Touched $4 yesterday, is the run over ?
Touched $4 yesterday, is the run over ?
1) General negative sentiment due to Telstra T2 purchasers having got badly burnt (they bought at $7.40)
2) The sell-off by the Future Fund
3) A lot of small investors not understanding the benefits of franking credits
For the last point read the following article:
"Dividends and franking credits are underestimated by investors"
by James Dunn, The Australian, July 09, 2011 12:00A
For the kind of reasons explained in this article I believe TLS share price has a long way to run, especially as bank interest rates have fallen further since the article was written.
For me personally I will keep buying TLS up to a price of $4.95, at which point I will consider it fully valued.
This is based on my judgement that TLS can at least maintain its 28 cents per share dividend long term and that interest rates will remain depressed long term, i.e. my TLS valuation does not depend on an assumption of dividend growth.
I also consider a more conservative valuation based on the assumption of lower dividend yields after 2014 but even then I come to a valuation of around $4.60 (i.e. that being the maximum price that I would be prepared to pay for a TLS share today)
If a dividend growth assumption is factored into the analysis it will give a higher valuation than $4.95.
But you have to make your own judgement according to your own circumstances.
I've just read through a lot of but certainly not all the posts in here and I can say that negativity is easy there's plenty of that but the positive posts by credible posters are the ones to watch.
The one that stands out is when someone said I shouldn't bother with shares, they're probably right, not without a very good adviser at least.
There is risk with every investment decision and judging that risk should be part of making the decision. If I seriously thought Telstra was completely risk free my valuation would be higher than $4.95 (maybe even as high as $7.00) because I would use a lower discount rate. But the reality is TLS is not risk free. So if TLS does reach $4.95 and the outlook for dividends remains at 28 cents/share I would prefer to keep spare cash in a term deposit rather than buy more TLS shares at that price. But these are just my personal judgements and I could be wrong.
http://www.theaustralian.com.au/aust...-1226414351617Gillard adamant on NBN despite Coalition policy shift From: AAP July 02, 2012 11:15AM
PRIME Minister Julia Gillard insists only Labor will build the national broadband network despite the coalition's backflip on cancelling the project.
After promising to terminate the NBN if it comes to power, Opposition communications spokesman Malcolm Turnbull has been quoted by Fairfax as saying the coalition won't cancel an estimated $1.8 billion worth of contracts already signed by NBN Co.
Asked about the coalition's change of heart, Ms Gillard said only Labor could guarantee the $36 billion project, which the government expects to have completed by late 2020.
"The only government that will build the national broadband network is this Labor government," Ms Gillard told reporters in Melbourne on Saturday.
However the coalition has changed its tune, saying it will continue with the rollout.
Can someone tell me when the best time to buy TLS is, what I mean doesn't it dip when the dividend is paid ???
I dont know about these things but if someone could enlighten me, I think I may dip a large toe in the water.
As regards "buy when?" for dividend, there are various theories about dividend stripping, buying-holding, etc. None of them are effective every time; to me, the chart tells the "right time" regardless of dividends.
But you're guessing correctly (IMHO) when you expect a drop after the ex-div date. The unknown elements are: by how much? and will the sp recover afterwards or keep dropping? What I wrote above makes me doubt it can hold on to current levels.
The early bird makes the early worm look pretty stupid.
Thanks pixel, much appreciated
Dunno how you guys do it but it's now below $4.00, my best move in shares is just to observe
Buy now Burnsie. The price is off about 5% in two days. You know if you don't now, you never will.
Hang on for a rise as it appraches the ex-div date and sell before ex-div for quick profit. See disclaimer below.
DISCLAIMER: I could be wrong.
Despite recent falls, the share price has risen strongly over recent months and I suspect this has been driven to some extent by investors chasing yield as interest rates have been falling. Headline profit while now inching in the right direction is only projected by the company to continue to grow slowly. If investor emphesis changes from yield to growth in the near term, the general trend in my view is that the share price would likely be to fall further in the near term.
Again when trying to predict these sorts of things, the above disclaimer applies.
But only 1 of the above types ever become long-term profitable traders.
Seems very unwise to not plan or control risk with so much cash, only asking to be at the mercy of emotions.
"All I Want in Life is an Unfair Advantage"