EQC last annual report .... pretty pictures .... and now we know where a lot of our insurance money has gone ... and no doubt premiums to go up to build up the reserves for the Wgtn quake
http://www.eqc.govt.nz/downloads/ar-...rt-2008-09.pdf
Printable View
EQC last annual report .... pretty pictures .... and now we know where a lot of our insurance money has gone ... and no doubt premiums to go up to build up the reserves for the Wgtn quake
http://www.eqc.govt.nz/downloads/ar-...rt-2008-09.pdf
EQC has re-insurance just like the commercial providers albeit from a much higher level.
Also re future costs I'll doubt you will notice much:Quote:
EQC chief financial officer Phillip Jacques said it would gradually be selling assets, such as global equities to pay for the first $1.5b of claims, before its $2.5b reinsurance kicked-in.
Quote:
The concept of insurance is about sharing and spreading losses. In this earthquake the losses suffered by around 100,000 households and probably 50-60,000 businesses will be shared with all of those taking insurance in New Zealand and around the world.
New Zealand is seen as part of the Australasian insurance market and therefore we tend to have events in Australia impact on our cost of buying global reinsurance.
But insurance is based on the expected cost, expected risk and number of people paying.
The Chch earthquake was unexpected so fell outside the insurance calculation so there will need to be some catchup. But given the number of people contributing, the extra burden shouldn't be that great on the individual level.
Study backs up hallowed traders' whim
GREG NINNESS - Sunday Star Times Last updated 05:00 31/10/2010
Share
Text Size
http://static2.stuff.co.nz/1288338374/871/4288871.jpg
It seems you can't go wrong if you buy after Halloween and sell in May, leaving your money on term deposit in between.
Tomorrow might be a good time to buy shares according to new research which confirms the effect of the "Halloween Indicator".
The indicator is a long-held theory among share traders that share prices start to rise in November and begin to fall back in in May, leading to the maxim you should buy after Halloween and sell in May, leaving your money on term deposit in between.
Research undertaken by Professor Ben Jacobsen and PhD student Cherry Zhang from Massey University's School of Economics and Finance, suggests the theory is true.
The pair looked at monthly data from the UK stock exchange going back to 1693 as part of a project to look at long-term seasonal influences on share prices, and found that prices do tend to rise in November and fall from May.
Jacobsen has also been studying data from this country which suggested the New Zealand market had been following the same trend since 1998, something he attributed to the increasing integration of the world's financial markets. He had followed the theory when investing himself and had achieved good returns, he said. "An investor with an investment horizon of five years would have remarkable odds of beating the market 80% of the time, with returns, excluding dividends, on average three times higher than the market, if they followed the theory," he said.
"With an investment horizon of 10 years, the historical odds increase to 90%."
Jacobsen and Zhang have published their findings on the Social Science Research Network.
Hoop
You'll love Chart of the Day today
http://www.chartoftheday.com/20101029.htm?T
Compelling eh .... sell in may and come back in October works ... on the US markets anyway
Nearly ALL the gains on the US markets have been made thru winter .... spooky eh
Is this going to become a self fulfilling prophesy?
I don't have NZSX50 data going back as far as 1693, but here is a study of the 8 year period covered in this thread.
The chart below compares the capital gains accrued by the "May/October" system with (i) doing nothing (Buy and Hold), (ii) the usual 200 day Moving average and (iii) trading the Market Strength Indicator as discussed in the NZSX50 thread.
http://i602.photobucket.com/albums/t...sPB/MaySep.gif
In any case, surely once you incorporate trading costs the case to try and time the markets becomes less compelling? Plus that way you don't feel like a sheep.
Of course your not going to get above average returns, when the period you cover is explicitly mentioned as not producing above average results.
Quote:
there are some noteworthy periods during which the Halloween indicator didn't produce (e.g. during the oil embargo of 1973-74, the dot-com bust of 2000-01, and the financial meltdown of 2007-2009), the overall out performance is compelling.
Brokerage of 0.2% on 8 - 12 trades spread over 8 years is a trifling sum, but nevertheless it has been incorporated into the above chart. The 2 trading systems plotted there doubled and tripled the returns gained by simply buying and holding. I can't conceive of a more compelling example of the case FOR trying to time the market!
Generally speaking, I think you will find that it is the sheeple that "buy and hold" regardless of overall market direction. They have been told that "it's time in the market that counts, not timing the market" - and unfortunately they believe it. They don't know how to time the market and think that it is impossible anyhow.
The aim is to make money, JayPe. Don't let your feelings get in the way of that.
Does your chart include
cost of trading software?
cost of data?
33% capital gains tax on any profits?
Dividends which the buy and holders would of recieved?
Time spent monitoring investments?
Is eight years really a long term chart?
Ratkin, that chart was set up to evaluate the worth of the "Halloween" TRADING SYSTEM and to compare its results with those of other approaches. It wasn't as good as "buying and holding" but plenty of systems are way, way better.
Quote "there are some noteworthy periods during which the Halloween indicator didn't produce (e.g. during the oil embargo of 1973-74, the dot-com bust of 2000-01, and the financial meltdown of 2007-2009), the overall out performance is compelling" In short, they are saying that the Halloween indicator worked really well - except when it didn't!
But, Mr Needs, the Halloween indicator never produced above average returns. Right from the get-go it lagged well behind the market average returns of simply buying and holding. Take another look at the red plot in the chart. Well before the meltdown, it had only made about half the gains of simply buying and holding - and those guys talk about "compelling overall out performance"!!!
Halloween Indicator:
One popular system many people discuss is the “Sell in May and Go Away” (also known as the Halloween Indicator) strategy. The system simply invests in the stock market from November – April, then moves to cash from May – October. This strategy popularized by Yale Hirsh (who writes the informative and entertaining Stock Trader’s Almanac 2011), has its origins in the U.K. market as far back as 1935 (see must read paper “Are Monthly Seasonals Real?“).
The paper finds very strong evidence of abnormal performance in the UK since the 1600s, and Bouman and Jacobson (2002) find that the strategy works in 36 of the 37 countries they tested.
When we look back over the history of the NZSX50 Index, Q3 (July/August/September) is way ahead of the other 3 quarters. This explains the abysmal performance of the "Halloween" indicator (Buy in November, Sell in May) - it has you out of the market over its most profitable quarter.
As applied to NZ stocks, this "indicator" is devoid of meaning and totally worthless. It may have worked well hundreds of years ago in the UK and perhaps it still works well in the Northern hemisphere - but down here in NZ, over the period covered by the NZSX50 Index, it has been a resounding failure.