ANZ vs WBC

[gonzo56]

Hey,
I was just wondering what thoughts are on investing in either of the two banks on NZX.
On DB, the depths are; WBC $29 and ANZ $35

Westpac shows better value PE wise compared to ANZ, though that could be due to due to the Asia expansion for ANZ and people willing to pay more...

What are your ideas?

[POSSUM THE CAT]

Gonso56 split your money and have some of each

[GTM 3442]

Gonso56 split your money and have some of each

Especially as they're both at 26.00 !

But no imputation credit.

[Aaron]

As far as valuing banks go I would have no idea but I'm trying to understand Technical analysis and wouldn't the indicators be telling you not to buy right at the moment.
Charts aside on a more fundamental basis isn't there some debate as to whether Aussie has a housing bubble and isn't overseas funding potentially going to become more expensive. What would these events do to the banks profitablity if they burst/occured.

[Phaedrus]

(1) Don't do it Gonzo! Hold on to your money. Markets are falling worldwide - ANZ and WBC along with the rest. Wait. Who knows how far they will fall. If you have a habit of buying downtrending stocks, break it!

(2) What's the difference? Tweedledum and Tweedledee. You may just as well toss a coin.

(3) Why on earth would you buy both? It's not as if you would be diversifying!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/WBCanz.gif

[gonzo56]

Thanks Phaedrus, I did not buy. I would be happy with around $24 for WBC...
When it happens how can you tell if it is an uptrend, and not a small bounce back? Is it when its in combination with a positive market, or is it determined by the duration of any particular trend etc..?

[Phaedrus]

I would be happy (to buy WBC) at around $24... Well Gonzo, in my opinion it is not good to have a specific "buy" figure in mind. What you are trying to do is impose your aims/aspirations/wishes/hopes on the market. WBC is going to do what it is going to do, so you must to adapt to it. Your purchase plan must be flexible enough to accommodate market reality.
Scenario (1). WBC falls to $25, tracks sideways for a while, then starts rising - and keeps on rising. You have missed out on buying and feel bad.
Scenario (2) WBC falls to $24 and you buy. The shareprice continues falling, going right down to $19 before the downtrend reverses. You feel bad.
Scenario (3). You get impatient and buy now at $26 and the downtrend continues. You feel bad.
Scenario (4). WBC falls to $22 stays flat for a while then starts to rise. You buy at $23. You feel good.
Scenario (5). WBC eventually breaks above the trendline and/or moving average. You buy at $23. You feel good.


When it happens how can you tell.....Entire books are written on just that topic, Gonzo. To give you some idea of the most basic Technical Analysis, here are 2 simple charts. The simplest trend indicators are trendlines (red) and Moving averages (blue) The idea is to buy if/when price action breaks above either of these.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/WBCanz73.gif

More sophisticated systems would probably get you into these stocks a bit earlier but you need to learn to walk before you run. Keep it simple to start with.

[gonzo56]

Ok Phaedrus, thank you.
Figuring out chart patterns can be daunting; following the MA is nice and simple.
Cheers again.

[winner69]

Gonzo - even the experts can't agree which is the best OZ bank

http://www.thebull.com.au/articles/a/11935-big-four-aussie-banks---buy-or-sell.html

[gonzo56]

Thanks for the article. They all follow the index to a T in that graph. WBC looks like a solid option + better divs

[winner69]

Especially as they're both at 26.00 !

But no imputation credit.

P told Gonzo 'don't do it' .... and both a re now just over $22

CBA got a muted response from a $6b profit ... these still to report ... and the world not a happy place for punters at the moment .... so P advice at $22+ to gonzo would still be 'don't do it' .... probably

Interesting times for the aussie banks

[winner69]

Even though both ANZ and WBC shareprice lower than when gonzo first posted the latest earnings announcements point to ANZ being the better medium to long term bet

[sharer]

Even though both ANZ and WBC shareprice lower than when gonzo first posted the latest earnings announcements point to ANZ being the better medium to long term bet
Agree, in my case because i hope their longer term strategy to expand in asia will succeed.