Black Monday

[SailorRob]

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.

And the years they don't will pull their CAGR down well below the market.

Otherwise they're all on NZ rich list.

[Daytr]

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

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


And the years they don't will pull their CAGR down well below the market.

Otherwise they're all on NZ rich list.

My career was overseas I wouldn't have a clue in NZ and there aren't too many prop funds in NZ I'm aware of. And if you are smart you avoid those lists. But John Key is an obvious one though he probably made his big money off his traders backs when he ran the business unit in the States.

Anyway you asked for a name & I gave you Sorros and also a list of prop funds that have beaten the S&P hands down & these returns will be lower than the actual prop trader returns, let alone their top traders.
But that's not good enough for you, so you can remain blissfully ignorant.

[whatsup]

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.

Any ideas what Berkshire bought PARA at ?

[ValueNZ]

Any ideas what Berkshire bought PARA at ?
Around $30. It's not possible to tell their exact purchase price.

[bull....]

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 藍 Freakin amateur hour.

Off to the shed to do something productive.

yep your right cagr meanss shi.t to traders who work for banks , hedgefunds. best traders can negotiate there pay most traders get jack or sack till they prove to company they good then move up pecking order in firm .
if you top trader paid on p&l of company results so say if hedge fund make 100m in profit trader might get 5% of this so 5m for the trader this just example top traders can get more of % of profit. being trader in firm is massively high stress and people come go all the time thru burn out and sack. far more relaxing do it yourself if you can after you made some big bonuses.

[winner69]

AFR headline Warren Buffett shows his fear by dumping the most shares since 2008

Must be zillions of greedy punters out there if Warren selling

[Toddy]

I spent years in NZ then the UK doing the accounting for traders.
I've had my fair share of milkshakes and profit and loss statements thrown at me and shouted at across the trading floor.

I bet you it's all pretty tame in comparison now days compared to the 90s and early 2000s.

[beacon]

AFR headline Warren Buffett shows his fear by dumping the most shares since 2008

Must be zillions of greedy punters out there if Warren selling
That is wrong. That headline was printed 2 years ago, See https://www.afr.com/world/north-america/warren-buffett-shows-his-fear-by-dumping-the-most-shares-since-2008-20211109-p59771

These last 12 months Warren has sold only about 10% of his share portfolio, which is sub-normal sales - given FFR has kept rising throughout the year, and he needed cash for reinsurance blowouts.

Warren Buffett’s Berkshire Hathaway sells stocks as cash pile swells to record levels
https://www.ft.com/content/4ec10c1b-a365-483f-8566-e2ff47435dd5

[Valuegrowth]

WB Buy stocks at a substantial discount to their fundamental book value. Something to learn from this value guru. Other punters are buying over valued current hot stocks. currently, market valuations have become increasingly stretched. If I am correct growth stocks are trading more than 3.3 times of value stocks. I am fearful more than before. More and more crises are adding to existing crisis. Insurance expenses and rents are also skyrocketing worldwide. Huge increased rents and insurance cost could hit many industries including farmers.

QUOTE=winner69;1028433]AFR headline Warren Buffett shows his fear by dumping the most shares since 2008

Must be zillions of greedy punters out there if Warren selling[/QUOTE]

[alokdhir]

AFR headline Warren Buffett shows his fear by dumping the most shares since 2008

Must be zillions of greedy punters out there if Warren selling

U being naughty W69 !! Why ? Forgot to close some shorts mate ?? :p

[Daytr]

I spent years in NZ then the UK doing the accounting for traders.
I've had my fair share of milkshakes and profit and loss statements thrown at me and shouted at across the trading floor.

I bet you it's all pretty tame in comparison now days compared to the 90s and early 2000s.

Yep those were the days, good & bad, but a lot of fun.
Some of the antics that went on in those days in London & elsewhere I'm sure, certainly wouldn't be tolerated now & I'm not referring to the trading...

[Getty]

Yep those were the days, goid & bad, but a lot of fun.
Some of the antics that went on in those days in London & elsewhere I'm sure certainly wouldn't be tolerated now & I'm not referring to the trading...

So the Wolf of Wall Street had nothing on the Bombard of Lombard?

[SailorRob]

Daytr, can you answer one question for me, even a yes or no is fine.

If I or someone else was a billionaire and could employ these traders you've been referring to, on similar terms to the banks, so give them the capital to trade and bonuses etc...

Could they then create returns on the capital I provided that exceed the returns of the S&P 500 over say 10 years? Assuming they could trade in any asset class with any leverage they saw fit to.

Cheers.

[Valuegrowth]

https://nz.finance.yahoo.com/news/maersk-cut-10-000-jobs-111124709.html

[beacon]

Could they then create returns on the capital I provided that exceed the returns of the S&P 500 over say 10 years? Assuming they could trade in any asset class with any leverage they saw fit to.

Yes, easily

[SailorRob]

Yes, easily

Thanks for your input Bacon but your opinion is not required on this occasion.

[777]

ignore him beacon.

[Bjauck]

Yep those were the days, good & bad, but a lot of fun.
Some of the antics that went on in those days in London & elsewhere I'm sure, certainly wouldn't be tolerated now & I'm not referring to the trading...
I was on my OE in the 1990’s in London. I knew several local Brits employed by the brokers, and they worked hard on research for international clients. They were paid handsomely and partied hard. They supported the Conservative Party as the Party that looks after ‘The City”.

Now these City Brits have had to move overseas as the City has been gutted as a result of their right-wing Conservative Party Brexit. Amsterdam has eclipsed London.

[Daytr]

Daytr, can you answer one question for me, even a yes or no is fine.

If I or someone else was a billionaire and could employ these traders you've been referring to, on similar terms to the banks, so give them the capital to trade and bonuses etc...

Could they then create returns on the capital I provided that exceed the returns of the S&P 500 over say 10 years? Assuming they could trade in any asset class with any leverage they saw fit to.

Cheers.

So you want me to answer a theoretical?
Who knows, its theoretical.

I have a few friends who trade wealthy people's money. The terms & returns are never disclosed.
Also a few that trade family money, again what & how they trade is kept very confidential.

Anyway you are boring me with the same dumb questions in relation to the S&P.

As I have said who cares about the S&P.
No one with any real word trading experience.
Several others have backed up what I have said, I have given you examples when requested of prop funds smashing the returns of the S&P hands down, but you are still asking dumb yestions & not convinced.

Anyway they are generally paid a percentage of profits so returns have to be good to make enough for themselves to earn a good income & still pay a good return to the investor.

Now I really don't care if you believe me or not & this is just a repeat of a discussion not that long ago, so it's been done to death.
Stay in your little bubble kid.

[bull....]

cagr mean jack to trader in bank/fund
cagr is important if you are an individual investor

to different things you too talk about

one other thing when a trader leave bank/fund many cant trade as good with there own money as trading with own money is mentally an entirely different proposition to trading with someone else money esp if the profits are needed to put food on the table

[Daytr]

cagr mean jack to trader in bank/fund
cagr is important if you are an individual investor

to different things you too talk about

one other thing when a trader leave bank/fund many cant trade as good with there own money as trading with own money is mentally an entirely different proposition to trading with someone else money esp if the profits are needed to put food on the table

Good point about trading their own money.
Many traders aren't willing to take the same risk either, even though if they could treat it as they had when trading others money they would have done better.

[winner69]

Jared says on X re USA ….

1. The yield curve inverted 16 months ago.
2. 8/8 times the yield curve inverts, we get a recession.
3. The recession happens when the curve un-inverts.
4. The curve is un-inverting.
5. Payrolls are finally crapping out.

A recession is inevitable.

[percy]

Good point about trading their own money.
Many traders aren't willing to take the same risk either, even though if they could treat it as they had when trading others money they would have done better.

You think and act differently when it is your own money on the line.
That is why I try to invest in companies where the directors/management have large or controlling shareholdings.
Far to many glib talking free loaders have broken too many good companies.

[ValueNZ]

I'd personally borrow 1000% of my net worth if I could do so non recourse and cheaply and I'd invest the whole lot in Berkshire.
Hey SailorRob, what do you consider "cheap" today in nominal terms? 6.5% p.a for 5 years?

[Leemsip]

So you want me to answer a theoretical?
Who knows, its theoretical.

I have a few friends who trade wealthy people's money. The terms & returns are never disclosed.
Also a few that trade family money, again what & how they trade is kept very confidential.

Anyway you are boring me with the same dumb questions in relation to the S&P.

As I have said who cares about the S&P.
No one with any real word trading experience.
Several others have backed up what I have said, I have given you examples when requested of prop funds smashing the returns of the S&P hands down, but you are still asking dumb yestions & not convinced.

Anyway they are generally paid a percentage of profits so returns have to be good to make enough for themselves to earn a good income & still pay a good return to the investor.

Now I really don't care if you believe me or not & this is just a repeat of a discussion not that long ago, so it's been done to death.
Stay in your little bubble kid.

Sailor Rob is super pedantic. This is a known quantity in him and he cant help keep beating the same drum. Trying to learn off the folks on the website, I guess this is part of what makes him money in the market. Just an unwavering core belief in the Buffett stuff and the stamina of a marathon runner for pointing it out.

Doesnt make for interesting reading, but I think its a worthwhile lesson for those of us with less patience and more of a trading/gambling mindset, that this is long game decent way to make $$. Good input I reckon.

[percy]

Buffett.
https://finnewsnetwork.us1.list-manage.com/track/click?u=4e327af0b9377422183e60879&id=a9734e36d0&e=2039e3d3d1

[beacon]

Thanks for your input Bacon but your opinion is not required on this occasion.

My bad! I thought you truly wanted to know :)

[winner69]

My bad! I thought you truly wanted to know :)

Doubt Bobby wanted to know anyway

[Leemsip]

My bad! I thought you truly wanted to know :)

Bacon, lol. Suggest a name change on your profile

[Daytr]

Sailor Rob is super pedantic. This is a known quantity in him and he cant help keep beating the same drum. Trying to learn off the folks on the website, I guess this is part of what makes him money in the market. Just an unwavering core belief in the Buffett stuff and the stamina of a marathon runner for pointing it out.

Doesnt make for interesting reading, but I think its a worthwhile lesson for those of us with less patience and more of a trading/gambling mindset, that this is long game decent way to make $$. Good input I reckon.

Yep no doubt. I'm not criticizing his strategy, but apparently what I have done in my professional life is a fairytale & those sort of traders & returns don't exist. 🤣

I am certainly not recommending trading to anyone and have said so on many occasions.
But according to SailorRob I am a fraud & a liar just for posting about a world he doesn't understand.

Each to their own I say & we should all be able to discuss different strategies etc without the barrage of abuse, just because they are ignorant of a world that exists outside their own.

[alokdhir]

https://www.marketwatch.com/articles/cash-defensive-stocks-rates-e5d0759b?mod=mw_latestnews

Cash is King trade is ending finally !!!

[kiora]

Jared says on X re USA ….

1. The yield curve inverted 16 months ago.
2. 8/8 times the yield curve inverts, we get a recession.
3. The recession happens when the curve un-inverts.
4. The curve is un-inverting.
5. Payrolls are finally crapping out.

A recession is inevitable.

NZ Economy SPLAT !!!!

[bull....]

Buffett.
https://finnewsnetwork.us1.list-manage.com/track/click?u=4e327af0b9377422183e60879&id=a9734e36d0&e=2039e3d3d1

the fact buffett keeps increasing the cash pile and finds treasuries a good investment and is a net seller of stocks just displays to me you dont want to be 100% fully invested at the moment

[alokdhir]

the fact buffett keeps increasing the cash pile and finds treasuries a good investment and is a net seller of stocks just displays to me you dont want to be 100% fully invested at the moment

I believe he has his reasons ...what I gather he is shoring up cash for blowout costs of reinsurance business ...I am no expert on his ways and his empire but just heard this reason on CNBC ...

[Daytr]

I believe he has his reasons ...what I gather he is shoring up cash for blowout costs of reinsurance business ...I am no expert on his ways and his empire but just heard this reason on CNBC ...

It will be interesting if that is the case as it was only recently that Charlie Monger basically dismissed climate change having a significant impact on their insurance business.

[SailorRob]

It will be interesting if that is the case as it was only recently that Charlie Monger basically dismissed climate change having a significant impact on their insurance business.

Munger bro. Not Monger.

'climate change' is great for Berkshires insurance business. GREAT. Correct no impact so far but soon the cash will roll in.

Insurance of this type is a contract that gets repriced very often... Extremely simple stuff.

[SailorRob]

the fact buffett keeps increasing the cash pile and finds treasuries a good investment and is a net seller of stocks just displays to me you dont want to be 100% fully invested at the moment

Great logic and what keeps you one step ahead of the heard.

Do you have 150 billion you're trying to invest?

What have Berkshires cash levels been over the last 5 years?

Has he EVER invested cash in ANYTHING but short treasuries??

He found them as good an investment at 5000 year lows...

And had the same amount of cash in late 2019 and 2020... Selling stocks and all in treasuries...

Keep up the solid analysis.

[winner69]

RBA raises rates …..acknowledging more work to do

Our Adrian remains focused on the climate ……should be having another rates increase this month but won’t. Hope he gets moved on somehow

[alokdhir]

RBA raises rates …..acknowledging more work to do

Our Adrian remains focused on the climate ……should be having another rates increase this month but won’t. Hope he gets moved on somehow

They have just woken up and doing catch up ...when RBNZ was doing 50 up they were doing reluctant 25 and some pauses ...IMHO RBNZ did much better job then spineless RBA !!

RBNZ finished its job long time back ...now just sitting back and let the high rates and bond yields do the final act

[winner69]

They have just woken up and doing catch up ...when RBNZ was doing 50 up they were doing reluctant 25 and some pauses ...IMHO RBNZ did much better job then spineless RBA !!

RBNZ finished its job long time back ...now just sitting back and let the high rates and bond yields do the final act

Both still behind the curve

[alokdhir]

Both still behind the curve


Both were expecting and maybe rightly that international longer term rates will do the final act ...and imo they are doing if recent increases by almost all banks is some indication ...they dont need OCR to go up to increase mortgage rates ...why u insisting they shud when real job is being done without such unpopular moves

"The Reserve Bank of Australia’s (RBA) widely-expected move to hike its official interest rate by 25 basis points to 4.35 per cent had little impact on equity markets on either side of the Tasman, although the Aussie dollar dropped by a quarter of a US cent to US64.62c.
“At the end of the day, the RBA is behind the curve and they probably need to go twice in the next few months,” Salt Funds managing director Matt Goodson said.
“We [the Reserve Bank of NZ] should be done, the US Federal Reserve seems to be done, and the European Central Bank is done, so it’s really only Australia and Japan that are the laggards,” he said. "

From todays market wrap !!

[bull....]

Great logic and what keeps you one step ahead of the heard.

Do you have 150 billion you're trying to invest?

What have Berkshires cash levels been over the last 5 years?

Has he EVER invested cash in ANYTHING but short treasuries??

He found them as good an investment at 5000 year lows...

And had the same amount of cash in late 2019 and 2020... Selling stocks and all in treasuries...

Keep up the solid analysis.

150 billion is nothing when you consider the value of world stock markets is over 100 trillion so yes they are having trouble finding stuff to invest in
bkr has stated they will always maintain a cash balance .... so they are never fully invested in stocks ( unlike you )

[Daytr]

150 billion is nothing when you consider the value of world stock markets is over 100 trillion so yes they are having trouble finding stuff to invest in
bkr has stated they will always maintain a cash balance .... so they are never fully invested in stocks ( unlike you )

His arrogance is astounding.
Hurls insults, asks a plethora of questions, doesn't acknowledge any answers.
Waste of space Bull.

[alokdhir]

https://www.goodreturns.co.nz/article/976522447/are-equity-markets-due-for-a-strong-finish-this-year.html

[bull....]

His arrogance is astounding.
Hurls insults, asks a plethora of questions, doesn't acknowledge any answers.
Waste of space Bull.

All quite humourous his insecurity around investing success

[SailorRob]

150 billion is nothing when you consider the value of world stock markets is over 100 trillion so yes they are having trouble finding stuff to invest in
bkr has stated they will always maintain a cash balance .... so they are never fully invested in stocks ( unlike you )

With total assets well over a trillion and equity portfolio 300 odd billion...

Yes of course they are not close to fully invested in stocks....

[SailorRob]

All quite humourous his insecurity around investing success

Correct.

I am very insecure about my incredibe success, never take for granted and it can dissapear very quickly.

Study study study, constantly look for flaws in my process and only after 30 or 40 years will I truly know the answer.

[Toddy]

https://www.goodreturns.co.nz/article/976522447/are-equity-markets-due-for-a-strong-finish-this-year.html

Thanks. Good article.

[SailorRob]

of course he is talking about the yr ahead. i do not need to work out numbers as the statement is from the horses mouth so working out numbers is futile cause then your saying you know buffetts businersses better than him.

as far as the future beyond that goes buffett will update you again next annual meeting

another interesting comment was munger saying value investors will have to get used to earning less going forward

BullS*&^ saying Back in May that Berkshire earnings were guaranteed to drop going foreward...

Berkshire Operating earnings

Q1 23 - 8 Billion

Q2 23 - 10 Billion

Q3 23 - 10.8 Billion

As I asked him back then - Give us a rough idea of the math required for earnings to decline while retaining 35 billion a year of equity within the operating business and a further 17 billion a year retained within the common stock portfolio, you can decrease the figures as you see fit.

[Daytr]

Correct.

I am very insecure about my incredibe success, never take for granted and it can dissapear very quickly.

Study study study, constantly look for flaws in my process and only after 30 or 40 years will I truly know the answer.

It's a pity you don't spend some of that energy on some self reflection, looking at personal flaws & how you interact with others.

[FTG]

Folks, please get this thread back on to the subject matter, or at least something that closely resembles it.

If you want to beat your respective chests on who has the biggest deck, best you start up another thread, rather than pollute this one with egotistical rubbish.

Thank you.

[bull....]

BullS*&^ saying Back in May that Berkshire earnings were guaranteed to drop going foreward...

Berkshire Operating earnings

Q1 23 - 8 Billion

Q2 23 - 10 Billion

Q3 23 - 10.8 Billion

As I asked him back then - Give us a rough idea of the math required for earnings to decline while retaining 35 billion a year of equity within the operating business and a further 17 billion a year retained within the common stock portfolio, you can decrease the figures as you see fit.

As i said back then i would never consider myself better than buffett and munger in understanding there business. the point was made in reference to munger's comments and even in there latest comments munger again said 24 will be difficult to sustain earnings. the fact they did better than they were thinking is great isnt it. im sure munger is pleased.
anyway as far as performance goes has not bkr underperformed sp500 last 5 yrs ? of top my head

[SailorRob]

Folks, please get this thread back on to the subject matter, or at least something that closely resembles it.

If you want to beat your respective chests on who has the biggest deck, best you start up another thread, rather than pollute this one with egotistical rubbish.

Thank you.

Agreed.

Subject matter is that in late August 2015 a particular Monday was going to see a crash.

Please stick to this subject.

Don't pollute this thread with anything but the crash of 2015.

[Daytr]

Folks, please get this thread back on to the subject matter, or at least something that closely resembles it.

If you want to beat your respective chests on who has the biggest deck, best you start up another thread, rather than pollute this one with egotistical rubbish.

Thank you.

Fair enough. What are you offering FTG ?

[percy]

Quote of the Day: "I’m no better than the next trader, just quicker at admitting my mistakes and moving on to the next opportunity” – George

Soros

[winner69]

Alokdhir ……OCR to go higher and inflation to hang around longer than most forecast/desire

https://www.westpaciq.com.au/economics/2023/11/nz-first-impressions-rbnz-survey-of-expectations-q4-2023?ai=1699408476228&cd=53404&cid=edm

[alokdhir]

Alokdhir ……OCR to go higher and inflation to hang around longer than most forecast/desire

https://www.westpaciq.com.au/economics/2023/11/nz-first-impressions-rbnz-survey-of-expectations-q4-2023?ai=1699408476228&cd=53404&cid=edm

Westpac and ANZ surely do think that way ...but not me ...lol

At present the data is mixed so all interpret it their own way ...soon it will be clearer then it will be too late to react ...so all need take call now or then hold your horses ....U know better than me any day !!!!

PS : Next weeks CPI of USA will seal the deal ...at least for US rates ...but that means all ...doesnt it ?

What has happened to Oil ? Dropping like a stone !! Recession fears ...then why OCR up mate

https://www.nzherald.co.nz/business/reserve-banks-survey-of-inflation-expectations-heads-in-the-right-direction/DBWTNVVHMZDMTC6TNRGJHJ62IY/

[winner69]

You look like you going to right alokdhir …..from RBNZ expectations survey …courtesy @MHReddell

Slightly surprising that respondents now expect monetary conditions to ease more rapidly over the next year than at any time since the height of the 2008 financial crisis

[alokdhir]

You look like you going to right alokdhir …..from RBNZ expectations survey …courtesy @MHReddell

Slightly surprising that respondents now expect monetary conditions to ease more rapidly over the next year than at any time since the height of the 2008 financial crisis

Data still all over the place ...but slowly we will get there .

I sincerely hope u super right about TRA though ...lol

[ValueNZ]

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.
I got my wish. Some random Bank of America Analyst decided that PARA is worth $9 instead of the previous $32 so Mr Market of course being a irrational drunk places a 15% discount on the price he previously gave just a couple days ago. :t_up:

[SailorRob]

I got my wish. Some random Bank of America Analyst decided that PARA is worth $9 instead of the previous $32 so Mr Market of course being a irrational drunk places a 15% discount on the price he previously gave just a couple days ago. :t_up:

Good work, I'll reply to your earlier question when I get a minute working full time refitting my yacht at present.

Will also reply to Day Trader, when I stop laughing that is.

[Joshuatree]

Maybe share what PARA is ,doesn't make sense otherwise

[bull....]

hope its not para - paramount pictures lol ...

[ValueNZ]

hope its not para - paramount pictures lol ...
Yep paramount global

[bull....]

Yep paramount global

i really want to hear your value case here

[ValueNZ]

i really want to hear your value case here
Well I found it whilst looking through Berkshire Hathaway's holdings, and also found out from SailorRob it is one of Christopher Bloomstan's holdings. I like Bloomstran's logic in this article (https://business.columbia.edu/sites/default/files-efs/imce-uploads/Graham%20Doddsville%20Fall%202022%20Issue%2046_0.p df), pg 41 onward.

"In my world, I've got revenues growing from today's $28 or $29billion to $33 or $34billion. You're going to get mid-single-digit growth on top line, you'll get price. But I've got profits which are depressed at a 5% net today. I've got the margin doubling back up to where they were prepandemic, so 10 to 12%.You're looking at $3 or$4 billion net income, and as we do the math, and think where everything shakes out in four or five years, we have a market cap today that's 12.5 billion. You capitalize that on $34 billion in revenues at a10 to 12% margin, you can get to a $50 billion market cap, four times where you are today.If we're wrong, and we simply muddle along and margins are permanently depressed at current levels, the stock’s at eight times earnings. Recapitalize it at double the multiple and contemplate the business throwing off alot of free cash."

Except only now PARA is sitting at a $7.8 billion market cap which gives a greater margin of safety than either Bloomstran or Buffett have on their investment. That is a 0.25 price to sales ratio, with a fairly high likelihood of margins returning to healthy levels in say the next five years. If margins are able to return to their historical level, Paramount will be absolutely raking in the cash.

Plus, theres chance of the business being acquired which would likely occur close to book value/assets being sold down and the cash distributed. But my thesis doesn't necessitate this occurring.

[bull....]

Well I found it whilst looking through Berkshire Hathaway's holdings, and also found out from SailorRob it is one of Christopher Bloomstan's holdings. I like Bloomstran's logic in this article (https://business.columbia.edu/sites/default/files-efs/imce-uploads/Graham%20Doddsville%20Fall%202022%20Issue%2046_0.p df), pg 41 onward.

"In my world, I've got revenues growing from today's $28 or $29billion to $33 or $34billion. You're going to get mid-single-digit growth on top line, you'll get price. But I've got profits which are depressed at a 5% net today. I've got the margin doubling back up to where they were prepandemic, so 10 to 12%.You're looking at $3 or$4 billion net income, and as we do the math, and think where everything shakes out in four or five years, we have a market cap today that's 12.5 billion. You capitalize that on $34 billion in revenues at a10 to 12% margin, you can get to a $50 billion market cap, four times where you are today.If we're wrong, and we simply muddle along and margins are permanently depressed at current levels, the stock’s at eight times earnings. Recapitalize it at double the multiple and contemplate the business throwing off alot of free cash."

Except only now PARA is sitting at a $7.8 billion market cap which gives a greater margin of safety than either Bloomstran or Buffett have on their investment. That is a 0.25 price to sales ratio, with a fairly high likelihood of margins returning to healthy levels in say the next five years. If margins are able to return to their historical level, Paramount will be absolutely raking in the cash.

Plus, theres chance of the business being acquired which would likely occur close to book value/assets being sold down and the cash distributed. But my thesis doesn't necessitate this occurring.


i can see why you see value but with high risk i reckon. been a terrible investment for most people

[ValueNZ]

i can see why you see value but with high risk i reckon. been a terrible investment for most people
Yeah it has been "terrible" over the short term for many. But it has some of the worlds best investors in it, so that alone gives it merit. The mere fact that I purchased an investment at probably close to 1/3rd the price Buffett paid for it just last year makes me feel comfortable with my investment in PARA.

[SailorRob]

i can see why you see value but with high risk i reckon. been a terrible investment for most people

High risk because the share price has fallen so far??

If the share price had gone from $30 to $40 you'd think low risk.

But as gone from $30 to $11 it's high!

Arse about face.

Worth far more than current bid, the lower it goes the better.

[alokdhir]

https://www.marketwatch.com/articles/fund-beats-s-p-500-secret-545c8e7e?mod=mw_latestnews

Found this article talking about a fund which has beaten S&P500 index on 5 years basis also !!

[SailorRob]

https://www.marketwatch.com/articles/fund-beats-s-p-500-secret-545c8e7e?mod=mw_latestnews

Found this article talking about a fund which has beaten S&P500 index on 5 years basis also !!

Yeah good effort but 5 years is meaningless really. Not even half a cycle, even ARKK probably beat market over 5.

Think Buffetts famous bet they were ahead after 5.

[causecelebre]

Yeah it has been "terrible" over the short term for many. But it has some of the worlds best investors in it, so that alone gives it merit. The mere fact that I purchased an investment at probably close to 1/3rd the price Buffett paid for it just last year makes me feel comfortable with my investment in PARA.

Wow down 90% from March '21 week highs. And 50% this year alone. I guess Buffet loves old movies because PARA's library (CBS, Showtime, Paramount Pictures) is very old. The real world value should be in future demographic and behaviour and Paramount Plus is not a service I would subscribe to. Paramount $931 debt service costs is haemophilic. PARA has some good realty which is possibly under valued, however, that said its Manhatten holdings doesn't mean as much post Covid. Its LA studio, like it's IP, is a shining beacon to what once was. I would be hoping some bottom fisher buys it. Good luck to holders and buyers

[bull....]

High risk because the share price has fallen so far??

If the share price had gone from $30 to $40 you'd think low risk.

But as gone from $30 to $11 it's high!

Arse about face.

Worth far more than current bid, the lower it goes the better.

if the price went up it would be even more high risk to me.
Im meaning high risk because of the industry they are in. highly competitive where in the med - long run not all players will survive.
I did say i saw value that being there cashflows are very good and there library of content is good. but there debt is very high and there streaming service like many others in the space is not profitable.
who knows why buffet brought do you have a guess what he is looking at ?

[winner69]

Apparently weak 30-year Treasury auction is pushing yields higher and equity markets lower today

[alokdhir]

Apparently weak 30-year Treasury auction is pushing yields higher and equity markets lower today

That's a bond market problem causing trouble to equity valuations ....when all Govts have so much debt already then how they afford to pay higher interest costs when rates go sky high ...they need borrow more thus too much supply leads to bonds under pressure thus yields up ...VICIOUS Cycle . Maybe controlled 2-4% Inflation on longer term or accepting little higher inflation is the only way out of this debt spiral

Heard on CNBC that US treasury alone is issuing almost $ 500 Billion debt per week !!!!

[percy]

David McEwen....Naughty Boy.?
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/00uOMNyc7W0fMktsiphqJQ/iaJUt2fjKx0feoRSK2ewXA

[Toddy]

Alarm bells ringing for sure. Whenever does the FMA ever act on anything unless it is of a very serious nature.

[SailorRob]

Wow down 90% from March '21 week highs. And 50% this year alone. I guess Buffet loves old movies because PARA's library (CBS, Showtime, Paramount Pictures) is very old. The real world value should be in future demographic and behaviour and Paramount Plus is not a service I would subscribe to. Paramount $931 debt service costs is haemophilic. PARA has some good realty which is possibly under valued, however, that said its Manhatten holdings doesn't mean as much post Covid. Its LA studio, like it's IP, is a shining beacon to what once was. I would be hoping some bottom fisher buys it. Good luck to holders and buyers

Have Berkshire or Bloomstran contacted you? You'd be a great fit for their teams.

Don't ever rely on luck...

[causecelebre]

That's a bond market problem causing trouble to equity valuations ....when all Govts have so much debt already then how they afford to pay higher interest costs when rates go sky high ...they need borrow more thus too much supply leads to bonds under pressure thus yields up ...VICIOUS Cycle . Maybe controlled 2-4% Inflation on longer term or accepting little higher inflation is the only way out of this debt spiral

Heard on CNBC that US treasury alone is issuing almost $ 500 Billion debt per week !!!!

When corporates and households were locking in almost 0% interest rates on debt Mnuchin ignored Trumps calls for locking in 50/100 year bonds. At the very least they could have done a book build to see what demand there was. I'm sure the US treasury is looking in the rear view mirror now.

[causecelebre]

Have Berkshire or Bloomstran contacted you? You'd be a great fit for their teams.

Don't ever rely on luck...

haha, Buffet bids to have lunch with me mate

[SailorRob]

haha, Buffet bids to have lunch with me mate

Do you mean Buffett?

Or are you talking about a buffet lunch?

[causecelebre]

Do you mean Buffett?

Or are you talking about a buffet lunch?

Sorry, yeah double 't'. I'm hungry and all this talk of food has left me grammatically challenged

[winner69]

Hey alokdhir ….thought was a good comment from an economy watcher ….

Surreal watching NZ striding into a self-inflicted recession while the media focuses on whether one tosser has spoken to another tosser yet.

Meanwhile the poor and precariously employed are losing work quickly - the hours are evaporating. It's all a bit 2008...

[Bjauck]

Hey alokdhir ….thought was a good comment from an economy watcher ….

Surreal watching NZ striding into a self-inflicted recession while the media focuses on whether one tosser has spoken to another tosser yet.

Meanwhile the poor and precariously employed are losing work quickly - the hours are evaporating. It's all a bit 2008...

As long as our already expensive house prices are preparing for another run upwards, that will keep Nat Party voters happy. Doss-houses can be prepared, visas terminated and the next immigration boom postponed. A country worthy of a King Charles!

[777]

As long as our already expensive house prices are preparing for another run upwards, that will keep Nat Party voters happy. Doss-houses can be prepared, visas terminated and the next immigration boom postponed. A country worthy of a King Charles!

Why would house prices keep National voters happy? Stupid statement.

[Toddy]

I'm surprised that there hasn't been a lot of speculation around the Mcewen and Associates FMA suspension of investor funds.
.
Is this the tip of the iceberg? Related party transactions etc

The FMA statement was very strongly worded.

[alokdhir]

Hey alokdhir ….thought was a good comment from an economy watcher ….

Surreal watching NZ striding into a self-inflicted recession while the media focuses on whether one tosser has spoken to another tosser yet.

Meanwhile the poor and precariously employed are losing work quickly - the hours are evaporating. It's all a bit 2008...


Every rate cycle same happens ...Rich / worldly wise become richer and poor/ hard workers become poorer ...maybe thats nature at play !!

U got MFT @ $55 in this rate cycle low ...will surely make u richer mate ..lol

[winner69]

I'm surprised that there hasn't been a lot of speculation around the Mcewen and Associates FMA suspension of investor funds.
.
Is this the tip of the iceberg? Related party transactions etc

The FMA statement was very strongly worded.

Probably some disgruntled brokers feeling he’s stealing their thunder …or they found a few disgruntled punters and pushed them into complaining

So tip sheets on way out along with other initiatives like that Stockfox he set up.

[SailorRob]

Probably some disgruntled brokers feeling he’s stealing their thunder …or they found a few disgruntled punters and pushed them into complaining

So tip sheets on way out along with other initiatives like that Stockfox he set up.

Bro... Learn to sniff out a shyster when one hits you in the face.

Could anything be more obvious??

Wait until it comes out properly.

[Valuegrowth]

https://www.youtube.com/watch?v=GQyrl_27lRA

[Valuegrowth]

For me only cheap stocks are value stocks. One of the best periods to buy stocks were in 2008 and 2009. Current bull market for all types of assets lasted nearly 12 years. Further rise in asset prices could create havoc in world economies.

<a href="https://www.macrotrends.net/2324/sp-500-historical-chart-data">
https://www.youtube.com/watch?v=MiH1Hnbmvz0https://www.macrotrends.net/2324/sp-500-historical-chart-data (https://www.macrotrends.net/2324/sp-500-historical-chart-data)

[alokdhir]

For me only cheap stocks are value stocks. One of the best periods to buy stocks were in 2008 and 2009. Current bull market for all types of assets lasted nearly 12 years. Further rise in asset prices could create havoc in world economies.

<a href="https://www.macrotrends.net/2324/sp-500-historical-chart-data">
https://www.youtube.com/watch?v=MiH1Hnbmvz0https://www.macrotrends.net/2324/sp-500-historical-chart-data (https://www.macrotrends.net/2324/sp-500-historical-chart-data)

Show me one link advising people to buy during 2008-09 ...then also all were making videos just like above . Only in hindsight now people saying that was good time to buy ...did anyone buy ...not many .

After few years many will be saying best time to buy was in 2023 ...but then all are happy watching such scary videos ...how will they buy anything ? Maybe end up selling or locking money in TD for 5 years !!

[SailorRob]

Show me one link advising people to buy during 2008-09 ...then also all were making videos just like above . Only in hindsight now people saying that was good time to buy ...did anyone buy ...not many .

After few years many will be saying best time to buy was in 2023 ...but then all are happy watching such scary videos ...how will they buy anything ? Maybe end up selling or locking money in TD for 5 years !!

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.nytimes.com/2008/10/17/opinion/17buffett.html&ved=2ahUKEwi-sIDljrqCAxVl2DQHHeK2ABsQFnoECBYQAQ&usg=AOvVaw0gJPXspO9yLc39sGDxPc6b

[percy]

I'm surprised that there hasn't been a lot of speculation around the Mcewen and Associates FMA suspension of investor funds.
.
Is this the tip of the iceberg? Related party transactions etc

The FMA statement was very strongly worded.

https://www.rnz.co.nz/news/business/502055/auckland-investment-advisor-issued-interim-stop-order-by-fma-for-dishonest-activities

[ValueNZ]

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.nytimes.com/2008/10/17/opinion/17buffett.html&ved=2ahUKEwi-sIDljrqCAxVl2DQHHeK2ABsQFnoECBYQAQ&usg=AOvVaw0gJPXspO9yLc39sGDxPc6b
"Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts. Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later."


Some here think they know better than Buffett by switching their Kiwisaver account between cash and equities to time the market haha.

[alokdhir]

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.nytimes.com/2008/10/17/opinion/17buffett.html&ved=2ahUKEwi-sIDljrqCAxVl2DQHHeK2ABsQFnoECBYQAQ&usg=AOvVaw0gJPXspO9yLc39sGDxPc6b

No wonder u are his fan ...when he says, people like and follow ...whats he saying at present ? Is he yet advising to buy currently or still says more value will emerge ??

Value in stocks can emerge two ways ...either they grow their eps and SP is stagnant due to market sentiment or SP drops like a stone due to recessionary / cyclical drop in eps currently which can be recovered in better economy times ...in this sell off ...SP drops more then actual reduction in eps thus p/e contracts

Blue chips actually p/e expands as some try to look thru current contraction in eps and focus on longer term ...maybe like OCA u trying to do ...lol

[Daytr]

"Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts. Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later."


Some here think they know better than Buffett by switching their Kiwisaver account between cash and equities to time the market haha.

As I have said anything of the sort, is there any actual point to your post or are you just learning to be rude (I'm being polite here) from your master SailorRob?

[ValueNZ]

No wonder u are his fan ...when he says, people like and follow ...whats he saying at present ? Is he yet advising to buy currently or still says more value will emerge ??

Value in stocks can emerge two ways ...either they grow their eps and SP is stagnant due to market sentiment or SP drops like a stone due to recessionary / cyclical drop in eps currently which can be recovered in better economy times ...in this sell off ...SP drops more then actual reduction in eps thus p/e contracts

Blue chips actually p/e expands as some try to look thru current contraction in eps and focus on longer term ...maybe like OCA u trying to do ...lol
"Value" or intrinsic value can increase despite EPS falling. The value of a company is all of the business's future cash flows discounted back to present value.

[ValueNZ]

As I have said anything of the sort, is there any actual point to your post or are you just learning to be rude (I'm being polite here) from your master SailorRob?
Not trying to be rude just drawing a parallel between the article and the posts made on this forum.

Perhaps instead you can explain why you know better than the world's greatest investor when it comes to market timing.

[Daytr]

Not trying to be rude just drawing a parallel between the article and the posts made on this forum.

Perhaps instead you can explain why you know better than the world's greatest investor when it comes to market timing.

Really? What else was it but rude?

Anyway just to give you facts rather than your gushing hero worship of your demigod Buffett.

I swapped my Kiwisaver out of equities near the highs for about 6 - 8 months in the that time earning 5%+. Equities were down between 10 - 15% in that same period and when I swapped back to equities.

Forget Buffett. Simple question.
Am I far better off for not taking the 10-15% loss instead taking a 5% gain & then re-entering the equities?
Even if equities fell another 10% or what ever I am still better off I than would be if I had sat tight.
Correct?

If they go up which they have about 5%+ since I re-entered, then I am much better off as my portfolio reflects.
Correct?

So overall in the last 6 - 8 months I am circa 20% better off than I would have been if I had done nothing.

So your post was not only rude, but incorrect.
And it's something you could have worked out for yourself rather than making a lazy remark as all the information to know the outcome has been posted.

Anything to say?

[ValueNZ]

Really? What else was it but rude?

Anyway just to give you facts rather than your gushing hero worship of your demigod Buffett.

I swapped my Kiwisaver out of equities near the highs for about 6 - 8 months in the that time earning 5%+. Equities were down between 10 - 15% in that same period and when I swapped back to equities.

Forget Buffett. Simple question.
Am I far better off for not taking the 10-15% loss instead taking a 5% gain & then re-entering the equities?
Even if equities fell another 10% or what ever I am still better off I than would be if I had sat tight.
Correct?

If they go up which they have about 5%+ since I re-entered, then I am much better off as my portfolio reflects.
Correct?

So overall in the last 6 - 8 months I am circa 20% better off than I would have been if I had done nothing.

So your post was not only rude, but incorrect.
And it's something you could have worked out for yourself rather than making a lazy remark as all the information to know the outcome has been posted.

Anything to say?
I never said you didn't make excess returns out of your market timing, although I doubt you did as I'm sure you're comparing your return to the NZX50 rather than the SP500. But that's not the point anyway. The question shouldn't be "are you better off in your short one year period" it should be "is this a viable long term capital allocation strategy". From all available data, no I don't believe it's a viable long term strategy.

Anyway I have to go study for my calculus exam.

[Daytr]

I never said you didn't make excess returns out of your market timing, although I doubt you did as I'm sure you're comparing your return to the NZX50 rather than the SP500. But that's not the point anyway. The question shouldn't be "are you better off in your short one year period" it should be "is this a viable long term capital allocation strategy". From all available data, no I don't believe it's a viable long term strategy.

Anyway I have to go study for my calculus exam.

I don't care what you believe.
Faith has no place in trading or investing.

You pointed to a particular example. I proved that example had dramatically higher returns than the S&P. Now you back track.

You keep on asking me to prove it, I did.
Now you prove it. Of course you can't.

If you don't actually start asking open questions rather than jumping to poor assumptions which you have done on several occasions then you will only learn about your own preconceived ideology.
That's fine if you want that, but don't then go & make judgments on others strategies that you know nothing about & obviously have a closed mind to.

[causecelebre]

Not trying to be rude just drawing a parallel between the article and the posts made on this forum.

Perhaps instead you can explain why you know better than the world's greatest investor when it comes to market timing.

I’d argue that Jim Simons is a superior capital allocator than Buffett

[causecelebre]

I don't care what you believe.
Faith has no place in trading or investing.

At least you have a plan and are acting on it. Plenty of others here have analysis paralysis

[ValueNZ]

I don't care what you believe.
Faith has no place in trading or investing.
Of course that's what you take out of my post. You take "believe" and you assume it's blind faith with no supporting evidence. My belief is ground in my knowledge of finance, statistics and economics. Yes it is my opinion that market timing isn't a viable long term strategy, and I am happy to be proven wrong (you'd be proving Buffett wrong too!), but it's certainly not blind faith.

[ValueNZ]

I don't care what you believe.
Faith has no place in trading or investing.

You pointed to a particular example. I proved that example had dramatically higher returns than the S&P. Now you back track.

You keep on asking me to prove it, I did.
Now you prove it. Of course you can't.

If you don't actually start asking open questions rather than jumping to poor assumptions which you have done on several occasions then you will only learn about your own preconceived ideology.
That's fine if you want that, but don't then go & make judgments on others strategies that you know nothing about & obviously have a closed mind to.
A one year return is hardly proof of those who time the market earning excess returns over the long term.

[Daytr]

Of course that's what you take out of my post. You take "believe" and you assume it's blind faith with no supporting evidence. My belief is ground in my knowledge of finance, statistics and economics. Yes it is my opinion that market timing isn't a viable long term strategy, and I am happy to be proven wrong (you'd be proving Buffett wrong too!), but it's certainly not blind faith.

This is hilarious.
All that inexperience going to waste.
This thread is approving again & again a waste of my time. The ignorance, combined with arrogance is stupifying combination.

How many times do I have to say I never, said its a better strategy than Buffett. I don't give a ****e about Buffett or the S&P generally unless I am trading it.

It's a different strategy and it works for me & it's only one of three strategies I employ for my three different portfolios.

[winner69]

Headline somewhere today ‘Veteran investor retires’

Can we assume that veteran investors are really successful investors

[Baa_Baa]

This thread is approving again & again a waste of my time.

Why do you keep coming back then, it is you who are choosing to waste your time?

[Daytr]

Why do you keep coming back then, it is you who are choosing to waste your time?

Yep fair call Baa_Baa.
I just get fed up with misinformation & ignorance thinking there is only one way to make money from markets successfully.

[Valuegrowth]

I can understand your investment strategy. In the long run we get above average returns if done intelligently. Basically, I don’t to want to pay high premium for very long-term growth. Value is my number one criterion(criteria) followed by future strong balance sheet and rising cash flow.

I like investment but I have done trading as well. Traders lose money by trading frequently. Investors also lose money by picking wrong investment. In addition, investing in both growth companies and value companies can be very rewarding if done correctly. I have made losses in growth and value investment. Similarly, I have done some good investment and trading as well. Only safe investment for me in the market is strong balance sheet firms. Some companies are ideal for long term investment and some companies are ideal for only short-term investment. When market hot I avoid stocks and when market weak I accumulate strong balance sheet firm stocks. They are for the long shot. That is my strategy now. I don’t hesitate to do some good trading as well when I see some great opportunity. For example, by analysing currency trend and commodity trend I have done some great trading in commodity stocks. If I am right WB has not invested in companies rely on commodities. But I have experienced in those types of companies as well. Stock market has lot of opportunities, but we have to face for unforeseen future situations like black days, correction, market sell-off, bear market and Covid-19 as well. Bull market will follow bear market. Accordingly, I like to build my portfolio.

https://www.forbes.com/advisor/investing/how-to-make-money-in-stocks/
How To Make Money In Stocks

https://www.investopedia.com/articles/trading/10/top-ten-rules-for-trading.asp
Top 10 Rules for Successful Trading


Show me one link advising people to buy during 2008-09 ...then also all were making videos just like above . Only in hindsight now people saying that was good time to buy ...did anyone buy ...not many .

After few years many will be saying best time to buy was in 2023 ...but then all are happy watching such scary videos ...how will they buy anything ? Maybe end up selling or locking money in TD for 5 years !!

[SailorRob]

This is hilarious.
All that inexperience going to waste.
This thread is approving again & again a waste of my time. The ignorance, combined with arrogance is stupifying combination.

How many times do I have to say I never, said its a better strategy than Buffett. I don't give a ****e about Buffett or the S&P generally unless I am trading it.

It's a different strategy and it works for me & it's only one of three strategies I employ for my three different portfolios.

I'd suggest using your incredible market timing ability in all three of your portfolios.

Pretty incredible what you do to be honest.

[Daytr]

Check out the video of Tauranga in this link. The number of empty shops is astounding.
The economy is on fire!.... 🙄

https://i.stuff.co.nz/bay-of-plenty/301005592/nzs-abandoned-city-hammered-by-wrecking-ball-leaders

[winner69]

I'd suggest using your incredible market timing ability in all three of your portfolios.

Pretty incredible what you do to be honest.

They don’t call daytr a veteran fir nothing

[Daytr]

My methods are catered to suit each portfolio, as what's contained within the portfolios are distinctly different and wouldn't suit the same strategy as I use for my Super for example and the other two portfolios definitely wouldn't suit my more aggressive trading portfolio strategy.

[ynot]

Check out the video of Tauranga in this link. The number of empty shops is astounding.
The economy is on fire!.... ��

https://i.stuff.co.nz/bay-of-plenty/301005592/nzs-abandoned-city-hammered-by-wrecking-ball-leaders

This is not unique to Tauranga. Replicated throughout the country.
Also Tauranga situation has been brewing for quite some time. Shopping malls, 1st Bayfair, more recently Tauriko have helped the demise of downtown retail.

[Balance]

This is not unique to Tauranga. Replicated throughout the country.
Also Tauranga situation has been brewing for quite some time. Shopping malls, 1st Bayfair, more recently Tauriko have helped the demise of downtown retail.

Yup - come to Auckland and see the empty shops and businesses scattered all over the 'old' CBD and suburbs.

[Valuegrowth]

Time to be cautious on overvalued assets while looking for value compnaies that can have growth and who can produce strong balance sheets in the future. Good thing is recession has postponed to the next year and Job market is still not that bad.


https://www.youtube.com/watch?v=mnhnYAe-88Q

[Daytr]

This is not unique to Tauranga. Replicated throughout the country.
Also Tauranga situation has been brewing for quite some time. Shopping malls, 1st Bayfair, more recently Tauriko have helped the demise of downtown retail.

Shopping malls, one of the banes of modern society. How many towns around the world have been killed off by souless shopping malls.

[ynot]

Shopping malls, one of the banes of modern society. How many towns around the world have been killed off by souless shopping malls.

Downtown Tga is transforming beyond retail. Maybe not such a bad thing ?

[winner69]

The Geography of Nowhere …James Kuntsler is a great read on this topic …even has suggestions how to improve it

The Geography of Nowhere traces America's evolution from a nation of Main Streets and coherent communities to a land where every place is like no place in particular, where the cities are dead zones and the countryside is a wasteland of cartoon architecture and parking lots.

[ynot]

The Geography of Nowhere …James Kuntsler is a great read on this topic …even has suggestions how to improve it

The Geography of Nowhere traces America's evolution from a nation of Main Streets and coherent communities to a land where every place is like no place in particular, where the cities are dead zones and the countryside is a wasteland of cartoon architecture and parking lots.

Kunstler had US future summed up 2 decades ago. He makes for grim reading today but the truth sometimes hurts.

[Daytr]

Downtown Tga is transforming beyond retail. Maybe not such a bad thing ?

Transforming into what?
That was a massive amount of empty shops.

[ynot]

Transforming into what?
That was a massive amount of empty shops.

My guess would be appartments.

[Valuegrowth]

https://www.youtube.com/watch?v=GiHT6TTy7Ws

[winner69]

https://www.youtube.com/watch?v=GiHT6TTy7Ws

That guy whoever he is doesn’t look very well at all

[Valuegrowth]

How about this?


https://www.youtube.com/watch?v=jQ5PcLTamMA

[winner69]

The Polycrisis Valuegrowth …there is no hope

https://dailyreckoning.com/the-polycrisis/

[Valuegrowth]

Thank you for the link. They have to find out once and for all solution to fix the economy. Otherwise, different types of crises will come again and again. I like to buy stocks which can weather future crises.


The Polycrisis Valuegrowth …there is no hope

https://dailyreckoning.com/the-polycrisis/

[Valuegrowth]

https://www.youtube.com/watch?v=LrhaQxNSkl4

[winner69]

https://www.youtube.com/watch?v=LrhaQxNSkl4

That guy not well …maybe not as earlier one

[SailorRob]

Check out the video of Tauranga in this link. The number of empty shops is astounding.
The economy is on fire!.... 🙄

https://i.stuff.co.nz/bay-of-plenty/301005592/nzs-abandoned-city-hammered-by-wrecking-ball-leaders

Finally get it. Yep getting anything done before Xmas virtually impossible. Everything running white hot.

Everything crazy busy, every gas station full. Last time things were like this was 1987.

[bull....]

Finally get it. Yep getting anything done before Xmas virtually impossible. Everything running white hot.

Everything crazy busy, every gas station full. Last time things were like this was 1987.

pretty busy alright , have to wait 2 weeks at the doctors it so busy

[alokdhir]

https://www.newshub.co.nz/home/money/2023/11/housing-market-showing-increasing-signs-of-life-property-values-lift-third-month-in-a-row-qv-house-price-index.html

Maybe time to revisit RV stocks ....

ASB / ANZ thinks housing has bottomed and its a sign of better times ahead for economy ...soft landing or no landing possible !!!

[alokdhir]

https://www.nzherald.co.nz/business/jarden-wealth-weekly-will-putting-the-skids-on-interest-rates-give-a-strong-boost-to-stock-markets/SQIQ5KSAS5H6NDGJAAAD5ICFVI/

[SailorRob]

https://www.newshub.co.nz/home/money/2023/11/housing-market-showing-increasing-signs-of-life-property-values-lift-third-month-in-a-row-qv-house-price-index.html

Maybe time to revisit RV stocks ....

ASB / ANZ thinks housing has bottomed and its a sign of better times ahead for economy ...soft landing or no landing possible !!!

What is their prior track record of calling the housing market?

Over what time period?

[Valuegrowth]

IMF cuts its 2024 growth forecast & warns of stubborn inflation.

[SailorRob]

IMF cuts its 2024 growth forecast & warns of stubborn inflation.

Love all the great work you do Valuegrowth. Your contribution and analysis is superb.

[JBmurc]

IMF cuts its 2024 growth forecast & warns of stubborn inflation.

At some point, the NDX is going to be a great short ...

[bull....]

US CPI on the radar tomorrow

[alokdhir]

US CPI on the radar tomorrow

The way markets are behaving in US ...it seems it wont be a problem ...rest we will know tonight 2:30 AM ...I am sure U will be watching few screens :p

[Valuegrowth]

No doubt about it. For some reason I prefer long over short. Some assets including stocks have insane prices. When the time come, I will become long. For me this is not the time to be long in over valued assets. That doesn’t mean I am going to stay sidelines. I am continuously looking for opportunities. Currently, I have put nealry 85% of my eggs in one basket.



At some point, the NDX is going to be a great short ...

[Valuegrowth]

Thanks SR.
Love all the great work you do Valuegrowth. Your contribution and analysis is superb.

[ValueNZ]

No doubt about it. For some reason I prefer long over short. Some assets including stocks have insane prices. When the time come, I will become long. For me this is not the time to be long in over valued assets. That doesn’t mean I am going to stay sidelines. I am continuously looking for opportunities. Currently, I have put nealry 85% of my eggs in one basket.



My brain hurts trying to process all that. Time for a software update?

[Baa_Baa]

My brain hurts trying to process all that. Time for a software update?

You're not alone ValueNZ. Best on ignore, a growing list sadly.

[Joshuatree]

Finally get it. Yep getting anything done before Xmas virtually impossible. Everything running white hot.

Everything crazy busy, every gas station full. Last time things were like this was 1987.

People are not spending ,things are tight I've easily found a plumber , a builder a laminate installer and a painter, at great quotes in the last few days to do what i want when I want before Xmas.Alot of belt tightening going on NZ wide methinks.Sign of the times.

[SailorRob]

People are not spending ,things are tight I've easily found a plumber , a builder a laminate installer and a painter, at great quotes in the last few days to do what i want when I want before Xmas.Alot of belt tightening going on NZ wide methinks.Sign of the times.

All in the same dog crap industry, depends where you are I guess. All I see is people spraying money around like 1987. Any resources are just sucked up instantly, nobody out of work, incredible really.

[t.rexjr]

People are not spending ,things are tight I've easily found a plumber , a builder a laminate installer and a painter, at great quotes in the last few days to do what i want when I want before Xmas.Alot of belt tightening going on NZ wide methinks.Sign of the times.

Building consents dropped below 3000 in September, trending down. 35-40% off peaks...

The good news is the cogs are starting to move again.

[alokdhir]

US 10 Y broken below 4.5% recent lows on better then expected US CPI numbers ....party time :t_up:

[causecelebre]

S&P up 7.3% and Nasdaq up 9.4% this month already. May the Xmas rally continue

[winner69]

US 10 Y broken below 4.5% recent lows on better then expected US CPI numbers ....party time :t_up:

Party time :t_up::t_up::t_up::t_up::t_up:

Watch the large blue chips fly :t_up::t_up::t_up::t_up::t_up:

And most other things

[alokdhir]

Party time :t_up::t_up::t_up::t_up::t_up:

Watch the large blue chips fly :t_up::t_up::t_up::t_up::t_up:

And most other things

Stars are aligning for TRA both news ...How lucky that when good news come ...sentiment is already euphoric !! :D

https://www.nzherald.co.nz/business/liam-dann-new-data-reveals-psychological-turning-point-in-inflation-fight/HE5KUMQFQJGT7DE5E7TDIS33UE/

[bull....]

US 10 Y broken below 4.5% recent lows on better then expected US CPI numbers ....party time :t_up:

CPI certainly heading in the right direction :t_up: go tra indeed

[winner69]

Stars are aligning for TRA both news ...How lucky that when good news come ...sentiment is already euphoric ! ]

Old saying alokdhir

When investors are euphoric, they are incapable of recognizing euphoria itself.

[alokdhir]

Old saying alokdhir

When investors are euphoric, they are incapable of recognizing euphoria itself.

Opposite is also true ...when they are pessimistic or scared then they wont even buy screaming value ...reason why volumes dry at the end !

[alokdhir]

Russel 2000 UP. 5%. !!!! Amazing ...time of small caps come back Go TRA !!!

[ValueNZ]

You guys want equities to become expensive? Huh.

[Toddy]

You guys want equities to become expensive? Huh.

Yes.......

[alokdhir]

If u buy at right time and not get too greedy that U shud get equity at throwaway prices then all works out well ...But greed stops us from selling when we shud and buy when we shud ...

[bull....]

huge fall in nz bonds this morning , helping also NZ inflation report yesterday and US cpi this morning

[alokdhir]

huge fall in nz bonds this morning , helping also NZ inflation report yesterday and US cpi this morning

Your IFT Bonds already gone up 15% mate ....good call !!!

But your equity exposure low as u still not very positive on economies ...Stocks disconnect with real economy during down and up of rate cycles ...as told by experts everyday on CNBC ...:p

[Valuegrowth]

Market is heading for a bubble. Intelligent investors know gravity of the credit bubble.

[bull....]

Your IFT Bonds already gone up 15% mate ....good call !!!

But your equity exposure low as u still not very positive on economies ...Stocks disconnect with real economy during down and up of rate cycles ...as told by experts everyday on CNBC ...:p

good company IFT always said it should be part of core portfolio and yes ift bonds part of my plan in building up the income portfolio now after years of no income portfolio as growth was best strategy. mix now good i reckon

[Panda-NZ-]

US 10 Y broken below 4.5% recent lows on better then expected US CPI numbers ....party time :t_up:

Feeding Frenzy...

NZX underperforming again, must be the sh*t incoming govt that will probably raise inflation with tax cuts

[Bjauck]

Why would house prices keep National voters happy? Stupid statement.
A sweeping statement - probably.

I am not sure about this last election, but National supporters tend to be older and wealthier. So no doubt a greater percentage of National voters would own housing assets. All the indications are that NZ’s expensive housing, post election result, are set to enter yet another above inflation price increase phase. https://www.newsroom.co.nz/sharp-rise-in-house-prices-forecast

Owners tend to feel “better” when prices are increasing. However perhaps it was a stupid thing to state, when research may yet reveal that National Party voters actually would have preferred house prices to fall by a half so that we would have the affordability level they have in the great USA.

As an investor in NZ shares, I think it is a pity that we have such an expensive residential housing market as it sucks up so much household capital that may otherwise be available for pension funds or investing directly in NZ companies.

[bull....]

great news

Annual migration has hit the highest level on record with a net gain of 118,835 people in the September 2023 year.

https://www.newshub.co.nz/home/new-zealand/2023/11/annual-migration-numbers-hit-record-high-of-118-835-citizens-heading-overseas-in-droves.html

[causecelebre]

Russel 2000 UP. 5%. !!!! Amazing ...time of small caps come back Go TRA !!!

Great to see equal weighted small cap index's on the up....and i'm keeping an eye on the rate sensitive sectors

[bull....]

great news

Annual migration has hit the highest level on record with a net gain of 118,835 people in the September 2023 year.

https://www.newshub.co.nz/home/new-zealand/2023/11/annual-migration-numbers-hit-record-high-of-118-835-citizens-heading-overseas-in-droves.html


Stats NZ figures show that total card spending fell by 0.3% in October, while retail spending dropped by 0.7%; 'the softness in spending is notable as it comes as population growth is continuing to surge'

https://www.interest.co.nz/business/125227/stats-nz-figures-show-total-card-spending-fell-03-october-while-retail-spending

savage decline in spending when you consider the record immigration

[Daytr]

Convos today. Local architectural firm that has four architects for the first time in 18 years they don't have any jobs.
Five local building firms have no new builds for 2024.

[SailorRob]

Convos today. Local architectural firm that has four architects for the first time in 18 years they don't have any jobs.
Five local building firms have no new builds for 2024.

Best news I've heard all day.

[alokdhir]

The October data were softer than we had expected, and in turn we have revised our Q4 CPI forecast from +0.9%q/q to +0.6%q/q. All else equal, this reduces the likelihood the RBNZ will hike as soon as February, although our medium-term inflation forecasts are unchanged.


ANZ looking to change its tune ...

[winner69]

The October data were softer than we had expected, and in turn we have revised our Q4 CPI forecast from +0.9%q/q to +0.6%q/q. All else equal, this reduces the likelihood the RBNZ will hike as soon as February, although our medium-term inflation forecasts are unchanged.


ANZ looking to change its tune ...



They got to stay in step with the other gurus eh

You ever noticed how all these forecasts are always means reverting looking …not very scientific is it

But if the populus see what they want to see everybody is happy ……..including our Adrian

[Bjauck]

great news

Annual migration has hit the highest level on record with a net gain of 118,835 people in the September 2023 year.

https://www.newshub.co.nz/home/new-zealand/2023/11/annual-migration-numbers-hit-record-high-of-118-835-citizens-heading-overseas-in-droves.html

Will Auckland roads and hospitals become even more clogged as government and council avoid the necessary public spending increases needed to cope with high immigration? Good for existing land owners and land lords though…as more people are stuffed in.

[alokdhir]

https://www.interest.co.nz/business/125238/economists-are-reviewing-their-inflation-and-interest-rate-forecasts-after-new

More stocks friendly news . Tide is changing ...maybe yet not fast enough for all to notice but hopefully it will pick pace soon

[Daytr]

3rd time for the DOW to revisit just over 35k since late August. Pretty key resistance level if the market is to re-visit the all time highs.

[bull....]

Will Auckland roads and hospitals become even more clogged as government and council avoid the necessary public spending increases needed to cope with high immigration? Good for existing land owners and land lords though…as more people are stuffed in.

congestion charges on the way.
anyway we need population growth the problem has been consecutive govt's and councils who have failed to invest in infrastructure or maintenance on infrastructure which would have improved productivity etc and easliy supported the increase in immigration.
hopefully this govt have the wisdom to open up kiwisaver funds in some sort of way to public/private investment etc in infrastructure.

an example is nz super fund funding the road's and tolling them with the toll money going back into the fund

[JBmurc]

https://www.interest.co.nz/business/125238/economists-are-reviewing-their-inflation-and-interest-rate-forecasts-after-new

More stocks friendly news . Tide is changing ...maybe yet not fast enough for all to notice but hopefully it will pick pace soon

I think we are going have Bullish markets till early next year .. the US has something like 7 trillion in DEBT rolling over ...why they are rolling out the red carpet to the Chinese leader at present ..

[Aaron]

anyway we need population

Why do we need such large population growth?

[causecelebre]

Why do we need such large population growth?

Because centre NZ governments have run out of ideas how to facilitate entrepreneurship and economic growth and the lowest hanging fruit is to import GDP

[Valuegrowth]

People have forgotten the current credit bubble.Asset prices are rising thanks to credit.

[Bjauck]

congestion charges on the way.
anyway we need population growth the problem has been consecutive govt's and councils who have failed to invest in infrastructure or maintenance on infrastructure which would have improved productivity etc and easliy supported the increase in immigration.
hopefully this govt have the wisdom to open up kiwisaver funds in some sort of way to public/private investment etc in infrastructure.

an example is nz super fund funding the road's and tolling them with the toll money going back into the fund
Good ideas. We need population growth from immigration to a greater degree as a result of the lack of investment (in training and capital investment) in making our existing workforce more productive. Also I think we are bad at retaining our own skilled population.

We also need to encourage more people to invest in business and infrastructure, rather than expensive residential land. Unfortunately those policies do not seem to be forthcoming.

However congestion charges end up hitting the working poor disproportionately as (if they are renters) they are often forced to move more frequently or they need to live further away from places of work for affordability reasons, and the charges are fixed and do not vary as percentage of take-home income.

[Swala]

So many ways for Kiwisaver providers to get involved in public infrastructure. Sam Stubbs of Simplicity has been banging on about this for a while. He's also been leading the way with Build to Rent projects in Auckland.


congestion charges on the way.
anyway we need population growth the problem has been consecutive govt's and councils who have failed to invest in infrastructure or maintenance on infrastructure which would have improved productivity etc and easliy supported the increase in immigration.
hopefully this govt have the wisdom to open up kiwisaver funds in some sort of way to public/private investment etc in infrastructure.

an example is nz super fund funding the road's and tolling them with the toll money going back into the fund

[Ggcc]

congestion charges on the way.
anyway we need population growth the problem has been consecutive govt's and councils who have failed to invest in infrastructure or maintenance on infrastructure which would have improved productivity etc and easliy supported the increase in immigration.
hopefully this govt have the wisdom to open up kiwisaver funds in some sort of way to public/private investment etc in infrastructure.

an example is nz super fund funding the road's and tolling them with the toll money going back into the fund
I agree about tolls being an option. I had a disagreement with a friend who mentioned that it really punishes the poor. He is a social worker. I read an article that backed him up

However, I feel that we can't keep borrowing for these sorts of projects when the likes of the Superfund could help and win on its investment.

[bull....]

Good ideas. We need population growth from immigration to a greater degree as a result of the lack of investment (in training and capital investment) in making our existing workforce more productive. Also I think we are bad at retaining our own skilled population.

We also need to encourage more people to invest in business and infrastructure, rather than expensive residential land. Unfortunately those policies do not seem to be forthcoming.

However congestion charges end up hitting the working poor disproportionately as (if they are renters) they are often forced to move more frequently or they need to live further away from places of work for affordability reasons, and the charges are fixed and do not vary as percentage of take-home income.

yep the continual decline in our education outcomes is bad news long term , unless the robots replace us all lol

[bull....]

Why do we need such large population growth?

replace the oldies retiring ...ongoing and increasing and our birth rate is not high enough so we need large immigration to provide for the future workforce and to keep the economy growing to pay your pension.

[Aaron]

replace the oldies retiring ...ongoing and increasing and our birth rate is not high enough so we need large immigration to provide for the future workforce and to keep the economy growing to pay your pension.

Maybe if we as a nation invested more in young people they might be more inclined to stay and have and raise families.

Bit of a bugger the oldies didn't save for their own retirement now following generations will have kiwisaver deductions for their own retirement as well as paying for national super to all the wealthy older asset owners no wonder they are heading to Australia. At least we are still preferable to living in India, China, The Phillipines, South Africa and the UK so have a steady stream of people. I wonder if they are looking at a back door entryway into Australia.

Importing GDP just means we are poorer per head of population. Jammed up highways and crowded beaches doesn't seem like a step in the right direction to me.

But to keep on topic yesterdays burst of stock market enthusiasm seems to have petered out pretty quickly. Pivot coming on interest rates?? or Black Monday.

[winner69]

NZX50 down more than 1% today ….supposedly profit takers to blame

[mike2020]

Wrong person answer

[Valuegrowth]

https://novelinvestor.com/reminder-mr-market/


“And you should accept that Mr. Market will offer some crazy prices at times. Embrace it. Profit from it. The smart investor listens when the opportunity is in their favor.

Remember, the day to day mood of the market might make you richer or poorer on paper but it’s the fundamentals of the business – earnings and asset growth – that really drive business performance and your net worth.”


NZX50 down more than 1% today ….supposedly profit takers to blame

[alokdhir]

https://www.nzherald.co.nz/business/stock-takes-has-the-market-turned-after-a-shocker-past-couple-of-years/NTBHPOG6FBGBJLMDBD57226L6Y/

[winner69]

https://www.nzherald.co.nz/business/stock-takes-has-the-market-turned-after-a-shocker-past-couple-of-years/NTBHPOG6FBGBJLMDBD57226L6Y/

Did you pen that article mate? Or just like the heading?

[alokdhir]

Did you pen that article mate? Or just like the heading?

As per SR my English language skills not good enough to write for such prestigious newspapers ...:p so just like the thoughts ...which maybe the right thoughts for the times ...nothing remains for ever ...circle of life continues ...history keeps repeating ...we all behave same ...like clones ...so market cycle works ...thats why its called cycle !!

[Bjauck]

Did you pen that article mate? Or just like the heading? Typical NZ Herald tabloid heading! A shocker couple of years for the sharemarket? Only if you expect markets never to retreat. Even after these “shockers” over the past 5 odd years we got approx. 5% pa growth in the NZX50 and that includes a pandemic. So that is more surprising than the last couple of years of negative returns!

[clearasmud]

Typical NZ Herald tabloid heading! A shocker couple of years for the sharemarket? Only if you expect markets never to retreat. Even after these “shockers” over the past 5 odd years we got approx. 5% pa growth in the NZX50 and that includes a pandemic. So that is more surprising than the last couple of years of negative returns!
Sorry mate the nzx50 capital index is only up 2%pa for the last five years (and that records actual share price changes).

[bull....]

Sorry mate the nzx50 capital index is only up 2%pa for the last five years (and that records actual share price changes).

dismal performance the nz market , still looking like another negative yr this one, i mean jeepers given back 1.5% last 2 days and bond yields are plunging under 5% this morning. thought it was a rate sensitive market

[Bjauck]

Sorry mate the nzx50 capital index is only up 2%pa for the last five years (and that records actual share price changes).
Sorry mate but my post was referring to the NZX50, which the NZH article also referred to, and it is a gross index and it is up approx 5% pa over the past five years. It is the default index used in NZ, even though other countries by default refer to capital indices. You conflated it with the NZ50C.

I think it is a good performance for a period that includes the pandemic. Even if it is not as good a performance as some overseas markets. If you take the past ten years, then the NZ gross return p.a. Exceeds the gross return in many European markets, but lags the gross return from the US market, taking into account currency movements.

[SailorRob]

Sorry mate but my post was referring to the NZX50, which the NZH article also referred to, and it is a gross index and it is up approx 5% pa over the past five years. It is the default index used in NZ, even though other countries by default refer to capital indices. You conflated it with the NZ50C.

I think it is a good performance for a period that includes the pandemic. Even if it is not as good a performance as some overseas markets. If you take the past ten years, then the NZ gross return p.a. Exceeds the gross return in many European markets, but lags the gross return from the US market, taking into account currency movements.

Gross index totally irrelevant, nz herald doesn't have a clue. Impossible to match it in real world, fake index created to con people. Gayner explained it all perfectly.

[clearasmud]

"I think it is a good performance for a period that includes the pandemic. Even if it is not as good a performance as some overseas markets."
Good point!

[SailorRob]

Would be a incredible effort for a gross index to go down over that period of time.

[Bjauck]

Gross index totally irrelevant, nz herald doesn't have a clue. Impossible to match it in real world, fake index created to con people. Gayner explained it all perfectly.
Fake? Who is Gayner? Did you mean Brian Gaynor? It has its uses. You just have to make sure when comparing NZ returns with those overseas, that you compare the NZX50 with a gross index ( and that you take into account currency exchange movement).

[Bjauck]

Would be a incredible effort for a gross index to go down over that period of time. However, I would have expected the returns from the gross index to underperform bonds and term deposits during that five year period, because of the pandemic.

[Daytr]

Sorry mate but my post was referring to the NZX50, which the NZH article also referred to, and it is a gross index and it is up approx 5% pa over the past five years. It is the default index used in NZ, even though other countries by default refer to capital indices. You conflated it with the NZ50C.

I think it is a good performance for a period that includes the pandemic. Even if it is not as good a performance as some overseas markets. If you take the past ten years, then the NZ gross return p.a. Exceeds the gross return in many European markets, but lags the gross return from the US market, taking into account currency movements.

A much better performance if you traded it.
I was in & out with my Super twice in that time now back in for a 3rd time recently.
First 2 times made gains of around 12% in relatively short periods + the interest gained when out.
Back in now in the last month but a mixed equity basket international & domestic & up 5% in the month.

Be interesting to see if US markets retreat from resistance as they have done in the last 2 days or go on to smash through it.

[Bjauck]

A much better performance if you traded it.
I was in & out with my Super twice in that time now back in for a 3rd time recently.
First 2 times made gains of around 12% in relatively short periods + the interest gained when out.
Back in now in the last month but a mixed equity basket international & domestic & up 5% in the month.

Be interesting to see if US markets retreat from resistance as they have done in the last 2 days or go on to smash through it. You did well timing it with your pension fund! I did manage to sell several of my shareholdings and add to several others at almost the right moment. Oherwise I have held throughout the period.

[clearasmud]

However, I would have expected the returns from the gross index to underperform bonds and term deposits during that five year period, because of the pandemic.

The nzx is off approximately 10% since right before the pandemic though. Bonds have outperformed.

[Muse]

We actually have three indices the folks at S&P keep for the NZX. Some 10 year performance stats per S&P below for those interested.

https://www.spglobal.com/spdji/en/indices/equity/sp-nzx-50-index/#overview

10 YEAR ANNUALISED RETURNS
* Price return / aka capital index: 4.90%
* Total return / aka gross index: 8.62%
* Gross with imputation return / aka gross plus IC's: 9.71%

Moving a few pieces around to isolate 10 year annualised returns:
Capital gains: 4.9%
(+) net dividends: 3.72% (gross index less capital index)
= 8.62% total shareholder return / gross index return
(+) 1.09% return from imputation credits (gross return inclusive of ICs less gross index)
= 9.71% gross return including imputation credits

Net dividend return: 3.72%
Gross dividend return: 4.81% (net plus ICs)

Will let others decide how bad, good, or achievable the index returns are.

10 years the longest dataset the S&P offers for free from their website. I had done the exercise previously using older data going back 20 years - can't find it - but don't think the long term annualised returns have been as good as the 10 year returns from memory, for what its worth.

[winner69]

Any guesses what the new Government will hock of first …could do with a few public offerings

[SailorRob]

Fake? Who is Gayner? Did you mean Brian Gaynor? It has its uses. You just have to make sure when comparing NZ returns with those overseas, that you compare the NZX50 with a gross index ( and that you take into account currency exchange movement).

What are two uses it has?

[SailorRob]

We actually have three indices the folks at S&P keep for the NZX. Some 10 year performance stats per S&P below for those interested.

https://www.spglobal.com/spdji/en/indices/equity/sp-nzx-50-index/#overview

10 YEAR ANNUALISED RETURNS
* Price return / aka capital index: 4.90%
* Total return / aka gross index: 8.62%
* Gross with imputation return / aka gross plus IC's: 9.71%

Moving a few pieces around to isolate 10 year annualised returns:
Capital gains: 4.9%
(+) net dividends: 3.72% (gross index less capital index)
= 8.62% total shareholder return / gross index return
(+) 1.09% return from imputation credits (gross return inclusive of ICs less gross index)
= 9.71% gross return including imputation credits

Net dividend return: 3.72%
Gross dividend return: 4.81% (net plus ICs)

Will let others decide how bad, good, or achievable the index returns are.

10 years the longest dataset the S&P offers for free from their website. I had done the exercise previously using older data going back 20 years - can't find it - but don't think the long term annualised returns have been as good as the 10 year returns from memory, for what its worth.


Mostly multiple expansion.

[Bjauck]

What are two uses it has?
Are you going to answer my questions -
How is the NZX50 a fake index?
Who is Gayner?

Gross Index (GI): This type of index tracks the gross return of the stocks it includes. In other words, it reflects not only changes in their prices, but also any dividends they pay (which are assumed to be reinvested). This is generally seen as a fuller measure of a market’s performance than a price index
https://nasdaqbaltic.com/market-information/about-indexes/

[bull....]

who's this gayner person ? what's there track record ?

[winner69]

who's this gayner person ? what's there track record ?

Gayner that Markel guy who punters on here rave about

[Muse]

who's this gayner person ? what's there track record ?

He’s one of Buffet’s mates.

[causecelebre]

MKL vs SPY

14847

[SailorRob]

Are you going to answer my questions -
How is the NZX50 a fake index?
Who is Gayner?

Gross Index (GI): This type of index tracks the gross return of the stocks it includes. In other words, it reflects not only changes in their prices, but also any dividends they pay (which are assumed to be reinvested). This is generally seen as a fuller measure of a market’s performance than a price index
https://nasdaqbaltic.com/market-information/about-indexes/

Brian Gaynor.

Index was created in 2003 as a fake to lure people back in after 1987. Only one in world that's posted as main.

Market only around 1987 level now, reached back to 87 in 2018 from memory.

The real nz index, capital index, is the story they don't want told.

[SailorRob]

MKL vs SPY

14847

Yes an excellent table.

Markel is phenomenal

[SailorRob]

He’s one of Buffet’s mates.

Buffett.....

[SailorRob]

who's this gayner person ? what's there track record ?

*their

Gayner has done 100 basis points over the sp500 over 35 years. One of most incredible records in world history.

Gaynor, also massively outperformed in Milford but I don't have number on hand.

[SailorRob]

I guess more importantly he did over a thousand points over the sp500 from 2000 to 2012.

[Muse]

Yes an excellent table.

Markel is phenomenal

Wait - from all that OCA carry on about how its better for share prices to fall or stay low allowing reinvested dividends to grow the holding - you like Markel’s rising share price?

With that OCA’s low prices are good as allows dividend reinvestment to grow the holding mindset - kinda sounds eerily similar to an argument to make about the nzx capital and gross index.

Spooky.

[SailorRob]

Wait - from all that OCA carry on about how its better for share prices to fall or stay low allowing reinvested dividends to grow the holding - you like Markel’s rising share price?

With that OCA’s low prices are good as allows dividend reinvestment to grow the holding mindset - kinda sounds eerily similar to an argument to make about the nzx capital and gross index.

Spooky.

What the hell??

No...

I like that Markel has had a hugely underperforming share price while the business has massively outperformed...

I far prefer Markel at $500 than $1500.

The gross index doesn't exist apart from in fantasy land.

[Muse]

What the hell??

No...

I like that Markel has had a hugely underperforming share price while the business has massively outperformed...

I far prefer Markel at $500 than $1500.

The gross index doesn't exist apart from in fantasy land.

Got it. Was worried you were deviating from the course there a minute. Phew.

[causecelebre]

Yes an excellent table.

Markel is phenomenal

Perhaps i've missed something but the SPY outperforms MKL on every measure in that table? Why would I not buy the index?

[SailorRob]

Got it. Was worried you were deviating from the course there a minute. Phew.

Bro. You cannot deviate from math.

https://milfordasset.com/insights/gross-index-will-beat-capital-one

Education is key Muse.

The Earth is flat. That's my opinion, as you've said, it's equally as valid as any other opinion. You just need to have an opinion and it's then as valid as any other.

World according to Muse...

[SailorRob]

Perhaps i've missed something but the SPY outperforms MKL on every measure in that table? Why would I not buy the index?

Every measure but the one that matters. That's the entire point.

Votes.

Weights.

Time.

Everything in your table is vote based or share price based.

You need to to look at the business.

Return on capital. EPS growth. Multiple.

[Muse]

Bro. You cannot deviate from math.

https://milfordasset.com/insights/gross-index-will-beat-capital-one

Education is key Muse.

The Earth is flat. That's my opinion, as you've said, it's equally as valid as any other opinion. You just need to have an opinion and it's then as valid as any other.

World according to Muse...

Not defending the gross index was trying to decipher your markel comment.

I’m pretty critical of the NZX and concept of the gross index. From memory the index assumes dividends are reinvested at ex date and not the payment date. In a bull market gives a slight compounding advantage. Plus assumes no transaction cost which not realistic particularly for NZ given we have among the worlds highest fees for investing into our own domestic exchange. And its creation was motivated in large part to compensate for the woeful performance after the 80s crash when the nzx was littered with garbage.

The positive of the gross index is that gives some consideration to the very high payout ratios here especially relative to the American indicies (of which I am heavily invested into via ETFs).

Ill keep cracking into those books. Thanks.

[SailorRob]

Not defending the gross index was trying to decipher your markel comment.

I’m pretty critical of the NZX and concept of the gross index. From memory the index assumes dividends are reinvested at ex date and not the payment date. In a bull market gives a slight compounding advantage. Plus assumes no transaction cost which not realistic particularly for NZ given we have among the worlds highest fees for investing into our own domestic exchange. And its creation was motivated in large part to compensate for the woeful performance after the 80s crash when the nzx was littered with garbage.

The positive of the gross index is that gives some consideration to the very high payout ratios here especially relative to the American indicies (of which I am heavily invested into via ETFs).

Ill keep cracking into those books. Thanks.


All very true yep.

[Daytr]

Any guesses what the new Government will hock of first …could do with a few public offerings

Maybe some of its stake in Air NZ.
Hopefully no more of the power companies.
That was one of the worst things Key did during his term

[SailorRob]

Maybe some of its stake in Air NZ.
Hopefully no more of the power companies.
That was one of the worst things Key did during his term


*best

We're not commies.

What business does the state have owning power companies?

USSR is over bro.

[Daytr]

*best

We're not commies.

What business does the state have owning power companies?

USSR is over bro.

Best by whom?
The Government is supposed to look after its citizens and this case it it did the opposite of that.
We weren't commies before he sold off 50% of the power companies either.

[SailorRob]

Best by whom?
The Government is supposed to look after its citizens and this case it it did the opposite of that.
We weren't commies before he sold off 50% of the power companies either.


Name a place where the state owns and controls the assets such as power generation that also looks after its citizens.

You are a massive communist and have no place in the free markets or this site.

[Muse]

A few other thoughts re the gross index / capital index.

American companies are not big dividend payers. Conventional wisdom is they reinvest all of it but that's not necessarily the case - many hoard it on the balance sheet (some have HUGE cash balances) and do a lot of buybacks. Less efficient to pay dividends given they don't have an imputation system and investors have to pay tax on the dividend, while at the same time analysts and instos when valuing a company often ascribe full value to the cash balance when determining their equity value, which would seem a good motivation to not payout more for many companies.

The annual average gross dividend yield on the S&P 500 over the last 10 years was ~1.84%.

The gross dividend yield for the NZX50 over the same period was ~4.8% or about 2.6x higher. Our main index is disproportionately represented by bond proxy type companies like LPTs and generators where investors are looking for and satisfied with dividend income and not necessarily capital growth focused.

Net dividends represented just under half (43%) of the total 8.62% gross index return, and gross dividends represented half the gross index plus imputation index return of 9.71%. So it is entirely worthwhile to at least pay some regard to the gross index given the high yields, given many of the constituent companies are bond proxies / alternatives for fixed securities.

But of course a gross index will outperform a capital one - the capital index is just price movements, the gross includes price movements and dividends. The main mechanical advantage a gross index has is the dividends are reinvested into equities which then reinvest into more equities and compound, pays no transaction fees, and has a slight price gain advantage from reinvested dividends in a bull market (although the inverse is true during a bear market where it has accelerated capital losses from reinvested divies that continue to reduce in value - although very minor).

The NZX is a different place from the 80s so comparing the capital index from then to now is losing some relevance, as it is a dramatically smaller exchange with fewer companies and significantly better controls (note, certainly not perfect). In 1985 alone there were 66 new investment & property companies that IPO'd or backdoor listed and crappy meme stocks were all the rage. Main point the NZX was the wild west in the 80s. It's sort of like comparing the share price of a company that divested its main business decades ago but acquired or transformed into something different (eg SPY). Not saying the NZX is a thriving exchange at all in fact I think its in quite a sorry state. Many solid companies have gotten taken over at opportunistic levels, we've had a serious dearth of quality IPOs, and we still get the dud listings like in 2014 when there was an IPO rush and most were flops (though most never made it into the NZX50) as well as the more recent MFB IPO. Big private companies now prefer to stay private or get taken over by trade rather than list.

The best way IMO to compare the performance of NZX and offshore exchanges is to compare tax adjusted gross indices annualised returns for both. S&P maintains various gross indices for the S&P500 the same way it does for the NZX50. It's the most like for the like we can get, despite some mechanical differences in the level of dividend payout compounding into more equities. It's not surprising the S&P500 gross outperforms the NZX50 gross given the vibrancy of the American economy and our mix of bond proxy companies. It is what it is.

There's a place for both the NZX50 gross and capital indices for the above reasons. I think its particularly important for ETF investors to be mindful of - NZX50 ETFs aren't going to have the gains that offshore indexes will, they will pay a good dividend, but have a lower total shareholder return, if history is any guide.

Just my random thoughts.

[Daytr]

Name a place where the state owns and controls the assets such as power generation that also looks after its citizens.

You are a massive communist and have no place in the free markets or this site.

Here we go again.
SailorRob telling people who they are and what they have rights to.
You obviously have no pride, otherwise you wouldn't keep making such idiotic comments.

That country is New Zealand before 50% was sold off.

[Muse]

Any guesses what the new Government will hock of first …could do with a few public offerings

I'd quite like to see AsureQuality IPO'd.

It's a fine SOE was doing $25m NPAT 5 years ago but has withered away under the last government. Maybe a bit of public company ownership could reignite that old commercial spark.

Doubt it'll ever happen.

[ValueNZ]

Here we go again.
SailorRob telling people who they are and what they have rights to.
You obviously have no pride, otherwise you wouldn't keep making such idiotic comments.

That country is New Zealand before 50% was sold off.
Way I see it the less government intervenes into markets the better we all will be in the long run.

Government are horrific capital allocators. Doesn't face the same profit incentives (or loss aversion) that you and I face.

[alokdhir]

https://www.stuff.co.nz/business/money/301010966/only-one-bank-left-predicting-ocr-increase

[SailorRob]

A few other thoughts re the gross index / capital index.

American companies are not big dividend payers. Conventional wisdom is they reinvest all of it but that's not necessarily the case - many hoard it on the balance sheet (some have HUGE cash balances) and do a lot of buybacks. Less efficient to pay dividends given they don't have an imputation system and investors have to pay tax on the dividend, while at the same time analysts and instos when valuing a company often ascribe full value to the cash balance when determining their equity value, which would seem a good motivation to not payout more for many companies.

The annual average gross dividend yield on the S&P 500 over the last 10 years was ~1.84%.

The gross dividend yield for the NZX50 over the same period was ~4.8% or about 2.6x higher. Our main index is disproportionately represented by bond proxy type companies like LPTs and generators where investors are looking for and satisfied with dividend income and not necessarily capital growth focused.

Net dividends represented just under half (43%) of the total 8.62% gross index return, and gross dividends represented half the gross index plus imputation index return of 9.71%. So it is entirely worthwhile to at least pay some regard to the gross index given the high yields, given many of the constituent companies are bond proxies / alternatives for fixed securities.

But of course a gross index will outperform a capital one - the capital index is just price movements, the gross includes price movements and dividends. The main mechanical advantage a gross index has is the dividends are reinvested into equities which then reinvest into more equities and compound, pays no transaction fees, and has a slight price gain advantage from reinvested dividends in a bull market (although the inverse is true during a bear market where it has accelerated capital losses from reinvested divies that continue to reduce in value - although very minor).

The NZX is a different place from the 80s so comparing the capital index from then to now is losing some relevance, as it is a dramatically smaller exchange with fewer companies and significantly better controls (note, certainly not perfect). In 1985 alone there were 66 new investment & property companies that IPO'd or backdoor listed and crappy meme stocks were all the rage. Main point the NZX was the wild west in the 80s. It's sort of like comparing the share price of a company that divested its main business decades ago but acquired or transformed into something different (eg SPY). Not saying the NZX is a thriving exchange at all in fact I think its in quite a sorry state. Many solid companies have gotten taken over at opportunistic levels, we've had a serious dearth of quality IPOs, and we still get the dud listings like in 2014 when there was an IPO rush and most were flops (though most never made it into the NZX50) as well as the more recent MFB IPO. Big private companies now prefer to stay private or get taken over by trade rather than list.

The best way IMO to compare the performance of NZX and offshore exchanges is to compare tax adjusted gross indices annualised returns for both. S&P maintains various gross indices for the S&P500 the same way it does for the NZX50. It's the most like for the like we can get, despite some mechanical differences in the level of dividend payout compounding into more equities. It's not surprising the S&P500 gross outperforms the NZX50 gross given the vibrancy of the American economy and our mix of bond proxy companies. It is what it is.

There's a place for both the NZX50 gross and capital indices for the above reasons. I think its particularly important for ETF investors to be mindful of - NZX50 ETFs aren't going to have the gains that offshore indexes will, they will pay a good dividend, but have a lower total shareholder return, if history is any guide.

Just my random thoughts.

Incredible post, very rare high quality thoughts and analysis on share trader.

The long term price advantage however would be from a long bear market where dividends were reinvested at higher rates of return. The more you can invest back into a cheap market the better long term returns will be.

Could you expand a little on your comment about the nzx being dramatically smaller than the 80's.

[SailorRob]

Here we go again.
SailorRob telling people who they are and what they have rights to.
You obviously have no pride, otherwise you wouldn't keep making such idiotic comments.

That country is New Zealand before 50% was sold off.

I think we've figured out that the state owning the means of production does not work very well sport.

What other assets would you like the state to own 50% of?

[Baa_Baa]

Way I see it the less government intervenes into markets the better we all will be in the long run.

Government are horrific capital allocators. Doesn't face the same profit incentives (or loss aversion) that you and I face.

Totally agree, it should not be up to the tax payer to fund (own) all essential services, when the capital market can do it far more efficiently, and effectively.

Some people just don't like the idea that a relatively apparently few (!) rich people get rewarded for risking their own capital to make that happen.

Sad perhaps that the outcome would be lower costs to the public and more stringent competition in the sector, if they weren't wholly or half owned by the government.

[SailorRob]

Totally agree, it should not be up to the tax payer to fund (own) all essential services, when the capital market can do it far more efficiently, and effectively.

Some people just don't like the idea that a relatively apparently few (!) rich people get rewarded for risking their own capital to make that happen.

Sad perhaps that the outcome would be lower costs to the public and more stringent competition in the sector, if they weren't wholly or half owned by the government.

Strongly agree.

So common sense and obvious but so many snivelling commies just don't get it.

They'd rather we all be poor and suffering at the hands of the bureaucracy.

I hope these people end up in a state run rest home.

[Muse]

Incredible post, very rare high quality thoughts and analysis on share trader.

The long term price advantage however would be from a long bear market where dividends were reinvested at higher rates of return. The more you can invest back into a cheap market the better long term returns will be.

Could you expand a little on your comment about the nzx being dramatically smaller than the 80's.

The point I was getting at was the NZX board was like the wild west in the 1980s, with a different market structure, behaviour and regulatory environment relative to today.

While the NZX50 is capped at - you guessed it - 50 - there were a lot more companies on the NZX. The nzx website shows 131 companies listed on the NZX (excludes funds). Haven't bothered to count the number with a primary listing here so by the time you take away the thinly NZX traded ANZ, westpacs, downers and the like the underlying number a bit lower.

By comparison there were more than 200 companies IPO'd from 1983 to 1987 - more IPOs than the entire number of NZX listed firms today! Then you have the existing companies already listed in addition to the 200 new IPOs and you get a have a bigger number of constituents. There was a lot of mania and skullduggery associated with the IPOs and the behaviour & market trends distorted the nzx50 as well as the general board. So while we followed the overseas trends with the big crash in the 80s we had a lot of own goals in making our crash more severe and long lasting relative to the american experience, if my memory serves me right.

[Daytr]

Totally agree, it should not be up to the tax payer to fund (own) all essential services, when the capital market can do it far more efficiently, and effectively.

Some people just don't like the idea that a relatively apparently few (!) rich people get rewarded for risking their own capital to make that happen.

Sad perhaps that the outcome would be lower costs to the public and more stringent competition in the sector, if they weren't wholly or half owned by the government.

And yet power prices have soared since the sale by Key at a pittance I might add just to cover his Governments deficit.

There has been poor allocation of capital and price manipulation.

https://i.stuff.co.nz/business/130454686/energy-minister-downplays-accusation-power-firms-engaged-in-asset-stripping

https://www.beehive.govt.nz/release/market-manipulation-energy-sector

[SailorRob]

And yet power prices have soared since the sale by Key at a pittance I might add just to cover his Governments deficit.

There has been poor allocation of capital and price manipulation.

https://i.stuff.co.nz/business/130454686/energy-minister-downplays-accusation-power-firms-engaged-in-asset-stripping

https://www.beehive.govt.nz/release/market-manipulation-energy-sector

Yes they sold too cheap...

But guess what...

Kiwis bought them.

[SailorRob]

The point I was getting at was the NZX board was like the wild west in the 1980s, with a different market structure, behaviour and regulatory environment relative to today.

While the NZX50 is capped at - you guessed it - 50 - there were a lot more companies on the NZX. The nzx website shows 131 companies listed on the NZX (excludes funds). Haven't bothered to count the number with a primary listing here so by the time you take away the thinly NZX traded ANZ, westpacs, downers and the like the underlying number a bit lower.

By comparison there were more than 200 companies IPO'd from 1983 to 1987 - more IPOs than the entire number of NZX listed firms today! Then you have the existing companies already listed in addition to the 200 new IPOs and you get a have a bigger number of constituents. There was a lot of mania and skullduggery associated with the IPOs and the behaviour & market trends distorted the nzx50 as well as the general board. So while we followed the overseas trends with the big crash in the 80s we had a lot of own goals in making our crash more severe and long lasting relative to the american experience, if my memory serves me right.

Yeah your memory is correct. Any idea of the total market capitalisation back then?

[kiora]

I'd quite like to see AsureQuality IPO'd.

It's a fine SOE was doing $25m NPAT 5 years ago but has withered away under the last government. Maybe a bit of public company ownership could reignite that old commercial spark.

Doubt it'll ever happen.

I'm not sure that would be good for NZ Inc ?

"What does AsureQuality do?

AsureQuality Limited (previously AgriQuality Limited) is a State-Owned Enterprise (SOE) fully owned by the government of New Zealand. The company's core business is food quality assurance with its services including certification, inspection, testing, and training"

I would think its independence from exporters /food manufacturers is a necessity for export certification?

[Daytr]

Yes they sold too cheap...

But guess what...

Kiwis bought them.

So it was a wealth transfer at the expense of the tax payer.
And of course it's those who either couldn't afford to buy shares or don't have the knowledge to be involved with shares who suffer.

[Bjauck]

Yes they sold too cheap...

But guess what...

Kiwis bought them.
With the Mighty River Power float for example, actually foreign institutions got 13.5% of the shares on offer.
Only 113,000 people were able and wanted to buy shares. Of those 13,000 could afford and wanted to take half the shares.
https://www.nzherald.co.nz/business/mighty-river-shares-went-to-just-a-few-greens/ORT2HBKUJE3X3BYHG6DDJZT3RY/

[Panda-NZ-]

And yet power prices have soared since the sale by Key at a pittance I might add just to cover his Governments deficit.

There has been poor allocation of capital and price manipulation.
r (https://www.beehive.govt.nz/release/market-manipulation-energy-sector)

If it was privately run we'd have blackouts.

Plus the wider economy paying more and recieving less reliable supply (due to run down infrastructure).

See Australia - conservatives there blame it on renewables - nope it's your mates.

[Panda-NZ-]

With the Mighty River Power float for example, actually foreign institutions got 13.5% of the shares on offer.
Only 113,000 people were able and wanted to buy shares. Of those 13,000 could afford and wanted to take half the shares.
https://www.nzherald.co.nz/business/mighty-river-shares-went-to-just-a-few-greens/ORT2HBKUJE3X3BYHG6DDJZT3RY/

NZers don't have the money.
Should have had higher wages and 10% kiwisaver... but the time for that was a decade ago I think.

[SailorRob]

So it was a wealth transfer at the expense of the tax payer.
And of course it's those who either couldn't afford to buy shares or don't have the knowledge to be involved with shares who suffer.

Yes I agree. But two different arguments.

This is talking about them being sold too cheap.

My concern is the state owning them at all.

This isn't the USSR.

[SailorRob]

NZers don't have the money.
Should have had higher wages and 10% kiwisaver... but the time for that was a decade ago I think.

Yes... And how do you get higher wages and kiwisaver?

You have to produce more goods and services in relation to inputs.

You can't sit around reading Karl Marx and magic up higher living standards.

You have to actually get off your arse.