SUM - Summerset Group

[troyvdh]

SUM is a retirement entity....it may be advantageous if folk focus in the same long term mind set than react to daily/weekly fluctuations.....cheers

[Hoop]

SUM is a retirement entity....it may be advantageous if folk focus in the same long term mind set than react to daily/weekly fluctuations.....cheers

My reason for the daily/weekly watch/lurk/post on SUM is to help "time" my next lot of accumulations..(portfolio efficiency)

Many say price doesn't matter when one buys in for the very long term....but imo.. many years of hand wringing when I was a long term investor I believe it does matter..Buying just before a correction (mistime) and watch it go down 15% (normal bull market correction) takes away one's confidence...sometimes when things don't go according to the fundamental plan one could be sitting on an investment for many months watching it going nowhere while the other stocks you chose not to buy + the market rockets up..this mistiming results in poor portfolio efficiency and can damage your ego causing rash/riskier decision making (speculative catch -up)..

Using SUM for example....mistiming a buy at the end of May 2014 @ 3.40 only to watch it fall -25% and you had to wait 13 months before your investment went from red to green (catch-up) and in the meantime have to suffer how happy other posters were, making money hands over fists in the on going Bull Market..and your are -11%

Using SUM again...More recently mistiming a buy back in September 2016 when it fell a couple of percent thinking you're buying "cheap" shares in the dip only to see your investment today is still in the red by -11%...Now these 1 year catch-up time examples I've mentioned have (is) happening during a bull market correction (minor) and could've been prevented using TA to time those buys/accumulations..How would that make you feel if media commentators commented that SUM share price has gained +400%** in 5years up to today's price...eh...and...telling you that chimps with dartboards are make lots of money during this bull market cycle...
** timing from IPO would have given your stock portfolio better efficiency >+400% probably+600%

We know from history that Bear market cycles (Major) can cause 2,3,4 years of catch-up time...SUM has not experienced a NZ index Bear Market cycle yet but we have seen what damage corrections can do...

In theory buy and hold for a long time in a growth stock sounds good..but its easier said than done...When sounding the virtues of LT B&H discipline no -one mentions the 6 to 12 months damage a Bear Market can do ...they are portfolio killers and especially damaging when an LT investors started or accumulates investing near a top of a cycle ,,,,,,,,,,,,,,,,,,,Just think how much more portfolio efficiency can be gained by being in the stocks for 3,4,5,6+ years (bull cycle) and being out of that stock for 6.12.15months (bear cycle) then back in again for another 3,4,5,6+ years...

TA helps in decision making.. not the ideal (perfect world), but a better chance to time ones buys and sells...Investors/Layman/ordinary people are misled when thinking TA.. TA is not a short term investing discipline used by frequent traders (although it can used this way).. TA is used by all sorts of investors and is considered a variable term investing discipline..eg If a stock continues to rise forever that TA investor will be invested in that stock forever..

Variables change all the time and affects investor behaviour and TA responds to investors changing behavioural sentiments....so us investors on this forum thread discuss SUM's changing investing environment looking/waiting for opportunities.....It's all about being aware and use timing timing timing

[Joshuatree]

Thanks Hoop.Timing is key alright.
"Many say price doesn't matter when one buys in for the very long term." I think the Investment adviser industry are responsible for this brainwashing. Someone is recommended a balanced portfolio to buy and the advisors have their standard go to stocks like RYM,FBU ,Vector etc which they buy at the current mkt price regardless of value,saying the above to the client. They also cultivate "its too hard to manage your investments leave it to us," take their annual fees out and let Investors dangle with RYM for example; gone nowhere for 3 YEARS! iF one had been placed in FBU 10 years ago one would be down $4 a share and the management fee gets taken out regardless. Buying and holding one of those relics unfortunately; if only it was that easy!

[JeremyALD]

Question Hoop when this was $5.40 a few months ago would this of triggered a buy signal using TA? It seemed like it was going onwards and upwards at that point as I and many others here thought.

[JeremyALD]

Thanks Hoop.Timing is key alright.
"Many say price doesn't matter when one buys in for the very long term." I think the Investment adviser industry are responsible for this brainwashing. Someone is recommended a balanced portfolio to buy and the advisors have their standard go to stocks like RYM,FBU ,Vector etc which they buy at the current mkt price regardless of value,saying the above to the client. They also cultivate "its too hard to manage your investments leave it to us," take their annual fees out and let Investors dangle with RYM for example; gone nowhere for 3 YEARS! iF one had been placed in FBU 10 years ago one would be down $4 a share and the management fee gets taken out regardless. Buying and holding one of those relics unfortunately; if only it was that easy!

I guess a lot of them pay good dividends though, so I do see the case in point of hanging in for the long term. For example let's say you bought HLG 5 years ago and it returned 11% dividend but zero capital gain you'd still of done pretty well - in high dividend stocks I can see the point of not trying to 'time' the market. With stocks like RYM and SUM timing is more important because essentially if it drops over a year it's wasted money with pretty limited income flow back.

[Joshuatree]

Fair point; if income is a high priority.

[Hoop]

Question Hoop when this was $5.40 a few months ago would this of triggered a buy signal using TA? It seemed like it was going onwards and upwards at that point as I and many others here thought.

I thought so too, the media was very positive..eh Jeremy

However the TA fired buy signals 6 weeks before then when it broke the ~4.80 resistance. When it reached 5.40 in March and again in April and failed to go higher to reach a new high that 5.40 double top or slanted H&S (take your pick) both bearish patterns became a TA warning sign that something was wrong as it showed there was conflicting behaviour, the media behaviour showed SUM had overcome its correction and was exuberant in it's outlook yet mass investor behaviour had turned bearish..

Have a look at the chart link here...I kept it very simple using EMA100 as a proxy trend line.. Using medium term TA and using ideal theoretical activity (allowing a little leeway with false EMA100 breaks) If you bought SUM at IPO using TA would have you "in" for 32 months.."out" for 6 months...."in" again for the next 22 months up until October 2016...since then SUM behaviour has changed its lost its upward trend momentum and got volatile making it a more risky stock to invest in using this simple method..

Portfolio efficiency shows up with that important one "in" and "out" and back "in" long term (LT) activity mentioned above
For example holding 100,000 shares from just after IPO say average value of 1.40/share..selling at 3.30 after 32 months realising $333,000 ...buying back in 6 months later at 3.00 using that 333,000 realised money, you have 110,000 shares..you are now 10,000 shares better off than the LT B&H investor..

My all time classic portfolio efficiency example using simple TA was with MFT a few years ago..I actually did this for real but not from the theoretical beginning (it took me a little while to cotton on that MFT was being MA30 friendly) ..Phaedrus didn't believe me at the time...but that example was quote.."At the end of trade 8 that $7800 has turned into $14780... +89% profit during a Bear market cycle on a share with had lost nearly 2/3's of its share value ( 810c high to 340c low).... Damn good eh..." In other words using a buy and hold discipline during that time would have seen that investor being ~60% down..a very poor portfolio efficiency rating.
MFT post #280, page 19, 5th May 2009 LINK

[Lewylewylewy]

I think sum changed direction because of industry news on wages and property prices. I don't think it had anything to do with how the chicken bones landed or tea leaves. #NotABelieverInTA

[Elles]

I think sum changed direction because of industry news on wages and property prices. I don't think it had anything to do with how the chicken bones landed or tea leaves. #NotABelieverInTA

I don't think TA is trying to explain why the change happened, but gives ways to time entries and exits into the market, rather than sitting through the ups and downs.

[Joshuatree]

Well put Elles and thanks again Hoop. I keep the T/A as simple as i can trying to follow KW's user friendly advice, but don't always have the discipline. My ego and lazy brain can be a problem. To call T/A superstitious like reading tealeaves is so far out as its very precise and mathematical.If one doesn't understand something how can one rubbish it. Taking the best opportunities from these threads to learn and get better at investing is a gift freely offered . I will refresh KW's wisdom.