Black Monday

[SailorRob]

Exactly Rawz. The intangible factor that cannot be captured in standard calculations.
The wife and I don't have kids. But we totally understand that providing kids with the opportunities from an early age is the best thing you can do. Because it compounds.
That's priceless.

Some very interesting arguments.

I think that financial independence is the best thing to strive for your kids and families.

The security you think you're giving them by having all your assets in a house is actually the exact opposite.

You need total financial independence, so you don't need to rely on any employer, insurance company, government.

Then you can actually spend some time with your kids rather than rely on the state to educate them.

Everyone talking tough after a decade of massive house price inflation and zeto rates.

I ask each of you to consider your positions and thoughts had we just been through a decade of zero price increases and 7% mortgage rates.

None of you would then be making the nonsensical arguments you are.

A multimillionaire family living in a bus is far more secure than one with their own home that parents need to work to pay a mortgage.

[SailorRob]

Well yes it is for most regular people who have a day job & want security as well as an appreciating asset.

Not everyone has the skill set you have to do what you do.

What skill set? All I do is try and not do anything stupid, like day trading. Keep all of my assets in productive assets and buy Berkshire in bulk whenever Buffett does, then just sit on my arse. Don't need any skill at all, just right behaviour.

Anyone can sell their house right now and buy Berkshire and then they are totally set. Assuming they have median house and keep working they can have nearly 4 million in 10 years.

Job done.

But all they will have is the same house.

[Baa_Baa]

What skill set? All I do is try and not do anything stupid, like day trading. Keep all of my assets in productive assets and buy Berkshire in bulk whenever Buffett does, then just sit on my arse. Don't need any skill at all, just right behaviour.

Anyone can sell their house right now and buy Berkshire and then they are totally set. Assuming they have median house and keep working they can have nearly 4 million in 10 years.

Job done.

But all they will have is the same house.

Assuming they can afford to buy a tent, where would you suggest they pitch it?

You might not be able to see it but there are vastly more people, however they get there, who would be more than satisfied with a home/house, that they 'have' (don't own), and that's all they have, than a pathway to riches beyond that. A low bar by some standards, but very high by others.

I think that you make a lot of valid points about how housing is a fraught 'investment' but bear with me, most who buy their first house are not investing at all, they're buying a home, a roof over their heads, security, safety, escape from renting ... and yes, that's going to cost them dearly, over a very long time, perhaps even cost them the opportunity to invest for real wealth creation.

Family security, including a roof over their heads, even at extraordinary expense over a very long time, is ingrained into the psyche of NZ'ers, contrary to any investment thesis. But few of them are investors, or even think in terms of investment.

It might be wrong, very wrong even, but a happy life, a happy wife, a happy family, a safe and secure abode, and one day it somehow can sell for ten times what you paid for it, without ever even intending to achieve that, is a monumental achievement for many who don't have the fiscal or investment skills of those who commentate on their investment, or lack of, expertise.

You can walk the streets of any larger city in NZ and see that investment expertise is pretty much lacking. The guy or girl in the duvet in the street corner has no chance of ever of enjoying a lifetime of paying excessive interest for the luxury of living in their own home.

It's not fair, life is not fair, investing is not fair either, and it's complicated, and beyond many either in comprehension or execution.

Better maybe that we thank our lucky stars that we we have an insight or two, maybe we own what we have already, owe no one any thing, have a bob or two tucked away that might make a few more, have no beef with anyone, and are contented with that.

[Valuegrowth]

IIRC, Berkshire Hathaway is currently in the exuberant territory and market is paying high premium for its quality. The average historical PE ratio for Berkshire is 15. During times of panic, it has dropped to PE ratio of 10 as well. I am going to keep it under my radar and won’t touch until I see price weakness.


What skill set? All I do is try and not do anything stupid, like day trading. Keep all of my assets in productive assets and buy Berkshire in bulk whenever Buffett does, then just sit on my arse. Don't need any skill at all, just right behaviour.

Anyone can sell their house right now and buy Berkshire and then they are totally set. Assuming they have median house and keep working they can have nearly 4 million in 10 years.

Job done.

But all they will have is the same house.

[SailorRob]

Assuming they can afford to buy a tent, where would you suggest they pitch it?

You might not be able to see it but there are vastly more people, however they get there, who would be more than satisfied with a home/house, that they 'have' (don't own), and that's all they have, than a pathway to riches beyond that. A low bar by some standards, but very high by others.

I think that you make a lot of valid points about how housing is a fraught 'investment' but bear with me, most who buy their first house are not investing at all, they're buying a home, a roof over their heads, security, safety, escape from renting ... and yes, that's going to cost them dearly, over a very long time, perhaps even cost them the opportunity to invest for real wealth creation.

Family security, including a roof over their heads, even at extraordinary expense over a very long time, is ingrained into the psyche of NZ'ers, contrary to any investment thesis. But few of them are investors, or even think in terms of investment.

It might be wrong, very wrong even, but a happy life, a happy wife, a happy family, a safe and secure abode, and one day it somehow can sell for ten times what you paid for it, without ever even intending to achieve that, is a monumental achievement for many who don't have the fiscal or investment skills of those who commentate on their investment, or lack of, expertise.

You can walk the streets of any larger city in NZ and see that investment expertise is pretty much lacking. The guy or girl in the duvet in the street corner has no chance of ever of enjoying a lifetime of paying excessive interest for the luxury of living in their own home.

It's not fair, life is not fair, investing is not fair either, and it's complicated, and beyond many either in comprehension or execution.

Better maybe that we thank our lucky stars that we we have an insight or two, maybe we own what we have already, owe no one any thing, have a bob or two tucked away that might make a few more, have no beef with anyone, and are contented with that.

Great post, yes basically a forced savings scheme for people who otherwise would spend everything.

If prices were at historical norms of 3 times annual salaries in the provinces then I'd strongly agree with you.

The issue I have is people borrowing huge sums to participate in a market where forward returns MUST be very low and far below the cost of the debt over time.

It's not about don't buy a house, invest instead... Its about DON'T borrow 500% of your net worth to buy into a train wreck.

[SailorRob]

Family security, including a roof over their heads, even at extraordinary expense over a very long time, is ingrained into the psyche of NZ'ers,

With respect, I think this is a mistake...

It's ingrained because of one thing only... That everyone has made a killing over the last 40 years.

Everyone thinks it's the smartest investment decision they can make.

Go to any country that has not had a booming property market and nobody gives a crap.

They would rather rent.

The entire property psyche in NZ is 100% due to money....

You can have your cake and eat it.

[Fortunecookie]

Some very interesting arguments.

I think that financial independence is the best thing to strive for your kids and families.

The security you think you're giving them by having all your assets in a house is actually the exact opposite.

You need total financial independence, so you don't need to rely on any employer, insurance company, government.

Then you can actually spend some time with your kids rather than rely on the state to educate them.

Everyone talking tough after a decade of massive house price inflation and zeto rates.

I ask each of you to consider your positions and thoughts had we just been through a decade of zero price increases and 7% mortgage rates.

None of you would then be making the nonsensical arguments you are.

A multimillionaire family living in a bus is far more secure than one with their own home that parents need to work to pay a mortgage.

I am all for financial independence. It is an idea I wish I encountered earlier in life, but hey life is a journey right?.

I am under no illusion we will be facing some headwinds. Past returns for housing and stocks will be difficult to achieve going forward. Shares have benefited from declining interest rates as well. In the overall scheme of things, aren't mortgage rates all relative.

Whos talking tough about past house price inflation and zero rates?. I cannot recall mortgage rates of zero percent.

I acknowledge everyone else has their own circumstances. Nothing wrong with a family living on a bus, I say good for them. But for some I imagine it presents some challenges and may not meet their requirements.
It may save some costs in the long run. It will depend on the person or family. Some have different ideas as they simply like the idea of a roof over their heads and being secured in their own home.

[JBmurc]

With respect, I think this is a mistake...

It's ingrained because of one thing only... That everyone has made a killing over the last 40 years.

Everyone thinks it's the smartest investment decision they can make.

Go to any country that has not had a booming property market and nobody gives a crap.

They would rather rent.

The entire property psyche in NZ is 100% due to money....

You can have your cake and eat it.

yes,Great modern NZ addiction ...RES Property ... when the money was cheap it was BUY BUY upgrade spend up ... now those same funds are getting very expensive and not likely to see cheap again for many years .. a painful reality check ...reset of the kiwi mindset?

But it wasn't just joe blogs kiwi coming up with the love affair ... it was a historic breed into us... ("You recall that house" could have picked that up for $30k back when I first rented .. now its $600K... 20x odd years later "..)

When you think about it for so many years we were indoctrinated to LOVE and do everything to secure our own property .. politically, MSM advertising, RE Agents hard sell(no prices just NEG,TENDER,AUCTION), how to buy 60 houses in a year BS ,, banks 5% deposit ...free equity .. houses only go up .. crap rental market


Maybe 20yrs from now the whole woeful rental market(that was a factor) will be fixed the RES housing love affair to be different than the last 30yrs

[alokdhir]

I don't think Nzers love of Residential property is going away anytime soon ...it's too deeply ingrained for various reasons ....mainly people think and maybe rightly so that it's a safe investment ...used to be No brainer when even Govt policy supported it full on compared to any other type of investments ...now its the other way round ...but about to be dismantled by new Govt ....why as its a popular move ...though surely not a Right one

Money was cheap for all other assets too ....many great stocks on NZX returned much more then residential property but not many took advantage of leverage for stocks while almost all feel safe doing so for property ...this feeling of security around property investment makes it bullet proof for times to come ...it will take many decades of negative returns to make people loose faith in property investment ...not happening ...imho

Rates were higher then now in 2010 ...all thought they will stay like that ...but they didnt ...CYCLE will turn again ...nothing lasts for ever as all have INBUILT negative feedback which creates circumstances for cycle to turn !!!

[Rawz]

Can’t just value the house. Need to value the debt as well.

Thanks to rampant inflation and tight labor market our household income has grown steadily. Debt to income was 5.5x when we bought and now 3.5x only 2.5 years later. Incredible

Inflation is a tax on those with cash and a subsidy for those with debt.

[SailorRob]

Can’t just value the house. Need to value the debt as well.

Thanks to rampant inflation and tight labor market our household income has grown steadily. Debt to income was 5.5x when we bought and now 3.5x only 2.5 years later. Incredible

Inflation is a tax on those with cash and a subsidy for those with debt.

This is a good point yes but I fear inflation could be the great reset as well, where wages don't keep up....

But all these people waiting for a massive crash in US equity markets... Or going back to pre Covid levels, well they don't understand how much bigger the economy is nominally now. 20% bigger or so.

Anyway it all boils down to what I'm saying is that if you borrow to buy an asset you must be supremely confident about the value of that asset both now and into the distant future.

[Rawz]

This is a good point yes but I fear inflation could be the great reset as well, where wages don't keep up....

But all these people waiting for a massive crash in US equity markets... Or going back to pre Covid levels, well they don't understand how much bigger the economy is nominally now. 20% bigger or so.

Anyway it all boils down to what I'm saying is that if you borrow to buy an asset you must be supremely confident about the value of that asset both now and into the distant future.

No idea about the short term but im supremely confident the value of the house we bought will be worth much more in 30 years compared to today

[blackcap]

No idea about the short term but im supremely confident the value of the house we bought will be worth much more in 30 years compared to today

Worth more in real terms or nominal terms?

[winner69]

Way that Chevron and Exxon are splurging 100’s of billions in taking over others in sector they obviously see a great future for fossil fuels …decades out

[SailorRob]

No idea about the short term but im supremely confident the value of the house we bought will be worth much more in 30 years compared to today

I am supremely confident you're wrong.

In real terms it is virtually guaranteed to be worth significantly less for very obvious reasons.

It will be 30 years older for one, and a modern equivalent will be construed to a far higher quality far cheaper and faster.

If you are exceptionally lucky it will be a goose egg but don't count on it.

[SailorRob]

Way that Chevron and Exxon are splurging 100’s of billions in taking over others in sector they obviously see a great future for fossil fuels …decades out

Correct and totally obvious.

[Rawz]

Worth more in real terms or nominal terms?

Nominal of course.

But then the debt in real terms will be substantially reduced if say i was to pay interest only.

[Rawz]

I am supremely confident you're wrong.

In real terms it is virtually guaranteed to be worth significantly less for very obvious reasons.

It will be 30 years older for one, and a modern equivalent will be construed to a far higher quality far cheaper and faster.

If you are exceptionally lucky it will be a goose egg but don't count on it.

your forgetting about land which in Auckland is the biggest cost

[Daytr]

Well I think the investing in property has been done to death. One against the world...
Don't have a secure roof over your head let alone you're children's head.
Put it all in the stock market!

Apparently the average house price is $1M, oh no it's $960k when actually it's just over $900k & irrelevant. There is a good reason why the median house price is quoted not the average.

Meanwhile, all three major US indices held a pretty critical levels overnight.

[Rawz]

Well I think the investing in property has been done to death. One against the world...
Don't have a secure roof over your head let alone you're children's head.
Put it all in the stock market!

Apparently the average house price is $1M, oh no it's $960k when actually it's just over $900k & irrelevant. There is a good reason why the median house price is quoted not the average.

Meanwhile, all three major US indices held a pretty critical levels overnight.

I aint living in no bus!!!! lol.

[ValueNZ]

You might not be able to see it but there are vastly more people, however they get there, who would be more than satisfied with a home/house, that they 'have' (don't own), and that's all they have, than a pathway to riches beyond that. A low bar by some standards, but very high by others.

It might be wrong, very wrong even, but a happy life, a happy wife, a happy family, a safe and secure abode, and one day it somehow can sell for ten times what you paid for it, without ever even intending to achieve that, is a monumental achievement for many who don't have the fiscal or investment skills of those who commentate on their investment, or lack of, expertise.
There's nothing necessarily wrong with people being satisfied with a house as opposed to investing it and likely earning a far greater return. But how many people do you think actually recognise the opportunity cost of purchasing a house? I'd suggest very few. All SR is doing is pointing out that opportunity cost, and if that makes some on here consider it then that's a win for the ST community.

You also suggest that people may be able to sell it in the future for more than they paid for it. I think it's more likely that housing is likely to have a 0% or slightly negative real return overtime from this point. The problem lies in the fact that nearly all individuals view housing as a safe bet over a long period, when in reality the only way they could make money is through unsustainable multiple expansion.

Anyway it'll be interesting to see if the madness continues.

[ValueNZ]

Well I think the investing in property has been done to death. One against the world...
Don't have a secure roof over your head let alone you're children's head.
Put it all in the stock market!

Apparently the average house price is $1M, oh no it's $960k when actually it's just over $900k & irrelevant. There is a good reason why the median house price is quoted not the average.

Meanwhile, all three major US indices held a pretty critical levels overnight.
Why is it so crazy to suggest that it makes sense to put your net-worth into productive assets?

[ValueNZ]

Nominal of course.

But then the debt in real terms will be substantially reduced if say i was to pay interest only.
Who cares about nominal returns. All that matters in investing is increasing your purchasing power.

[Daytr]

Why is it so crazy to suggest that it makes sense to put your net-worth into productive assets?

If only it was just that simple.
Go & take photos if your kids swinging from a tree with a grin from ear to ear from the secure property they grew up in and built memories from.

Or take the photo when you're kids are crying as a landlord kicks you out of your rental and you can't find another as the demand is so high and 50% of your income is chewed up in rent.

A house is not just an investment.

[causecelebre]

I wonder how many contributors here have 5x leverage on their stock portfolios? Bugger all I bet. Property a no brainer for everyday NZ investors. Tax advantageous on capital gains and soon to be reinstated deductibles on the 'cost of business'. And most importantly for your average NZ'er you can simply drive past their investment. Hardly the same thing logging into your share registry and viewing a 1990's website. The NZX is also a very boring market not one to excite your average punter.

[Relaxed]

If only it was just that simple.
Go & take photos if your kids swinging from a tree with a grin from ear to ear from the secure property they grew up in and built memories from.

Or take the photo when you're kids are crying as a landlord kicks you out of your rental and you can't find another as the demand is so high and 50% of your income is chewed up in rent.

A house is not just an investment.

I agree. but go further. the house you live in is not even an investment.
It is a cost to your finances.

So everyone has a valid point.
If you are investing in productive assets then you are increasing your overall net worth in real terms (Hopefully)
If you buy a house to live in, then you are increasing something else. and that something else is valuable to a well lived life. it's just not money.

BTW, I did both. while paying off my mortgage I also invested in shares. It used to take a very long time to save $1,000 and then put it into shares. but we still did it. and then it didn't take so long, and then it grew, and then our mortgage reduced and then one day they were the same number (mortgage and investments, so we were effectively mortgage free) and then and then........

each to their own I guess. we have the kids investing in shares now so that when they are 30 they will have more options than we had

[bull....]

Well I think the investing in property has been done to death. One against the world...
Don't have a secure roof over your head let alone you're children's head.
Put it all in the stock market!

Apparently the average house price is $1M, oh no it's $960k when actually it's just over $900k & irrelevant. There is a good reason why the median house price is quoted not the average.

Meanwhile, all three major US indices held a pretty critical levels overnight.

agree critical supports held ... for how long some might ask

[Daytr]

I agree. but go further. the house you live in is not even an investment.
It is a cost to your finances.

So everyone has a valid point.
If you are investing in productive assets then you are increasing your overall net worth in real terms (Hopefully)
If you buy a house to live in, then you are increasing something else. and that something else is valuable to a well lived life. it's just not money.

BTW, I did both. while paying off my mortgage I also invested in shares. It used to take a very long time to save $1,000 and then put it into shares. but we still did it. and then it didn't take so long, and then it grew, and then our mortgage reduced and then one day they were the same number (mortgage and investments, so we were effectively mortgage free) and then and then........

each to their own I guess. we have the kids investing in shares now so that when they are 30 they will have more options than we had

Tell that to SailorRob.
I'm advocating for a diversified portfolio & buy a house to live in.
But apparently that's madness.

[mike2020]

Tell that to SailorRob.
I'm advocating for a diversified portfolio & buy a house to live in.
But apparently that's madness.

Yip. We are going to need more buses and boats.
Lets plan a discussion around single verses a relation and dependents next long weekend. Dinner for one verses all that dammed jewelry....

[Daytr]

Yip. We are going to need more buses and boats.
Lets plan a discussion around single verses a relation and dependents next long weekend. Dinner for one verses all that dammed jewelry....

As an owner of multiple boats, don't get me started. 😅

[SailorRob]

Tell that to SailorRob.
I'm advocating for a diversified portfolio & buy a house to live in.
But apparently that's madness.

If you have 10 million then go for it. I still think it would be stupidity to have 10% of net worth (a million) in a house in NZ.

Any less than 10 mil and it's more than madness.

[Relaxed]

agree critical supports held ... for how long some might ask


If you have 10 million then go for it. I still think it would be stupidity to have 10% of net worth (a million) in a house in NZ.

Any less than 10 mil and it's more than madness.

Clearly we agree on some points but disagree on this last point.
I still have nowhere near the sums you are talking about and yet own my own home, and this seems to be working for a lot of people. it certainly works for me.

perhaps the other posters are correct and we should drop it and move on to other topics

[JBmurc]

I wonder how many contributors here have 5x leverage on their stock portfolios? Bugger all I bet. Property a no brainer for everyday NZ investors. Tax advantageous on capital gains and soon to be reinstated deductibles on the 'cost of business'. And most importantly for your average NZ'er you can simply drive past their investment. Hardly the same thing logging into your share registry and viewing a 1990's website. The NZX is also a very boring market not one to excite your average punter.

I agree if the only market I had to invest in was the NZX ..I wouldn't have stayed trading in the market for as long as I have and continue to ....If I could have only invested in NZ investments ..prob would have put most funds into more commercial property and Mortgage secured investments ..NZX is a Bore

the bulk of my income comes from the ASX... even though even its become a bore of late..

[moimoi]

Way that Chevron and Exxon are splurging 100’s of billions in taking over others in sector they obviously see a great future for fossil fuels …decades out

The Chevron all share / no cash offer for Hess says more about the Hess Family avoiding US capital gains taxes than it does about Chevron splurging billions..

[Valuegrowth]

The energy sector is taking a hit.

[bull....]

Way that Chevron and Exxon are splurging 100’s of billions in taking over others in sector they obviously see a great future for fossil fuels …decades out

nah , transition to new energy means only the biggest fossil fuel companies will survive longest time in the future. eat or be eaten is the motto. woodside in asx is another example of need to get bigger by buying bhp oil assets where as bhp wants to transition to new energy materials and rid themselves of fossil fuels

[bull....]

I agree if the only market I had to invest in was the NZX ..I wouldn't have stayed trading in the market for as long as I have and continue to ....If I could have only invested in NZ investments ..prob would have put most funds into more commercial property and Mortgage secured investments ..NZX is a Bore

the bulk of my income comes from the ASX... even though even its become a bore of late..

yep hard going on asx at moment , small caps getting esp crushed

[alokdhir]

Real sign of retail capitulation will be TRA getting dumped ...but its holding well on near term inclusion prospects and with regular forecasts of $ 6 from W69 !!!

Shows retail still not panicking in spite of regular scary posts of Bull that its all over for stocks :p

[Daytr]

We perhaps have locked in the lows in the US indices, all holding key areas for two nights running & gyrating between flat % 1% or so. Upbeat corporate earnings coming at the right time.

DOW could challenge 34,000 next on the upside.

I have switched my Kiwisaver back to growth with a high proportion of international & NZ stocks.

[bull....]

Real sign of retail capitulation will be TRA getting dumped ...but its holding well on near term inclusion prospects and with regular forecasts of $ 6 from W69 !!!

Shows retail still not panicking in spite of regular scary posts of Bull that its all over for stocks :p

stock return premium relative to fixed income remains low ... so i ask you when will retail bail more to fixed income and outright sell stocks ? what level of term deposit will cause mass selling on nzx ?

[Daytr]

stock return premium relative to fixed income remains low ... so i ask you when will retail bail more to fixed income and outright sell stocks ? what level of term deposit will cause mass selling on nzx ?

Hey Bull, I think rates are going to come down quicker than forecast both here & in the US. Inflation imo has been tamed and time is a great healer of inflation woes.

So I think we have seen peak interest rates.
Just my opinion of course.

[bull....]

Hey Bull, I think rates are going to come down quicker than forecast both here & in the US. Inflation imo has been tamed and time is a great healer of inflation woes.

So I think we have seen peak interest rates.
Just my opinion of course.

i agree with your opinion and have taken positions accordingly and im guessing thats why we have not seen wholesale selling yet in equities but market is starting to price in higher for longer now and the canary in the coal mine is geopolitics which could blow both our thinking out of the water. thats why i was thinking what level of term deposit in NZ would cause people to mass sell stocks

[causecelebre]

i agree with your opinion and have taken positions accordingly and im guessing thats why we have not seen wholesale selling yet in equities but market is starting to price in higher for longer now and the canary in the coal mine is geopolitics which could blow both our thinking out of the water. thats why i was thinking what level of term deposit in NZ would cause people to mass sell stocks

Exactly with 1 year PIE TD's at an effective 6.7% risk free its a pretty compelling argument

[JBmurc]

nah , transition to new energy means only the biggest fossil fuel companies will survive longest time in the future. eat or be eaten is the motto. woodside in asx is another example of need to get bigger by buying bhp oil assets where as bhp wants to transition to new energy materials and rid themselves of fossil fuels

BHP still promotes MET COAL .. can't build those windmills out of wood..

[Daytr]

i agree with your opinion and have taken positions accordingly and im guessing thats why we have not seen wholesale selling yet in equities but market is starting to price in higher for longer now and the canary in the coal mine is geopolitics which could blow both our thinking out of the water. thats why i was thinking what level of term deposit in NZ would cause people to mass sell stocks

Yes re geo politics / tensions.
Unless the Mid / East oil production is impacted I don't see this having a huge impact on inflation.

Israel are trying to win a mandate for its land invasion hence the release of it latest video.
I don't think they will get it, however it doesn't mean they don't ignore outside opinion or influence & go in hard anyway.

Localized conflicts very rarely have on-going negative impact on markets and quite often the initial fear is not realized.

[winner69]

Aussie CPI surprises on upside …….another rate rise likely

[Valuegrowth]

IMHO It's a wrong move.
We perhaps have locked in the lows in the US indices, all holding key areas for two nights running & gyrating between flat % 1% or so. Upbeat corporate earnings coming at the right time.

DOW could challenge 34,000 next on the upside.

I have switched my Kiwisaver back to growth with a high proportion of international & NZ stocks.

[Valuegrowth]

https://www.advisorperspectives.com/dshort/updates/2023/10/03/market-valuation-is-the-market-still-overvalued

"Based on the latest S&P 500 monthly data, the market is overvalued somewhere in the range of 70% to 126%, depending on the indicator, down from last month's 73% to 130%."

[Baa_Baa]

https://www.advisorperspectives.com/dshort/updates/2023/10/03/market-valuation-is-the-market-still-overvalued

"Based on the latest S&P 500 monthly data, the market is overvalued somewhere in the range of 70% to 126%, depending on the indicator, down from last month's 73% to 130%."

Not even bothered to read that article. The SP500 is dominated, massively by the FANGS, they own the market, literally. If you think global domination of their markets is going to change any time soon, then believe the multitude of minions who commentate on it, otherwise, invest wisely.

Analysis paralysis seems to dominate your investment thesis. Good luck with that, you'll never make a decent decision with this nonsense occupying your thoughts. Back on ignore, you add nothing of value in your commentary, despite your nom de plume.

[bull....]

agree critical supports held ... for how long some might ask

just as we thought testing those critical supports again .... could get ugly if they dont hold

[bull....]

https://www.advisorperspectives.com/dshort/updates/2023/10/03/market-valuation-is-the-market-still-overvalued

"Based on the latest S&P 500 monthly data, the market is overvalued somewhere in the range of 70% to 126%, depending on the indicator, down from last month's 73% to 130%."

yep article just emphasizing what plenty of people think. that is equities still expensive

[Daytr]

IMHO It's a wrong move.

Everyone is entitled to their opinion & that's what stops are for.

But I think you are massively wrong if you think the market is over valued by a minimum of 76%.
How can something be over valued by more than 100%?

[SailorRob]

How can something be over valued by more than 100%?

Because... Math...

If intrinsic value of a particular of something is $50 and market value $150, then it's selling for $100 more than you believe it's worth. In this case, it's overvalued by 200%.

The calculation is:


((Market Price - Intrinsic Value) / Intrinsic Value) * 100%


= (($150 - $50) / $50) * 100%


= 200%

[Daytr]

Because... Math...

If intrinsic value of a particular of something is $50 and market value $150, then it's selling for $100 more than you believe it's worth. In this case, it's overvalued by 200%.

The calculation is:


((Market Price - Intrinsic Value) / Intrinsic Value) * 100%


= (($150 - $50) / $50) * 100%


= 200%
Fair enough, but the post didn't say intrinsic value. It said value.
I didn't bother reading the article as these doomsday peddlers are a waste of time.
Even a clock....

[Daytr]

just as we thought testing those critical supports again .... could get ugly if they dont hold

Indeed but that's what stops are for.
I had a nice little in & out trade on the DOW in the last 24 hours, now long the NASDAQ on the current lows.
Certainly don't what another result like Alphabet.
Meta reports after the bell.

[winner69]

Guru Jeremy Grantham: "In the U.S., the three near perfect markets with crazy investor behaviour and 2.5+ sigma overvaluation have always been followed by big market declines of 50%. The current superbubble features a dangerous mix of cross-asset overvaluation."

Jeez ..not good, bad times ahead?

[bull....]

Indeed but that's what stops are for.
I had a nice little in & out trade on the DOW in the last 24 hours, now long the NASDAQ on the current lows.
Certainly don't what another result like Alphabet.

end of the day print is the important one ( as far as the supports go ) and of course results after the bell.
i closed my short couple hrs ago ( i mainly day trade index stuff )

[SailorRob]

Fair enough, but the post didn't say intrinsic value. It said value.
I didn't bother reading the article as these doomsday peddlers are a waste of time.
Even a clock....


Come on bro... You said how can anything be overvalued by more that 100%

Which was a display of a lack of mathematical competence.

It is possible for things to be overvalued by more than 100%, that was the point, not the specific example.

[SailorRob]

Guru Jeremy Grantham: "In the U.S., the three near perfect markets with crazy investor behaviour and 2.5+ sigma overvaluation have always been followed by big market declines of 50%. The current superbubble features a dangerous mix of cross-asset overvaluation."

Jeez ..not good, bad times ahead?


Yes his track record is pretty good with this stuff.

Called 56 of the last 2 crashes perfectly.

[Daytr]

Come on bro... You said how can anything be overvalued by more that 100%

Which was a display of a lack of mathematical competence.

It is possible for things to be overvalued by more than 100%, that was the point, not the specific example.

Yawn ........

[bull....]

Guru Jeremy Grantham: "In the U.S., the three near perfect markets with crazy investor behaviour and 2.5+ sigma overvaluation have always been followed by big market declines of 50%. The current superbubble features a dangerous mix of cross-asset overvaluation."

Jeez ..not good, bad times ahead?

yea the relationship to bonds is out of whack

[SailorRob]

Yawn ........


Just reply and say, oh yeah... I stuffed that up, I was confused by the fact that anything can only go down 100% but up unlimited %

Don't try cover your tracks on a public forum, just look pathetic.

We are all here to learn, even if it is day trading our kiwisaver funds.

[Daytr]

Just reply and say, oh yeah... I stuffed that up, I was confused by the fact that anything can only go down 100% but up unlimited %

Don't try cover your tracks on a public forum, just look pathetic.

We are all here to learn, even if it is day trading our kiwisaver funds.

I was falling asleep, but I'm wide awake now as it's comedy hour.

I hope that was the final punchline otherwise I will be back to yawning quick smart.

[Daytr]

Excellent earnings result from Meta.

[bull....]

Excellent earnings result from Meta.

nah they just said advertising staRTING TO SOFTEN FOR THEM

[bull....]

failed to close above support at end of day
after hr's action pretty bad on poor earnings
plunge tonight ? to confirm the breakdown ?

[Daytr]

failed to close above support at end of day
after hr's action pretty bad on poor earnings
plunge tonight ? to confirm the breakdown ?

Yep chart not looking great now. Needs to flip back above quick smart or could go test quite a bit lower. This could be the final push lower imo.
Time will tell.

Note the DOW is still holding support.
Nasdaq & S&P broken below

[Muse]

In good news - the yield of my portfolio has gone up a lot today.

In bad news - thats just because the value of my shares went down.

Whoo hoo.

[bull....]

Yep chart not looking great now. Needs to flip back above quick smart or could go test quite a bit lower. This could be the final push lower imo.
Time will tell.

Note the DOW is still holding support.
Nasdaq & S&P broken below

dow just broken supports too now .... timber

[Daytr]

dow just broken supports too now .... timber

Yeah it's where it closes that counts though.
Copper up, oil down.
Interesting markets to say the least.

[Daytr]

Well the DOW has definitely broken down now. NASDAQ trading higher but still below resistance.

[bull....]

very bad price action , possibly setting up for much lower price levels some time in the future esp when you consider the stock premium relative to bonds

[alokdhir]

https://www.nzherald.co.nz/business/mark-lister-the-sharemarket-is-nothing-like-a-casino/SH2MEOVAWVHDNEEZHJO2OB4URY/

[Daytr]

very bad price action , possibly setting up for much lower price levels some time in the future esp when you consider the stock premium relative to bonds

I wonder if the bond : equities ratio is no longer a good indicator considering the amount of global Government debt issuance.
Basically the bind market has been flooded in the last 15 years.

Particularly in the US corporate America has made a fortune at the expense of the US taxpayer.

[winner69]

https://www.nzherald.co.nz/business/mark-lister-the-sharemarket-is-nothing-like-a-casino/SH2MEOVAWVHDNEEZHJO2OB4URY/

That guru Mark doesn’t look old enough to have lived through real bad times in the market ……maybe he is he might not be noticing that one of those 5 year periods of a negative return (Inc dividends) is underway

But no worries …stay fully invested people because my job depends on it

[Daytr]

That guru Mark doesn’t look old enough to have lived through real bad times in the market ……maybe he is he might not be noticing that one of those 5 year periods of a negative return (Inc dividends) is underway

But no worries …stay fully invested people because my job depends on it

He's right & wrong imo.
If you have held up until now then it's probably not the time to sell. The time was 6 - 8 months ago.
But you're right they aren't paid to manage cash.

[Valuegrowth]

I agree. Should buy wonderful companies (strong balance sheet companies) at beautiful prices and keep them for the long game. I invested in one turnaround company under Singapore management 15 years back and I also added in every market weakness and market sell-off. It is going to be one of the best investments and can keep at least for another 15 years.


https://www.nzherald.co.nz/business/mark-lister-the-sharemarket-is-nothing-like-a-casino/SH2MEOVAWVHDNEEZHJO2OB4URY/ (https://www.nzherald.co.nz/business/mark-lister-the-sharemarket-is-nothing-like-a-casino/SH2MEOVAWVHDNEEZHJO2OB4URY/)

[mike2020]

He's right & wrong imo.
If you have held up until now then it's probably not the time to sell. The time was 6 - 8 months ago.
But you're right they aren't paid to manage cash.

No, the time to sell was around 23 months ago, was all downhill from the start of 2022.

[Daytr]

No, the time to sell was around 23 months ago, was all downhill from the start of 2022.

So you are forgetting the big bounce back in between? I.e they were both selling opportunities, followed by a large buying opportunity in between.
I did rather nicely out of buying on that dip & selling it out earlier in 2023.

The question for mine is, when is the next buying opportunity?

I have shifted my Super perhaps prematurely back to equities, but having it out whilst the market came down 10% is and picking up interest on the way has worked well.

I still have my investment portfolio & trading portfolios largely on standby.

[Valuegrowth]

https://www.youtube.com/watch?v=_BE5T8c3LOc

[bull....]

all blacks losing :scared: bound to add to nz50 pessimism

[mike2020]

So you are forgetting the big bounce back in between? I.e they were both selling opportunities, followed by a large buying opportunity in between.
I did rather nicely out of buying on that dip & selling it out earlier in 2023.

The question for mine is, when is the next buying opportunity?

I have shifted my Super perhaps prematurely back to equities, but having it out whilst the market came down 10% is anfmd picking up interest on the way has worked well.

I still have my investment portfolio & trading portfolios largely on standby.

I don't trade so yeah completely forgot the bounce(s). My NZ portfolio is well green, so long term I have no worries, I guess this is "sharetrader" and I have picked up some good buys here along the way, I'm hopeful BRW pays for Christmas, preferably this year.

[moka]

https://www.youtube.com/watch?v=7RLfKaxH-Og
Grants 40th Anniversary: "Rates Can Never Rise" 10-3-23. DoubleLine CEO Jeffrey Gundlach.

0:30 My title page at this conference in 2016 was rates can never rise. I actually was so bold in 2016 as to say I believe that within about five or six years, six years I think I said rates will possibly at be at 6% and boy did I get lampooned for that statement but hey they're at 550 so I'm going to say close enough.

One of the things I've learned from 40 years in the investment business is you might have a good vision of where things are headed but it takes forever in the investment business. People want things to happen in their normal life cycle like weekly, monthly, quarterly but it takes years and years and years nothing happens and then all of a sudden it all collapses.

In our management of the economy we have two tools, zero interest rates and quantitative easing and budget deficit, so I guess that's three but the quantitive easing and budget deficit are sort of the same thing.
And you'll notice that we claim to have a good economy but we have nearly an 8% budget deficit as a percentage of GDP and I think the guessing is that GDP in the United States will be around 2 and a half % real for this year, nominal will probably more like 6% or 7% but that's all the budget deficit.

If we didn't have a budget deficit we'd have zero growth and the level of the budget deficit now is about the same as a percentage of GDP as it was at the depths of the global financial crisis. And here we are probably heading into another bout of stimulus in response to the next recession. We've been raising interest rates. We'll notice that the one that started last year in 2022 is by far the steepest by far and the largest and this goes all the way back to 87. This is kind of Volckeresque type of interest rate increases.

But it's not just the United States it's all over the world and it's very interesting how synchronized everything seems to be. At the left hand side of this chart there was some people that were cutting while others were not. Not anymore, it's sort of like everybody's hiking together. It's almost like we have a global Central Bank the way that they all work together.

So what we've got here is an interest burden problem and you'll notice the orangish the bluish line is the defense budget and in billions of dollars and the blue line is the interest expense and it's gone up by something like $400 billion since the FED started raising interest rates.

And so it's about three years it takes really for the interest rates to cycle through but this is obviously going to be a huge problem.
And Powell kind of stepped in it when he decided he was going to use super core inflation so PCE core less shelter. I mean you're you're down to what? Boxes of pencils, what are we what are we measuring here? I mean there's no food, there's no energy there's no shelter.

He decided that this is the one that has to get down to 2% but it's a 4.7 and it's actually not improved at all really since the Fed started raising interest rates.
So what happens when you raise interest rates, borrowing costs go way up. Businesses used to pay about 4% a little over 18 months ago and now they're up at 9%. That's a pretty big increase.

6:12 How far along are we in this process? I'm going to come up with three slides that are the most important I think in monitoring the economy right now. These are recessionary indicators. The one that is the earliest to be on watch for recession is the yield curve two's 10 yield curve inverts and then it stays inverted for a while. That's why it's an early indicator and then something happens. It's not the inversion that puts you on what was it, basement mode, it's when it de inverts. You'll notice that we're de inverting. In fact today we've got to 108 basis points inverted 2,10 several months ago. And now we're inside right at 40 so it's already come in by 68 basis points and it's de inverting fast. And you'll notice it's when it de inverts that you really have to worry about things and that's what's happening.

[moka]

https://www.youtube.com/watch?v=7RLfKaxH-Og
Grants 40th Anniversary: "Rates Can Never Rise" 10-3-23. DoubleLine CEO Jeffrey Gundlach.
7:29 Somebody sent me a very helpful chart and he looked at the twos 10 on a weekly basis versus its 30 week moving average and that has an absolutely perfect record in forecasting recession. And it has crossed above its 30 week moving average in recent couple of weeks.

Then there's sentiment. Its future expectations less the current situation. People always feel sort of bad in these surveys about the future. They often feel very good about the present, but they are concerned about the future. So you see when the area gets very red down there, it means they feel really bad about the future but they're still feeling decent about the present. But then when the red area starts to shrink. It means that they're starting to feel bad about today relative to the future. And I must say it has that same look again, where it's been down here for a while and here we go, it's starting to shrink in that red area. So this is less of a long-term predictor, it's more of a real-time predictor than the twos 10 but it's starting to shift.

And then we have the unemployment rate which is of course the most lagging indicator of them all. What we have here is the unemployment rate that's reported every month going to get one on Friday versus its 12 month moving average. And there we see the recessions again in red and it's really interesting it gets low and then it stops falling and then it starts to gradually rise and then it crosses over its 12-month moving average which has happened and then it tends to kind of explode to the upside.

I figured these layoffs are coming. Well in the world of economics and the world of investments you can see what's coming but it takes forever. It takes much longer than you think. Well my gut tells me that these layoffs are coming like at the end of this year.

10:55 Now the one that really matters and I didn't include it is the unemployment rate versus its 36 month moving average, it's three year moving average has a perfect record when that crosses over you're cooked. And that's going to happen I think with high probability in the first quarter of 2024.

So we're going to be having some problems with the current Fed policy and the budget deficit is going to explode.
So that's what we got left - print and pay wealth tax. Well that won't solve the problem but it'll make some people feel better

So when the next recession comes what's it going to be? Well I believe there will be a bond rally in a pavlovian sense when the recession comes. But I'm not sure it's going to last. So the problem is that the response is very likely to be about helicopter money. So let's say we go out and print all this money, send checks to everybody. So obviously printing money will lead to inflation.

We start to see that at 6% interest rates we have a huge increase of about $1-1.5 trillion in interest expense as a percentage of GDP. In other words it would go up by about six percentage points. So what we'd have is interest expense as a share of GDP would be up at such a large number that it obviously crowds out the mandatory spending, military spending and so forth but what if it goes to 12% of GDP which is sort of a base case. We're at eight now. If there's a recession I don't think the deficit is going to shrink. So what happens well the interest expense as a percentage GDP goes up to about 133%. So now we're talking about some real money. We're talking about $3 trillion. We're talking about a really, really big deficit problem. So what is this going to cost us if this all happens. Well using the CBO’s baselines which is the same as about a 4% of GDP deficit we see that the interest expense goes up about 40% of tax revenue. So what happens to the defense budget?

There's a big part of the budget like 70% that's so-called mandatory. So what this means is there'd be no money for anything but the so-called mandatory stuff. So how are you supposed to go forward with that? Well what if what if the primary deficit is 8% of GDP? Now we're at 40% what if it's 12% of GDP, we're up at 70% so you can't fund the mandatory items so what are you supposed to do?

18:18 And what if God forbid interest rates are at 9% which is certainly plausible if you have this type of crazy spending program. Well I’ve got bad news for you. Over 140% of tax revenue goes to paying the interest expense.

[moka]

https://www.youtube.com/watch?v=7RLfKaxH-Og
Grants 40th Anniversary: "Rates Can Never Rise" 10-3-23. DoubleLine CEO Jeffrey Gundlach.

19:53 Okay so we've had this long longterm interest rate trend.
This is a 30-year treasury yield which did nothing but fall since 1990s, early 90s in a fairly controlled pattern. You'll notice it was pretty well contained inside of these bands but it's pretty clear that something changed and now we're completely out of the context of the past. And one of the things that I've been thinking about really for the past 5 years, but more intently since the 2020 situation when interest rates got insanely low. I mean the intraday the 10 year treasury got to 50 basis points for about an hour, the long bond got to 1% for about an hour but those were obviously panic levels.

But when you've been around for 40 years you think you've learned stuff. You think that you understand relationships. You can tap into your experience and how things interrelate and act. But what if your experience is all informed by a secular trend that isn't in place anymore? What happens if falling interest rates were significant in creating those relationships?

21:12 And if they're not falling anymore maybe those relationships are irrelevant, maybe they're even misleading. For example, during this long interest rate decline did any high yield bonds ever mature? I don't think so, I think they were defaulted or got refinanced. So if your company's in trouble and the economy gets weak you can refinance at ever lower interest rates. And that obviously bails you out. Your interest expense goes down.

But what happens if interest rates are going up?
I think the default rate will be higher than any other time. I also think recovery rates will be lower, so there's more risk. When you have higher interest rates, obviously rising interest rates don't help. The stock market bottomed out when 1982 when rates were at their peak.

22:22 We've gone from a situation where stocks at the beginning of 2022 were wickedly overvalued. The S&P 500 as a proxy versus their internal history of price to book, PE ratio, Schiller ratio, price to sales but as overvalued as they were versus their own history they were in the top few percentile of overvalued versus decades long history, they were very cheap to bonds amazingly so as stocks were rich, bonds were even richer with the 10yr treasury laughably as inflation was heading to 5, 6, 7, 8, 9% the 10year treasury was hanging out down at a one handle. What a joke. Not any more.

Bond yields are up at 5% five and a half on Fed funds and you can buy Double B bank loans which at some point you're going to want to sell them because their high yield is a it's a kind of a blessing and a curse. It's a blessing because you get the income. It's a curse because the company has to pay it. So you got to watch out for that. But stocks were twice as cheap as bonds 18 months ago. And now they're twice as rich. There's been a four-time re-evaluation of stocks versus bonds on evaluation basis.

So Mark Twain had one of the statements that I've been thinking about a lot over the past five years and that's it's not what you don't know that gets you in trouble, it's what you think you know that just ain't so.
And that's what I think investors should be careful about because what they think they know things.

But what you know is falling interest rates. And it's not happening anymore and I think you'll get a bond rally again in a pavlovian fashion when this recession comes but if you do it'll be a pretty good selling opportunity because I think yields have to go much higher in the context of this interest expense problem that I've outlined.

So what else has changed as the interest rate trend has gone from declining secularly to at least for now being on the increase? Well one thing is people's forecasts.
You'll notice that for every year up until about 2021 the 10year yield undershot the forecast every single year. The white line is behind is underneath the colored line every single time.

25:13 Not anymore now. What we see is they are underestimating where the rate is going to be.
It's not terribly convincing but because it's only 18 months or so but it is a change in trend.

[moka]

https://www.youtube.com/watch?v=7RLfKaxH-Og
Grants 40th Anniversary: "Rates Can Never Rise" 10-3-23. DoubleLine CEO Jeffrey Gundlach.

25:42 Until a couple of years ago the FED funds rate was always estimated to go up pretty much more than it did or the same as it did.

Now everybody's expecting the Fed funds rate to come down. Interesting how everything has changed with that secular change in the yield curve. Here's two slides that I used back in 2016 and I think they proved helpful.
The first is nominal GDP seven-year moving average and the 10year US Treasury yield and you'll notice that the white line which is the nominal GDP 7year average kept going up until the early 80s, and you'll notice that it dragged the yellow line the 10year Treasury yield dragged it higher.

And then something changed and 7-year moving average of nominal GDP started to fall almost monotonically from 1982 until about 2016 or 2020. And when I spoke in 2016 I said this white line is about to go up and that's why “this rates can never rise” mantra is nonsense because this white line is going to drag the yellow line higher and sure enough that's exactly what's happening. You'll notice this is exactly in line with that 40-year trend of the 30-year treasury yield that I talked about.

So this looks like it's dragging yields higher ultimately. and then we have another one that I used 7 years ago. This is the core PCE 7year moving average and the 10-year treasury yield. Same exact picture isn't it? Rises up and it fuels the 10year treasury yield going up in sync with it and then it peaks in the early 80s and starts declining almost monotonically all the way into 2020 and now it's going up. Another variable that is likely to have secular problems for interest rates.

30:06 Fourth Turnings - there seem to be these cycles and stuff like this society gets shocked and there's a reset and institutions have to be recreated and rethought and you can think of the New Deal, you can think of the World War II and how we came out of that.
And you get a system that is set up where the means of production and the property relations, which are the way the fruits of production are split up in the society are in sync. And everybody is sort of happy and they buy into this deal of okay we're going to organize society this way, here's the property relations, here's the means of production and everything goes fine except as the time passes the property relations are very, very, very slow to change because the people that benefit from the property relations don't want them to change.
So you get wealth inequality and you get a tension between part parts of the society because the means of production change very rapidly, think radio, television, internet, AI. They change very, very radically and the property relations are calcified and so things get terribly out of sync.

And you need to reset the property relations and you have to redo the institutions, and I'm not exactly sure why that seems to tie in with these interest rate cycles, but it just seems to and so it's not just interest rate cycles, it's societal cycles and the Fourth Turning is a book written by Neil Howe back in 1997. Using demography he predicted there would be a global financial crisis around the year 2006. He's got a new book out called The Fourth Turning is Here. And the fourth turning is when everything falls apart.

[moka]

https://www.youtube.com/watch?v=7RLfKaxH-Og
Grants 40th Anniversary: "Rates Can Never Rise" 10-3-23. DoubleLine CEO Jeffrey Gundlach.

32:34 I've been talking about this debt problem for more than 15 years and in 2012 I said, I know I'm a broken record on this debt problem but I've got excellent news for you. We have a level place to stand here in 2012 because the way the demography is and the way the structure of the market is we're not going to have the debt problem be an issue at least until about 2019, 2020.

And then 2020 came and boom and so here we are, so it's a time of change. The fourth turning is difficult because you're tearing things down but the optimism part of it is what I'm getting actually excited about. There's two things that I'm actually excited about. When the fourth turning is finally over we have the first turning which is we're back in sync, we have a structure of property relations and means of production that works. So I'm happy about that. Also I'm much happier today as a bond investor. We were in the fixed income dungeon for about seven years, you had negative interest rates in Europe we had 1%, 2% treasury yields, we knew inflation was going to come, spreads were non-existent.

Do you know that two years ago the only way to get 5% from a United States bond portfolio was to buy the junk bond index and leverage it 50% and hope you didn't get any defaults. That was what you needed to get 5%. Now there's yield everywhere. So it's exciting to be a bond investor.
I feel sorry for the poor stock investors because if it weren't for the Magnificent 7 the S&P 500 is down this year.

I think one thing that we should all acknowledge is that the rules change very quickly (by the government.) In 2006 the prospectuses on mortgage backed securities were you cannot modify these loans, but they modified them. It's illegal but they did it anyway. The Federal Reserve Act of 1913 says the FED will cannot buy corporate bonds, it's illegal. A friend of mine was at the FED in 2006 through 2008 the global financial crisis and that she said that they had a very, very long discussion should they buy corporate bonds in response to the global financial crisis. And they said we can't do it. We wish we could but we can't.

36:07 Well that went out the window in March of 2020 to first part of April 2020 where they bought corporate bonds, even we're open to buying junk bonds. Why not just buy equities while you're at it.
So sure if tips become a problem they're just going to change the rules. I just don't think there's any doubt about it. So the fundamental point of my fourth turning commentary is the rules are going to change. They're already changing. They've already changed in front of your eyes over and over again.

I increasingly like a fixed income as a financial asset. I've been sort of 60,40 more like 60, 25, 15, 60% bonds, 25% stocks because you know you want some diversification and stuff but I like foreign stocks better than United States stocks. I like India. I've been talking about India for years and years. It's not for 18 months, it's for 18 years.

Amazingly for the present moment I actually think you have profit potential in long-term treasuries. I don't think you want to hold on to them, but I do believe that the recession is coming and there's going to be a pavlovian reaction and you can probably have look the 30-year treasury bond has had a draw down of more than 50% in less than the last two years 50%.
I'm not saying it's going to go back up to 100 from 50 but it can certainly go to 70 and so you have a 40% gain which will help to risk manage in your portfolio for the for the short term.

I like floating rate assets because the FED is just stubbornly not going to cut interest rates maybe not until the recession comes, maybe won't be until eight months from now. I don't know but when it comes to fixed income rate now you have to be on top of it. It's not buy and hold at all. You have to be on top of it because the volatility is very high, the liquidity is terrible, the banks don't have balance sheet anymore. There are days where you can't even get a bid, I mean it's not it's not frequent, but there are days when there's no bid for stuff.

[bull....]

nz50c down again :t_up: only 7 - 10% more downside too go to the 50% retracement. next yr hopefully we will reach there.

[850man]

I don't trade so yeah completely forgot the bounce(s). My NZ portfolio is well green, so long term I have no worries, I guess this is "sharetrader" and I have picked up some good buys here along the way, I'm hopeful BRW pays for Christmas, preferably this year.

Wish mine was green, even with divies I'm coming up 5% in the red :crying:
Think I should stop watching

[Toddy]

nz50c down again :t_up: only 7 - 10% more downside too go to the 50% retracement. next yr hopefully we will reach there.

Super skinny volumes. So not to many punters are losing real cash.

[Daytr]

The DOW has snapped back quickly & is brushing up against key resistance.

[bull....]

The DOW has snapped back quickly & is brushing up against key resistance.

big us news in a few minutes might swing things

[Daytr]

big us news in a few minutes might swing things

Sorry what news is that?

[bull....]

Sorry what news is that?

US debt funding ... anyway it turned into a non - event as pretty much as expected although at record levels

[Daytr]

Ahh well NZX should finally see a green day.
Big week ahead, FED, Apple & Security Council meeting on Gaza.
My take is that recent sell-off could be the dip I was looking for & markets tend to shake off conflicts after the initial shock.

I've shorted gold & long DOW.
Let's see.

[Toddy]

Here is a positive investment story. Nice little ending about taking stocks over cash. But he obviously invested that cash wisely.

https://www.bbc.com/news/world-us-canada-67258902

[alokdhir]

https://www.nzherald.co.nz/business/reserve-bank-warns-kiwi-mortgage-holders-are-particularly-exposed-to-interest-rate-changes/CFA2247JING6JODOIUOVL33NPI/

Main reason why NZX shud be a winner sooner then latter ....high rates have higher traction in NZ due to higher debt burden of average households as per RBNZ !!

[Daytr]

https://www.nzherald.co.nz/business/reserve-bank-warns-kiwi-mortgage-holders-are-particularly-exposed-to-interest-rate-changes/CFA2247JING6JODOIUOVL33NPI/

Main reason why NZX shud be a winner sooner then latter ....high rates have higher traction in NZ due to higher debt burden of average households as per RBNZ !!

To get rates down quicker we need to stop losing talent to Australia. Australia continually targets our Labour pool & unfortunately its probably not going away.

Speaking to a mate of mine who manages some significant infrastructure projects in NZ and he said most inputs were falling in price except labour which is still under immense pressure.

[alokdhir]

Labour supply is being sorted thru immigration ....cant undo Australia bond !!

Main reason so many new immigrants find NZ attractive maybe a future pathway to Australia option ....so it need stay from that angle too

[SailorRob]

https://twitter.com/MHReddell/status/1719074825593893068?t=5YAi98Krmn68HM1cGAGHuw&s=19

Hmmm who was saying this, can't remember.

[alokdhir]

Who will RING the bell when its best time to get in the market ?

Surely not our famous BEAR Bull ...what about U W69 ? Is it good enough time to go all in or part in ? Or still expecting 10% downside like Bull is saying will happen next year ...he has left space for Santa rally for this year !!! :p

[bull....]

Who will RING the bell when its best time to get in the market ?

Surely not our famous BEAR Bull ...what about U W69 ? Is it good enough time to go all in or part in ? Or still expecting 10% downside like Bull is saying will happen next year ...he has left space for Santa rally for this year !!! :p

anytime is a good time to be in the market if you play it right
im tending to be in mike wilson's camp as far as santa rally goes but as you know alokdhir december is a very seasonal good time so that would be against the grain wouldnt it lol

[Onemootpoint]

Is Mike Wilson getting less bearish?

Morgan Stanley's Mike Wilson says year-end rally unlikely


https://www.youtube.com/watch?v=QtYsDlzWlHM

[Valuegrowth]

There is no room for a bull market in the short run unless asset prices come down to reasonable prices. I prefer attractive strong balance sheet companies now.

[SailorRob]

Who will RING the bell when its best time to get in the market ?

Surely not our famous BEAR Bull ...what about U W69 ? Is it good enough time to go all in or part in ? Or still expecting 10% downside like Bull is saying will happen next year ...he has left space for Santa rally for this year !!! :p

Question is, why would anyone be out of the market. This would imply the ability to time the market and therefore no need to ask random people on the Internet for opinion of when to get back in.

[alokdhir]

It was to know if they post only Bearish posts or do they actually ever think its time to get in for the benefit of the people waiting for some signs ...though I fully understand its up to any individual to decide himself his entry or further investment time ...still its some help for not so advanced thinkers like many here or at least they think that way

Entry or additional investment at current levels maybe have better chance of doing better then entry or additions after maybe one year

If one wud pay heed to advise of Bull who still expects further 10% drop ...that will surely make people hesitate to do anything now !!!

I fully agree that regular small additions maybe on monthly basis is best way to participate or add to your current investments

[bull....]

Question is, why would anyone be out of the market. This would imply the ability to time the market and therefore no need to ask random people on the Internet for opinion of when to get back in.

question is - are you saying we should always be 100% invested in the market at all times

[bull....]

It was to know if they post only Bearish posts or do they actually ever think its time to get in for the benefit of the people waiting for some signs ...though I fully understand its up to any individual to decide himself his entry or further investment time ...still its some help for not so advanced thinkers like many here or at least they think that way

Entry or additional investment at current levels maybe have better chance of doing better then entry or additions after maybe one year

If one wud pay heed to advise of Bull who still expects further 10% drop ...that will surely make people hesitate to do anything now !!!

I fully agree that regular small additions maybe on monthly basis is best way to participate or add to your current investments

i only make assumptions which i hope all investors do in regard to there portfolio's and then i plan around those and then adjust as conditions dictate. i cannot forecast the future only make assumptions

[alokdhir]

I can answer that Bull ...YES ...its always advisable for most to be fully invested ALL the times ...its called investment not trading ...thus one doesn't need to gamble with timing issues

Since 2009 this was the next opportunity to time the market with some certainty ...but many other times in between it wud have failed miserably for most !!

PS : So from 2550 NZX50G ...one came to still very respectable 10700 without much heartache ...rather then try to sell in between and got left out ...Now it looks good saying sell in Jan 2021 around 13500 wud have served well to reenter 10500 ...but still 2550 to 10700 scores bigger gains ...literally doing nothing just simple investment

[mike2020]

I had a little top up of tra hgh gne and to a lesser extent 2cc in late August. All good till this week. OCA dropped as I bought back in after several years. Not worried. GNE maybe the risky one but its a small investment.
Im still at a loss around housing going up with interest rates heading north. TAs predictions today....

[Daytr]

I can answer that Bull ...YES ...its always advisable for most to be fully invested ALL the times ...its called investment not trading ...thus one doesn't need to gamble with timing issues

Since 2009 this was the next opportunity to time the market with some certainty ...but many other times in between it wud have failed miserably for most !!

PS : So from 2550 NZX50G ...one came to still very respectable 10700 without much heartache ...rather then try to sell in between and got left out ...Now it looks good saying sell in Jan 2021 around 13500 wud have served well to reenter 10500 ...but still 2550 to 10700 scores bigger gains ...literally doing nothing just simple investment

Early 2020 wasn't a bad time either with the market having given up circa 40%.

[Fortunecookie]

I can answer that Bull ...YES ...its always advisable for most to be fully invested ALL the times ...its called investment not trading ...thus one doesn't need to gamble with timing issues

Since 2009 this was the next opportunity to time the market with some certainty ...but many other times in between it wud have failed miserably for most !!

PS : So from 2550 NZX50G ...one came to still very respectable 10700 without much heartache ...rather then try to sell in between and got left out ...Now it looks good saying sell in Jan 2021 around 13500 wud have served well to reenter 10500 ...but still 2550 to 10700 scores bigger gains ...literally doing nothing just simple investment

Correlation to interest rate? The big question is what will happen to interest rate going forward?
Buying a company at 2x earnings yeah no problem, but at 20x yeah nah don't know.

[Daytr]

Company bankruptcies up 40% year on year following on from the previous quarter which was up 35% yoy.
Late or non payment on electricity bills has grown significantly. This is the bill neglected of last resort, I.e consumers will generally forego their daily flat white or dinner out to ensure their power bill, mortgage or rent etc is paid.

But apparently the economy is on fire! 😅

[Fortunecookie]

Early 2020 wasn't a bad time either with the market having given up circa 40%.

As I recall Adrian Orr push down rates and said it will stay down for a while(obviously he backtracked)

[bull....]

I can answer that Bull ...YES ...its always advisable for most to be fully invested ALL the times ...its called investment not trading ...thus one doesn't need to gamble with timing issues

Since 2009 this was the next opportunity to time the market with some certainty ...but many other times in between it wud have failed miserably for most !!

PS : So from 2550 NZX50G ...one came to still very respectable 10700 without much heartache ...rather then try to sell in between and got left out ...Now it looks good saying sell in Jan 2021 around 13500 wud have served well to reenter 10500 ...but still 2550 to 10700 scores bigger gains ...literally doing nothing just simple investment

100% fully invested all the time and have no cash holding ?

[Fortunecookie]

Company bankruptcies up 40% year on year following on from the previous quarter which was up 35% yoy.
Late or non payment on electricity bills has grown significantly. This is the bill neglected of last resort, I.e consumers will generally forego their daily flat white or dinner out to ensure their power bill, mortgage or rent etc is paid.

But apparently the economy is on fire! 

Funny that I looked at liquidations last night.
Not as bad post 2008 but somewhere in between.

https://www.insolvency.govt.nz/about/statistics/corporate-insolvency-statistics/cumulative-totals/
https://www.insolvency.govt.nz/about/statistics/annual-figures-for-new-estates-since-1988/
https://waterstone.co.nz/insolvency-statistics/#:~:text=Total%20liquidations%20continue%20to%20cl imb,1380%2C%20and%201557%20for%202022.

[alokdhir]

Investment for income plus growth ...income gives cash to live life and some short term security amount

[thegreatestben]

Investment for income plus growth ...income gives cash to live life and some short term security amount

This is obviously been the plan, but it's been a tough run. Got to stay patient and unemotional.

[alokdhir]

Worked pretty well for me ...It will for all too if they invest wisely and stay patiently invested ....time in the market makes it look better and better ...timing it only adds some excitement and nothing more ....2550 to current 10700 is still looking wonderful ...similarly 10700 to maybe 40000 in next 15 years when the next rates cycle comes !!!! Rates are surely cyclical ...all shud know by now ...so why being so pessimistic at current high levels of rates !!!!

[bull....]

Worked pretty well for me ...It will for all too if they invest wisely and stay patiently invested ....time in the market makes it look better and better ...timing it only adds some excitement and nothing more ....2550 to current 10700 is still looking wonderful ...similarly 10700 to maybe 40000 in next 15 years when the next rates cycle comes !!!! Rates are surely cyclical ...all shud know by now ...so why being so pessimistic at current high levels of rates !!!!

your talking about a period in time which was not normal

[alokdhir]

And are u talking and consider this period being normal ?? All got it wrong at higher for longer in 2010 also ...then wrong lower forever and now again higher forever!!! Really it will be higher and higher till all need sell houses or get triple wage rises every year ???

[alokdhir]

Unemployment data going better than plan ....will it help rates eventually my mate Bull ?

https://www.newshub.co.nz/home/money/2023/11/new-zealand-unemployment-rate-edges-up-to-3-6-percent-in-september-quarter.html

[winner69]

Unemployment data going better than plan ....will it help rates eventually my mate Bull ?

https://www.newshub.co.nz/home/money/2023/11/new-zealand-unemployment-rate-edges-up-to-3-6-percent-in-september-quarter.html

Rates ain’t peaked yet

But that 3.9% will mean Orr will hold off until next year before the next rise ….he’s a wimp

[Daytr]

And are u talking and consider this period being normal ?? All got it wrong at higher for longer in 2010 also ...then wrong lower forever and now again higher forever!!! Really it will be higher and higher till all need sell houses or get triple wage rises every year ???

All got it wrong???
Really???
Did you just make that up?

[alokdhir]

U dont remember the talk at that time ...rates will never come down ?? Then in 2018 that they will never go up etc ...maybe u got it right ...but not all profess to be professional traders mate ....Did I make that out ...anyone's call

[alokdhir]

W69 ...the question is not whether there is another 25 bips left or 50 bips left ...which I sincerely doubt ...but main point is that is it nearer top or nearer bottom ...more time ahead for a cut on horizon or more time ahead for still higher and higher ...Bull talked about assumptions ...so I assume better to look for cuts then hikes now

[Rawz]

times are tough out there from what I can see. Expect unemployment numbers will continue to rise fairly steadily.

[winner69]

Rates settling into new norm I reckon ……NZ 10 year to settle in 3.5% to 7% range

Crude chart tell the picture

[winner69]

I’ve always found ‘The 6/50 Rule’ fascinating - states: “Interest rates will change by at least 50 basis points (0.5%) within the next 6 months.”

Interest more volatile than we assume

Rule apples in the US …no doubt NZ as well

[alokdhir]

Yesterday's Inflation data from European countries was very encouraging ...at least to me

With Italy doing the best with a print of 1.8% YOY ...also GDP figures were below expectations ...both being positive from rates perspective

PS : Maybe to fulfil 6/50 rule of W69 ...we get 50 bips cut in next 6 months ...wishful thinking ??

[SailorRob]

question is - are you saying we should always be 100% invested in the market at all times

No. Far more than 100%. Provided the additional funds are long term and locked in.

100% is a joke. Normal people are 800% invested when young.

[alokdhir]

"Nonetheless, the RBNZ will be wary of the risk that labour costs and core inflation do not cool as quickly as it is comfortable with. 5.50% looks to be the OCR peak this cycle, but we note that the RBNZ will be vigilant to signs of inflation settling above the top of the 1-3% target band. We do not expect an OCR cut until 2025, with monetary settings to remain tighter than neutral levels until at least mid-2026."

ASB commentary after today's data ....covering both sides ...but insisting 5.5% is the top ...Rate cuts only in 2025 can change to 3rd qtr 2024 maybe

https://www.stuff.co.nz/business/money/300999597/susan-edmunds-why-we-keep-incorrectly-calling-the-interest-rate-peak

Lots of talk about rates going on ...as that decides many markets direction not just stocks ...Property many are already calling has bottomed ...then why not stocks ?? Normally stocks bottom before property !!!

[bull....]

No. Far more than 100%. Provided the additional funds are long term and locked in.

100% is a joke. Normal people are 800% invested when young.

i dont know if investing +100% no matter what point in time is a good strategy. you must explain more to back this up.

[bull....]

"Nonetheless, the RBNZ will be wary of the risk that labour costs and core inflation do not cool as quickly as it is comfortable with. 5.50% looks to be the OCR peak this cycle, but we note that the RBNZ will be vigilant to signs of inflation settling above the top of the 1-3% target band. We do not expect an OCR cut until 2025, with monetary settings to remain tighter than neutral levels until at least mid-2026."

ASB commentary after today's data ....covering both sides ...but insisting 5.5% is the top ...Rate cuts only in 2025 can change to 3rd qtr 2024 maybe

https://www.stuff.co.nz/business/money/300999597/susan-edmunds-why-we-keep-incorrectly-calling-the-interest-rate-peak

Lots of talk about rates going on ...as that decides many markets direction not just stocks ...Property many are already calling has bottomed ...then why not stocks ?? Normally stocks bottom before property !!!

bro where you going to get the cash to lock n 10% term deposit ( if rates go up ) if your fully invested

[alokdhir]

bro where you going to get the cash to lock n 10% term deposit ( if rates go up ) if your fully invested

Mate I have been in that situation in 2010 ...locked major funds in 7.25% term funds for 5 years and regretted it ...My KFL returns were much superior to my 7.25% term fund returns in the next 5 years ...so I will not advise anyone to lock in funds in term funds even if they go to 7.25% ...for 10% term funds rates I think most NZ will have to be bankrupt first or homeless which ever u prefer

PS : BTW even conservative banks are stress testing new borrowers at peak rate of 9% mortgage ...for 10% deposit rates ...mortgage needs be at least 12% !!!!

[bull....]

Worked pretty well for me ...It will for all too if they invest wisely and stay patiently invested ....time in the market makes it look better and better ...timing it only adds some excitement and nothing more ....2550 to current 10700 is still looking wonderful ...similarly 10700 to maybe 40000 in next 15 years when the next rates cycle comes !!!! Rates are surely cyclical ...all shud know by now ...so why being so pessimistic at current high levels of rates !!!!

index levels mean nothing . its your return each year that matters

[alokdhir]

index levels mean nothing . its your return each year that matters

If u invest in safe FNZ / NZG which follow index and its returns then why it doesn't matter mate ?? ...

eg if u had invested in KFL for income to live and FPH / MFT for growth then u wud have lived well as well grown even better then index returns mentioned above

PS : Kiora did that very successfully ...He had IFT and FPH and doing very well even now !!

[bull....]

If u invest in safe FNZ / NZG which follow index and its returns then why it doesn't matter mate ?? ...

eg if u had invested in KFL for income to live and FPH / MFT for growth then u wud have lived well as well grown even better then index returns mentioned above

if you invest in a index your betting it goes up over time. time is the important bit because if it takes 20yrs to go up 10% say your wasted 20yrs of gaining loot for retirement. remember index's go sideways most of time.
your right about kfl if it has returned you a real return of 7 odd % per yr then that is a real return which when compounded over the 20yrs is much better for your retirement.
when you entered both of these investments matter cause if you invest in index at wrong time that make it even harder to get your 10% in 20 yrs
if you invested in kfl a yr agao you have lost capital but still get your return each yr but the punch line is if you havnt got time on your side and have to sell kfl your capital losses wipe out your div return.

so that why i say real return each yr matters as to meet your goals not investment based on uncertainties

[alokdhir]

if you invest in a index your betting it goes up over time. time is the important bit because if it takes 20yrs to go up 10% say your wasted 20yrs of gaining loot for retirement. remember index's go sideways most of time.
your right about kfl if it has returned you a real return of 7 odd % per yr then that is a real return which when compounded over the 20yrs is much better for your retirement.
when you entered both of these investments matter cause if you invest in index at wrong time that make it even harder to get your 10% in 20 yrs
if you invested in kfl a yr agao you have lost capital but still get your return each yr but the punch line is if you havnt got time on your side and have to sell kfl your capital losses wipe out your div return.

so that why i say real return each yr matters as to meet your goals not investment based on uncertainties

I did say timing it matters if u dont have much time on your side ...like I invested in KFL in 2010 and FPH same time ...one for income and other for growth ...both did very well ....recently I switched from FPH to MFT for the growth part ...while keeping KFL part .

I cud have invested only in KFL and kept 80% in DRP and 20% in dividends for income ...even that wud had done very well though not as good as FPH/ MFT

Otherwise all in FNZ wud have given 400% returns overall over 12 years period ...as FNZ also pays reasonable dividend while keeping risk very low

So many stay invested strategies can work ...surely when u get in matters if u just want returns in 10 years ...but if u have 20-30 years perspective then it matters much less

PS : Thats why I wanted some Gurus to advise or at least encourage people like me to invest long term in the current environment rather then just keep on scaring them to keep looking for cheaper and lower prices and finally they loose an opportunity ...with full caveat that no one can time prefect bottom but general bottomish time can be sensed ...like I sense current atmosphere is like 2010 type

[bull....]

I did say timing it matters if u dont have much time on your side ...like I invested in KFL in 2010 and FPH same time ...one for income and other for growth ...both did very well ....recently I switched from FPH to MFT for the growth part ...while keeping KFL part .

I cud have invested only in KFL and kept 80% in DRP and 20% in dividends for income ...even that wud had done very well though not as good as FPH/ MFT

Otherwise all in FNZ wud have given 400% returns overall over 12 years period ...as FNZ also pays reasonable dividend while keeping risk very low

So many stay invested strategies can work ...surely when u get in matters if u just want returns in 10 years ...but if u have 20-30 years perspective then it matters much less

PS : Thats why I wanted some Gurus to advise or at least encourage people like me to invest long term in the current environment rather then just keep on scaring them to keep looking for cheaper and lower prices and finally they loose an opportunity ...with full caveat that no one can time prefect bottom but general bottomish time can be sensed ...like I sense current atmosphere is like 2010 type

i think you have plan which is important bit you dont need anyone to advise you if good time or not just stick to your plan as it looks like it working for you. people just got to remember its actual returns banked each yr that count and time.

anyway gooto go for the day , working on chatgpt code for my guru trading system.

[alokdhir]

i think you have plan which is important bit you dont need anyone to advise you if good time or not just stick to your plan as it looks like it working for you. people just got to remember its actual returns banked each yr that count and time.

anyway gooto go for the day , working on chatgpt code for my guru trading system.

Good luck mate ...U are doing great with your trading skills and sense :t_up:

[alokdhir]

https://www.nzherald.co.nz/business/job-market-wage-growth-cooling-what-it-means-for-interest-rates/MFWIZK5ILVHKJJYHAJGB5SFNOA/

[Daytr]

Another economic bellwether. Mitre10 books loss. Article behind paywall.

https://www.nzherald.co.nz/business/parent-of-national-retailer-mitre-10-slips-into-red-records-67m-loss/AAMVX33DIRD5LG3MAGH3YDTSLM/?utm_medium=Social&utm_campaign=nzh_fb&utm_source=Facebook&fbclid=IwAR0mn3iTNUo5dBaL9XqtIs5GPJCUL9hUu6gVrtnf6 CRlZiJVtrslJK-nN48#Echobox=1698803368

[SailorRob]

Company bankruptcies up 40% year on year following on from the previous quarter which was up 35% yoy.
Late or non payment on electricity bills has grown significantly. This is the bill neglected of last resort, I.e consumers will generally forego their daily flat white or dinner out to ensure their power bill, mortgage or rent etc is paid.

But apparently the economy is on fire! 😅

And bankruptcies are up how much on 2019? 40% rise from effectively nothing with rates at 5000 year lows doesn't mean much.

Yes economy smoking hot. So hot we have high single digit inflation...

[mike2020]

Every company that starts a tech upgrade goes over the top.
Supie was no didrupter just clever packaging.
Some businesses have no chance from the get go.

[bull....]

fed maintained its stance from last meeting , treasury news earlier in the day set the tone.

[alokdhir]

After KiwiBank now BNZ also predicting RBNZ can start cutting from May 2024 ....wont that be lovely for the markets ?

If this thought gets further traction then stocks will keep moving up and Never look back for few years !!!

[Aaron]

After KiwiBank now BNZ also predicting RBNZ can start cutting from May 2024 ....wont that be lovely for the markets ?

If this thought gets further traction then stocks will keep moving up and Never look back for few years !!!

Bad news is good news again, yay.

[winner69]

After KiwiBank now BNZ also predicting RBNZ can start cutting from May 2024 ....wont that be lovely for the markets ?

If this thought gets further traction then stocks will keep moving up and Never look back for few years !!!

All this ‘expert’ speculation at least keeps those bank economists and other commentators in a job

They probably think they are important people

Love it when that Bradford woman dies a rave on the tv news ….she really sounds convincing regurgitating the reports and adding a bit of sensationalism to them

[percy]

After KiwiBank now BNZ also predicting RBNZ can start cutting from May 2024 ....wont that be lovely for the markets ?

If this thought gets further traction then stocks will keep moving up and Never look back for few years !!!
MMMMMMMMMMMmm.?
May.???????????
https://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp

[alokdhir]

MMMMMMMMMMMmm.?
May.???????????
https://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp



Economics RBNZ could cut from May next year: BNZ Bank’s chief economist Mike Jones says recent run of data, including yesterday’s unemployment rate, supports an OCR cut earlier than forecast. Jonathan Mitchell | Thu, 2 Nov 2023 (https://nbr.lt.acemlnb.com/Prod/link-tracker?redirectUrl=aHR0cHMlM0ElMkYlMkZ3d3cubmJyLm NvLm56JTJGZWNvbm9taWNzJTJGZWNvbm9teS1jb3Blcy13aXRo LXVuZW1wbG95bWVudC11cHRpY2slMkYlM0Z1dG1fc291cmNlJT NEQWN0aXZlQ2FtcGFpZ24lMjZ1dG1fbWVkaXVtJTNEZW1haWwl MjZ1dG1fY29udGVudCUzRE5CUiUyQkhFQURTJTJCVVAlMjUzQS UyQlJCTlolMkJjb3VsZCUyQmN1dCUyQmZyb20lMkJNYXklMkJu ZXh0JTJCeWVhciUyNTNBJTJCQk5aJTI2dXRtX2NhbXBhaWduJT NETkJSJTJCTmV3c2xldHRlciUyNTNBJTJCMjAyMy0xMS0wMiUy QjA5JTI1M0EyMiUyNTNBMzE=&sig=9EbhLtdXYeeUhNfcNyVu8tXi5aNMgcUJy1sWcSTawNiQ&iat=1698870486&a=%7C%7C477259867%7C%7C&account=nbr%2Eactivehosted%2Ecom&email=y1ZSusSidb2mS5RCvqm5h8gXZM3CEC%2FfdX6VlJLIuT BkZWQ%3D%3ABNoerVNMHLPvbey29LLQR9KwYNVXwRVS&i=593A666A3A12861)

[Muse]

Economics RBNZ could cut from May next year: BNZ Bank’s chief economist Mike Jones says recent run of data, including yesterday’s unemployment rate, supports an OCR cut earlier than forecast. Jonathan Mitchell | Thu, 2 Nov 2023 (https://nbr.lt.acemlnb.com/Prod/link-tracker?redirectUrl=aHR0cHMlM0ElMkYlMkZ3d3cubmJyLm NvLm56JTJGZWNvbm9taWNzJTJGZWNvbm9teS1jb3Blcy13aXRo LXVuZW1wbG95bWVudC11cHRpY2slMkYlM0Z1dG1fc291cmNlJT NEQWN0aXZlQ2FtcGFpZ24lMjZ1dG1fbWVkaXVtJTNEZW1haWwl MjZ1dG1fY29udGVudCUzRE5CUiUyQkhFQURTJTJCVVAlMjUzQS UyQlJCTlolMkJjb3VsZCUyQmN1dCUyQmZyb20lMkJNYXklMkJu ZXh0JTJCeWVhciUyNTNBJTJCQk5aJTI2dXRtX2NhbXBhaWduJT NETkJSJTJCTmV3c2xldHRlciUyNTNBJTJCMjAyMy0xMS0wMiUy QjA5JTI1M0EyMiUyNTNBMzE=&sig=9EbhLtdXYeeUhNfcNyVu8tXi5aNMgcUJy1sWcSTawNiQ&iat=1698870486&a=%7C%7C477259867%7C%7C&account=nbr%2Eactivehosted%2Ecom&email=y1ZSusSidb2mS5RCvqm5h8gXZM3CEC%2FfdX6VlJLIuT BkZWQ%3D%3ABNoerVNMHLPvbey29LLQR9KwYNVXwRVS&i=593A666A3A12861)

maybe the ole adage shall become, buy in may, dont shy away

[Daytr]

maybe the ole adage shall become, buy in may, dont shy away

As both Bull & I put out last week, rates imo will be cut earlier than anticipated.
If this view gains traction the markets will have anticipated the move long before May.

Although I have been posting what's happening in the real economy I.e bankruptcies, payment defaults & corporate losses, these are all lagging indicators.

The market looks forward.

[Leemsip]

Rate cuts will be a result of some terrible economic news. Bonds are the play here IMO. Get them AKC130's @ 54c on the dollar, yeilding 6.6% to 2050 while you can.

[SailorRob]

MMMMMMMMMMMmm.?
May.???????????
https://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp

3M, yes great pick.

[winner69]

Labour market easing – too slowly for the RB …….says Tony Alexander

[alokdhir]

Labour market easing – too slowly for the RB …….says Tony Alexander

As only ANZ still expects another rise of OCR in Feb 2024 ....initially it was expected by them in Nov 2023 ...He needs to justify that thought by saying above !!!

PS : I am mistaken ...Tony is independent economist and not ANZ chief economist !!!

[alokdhir]

Seeing this rebound / rally starting with large caps / blue chips is assuring ...normally this is how turn arounds happen ...large caps run for a while then small caps do catch up if this rally or rebound has the legs to last till Jan middle !

[winner69]

Seeing this rebound / rally starting with large caps / blue chips is assuring ...normally this is how turn arounds happen ...large caps run for a while then small caps do catch up if this rally or rebound has the legs to last till Jan middle !

Great that Luxon and his new government have made the punters happy and giving them the confidence to get back into stocks

What they say about the first 100 days again?

[alokdhir]

Great that Luxon and his new government have made the punters happy and giving them the confidence to get back into stocks

What they say about the first 100 days again?

Now I am in your camp that Govt doesn't matter for NZ stocks ...its the economy which drives them not Luxon or Peter or David :p

[alokdhir]

When will be fully sure that Santa rally or something more lasting and real have started based on changing economics like rates outlook. etc ??

Bull shud help us figure that out as he is master of the levels ....What are the levels we shud be aiming for on NZX ...or just follow USA markets to know where we can end up by mid Jan 2024

Going by the advice of Mark Lister ...he said typically markets can move 20% in 6 months from bottom on turn arounds ...that makes 12850 on horizon by April 2024 ??

[bull....]

When will be fully sure that Santa rally or something more lasting and real have started based on changing economics like rates outlook. etc ??

Bull shud help us figure that out as he is master of the levels ....What are the levels we shud be aiming for on NZX ...or just follow USA markets to know where we can end up by mid Jan 2024

Going by the advice of Mark Lister ...he said typically markets can move 20% in 6 months from bottom on turn arounds ...that makes 12850 on horizon by April 2024 ??

nzx was massively oversold 2 days ago so was US markets ... see what happens

as for levels wait till 2pm nz time for announcement and ask winston

[kiora]

Watching daily volumes c.f. average daily volumes?

[alokdhir]

nzx was massively oversold 2 days ago so was US markets ... see what happens

as for levels wait till 2pm nz time for announcement and ask winston

So in your mind this rebound or rally has nothing to do with better economic data and better rates outlook ??

Do u actually think NZ 10 year dropped from 5.6% to 5.2% due to politics ??

Now u being naughty mate !!

https://www.interest.co.nz/bonds/125053/market-expectations-official-cash-rate-settings-leaning-towards-cuts-after-increase

[bull....]

So in your mind this rebound or rally has nothing to do with better economic data and better rates outlook ??

Do u actually think NZ 10 year dropped from 5.6% to 5.2% due to politics ??

Now u being naughty mate !!

https://www.interest.co.nz/bonds/125053/market-expectations-official-cash-rate-settings-leaning-towards-cuts-after-increase

rates outlook has not changed , just cause bonds fell some could just be short term noise. powell talk is more importasnt .. higher for longer is what he says still.

[alokdhir]

rates outlook has not changed , just cause bonds fell some could just be short term noise. powell talk is more importasnt .. higher for longer is what he says still.

Ok ...As per your current thinking ...future rates outlook is still the same ...higher and higher they stay with no visibility of any rate cuts !! GOT IT

[bull....]

Ok ...As per your current thinking ...future rates outlook is still the same ...higher and higher they stay with no visibility of any rate cuts !! GOT IT

lol he didnt say that he say on hold see what happens we data dependant but rates will stay high for longer but we reserve the right to change our mind at any time. just like bull

[Daytr]

When will be fully sure that Santa rally or something more lasting and real have started based on changing economics like rates outlook. etc ??

Bull shud help us figure that out as he is master of the levels ....What are the levels we shud be aiming for on NZX ...or just follow USA markets to know where we can end up by mid Jan 2024

Going by the advice of Mark Lister ...he said typically markets can move 20% in 6 months from bottom on turn arounds ...that makes 12850 on horizon by April 2024 ??

It's been highly profitable being long the DOW & short gold. The DOW is close to 50% rebound resistance and the chart depicts resistance around 34,000. Outside of left field events I.e a ceasefire in Gaza, we might see stocks take a breather around there.

I'll probably exit my DOW position but hold my gold short.

Apple to report shortly.

[winner69]

Good times continue to roll on …punters happy today …market up

[SailorRob]

It's been highly profitable being long the DOW & short gold. The DOW is close to 50% rebound resistance and the chart depicts resistance around 34,000. Outside of left field events I.e a ceasefire in Gaza, we might see stocks take a breather around there.

I'll probably exit my DOW position but hold my gold short.

Apple to report shortly.

If you're unable to beat the results you would obtain by just staying long the sp500 over a long period, why do you do all this queer stuff? You enjoy it?

If you have been able to exceed the market returns, by how much and for how long?

[Daytr]

If you're unable to beat the results you would obtain by just staying long the sp500 over a long period, why do you do all this queer stuff? You enjoy it?

If you have been able to exceed the market returns, by how much and for how long?

Asked and answered on multiple occasions.
You stick to your knitting & I'll stick to mine.

Your childish behavior is just plain tedious.

But the economy is on fire! 😅
What crack are you smoking.

[SailorRob]

Asked and answered on multiple occasions.
You stick to your knitting & I'll stick to mine.

Your childish behavior is just plain tedious.

But the economy is on fire! 😅
What crack are you smoking.

Yes you've told us you can't get the results of just the market average, so what are you playing at?

Yeah, lots of stuff I'm trying to get and get done is all booked out until well into next year, anyone anywhere can get a job instantly, it's mayhem in the real world.

No lack of demand anywhere at all.

[Daytr]

Yes you've told us you can't get the results of just the market average, so what are you playing at?

Yeah, lots of stuff I'm trying to get and get done is all booked out until well into next year, anyone anywhere can get a job instantly, it's mayhem in the real world.

No lack of demand anywhere at all.

I said nothing of the sort.
You love making stuff up.

Wake up on the wrong side of bed this morning did we and decide, today I am going to get back to trolling?

How about contributing something productive and worth while, rather than either derogatory or self congratulating clap trap?

You really are just turning into a snooze fest with all this repetitious BS.

[Valuegrowth]

In the short run we find volatility. Cannot expect strong uptrend in the short run given the historically high asset prices.

[Daytr]

In the short run we find volatility. Cannot expect strong uptrend in the short run given the historically high asset prices.

Volatility is the trader's friend.

[alokdhir]

The Q3 labour market release (https://publications.anz.com/SingletrackCMS__DownloadDocument?docRef=d728bd61-6252-4d89-b676-5115657db2c2&uid=b998bbc0-6264-4a07-8394-1538e10f759a&jobRef=52fcbec7-83f8-408d-bdb8-499af83c6cf8) had a slightly softer underbelly than both we or the RBNZ expected. In big picture terms, the Q3 data hinted that the imbalance between labour supply and demand is perhaps resolving a little faster than we had previously thought.
While this isn’t a game changer for the November MPS (where a hold is unanimously expected), it does shift the risk profile around a February hike a little. We’d say our call for a hike in February is now pencilled in a shade lighter than previously (but pencilled in nonetheless).
We remain comfortable with our prior assessment that the next move is more likely to be a hike than a cut. Indeed, a lot still needs to go right before the RBNZ can confidently declare victory over domestic (and potentially sticky) inflation, which has barely budged from its recent peak.


Views of ANZ which is now the only Bank expecting Feb OCR hike other then our own Bull ...lol ..at least they acknowledge that situation improving faster then their expectations !!!

[SailorRob]

I said nothing of the sort.
You love making stuff up.

Wake up on the wrong side of bed this morning did we and decide, today I am going to get back to trolling?

How about contributing something productive and worth while, rather than either derogatory or self congratulating clap trap?

You really are just turning into a snooze fest with all this repetitious BS.

Woke up to an investors dream, Markel down 12% on great earnings.

Massive holding for me, best thing that can ever happen is for it to plummet.

Gayner buying up large for personal and massive buybacks, sailor in there too.

[SailorRob]

But perhaps I should instead be trading the DOW and gold!

[Daytr]

Woke up to an investors dream, Markel down 12% on great earnings.

Massive holding for me, best thing that can ever happen is for it to plummet.

Gayner buying up large for personal and massive buybacks, sailor in there too.

But your fully invested right?
Or so you keep saying. Amazing how you seem to have funds available when a stock dips when you borrow multiples of your net worth and are always fully invested.

But I don't really give a rats what you do, that's your business, as is my trading, is mine.
But for some reason it riles you.
Some deep seated flaw there you might want to analyze.

[Leemsip]

But your fully invested right?
Or so you keep saying. Amazing how you seem to have funds available when a stock dips when you borrow multiples of your net worth and are always fully invested.

This is one of the trickiest things IMO. How to keep funding around in case of opportunities. Anyone care to share how they do this?
Only invest 80%, oncall deposit earning subpar returns, sell stuff?

[Daytr]

But your fully invested right?
Or so you keep saying. Amazing how you seem to have funds available when a stock dips when you borrow multiples of your net worth and are always fully invested.

This is one of the trickiest things IMO. How to keep funding around in case of opportunities. Anyone care to share how they do this?
Only invest 80%, oncall deposit earning subpar returns, sell stuff?

When opportunity presents itself, be in a position to take advantage of it when you can.

[SailorRob]

But your fully invested right?
Or so you keep saying. Amazing how you seem to have funds available when a stock dips when you borrow multiples of your net worth and are always fully invested.

But I don't really give a rats what you do, that's your business, as is my trading, is mine.
But for some reason it riles you.
Some deep seated flaw there you might want to analyze.

More than fully invested correct, but not multiples of net worth as don't have that type of funding available.

Always have additional funds available however and can and do sell things when other opportunities become available. Not rocket science.

I just like calling out frauds, everyone else cottoned on.

[Relaxed]

But your fully invested right?
Or so you keep saying. Amazing how you seem to have funds available when a stock dips when you borrow multiples of your net worth and are always fully invested.

This is one of the trickiest things IMO. How to keep funding around in case of opportunities. Anyone care to share how they do this?
Only invest 80%, oncall deposit earning subpar returns, sell stuff?

I am fully invested, except when something hits a stop loss.

So, when an opportunity arises, I evaluate it against the worst thing in my portfolio. if it is better than that I sell one to buy the other

[SailorRob]

I am fully invested, except when something hits a stop loss.

So, when an opportunity arises, I evaluate it against the worst thing in my portfolio. if it is better than that I sell one to buy the other

"using a stop loss has always struck me as like having a house that you like, and you’re living in, and it’s worth $100,000 and you tell your broker, ‘You know, if anybody ever comes along and offers $90, 000, you want to sell it."

Why sell something at a lower price that you could sell now?

[Daytr]

More than fully invested correct, but not multiples of net worth as don't have that type of funding available.

Always have additional funds available however and can and do sell things when other opportunities become available. Not rocket science.

I just like calling out frauds, everyone else cottoned on.

Back on ignore.
Your antagonistic approach to posting on here is just so dated, predictable and down right childish.

But also at times comedic.
Like the economy is on fire. 🤣
I'm fully invested all the time, oh wait a minute did I say that? Oh only when it suits me. 🤣
Who are you calling a fraud? 🤣

It would be interesting how many other have you on ignore due to your abusive antics & just lazy posts.

[Relaxed]

"using a stop loss has always struck me as like having a house that you like, and you’re living in, and it’s worth $100,000 and you tell your broker, ‘You know, if anybody ever comes along and offers $90, 000, you want to sell it."

Why sell something at a lower price that you could sell now?

Because I have a 10 year time horizon and a large drop is always a reason to reevaluate the investment.
My stops are manual and not automatic so I always evaluate the reasons first.

If the reason I bought something has changed, it is often time to sell. If not, then maybe a good time to buy. BUT.........
I am not generating investing free cash as I need that to eat. so If I want to buy, I have to sell the worst thing in my portfolio to do so.

Over time, on specific decisions, I have been wrong, right and neutral. I imagine that will continue :)

but overall, I have been right. My portfolio is worth more today that it was when I stopped working

[SailorRob]

Because I have a 10 year time horizon and a large drop is always a reason to reevaluate the investment.
My stops are manual and not automatic so I always evaluate the reasons first.

If the reason I bought something has changed, it is often time to sell. If not, then maybe a good time to buy. BUT.........
I am not generating investing free cash as I need that to eat. so If I want to buy, I have to sell the worst thing in my portfolio to do so.

Over time, on specific decisions, I have been wrong, right and neutral. I imagine that will continue :)

but overall, I have been right. My portfolio is worth more today that it was when I stopped working

Makes sense, so they're more like warnings than stops.

Did you stop working at normal retirement age?

Best thing to ask is if your portfolio is worth more today than if you had invested it all in a sp500 index fund when you stopped working, otherwise not really meaningful. But harder to do if you're also drawing from it.

[Relaxed]

Makes sense, so they're more like warnings than stops.

Did you stop working at normal retirement age?



No. much much earlier


Makes sense, so they're more like warnings than stops.

Best thing to ask is if your portfolio is worth more today than if you had invested it all in a sp500 index fund when you stopped working, otherwise not really meaningful. But harder to do if you're also drawing from it.

This is correct. I track my portfolio returns on the basis of how much cash I would have to invest. This means that it is largely after tax (eg I only include net dividends when I am calculating my growth of the portfolio)
my current 20 year average return is 16% before withdrawals.
I withdraw less that that per year. and just like magic, the fund grows.

except for the years it goes down, or sideways. but overall, it grows.

Not dissimilar to a successful business except I don't work anywhere near as hard and obviously get a lower return than a well run successful business.

[SailorRob]

No. much much earlier



This is correct. I track my portfolio returns on the basis of how much cash I would have to invest. This means that it is largely after tax (eg I only include net dividends when I am calculating my growth of the portfolio)
my current 20 year average return is 16% before withdrawals.
I withdraw less that that per year. and just like magic, the fund grows.

except for the years it goes down, or sideways. but overall, it grows.

Not dissimilar to a successful business except I don't work anywhere near as hard and obviously get a lower return than a well run successful business.

Only a small handful of people in the world have done 16% CAGR over 20 years, massive outperformance. Mainly offshore or nz based investments?

[Valuegrowth]

I am fully invested, except when something hits a stop loss.

So, when an opportunity arises, I evaluate it against the worst thing in my portfolio. if it is better than that I sell one to buy the other I was doing the same thing over the last 2 years. I parked my money in one strong balance sheet strong cash flow company after selling others. No need to get any outside funds. I can generate my funds from inside by selling underprerforming companies. I like multibagger companies.

[alokdhir]

Mate Bull ...Winston has finally become super prime minister again ...Now what will happen ? What levels of downside u looking for ?? Enlighten us with your pearls of wisdom ....:p

[bull....]

Mate Bull ...Winston has finally become super prime minister again ...Now what will happen ? What levels of downside u looking for ?? Enlighten us with your pearls of wisdom ....:p

i think winston might say

"Today, our stock market resembles a foreign bazaar, teetering on the brink of uncertainty. It's time we regain control of our financial destiny, lest we lose sight of our economic identity. We cannot afford to let the winds of global markets sweep us away. Let's ensure that our investments sail a steady course in the true spirit of Aotearoa New Zealand."

[Relaxed]

Only a small handful of people in the world have done 16% CAGR over 20 years, massive outperformance. Mainly offshore or nz based investments?

Started out 100% NZ. but only had $1,000 to invest :)
over time moved to Oz
then US

Now, with technology on my side it's about 1/3 NZ/Oz and 2/3 US (that's where the real growth is to be found)

[Relaxed]

I like multibagger companies.

Any examples to share that would be a current buy?
all of mine are hard to buy at the moment due to reasonable to high valuations, except Markel which got hammered last night

[SailorRob]

Any examples to share that would be a current buy?
all of mine are hard to buy at the moment due to reasonable to high valuations, except Markel which got hammered last night

Oh man, you actually do know what you're talking about. See my earlier post about Markel. Not many kiwis would know the company. One of my biggest holdings. I was buying this morning.

[Relaxed]

Oh man, you actually do know what you're talking about. See my earlier post about Markel. Not many kiwis would know the company. One of my biggest holdings. I was buying this morning.

well, I wanted to buy, but alas no cash :) and pretty close to a max holding and didn't want to sell anything else.

but buying for the kids. Fractional shares are their friend

[Leemsip]

Started out 100% NZ. but only had $1,000 to invest :)
over time moved to Oz
then US

Now, with technology on my side it's about 1/3 NZ/Oz and 2/3 US (that's where the real growth is to be found)

What platform do you use for the US?

[Relaxed]

What platform do you use for the US?

I use Interactive Brokers. It can trade in a lot of different countries, not just the US
It is amazing and cheap and easy, once you get your head around things.
It's not perfect, but at $USD 1 minimum per trade it saves heaps from the ASB $USD 90 minimum per trade.

If you want to set up an account PM me and I'll give you a link where we both get a benefit (me $200 and you up to $1000 after a year, but there are conditions. the biggest of which is a minimum $USD 10,000 balance and you need $USD 100k for a year to get the whole $1000.)

for the kids I use Hatch. they didn't have the minimum required to open an IB account at the time (although that has gone now I think).
Hatch is also cheap and easy to use.
it's not that clever (few features), but it doesn't need to be.

[Valuegrowth]

I don't see any great buy at this juncture.
Any examples to share that would be a current buy?
all of mine are hard to buy at the moment due to reasonable to high valuations, except Markel which got hammered last night

[Daytr]

Woke up to an investors dream, Markel down 12% on great earnings.

Massive holding for me, best thing that can ever happen is for it to plummet.

Gayner buying up large for personal and massive buybacks, sailor in there too.

So one of your biggest holdings is Markel Group correct?

[Valuegrowth]

https://finance.yahoo.com/news/korea-day-traders-set-cut-011628972.html

"Retail investors in South Korea are on course to reduce their holding in US equities for the first time in nearly a decade in a shift from their feverish interest in these stocks during the pandemic."

[SailorRob]

So one of your biggest holdings is Markel Group correct?

Second largest that's correct.

[ValueNZ]

I use Interactive Brokers. It can trade in a lot of different countries, not just the US
It is amazing and cheap and easy, once you get your head around things.
It's not perfect, but at $USD 1 minimum per trade it saves heaps from the ASB $USD 90 minimum per trade.

If you want to set up an account PM me and I'll give you a link where we both get a benefit (me $200 and you up to $1000 after a year, but there are conditions. the biggest of which is a minimum $USD 10,000 balance and you need $USD 100k for a year to get the whole $1000.)

for the kids I use Hatch. they didn't have the minimum required to open an IB account at the time (although that has gone now I think).
Hatch is also cheap and easy to use.
it's not that clever (few features), but it doesn't need to be.
First of all I want to congratulate you on 16% CAGR over 20 years. That is better than what 99.9% could ever achieve, truely a massive feat.

What do you find is the cheapest way of transferring cash into interactive brokers? Wise or one of the banks? Cheers.

[SailorRob]

First of all I want to congratulate you on 16% CAGR over 20 years. That is better than what 99.9% could ever achieve, truely a massive feat.

What do you find is the cheapest way of transferring cash into interactive brokers? Wise or one of the banks? Cheers.

It's just a NZ internal transfer, to interactives nz account, so 'free'. Then all currency conversion within interactive.

You can convert 170k nzd to usd for $2 usd.

Partly because nz currency is banana money.

[SailorRob]

First of all I want to congratulate you on 16% CAGR over 20 years. That is better than what 99.9% could ever achieve, truely a massive feat.

What do you find is the cheapest way of transferring cash into interactive brokers? Wise or one of the banks? Cheers.

Far far less than 1 in a thousand could do that, he's outperformed the index by over 600 basis points for 20 years. You're talking top 50 in the world I would say.

[ValueNZ]

It's just a NZ internal transfer, to interactives nz account, so 'free'. Then all currency conversion within interactive.

You can convert 170k nzd to usd for $2 usd.

Partly because nz currency is banana money.
Thanks, I can see that on the site now. For some reason I thought you had to transfer USD in.

Finally able to move away from Sharesies and their steep fees now that I'm 18.

[ValueNZ]

Far far less than 1 in a thousand could do that, he's outperformed the index by over 600 basis points for 20 years. You're talking top 50 in the world I would say.
I wonder what the actual distribution of returns over a long period of time would look like. I imagine heavily skewed to the left with nearly all investors not beating the sp500.

[Daytr]

Second largest that's correct.

I don't know this company but from a quick look in the last five years it's up a total 16% and hasn't paid a dividend.
Is that correct?

[SailorRob]

I don't know this company but from a quick look in the last five years it's up a total 16% and hasn't paid a dividend.
Is that correct?

That's correct yes.

One of the best companies in the world, Berkshire recently took a large stake in the company, the CEO, Gayner is one of the very top investors in the world. Was on Washington Post board with Buffett.

An extremely high quality compounding machine, and extremely safe as well.

One of only two companies I would put everything I have into, and/or leave everything in for my family if I was to harei ra ehoa

[Rawz]

That's correct yes.

One of the best companies in the world, Berkshire recently took a large stake in the company, the CEO, Gayner is one of the very top investors in the world. Was on Washington Post board with Buffett.

An extremely high quality compounding machine, and extremely safe as well.

One of only two companies I would put everything I have into, and/or leave everything in for my family if I was to harei ra ehoa
Why has the SP done so poorly over last 5 years? Has it followed the fundamentals or?

I don’t know this company from a bar of soap

[Joshuatree]

Back on ignore.
Your antagonistic approach to posting on here is just so dated, predictable and down right childish.

But also at times comedic.
Like the economy is on fire. 🤣
I'm fully invested all the time, oh wait a minute did I say that? Oh only when it suits me. 🤣
Who are you calling a fraud? 🤣

It would be interesting how many other have you on ignore due to your abusive antics & just lazy posts.
Looks to me like you're putting yourself on ignore,that's your loss,your reactive choice rather than an informed in control one

[causecelebre]

Thanks, I can see that on the site now. For some reason I thought you had to transfer USD in.

Finally able to move away from Sharesies and their steep fees now that I'm 18.

One thing to keep an eye on is if you set up your account with margin then a trade using NZD may end up using margin to cover the USD denom trade. If you convert your NZD to USD first then there isn't an issue and your margin trades must be explicit. There may be other ways but this was how I was advised

[alokdhir]

Todays Non Farm Payrolls / ISM PMI data all came favourable then expected ...thus US 10 Years drops from 4.68 % to sub 4.50% !!!

Shud make Bull happy if he is playing the long side now ...Are u Bull " Running with the Bulls now " ??


PS : Decks are cleared for a long Santa rally hopefully ?? :t_up:

[Daytr]

Looks to me like you're putting yourself on ignore,that's your loss,your reactive choice rather than an informed in control one

You're not the one that gets constantly trolled and abused by SailorRob. As of yet I haven't flicked the switch.

[Daytr]

That's correct yes.

One of the best companies in the world, Berkshire recently took a large stake in the company, the CEO, Gayner is one of the very top investors in the world. Was on Washington Post board with Buffett.

An extremely high quality compounding machine, and extremely safe as well.

One of only two companies I would put everything I have into, and/or leave everything in for my family if I was to harei ra ehoa

So in that five years the DOW is up around 35%, the S&P up 54% & the NASDAQ up 89% and paid dividends on top.

Versus 16% Markel has appreciated & hasn't paid a dividend.
I do realise before that it had very rapid appreciation but it hasn't performed in the last five years, infact it's less than half that of the lowest performing indices.

So even though Markel holds on to its profits & presumably reinvests them its only up 16 - 17% in 5 years.

Has its PE ratio dramatically come down in that time?

Notice there is no abuse in my posts, no calling people liars or frauds, just because I don't agree with them.

Anyway I am interested to hear why you think this is a stock to throw the kitchen sink at as you said.

[winner69]

Todays Non Farm Payrolls / ISM PMI data all came favourable then expected ...thus US 10 Years drops from 4.68 % to sub 4.50% !!!

Shud make Bull happy if he is playing the long side now ...Are u Bull " Running with the Bulls now " ??


PS : Decks are cleared for a long Santa rally hopefully ?? :t_up:

Yep job numbers increased less than expected and unemployment rate higher than expected

All good news for markets …..we are on a roll

[Relaxed]

It's just a NZ internal transfer, to interactives nz account, so 'free'. Then all currency conversion within interactive.

You can convert 170k nzd to usd for $2 usd.



Correct. transfers to and from are the simplest I have seen

IB can hold multiple currencies and you can convert at will.
conversion is not free though

[ValueNZ]

So in that five years the DOW is up around 35%, the S&P up 54% & the NASDAQ up 89% and paid dividends on top.

Versus 16% Markel has appreciated & hasn't paid a dividend.
I do realise before that it had very rapid appreciation but it hasn't performed in the last five years, infact it's less than half that of the lowest performing indices.

So even though Markel holds on to its profits & presumably reinvests them its only up 16 - 17% in 5 years.

Has its PE ratio dramatically come down in that time?

Notice there is no abuse in my posts, no calling people liars or frauds, just because I don't agree with them.

Anyway I am interested to hear why you think this is a stock to throw the kitchen sink at as you said.
~37 years of 15% CAGR ain't good enough for you? The fact that it has only risen 16% over 5 years should get you interested, pick up an annual report and decide whether you think the market valuation is fair or not.

The mere fact that Buffett holds a position should be enough to consider taking a look at the stock.

[alokdhir]

Correct. transfers to and from are the simplest I have seen

IB can hold multiple currencies and you can convert at will.
conversion is not free though

When u buy thru IBKR in any market eg USA / India then stock is held in their own custodial account ? Like Sharesies here ? Then do u run the risk of Lehman happening to u or they have some independent custodial service with its own checks and balances that they wont use your bought shares for leverage or anything else ??

[Daytr]

~37 years of 15% CAGR ain't good enough for you? The fact that it has only risen 16% over 5 years should get you interested, pick up an annual report and decide whether you think the market valuation is fair or not.

The mere fact that Buffett holds a position should be enough to consider taking a look at the stock.

Who was saying history is no predictor of the future? Yep it was a great investment up to 5 years ago. And one to get out of five years ago and if that money was just invested in any of the major indices your return would have been well more than doubled or even tripled.

I'm asking SailorRob, not you, why it's a good investment now.
Is that not a reasonable question?
Why do you think you can lecture someone?

Buffet also bought Para, take a look at the performance since he bought. I wonder how many followed him into that quicksand?

I saw Charlie Monger at the recent annual address, munching on crackers or something as he spoke. He made Biden look sprightly.
No doubt they have had incredible success, however I do wonder if like all good things, they come to an end.

No doubt their holdings will see Berkshire do well no matter what, I am more circumspect about their stock picking going forward though.

[SailorRob]

So in that five years the DOW is up around 35%, the S&P up 54% & the NASDAQ up 89% and paid dividends on top.

Versus 16% Markel has appreciated & hasn't paid a dividend.
I do realise before that it had very rapid appreciation but it hasn't performed in the last five years, infact it's less than half that of the lowest performing indices.

So even though Markel holds on to its profits & presumably reinvests them its only up 16 - 17% in 5 years.

Has its PE ratio dramatically come down in that time?

Notice there is no abuse in my posts, no calling people liars or frauds, just because I don't agree with them.

Anyway I am interested to hear why you think this is a stock to throw the kitchen sink at as you said.

I will post a detailed reply when I can get to a computer, but for me all I'm looking for is a 10% CAGR over the next decade with zero risk of permanent loss of capital (major company impairment or bankruptcy). This will be against an index that does mid single digits perhaps less. Markels stock portfolio did well over 100% against a 10 year sp500 return of zero from the early 2000's.

I'm not looking to smash it out the park. 10 to 13% with no risk is fine for me.

As with Berkshire you can't look at GAAP earnings for markel as their portfolio goes through the income statement, but it's fairly easy to work out.

The business performance numbers over the last 5 years are pretty amazing.

My personal CAGR owning Markel has been well north of 10%, suffice to say I would not have purchased at the price it was selling for 5 years ago.

All you need to do as with Berkshire is follow the companies buy backs and inside purchases and you'll do very well.

[bull....]

Todays Non Farm Payrolls / ISM PMI data all came favourable then expected ...thus US 10 Years drops from 4.68 % to sub 4.50% !!!

Shud make Bull happy if he is playing the long side now ...Are u Bull " Running with the Bulls now " ??


PS : Decks are cleared for a long Santa rally hopefully ?? :t_up:

amazing isnt it how a string of positive fundamental data can change things on a dime and yes i brought a few long term stocks this week for my income portfolio which i mentioned on kpg thread a while back i was building one up now.

[bull....]

No. much much earlier



This is correct. I track my portfolio returns on the basis of how much cash I would have to invest. This means that it is largely after tax (eg I only include net dividends when I am calculating my growth of the portfolio)
my current 20 year average return is 16% before withdrawals.
I withdraw less that that per year. and just like magic, the fund grows.

except for the years it goes down, or sideways. but overall, it grows.

Not dissimilar to a successful business except I don't work anywhere near as hard and obviously get a lower return than a well run successful business.

well done , there are many people on this site who achieve double digit returns on average every yr over the long run

[SailorRob]

Who was saying history us no predictor of the future. Yep it was a great investment up to 5 years ago.

I'm asking SailorRob, not you, why it's a good investment now.

Buffet also bought Para, take a look at the performance since he bought. I wonder how many followed him into that quicksand?

I saw Charlie Monger at the recent annual address, munching on crackers or something as he spoke. He made Biden look sprightly.
No doubt they have had incredible success, however I do wonder if like all good things they come to an end.

No doubt their holdings will see Berkshire do well no matter what, I am more circumspect about their stock picking going forward though.

BuffeTT and Munger.

Yes their stock portfolio won't do incredibly well forward, between 7 and 10 I'd say. But their stock portfolio isn't Berkshire.

Berkshire is just getting started. Yeah they won't CAGR at 20% but 12 is great for me. With 6 for the index...

[SailorRob]

well done , there are many people on this site who achieve double digit returns on average every yr over the long run

Correct. Many people on share trader are in the top 50 in the world.

[Daytr]

I will post a detailed reply when I can get to a computer, but for me all I'm looking for is a 10% CAGR over the next decade with zero risk of permanent loss of capital (major company impairment or bankruptcy). This will be against an index that does mid single digits perhaps less. Markels stock portfolio did well over 100% against a 10 year sp500 return of zero from the early 2000's.

I'm not looking to smash it out the park. 10 to 13% with no risk is fine for me.

As with Berkshire you can't look at GAAP earnings for markel as their portfolio goes through the income statement, but it's fairly easy to work out.

The business performance numbers over the last 5 years are pretty amazing.

My personal CAGR owning Markel has been well north of 10%, suffice to say I would not have purchased at the price it was selling for 5 years ago.

All you need to do as with Berkshire is follow the companies buy backs and inside purchases and you'll do very well.

Appreciate the response.

[ValueNZ]

Who was saying history is no predictor of the future? Yep it was a great investment up to 5 years ago. And one to get out of five years ago and if that money was just invested in any of the major indices your return would have been well more than doubled or even tripled.

I'm asking SailorRob, not you, why it's a good investment now.
Is that not a reasonable question?
Why do you think you can lecture someone?

Buffet also bought Para, take a look at the performance since he bought. I wonder how many followed him into that quicksand?

I saw Charlie Monger at the recent annual address, munching on crackers or something as he spoke. He made Biden look sprightly.
No doubt they have had incredible success, however I do wonder if like all good things, they come to an end.

No doubt their holdings will see Berkshire do well no matter what, I am more circumspect about their stock picking going forward though.
Apologies if my post came off as rude. What I was trying to highlight, in my opinion it is not enough to call an investment good or bad based purely off 5 year share price performance.

Also I hold PARA at an average price of $12.26, but it's a pretty insignificant position only around 2% of my total portfolio. It's been jumping up in price which sucks because I want to buy more at some point.

Buffett and Munger are still pretty sharp I think, but yes their minds are deteriorating.

[Daytr]

Correct. Many people on share trader are in the top 50 in the world.

And here is where you get it so wrong from sheer ignorance.

I know plenty of traders that at least do double digit & much higher returns most years. They might have the odd poor year but on average they make very high returns.

On average bank prop traders double the funds allocated if not more.
But a new year begins, the P&L is wiped and they start again, as the profits are swept up into the bank's accounts, costs & taxes & dividends etc.

Typically PA traders they are living off the profits they make, so it's not compounded, in fact as that's their livelihood and their capital in one basket, they typically diversify it out into living expenses, could be buying a holiday home, overseas holidays, a boat or investments away from.the market to diversify their risk.

To deny that there are traders who don't make those sort of returns, just displays naivety.

[ValueNZ]

And here is where you get it so wrong from sheer ignorance.

I know plenty of traders that at least do double digit & much higher returns most years. They might have the odd poor year but on average they make very high returns.

On averafe bank prop traders double the funds allocated if not more.
But a new year begins, the P&L is wiped and they start again, as the profits are swept up into the bank's accounts, costs & taxes & dividends etc.

Typically PA traders they are living off the profits they make, so it's not compounded, in fact as that's their livelihood and their capital in one basket, they typically diversify it out into living expenses, could be buying a holiday home, overseas holidays, a boat or investments away from.the market to diversify their risk.

To deny that there are traders who don't make those sort of returns, just displays naivety.
On average bank prop make 100% returns if not more. Really?

Comon Daytr where are all the trillionaire traders?

[Relaxed]

When u buy thru IBKR in any market eg USA / India then stock is held in their own custodial account ? Like Sharesies here ? Then do u run the risk of Lehman happening to u or they have some independent custodial service with its own checks and balances that they wont use your bought shares for leverage or anything else ??

I am happy that this would be enough security.

https://www.interactivebrokers.com/en/general/security-investor-protection.php

Account Protection
Client securities accounts at Interactive Brokers LLC are protected by the Securities Investor Protection Corporation ("SIPC") for a maximum coverage of $500,000 (with a cash sublimit of $250,000). In addition, Interactive Brokers LLC carries an excess SIPC policy with certain underwriters at Lloyd's of London,2 which extends the per account3 coverage by an additional $30 million (with a cash sublimit of $900,000), subject to an aggregate limit of $150 million. Futures and options on futures are not covered. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities.
For the purpose of determining an Interactive Brokers LLC client account, accounts with like names and titles (e.g. John and Jane Smith and Jane and John Smith) are combined, but accounts with different titles are not (e.g. Individual/John Smith and IRA/John Smith).
SIPC is a non-profit, membership corporation funded by broker-dealers that are members of SIPC. For more information about SIPC and answers to frequently asked questions (such as how SIPC works, what is protected, how to file a claim, etc.), please refer to the following websites:

[alokdhir]

amazing isnt it how a string of positive fundamental data can change things on a dime and yes i brought a few long term stocks this week for my income portfolio which i mentioned on kpg thread a while back i was building one up now.

Me find it amazing that people including U and some more were not expecting data to turn anytime now ...after all we all know that high rates DO work to slow economies thus control inflation ....Data was destined to turn ...mere question was when and how soon ? If u know the eventual direction then it becomes just a question of patience which long term investors like me have in abundance ...though I agree your type traders need get timing right as close as possible as u try to play both side of the coin ...main reason for big turn around rallies is traders flipping not suddenly long termers joining in !!

[bull....]

Me find it amazing that people including U and some more were not expecting data to turn anytime now ...after all we all know that high rates DO work to slow economies thus control inflation ....Data was destined to turn ...mere question was when and how soon ? If u know the eventual direction then it becomes just a question of patience which long term investors like me have in abundance ...though I agree your type traders need get timing right as close as possible as u try to play both side of the coin ...main reason for big turn around rallies is traders flipping not suddenly long termers joining in !!

yep you and me different investing styles but the thing we have in common is we both do well :t_up: for me timing my entries is important esp for income portfolio as that extra 2% i get on my timing compounded over the long term is huge. my timing is not perfect but it matches my goals
anyway off for weekend now

[Daytr]

On average bank prop make 100% returns if not more. Really?

Comon Daytr where are all the trillionaire traders?

Re read the post, it clearly went straight over your head. For starters what should be obvious is that they aren't trading their own money & the profits aren't theirs either but the banks. But if you had actually read what I wrote you would get that. So re-read & think it through before responding.

I know bank traders who got $20M bonuses. This wasn't normal by any means. One guy got paid $100M bonus.

Obviously it depends on the size of the portfolio they trade. Typically a prop traders portfolio isn't that big ad its all about taking risk.

[Getty]

Yep job numbers increased less than expected and unemployment rate higher than expected

All good news for markets …..we are on a roll

And 75% of American workers say they would do as much work in 4 days, as 5.
87% of Millennials, under 35 years old, say that.
Source, Fiverr, CNBC.

So what does that say about productivity and the future? and of investment?

[SailorRob]

And here is where you get it so wrong from sheer ignorance.

I know plenty of traders that at least do double digit & much higher returns most years. They might have the odd poor year but on average they make very high returns.

On average bank prop traders double the funds allocated if not more.
But a new year begins, the P&L is wiped and they start again, as the profits are swept up into the bank's accounts, costs & taxes & dividends etc.

Typically PA traders they are living off the profits they make, so it's not compounded, in fact as that's their livelihood and their capital in one basket, they typically diversify it out into living expenses, could be buying a holiday home, overseas holidays, a boat or investments away from.the market to diversify their risk.

To deny that there are traders who don't make those sort of returns, just displays naivety.

I have spent years analysing and studying the returns of the best investors in the world, including through time periods over the last hundred years.

Double digits and higher most years is totally meaningless.

It's the CAGR through the entire time period that matters. Anything less than 10 years isn't that relevant either, and all has to be related to the performance of the sp500.

Show me one of your trader mates that has beaten the return of the sp500 over a decade.

You cannot.

[SailorRob]

I also read 50 of the best funds letters each quarter and they all report returns over the whole time period...

Very familiar with what the best in world do.

Like francois Rochon. Who has a 6% position in markel.

[SailorRob]

And here is where you get it so wrong from sheer ignorance.


So again, the truth is exactly the opposite of what you're saying.

Very few people if any in NZ would know more about investors returns than me.

Also, your math is again showing it's idiocy as you have stated that on average traders double their funds.

On average they cannot... On average they by definition must net out to zero above the market...

This is 101 of trading.

One traders gain is anothers loss, so they can't all do 100% returns on average.

[Daytr]

So again, the truth is exactly the opposite of what you're saying.

Very few people if any in NZ would know more about investors returns than me.

Also, your math is again showing it's idiocy as you have stated that on average traders double their funds.

On average they cannot... On average they by definition must net out to zero above the market...

This is 101 of trading.

One traders gain is anothers loss, so they can't all do 100% returns on average.

So you aren't aware of what goes on in investment banking and hedge funds, so in your little world is doesn't exist.
You keep referring to investing, I am talking about trading cross asset portfolios. Two quite different things. Open your eyes, there is a bigger world out their than just Berkshire & longterm investing in equities.

Wholesale traders do not measure CAGR.
It's not a measure fit for purpose for cross asset trading or even FX trading. There is only one measure & that is P&L that they monitored on closely every day.

Who gives a $#@% what Francois Rochon's investment fund does, that's not prop trading.
He may have some prop traders within his fund, but the entite fund's returns will have very little to do with prop trading.
The fact that you used him as an example just goes to show you are out of your depth and have no clue outside your bubble.

You need your revisit your 101 theory as it's just ludicrous. For your theory to be correct Wholesale / Prop Traders would have to be in a bubble only trading with themselves. And what you keep missing the point is, it's cross asset propriety trading, it's going short, or long, or both in an arb trade.

What's the benchmark market returns in FX that according to you have to be beaten?
Credit?
Commodities?
Crypto?
Bonds?
The list goes on.

Honestly you are making a fool of yourself.

[blackcap]

So again, the truth is exactly the opposite of what you're saying.

Very few people if any in NZ would know more about investors returns than me.

Also, your math is again showing it's idiocy as you have stated that on average traders double their funds.

On average they cannot... On average they by definition must net out to zero above the market...

This is 101 of trading.

One traders gain is anothers loss, so they can't all do 100% returns on average.

Correct. Anything less than 10 years is also pure chance. 20 years is really necessary to show if there is alpha.

Traders will at an aggregate level underperform the index, purely due to transactions costs.

[Daytr]

Correct. Anything less than 10 years is also pure chance. 20 years is really necessary to show if there is alpha.

Traders will at an aggregate level underperform the index, purely due to transactions costs.

What transaction costs specifically are you referring to?
I'm short gold at the moment and getting paid positive funding to hold the position.

Why would you comment on something you know nothing about?
Back to the Covid & Trump threads Blackcap.

Anyway, beautiful day here & I've wasted enough time on ignorance for a Saturday morning.

[SailorRob]

What transaction costs specifically are you referring to?
I'm short gold at the moment and getting paid positive funding to hold the position.

Why would you comment on something you know nothing about?
Back to the Covid & Trump threads Blackcap.

Anyway, beautiful day here & I've wasted enough time on ignorance for a Saturday morning.

Blackcap is 100% correct and this is well known in the industry.

What he says is backed by all the data that exists.

[ValueNZ]

So you aren't aware of what goes on in investment banking and hedge funds, so in your little world is doesn't exist.
You keep referring to investing, I am talking about trading cross asset portfolios. Two quite different things. Open your eyes, there is a bigger world out their than just Berkshire & longterm investing in equities.

Wholesale traders do not measure CAGR.
It's not a measure fit for purpose for cross asset trading or even FX trading. There is only one measure & that is P&L that they monitored on closely every day.

Who gives a $#@% what Francois Rochon's investment fund does, that's not prop trading.
He may have some prop traders within his fund, but the entite fund's returns will have very little to do with prop trading.
The fact that you used him as an example just goes to show you are out of your depth and have no clue outside your bubble.

You need your revisit your 101 theory as it's just ludicrous. For your theory to be correct Wholesale / Prop Traders would have to be in a bubble only trading with themselves. And what you keep missing the point is, it's cross asset propriety trading, it's going short, or long, or both in an arb trade.

What's the benchmark market returns in FX that according to you have to be beaten?
Credit?
Commodities?
Crypto?
Bonds?
The list goes on.

Honestly you are making a fool of yourself.
Daytr I have some news for you. CAGR is just a way of measuring P/L relative to capital employed over a set period of time. Aka the only way to fairly measure returns across different portfolio sizes.

CAGR is everything, If I said for example I made 100k last year the first question you'd ask is how large is your portfolio.

[SailorRob]

So you aren't aware of what goes on in investment banking and hedge funds, so in your little world is doesn't exist.
You keep referring to investing, I am talking about trading cross asset portfolios. Two quite different things. Open your eyes, there is a bigger world out their than just Berkshire & longterm investing in equities.

Wholesale traders do not measure CAGR.
It's not a measure fit for purpose for cross asset trading or even FX trading. There is only one measure & that is P&L that they monitored on closely every day.

Who gives a $#@% what Francois Rochon's investment fund does, that's not prop trading.
He may have some prop traders within his fund, but the entite fund's returns will have very little to do with prop trading.
The fact that you used him as an example just goes to show you are out of your depth and have no clue outside your bubble.

You need your revisit your 101 theory as it's just ludicrous. For your theory to be correct Wholesale / Prop Traders would have to be in a bubble only trading with themselves. And what you keep missing the point is, it's cross asset propriety trading, it's going short, or long, or both in an arb trade.

What's the benchmark market returns in FX that according to you have to be beaten?
Credit?
Commodities?
Crypto?
Bonds?
The list goes on.

Honestly you are making a fool of yourself.

Hedge funds are what I'm talking about...

No point in doing anything else if you can't beat the sp500... So that's what has to be beaten.

None of the folk you refer to can do it otherwise they would get the highest assets under management.

Can these traders beat the sp500? Yes or no. If yes, over what time period.

[SailorRob]

So you aren't aware of what goes on in investment banking and hedge funds, so in your little world is doesn't exist.
You keep referring to investing, I am talking about trading cross asset portfolios. Two quite different things. Open your eyes, there is a bigger world out their than just Berkshire & longterm investing in equities.

Wholesale traders do not measure CAGR.
It's not a measure fit for purpose for cross asset trading or even FX trading. There is only one measure & that is P&L that they monitored on closely every day.

Who gives a $#@% what Francois Rochon's investment fund does, that's not prop trading.
He may have some prop traders within his fund, but the entite fund's returns will have very little to do with prop trading.
The fact that you used him as an example just goes to show you are out of your depth and have no clue outside your bubble.

You need your revisit your 101 theory as it's just ludicrous. For your theory to be correct Wholesale / Prop Traders would have to be in a bubble only trading with themselves. And what you keep missing the point is, it's cross asset propriety trading, it's going short, or long, or both in an arb trade.

What's the benchmark market returns in FX that according to you have to be beaten?
Credit?
Commodities?
Crypto?
Bonds?
The list goes on.

Honestly you are making a fool of yourself.

Why not just provide the name of one single of these people you are referring to, who has beaten the sp500 over 10 years.

Just one sport.

[SailorRob]

Daytr I have some news for you. CAGR is just a way of measuring P/L relative to capital employed over a set period of time. Aka the only way to fairly measure returns across different portfolio sizes.

CAGR is everything, If I said for example I made 100k last year the first question you'd ask is how large is your portfolio.

Correct. And obvious.

[Daytr]

Hedge funds are what I'm talking about...

No point in doing anything else if you can't beat the sp500... So that's what has to be beaten.

None of the folk you refer to can do it otherwise they would get the highest assets under management.

Can these traders beat the sp500? Yes or no. If yes, over what time period.

There are many types of hedge funds. As I keep saying I am talking about individual traders cross asset proprietary trading.

Most years they would beat the return of the S&P by multiples.

[Daytr]

Daytr I have some news for you. CAGR is just a way of measuring P/L relative to capital employed over a set period of time. Aka the only way to fairly measure returns across different portfolio sizes.

CAGR is everything, If I said for example I made 100k last year the first question you'd ask is how large is your portfolio.

Well your news is irrelevant.
Prop traders are continually turning over their capital, sometimes daily.
So no in the big boys world of proprietary trading its meaningless.

[Daytr]

Blackcap is 100% correct and this is well known in the industry.

What he says is backed by all the data that exists.

Really? What transaction costs?


Why not just provide the name of one single of these people you are referring to, who has beaten the sp500 over 10 years.

Just one sport.

Well obviously not your 2nd biggest holding which has underperformed the S&P by multiples in the the last five years.

Anyway George Soros comes to mind.
Roughly returned 20% per annum for 40 years.

In the link below are top performing funds over the last 3 years.

https://hedgefollow.com/top-hedge-funds.php

But again this is not an individual prop trader returns that I am referring to, this is the Funds returns to investors after costs. I.e wages, bonuses, utility costs, funding costs, office costs etc.

On average the individual prop traders will have much higher returns.

I love it how you guys who have probably never stepped foot on a trading floor, let alone worked on one tell me how traders returns are measured. It's hilarious. 🤣

[ValueNZ]

Really? What transaction costs?



George Soros comes to mind.
Roughly returned 20% per annum for 40 years.

In the link below are top performing funds over the last 3 years.

https://hedgefollow.com/top-hedge-funds.php

But again this is not an individual prop trader returns that I am referring to, this is the Funds returns to investors after costs. I.e wages, bonuses, utility costs, funding costs, office costs etc.

On average the individual prop traders will have much higher returns.

I love it how you guys who have probably never stepped foot on a trading floor, let alone worked on one tell me how traders returns are measured. It's hilarious. 藍
If traders are measuring their returns using your method it's because they are trying to hide the fact their returns are inferior to the SP500.

[Daytr]

Blackcap is 100% correct and this is well known in the industry.

What he says is backed by all the data that exists.


If traders are measuring their returns using your method it's because they are trying to hide the fact their returns are inferior to the SP500.

Keep it up champ. Instead of making bad assumptions try & learn something as it's getting tiresome.

Do you seriously think Traders in banks measure & report their own returns?
And they don't give a %$#@ about the S&P as a comparison. All they care about is making bonus which is measured purely on P&L.

Each day your P&L, VaR on open positions
is produced each day by a middle office accountant to be signed off by the trader that they agree the financial reporting.

Getting a bit sick & tired of explaining this to rude & ignorant people who don't have a clue about the market outside their own little world.
And it's not like we haven't been here before.

CAGR 🤣 Freakin amateur hour.

Off to the shed to do something productive.