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Value Investing Principles
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geojam
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11-Mar-2007 05:59
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Victorian Hope this time i got ur name rite,otherwise ppl like asterisk will laugh at me.He must be having stomach cramps by now. U are rite.When i first started mugging around with margin lending,The loan interest was 6% and the divvy yield was about 5.5%.the gap is small.That was the window of opportunity for me----once in a life time so to say. Nowadays,the loan interest is 10% and the yield is still about 5.5% to 6%.Maybe ppl have discovered this money making process. Looks like i have to explore new grounds. Cheers |
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geojam
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10-Mar-2007 21:49
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sorry typing error,should be Victorian. Asterisk,what does *guffaws*means? |
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geojam
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10-Mar-2007 13:25
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Victorina Good point u have made. Now i have zero loan balance in my margin lending(in Australia),keeping the powder dry for the "big"correction to come so that i can go for the next kill. Alot of stuff we can talk about but sometimes it come down to experience and guts and intuition and astuteness. Adrianpang05,this is probably only chapter one of margin lending.U can read alot of Livermore posts too. Cheers |
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iPunter
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10-Mar-2007 13:18
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Firstlady... It's contributions from people like you, etc, that make this forum much like a field or forest where one can stumble upon priceless gems scattered therein... :) |
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adrianpang05
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09-Mar-2007 09:15
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Yo geojam, me believe in long term, sound FA counters, like Vic. However, am also into the occasional punt and got some kopi $! |
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firstlady
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09-Mar-2007 09:13
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dear ipunter...thanx for the compliment...i am just trying to learn and share with all of u...nice meeting u too. |
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geojam
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09-Mar-2007 07:18
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adrianpang05 be prepared to buy for the long term. Cheers and good luck |
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adrianpang05
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09-Mar-2007 04:52
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Geojam Very clever strategy! Hmm never thought of that. Worth giving it a shot. Thanks |
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geojam
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09-Mar-2007 04:10
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Like Livermore,I buy using margin lending.I will concentrate on blue chips,ie,in the top 50 companies,and with steady divvy yields. At the moment I have SPC and STE. I do not borrow the full amount,so that will leave me room in case there is a mkt correction. The divvy received will be used to offset the loan interest.And hopefully,the value of the shares will grow with time as most blue chips shares do. If opportunity arises,where a big correction comes,and i think it offers me good value,i will again margin lend to accumulate.And in appropraite time may sell it off.This is the beauty of margin lending,it can offers flexibility. Just sharing. |
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Livermore
Master |
09-Mar-2007 00:19
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Oh I am not looking at Portek or CH Offshore....:) |
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musicwhiz5
Senior |
09-Mar-2007 00:16
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Haha ok I've looked at several too like Portek and CH Offshore but there is a reason for them to trade at low P/Es. There is hatdly any newsflow or progressive strategy update from these companies, for example. Anyway, all the best to you :) |
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Livermore
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09-Mar-2007 00:13
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Hi Whizmusic, Yes, you are right! I am now looking at a marine stock it is still largely unnoticed:) |
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musicwhiz5
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08-Mar-2007 23:55
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Thanks Livermore, I agree that some companies rise and then fall, so in such cases going "long" is not a good idea. But in the first place, one should be aware of the industry in which the company is in, and whether it is facing obstacles like increasing costs (such as TPV), decreased demand or eroding profit margins due to increased competition (like Magnecomp). All these factors will fundamentally affect a company and cause a permanent decrease in earnings. Also, in the first place, the two companies you mentioned may not fall into the category of "value" companies as they have no sustainable competitive advantage.TPV makes TV screens but this can go out of fashion when a new technology takes over. Similarly, Magnecomp is a maker of disk drives (if I am not wrong) but increasing competition means they have to cut prices and suffer margin declines. A sharp investor would have seen this coming and sold before the price fell too steeply. Thus, I always emphasize the importance of keeping up with the industry in which the company is in. |
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Livermore
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08-Mar-2007 23:52
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But it all depends on when one buys the stock. My advise is if you buy a growing stock coming from a consolidation phase, just hold and don't buy any more after it takes off once you have established your positions which I do by averaging up. But of course when you bought the share price after it has run up quite a bit then the risk factor is a bit higher........ |
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Livermore
Master |
08-Mar-2007 23:44
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I don't mean to put down TA chartists but I feel the gains are more if you just hold onto a growing stock and don't keep buy sell buy sell so much. This is from my personal expreince. Like what musicwhiz5 said, sometimes you make just by doing nothing after you buy. You can still use your chart skills to sell off some stocks buy maybe keep at least one stock and just don't do anything. Just offering a alternative point of view........ |
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Livermore
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08-Mar-2007 23:35
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Hi Musicwhiz5, Your style is similar to mine:). I used to be a buy sell buy sell person. I lost out on spectacular gains because of this method. Yes, I missed out Ezra when I was looking at it at $1. So whenever Ezra is mentioned, I keep wondering what might have been:(. I also bought Labroy at 60c and then let go and now it is $1.80. Ater these lessons, I have become a long term investor using margin just like Geojam. Once I have established my positions before the stock "takes off" I don't but any more. But having said that I am aware that sometimes being long term does not alway mean good. TPV went from 50c to $1.80 but now is 90 over cents only. Magnecomp went from $1 to 50c then went back up to $1.50 and then back to 60 over cents now. I just ask mysef if I think the company is going to going to grow with increase in profit, I should hold. However to make more money, I might sell off half my holdings at the start of a correction and buy back at lower price. This is one lesson I learnt form the correction. |
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iPunter
Supreme |
08-Mar-2007 19:16
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But techicians must not do nothing!!! On the contrary... they must act in accordance with the visible signs. They must buy back in at low prices after exiting at the high prices. This is the rationale of all technicians.. |
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iPunter
Supreme |
08-Mar-2007 19:12
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"Most of the gains can be achieved doing nothing..."... While this is very true, those who absorb this philosophy in good faith are actually the long-term investors. |
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musicwhiz5
Senior |
08-Mar-2007 18:49
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Most of the gains in your portfolio can be achieved by doing nothing. That's what I have experienced personally. Frantic trading is not always the way to success. Just offering an alternative view to TA and chartists. |
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iPunter
Supreme |
08-Mar-2007 17:34
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Firstlady... You've made a valuable contribution here... :) It is priceless to remember this... "Not having a position is also position itself" |
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