Which one do you use? Technical or fundamental analysis?

cuttlefish · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Realist said:
I'll always sell stocks when they become overvalued. I just sold CDO at $4.35. My first sale in years. Time will tell if that was a good sale.

And yes I will sell stocks if I wanna buy a car, or for tax reasons - in this case both.

Otherwise I hold....

What is your selling strategy? (I admit mine is poor - I rely on buying well not selling well)

For the value investing I tend not to be in a hurry to sell even if some of the stocks end up a bit overvalued - so I usually only sell something if my research has found a better value buy and I want to free up some money to allocate towards that. I've also sold my whole share portfolio a couple of times to buy property.

Its surprising how often a stock I've bought has ended up a takeover target at some point - when that occurs if there is the choice of cash or shares I'll make an assessment of the value of the company carrying out the takeover and if it matches my criteria for a value buy (which is rare) I'll take the shares instead of cash. (an example of a situation where I did take the shares instead of cash was Downer's takeover of EDI).

It's Snake Pliskin · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Realist said:
I'll always sell stocks when they become overvalued. I just sold CDO at $4.35. My first sale in years. Time will tell if that was a good sale.

And yes I will sell stocks if I wanna buy a car, or for tax reasons - in this case both.

Otherwise I hold....

What is your selling strategy? (I admit mine is poor - I rely on buying well not selling well)

I thought you were going to hold for 30 years, as posted before in this thread.

Realist · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

I thought you were going to hold for 30 years, as posted before in this thread.

30 years, 30 days what's the difference. :dunno:

The answer is tax of course.

Colorado is not a bluechip, it probably aint worth holding for 30 years, (some) bluechips are..

Had it not been the end of the financial year I would have held - I changed my plan for this stock, and I'll sell a couple of my losers to fix up my portfolio.

I'll sell a couple of losers to offset the tax and maybe buy them back next year at the lower price. tis the smart thing to do I think.

Buy and hold is my basic principal - I of course adjust accordingly. If a company starts to make losses or becomes too overvalued I review accordingly.

It's Snake Pliskin · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Realist said:
30 years, 30 days what's the difference. :dunno:

The answer is tax of course.

Colorado is not a bluechip, it probably aint worth holding for 30 years, (some) bluechips are..

Had it not been the end of the financial year I would have held - I changed my plan for this stock, and I'll sell a couple of my losers to fix up my portfolio.

I'll sell a couple of losers to offset the tax and maybe buy them back next year at the lower price. tis the smart thing to do I think.

Buy and hold is my basic principal - I of course adjust accordingly. If a company starts to make losses or becomes too overvalued I review accordingly.

Woop dee doo as you say.

Read your posts and look how you have changed in a week. The icon says it all.

Realist · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Woop dee doo as you say.

Read your posts and look how you have changed in a week. The icon says it all

My policy on that share has changed, sure I got a quick windfall - I'll take it any day.

My overall policy will always be the same though. Avoid tax (which I am doing now), buy undervalued shares - hold for yield - sell if they become too overvalued.

Simple.

It is not as if I would ever not sell shares, I avoid it though for one main reason - tax!

cuttlefish · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

c'mon you're all over the place - you either don't have any real plan or you don't know how to stick to it. Why did you sell CDO at 4.35 instead of 4.30 or 4.40?

What is it about CDO that makes it a stock that you wouldn't hold forever.

Also I thought your investment plan is to buy and hold for 30 years, so if CDO isn't a stock you would hold, then why on earth did you buy it in the first place?

Realist · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

What is it about CDO that makes it a stock that you wouldn't hold forever.

Too small, ****ty products - I don't like Colorado, Diana Ferrari or Jag at all. Brands are average.

Also I thought your investment plan is to buy and hold for 30 years, so if CDO isn't a stock you would hold, then why on earth did you buy it in the first place?

Cause it was undervalued!!

I buy one of 2 types of companies:

I'll buy a small company ( even if I don't like it), if it makes a profit year after year, is not in debt and pays dividends and is quite underpriced at the time - if it is on sale!!!

I own (CDO), CMI, GHG, FUN, RIC etc.

I'll buy a large monopoly like BHP, Fosters and Westfield, a company that is a world leader, a company with a competitive advantage, excellent brands, and has a fantastic past and future ahead of it - and hold forever!! I must like the company, And I'll buy it as long as it is not overvalued. (you don't get these on sale very often)

I own BHP, RIO, FGL, WDC, etc.

You need a great company to hold forever. CDO was never to hold forever.

cuttlefish · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

So what will be your criterion for selling GHG - i.e. at what price will you consider it to be overvalued?

Did you decide at the time of buying CDO that 3.45 was going to be the price you would sell at? If not, at what stage did you decide that 3.45 was an overvalued price for this stock?

Staybaker · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Why all the grilling of Realist on his buys and sells? I don't see others being subjected to this in-depth questioning ...

Cheers, Staybaker.

cuttlefish · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Because realist has said, in the past week or two, that his strategy is buying and not selling for 30 years. So when he then say's ( a few days later) that he's sold something I'm curious as what drove that decision at that point in time.

Julia · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Staybaker said:
Why all the grilling of Realist on his buys and sells? I don't see others being subjected to this in-depth questioning ...

Cheers, Staybaker.

Hello Staybaker

Probably because Realist has been rash enough to make really emphatic statements about his philosophies and then completely contradict them.
e.g. A few pages ago I described myself as basically a buy and hold investor from preference. However, this is qualified by my readiness to sell something which is just not performing or if the fundamentals have changed. Perhaps I bought a stock on what appeared to be great fundamentals but for all that, the market hasn't agreed, and in the end I am going to be governed by the price action.

Realist contended that this made me a "trader" and repeated that he believed in holding on to stocks pretty much for ever (or words to that effect).

But then, he states he has sold Colorado. So it's not altogether unreasonable for other members to suggest that he's changing his mind all the time. That's fine. We all change our minds. I think the difference is the way Realist has "rubbished" approaches other than his own, which in the event appears to be subject to significant change anyway.

That's just how I see it. Others may have better answers to your query.

Cheers
Julia

Realist · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Realist contended that this made me a "trader" and repeated that he believed in holding on to stocks pretty much for ever (or words to that effect).

But then, he states he has sold Colorado. So it's not altogether unreasonable for other members to suggest that he's changing his mind all the time. That's fine. We all change our minds. I think the difference is the way Realist has "rubbished" approaches other than his own, which in the event appears to be subject to significant change anyway.

There's a big difference!!

Traders sell shares because they've gone down. They move onto other "better performing" shares in their eyes.

Investors sell because they've gone up. They bought undervalued shares, the value has been realised - they cash out.

If you buy a nice house in a nice street for a good price and some hotshot billionaire offers you twice what you paid for it, hell yeah I'd sell to him. And if he moved out a year later and sold it cheap I'd buy it back off him.

That's all I did. If he hadn't offered I'd have lived in it. I got an offer I couldn't refuse - I took it. What is wrong with that?

If I want CDO I can probably buy it back cheaper next month.

If it goes down to $3.40 again I will!!

Realist · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Because realist has said, in the past week or two, that his strategy is buying and not selling for 30 years.

I did say that - but only for great companies. I mentioned Fosters and Westfield. And I have no intention of selling them possibly ever. But of course if they got to be tremendously overvalued I'd sell them - I've said that as well. The chances of that are slim though obviously.

I have in the past also mentioned I've bought undervalued small caps - I could hold them for a long time, but if they become overvalued I'd sell them.

Simple as that.

Only an idiot would buy and hold forever regardless of price - if a share is clearly overvalued you sell. If it is not you hold. If in doubt hold. Patience.

BSD · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

You have bagged a cracker - why not wait to see the offer?

Or a trumping offer?

Why leave early?

cuttlefish · 23 June 2006

Re: Which one do you use? Technical or fundamental analysis

Realist said:
Only an idiot would buy and hold forever regardless of price - if a share is clearly overvalued you sell.

At the risk of sounding repetitive - on what criteria did you decide that 3.45 was the magic number at which CDO was overvalued?

Let me guess - you didn't decide it based on any logical criteria at all, you just decided to sell it because you felt like it at the time.

Traders sell shares because they've gone down. They move onto other "better performing" shares in their eyes.

Investors sell because they've gone up. They bought undervalued shares, the value has been realised - they cash out.

ahh, thanks for explaining that - so the problem with trading is that traders advocate buying shares at a high price and when they fall then selling them - no wonder they all do so badly compared to your brilliant strategy of buying shares when they are undervalued and selling them when they go up in price, which is entirely different in philosophy.

Realist · 24 June 2006

Re: Which one do you use? Technical or fundamental analysis

You have bagged a cracker - why not wait to see the offer?

Or a trumping offer?

Why leave early?

My guess is this takeover company wants to take a 14% share and wait. Nothing more.

When they do nothing for a while the price will go down again, then when it is cheap again they can pounce if they want. Why buy some ramp the price up and buy some more? doesn't seem right to me.

Cuttlefish, that answers your question. I sold today because I thought it was very close to the best price I could get.

If it goes much higher I'll be surprised, if it drops down I wont.

What would you have done in this situation oh wise one?

cuttlefish · 24 June 2006

Re: Which one do you use? Technical or fundamental analysis

Realist said:
Cuttlefish, that answers your question. I sold today because I thought it was very close to the best price I could get.

But on what did you base your decision that it was the best price you could get? How did you arrive at that decision?

Realist · 24 June 2006

Re: Which one do you use? Technical or fundamental analysis

But on what did you base your decision that it was the best price you could get? How did you arrive at that decision?

To buy the stock I did some basic research, some maths about previous NPAT results compared to the current Market Cap. looked at debt, P/B and NTA, I deemed the stock was "cheap" for the yield and average EPS you get for the price.

It went up 25% from where I bought it, I figured out why, it was a 14% buyout but mainly rumours & speculation. And I deemed it wont go up much more cause now it is fairly valued, but could drop down again if rumours prove to be unfounded, as all the maths I did changed and the margin of safety I had was no longer there. I suspected the takeover company will bide its time and wait for the price to fall again - why buy when the price is up. I watched for a bit, put in a sell bid and took the profits for what was only 1% off the recent high. The fact we are 1 week from financial year end and I had only owned it about 3 weeks helped make the decision for me.

We'll see if I was right. I was about the buy, as for the sell? Only time will tell.

I appreciate your feedback....

I'm sure this is not perfect value investing, but I am very happy to learn from it. And hear others opinions.

I'm sure others may hold.

cuttlefish · 24 June 2006

Re: Which one do you use? Technical or fundamental analysis

Ok realist, contrast the following selected quotes out of this thread by your's truly with the final one.

I worry about brokerage fees and tax more than most here, and I never aim to own any share less than 1 year because of this.

I've got 30 years to wait and thousands of dollars to spend - that's enough for me to wait.

Exactly, he buys them when they are on sale. And holds onto them forever.
Tax, brokerage, effort, time, slippage and stress are 6 reasons why I don't trade.

People like to make easy things difficult. People will not accept that weightloss is that easy, and they will not accept investing is as easy as buying shares in a great company and mostly forgetting about them. If they want to make more pay less initially, wait for a sale.

I have no doubt that anyone who just bought some Woolworths, Fosters, Westfield and BHP shares today and reinvested the dividends and forgot about them for 30 years would end up richer than most, if not all of you on this board.
Your tax is nothing, brokerage nothing, stress nothing, effort and time involved nothing, Price slippage on trades nothing. You don't actually have to do anything. But I have no doubt that none on you will do this

Okay my shares are FGL ($5.55) and WDC ($17.20) - and I recommend you hold them for 30 years minimum and reinvest dividends.

Why buy them? Great companies, great brands, they pay dividends, worldwide market leaders, property and wine is a bit out of fashion at the moment but will surely be back in fashion sooner or later. They are fairly valued. And I firmly believe people (mainly Aussies but worldwide as well) will shop at Westfield and buy beer and wine in 30 years time.

It'll be interesting to see what you recommend.

We'll meet back here on June 17th 2036 to compare. (just kidding )

An investor buys a good company and waits, A trader buys a stock price and watches. There is no in between in my opinion. You can't be a short term investor, you either invest with longterm goals or you trade/speculate - simple as that.

Bear in mind I only buy companies that I see as having an excellent longterm future. No specs whatsoever.
I could not watch the market for a year and be safe my companies arew performing adequately.

I'm not interested in short term income or returns anyway, I've still got 30 odd years of working to do unfortunately.

And then we have:

It went up 25% from where I bought it .... The fact we are 1 week from financial year end and I had only owned it about 3 weeks helped make the decision for me.

can you see the inconsistency here?

Realist · 24 June 2006

Re: Which one do you use? Technical or fundamental analysis

Cuttlefish, thanks for spending hours searching through my posts.

As I've said and I will always say : I try and buy undervalued stocks and hold them as long as possible.

Bluechips I'll try and hold forever, small caps not forever but at least a year and in most cases longer.

However, it would be naieve of anyone to hold everything forever always.

I have recently sold just 4% of my portfolio because I got a windfall and it is one week from year end. Some people sell 1000% of what they buy each year - they buy and sell everything 10 times over - I sold just 4%. is there anyone here who's sold less this whole year?

Do you not think someone selling 4% of their portfolio is living up to the buy and hold mentality? Especially considering they are a "value investor" and the one stock they sold rocketed 25% in 2 days? And it was just 1 week before Financial year end?

Who are you kidding trying to interogate me? I could easily not have mentioned I sold the stock if I was worried about coming across as inconsistent.

I have and will continue to buy and hold. But things change, I may get married and have to buy a house, I may lose my job, or my stocks soar and become overvalued. I will of course sell if it suits me, but my policy is buy undervalued, hold, avoid tax and brokerage.

It is bizzare that you are so fixated on this....

I will probably be selling some Nasdaq shares next financial year as well (they've doubled and I have far too much money in them)- so please prepare yourself so the shock to your system is not too great.

Which one do you use? Technical or fundamental analysis?

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