-Australian investments in their investment allocation, so I recommend looking for more info on this topic if you would like to.  In short, it's up to each person to determine their appropriate split.  50/50 (or similar) appears to be a common approach, while some skew it to increase their exposure one way or the other.

$5k is a good amount to get started.  So if you're interested in both these funds and can invest in one of these now, then can you rouse up some funds to put in the other one and form a more diversified position as soon as you can?

BattlaP

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Re: Australian Investing Thread
« Reply #4914 on: April 19, 2020, 03:44:50 PM »
Can someone a bit more cluey than me discuss if there is any opportunity in the governments 'withdraw from super' covid plan, for people who don't actually need the money right now (but has experienced a significant loss in income and therefore qualifies)?

If they're not charging any withdrawal fees or tax, could I not just basically move $40k altogether (both me and my Mrs) from my super to my non-super investment accounts, thereby increasing the flexibility of the money and slightly reducing regulatory risk for future super changes? (at the slight cost of the vanguard spread fee I guess)

Or is the answer just always "don't touch it"?

happy

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Re: Australian Investing Thread
« Reply #4915 on: April 19, 2020, 03:52:40 PM »
Or is the answer just always "don't touch it"?

I can't answer the first part of your question, but I found myself wondering why you would want to do this, then realised I know nothing about your individual circumstance. The best ratio of super:non-super investments depends so much on things like your age, how much you already have in super, when you are going to retire etc etc as well as your personal views on the long term stability of the super system.

mjr

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Re: Australian Investing Thread
« Reply #4916 on: April 20, 2020, 12:40:10 AM »
I'm seeing this question discussed on other fora as well.

My comments there and here are "Given it's so hard to get large sums into super these days, why would you want to voluntary take some out" ?

I mean, it's at most $20k.  People want to move $20k out of a low-tax environment into a taxable account just to get access to $20k earlier ?

I'm 54, retired and still shovelling $25k p.a. into super and plan to until I'm 60 at least.

If your income is already permanently low such that you're better off tax-wise to move money out of super, then sure, but that's no early-retirement situation in which I'd want to be...

bigchrisb

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Re: Australian Investing Thread
« Reply #4917 on: April 20, 2020, 01:50:38 AM »
I'm seeing this question discussed on other fora as well.

My comments there and here are "Given it's so hard to get large sums into super these days, why would you want to voluntary take some out" ?

I mean, it's at most $20k.  People want to move $20k out of a low-tax environment into a taxable account just to get access to $20k earlier ?

I'm 54, retired and still shovelling $25k p.a. into super and plan to until I'm 60 at least.

If your income is already permanently low such that you're better off tax-wise to move money out of super, then sure, but that's no early-retirement situation in which I'd want to be...

I'm in the same camp.  I'm younger (38), but am looking for all the ways I can get money IN to super, not out.  If I needed the liquidity to get through the short term, then I'd be looking strongly at it. 

The way I look at it, I expect my taxable income to be above the $37k tax band for the rest of my life.  Why would I move money from a 15%/0% environment to a 34.5% tax environment if I didn't need it?  The same logic would hold true (but less strongly) if I was looking at the $18k tax band.  Of course, the various tax offsets/credits may have minor impact, but for me won't change the outcome.

I am however enjoying the pain that the industry super funds are having for being too arrogant about liquidity.  I'm following the HostPlus drama unfold in particular, as they are likely to be one of the most impacted.  Will be interesting to see what the impact on buy/hold/accumulate members is in the long run.  Its one of those moments when the control of a SMSF comes to the fore!

marty998

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Re: Australian Investing Thread
« Reply #4918 on: April 20, 2020, 02:00:34 AM »
I'm seeing this question discussed on other fora as well.

My comments there and here are "Given it's so hard to get large sums into super these days, why would you want to voluntary take some out" ?

I mean, it's at most $20k.  People want to move $20k out of a low-tax environment into a taxable account just to get access to $20k earlier ?

I'm 54, retired and still shovelling $25k p.a. into super and plan to until I'm 60 at least.

If your income is already permanently low such that you're better off tax-wise to move money out of super, then sure, but that's no early-retirement situation in which I'd want to be...

I'm in the same camp.  I'm younger (38), but am looking for all the ways I can get money IN to super, not out.  If I needed the liquidity to get through the short term, then I'd be looking strongly at it. 

The way I look at it, I expect my taxable income to be above the $37k tax band for the rest of my life.  Why would I move money from a 15%/0% environment to a 34.5% tax environment if I didn't need it?  The same logic would hold true (but less strongly) if I was looking at the $18k tax band.  Of course, the various tax offsets/credits may have minor impact, but for me won't change the outcome.

I am however enjoying the pain that the industry super funds are having for being too arrogant about liquidity.  I'm following the HostPlus drama unfold in particular, as they are likely to be one of the most impacted.  Will be interesting to see what the impact on buy/hold/accumulate members is in the long run.  Its one of those moments when the control of a SMSF comes to the fore!

It's really not going to have that much of an impact on the Industry Funds, even Hostplus. There's really not going to be much pain, if anything, getting rid of all the low balance members will actually help reduce admin costs and improve returns in the medium term.

The Industry funds have a huge amount of cash stockpiled (ask me how I know). Hostplus, per the front page of its website says they have $6 billion as of 1 April, and remember they still get the 9.5% in from the people who are still working.

If all 600,000 registered with the ATO to withdraw their Super withdrew the maximum and if all of them are with Hostplus, the fund will still be ok.

Ozstache

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Re: Australian Investing Thread
« Reply #4919 on: April 20, 2020, 02:04:28 AM »
"Given it's so hard to get large sums into super these days, why would you want to voluntary take some out" ?

One reason is if you wanted to transfer some super from one partner who has hit the transfer balance cap to the other who has not. A tax free withdrawal then a tax deductible contribution, plus more overall pensionable super for a couple sounds like a win to me.

bigchrisb

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Re: Australian Investing Thread
« Reply #4920 on: April 20, 2020, 02:24:49 AM »

I'm in the same camp.  I'm younger (38), but am looking for all the ways I can get money IN to super, not out.  If I needed the liquidity to get through the short term, then I'd be looking strongly at it. 

The way I look at it, I expect my taxable income to be above the $37k tax band for the rest of my life.  Why would I move money from a 15%/0% environment to a 34.5% tax environment if I didn't need it?  The same logic would hold true (but less strongly) if I was looking at the $18k tax band.  Of course, the various tax offsets/credits may have minor impact, but for me won't change the outcome.

I am however enjoying the pain that the industry super funds are having for being too arrogant about liquidity.  I'm following the HostPlus drama unfold in particular, as they are likely to be one of the most impacted.  Will be interesting to see what the impact on buy/hold/accumulate members is in the long run.  Its one of those moments when the control of a SMSF comes to the fore!

It's really not going to have that much of an impact on the Industry Funds, even Hostplus. There's really not going to be much pain, if anything, getting rid of all the low balance members will actually help reduce admin costs and improve returns in the medium term.

The Industry funds have a huge amount of cash stockpiled (ask me how I know). Hostplus, per the front page of its website says they have $6 billion as of 1 April, and remember they still get the 9.5% in from the people who are still working.

If all 600,000 registered with the ATO to withdraw their Super withdrew the maximum and if all of them are with Hostplus, the fund will still be ok.

Yes, and as per their 2019 annual statement, they had 2bn.  So, when asset prices have been totally smashed, they have not only increased the percentage allocation to cash, but total cash balances too.  That's exactly the opposite action than I want for my super.  If I were a long term holder of assets in this fund, who will effectively pay for it by reduced returns, I'd be very frustrated.

mjr

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Re: Australian Investing Thread
« Reply #4921 on: April 20, 2020, 03:13:14 AM »
One reason is if you wanted to transfer some super from one partner who has hit the transfer balance cap to the other who has not. A tax free withdrawal then a tax deductible contribution, plus more overall pensionable super for a couple sounds like a win to me.

I did ask for a reason and yep, this is one, but I don't know that I'd be OK with a person who has accumulated $1.6m in super using a mechanism designed to help people desperate for money to wangle a tax deduction and skirt a contribution cap.

Of course, I know that no one is asking me if I'm ok with it :-)


marty998

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Re: Australian Investing Thread
« Reply #4922 on: April 20, 2020, 03:19:38 AM »

I'm in the same camp.  I'm younger (38), but am looking for all the ways I can get money IN to super, not out.  If I needed the liquidity to get through the short term, then I'd be looking strongly at it. 

The way I look at it, I expect my taxable income to be above the $37k tax band for the rest of my life.  Why would I move money from a 15%/0% environment to a 34.5% tax environment if I didn't need it?  The same logic would hold true (but less strongly) if I was looking at the $18k tax band.  Of course, the various tax offsets/credits may have minor impact, but for me won't change the outcome.

I am however enjoying the pain that the industry super funds are having for being too arrogant about liquidity.  I'm following the HostPlus drama unfold in particular, as they are likely to be one of the most impacted.  Will be interesting to see what the impact on buy/hold/accumulate members is in the long run.  Its one of those moments when the control of a SMSF comes to the fore!

It's really not going to have that much of an impact on the Industry Funds, even Hostplus. There's really not going to be much pain, if anything, getting rid of all the low balance members will actually help reduce admin costs and improve returns in the medium term.

The Industry funds have a huge amount of cash stockpiled (ask me how I know). Hostplus, per the front page of its website says they have $6 billion as of 1 April, and remember they still get the 9.5% in from the people who are still working.

If all 600,000 registered with the ATO to withdraw their Super withdrew the maximum and if all of them are with Hostplus, the fund will still be ok.

Yes, and as per their 2019 annual statement, they had 2bn.  So, when asset prices have been totally smashed, they have not only increased the percentage allocation to cash, but total cash balances too.  That's exactly the opposite action than I want for my super.  If I were a long term holder of assets in this fund, who will effectively pay for it by reduced returns, I'd be very frustrated.

Is it possible to resolve how they increased the cash holdings by $4bn? A lot of it could be the 9.5% + franking credit refunds.

If you're in the balanced option you might feel some drag on future returns, but if you've chosen 100% equities then you're not going to notice any change long term.
« Last Edit: April 20, 2020, 04:19:14 AM by marty998 »

mjr

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Re: Australian Investing Thread
« Reply #4923 on: April 20, 2020, 01:31:03 PM »
Nice work Eucalyptus!

As for bargains, I see that the travel sector is getting hammered.  Flybe collapsed in the UK.  The one I'm watching at the moment is VAHHA, a listed note/bond from Virgin Australia.  Its been smashed in the last couple of weeks, and is trading at 75c in the dollar. 

It has a fixed face yield of 8% and lasts for 5 years (Nov 2024).  What that means is that you are buying $140 in future cash flows for $75.  A bargain, provided Virgin Australia does not go bust in the next 4 years an 8 months.

Given that they were already in some financial strife prior to the virus problems emerging in China , I don't see it as risk free by any means.  But I am watching it, and am tempted to start to accumulate it over the next while.  I see it as a similar mis-pricing, akin to the SVWPA pricing a few years ago - I did very well out of that (although SVW is much more diversified as a business than Virgin).

bigchrisb - did you end up buying some ?  I had a look when you mentioned it, but knew immediately that it was too risky for me.

bigchrisb

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Re: Australian Investing Thread
« Reply #4924 on: April 20, 2020, 10:47:47 PM »
No, I watched it, and had an unfilled order at one point, but didn't buy. Possibly lucky - suspect they will see some form of haircut.

potm

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Re: Australian Investing Thread
« Reply #4925 on: April 21, 2020, 11:42:15 PM »
The biggest issue with the industry funds is them not writing down the unlisted assets sufficiently/overvaluing them to begin with. It benefits members who cash out to the detriment of remaining members, not too dissimilar to a ponzi scheme. Host plus have applied to redeem $1.5 bil in an unlisted fund. At least they are selling unlisted assets to meet redemptions instead of deferring the problem for later. Will be interesting to see how the sale goes.

I hope if there is a massive blowup one day that my investments in the all listed share options with sunsuper arenít impacted. Iím hoping they are not able to take a little from one area to prop up another.

Andy R

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Re: Australian Investing Thread
« Reply #4926 on: April 22, 2020, 02:17:38 AM »
I wouldn't call it a ponzi scheme.

But yes it's a problem, as Neil Woodford and investors found out last year.

I once mentioned this elsewhere to be met with "but this is super and you won't get lots of outflows because people are only allowed to access it a bit at a time".

Sounded reasonable. Still a no from me back then. Illiquid assets are often less correlated simply due to not being able to price them rather than actually falling in value less. If you have a product that nobody is buying and nobody is selling because they have taken it off the market to avoid selling at a loss, the value is no longer the last comparable price. Not only that, unlisted products are not under the scrutiny of ASIC. They also tend to have high fees. Alternatives sound good in theory, but in practice you better know what you are buying, and for 99% of people they won't know anything about it, and in that case it's just safer to not use it in my opinion. I'm thrilled that indexing is an easily available option.

bigchrisb

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Re: Australian Investing Thread
« Reply #4927 on: April 22, 2020, 06:44:26 AM »
I wouldn't call it a ponzi scheme.

If the definition of a ponzi scheme is paying some investors from the new contributions of others, then yes, that's whats being proposed.   Super is much more opaque than it should be  - which means no-one really knows what the outcomes are going to be.  Hence my interest in watching this space. 

I'm also thrilled that indexing is now widely available and cheap.  That's where the bulk of my money is going these days. 

mymatenate

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Re: Australian Investing Thread
« Reply #4928 on: April 24, 2020, 05:21:53 PM »
But what about for the mustachian?  What if they take $10-20k out of their super (let's assume they've chosen the index option inside super) and re-invest it in the index outside super?  Pay

It's really hard to get money into super, I can't imagine that anyone who's fair dinkum about retiring early would care about $20k taken out of super and reinvested in taxable accounts.

I'm still wondering whether it might be a reasonable idea.

We are already retired, and so our tax bill is very low on our largely passive income.

We're doing more of an Early Retirement Extreme style FIRE, so our net worth is a little on the lower side, and $20k ($40k for the both of us) represents a not-completely-insignificant contribution to our stash.

The preservation age (the age at which you can first access your super) has recently been upped from 55 to 60. Will they up it again in the next ~25 years? The higher it goes, the greater the likelihood that you might drop dead soon after finally being able to access it, and having little time to enjoy it.

Perhaps taking into account the risk that we may not be lucky enough to live into our nineties or even eighties, and/or the risk of some sort of financial system meltdown (hyper-inflation? monetary system collapse? etc) within the next 25-35+ years, it might be better to get your hands on at least some of that money now...?
« Last Edit: April 24, 2020, 05:25:38 PM by mymatenate »

happy

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Re: Australian Investing Thread
« Reply #4929 on: April 24, 2020, 07:04:21 PM »
@mymatenate Your scenario and the questions you raise are an example of one situation of why it might make sense to utilise this opportunity.  Thats why there is no on- size-fits-all answer to questions about how much to put into super. One just has  to understand the principles and parameters and figure it out for oneself.

I am 61 and retired, but still trying to get as much into super as I can (by gradually shifting some assets around), whilst withdrawing the minimum amount. So taking 20k out makes no sense to me at all. Totally different scenario to bigchrisb, but taking it out makes no sense for either of our situations.

mymatenate

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Re: Australian Investing Thread
« Reply #4930 on: April 27, 2020, 02:14:33 AM »
Thanks Happy, I appreciate the reply

travelbug

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Re: Australian Investing Thread
« Reply #4931 on: April 27, 2020, 05:20:36 PM »
NAB trading halt and the reduction of the dividend payout is a bit of a blip. I have been watching these to buy more, but 30c per share dividend is much lower that expected, even if the price is pretty good buying.
Have  been buying VAS though.

KiniGula

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Re: Australian Investing Thread
« Reply #4932 on: April 27, 2020, 06:22:58 PM »
NAB trading halt and the reduction of the dividend payout is a bit of a blip. I have been watching these to buy more, but 30c per share dividend is much lower that expected, even if the price is pretty good buying.
Have  been buying VAS though.

On the subject of NAB, I can't fathom how their profit was down 51% because of COVID-19. The effects of it came in late-February thru March? What am I missing here?

Little Aussie Battler

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Re: Australian Investing Thread
« Reply #4933 on: April 27, 2020, 07:06:42 PM »
NAB trading halt and the reduction of the dividend payout is a bit of a blip. I have been watching these to buy more, but 30c per share dividend is much lower that expected, even if the price is pretty good buying.
Have  been buying VAS though.

On the subject of NAB, I can't fathom how their profit was down 51% because of COVID-19. The effects of it came in late-February thru March? What am I missing here?
I think that top-line revenue was relatively flat (perhaps down a little), which would be in line with your comments around the timing of C-19 impacts.

The drop in NPAT would be the result of taking a big collective provision against future credit losses, plus whatever else McEwan managed to push through to tank the result - usually by bringing forward costs like amortisation in order to make the subsequent recovery (and hence his performance) look better.  Standard behaviour for a new CEO.

KiniGula

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Re: Australian Investing Thread
« Reply #4934 on: April 27, 2020, 09:36:36 PM »
Yep that makes a bit more sense then. And yes I was thinking about top-line revenue - it will no doubt drop but will take a while.

marty998

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Re: Australian Investing Thread
« Reply #4935 on: April 27, 2020, 09:48:54 PM »
Accounting standards for asset impairments (basically for loan defaults for Banks) changed quite substantially a couple of years back.

The relevant accounting standard is IFRS9, specifically regarding Expected Credit Losses (ECL).

Previously, the accountants would look at the loan book a point in time and assess which loans were bad and which ones were likely to go from arrears to default. This meant that "bad earnings news" would only be taken well after the event, which we saw in the GFC meant a lack of trust between banks. No one knew which loan books were good and which were bad.

The ECL provisions of the standard* require banks to assess continuously what is the probability of default over the life of the loan (not just now). This means the collective provisions of the banks are much higher than they used to be, and are likely to be much higher than required. When times return to normal, you might find some of the provisions reverse (assuming things don't get worse from here).

The banks also like to play around with software amortisation costs. They do take a hit now so that future earnings look a lot better.

* On transition to the new standard a couple of years ago in 2018, each of the banks took about a $1billion charge to opening retained earnings, so the value of the provision for bad debts could be increased to what it needed to be under the new rules. You will find it in the fine print of the 2018 annual reports under "changes to accounting standards", and also as a line item in the Statement of Changes in Equity.

That extra billion dollar hit did not go into the profit results, so also did not impact anyone's bonus calculations.

Accounting generates some interesting outcomes sometimes.

KiniGula

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Re: Australian Investing Thread
« Reply #4936 on: April 29, 2020, 04:26:21 PM »
I hear that. Iíve been dealing with interesting effects of accounting standards in my own world with AASB 16 - Leases.

marty998

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Re: Australian Investing Thread
« Reply #4937 on: April 29, 2020, 09:19:00 PM »
I despise with a vengeance the leasing standard.

Somehow I have to explain that rental occupancy costs are not "rent expense" anymore but are now in depreciation and interest expense lines, and that we have a building on our balance sheet that we do not own. I yhen also have to explain the deferred tax impacts of these fictitious make believe P&L items.

And accountants wonder why the profession is not trustworthy...

KiniGula

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Re: Australian Investing Thread
« Reply #4938 on: April 30, 2020, 06:31:05 AM »
You are speaking my language mate. All just new things for accountants to keep themselves employed year after year!

Tl;dr become an accountant or a lawyer, youíll always have a job.

Alchemisst

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Re: Australian Investing Thread
« Reply #4939 on: April 30, 2020, 06:01:12 PM »
What bonds do you guys have? I currently have VAF and a little VCF, thinking maybe I should diversify and get some global bonds instead of just VAF?

Andy R

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Re: Australian Investing Thread
« Reply #4940 on: April 30, 2020, 08:12:17 PM »
What bonds do you guys have? I currently have VAF and a little VCF, thinking maybe I should diversify and get some global bonds instead of just VAF?

Depends on your strategy.

If you're using bonds to lower volatility and for preservation of capital and you get your returns from your equity, then government bonds make the most sense to avoid credit risk, and in that case I doubt the Australian government (or the government of pretty much any developed country) is going to default, and I'm not convinced you need to diversify internationally.

If you use a very low portion of growth assets (eg an irrational fear of stocks might be one reason, can't think of other reasons) and you need to boost your returns, then some corporate bonds would be the choice, and in that case you really want to diversify to lower idiosyncratic risk and going international makes sense.

Since you decided on using 2 funds with one of them a corporate bond fund, why not just remove the corporate bonds from VAF and go with VGB?

Murdoch

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Re: Australian Investing Thread
« Reply #4941 on: May 01, 2020, 03:51:19 PM »
Hi all,
In The Australian Vanguard funds, I assume CPU for the quarterly dividends means 'Cents Per Unit'?
I'm changing from the Growth Index to a heavier Shares fund and trying to work out how much dividends payments will change.
Other places I read suggest CPU may be a percentage of the individual shares price rather than a flat 'cents per unit' number.
I couldn't find an answer on the website.
Can anyone clarify please?
Cheers
Murdoch

mjr

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Re: Australian Investing Thread
« Reply #4942 on: May 02, 2020, 02:18:52 AM »
You have it correct.  CPU means cents per unit, it's not a percentage.

"As at 31 March 2020, the gross distribution of 2.7025 cents per unit comprised 2.0039 of net (cash)
distribution plus 0.6986 by way of franking credits and foreign tax credits."

deborah

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Re: Australian Investing Thread
« Reply #4943 on: May 02, 2020, 02:55:10 AM »
As many businesses are foreshadowing lower dividends, dividend payments will certainly be changing anyway due to our current economic climate.

Murdoch

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Re: Australian Investing Thread
« Reply #4944 on: May 02, 2020, 04:53:36 AM »
Cheers MJR and Deborah.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #4945 on: May 02, 2020, 03:18:29 PM »
Hi, Iíve asked a question on the main board to get a wide perspective, but Iíd love to get your thoughts on something Iím trying to work through: will next year be the best time to buy a property in Sydney? And if so, should I pause my investing to save cash to grab the opportunity?

Hereís my thinking on why next year should be the best window:
óBecause of COVID, there will be lots of stock on the market
óthere will be lots of people who wonít be cashed up to buy next year
ótheyíre predicting a 10-20% drop in house prices
óseems like theyíre going to abolish stamp duty

My hope and thinking is that places that are $850-950k now come down to $750-850k, which would give me my desired 2 bed/2bath with car within 20 min walking to the CBD (a boy can dream).

Do you all see this as well? If there was a time to jump in, Will that be then?

Would love your thoughts @marty998  and @bigchrisb @deborah

marty998

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Re: Australian Investing Thread
« Reply #4946 on: May 02, 2020, 06:03:53 PM »
I just bought in Southern Sydney and have a property settling in 10 days time.

Admittedly I exchanged contracts at the end of January just before SHTF but I'm still ok with the decision. Vendors are renting it back from me until mid September @ $800 a week, which basically means I'm positively geared.

I don't think I'll have any issues renting it for that amount or more afterwards. Plenty of families will be interested in a 4 bed unit in a nice complex located 5-10 minutes from a train station, major hospital, selective school, shopping centre and the beach.

Having just dropped $37,752 in stamp duty I'll be annoyed if I start getting charged land tax but what can you do? The rules change all the time. You've got to expect that and be willing to adapt. If you bitch and moan and complain like a a lot of people do then all you're left with is nothing but a head-ful of anger and no portfolio because you refuse to take action.

$40 grand is small change when you're playing a long game and eventually have an investment portfolio that goes up and down by that amount every day.

Specifically on your questions

- there is currently a shortage of stock as sellers hold off, and banks extend repayment holidays - people are not being forced to sell right now.
- there are alway investors cashed up to buy - like me :)
- It depends where. Some areas might go down, some areas might go up.
- Abolishing stamp duty might allow people to spend more, and push prices up.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #4947 on: May 02, 2020, 07:14:08 PM »
Thanks @marty998.  Do you think itís better to save the cash now in HISA for the next year, or invest and take it out next year if I want to buy something?

marty998

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Re: Australian Investing Thread
« Reply #4948 on: May 02, 2020, 07:26:36 PM »
I'd be hesitant to invest a house deposit in shares if you need it as early as next year.

Cash is probably the best place for it to be frank.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #4949 on: May 02, 2020, 11:39:35 PM »
Thanks @marty998