High Yielding Shares Again
- Thread starter MTR
- Start date
China, BHP and WOW will still exist in 10 years. And I am going to suggest that their share prices will be higher than they are now, and between now and then they will return capital/dividends to shareholders. As to the share price next month/year/2 years...no idea.
For what is worth, the more I consider the population growth in Oz, and the competitive situation I see no reason to see why WOW will not continue to grow sales, albeit at a slower rate, but grow nonetheless. Share price may well decline further from here of course, but it wont stay there. This is not the case for MTS (Metcash) who is basically buggered!
Likewise (to WOW) on that point a cyclical like BHP, who is more dominant than ever, with growing Oil and Gas interests will perform well over the long term, but due to the nature of the stock you can never be sure where it will be in any given year.
Like you, I have a bit of red on my screen, WOW, BHP and SVW the main actors, but I have plenty of more in the black. What I do now is to look for buying opportunities, not focus on the red, but take what capital I have on hand, and look for stock that I would like to add to my portfolio. I keep a list of stocks I want, but not at any price and have it in my drawer. When things go on sale, I pull the list out and see what I can buy, the stock I couldn't afford (didn't agree with valuation) now is on sale!...Often the baby is thrown out with the bathwater, and great businesses and dragged down by the market. Buying time!
This way you look forward to the volatility and just focus on growing the portfolio, not dollars, but ever larger pieces of companies. Whenever there is a sell off, I make a point of deploying some capital.
If you can start thinking very long term and embrace volatility it helps a lot, not least to your mental state.
Good luck and stay the course
For what is worth, the more I consider the population growth in Oz, and the competitive situation I see no reason to see why WOW will not continue to grow sales, albeit at a slower rate, but grow nonetheless. Share price may well decline further from here of course, but it wont stay there. This is not the case for MTS (Metcash) who is basically buggered!
Likewise (to WOW) on that point a cyclical like BHP, who is more dominant than ever, with growing Oil and Gas interests will perform well over the long term, but due to the nature of the stock you can never be sure where it will be in any given year.
Like you, I have a bit of red on my screen, WOW, BHP and SVW the main actors, but I have plenty of more in the black. What I do now is to look for buying opportunities, not focus on the red, but take what capital I have on hand, and look for stock that I would like to add to my portfolio. I keep a list of stocks I want, but not at any price and have it in my drawer. When things go on sale, I pull the list out and see what I can buy, the stock I couldn't afford (didn't agree with valuation) now is on sale!...Often the baby is thrown out with the bathwater, and great businesses and dragged down by the market. Buying time!
This way you look forward to the volatility and just focus on growing the portfolio, not dollars, but ever larger pieces of companies. Whenever there is a sell off, I make a point of deploying some capital. If you can start thinking very long term and embrace volatility it helps a lot, not least to your mental state.
Good luck and stay the course
There's some really good information on here and I'm really liking this thread. Are most people on here self managing their portfolios and if so how often do you look at your shares? I'm keen to drop 10k on a few and I was looking at SVW and WOW as well as a couple of banks. I figure that my Superannuation is mostly invested in the markets so it can't be all that scary or dangerous over the longer term.
China, BHP and WOW will still exist in 10 years. And I am going to suggest that their share prices will be higher than they are now, and between now and then they will return capital/dividends to shareholders. As to the share price next month/year/2 years...no idea.
Good luck and stay the course
I hope that you are correct in those assumptions. If their prices are higher in 10 years than they are now, then there is nothing to be worried about. However, I guess no one really predicted the downwards price of Tesco after ALDI came along. Is WOW under similar threat and combined with its disastrous play with Masters hardware - looking shaky even at 10 years?
UK market much more fragmented than Oz, not really comparable.
2 Things happen with Masters, it's either flogged off or it turns. Both result in a stock price rise.
2 Things happen with Masters, it's either flogged off or it turns. Both result in a stock price rise.
It wasn't always that way. Nothing to stop ALDI doing the same here. Well underway already in some areas...
As for selling Masters - at what price can you sell such a beast?
There are a very large number of aldi stores being built/refurbished. They're here to stay and will only expand market share over time, as they become more widespread/well known. I wonder if Lidl will make the move over as well?
HiEquity, Yes, it was always fragmented. Aldi and Lidl jointly only have 8.5% of the UK market.
http://www.fooddeserts.org/images/supshare.htm
And
http://www.economicshelp.org/blog/6288/economics/uk-grocery-market-share/
Tesco has plenty of its own issues....not least an accounting scandal. UK grocery spend has barely increased since 2006. This simple extrapolation of UK events to OZ is superficial and half baked...and I was guilty of it too until I got a deeper understanding. Meanwhile WOW and WES continue to grow market share in 2014....there is room for Aldi too of course. Our population is on the way to 40m. We all need groceries.
As for who would buy Masters, oh I don't know, maybe someone like Lowes....
Meanwhile this bearish self feeding sentiment drummed up by the press on slightly weaker numbers is presenting an attractive entry point. Next headlines in 2015, Woolies is back! As everyone piles back in at $38
http://www.fooddeserts.org/images/supshare.htm
And
http://www.economicshelp.org/blog/6288/economics/uk-grocery-market-share/
Tesco has plenty of its own issues....not least an accounting scandal. UK grocery spend has barely increased since 2006. This simple extrapolation of UK events to OZ is superficial and half baked...and I was guilty of it too until I got a deeper understanding. Meanwhile WOW and WES continue to grow market share in 2014....there is room for Aldi too of course. Our population is on the way to 40m. We all need groceries.
As for who would buy Masters, oh I don't know, maybe someone like Lowes....
Meanwhile this bearish self feeding sentiment drummed up by the press on slightly weaker numbers is presenting an attractive entry point. Next headlines in 2015, Woolies is back! As everyone piles back in at $38
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HE well said.
Everyone has 100% in hind site. I like to see people decision making at the time. In real time. When you back is against the wall and your nuts have shriveled. What decision do you make and why.
I also like looking back on my own threads to get an idea, and remember what was going through my mind.
I think I already mentioned that I purchased a small ($10k) parcel of VTI. This is a US fund. For me, I don't know stocks well, I don't have the time, or inclination to watch and research individual stocks (at this point-maybe in the future) - hense taking a 'market' position.
Add to that my personal belief that Australia 'market' is in for some tough years - which presents some good opportunity, but also risk. I believe the aud/usd will devalue, and the US market will swing up. All this plus it is more benificial from a tax perspective (for me).
My intent is to hold long term. And buy regularly.
Blacky
Ps. Sorry for typos, hard to post on a phone after several beers.
Lidl are "actively looking" for sites, quoting an internationally recognised retail marketing guru heard on the radio about a month ago.
Unfortunately, bad news for Vocation continues...
The one year chart.
Full article http://www.businessspectator.com.au...on/vocation-shares-sink-60-earnings-downgrade
Cheers,
Oracle.
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Last time I bought shares was 10 years ago, have been reading Montgomery (Value.able) and Buffet in preparation for testing the waters with my SMSF and finally took the plunge.
Finished my first purchases for SMSF over the last few weeks:
* $25k CBA @ $81.37 - up 1%
* $25k IAG @ $6.46 - down 3%
* $25k AGI @ $2.14 - up 5%
* $25k BGA @ $2.30 - down 5%
So far I've lost $500 or 1/2 % in 2 weeks mostly due to Bega Cheese decline.
But like you guys say, it's a short term market valuation and I hope the fundamentals will prevail long term!
Looking forward to watching them over the next couple of years, and topup with more if there is more price drops.
Seems so small compared to property I almost wish for margin lending to become available from SMSF... but probably safer for me not to mess with that. Love having no margin calls on property! But don't know what I'd do if I had to deal with one on shares in a crash..
Finished my first purchases for SMSF over the last few weeks:
* $25k CBA @ $81.37 - up 1%
* $25k IAG @ $6.46 - down 3%
* $25k AGI @ $2.14 - up 5%
* $25k BGA @ $2.30 - down 5%
So far I've lost $500 or 1/2 % in 2 weeks mostly due to Bega Cheese decline.
But like you guys say, it's a short term market valuation and I hope the fundamentals will prevail long term!
Looking forward to watching them over the next couple of years, and topup with more if there is more price drops.
Seems so small compared to property I almost wish for margin lending to become available from SMSF... but probably safer for me not to mess with that. Love having no margin calls on property! But don't know what I'd do if I had to deal with one on shares in a crash..
There is SMSF margin lending available.
Can you talk us through your entry points on each share citing what you learned from these guys above?
Also, 4x $25k parcels in quick succession? Why not drip feed when looking for good entry points? Personally I think the CBA and IAG parcels are bought at premium price especially when a few weeks ago you could have got in CBA sub $74 bucks and IAG sub $6 bucks. Why not $5-$10k parcels and waiting for good entry if you need to average down?
I cant comment on the other 2, but why these in your SMSF? Personally I find them a bit of a strange purchase considering you will be wanting good long term stability in Super and compounding returns.
Not having a go, just interested.
pinkboy
Sure, although entry points was not my focus - I was more focused on the details about the company itself, and if the price was reasonable (without looking at price history or charts).
The analysis was via a whole bunch of criteria, but basically:
* Must be in top 300 ASX
* Must return a profit
* >15% return on equity
* Acceptable debt ratios, and/or declining debt levels over time, preferably little or not debt
* Decent PE ratio (good PE without debt or low debt, is more reliable than good PE with lots of debt)
* Positive earnings growth > 10%
* Price to book value < 4
After filtering the top 300 shares, the first week I got some of those out.
Then the next two weeks I got the other two out.
I didn't factor dividends into it, since it's generally OK to retain profits if ROE is good.
I haven't factored any technical analysis in my decision here at all. The price what it was a few weeks ago had no bearing on my decision, and was of no use to me. My funds weren't transferred at that time so I didn't have the ability to buy at that time.
For averaging down, is a good idea I agree. 30% of my portfolio is in cash, This is my initial investment, I'm not fully invested yet. I'm not buying lots of small parcels, but I have cash spare to average down if things do go > 10 or 20% against me.
So far I haven't learnt anything yet as they're longer term plays. Except maybe that I shouldn't be checking share prices so often
Also I'll consider your suggestion of buying smaller parcels in the future - I thought that was more an institutional technique for bigger players. I see these as small parcels already but maybe I can improve my entry next time.
IAG and CBA? I don't see what's not long term stability about them, they are some of the biggest companies on the ASX.. am I misunderstanding?
To help me understand - what is the criteria for long term stability? What criteria would improve on this to get the "stability" factor?
If it's just price fluctuations, I don't mind some fluctuations, as long as the long term the company does not go under, cave in under debt from interest rate changes, or turn out to be a lemon.
Yes. I mentioned CBA and IAG....so naturally assumed you would pick up 'the other 2' as BGA and AGI.
pinkboy
Yep I did pick the "other two" as BGA and AGI, that's why I thought you were discussing "these" as CBA and IAG since you said you "can't comment on the other two"
Was that right or did you mean BGA and AGI are the unstable ones?
Also please help understand the instability part, I'm not experienced in shares for a long time so would appreciate the input.
Cheers
