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Phaedrus
08-10-2004, 02:03 PM
SCT has very convincingly broken out above the resistance level that had held for a year. This stock has been in an uptrend since giving a trendline break Buy signal in late 2001. There is a confirmed trendline in place. All lows of this uptrend have been above a 300 day exponential moving average - a Close below this ema would provide a good exit signal, as would a break of the trendline or a drop below the 20% trailing stop as plotted on the chart.

When a stock has been encountering resistance over a period of time, a "depletion zone" is created just above the level of that resistance, where there is a paucity of sellers. This means that the longer any given resistance level is in effect, the more explosive any breakout will be. The reason is simple. Put yourself in the position of holders of this stock that were wanting to sell at, say, $3.50 to $3.80. These people would have had an entire year to realise that, if they really wanted to sell, they would have to reduce their price. Many would have done just that - continually lowering their asking price until eventually their stocks were sold. This leads to fewer sellers in the price band above the resistance. Fewer sellers mean a more vigorous rise when/if the resistance level is broken. In addition, of course, there are naughty TA people who like to buy stocks that have just broken above an extended period of resistance. So, you have increased buying pressure and a smaller than usual number of sellers. A good recipe for a sharp rise in the share price. This chart is an excellent illustration of the classical TA phenomenon of an explosive breakout after prolonged resistance. Take a look at the CEN chart to see another clear example.

In the book "Technical Analysis of Financial Markets" the author, John Murphy, devoted many pages to the psychology of Support and Resistance. MvT, on the other hand, claims that "support and resistance are rubbish".

http://img.villagephotos.com/p/2004-10/848030/SCT001.gif

k1w1
08-10-2004, 02:09 PM
Hi Phaedrus, is that what is going on with NZR which has jumped 10% today for no reason that I am aware of ?

Phaedrus
08-10-2004, 02:24 PM
Yes, but the breakout was on 1/6/04.

http://home.ripway.com/2003-11/39768/NZR001.gif

k1w1
08-10-2004, 02:28 PM
Thanks Phaedrus. Although your chart doesnt show it the SP went to 24.50 today with buyers at that figure and only a few sellers on the medium horizon around $26.00. Would you still keep 20% trailing stops on this bearing in mind that it is less liquid even than SCT. ?

foodee
08-10-2004, 02:47 PM
Thanks Phaedrus for the revealing chart. Studying it closer it seems that this share has been spiking about this time of the year over the last three years that is pre announcement - may be more good news. Noted your ma suggestion.
Has been an excellent performer for me.
cheers

Capitalist
08-10-2004, 03:55 PM
Welcome back Phaedrus. I found this very interesting...

When a stock has been encountering resistance over a period of time, a "depletion zone" is created just above the level of that resistance, where there is a paucity of sellers. This means that the longer any given resistance level is in effect, the more explosive any breakout will be (...) This chart is an excellent illustration of the classical TA phenomenon of an explosive breakout after prolonged resistance. Take a look at the CEN chart to see another clear example.

In the book "Technical Analysis of Financial Markets" the author, John Murphy, devoted many pages to the psychology of Support and Resistance. MvT, on the other hand, claims that "support and resistance are rubbish".

All rather Freudian...explosive breakouts after prolonged resistance. We all like it when that happens ;) even Tempksy I'm sure...I must read that book.

PS I sold HRB late August, which was a good move I think.

Phaedrus
08-10-2004, 04:12 PM
K1w1, I had better post the reply to your NZR chart query under its proper heading. See NZR thread.

k1w1
08-10-2004, 04:41 PM
Cap I think Roger encountered prolonged resistance from Deb C. I think he was hoping for the "explosive breakout" after they left the Backbencher.

k1w1
14-10-2004, 09:23 AM
Okay techies, its down 5% as people realise that our strong currency will hurt and there are no bonus shares. At what price do the stop losses kick in ?

Phaedrus
14-10-2004, 10:31 AM
K1w1,
As per the chart above. "A Close below the ema would provide a good exit signal, as would a break of the trendline or a drop below the 20% trailing stop as plotted on the chart".
SCT remains a good stock that is still in an uptrend. Only short-term traders would be flicked out by price action such as todays drop. We Medium-term trend-following techies are made of sterner stuff than that! We also know that it is quite common for price action to drop after a breakout such as this. It is also common for resistance, once broken, to become support. That is what ought to happen here - SCT should find support at $3.40. A clear break below that would give a Sell signal.
SCT is a good stock with good fundamentals. We techies are counting on the fundies to provide a good solid floor of buying support at $3.40. You should see todays drop as a market over-reaction and as such, presenting a buying opportunity. If you guys fail to front up here, I will (sadly and with regret) begin unwinding my position.
K1w1, on the fundamentals alone, do you consider SCT to be worth buying at $3.40?

k1w1
14-10-2004, 02:55 PM
Under $3.40 so lets see you techies take your medicine like men !

I don't want any MacDunk wobblers who act contrary to their hybrid code, always with some weasel worded ex post facto rationalisation.

Phaedrus here are my views on the fundamentals.

Scott's real asset is its location and workforce. Because of where it is and because South Islanders are real men who do real jobs they have a highly skilled workforce who arent going to leave. Peter Jackson sourced many of his Weta technicians from small towns in the bottom of the South Island where making do with whats available, creating and fixing are just a way of life. Like farmers used to do, and mechanics before they became replacement part fitters. So just like Weta these Scott boys are world class. Like all of us Mainland born lads.

I read there was almost a cult amongst managers who had installed their plant. Setting up assembly lines in the third world seems to be the sort of niche that we should be in to me. They always have no debt. Currently the currency will hurt them. In Buffet terms they have lumpy earnings which the market doesnt like. So thats my fundy take on them.

Enough of that. Its entertainment time. I want to go watch the SCT shareprice as the techies hold hands as they jump from the Twin Towers

GO YOU LEMMINGS !!!!

stephen
14-10-2004, 03:14 PM
Another fundie-orientated take: these guys potentially have a real franchise. This is stuff is hard-core engineering. They have protection from competition both in intellectual property law (or do they? an interesting thing to investigate) and in sheer know-how; implementing this kind of machinery takes skill and you can't afford to be close enough or rough around the edges.

Having said that, the promise of this machinery is that it is cheaper than paying people. In the long term, skilled labour becomes ever-more expensive; there can be many short term hiccups.

The meat industry stuff worries me. I used to work at MIRINZ; slaughterhouse automation is a very difficult problem. Animals do not come in standard sizes, the conditions are awful for machinery, the industrial accident potential is horrendous, and slaughterhouse staff are sadly a lot cheaper than they used to be. All luck to these guys, but this itself requires investigation at a deep level before I would have faith in its potential.

I agree on the lumpy earnings. Unless we are all confident that they will see substantial and sustained earnings growth in the future they are over-valued significantly right now.

Phaedrus
14-10-2004, 03:21 PM
K1w1,
You haven't answered my question - Do you consider SCT to be worth buying at $3.40? In other words, what do you value SCT at?

k1w1
14-10-2004, 03:36 PM
No I wouldn't buy at 3.40. But I will hold what I hve.

stephen
14-10-2004, 03:39 PM
Can I try to answer? My bedside reading is a new value investing book so let's see what I learned.

A very conservative, old-school person would simply look at the present value of their current earnings. Let us make some back of the envelope assumptions:
- eps as reported is accurate (really we should poke hard at the annual report)
- for fairness' sakes, we'll call this year a currency blip, and average with last year, giving an eps of 0.20
- we'll assume a cost of capital around 10%

This would give you a no-growth valuation of just over $2.

How much do we value their growth prospects at? Weeeeell, I don't see much of a trend over the last five years - I see up and down. Any growth potential, and particularly growth where there are barriers to entry from competitors, has yet to be demonstrated in my view. So personally, I see $3 as being more than fair at this point, noting the worries I mentioned above. A true value investor would want more safety margin than that.

k1w1, how'd I do?

stephen
14-10-2004, 03:45 PM
PS: dunno how you would value a big bunch of machine tools but I would wonder whether a typical Taiwanese engineering firm would have much trouble cloning their operation. I would be most interested in an informed opinion from someone with a commercial engineering background.

Phaedrus
14-10-2004, 03:51 PM
Kiwi,
What do you value SCT at?

Stephen,
Since you value SCT at $3, does that mean that you would have sold at that level on the way up? Certainly that valuation must make SCT overpriced and thus a screaming sell at the moment - Yes?

stephen
14-10-2004, 04:02 PM
Not necessarily. Yes, I would have sold if I felt there was a significantly better opportunity elsewhere. Right now, if I held SCT (which I don't) I would be doing my homework on the issues I raised about prospects for growth, the success of the meat industry initiative, and the vulnerability to competitors. If my fears proved correct, why yes, I certainly would sell. Of course we can't say another opportunity is genuinely better unless we have done our homework on that potential purchase also.

Of course, if I really held SCT, I would have done that homework already, and wouldn't be so cagey now.

Stock Man
14-10-2004, 04:02 PM
Down .44c or 11.5% so far. It will be interesting to see if sct has 'hit the floor' and buyers move in...

Taijon
14-10-2004, 05:50 PM
SCT traded at $3.35 in Nov 2003 cum a 1 for 8 bonus issue and a final dividend of 8 cents per share which was paid out on the bonus shares as well as the holding pre-bonus.

After going ex bonus and final dividend the share price dropped to $2.85.

Looking at the situation now, there is no bonus issue and the final dividend (7 cents) is 1 cent lower. The recent prices of $3.85 - $3.90 were most likely based on the expectation of another bonus issue, similar to those of 2002 and 2003.

The bright light on the horizon is the order book which is said to be very high. Some of these contracts will have been signed at this higher exchange rate for the $NZ and so profits are less likely to be eroded by an unfavourable exchange rate. The company says it is also going to outsource overseas, some activities to reduce costs.

I wouldn't buy today at more than $3 cum dividend, based on the current scenario. I expect profits for year-end Oct 2005 will be higher than this year. Between now and then if there are opportunities to buy at around $2.70-$2.80 I for one will be in.

Phaedrus
14-10-2004, 07:09 PM
Some months ago in an earlier SCT thread I said "SCT is a relatively lightly traded stock. This generally means a wide bid/ask spread and greater volatility. You have to give such stocks more than the usual amount of room to breathe". $100,000 daily turnover is not large and is not especially high even for this stock. Take a look at the sharp dip in mid 2003. Here the percentage price drop was double that of today, along with more than triple the volume. Price action still failed to break below the trendline and the uptrend continued.
Todays action, then, was NOT a Price/Volume Climax such as often mark major turning points. (You can easily see the one in October 2001)

I am monitoring this stock using 4 parameters. Exit signals would be generated by :-
(1) A break of the current confirmed trendline
(2) A break below a 300 day Exponential Moving Average
(3) A break below a 20% Trailing Stop
(4) A clear break below the recent Resistance level.

http://img.photobucket.com/albums/v418/789456/SCT3001.gif

As you can see, NONE of these conditions have been met (yet!) so I have NOT sold. I have quite a substantial position in this stock that will take time to unwind, so my plan is to sell progressively, as each Sell signal is triggered.

K1w1, I am puzzled as to why you equate "taking your medicine like men" with acting on predetermined Sell signals when they are eventually triggered. I have been holding SCT for 3 years now - that is a long time by my standards. A Sell at any of the 4 posted exit criteria will lock in capital gains from what has proved to be a very profitable trade. I am happy to hold, I am happy to sell. At this stage I cannot lose - either way.

You seem to be in some doubt as to whether I will have the discipline to act on these signals when they are eventually triggered. Fear not my flightless feathered friend - I learnt that lesson many years ago. The hard way.

k1w1
14-10-2004, 07:30 PM
Well Phaedrus, (damn that was a great book wasn't it)there was a touch of hyperbole in it. But there is a human factor to overcome when you have to exit on a falling share. Always the hope that if you just hold for a few cents lower that the tide will come in. Perhaps it will tomorrow for the volume is very light.

That's why I need all the techies to get triggered. Buyers will not be all that thick on the ground same as sellers. This baby could go down like the Titanic. If so us bottom dwelling scum suckin' low life fundies will be all over this baby.

Stephen I think that the discounted present cashflow model you made was credible, how do you put a figure on future growth potential. Too many variables if you ask me.

I am going to watch this share.I hope that the techies hold true to their principles like Phaedrus assuredly will if we can get this baby down to 3.35. Then anything could happen.

If I was a trader or techie there may be an argument for getting out now and safeguarding profits. If it goes lower you can always get back in. If it starts to trend back up you can buy in as well. But I'm not so I won't be a seller. There is no reason to ,according to my investment style. But it is not a compelling buy at the current price.

duncan macgregor
14-10-2004, 08:04 PM
KIWI, The idea in my opinion is wait to this share bottoms, and keep close watch on the exchange rate. That is the basic reason for the less than expected profit. This will be a good company to get back into later. cheers macdunk

stephen
14-10-2004, 08:12 PM
"How do you put a figure on future growth potential?"

With great scepticism, which is why I would demand a large margin of safety before I bought.

k1w1
14-10-2004, 08:13 PM
Agreed, MacDunk

*gasp. goes off to take his temperature as may have been stricken by a strange illness*

k1w1
15-10-2004, 11:18 AM
Any of you techies walked the plank ? er.. sorry

Any of you techies unwound your positions as a result of stop losses being triggered by a break below the resistance level signalling an impending um, um spiralling pattern ending in a splat ? er..well I started that off with good intentions I just don't know enuf techie speak....

o-k one more try.

"To paraphrase the Erebus Report.

Has this share emitted a " whoop , whoop, pull up now " noise yet ?"

Steve
15-10-2004, 12:02 PM
I received my SCT shares when split out of DON @ 67.6c and adjusted for the 2 bonus issues since then, my entry price reduces to 53.3c:D:D:D

Anyone else in the same boat?!

k1w1
15-10-2004, 12:10 PM
Phaedrus,

I notice that someone has just sold 216 shares @ 3.35 and finally 8 shares @3.35.

Was that you liquidating your positions ?

duncan macgregor
15-10-2004, 02:59 PM
KIWI, The 8 shares at$3-35 were not mine honest. It would be some jewish bastard trying to give us scotties a bad name. cheers Macdunk

Nevl
15-10-2004, 03:12 PM
SCT is one that I looked at a few years ago when I had no cash and wanted to buy then never did and then watched as all you other investors did well. Congrats. I am with K1w1 on this one and will buy on any major oversell. I like the way K1w1 values his stocks but after a few years of observation have a very profound respect for Phadreus' postings. One issue is that I belive that the NZ$ may stick above .60 US for a long time. It will be interesting to see how this effects a number of stocks. Not just SCT but also PVO, WDT, SOE and CTL and a number of other small exporters.

Risk
15-10-2004, 04:06 PM
I traded SCT a couple of times in 2002-2003 for some quick profits, but looking at the chart now, long term holders did better....thats assuming you can sell at current prices ;)

not that I'm complining, because holding SCT long term means you occasionally have given back a lot of your paper profits...which is not usually my style.

maybe I lack patience, but when the price reached 3.80, I would have set my trailing stop to 3.70 (2%+)

duncan macgregor
15-10-2004, 06:19 PM
KIWI For petes sake get these bums of my back,I had nothing to do with them eight shares. PHeadrus it must have been you and a wrotten TA swindle. NEVI, BELGARIAN,RISK, AND steve.macdunk will be watching take care. MACDUNK

k1w1
15-10-2004, 06:53 PM
I've got your back on those 8 shares MacDunk. I regard Phaedrus silence on the point as incriminating at this stage.

stephen
15-10-2004, 07:45 PM
This Jewish bastard assures you that he has more money than that.

MacDunk is drunnk, but won't take a taxi! Think of the oney he'll save when he walks home behind it!

duncan macgregor
15-10-2004, 07:54 PM
STEPHEN, You were the one that sold the ten shares after that then?. MACDUNK.

Phaedrus
16-10-2004, 05:43 AM
K1w1,

[u]THERE HAVE NOT BEEN ANY SELL SIGNALS YET.</u>

Why do I have to keep telling you this?

k1w1
16-10-2004, 06:37 AM
quote:Originally posted by Phaedrus

K1w1,
. It is also common for resistance, once broken, to become support. That is what ought to happen here - SCT should find support at $3.40. A clear break below that would give a Sell signal.
SCT is a good stock with good fundamentals. We techies are counting on the fundies to provide a good solid floor of buying support at $3.40. You should see todays drop as a market over-reaction and as such, presenting a buying opportunity. If you guys fail to front up here, I will (sadly and with regret) begin unwinding my position.



Phaedrus, when you said here, I took it you were referring to 3.40.For two straight days now the SP has been below 3.40. It has been as low as 3.35 on both days .We may have to differ as to whether or not there has been a clear break of the 3.40 resistance level.

Whilst I accept that volumes are not huge there is a clear argument that can be made that this stock is retracing to its earlier levels in the mid 3.30's.

The price rise can perhaps be explained by buyers hoping that there would again be a bonus issue in the annual result pushing the price up on a lightly traded stock. Those signals caused techies to regard this as a break out and also purchasing as per their methodology.

When the bonus issue did not eventuate buyers exited as on its fundamentals the 3.80 price was hard to justify.The share price has dropped over 10%, a significant amount.

Phaedrus
16-10-2004, 10:07 AM
K1w1,
You are still not looking at the chart. The last 3 peaks were :-
21/4/04 $3.38
30/7/04 $3.38
3/8/04 $3.38
the days in question are :-
14/10/04 $3.37
15/10/04 $3.38
It is hard to credit that you are claiming that this price action constitutes, as per point (4) in my post of 14/10/04, "A clear break below the recent Resistance level" ("Clear" = conspicuous, definite, distinct, obvious, pronounced) Look again at the chart I posted for you on 14/10/04 - I would be absolutely astonished if anyone on ShareTrader agreed with you on this point!

You state that (The price) "...has been as low as 3.35 on both days". Wrong - it went to 3.35 on one day only, but so what? The system as posted is based solely on End of Day data - intraday lows (and highs) are totally irrelevant here.

"The share price has dropped over 10%, a significant amount." Nonsense - that is nothing for SCT. As I have said many times "SCT is a relatively lightly traded stock. This generally means a wide bid/ask spread and greater volatility. You have to give such stocks more than the usual amount of room to breathe". Anyone foolish enough to use a 10% Trailing Stop with this stock would have been flicked out 17 times over the course of this uptrend. That's how insignificant a 10% fall is! That's why we are using a 20% Trailing Stop. A 10% drop is well within the normal volatility of this stock. Again, look at the chart.

"There is a clear argument that can be made that this stock is retracing to its earlier levels in the mid 3.30's." Really? Let's hear it!

K1w1, Why is the possible triggering of a Sell signal here a matter of such keen interest to you? You seem very critical, but I am unable to discern what it is that lies behind the sarcastic tone of your posts.

What, precisely, is the point you are trying to make?

k1w1
16-10-2004, 12:05 PM
[quote]Originally posted by Phaedrus
"There is a clear argument that can be made that this stock is retracing to its earlier levels in the mid 3.30's." Really? Let's hear it!

K1w1, Why is the possible triggering of a Sell signal here a matter of such keen interest to you? You seem very critical, but I am unable to discern what it is that lies behind the sarcastic tone of your posts.

What, precisely, is the point you are trying to make?
[quote]

The Sp definitely hit 3.35 yesterday. As I recall it hit 3.35 the day before as well but I dont have access to figures to check that.Why are intra day figures irrelevant? Is that one of the Techie Ten Commandments?

The figure of 3.40 as the support price/resistance came from you, as per your earlier quoted posts, not me. Who did not read the charts properly ? Or did you mean 3.38 all along. It is a fair interpretation of what you wrote to regard a SP of 3.35 as a distinct, obvious orpronounced break of a 3.40 support price regardless of your indignation at my temerity in doing so.

Here is my take. Previously the market rated this stock around the mid 3.30's based on previous performance and growth potential. This SP runs up prior to the annual announcement on hopes of increased profits and/or bonus shares. They were not met this year so the SP is retracing to those earlier levels. I may be wrong - only the Pope has to be infallible.

I don't retract from describing a 10% drop in SP as significant regardless of where you techies set your stop losses.

Why the sarcasm ? Always been a weakness of mine . No offence meant and apologies to anyone offended.

What's the point ? That there are different investing styles which produce different action points or not as the case may be. Freedom of expression should allow me to give you techies a good rev up, just as I expect us fundies to come under fire on a regular basis.

Phaedrus
16-10-2004, 03:39 PM
K1w1,
Regardless of what you recall, the SCT Low for 14/10/04 was $3.37. I have checked from 4 different sources and all agree.

Intraday figures are vital for short-term TA, stochastics, candlesticks, price bars and many other indicators. The system I have been posting for SCT is obviously a long-term one - intraday prices do not figure here at all, therefore they are totally irrelevant in this case.

"I don't retract from describing a 10% drop in SP as significant regardless of where you techies set your stop losses." K1w1, this has nothing whatsoever to do with TA, it is to do with the natural volatility of the stock in question. For reasons I have stated many times, SCT is quite a volatile stock - its price often drops by 10% or more. Thus, viewed within the context of SCT, a drop of 10% is insignificant, it means nothing. Anyone uncomfortable with sustaining short-term losses of that size (or larger) would have quit SCT years ago, missing out on substantial capital gains. Fundamental analysts are supposed to concentrate on "value", and usually claim to be indifferent to fluctuations in the share price.

K1w1, I believe that you have gone out of your way here to deliberately misinterpret the system I posted. I simply cannot put it any clearer than I already have :-
"I am monitoring this stock using 4 parameters. Exit signals would be generated by :-
(1) A break of the current confirmed trendline
(2) A break below a 300 day Exponential Moving Average
(3) A break below a 20% Trailing Stop
(4) A clear break below the recent Resistance level."

SCT has, in fact, never shown Resistance at $3.40. It has always been at lower figures than that as is obvious from even a cursory inspection of the chart. You can easily see that the Resistance line is a little below $3.40. Any reasonable, thinking person would have recognised the figure of $3.40 in the text of that old post as a typo. You have based your entire case on this, and I think less of you for it. Look at the chart - any fool can see that recent price action has so far failed to clearly break below the Resistance line - whatever the level it is at. That is the crucial point here.

TA has worked well on this stock - getting you in early and keeping you in for 3 years (so far) regardless of short-term price fluctuations, while the long-term uptrend continues.

k1w1
16-10-2004, 07:15 PM
quote:Originally posted by Phaedrus

That is what ought to happen here - SCT should find support at $3.40. A clear break below that would give a Sell signal.
SCT is a good stock with good fundamentals. We techies are counting on the fundies to provide a good solid floor of buying support at $3.40. You should see todays drop as a market over-reaction and as such, presenting a buying opportunity. If you guys fail to front up here, I will (sadly and with regret) begin unwinding my position.
K1w1, on the fundamentals alone, do you consider SCT to be worth buying at $3.40?


Well its a funny old typo isnt it, Phaedrus. You appear to have made the same typo three times in one paragraph alone . Back to typing school perhaps so that next time you mean 3.38 your fingers dont mistakenly hit 3.40. I've tried to do it and its not all that easy.

Clearly you have read the posts on this thread and you never before corrected me or others when they have referred in their posts to your resistance level being at 3.40.

Is what a fundy would call an "I've reviewed this on being challenged.The resistance level on the graph is 3.38 not 3.40 as I mistakenly assumed in my earlier post" called a "typo" in techie speak ?

As for the SP I recall on day 1 last sale was 337 but there were sellers at 335. These were picked up by buyers on opening of day 2. I accept what you say about no sales on day 1 at 3.35.

If any share that I hold drops 10% in a short period that is significant TO ME. I don't think it is yet illegal for fundies to hold this viewpoint despite your disagreement with the proposition.

There are a lot of us fundies who were in this share early Phaedrus, not just techies. I am not in fact a MVT about techies at all. I am just giving it a robust shake on a share I have some interest in. I am sorry if I have ruffled your feathers as a result.
.

Risk
16-10-2004, 09:24 PM
quote:Originally posted by Phaedrus
Any reasonable, thinking person would have recognised the figure of $3.40 in the text of that old post as a typo.

Phaedrus, with all due respect, I dont believe that 3.40 was a typo...perhaps 3.38 was what you meant, but its not what you said.

Sure, if you look at closing price, 3.38 is resistance/support, but unless Kiwi zoomed on the charts himself, he obviously took your word for it that it was 3.40.

Most members here take your word as Gospel.;)

Phaedrus
17-10-2004, 10:25 AM
In an effort to avoid just the sort of petty hairsplitting that is going on here, I generally refer to resistance or support as being found at around a certain level. It is a shame that I failed to use that qualifier in this instance, though I suspect that if I had, some bird-brained beanie would be requesting a formal definition of exactly what I meant by "around". I should also have referred to the minor and inconsequential discrepancy between the chart and the text as an oversight or a mistake rather than a typo.
While it can occasionally be exact, right to the cent, Support and Resistance most commonly appears across a narrow range of prices. The peaks that defined the initial resistance here were at 338 and 339. Give or take a cent and we have a resistance/support zone of 337 - 340. It would have been better if I had used these figures. But I didn't. Mea culpa maxima.

Let's cut the crap gentlemen.
The single important question here is this :- Has SCT made a clear break below the recent Resistance level, thus triggering a Sell signal?

The answer is [u]NO</u>

Capitalist
17-10-2004, 02:09 PM
Phaedrus: Some bird-brained beanie would be requesting a formal definition of exactly what I meant by "around".

Your are far too polite Phaedrus. Lindsay Perigo calls such creatures "Pedantic, nit-picking clever-dick smart-asses who ejaculate to arcane masturbations about the meaning of the word "meaning"

:D:D:D

k1w1
17-10-2004, 06:32 PM
Can I say Cap that I strongly resemble that last remark...

duncan macgregor
17-10-2004, 06:38 PM
KIWI. can you please explain what capitalist said. and while you are at it what is the definition of around. macdunk

k1w1
17-10-2004, 06:41 PM
Oooh, oooh I know that one MacDunk ...the definition of around-is the type of question that would be asked by a bird-brained beanie. The other bit about dicks, and asses and masturbation is from Cap's friend Lyndsay Perigo. He enjoys playing wide receiver - to borrow an American football expression.

Risk
17-10-2004, 08:01 PM
I've never heard of this lyndsay perigo....
but I bet she's facist too ;)

my definition of "around" is a vague figure that I used when I didnt stick to my stoplosses.

(nowdays I use "exactly"...which is a precise figure which I always use as a stop...its too hard to set an automatic stop to trigger at "around")

but seriously...Phaedrus is right as usual...you must give support a bit of breathing space, so if I had been using support as a stop I would have set my suto stop to sell if a trade completed at $3.36. (ie. just below the expected support range...because if it trades there, then you are proved wrong)

k1w1
10-11-2004, 12:06 PM
Originally posted by Phaedrus ,
K1w1 said "There is a clear argument that can be made that this stock is retracing to its earlier levels in the mid 3.30's." Really? Let's hear it!


Is this SP now out of the 337-340 resistance/support range from a TA viewpoint ?

StainlessSteelRat
10-11-2004, 02:40 PM
quote:Originally posted by Phaedrus

In an effort to avoid just the sort of petty hairsplitting that is going on here, I generally refer to resistance or support as being found at around a certain level.


I imagine all but the most obtuse would have been able to see that from your original post. You said a

quote:clear break below that would give a sell signal

Now, for my mind a "clear break below" would have to be at least one percent, though some might argue two - any less would mean that a quick sneeze at almost any price would get the sellers out. At $3.40 1% is 3.5 cents, 2% is 7c.

IMO, you were justified so far with your original position.

Having said that, i notice SCT is sitting at 331c last sale - there might be a few who are getting a bit twitchy.

Phaedrus
10-11-2004, 03:14 PM
K1w1, given that the latest price of $3.31 is below the nominal 337-340 resistance/support range quoted, the answer must be yes. You will be pleased to know that I have made a couple of fairly ineffectual attempts to reduce my holding of SCT. My heart is not in it though, for the following reasons :-
(1) The 3 year+ uptrend is still intact.
(2) Price action is still above the confirmed trendline.
(3) Prices have not broken below the 300 ema as plotted.
(4) Price action is well above the plotted Trailing Stop.
(5) The On Balance Volume continues to rise.
SCT is very lightly traded and is currently sporting a 4 cent bid/ask spread. Now I remember why I usually avoid illiquid stocks!

k1w1
10-11-2004, 04:35 PM
Phaedrus, keep your SCT shares. Macdunks NOG's did him no harm.

Cheers,

K1w1

k1w1
26-11-2004, 09:26 AM
Is there now a clear break below the resistance level giving a sell signal on this share to the TA people ?

Phaedrus
26-11-2004, 09:41 AM
K1w1, given that the latest price of $3.28 is below the nominal 337-340 resistance/support range quoted, the answer must be yes. You will be pleased to know that I have been reducing my holding of SCT. My heart is not in it though, for the following reasons :-
(1) The 3 year+ uptrend is still intact.
(2) Price action is still above the confirmed trendline.
(3) Prices have not broken below the 300 ema as plotted.
(4) Price action is well above the plotted Trailing Stop.
(5) The On Balance Volume continues to rise.
SCT is very lightly traded and is currently sporting a 6 cent bid/ask spread. Now I remember why I usually avoid illiquid stocks!

Snoopy
26-11-2004, 09:02 PM
quote:Originally posted by Phaedrus

K1w1, given that the latest price of $3.28 is below the nominal 337-340 resistance/support range quoted, the answer must be yes. You will be pleased to know that I have been reducing my holding of SCT. My heart is not in it though, for the following reasons :-
(1) The 3 year+ uptrend is still intact.
(2) Price action is still above the confirmed trendline.
(3) Prices have not broken below the 300 ema as plotted.
(4) Price action is well above the plotted Trailing Stop.
(5) The On Balance Volume continues to rise.
SCT is very lightly traded and is currently sporting a 6 cent bid/ask spread. Now I remember why I usually avoid illiquid stocks!


Aw Phaedrus, I had real hope's we would convert you back to an F/A 'buy and hold' guy and there you go selling out....

Very difficult to know from an F/A perspective where SCT goes from here. Based on their traditional business, I would say SCT has to be near the top of its share price range.

If we get a major downturn in the US and the appliance manufactuerers decide 'on mass' not to update their washing machine production lines, then SCT might be in for a tough couple of years.

OTOH the SCT move into China sounds promising. And if the automatic boning machine takes off, well, who knows how to measure the positive business effects of that!

One thing that seems to be consistant with SCT is that, based on past history, the company news doesn't 'leak out' before the market is fully informed. That would seem to reduce the usefulness of T/A for this particular share.

So with F/A and T/A both looking shakey as the company moves into new territories we might just have to go to the AGM meeting Phaedrus! It's on in Christchurch next week. Stick it in your diary!

SNOOPY

k1w1
06-12-2004, 03:00 PM
In or out Phaedrus ? Did Snoopy's FA convince you to keep on holding ?

Phaedrus
06-12-2004, 03:43 PM
I am out now. I had held SCT since 2001. Over this time it went from being my best stock, to my worst. The current price is less than it was over a year ago, and it has now broken below my longterm trendline. I am a patient man, but I have my limits.
The fundamentals of SCT still look good to me, but you can't help being struck by the indifference with which the market is treating this stock.
I have been putting the proceeds into NPX, on the basis of the breakout above its recent trading range.

http://img.photobucket.com/albums/v418/789456/SCT001.gif

halcyon9
06-12-2004, 03:46 PM
why didnt you get a trendline sell break in Feb/Mar 04?



not being smart, just see the 2 dips before if drawn up to them would have seen you out at $2.70?

Phaedrus
06-12-2004, 05:15 PM
As I have repeatedly stressed in this thread, SCT is a lightly traded stock. This means a wide bid/ask spread and greater volatility. It is generally accepted that with stocks like this, TA does not work as precisely as it does with heavily traded stocks. You have to give such stocks more than the usual amount of room to breathe.

Go back and look again at the chart that started this thread. Look particularly carefully at the 300 day ema and the 20% Trailing Stop that I was using at that time to monitor the uptrend. Would YOU have sold in Feb 04?

I think not.

winner69
30-01-2005, 06:26 PM
quote:Originally posted by Phaedrus

I am out now. I had held SCT since 2001. Over this time it went from being my best stock, to my worst. The current price is less than it was over a year ago, and it has now broken below my longterm trendline. I am a patient man, but I have my limits.
The fundamentals of SCT still look good to me, but you can't help being struck by the indifference with which the market is treating this stock.
I have been putting the proceeds into NPX, on the basis of the breakout above its recent trading range.

http://img.photobucket.com/albums/v418/789456/SCT001.gif


Seems to flattening out around 310

Probably needs another announcement (good or bad) to give any indication of where this is going in the medium turn

k1w1
31-01-2005, 07:34 AM
one to watch if US dollar rises

Phaedrus
27-05-2005, 10:28 AM
http://home.ripway.com/2003-11/39768/SCT527001.gif

Phaedrus
29-07-2005, 09:56 AM
After giving a trendline break "Buy" signal a couple of months ago, SCT has been in a steady uptrend and is looking good - right? Wrong! Take a look at the craftily inserted short-term plot of the On Balance Volume indicator. For about a month now, while the price has been rising, the OBV has been falling. (Volume has been higher on down days than up days). Distribution has been taking place as bigger holders exit this stock. Obviously this is Bearish. The red extention to the price plot shows todays current price drop of 2.2% to $2.65.

http://img.photobucket.com/albums/v418/789456/SCT729001.gif

You can see that TA has been working superbly with SCT, in spite of this stock being quite lightly traded. I sold at the trendline break last year. I'll bet that quite a few fundamentalists now wish they had done the same!

Phaedrus
10-12-2005, 09:56 AM
Any sign of a turning point?! In a word, NO. You don't need me to tell you that though - SCT has just made a new 3 year low.

The chart shows trendlines for the long-term downtrend (magenta), the medium-term downtrend (red) and the On Balance Volume indicator. It would take a break of at least one of these trendlines before you could begin to get even a little optimistic.

http://h1.ripway.com/DoreenD/SCT1210001.gif

k1w1
10-12-2005, 12:54 PM
Oh alright, I'll own up as well.[:I]

Snoopy
10-12-2005, 09:02 PM
quote:Originally posted by belgarion

The g'damn exchange rate!

What value would you put on SCT with the NZD/USD at 0.60?


Good questions Belg. Chairman Marsh obviously thinks it is higher than the closing price on Friday, as he has been buying up shares, via Silveracres (the largest shareholder), in the low two dollar bracket over the last month.

Interestingly Marsh performed exactly the same trick during the last profit slump and associated share price dip in 2001 and Silveracres hasn't sold down any of those shares since! That rather shoots down Phaedrus's theory on the big boys and the smart money getting out of SCT!

This latest profit slump, I will admit, has been extremely disappointing to me. Following on from the 2001 profit slump, which we were lead to believe was a 'one off', due to factors outside Scott's control, doubley so! High exchange rate or not, you would have to be a very staunch supporter indeed to believe that Scott Technology had not lost some of it's reputation, at least in an operational sense. So how to value the company from here?

If we see periodic profitability squeezes as repeating occurences, then perhaps it makes sense to evaluate SCT over the whole business cycle rather than try to value it on a snapshot basis? That is a slightly different approach Belg, to your question on valuing the company 'now' when it isn't making any money.

Adjusting for bonus issues, the dividend payout on this share on a per share basis since listing has been:

1999: 8.7c
2000: 8.7c
2001: 4.3c
2002: 8.7c
2003: 12.4c
2004: 13.0c
2005: 4.0c

That gives a mean dividend return of 8.5cps over the business cycle. Put that over Friday's closing share price of $1.91, and you are getting a gross dividend yield of some 6.5%. I'd say that is fair value. But if you believe that profitability can be returned to 2003/2004 levels soon then you are looking at a gross yield approaching 10%. I'd class that as astonishing value!

Some weeks ago, after the 2005 profit downgrade was first announced, I placed an order for SCT with my broker. I think it was the closest I have ever come to being sworn at by a businessman in a suit! The conversation went something like this:

S: Hi B, I hear there has been a profit downgrade at Scott Technology today. What are they trading at?

B: $2.20 buyer/$2.25 seller.

S: I wanted to put a cheap buy order in. Do you accept orders rather below the market?

B: You want to put in a buy order at $2.05 or something?

S: Actually I was thinking of something a little lower around (mumble mumble)

B: YOU WANT WHAAAT!

At that stage the conversation became a little animated but the broker agreed to accept my order in the end.

I hadn't thought much about that order over the last few weeks. I thought that if anyone accepted my price I would be astonishingly lucky. Yet on Friday my ship came in.....

I don't see Scott's returning to the all time highs of $3.80 or anything. But for the long term investor I think $1.91 is a very attractive entry price. I always feel good about buying shares at a price less than the insiders are buying in at. Yet I don't see much share price movement over the next six months, so this isn't one for the share traders.

But from a long term investors viewpoint, I do know (because Scott's is such a lightly traded share) *if* I wait for any uptrend in the share price it will be far too late to buy! In a market unusually devoid of bargains I'm rating SCT as a buy 'right now', and I've backed my BUY rating with my own money!

SNOOPY

discl: hold SCT, added some more last Friday.

duncan macgregor
11-12-2005, 06:43 AM
SNOOPY, SCT is a very easy share to predict. Nov, dec is where all the large movements in sp eventuated. We have had plenty of lets say hints that instead of a rise in sp this time a fall was looming. the smart investor should have been out of this twelve months ago at over $3 if they had any sell system going at all. I will venture the prediction that your averaging down to buy more at $1-91 is still to high. The fundamentals read this way. The NZ dollar will take time to retrace, the busines that SCT are in is highly competative.the market in general is destined to track down, they will get more than their share of negativity. The golden macdunk rule is never buy anything on a downtrend regardless of how right it feels. macdunk

Phaedrus
11-12-2005, 09:59 AM
"That rather shoots down Phaedrus's theory on the big boys and the smart money getting out of SCT!"
Snoopy, it is very naughty of you to say such a thing - re-read this thread and you will find that I have NEVER MENTIONED the "big boys" or "smart money" as getting out of SCT. The current downtrend in the OBV (as plotted at the top of the latest chart) does show that the general public is getting out, though.
Wasn't that a good Sell signal way back in 2004? And some of you guys hope to convert me to a more FA orientated approach! Given the relative TA/FA performance of investing in this stock, I would have thought that people like you and K1w1 would be trying to incorporate a bit more TA into your systems!

K1w1, I think your experience with this stock has been good for your spiritual growth. You were quite antagonistic toward the charts that I was posting in the first page or two of this thread, but over this year, as your investment in SCT has halved in value, you have become a much nicer person - gentler, kinder, more open minded and less sarcastic. Well done.
Here's to ego-free trading!

k1w1
11-12-2005, 03:35 PM
Phaedrus, if it goes much lower I may turn into Ghandi.

duncan macgregor
11-12-2005, 03:50 PM
KIWI my old flower dont throw a wobbly stick with it man average down. Sorry mate i owe you one. pals for life, macdunk
quote:Originally posted by k1w1

Under $3.40 so lets see you techies take your medicine like men !

I don't want any MacDunk wobblers who act contrary to their hybrid code, always with some weasel worded ex post facto rationalisation.

Phaedrus here are my views on the fundamentals.

Scott's real asset is its location and workforce. Because of where it is and because South Islanders are real men who do real jobs they have a highly skilled workforce who arent going to leave. Peter Jackson sourced many of his Weta technicians from small towns in the bottom of the South Island where making do with whats available, creating and fixing are just a way of life. Like farmers used to do, and mechanics before they became replacement part fitters. So just like Weta these Scott boys are world class. Like all of us Mainland born lads.

I read there was almost a cult amongst managers who had installed their plant. Setting up assembly lines in the third world seems to be the sort of niche that we should be in to me. They always have no debt. Currently the currency will hurt them. In Buffet terms they have lumpy earnings which the market doesnt like. So thats my fundy take on them.

Enough of that. Its entertainment time. I want to go watch the SCT shareprice as the techies hold hands as they jump from the Twin Towers

GO YOU LEMMINGS !!!!

Snoopy
11-12-2005, 05:37 PM
quote:Originally posted by Phaedrus

"That rather shoots down Phaedrus's theory on the big boys and the smart money getting out of SCT!"
Snoopy, it is very naughty of you to say such a thing - re-read this thread and you will find that I have NEVER MENTIONED the "big boys" or "smart money" as getting out of SCT. The current downtrend in the OBV (as plotted at the top of the latest chart) does show that the general public is getting out, though.


I don't wish to get involved in a fruitless argument Phaedrus. I will concede that you never used that exact phrasing. However, let's examine what you actually said.


quote:
Take a look at the craftily inserted short-term plot of the On Balance Volume indicator. For about a month now, while the price has been rising, the OBV has been falling. (Volume has been higher on down days than up days). Distribution has been taking place as bigger holders exit this stock.


'bigger holders exit this stock'

vs

'big boys getting out of SCT'

In other threads you have certainly referred to the larger institutional holders being 'smart money' (or an equivalent term).

I put it to you that while the point you make is technically correct, it is also semantic. I'm not trying to points score here. If your phrase 'bigger holders exit this stock' implies something different to 'big boys getting out of SCT' then please enlighten me, as I want to understand the message you were trying to convey.

All I'm saying is that, as of this moment, *I* can't see any effective difference in the meaning between.

'bigger holders exit this stock' vs 'big boys getting out of SCT'

But I'm prepared to be educated.

SNOOPY

Snoopy
11-12-2005, 06:19 PM
quote:Originally posted by duncan macgregor

SNOOPY, SCT is a very easy share to predict. Nov, dec is where all the large movements in sp eventuated. We have had plenty of lets say hints that instead of a rise in sp this time a fall was looming.


I think a share price fall was likely, agreed, because the longer the dollar is hanging 'up there' the longer exporters are doing it tough.
However, you are working on the assumption that when the dollar turns there will be plenty of investors willing to sell their SCT shares to you at cheap prices. I think you will be surprised how quickly SCT rises when the dollar turns. That's what happens with thinly traded shares.


quote:
the smart investor should have been out of this twelve months ago at over $3 if they had any sell system going at all.


Is this the same smart investor that was predicting a big fall in the kiwi dollar twelve months ago?


quote:
I will venture the prediction that your averaging down to buy more at $1-91 is still too high.


Perhaps. I don't count myself as a timing genius. But IMO $1.91 is cheap enough, for the fundamental reasons I have already explained. I'm not worried if someone else gets a slightly cheaper deal. But IMO it is just too risky to asume it will get much cheaper.

Oh and BTW I am not averaging down, I am averaging up. My historic adjusted average purchase price for SCT is below $1.91.


quote:
The fundamentals read this way. The NZ dollar will take time to retrace,


Yes


quote:
the business that SCT are in is highly competitive.


No, I disagree. There are only two or three companies globally that can do what Scott's do. Scott's business is competitive (what business isn't, apart from AIA ;) but it is not 'highly competitive'.


quote:
the market in general is destined to track down,


It could do. But I just leave Mr Market to do his own thing. I don't worry about what he does as I can afford to wait out any periods of irrational pessimism.


quote:
they will get more than their share of negativity.


Have to disagree with that. The more negativity surrounding a share the *less* it falls when the market trends down. Look at RBD, strike ridden and seemingly swimming in negative sentiment. It has been completely untouched by the market downturn last week. In case you haven't noticed SCT has already fallen a long way as well.

In addition, rising interest rates will have no effect on SCT, as it has no term debt at all.

In summary, I'd say you're dead wrong.

[quote]quote:
The golden macdunk rule is never buy anything on a

Phaedrus
11-12-2005, 06:45 PM
Snoopy,
Here is a quote from the "NOG/NOGOC Charts" thread :-

"...... the theory is that the smart money is the big money and when it buys or sells there is a [u]spike in the OBV.</u> A good example of this is shown here :- http://h1.ripway.com/Phaedrus/MCH128001.gif
The more gentle overall trends are the public moving into or out of the stock. A bit simplistic to be sure, but it gives a little more insight into the market."

PS A few of my charts including the MCH link as above, are being reproduced rather oddly at the moment - maybe there is some (hopefully temporary) problem with the webspace provider that I use.

Snoopy
11-12-2005, 09:05 PM
quote:Originally posted by Phaedrus

Snoopy,
Here is a quote from the "NOG/NOGOC Charts" thread :-

"...... the theory is that the smart money is the big money and when it buys or sells there is a [u]spike in the OBV.</u> A good example of this is shown here :- http://h1.ripway.com/Phaedrus/MCH128001.gif
The more gentle overall trends are the public moving into or out of the stock. A bit simplistic to be sure, but it gives a little more insight into the market."


OK Phaedrus, thanks for the clarification.

It is true that Chairman Marsh, as a director of Silveracres (the largest shareholder in SCT) would likely be judged as 'smart'. But the number of shares he has bought in the last month, in relation to his total associated holding in SCT, is small.

What we have here is a 'smart' man doing something inconsequential in the greater meaning of things. Nevertheless my interpretation of what Marsh is doing is that he is sending a signal to the market. Namely, that SCT shares are too cheap from a long term investing standpoint.

I put my own buy order in long before Marsh started buying shares in 2005. I came to my own conclusion as to what SCT shares were worth, independent of Marsh. Nevertheless I took comfort from the fact that when Marsh bought his shares, he paid more than I did.

Either way, I guess what Marsh is doing doesn't rate on the OBV scale? But on the confidence scale, I think it is significant.

SNOOPY

duncan macgregor
12-12-2005, 07:39 AM
When I read this thread from start to finish it makes me look at Investment styles, see who said what, who did that. We all agreed that SCT was a good company, the difference being some people fell in love with the company, and others sold out. The ones that fell in love bought more before it bottomed incase they missed a bargain. That to me is financial suicide. The ones that sold out can buy back If It turns the corner at the bottom and end up with nearly double the ammount with the same money. Who is right and who is wrong is easy to see now that we look at it in hindesight. The next sharemarket crash, yes sooner or later we will have one read this thread from start to finish to see who the big time losers will be, and who will have their money out of It. macdunk

Snoopy
12-12-2005, 10:17 AM
quote:Originally posted by duncan macgregor

When I read this thread from start to finish it makes me look at Investment styles, see who said what, who did that. We all agreed that SCT was a good company, the difference being some people fell in love with the company, and others sold out. The ones that fell in love bought more before it bottomed in case they missed a bargain. That to me is financial suicide. The ones that sold out can buy back If It turns the corner at the bottom and end up with nearly double the amount with the same money. Who is right and who is wrong is easy to see now that we look at it in hindesight. The next sharemarket crash, yes sooner or later we will have one read this thread from start to finish to see who the big time losers will be, and who will have their money out of It. macdunk


I know he is quite capable of defending himself Macdunk, but I just had to rise to the defence of my old sparring partner Phaedrus after such an unwarranted verbal tirade.

Just because Phaedrus didn't have a specific valuation target or even a rough valuation range in mind (or at least hasn't shared that with us on Sharetrader) for SCT doesn't mean he 'fell in love' with it. From what I have seen Phaedrus is very disciplined about the way he goes about investing.

I agree that Phaedrus is very set in his ways about things like 'selling at the trendline break' no matter what the fundamentals, but if it works for him, does that really matter?

It is also not fair to glibly say that 'the ones who sold out can buy back' when Phaedrus has already shared with us the agony of seeing SCT change from being his best performing investment to his worst *before* he was finally able to sell out. You just know that liquidity in SCT shares hasn't improved since that time. And that should Phaedrus decide to re-enter the share, he will not be able to buy all the shares he wants at the low prices he seeks. You are well aware that just because someone buys a couple of thousand SCT shares at some sweet spot which happens to co-incide with the daily closing price, *doesn't* mean it is easy for even that same person to buy ten times that number of shares at the same price. And if such a desired purchase is impossible for the 'grand master', what does it say for the chances of those disciples that follow on the coat tails of his strategy?

I am sure that Phaedrus will cope all right with having more and more of his portfolio money in the bank. Even if his income on invested capital has dropped to only two thirds of mine because he doesn't seek out good dividend paying shares. His strategy may not be optimal, but to call it 'financial suicide' is going too far.

And finally, judging an investment performance with hindsight only works if the market is deterministic. Clearly if you, or even Phaedrus, had such 'certainty of the future insight' you wouldn't be lulling around on this forum. You'd be swanning around on your own tropical island fighting off the attention of the army of personal masseurs while you decide which cocktail to sip next! So let's get back top some reality here. Phaedrus's escape from the cliff edge, does not prove that those that adopted the same strategy, yet still ended up at the bottom of the ravine, were right.

SNOOPY

duncan macgregor
12-12-2005, 10:33 AM
SNOOPY, You are twisting words I look on PHEADRUS as having an excellant sell strategy. It is much better to have your money in the bank as watch it down trend in a company. I feel sure that PHEADRUS is smart enough to find a company on an uptrend to invest in. His charts and comments were right on the nail looking back on this thread. MACDUNK

k1w1
12-12-2005, 01:44 PM
Macdunk, I must agree with SNOOPY that you have been far to harsh on Phaedrus. Although he fell in love with this share as it turned from his best to his worst he still did eventually part with it.As I am sure you have with Trustpower...

duncan macgregor
12-12-2005, 02:18 PM
KIWI
quote:Originally posted by k1w1

Agreed, MacDunk

*gasp. goes off to take his temperature as may have been stricken by a strange illness*

Bet you feel a lot sicker now my old mate that you didnt listen to old macdunk and his time line or PHEADRUS and his sell signals. Bringing up TPW in a desperate attempt to cover you being so silly is the bottom of the barrel stuff. pals for life macdunk

k1w1
12-12-2005, 02:56 PM
Ah Macdunk, the laird of evasive answering, I'll take that as a negative on your sale of TPW despite it breaking through the lines of your system.

I should perhaps disclose that SCT is a miniscule part of my portfolio having purchased a small parcel on a buy and hold basis so long ago I remain significantly under the current SP. Like Snoopy I would have to average up to purchase at current levels.

If I hold for 10 years the dividends I receive will probably return my purchase price without having to sell the shares. Having held AIA and CEN since issue it is quite likely this will occur. The major risk is that SCT may go belly up.As I have received dividends and extra shares I am prepared to run that risk.

I could sell, the brokerage on the way in and out, on such a small holding would mean I would have to be on a far better thing which on a short term basis I am not always able to determine ( I purchased VCT for instance, like AIA and CEN it has not immediately risen).

Or I would hold in cash paying a third of the interest to Helen Clark. Then I would also have to be able to get in on a rise, and I may or may not time that without missing out on a significant percentage.

In this particular case I will sit out the dance thankyou.Feel free however to keep performing your trustpower jigs and victory flings, its quite entertaining.

Your mate

K1W1

duncan macgregor
12-12-2005, 03:27 PM
KIWI, not a bad reply from someone on the defensive. I take it that you dont consider brokerage on a buy but use it as an excuse not to sell. I find that brokerage is something i consider in a buy situation,but not in a sell situation. Every situation is taken on its merits and dealt with accordingly, but to watch a sp half in value regardless of what price you paid shows me that you need to take a good look at your sell strategy. TPW is still on an uptrend and like SCT is very thinly traded so must be given room to move. SCT however is on a confirmed downtrend with down grades in profit. Its much better sticking to winners regardless of brokerage. macdunk

winner69
15-12-2005, 07:30 AM
quote:Originally posted by belgarion

Im accumulating this stock at this level. What's truely scary is how many trades it takes to fill even a small order. Packets of 100 shares or less being sold!


Staff selling out?????

Snoopy
15-12-2005, 07:42 AM
quote:Originally posted by winner69

Originally posted by belgarion

-----------

Im accumulating this stock at this level. What's truely scary is how many trades it takes to fill even a small order. Packets of 100 shares or less being sold!


-----------

Staff selling out?????


Could be small time holders cashing up a Christmas nest egg. I note that independent director Mark Waller has just bought 20,000 shares though.

SNOOPY

Snoopy
15-12-2005, 12:48 PM
quote:Originally posted by Tom Hall

[quote]
if no (almost no) trades are taking place, and the price isn't rising, this implies that the stock is accurately valued, and the market has reached something of a consensus about that.


Tom, days where under 5000 SCT shares are traded in total is not an unusual event. My casual observation of the liquidity of SCT shares is that it is no better, or no worse than it has always been.

SCT accurately valued? Try precisely valued! Accurate implies to me there is a valuation target that you can aim at, and I'm not sure that is true with SCT.

SCT is probably one of the purer export plays available as an investment. By that I mean they don't take currency hedging risks. They only buy foreign exchange contracts when a project is signed and sealed. If the dollar remains at US70c or thereabouts for a year, it may be twelve months before we see another dividend. The dollar is so high at the moment that I doubt SCT have any hedging contracts in place. SCT are not under any financial pressure with their capital structure, so there would be no point in hedging to guarantee a loss!

OTOH SCT have a full order book, so that means if the dollar falls in value the benefits will be immediate. As to which way the dollar is going, in the short term who knows? That is why, apart from arbitrage plays, I don't make short term investments in the stock market.

SNOOPY

disc: hold SCT and can afford to do so until they 'come right', whether that be weeks, months, years or even a decade.

duncan macgregor
15-12-2005, 02:30 PM
]Originally posted by Snoopy[/i]
disc: hold SCT and can afford to do so until they 'come right', whether that be weeks, months, years or even a decade.
SNOOPY,
This is where you are completely wrong In your disc statement. If you had sold out when the PHEADRUS TA chart told you to, or heaven forbid suggesting this, my time line, you would be able to buy back almost double with the same money. To hold a share when all the fundamentals TA whatever tell you the chances are higher of a drop than a rise, and still hold is a sure way to bankruptsy. macdunk having a go at yous

Snoopy
15-12-2005, 09:58 PM
quote:Originally posted by duncan macgregor

]
This is where you are completely wrong In your disc statement. If you had sold out when the PHEADRUS TA chart told you to, or heaven forbid suggesting this, my time line, you would be able to buy back almost double with the same money. To hold a share when all the fundamentals TA whatever tell you the chances are higher of a drop than a rise, and still hold is a sure way to bankruptcy. macdunk having a go at yous


First of all Macdunk, SCT production line sales are at record levels. So I don't think that you can say that all the fundamentals point to the share price sinking.

The problems that Phaedrus had selling out are well documented, yet you exhort all other shareholders to 'sell out' believing that they could get the same price that Phaedrus did? Without further affecting the market?

Only 3416 SCT shares traded today. I don't usually mention how many shares in any particular company I have as it is not usually relevant. However, I don't mind disclosing that I have more SCT shares than that. The idea that you can simply 'sell out' at a reasonable price on whatever day you wish is not reality.

The idea that you should always sell out of a share just because you think it will probably go down is not rational either.

If you think there is a 70% chance a share will go down by 20c your expected downside is:

0.7x0.20= 14cps

If you think there is a 30% chance the same share will go up by $1 then your expected upside is:

0.3x1.00= 30cps

Thus even though you expect the share price to go down, it could still be rational to 'buy' the share. This is how I feel about SCT at the moment, and why I bought at $1.91.

SNOOPY

Phaedrus
07-03-2007, 11:12 AM
http://h1.ripway.com/Phaedrus/SCT37002.gif

Snoopy
07-03-2007, 12:08 PM
quote:Originally posted by Phaedrus
&lt;chart snipped&gt;


Why Phaedrus, your lovely smile. It seems that it has gone -upside down! I thought you had given up on this share, due to the lack of liquidity and the associated difficulties getting in and out!

Either way, I guess I and all those others who are left in are deeply touched by your schadenfreude.

But are we shareholders all so badly off?

Nothing really new going on here. Profits for this year are already locked in. The share price today will be responding to the exchange rate over next year and how that will effect tendering for new projects in subsequent years. If it stays up, we shareholders are losers. If it eases back the share price will creep up. We are probably now outside the profit announcement window where 'insiders' can buy in. That may be why the share price has slipped a few cents.

There are no trades at all today as I write this, so I wouldn't read much into today's price. I, like other long term holders, am prepared to play the waiting game

SNOOPY

discl: hold SCT (slight underweight rating)

duncan macgregor
07-03-2007, 12:36 PM
SNOOPY, What puzzles me is why would you hold a share like this in the first place. It is not something your WARREN BUFFET would buy is it?. This is a share that relies on contracts to make one off machinery, they dont have anything to sell other than that. I did ask you the question on another forum about some of their source materials [stainless steel] doubleing in price but you never replied.
This is a very risky company that you cant predict the worth with fundamental analysis. The TA charts tells me its a dog, yet you still defend your position. This company is a contract company that you know nothing about, and wont find out until its to late dont defend your position change it. macdunk

Phaedrus
07-03-2007, 01:19 PM
Don't knock the stock Dunc - there was a LOT of money to be made with SCT from 2002 - 2004. It was an absolutely outstanding performer back then.

Snoopy, I follow all NZ stocks, not just the ones I hold. In a small market like ours this is very easy to do so long as you have a well set-up system.
You may be interested to know that I have undergone extensive counselling over the last 2 years and believe that I can now say with total honesty that SCT means nothing to me. I have no emotional attachment to it and any view I express is now totally objective. Of course this is easy when you do not hold the stock in question.
A breakout from a formation that lasted for such a long time is technically noteworthy, in my opinion. I swear that had the breakout been upward, I would have marked it with a Smiley face. Just for you!

duncan macgregor
07-03-2007, 03:02 PM
quote:Originally posted by Tom Hall


quote:Originally posted by duncan macgregor

SNOOPY, What puzzles me is why would you hold a share like this in the first place. It is not something your WARREN BUFFET would buy is it?. This is a share that relies on contracts to make one off machinery, they dont have anything to sell other than that. I did ask you the question on another forum about some of their source materials [stainless steel] doubleing in price but you never replied.
This is a very risky company that you cant predict the worth with fundamental analysis. The TA charts tells me its a dog, yet you still defend your position. This company is a contract company that you know nothing about, and wont find out until its to late dont defend your position change it. macdunk
If he didn't reply why do I remember reading his reply?
You tell me then we will both know.:D:D:D?
I did ask about stainless steel with nickel price doubleing last year.
I did ask about how you can work out the fundamentals of a contract company when the material cost rises to that extent. His answer escapes me, so perhaps you might like to remind me. macdunk

duncan macgregor
07-03-2007, 03:19 PM
quote:Originally posted by Tom Hall


quote:Originally posted by duncan macgregor



You tell me then we will both know.:D:D:D?
I did ask about stainless steel with nickel price doubleing last year.
I did ask about how you can work out the fundamentals of a contract company when the material cost rises to that extent. His answer escapes me, so perhaps you might like to remind me. macdunk
I thought I just did. Go and check the thread where you made that post. My memory is not at its best right now but I think the reply was something about SCT not using a lot of Stainless steel, But I don't have to remind you where you made your post do I?
TOM you made the statement you told me you remembered i told you i didnt. I take it then you dont remember either?. That makes us either a couple of silly old buggers that cant remember or SNOOPY skipped the question. SCT uses lots of stainless steel in making their machinery. I will be most interested in your reply if you can remember to reply, and i dont forget.:D:D:Dmacdunk

duncan macgregor
07-03-2007, 05:17 PM
Tom, I am so glad you found it now we both know.
What a load of rubbish the answer was. Neither wonder i couldnt remember it. SCT make all types of butchering machinery, which require a high percentage of stainless steel. With the price doubleing last year tells me that is beyond reasonable expectation. To mention scrap price tells me the person is clueless on metal recycleing. To say that you are a fundamentalist requires you to understand the basic expences in running the business, this clearly represents someone who is not up with the required knowledge to understand even the basic problems.
I hope you are not stupid enough to have shares in this one Tom it is going nowhere. macdunk

Snoopy
07-03-2007, 07:29 PM
quote:Originally posted by duncan macgregor

Tom, I am so glad you found it now we both know.
What a load of rubbish the answer was. Neither wonder i couldnt remember it. SCT make all types of butchering machinery, which require a high percentage of stainless steel. With the price doubling last year tells me that is beyond reasonable expectation.


Macdunk, the meat processing robots that SCT makes in their 'joint venture' (sic) with PPCS are a tiny part of the overall business. I think they only make two kinds of robots at the moment, and the total number of robots they have made in all the world would be less than ten. You could probably deliver the total amount of stainless steel they needed for all of these robots on the back of your farm ute.

To suggest that the SCT share price will sink because the price of the stainless steel in the meat boning robots has gone up by 50% (or whatever) is absurd. The value of the robot project is in owning the intellectual property of the software that runs then, and having the engineering team that created them on hand at SCTs Dunedin base. It would be hard to imagine the price of stainless steel as being as big a factor as, for example - the afternoon tea budget in the overall profitability of SCT....

However, if raw material cost *really* is an issue, then it is common practice to quote on a project 'based on a stainless steel price of $x per metre'. That way if the price of a critical component goes up beyond the contractors control they simply pass those costs on. However, in my view there probably isn't such a clause in any of the meat boning robot installation contracts. Because the cost of raw materials is in the overall project sense is 'not material' (if you'll pardon the pun).

SNOOPY

discl: hold SCT

COLIN
07-03-2007, 08:45 PM
I got lost trying to follow the "who-said-what-to-who-and-why" exchanges in the last two pages, but did anyone else notice the reference to WASHING MACHINE BOWELS? Perhaps that's the answer!!

PointyHat
18-07-2007, 09:34 AM
Phaedrus, is this a SCT buy period, it seems to me that we are now on the bottom of the 3rd trough 2006/7. I know your chart was 2001 -2007 but just looking at the recent past with the high NZ $ the company is now operating with contracts at the high $value. Divis reinstated. I think it is a leaner co and a buy now.Does your chart show this? I have bought a few today anyway with some spare cash.

Are you still a long term holder Snoopy, or have you changed your stance?

So much money in the bank and no debt if I remember. Looks lime take over time.

VComments appreciated.

limegreen
18-07-2007, 11:03 AM
It looks far more like a sell than a buy. SCT has been a trading range for the last 2 years, and it has closed the last few days at the lowest price in the period, fractionally below the support level of $2.

http://img.photobucket.com/albums/v361/limegreenz/sct18jul07.gif

duncan macgregor
18-07-2007, 12:06 PM
The TA says its a no go area so lets look at the fundamentals. The Ever rising dollar contributes to the downward trend of SCT. The time to buy is when the dollar changes direction, and not before. SCT will reverse the trend when the dollar turns round and not before. Macdunk

Snoopy
18-07-2007, 12:33 PM
quote:Originally posted by PointyHat


Phaedrus, is this a SCT buy period, it seems to me that we are now on the bottom of the 3rd trough 2006/7. I know your chart was 2001 -2007 but just looking at the recent past with the high NZ $ the company is now operating with contracts at the high $value. Divis reinstated.


Pointy Hat, you correctly point out that SCT is very much an $NZ play. But are you right in saying that the the company is 'now operating with contracts at the high $value'? From the interim report in February:

"Sales of appliance systems have been a significant contributor to the company's profitability improvement and as noted at this time last year, much of the work undertaken over the last 12 months was on contracts secured when the New Zealand dollar was at more favourable exchange rates than the current US 0.71 cents."

The NZD/USD cross rate is now nearly 80c! The current years profit and final dividend is 'safe', as it relates to work acquired when the exchange rate was $NZ1 = US 60 to 65c. But what about next years profit? There has been no announcement of any new contracts for a long time now. I am not expecting any dividend at all in FY2008!

With Chairman Marsh having his annual whinge on the high exchange rate at each AGM (I should offer my service to SCT as a speech writer and write Marsh's speech for this years AGM now) it is far from clear if this company has 'changed its spots'.


quote:
I think it is a leaner co and a buy now. Does your chart show this? I have bought a few today anyway with some spare cash.

Are you still a long term holder Snoopy, or have you changed your stance?


'Leaner company'? Is that good? If you remember, the excuse for profitability falling short of previous years with similar record sales levels was that a lot of work had to be subcontracted out which crushed the profit margin. If anything the problem with SCT was that they were too lean!

Having said that, I'm still sitting there on the share register. New CEO Hopkins is a good man to have on the helm. *If* (and I stress that qualification) the NZD falls, then the SCT share price could kick upwards quite strongly. I am a believer in the meat processing robotic technology. But I can't see it making up for what looks like a lean year in appliance line manufacturing in FY2008. I would describe my shareholding in SCT as 'underweight' and I intend to keep it that way - for now.

SCT isn't alone in the problems I describe. To a large extent these problems are the same for all NZ based manufacturers. But a skills base competitive advantage is IMO more likely sustainable than a cost based competitive advantage. IMO the competitive advantage of SCT is skills based, and that's the reason I'm on the share register 'here' and not on the share register of any other NZ based exporter (in the traditional sense).


quote:
So much money in the bank and no debt if I remember. Looks like take over time."


At the half year I calculate an asset backing of 79c. On those terms you are hardly getting a bargain at $2 on the market. The low debt levels have been previously explained as being necessary to provide the working capital for 'projects under construction'.

Personally I doubt the company could be taken over without destroying the management team there that are the backbone of the company. If all the senior staff left, most of the value of the company would disappear with them . It is

duncan macgregor
18-07-2007, 02:15 PM
quote:[i]Originally posted by Snoopy[/ *If* (and I stress that qualification) the NZD falls, then the SCT share price could kick upwards quite strongly.

SNOOPY

discl: hold SCT. Will buy more if the share price weakens significantly.

SNOOPY we agree on something at last at least things will come right if the dollar drops. The dropping dollar is the buy signal for this company, and all the other manufacturing, and export companies. A company like this with an engineering skill base where the labour content exceeds the material imput, will trend up as the dollar trends down. Until that happens stand well clear. MACDUNK

Snoopy
18-07-2007, 10:33 PM
quote:Originally posted by duncan macgregor
SNOOPY we agree on something at last at least things will come right if the dollar drops. The dropping dollar is the buy signal for this company, and all the other manufacturing, and export companies. A company like this with an engineering skill base where the labour content exceeds the material imput, will trend up as the dollar trends down. Until that happens stand well clear. MACDUNK


Just to add a bit more here. The currency exchange rate you need to watch is NZD vs the Euro. Why? Because Scott's two competitors are based in Spain and Italy. So even though the jobs Scott's quotes on are generally quoted in USD, Scott's competitors costs are in Euro. The NZD vs Euro exchange rate is therefore a good measure of the relative competitiveness of Scott Technology. And in this game 'relative competitiveness' is what is most important.

There is one rider to this 'rule of thumb'. The US household consumer goods market needs to have a buoyant outlook. Why? Because even the appliance factories based in China, where Scott's have an office now, are largely built to service the US market. A buoyant US household, and household replacement market, is a prerequisite for appliance manufacturers worldwide to invest in new appliance designs that will require the new production lines built by SCT.

I don't agree with Macdunks 'stand well clear' comment though. This company is in no danger of going bust - it has no long term debt. The safest investment returns are usually obtained when buying in gloom. By the time the exchange rate turns around with SCT, you may well have given away the easy profit if you own no shares. I prefer 'buy now and wait' rather than trying to time any dollar correction. The dollar correction may come in two years time or it may come tomorrow. Boarding the investment train now is the only guaranteed way to be on it when 'locomotive New Zealand' rolls out of the station. Scott Technology is too thinly traded to guarantee that you can simply 'jump on' at a sensible price when the train starts moving.

SNOOPY

Snoopy
18-10-2007, 09:56 PM
Scott Technology is too thinly traded to guarantee that you can simply 'jump on' at a sensible price when the train starts moving.
SNOOPY

Today is an example of what I mean. Scott Technology up 17% today (or 31c) on the back of the latest result. I have run my thumb nail over the figures:

Eps of 12.2cps good, but really only bringing us back to 2002 when eps amounted to 12.4cps.

ROE being $3.042m profit on $18m of shareholder capital is 16.9%. Quite acceptable. Dividend yield (gross) based on the announced annual dividend of 9cps is 6.2%, based on the closing share price of $2.15. Not bad, but not a great bargain either.

All in all, I don't think too much money will be made by jumping into SCT at $2.15, which is why I jumped in several months ago.

There are a couple of comments in the written result that I wanted to comment on:

"Expansion of our target market into Europe, in particular, is producing good prospects and will assist in meeting the challenge of a volatile exchange rate in our US dollar denominated
markets."

I take this as a signal that Chairman Marsh won't be spending huge amounts of time at the AGM whinging about the NZD strength relative to the USD, yet again ;-P. But the above quote is more a statement of hope than cashflow. Targets still have to be hit before you score points on the board!

"The high value of the NZ dollar in relation to the US dollar remains a concern but the company is in a position to offset some of this affect by additional marketing in the Euro zone, improved cost control, and by utilising global markets to improve manufacturing efficiencies. Scotts have positioned an additional executive in China to increase the effectiveness of their offshore purchasing."

'Offshore purchasing' is what was promised as a cost controller last year. It is good to see some positive movement on this. It looks like new CEO Hopkins is making his presence felt.

SNOOPY

discl: hold SCT

duncan macgregor
19-10-2007, 01:09 PM
SNOOPY, You have me whacked why you persist trying to turn a sows ear into a silk purse. Lets take a look at the fundamentals from a straight out investment point of view since any self respecting TA investor would not touch them with a barge pole. The last four oct prices for starters.2007 $2-20, 2006 $2-40, 2005 $2-20, 2004 $3-40. as you can see the sp is a disaster. Dividend yeild last year was 2.73%, [ the bank beats that]. The number of shares traded is pathetic if a crash comes you are a sitting duck. Give me one good fundamental reason why you or anyone else would buy into a company with that record of return?. Macdunk

Phaedrus
19-10-2007, 04:09 PM
As a long-term Buy and Hold "investment", this stock has been a particularly poor performer - the current shareprice is around what it was 10 years ago!

On lightly traded stocks like SCT, the activity of "smart money" is very obvious when you look at the On Balance Volume indicator. Big buyers have moved in 4 times over the last 10 years - this activity appears as sudden vertical "steps" in the OBV. (Circled in green). The corresponding shareprice entry points are marked on the price plot by green arrows. You can easily see that without exception these entries have been made when SCT was particularly weak, and that without exception these entries have been followed by steep uptrends. As entry points into SCT, they could hardly be bettered.

While SCT has been an appalling long-term "Buy and Hold" candidate, take a look at the difference a slightly more active approach makes. Using the OBV entry points and selling at the trendline breaks (red arrows) just 3 trades in 10 years would have given returns of 50%, 300% and 15% - a five-fold gain.

http://h1.ripway.com/Phaedrus/SCT1019.gif

Snoopy
22-10-2007, 09:59 PM
As a long-term Buy and Hold "investment", this stock has been a particularly poor performer - the current shareprice is around what it was 10 years ago!


Ten years ago I held this share and the share price was around $2.20 - the same as Friday's closing price. However, that historic figure is misleading as there have been two 1:8 bonus issues along the way. So the correct comparative price from ten years ago is $1.74. Also the dividends paid in that time anount to 69.5cps. That means the investment picture is not as bleak as Phaedus paints. It still isn't great though. By my calculations our 'buy and hold' investor has made 5% per annum compounding. That is a gross return of 7.5% per annum compounding.



On lightly traded stocks like SCT, the activity of "smart money" is very obvious when you look at the On Balance Volume indicator. Big buyers have moved in 4 times over the last 10 years As entry points into SCT, they could hardly be bettered.


I will let you guys into a little secret. I was buying shares last Thursday as the share price was jumping. So I guess by definition that makes me 'the smart money' this time. Of course having been a shareholder, albeit in a small way, since 1997, perhaps you are thinking I am not so smart?



While SCT has been an appalling long-term "Buy and Hold" candidate, take a look at the difference a slightly more active approach makes. Using the OBV entry points and selling at the trendline breaks (red arrows) just 3 trades in 10 years would have given returns of 50%, 300% and 15% - a five-fold gain.


I certainly can't claim to have made a five fold gain! Of course to some extent such a gain is theoretical because it relies on you being able to buy and sell all the shares you need at the chart quoted prices. With a thinly traded share like SCT this can't be done in any meaningful volume.

However, I have on paper made around 150% on my SCT investment over ten years. Not an absolutely outstanding result, but not too bad either. Naturally I have not been merely buying and holding. I have also not been following the principles of Warren Buffett who would not have bought this share at all. So what is my secret?

I have been 'buying on weakness' when my capital becomes available. I calculate I have made an average gain of 12.3% compounding per annum over the last ten years.
That is equivalent to an 18.4% gross return. Furthermore most of my investment in SCT has been over the last two years where my returns have been higher than the figures quoted.

All in all, this is an investment that I am happy with. I sure hope Phaedrus is right and a period of rich reward for shareholders awaits. But I won't be buying more SCT shares at $NZ2.20 just yet. Is that smart or what?

SNOOPY

PS hold SCT,and bought some more on Thursday at $2.

duncan macgregor
23-10-2007, 07:35 AM
SNOOPY, When you buy into dog comanies like this then average down over the years you have not only lost opportunity but lost money. Money devalues each year. The price of your house has doubled in the last ten years, after doubleing in the previous ten years.
If you are a long term investor, you require a monetry gain of 10% to even stand still, thats if you are saving up to buy a house. By having no sell system then averaging down gives you more and more, of less and less, until you work that one out, you will always underperform the market. Macdunk

Phaedrus
23-10-2007, 09:14 AM
I was buying shares last Thursday as the share price was jumping, so I guess by definition that makes me 'the smart money' this time.........

Close, Snoopy, but no cigar I'm afraid!

The OBV spike "Buy" signal was on 28/9/07, nearly 3 weeks before you bought on 18/10/07. The smart money got in at $1.86 - $1.87. Close followers of SCT then had weeks to emulate this entry at prices ranging from $1.82 if they were lucky to $1.90 if they were not. This is clearly shown on a larger scale chart, as posted below.

So, you bought at $2 on Thursday eh Snoopy?
Right on the break of the confirmed trendline!
I'm so proud of you!

http://h1.ripway.com/Phaedrus/SCT1023.gif

Placebo
23-10-2007, 10:22 AM
MacDunk I think the value of my house doubled in about 7 or 8 years, but that's a bit of useless trivia since I can't sell off bits of it or sub-let the windows and doors. The frickin thing is still sucking up money and now this summer will be spent with a paintbrush in hand, all worth it though to get the wife off me back...;)

duncan macgregor
23-10-2007, 10:35 AM
MacDunk I think the value of my house doubled in about 7 or 8 years, but that's a bit of useless trivia since I can't sell off bits of it or sub-let the windows and doors. The frickin thing is still sucking up money and now this summer will be spent with a paintbrush in hand, all worth it though to get the wife off me back...;) Sell the bloody thing PLACEBO, buy a brick and tile. Never mind your missus growling, just think it might have been worse like renting, and investing in SCT. She wouldnt be growling she would have taken off. Think about poor SNOOPY trying to defend himself with his investment of SCT to his missus you got no worries mate. Macdunk

Snoopy
23-10-2007, 12:28 PM
Close, Snoopy, but no cigar I'm afraid!

The OBV spike "Buy" signal was on 28/9/07, nearly 3 weeks before you bought on 18/10/07. The smart money got in at $1.86 - $1.87. Close followers of SCT then had weeks to emulate this entry at prices ranging from $1.82 if they were lucky to $1.90 if they were not. This is clearly shown on a larger scale chart, as posted below.


I guess that explains why I'm not feeling smart then. I was out of the country when those 'smart guys' were doing their business. Curiously most of the action seems to have come from Walker Capital Management selling down their holding in the company, now down to 7.09%. However, checking up in last year's report I can't see Walker Capital Management as a substantial shareholder. So perhaps they were just short term fly by nighters looking for the quick buck that didn't materialise?

I actually had a buy order in at $1.81 recently, but I was unfortunately just too mean to pick up any shares :-(.



So, you bought at $2 on Thursday eh Snoopy?
Right on the break of the confirmed trendline!
I'm so proud of you!


Don't be too proud of me Phaedrus. I haven't changed my spots and no doubt you will take my gold star away when I fail to sell when the trend breaks back the other way!

SNOOPY

Phaedrus
23-10-2007, 12:31 PM
I thought I would try some positive reinforcement for a change!

Snoopy
23-10-2007, 01:23 PM
SNOOPY, When you buy into dog comanies like this then average down over the years you have not only lost opportunity but lost money. Money devalues each year. The price of your house has doubled in the last ten years, after doubling in the previous ten years.
If you are a long term investor, you require a monetry gain of 10% to even stand still, thats if you are saving up to buy a house. By having no sell system then averaging down gives you more and more, of less and less, until you work that one out, you will always underperform the market.

Macdunk my long term average return for investing gain in SCT is 12.3% compounding over ten years. That more than meets your 10% per year target for keeping up with house prices. Futhermore the equivalent 'buy and hold' strategy in SCT would only have yielded 5.5% per year. So I think my strategy with SCT has been more than successful, earning more than double the SCT market return. And the strategy is so simple. I always buy when I can afford to, when the company is down and when the gloom in the air is the highest.

You may also be surprised to learn that generally I have been 'averaging up' over the years, not 'averaging down'. I only averaged down only once and that was in March 1998. My return from that small tranche of shares alone has been 7.8% per annum (net) compounding over 9.5 years, thus beating buy and hold by a significant margin. Verses 'buy and hold', the strategy you despise - averaging down as you put it- , is almost always superior and so it has proved to be here.

While I have had poor years with SCT, my ten year average return has been 12.3% net (18.4% gross) which I think you will find has outperformed the market over that ten year timeframe. So let's have no more of your insinuations Macdunk that I have underperformed the market when absolutely the opposite is true. The only sure way to underperform the market is be completely out of it, which as I understand is now your own position Macdunk.

SNOOPY

discl: hold SCT

Snoopy
23-10-2007, 02:29 PM
Personally I doubt the company could be taken over without destroying the management team there that are the backbone of the company. If all the senior staff left, most of the value of the company would disappear with them . It is

I just noticed this post of mine has been truncated during the conversion to the new format. So for all those fans wanting to sweat over the full wisdom of what I wrote here is that last paragraph in full!

"Personally I doubt the company could be taken over without destroying the management team there that are the backbone of the company. If all the senior staff left, most of the value of the company would disappear with them . It is hard to see a takeover being successful anyway with both 'Silveracres' (linked to Chairman Marsh) and 'James Ian Urquhart' (a traditional Southern Boy and shareholder from way back who wouldn't stand for any financial engineering nonsense) holding blocking stakes.

SNOOPY

discl: hold SCT. Will buy more if the share price weakens significantly."

Snoopy
10-01-2008, 11:46 AM
discl: hold SCT. Will buy more if the share price weakens significantly."


I have been true to my word. I was in the market yesterday boosting my shareholding at $1.75.



Personally I doubt the company could be taken over without destroying the management team there that are the backbone of the company. If all the senior staff left, most of the value of the company would disappear with them . It is hard to see a takeover being successful anyway with both 'Silveracres' (linked to Chairman Marsh) and 'James Ian Urquhart' (a traditional Southern Boy and shareholder from way back who wouldn't stand for any financial engineering nonsense) holding blocking stakes.


A takeover looks even less likely now. Cornerstone Shareholder Ian Urquhart is 'digging in' and has boosted his shareholding from 12&#37; of the company to nearly 16% over the period 8th August 2007 to 21st December 2007. That represents over a $NZ1.75m vote in the future of the company in the last three months. No that's what I call putting your money where your mouth is!



The OBV spike "Buy" signal was on 28/9/07, nearly 3 weeks before you bought on 18/10/07. The smart money got in at $1.86 - $1.87. Close followers of SCT then had weeks to emulate this entry at prices ranging from $1.82 if they were lucky to $1.90 if they were not. This is clearly shown on a larger scale chart, as posted below.


The 'smart money' was Walker capital management reducing their holding from 8.4% down to 7.1%, if we can believe the SSH notice dated 5th October. My most recent purchase in SCT was at $2 last October and November (pre dividend). My purchase yesterday reduces that average effective purchase price to $1.85. So I guess I am closer to the lucky(?) end of the 'smart money' purchase spectrum.

There are risks in purchasing SCT, but those risks are probably lower than purchasing any other company. There is no term debt. So interest rate rises do not affect the company at an operational level. Whiteware does wear out, even if new housing starts drop . So eventually the production lines on which the whiteware is made will need to be redesigned, providing SCT company with an onogoing core work flow. And at today's prices you are basically buying the developing robotic technology arm of the business 'for free'. Buying something for nothing is usually a rewarding investment strategy

SNOOPY

discl: hold SCT. Will take a breather in my purchasing for now, but may have another look in three months or so as the dividend payment date approaches

rtaylor
11-01-2008, 01:36 PM
You but these when they go under $2, and after a while, they go above $2.50 and you sell them. After a while, they gp back to under $2 and you buy some more.

And so it goes.

Sometimes you even get a dividend as a bonus.

Other years, no dividend for anybody.

Guess it depends on your time frame . . .

duncan macgregor
11-01-2008, 02:03 PM
You but these when they go under $2, and after a while, they go above $2.50 and you sell them. After a while, they gp back to under $2 and you buy some more.

And so it goes.

Sometimes you even get a dividend as a bonus.

Other years, no dividend for anybody.

Guess it depends on your time frame . . . Its not a very good share to swing on the pendulum with lack of liquidity. There are much better options to do that sort of trading on the ASX. A good way to do this is find a volatile company running at profit, and use the 30 day moving average as a buy signal when it crosses on the way up. The idea is to stand clear when its below and run a stop loss on it when its above. You should have been out with this one at $2-05 waiting on the buy signal since mid nov. If you get into this sort of thing you will become a trader making a much higher return but having extra tax liabilities to take into account. Run that over PRC and NZO and a few others on the NZX to see which companies qualify then run it against buy and hold systems. Macdunk

Steve
13-01-2008, 10:07 AM
Assuming SCT uses fixed priced contracts, any drop in the exchange rate will be delayed in benefitting the bottom line as it would only kick-in when new contracts are being entered into and subsequently progressed.

Does anyone have any ideas what hedging (if any) they would be using?

Snoopy
14-01-2008, 10:23 PM
Assuming SCT uses fixed priced contracts, any drop in the exchange rate will be delayed in benefitting the bottom line as it would only kick-in when new contracts are being entered into and subsequently progressed.

Does anyone have any ideas what hedging (if any) they would be using?

SCT hedge on 'work in progress' once a job is confirmed. There is no speculate hedging on work they might get. So yes Steve there is no instant flow through to profits for SCT if the exchange rate drops.

SNOOPY

Steve
15-01-2008, 05:30 PM
Thanks Snoopy.

Also appreciate your analysis that you post.

winner69
08-02-2008, 07:31 PM
Sometimes hard to intepret those SSH notices but it looks like the smart money in Walker Capital has been selling down a few more .... and prob Urghuart buying them unless Snoopy has beaten him to the draw. The SSH does seem rather similar to the previous one so maybe wrong - maybe just something to do with the ones they have some benficial interest in or something

Whatever at 154 the chart looking sicker by the day ..... but SCT must be so so so cheap at these prices ..... like The Warehouse roll back the prices special .... buy today at prices not seen since last century (well almost)

Steve
08-02-2008, 08:24 PM
Who can remember the 'distribution' value used when SCT was spun out of DON? Was it approx 89c?

Snoopy
26-02-2008, 09:42 PM
Sometimes hard to intepret those SSH notices but it looks like the smart money in Walker Capital has been selling down a few more .... and prob Urghuart buying them unless Snoopy has beaten him to the draw. The SSH does seem rather similar to the previous one so maybe wrong - maybe just something to do with the ones they have some benficial interest in or something

Whatever at 154 the chart looking sicker by the day ..... but SCT must be so so so cheap at these prices ..... like The Warehouse roll back the prices special .... buy today at prices not seen since last century (well almost)

Have you caught up with this Winner?

"Walker Capital Management's founder and Managing Director, Stephen Walker, has joined Goldman Sachs JBWere Asset Management (NZ) Limited as the Head of Assset Management in New Zealand. All of Walker Capital Management's clients will be offered the opportunity to transfer their business to Goldman Sachs JB Were Asset Management on terms comparable to those they are currently on."

If you take a look at the performance of Walker Capital Management's main fund via the website

http://www.wcm.co.nz/

it has been dismal since inception in 2005. A 15&#37; *total* return, with big losses more recently! I think I interpreted that graph right! Looks like Walker was concentrating on the 'industrials' which has (with hindsight) been a bad call. Although in fairness the decline in the share price of SCT has not been much greater than many other industrials.

I'm just reading between the lines here. But it looks like Walker Capital Management's main investment fund is effecitively in liquidation. Walker won't be spending much time on it now that he has a 'real full time job' and no doubt clients are voting with their feet wanting 'out', err their funds transferred.

A small fund selling a share in the top 40 can probably get out without causing too much attention to themselves. But try the same thing in a small relatively illiquid share, like SCT, and you will cause the share price to fall. *That* is why the SCT share price has fallen this year Winner. I think your 'smart money man' Stephen Walker is not quite as smart as you thought he was.

Mind you I am not saying that some of the SCT share price fall isn't justified. With the USD exchange rate looking to sit above 80c NZ, all exporters must be hurting. Watch for the share price bounce when SCT announce the dividend though.

SNOOPY

discl: hold SCT

Phaedrus
27-03-2008, 12:20 PM
Looking at the long-term chart of SCT, one could say that the performance of this stock has been, umm, disappointing. There aren't too many stocks around that are below what they were in 1997! Nevertheless, we can learn something from such a chart.
Firstly, it can be clearly seen that while SCT has gone nowhere overall, it has had some really spectacular up (and down) trends on the way. - in fact, at one time SCT was my best performing NZ stock.
Secondly, note the points at which big ("smart") money bought into this stock, as marked by blue arrows. Without exception, these proved to be excellent entry points that were followed by substantial rises, generally outperforming other TA buy signals such as the trendline breaks marked by green arrows.
Thirdly, see how SCT is now at or near its historical long-term support levels.

http://h1.ripway.com/Phaedrus/SCTltm327.gif

Now, lets take a look at a shorter-term chart. Note big money getting out last November. See how, when the "smart" money was getting out, Snoopy was getting in, buying into an established and ongoing downtrend (blue arrows). To me, this is a perfect illustration of the folly of ignoring market sentiment and buying into downtrending stocks. The downtrend continued, but now that SCT has fallen to around its long-term support levels, buy signals are starting to appear - a 10% trailing short stop has been broken, for example (green arrow). Note that while the confirmed trendline and the moving average as plotted here have not been broken as yet, current price action is very close to both.

http://h1.ripway.com/Phaedrus/SCTstm327.gif

Snoopy and I both held SCT for years - the big difference being that I sold at the 2004 trendline break and haven't held since. Snoopy has held SCT for well over 10 years, didn't sell any at the trendline break, and has been buying during the subsequent downtrend.

This post is about timing. Snoopy will probably want to talk about dividends and liquidity, but these are side issues here, and have nothing to do with when this stock should be bought, sold or held.

After years of disagreeing with Snoopy as to when/if SCT is a buy, we are at last able to agree on timing an entry into this stock.

TA meets FA - at last!

Snoopy
27-03-2008, 06:10 PM
Now, lets take a look at a shorter-term chart. Note big money getting out last November. See how, when the "smart" money was getting out, Snoopy was getting in, buying into an established and ongoing downtrend (blue arrows). To me, this is a perfect illustration of the folly of ignoring market sentiment and buying into downtrending stocks.


'Folly'? We both know who the smart money was: Walker Capital Management. We know why Walker was selling. He was in effect closing down his fund that owned those SCT shares as he has taken a job with someone else. Now I know you used the word "smart" Phaedrus, in quotation marks. But really, this is taking advantage of a distressed seller. I can't help the fact that Walkers general stock selection was so poor that his fund failed. But I can certainly take advantage of the situation, and that is what I was doing.

Now Phaedrus did you not write this just last October, on this very thread?

"So, you bought at $2 on Thursday eh Snoopy? Right on the break of the confirmed trendline! I'm so proud of you!"

How things now look different, with the benefit of hindsight!

Of course I know you, Phaedrus, would have sold out when this 'trendline break' proved to be a false dawn. But really I can't see a problem with accumulating some shares in a low liquidity stock like SCT on the way down. There really is no other way to do it if you want some reasonable volume.



The downtrend continued, but now that SCT has fallen to around its long-term support levels, buy signals are starting to appear - a 10% trailing short stop has been broken. Note that while the confirmed trendline and the moving average as plotted here have not been broken as yet, current price action is very close to both.

Snoopy and I both held SCT for years - the big difference being that I sold at the 2004 trendline break and haven't held since. Snoopy has held SCT for well over 10 years, didn't sell any at the trendline break, and has been buying during the subsequent downtrend.

This post is about timing. Snoopy will probably want to talk about dividends and liquidity, but these are side issues here, and have nothing to do with when this stock should be bought, sold or held.


With respect Phaedrus, liquidity has *everything* to do with it where SCT is concerned.

Today SCT closed up 6% at $1.40. My average buy price over ten years is $1.57. So I am down, (apparently), as the market closed today. But try to accumulate as many shares as I now have at $1.40. That $1.40 market price is transaction between buyer and seller *at the margin*. Try to buy tens of thousands of shares at that price, when typical liquidity is only a few thousand shares a day, and see how far you get.

Phaedrus I know you know all this, because of your own experience in reverse - selling out of SCT three or four years ago.

Now here is another lesson in liquidity. Last week I turned on my PC screen and saw sellers in SCT at $1.30, with nothing at all on the buy side. I pinched myself expecting the screen to change but it didn't. So I put in a 'silly' buy order at $1.20, not really expecting to get any shares at that price and ended up picking up quite a few shares! That is how you low liquidity can work for you.



After years of disagreeing with Snoopy as to when/if SCT is a buy, we are at last able to agree on timing an entry into this stock.

TA meets FA - at last!


I'm not so sure Phaedrus . I was going to wait until the SCT half year result came out before I bought again. Often when I make impulsive purchases like I did last week , I get into trouble because I didn't stick to my system.

The NZD/USD exchange rate has embedded itself at over US80c - an unprecedented level. It is just as well Chairman Marsh has retired. Because if he had had to give we shareholders yet another ear bashing on the perils of high exchange rates at this years AGM he might have exploded!

Down the track SCT is exposed to the 'sub prime' problem. If new home buyers are not ordering as many refrigerators and washing machines then that is an incentive for whiteware makers to cut back on updating their production lines in the medium term. If the production like market dries up, SCT could be in for a few very tough years. If this really is a 'perfect storm', there is no reason for even the lowest historic SCT 'support level' share price to hold.

I expect the SCT half year announcement is only days if not hours away. So all will be revealed in terms of the business outlook, and the share price will react one way or the other. You will then be able to announce Phaedrus that SCT has 'broken the trendline' one way or the other , and look smart. The problem is neither of us knows which way the trend line will break until after the half year announcement has been made to the market. And by that time the opportunity for us to benefit from that announcement will be gone.

SNOOPY

discl: hold SCT

Snoopy
09-01-2009, 10:38 AM
I can't see a problem with accumulating some shares in a low liquidity stock like SCT on the way down. There really is no other way to do it if you want some reasonable volume.

With respect Phaedrus, liquidity has *everything* to do with it where SCT is concerned.


A big move with SCT on 8th January with the shares up 14% in a single day! No doubt that little move will attract some attention from the chartists, if not their chequeboks - yet!

However, if you look at the total volume traded we are only talking about 2750 shares! Not even enough dollar value to qualify you for the minimum brokerage rate at a full service broker. Most days of this year SCT hasn't traded at all. So I guess you could call yesterday a 'high volume' day.

Over the last year or so I have been trying to accumulate more SCT shares. In fact I have doubled my holding. So I guess you could say my strategy has been successful. Nevertheless it has been quite a painful process. I always buy at a nominated price- not 'at market'. On one occasion it took a week, on another nearly two to buy a couple of quite modestly sized parcels. When this kind of thing happens you know that you haven't been bidding too much!



Now here is another lesson in liquidity. Last week I turned on my PC screen and saw sellers in SCT at $1.30, with nothing at all on the buy side. I pinched myself expecting the screen to change but it didn't. So I put in a 'silly' buy order at $1.20, not really expecting to get any shares at that price and ended up picking up quite a few shares! That is how you low liquidity can work for you.


The market got even sillier since this point and I managed to get some more shares at 91c late last year. My average buy price is now $1.53, so I am down about 35% given yestreday's closing price. Ouch, although I do note that is less than the market decline over the last year. But am I really down 35%?

I talked to my broker on the market depth of this thinly traded stock. I found that if I wanted to rebuy my shares today I couldn't because there just aren't the number of shares I have already on offer, at *any* price. That is the problem with thinly traded shares. You can't take the market price too seriously as your own actions in buying and selling shares will move the market and render the 'market price' inaccurate. And the projected returns of trading systems break down when you cannot rely on the market price.

This then is a good lesson to traders as to why they should not buy SCT. But if the current market price represents real value (long term I think it does), why would you follow a method which tells you not to buy? This is why I don't trade myself and instead use an F/A strategy of accumulating on weakness. Roll on the next downtrend. I will be waiting there ready to stock up on more SCT shares.

SNOOPY

discl: hold SCT

winner69
10-05-2020, 07:49 AM
The 10 year SCT very cyclical

Now could be a good time to buy

But then this was being debated at the start of this thread in 2004

Snoopy
10-05-2020, 08:39 AM
The 10 year SCT very cyclical

Now could be a good time to buy

But then this was being debated at the start of this thread in 2004


Was it Split Enz that said "History never repeats"? According to Winner's chart, they got it wrong. But SCT is a very different beast compared to what that squiggly line was representing ten years ago: No Alvey, no Transbotics and no Robotworx back then. The Australian branch was a three person outfit showing people how to crush rocks.

The bigger the conglomerate, the smaller the effect on that squiggly line of any individual unit in that conglomerate moving that squiggly line going forwards. To repeat that historical pattern then all of those 'individual business unit ducks' have to line up. How likely will that be going forwards?

I can't leave the chart without commenting on the peak. That occurred following JBS taking a controlling stake, and subsequently one of the local institutions deciding they wanted a meaningful stake. The only way to do that with a low liquidity share was to pay 'the market price' and that ended up being something north of $3. Short of another institution wanting in, I don't see the share price of SCT rising above $3 again. If you lop the top off that last peak the pattern looks even more repeatable. Yet how good a business analyst is Tim Finn? Better than some here would give him credit for I think!

SNOOPY

winner69
10-05-2020, 09:07 AM
Snoopy the thing that struck me with that chart that supposedly being a ’low liquidity’ it’s surprisingly ‘smooth’ (should have put a 200MA line on it) and it’s a beautiful 5 year cycle

But then should companies dealing in leading edge world class high tech stuff be so cyclical?

Suppose being cyclical is a result of failed strategies and poor execution.....so let’s have another go.

I found a broker research paper on Scott put out at the turn of the century ...so much potential.

Bjauck
18-12-2020, 10:56 AM
An announcement was posted concerning a couple of new contracts including one with Little Swan washing machines in China. It seems to have attracted a bit of buying interest. If this were concerning one of the "more trendy" companies, there would have been a flurry of excited posts!

I don't know know just how significant these contracts will be in the scheme of things. However extra business is good, geo-political concerns notwithstanding.

https://www.nzx.com/announcements/365290

Disc. SCT Shareholder