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petechewy
23-02-2011, 06:36 PM
Hi all, I've been lurking around the forum absorbing great knowledge from people.

I'm a student at Auckland University studying Architecture. But since 6th form (2006) I've been learning about sharemarket and have been investing since 2007 starting with only $1500.

I've learnt a lot of hard lessons over the past few years and made some good profit every now and then and my portfolio is now around $40000 (with $20000 of loan). However, One of my mistakes was in FPA when it was hanging at around $0.80. Including several other long term investments, I have around 65% of my portfolio locked up or I will suffer an 25% loss on the value my total portfolio.

I'm 21 years old, so I have a high risk tolerence. I can/ have seen my portfolio drop 50% without lossing my nerves. Although I have not followed finance related careers, I have educated myself extensively on sharemarket and everything relating to it. I am very much a foundamental trader, but use technical to make entry/ exit choices. I have tried and used all kinds of techniques over the years, and developed and refined my own strategy.

Apart from study, I have a permanent part-time job 20 hours per week. I can pretty much use that to support myself and use interest free loans for investment (student loan and bank overdrafts). As I can only utilise around $10,000 at the moment, I can't help but wondering how can I increase my investment capital?

My first dilemma is should I take a 25% decrease in my portfolio value in order to have more liquidity? It will mean all the profit I've made in the past few years will be broke even.

secondly, how can I raise more capital? My parents can not support me (in fact I'm supporting my own living and studying myself let alone investing). I'm not in the business school and as many know, people my age are not exactly interested in investing. It's pretty hard to bounce ideas from people. I can't get margin lending because I don't earn enough. I definately can't get/ afford personal loans.

I'm a bit of an idealist, I want to have enough passive income so that I can get by when I finish with university (when I'm 26). I sat this goal for myself since I was 18. am not a person who needs millions and millions to satisfy, but want to have enough freedom to pursue what I love without financial worries.

I live in Auckland, would be keen to get to know some of the pros and how you did it. Thanks heaps on reading my ramble!

buns
25-02-2011, 10:02 AM
Mate have a look around the site for some thoughts on this. A lot of people have asked similar questions already.

In summary – I think if you have no cash flow you should spend this time building up knowledge in markets and a wealth generating strategy. Boring I know… Once you graduate and work, start investing this capital with your given strategy.

With no cash flows, lending is super dangerous. Invest what you have now and get a small snowball (some compounding) building, and then be patient if you don’t have much spare capital – don’t force it.

And remember you are 21 – Free capital should be pumped into Double Brown Yardy’s, powerades on Sunday, junk food, events, travel or whatever else floats your boat. Investing is pretty boring compared to the life of a 21yr old.

buns
25-02-2011, 10:25 AM
Oh and on the interest free loan thing - I'm assuming you are talking about the $2k every bank gives a grad?

Mate jump on those ASAP, and get as many as you can before they expire. I got it from 4 banks ($8k), that was all I started with.

I don't know if I should be widly advertising it, or if it is morally correct but 3/4 of those banks have no system in place around expiry and I still have these loans.. $6k, no interest.

I have always intended on paying these back once 1 or 2 shares hit some milestones, but they just havent come about (ACL FDA approval etc)

For you (I just re read you have 50% debt!!!), I think you should take these loans and pay down any interest bearing loans ASAP

CJ
25-02-2011, 10:56 AM
I have around 65% of my portfolio locked up or I will suffer an 25% loss on the value my total portfolio. Not sure I understand this. Always value your portfolio at market value (not cost) and determine if each investment is the best use of money.

If a stock is down 25%, dont wait for it to go back up. think is that the best use of the money or would I be better selling now and investing in something else.

shasta
25-02-2011, 11:39 AM
Not sure I understand this. Always value your portfolio at market value (not cost) and determine if each investment is the best use of money.

If a stock is down 25%, dont wait for it to go back up. think is that the best use of the money or would I be better selling now and investing in something else.

Yeah, re FPA - the loss is a loss - accept it.

Would you buy into FPA today, based on what you think there future is?

If no, sell take the loss on the chin & smile - you have just had you're first lesson in the market & you got off relatively cheaply.

You have plenty of time to recoup those losses, find something with a better outlook & learn from that mistake.

I'm 34, so i agree with Buns - live the student life & grab whatever the Govt will give you, i had to pay for my student loan (@ 7% interest), but the generation before got it free, take it, use it, abuse it.

When you make a couple of grand on some shares, jump on a plane & go shopping in sydney/melbourne etc, enjoy it - i used to buy some decent wine to drink/cellar when i made some good coin

On kiwisaver, make sure you chuck in 2% so you get the 2% from your employer, the Govt tops it up by just over $2k in the first year

ENP
25-02-2011, 09:21 PM
Mate jump on those ASAP, and get as many as you can before they expire. I got it from 4 banks ($8k), that was all I started with.


That's pure genius!!

Why didn't I think of that?

petechewy
25-02-2011, 11:11 PM
cheers guys for all your inputs. Maybe I am getting a little out of perspective.

Mate jump on those ASAP, and get as many as you can before they expire. I got it from 4 banks ($8k), that was all I started with.
yeap, that's pretty much how i started too. I have quite a bit loan, but they are all interest free, so i'm not too worried.
cheers shasta for your advices, went to Spain last year for a good month and half was bloody fantastic!! Truth is, I do enjoy life, just don't want to come out of the student life and straight into debt and 9-5 corporate graveyard ae.

anyone know of places where i can meet gurus etc? ie i'd love to chat with you guys if possible.

shasta
26-02-2011, 03:58 PM
cheers guys for all your inputs. Maybe I am getting a little out of perspective.

yeap, that's pretty much how i started too. I have quite a bit loan, but they are all interest free, so i'm not too worried.
cheers shasta for your advices, went to Spain last year for a good month and half was bloody fantastic!! Truth is, I do enjoy life, just don't want to come out of the student life and straight into debt and 9-5 corporate graveyard ae.

anyone know of places where i can meet gurus etc? ie i'd love to chat with you guys if possible.

Where are you?

Sharetrader has casual catch up meetings around the traps ever now & then, i used to organise the Wellington ones over a few drinks etc

Always been great to put a face to the names & ive meet some wonderful & knowledgable posters thru these meetings.

STRAT
27-02-2011, 09:14 AM
anyone know of places where i can meet gurus etc? ie i'd love to chat with you guys if possible.Hi Peter.
Have a look here for meeting people with the same interests.

http://www.sharetrader.co.nz/showthread.php?5154-Sharetrader-Meeting-Auckland/page36

I should probably point out you get to be a Guru here by posting a lot. Quality of content is not measured.;)

petechewy
27-02-2011, 10:54 PM
cheers shasta and STRAT. I live in Auckland City Centre but occassionally travel to Wellington. will be awesome to go to one of those meetings. are they regular or just depends on opportunity?

steve fleming
28-02-2011, 12:17 AM
Hi all, I've been lurking around the forum absorbing great knowledge from people.

I'm a student at Auckland University studying Architecture. But since 6th form (2006) I've been learning about sharemarket and have been investing since 2007 starting with only $1500.

I've learnt a lot of hard lessons over the past few years and made some good profit every now and then and my portfolio is now around $40000 (with $20000 of loan). However, One of my mistakes was in FPA when it was hanging at around $0.80. Including several other long term investments, I have around 65% of my portfolio locked up or I will suffer an 25% loss on the value my total portfolio.

I'm 21 years old, so I have a high risk tolerence. I can/ have seen my portfolio drop 50% without lossing my nerves. Although I have not followed finance related careers, I have educated myself extensively on sharemarket and everything relating to it. I am very much a foundamental trader, but use technical to make entry/ exit choices. I have tried and used all kinds of techniques over the years, and developed and refined my own strategy.



Hi Peter,
As an Auckland uni grad myself, I read your post and was pretty impressed by what you have acheived to date.

Based on what you have done so far, I think your goal of financial freedom in a few years time is definitely not unrealistic with a bit of luck.

I started investing at the same sort of age as you, and now am in my early 30s and have got a mortgage free home and an investment portfolio of a size that i could now stop working if i wanted to, a large part as a result of share investing, so what you are after is definitely do-able.

Regarding your current capital restrictions, there are other ways to leverage your portfolio rather than taking on debt especially given your risk tolerance - i use options and also micro-cap stocks to maximise the bang for my buck.

If i could just say one thing, for me, from an FA perspective, a big part of my understanding has been gathered by reading as many company announcements and learning about as many companies as I possibly can....assuming you follow ASX stocks, there are over 2000 stocks, there are just so many opportunities out there that most people are not aware of that can potentially make you alot of money, but the only way to find out about them is just to read and research and read and research as much as you can.

Good luck!

petechewy
01-03-2011, 09:52 PM
Cheers steve, to hear what you have done has given me some confidence. I am however somewhat scared of using options and micro-cap stocks. I've read and understand the basics of options, but there's hardly a market on NZX and I've only just moved into ASX towards the end of last year. micro-cap seems are hard for me because I like FA approach to select stocks, and with limited financial background it is difficult to sort diamond from sand. But I will keep on reading and researching till I find some.

By the sound of it, did you study finance in University? which I guess also brings up the question, how did you (meaning steve and anyone else) got started in stock market in the first place?

shasta
01-03-2011, 10:31 PM
Cheers steve, to hear what you have done has given me some confidence. I am however somewhat scared of using options and micro-cap stocks. I've read and understand the basics of options, but there's hardly a market on NZX and I've only just moved into ASX towards the end of last year. micro-cap seems are hard for me because I like FA approach to select stocks, and with limited financial background it is difficult to sort diamond from sand. But I will keep on reading and researching till I find some.

By the sound of it, did you study finance in University? which I guess also brings up the question, how did you (meaning steve and anyone else) got started in stock market in the first place?

Steve understood the risks with options & is a very astute investor, but that isnt for everyone, you wanna stick to what works for you.

I started out at what is now PricewaterhouseCoopers back in 1994, one of the partners encouraged me to get into shares & learn about general business matters.

I was always interested in economics over accounting anyway & decided the sharemarket was a way to make money whilst learning

I started off on the NZX too, but when the AUD was weakening in 2007 i moved from the NZX to the ASX moving most funds over between 90 - 92c.

Now i have refined a system that suits me, & i look for undervalued low EV resource companies, plus stocks trading well below NTA (ASX: DGR for example)

Have a look on the ASX thread - LOW EV Resource Companies & read the comments (ive already filtered thru what i consider to be some of the better stocks), that will give you a starting point for resource companies to look into, these are NOT buy recomendations, i've just shared my research ;)

Navigate your way around the ASX threads & see what sort of companies others follow & post about, then read there last quarterly report & suss out there website etc

steve fleming
02-03-2011, 08:39 PM
I'm a bit of an idealist, I want to have enough passive income so that I can get by when I finish with university (when I'm 26). I sat this goal for myself since I was 18. am not a person who needs millions and millions to satisfy, but want to have enough freedom to pursue what I love without financial worries.


Realistically, IMO if you want to become financially independent through investing in a short space of time (by 26) (and you are genuinely committed to this goal) then, realistically, the only real option to turn a $40k portfolio into say a $500k portfolio (sufficient to generate enough passive income to survive) is to massively leverage your equity.

As you said, as a student, borrowing is going to be tough, so, the other key leverage alternatives apart from borrowing are CFD’s or options. I would also include micro-cap ($10m market cap or less) investing as a form of investment that offers larger upside than downside and therefore a similar sort of leverage. As Shasta has said, his low EV resource list has some really quality micro-caps that offer some substantial upside.

Realistically, i can't see Pete turning $40k into $500k in a few years by investing in the likes of FPA.

You really need some big multi-baggers to pump up that portfolio size. Eg, a $5k investment that turns into $50k or a $10k investment that turns into $100k can quickly do wonders for your portfolio.....You can then re-invest that $100k into 10 further lots of leveraged $10k investments which in effect generates compounding/multiplying returns....I adopted this strategy as, given the riskiness, I knew not all the leveraged plays would come off, so needed to maintain a very large diverse portfolio with many different exposures....Because the investments are leveraged, a $10k leveraged exposure equates to a significantly higher risk/upside exposure than had the investment been in a bluechip.

I am not recommending this strategy at all, but am saying IMO it is probably the most REALISTIC way to quickly (say within 5 years) turn increase your portfolio size by many times. (Although, I note that I am coming from a FA point of view and take a medium term investment horizon , some of the TA experts may have other short term trading strategies to multi-bag your portfolio ).

This strategy can work, I have done it myself using options and micro-caps to significantly increase my portfolio size, and i know others who have done similar over time. For me, it required a lot of research, understanding of the market, a lot of bottom feeding, patience, confidence and conviction buying when nobody else was. You have to have some luck and make some calls along the way that no one else is willing to make.

Again, I am NOT recommending this leverage strategy, and in many cases will fail, but if you want high returns as Peter requires to meet his aim of sufficient passive income by the time he is 26, then realistically you need to take risks (though there are strategies to minimise the risks – diversification; buying in early; buying in at/under asset backing).

The alternative is building your portfolio more slowly using a more orthodox strategy.

And Pete- yes i did study a bit of finance at Auckland University – i used to spend a lot of time at the old access brokerage stock boards in Finance Plaza on the way to and from uni watching all the live stock quotes – good times!

petechewy
04-03-2011, 04:21 PM
Cheers guys.

It seems that if I want to get to where I want to be in that time frame, the best chance is with micro-caps and options where the risk is far higher in the hope of better leaverage and maybe return. Maybe I should reposition myself to move at least half of my portfolio out of NZX50 and ASX200 to look for some of the more riskier investments? Obviously taking into accounts of a lot more study and research into companies.

POSSUM THE CAT
04-03-2011, 06:26 PM
Petechewy If you really want leverage try CFDs through CMC markets but remember they are Basically Bookmakers

petechewy
07-03-2011, 07:24 PM
Okay, i spent most of the weekend on this forum. Thanks to Steve, shasta and possum. I've began to see the merits in all sides. Fact, I don't have a huge capital (quite the opposite) and I have exhausted most of my avenues of cheap loans (overdraft and student loan). It has also become clear that at my age, to take on additional loans is not going to be easy and has more chance to do damage to me than help me. Therefore, if I want to seek what I want, I must reposition myself and take on more risk as a form of leverage.

I think the best thing for me to do is restructure my portfolio (please tell me if I'm wrong). Think I'll divide it equally into three parts: a third in NZX50 market focusing on medium term growth/ opportunities (I don't know enough about business yet to be confident with IPO and micro-chip stocks on NZX seems to have no liquidity); A second third in Micro-cap/ options in ASX focusing on short term trading (thanks to steve and shasta's advice and threads on low EV healthcare and mining. Very high risk, but it will help to give the leverage that I need to propel myself and i have already and will learn a lot from); the last third in ASX200 and NZX50 as I already have shares in AIA, RYM, MHI, HLG, FBU and it will be focussed on long term growth/ income (something to fall back on if others should fail).

Like steve said, FPA is most likely not going to get me anywhere in short term, medium or long term. So I will just learn the lesson and offload those when opportunities arises, basically treating it as cash sitting on the side. CFD, don't know enough and don't really want to go with bookmakers thanks to your advice possum ;)

shasta
08-03-2011, 12:24 AM
Okay, i spent most of the weekend on this forum. Thanks to Steve, shasta and possum. I've began to see the merits in all sides. Fact, I don't have a huge capital (quite the opposite) and I have exhausted most of my avenues of cheap loans (overdraft and student loan). It has also become clear that at my age, to take on additional loans is not going to be easy and has more chance to do damage to me than help me. Therefore, if I want to seek what I want, I must reposition myself and take on more risk as a form of leverage.

I think the best thing for me to do is restructure my portfolio (please tell me if I'm wrong). Think I'll divide it equally into three parts: a third in NZX50 market focusing on medium term growth/ opportunities (I don't know enough about business yet to be confident with IPO and micro-chip stocks on NZX seems to have no liquidity); A second third in Micro-cap/ options in ASX focusing on short term trading (thanks to steve and shasta's advice and threads on low EV healthcare and mining. Very high risk, but it will help to give the leverage that I need to propel myself and i have already and will learn a lot from); the last third in ASX200 and NZX50 as I already have shares in AIA, RYM, MHI, HLG, FBU and it will be focussed on long term growth/ income (something to fall back on if others should fail).

Like steve said, FPA is most likely not going to get me anywhere in short term, medium or long term. So I will just learn the lesson and offload those when opportunities arises, basically treating it as cash sitting on the side. CFD, don't know enough and don't really want to go with bookmakers thanks to your advice possum ;)

Thats too passive to meet your goals, you should aim to have 20% max in conservative growth stocks that pay dividends, like the NZX ones you mentioned, even better if they pay interim/quarterly dividends & have a DRP scheme (lazy way to accumulate by reinvesting dividends), this is your "safety" money.

You need to be trading around 50% of capital in ASX spec stocks, 20% in options, & retain just 10% in cash (for any short term opportuntities)

Why follow this kind of model?

You are young & need to leverage your capital to make the kind of returns you require, but it could all go pear shaped, so you need a plan of some sort.

As the amount you have to invest with grows, you will need to develop some system & learn to stick with it, so i'd write down some "rules"

I'll use an example of how you could operate using the above.

Lets say you have $20k to start with.

1. 20% Conservative - NZX large cap dividend payer, the likes of RYM/IFT/FBU as examples, $4k

2. 50% Speculative/Risky - ASX Small Caps (Metals/Oil & Gas), basically any explorer that is actively drilling & generating newsflow, $10k

3. 20% High Risk - ASX Options/CFD's etc - Largely the same as above, but must be listed perhaps utilising SPP's, Capital Raisings, Bonus options etc, $4k

4. 10% Cash Mgmt -Leave to earn interest & a place for your "tax provision*" money, & only to be used in lieu of selling conservative shares, $2k

Eg, If you were to fund additional $ regularly, you would split as per the above ratio, so you are growing your "conservative assets" & "risks assets" in proportion.

Any dividends from the "conservative stock" should ideally be reinvested (via DRP's) or the added into the 10% "cash on standby", perhaps each quarter you can rebalance the portfilio, as any money you put in regularly would be retained in the "Cash Mgmt a/c" until sufficient enough to buy stocks

* Trading profits should have an amount for tax set aside (add to Cash Mgmt A/c to earn interest til due to pay it) & the rest split as above.

I believe this provides you with enough leverage whilst trying to minimise the downside risks, due to the relatively small amounts involved, i'd only have 1 conservative stock, 1 speculative stock & 1 option, with the conservative stock being a long term hold & not to be sold

The whole idea is as you get older & your total capital builds up, your risk profile will change & you will want to put more into the conservative assets for income

I'm having a rethink of my own "system" & am looking at a similar setup myself

petechewy
08-03-2011, 04:00 PM
Lets say you have $20k to start with.

1. 20% Conservative - NZX large cap dividend payer, the likes of RYM/IFT/FBU as examples, $4k

2. 50% Speculative/Risky - ASX Small Caps (Metals/Oil & Gas), basically any explorer that is actively drilling & generating newsflow, $10k

3. 20% High Risk - ASX Options/CFD's etc - Largely the same as above, but must be listed perhaps utilising SPP's, Capital Raisings, Bonus options etc, $4k


Gosh that sounds a little adventurous but it does seem to make sense. By the looks of it, ASX is where I should dump most of my money in right? NZX is not really suited for aggressive approach.

Do you think that 1 share in each category a little too risky? I totally agree with only 1 or 2 in long term as per warren buffett's teaching, if one company is good to buy then you should buy as much as you can. But speculative or options, it's more about research with an element of luck. Wouldn't it be better to have a few more buskets to put your money in?

looks like a revisit to the drawing board.

Corporate
08-03-2011, 04:13 PM
In my opinion, you've got to many stocks already. With your limited capital, research and invest in a maxiumu of 4 or 5 companies. Then watch them closely!

At your age, forget the conservative stocks. Get a competitive edge through research, reseach and more research!

shasta
08-03-2011, 04:31 PM
Gosh that sounds a little adventurous but it does seem to make sense. By the looks of it, ASX is where I should dump most of my money in right? NZX is not really suited for aggressive approach.

Do you think that 1 share in each category a little too risky? I totally agree with only 1 or 2 in long term as per warren buffett's teaching, if one company is good to buy then you should buy as much as you can. But speculative or options, it's more about research with an element of luck. Wouldn't it be better to have a few more buskets to put your money in?

looks like a revisit to the drawing board.

To meet your stated goals you wont get there with boring steady companies, you need multi baggers & they are out there, i just cant see any other way to get to where you want to be.

The conservative option was just a back up plan for if you lost most of the trading funds, perhaps you just need to throw yourself to the wolves & trade the whole lot & risk losing half your funds trying to double them & more.

Corporate has the right idea, if you are looking at the fundamentals its all about constant research, ive shared mine on the "LOW EV" thread, & these are the sort of companies you need to invest in, to double your money & beyond within say a 12 month timeframe. (Not saying to buy those, but to find similar companies etc)

I personally wouldnt diversify beyond 5 stocks, whatever the amounts involved are, & starting off with a modest amount (& needing high risk v high reward) you may just want to buy one stock to start with.

Its not easy to get it right all the time, have a look at the more astute members on Sharetrader & how they are doing in the NZX/ASX comps, thats the best minds on here & what returns they have obtained thru there knowledge

You may need to reassess your goals, & thats fine - if we could all turn $10k into $1m we wouldnt be posting here, we'd be on a tropical island sipping tequila sunrises ;)

petechewy
08-03-2011, 05:02 PM
You may need to reassess your goals, & thats fine - if we could all turn $10k into $1m we wouldnt be posting here, we'd be on a tropical island sipping tequila sunrises ;)

Mmmmm that doesn't sound too bad, maybe $1m is the goal then! haha

shasta, I've read through your low EV resource and healthcare and it is really good. I guess just as a newbie question, what are the key things to look for in the micro-cap shares? It came pretty apparent to me that the foundamentals have different emphasis in micro cap market. How do I even began to find those promising companies out of all the companies on ASX?

SOrry to sound so newb, but in the past, my comfort zone has been NZX50 and only in the last year, ASX 200.

trackers
08-03-2011, 07:25 PM
Mmmmm that doesn't sound too bad, maybe $1m is the goal then! haha

shasta, I've read through your low EV resource and healthcare and it is really good. I guess just as a newbie question, what are the key things to look for in the micro-cap shares? It came pretty apparent to me that the foundamentals have different emphasis in micro cap market. How do I even began to find those promising companies out of all the companies on ASX?

SOrry to sound so newb, but in the past, my comfort zone has been NZX50 and only in the last year, ASX 200.

focusing on mining companies, you need to think about situations where the company is going to be all of a sudden worth a hell of a lot more than it is currently. i.e

1. It is in a commodity sector which is booming or about to boom(and perhaps this fact has gone unnoticed to date)
2. It is in the middle of a mining programme that has a very high chance of success
3. It is so ridiculously undervalued in relation to its permits/resources (extra points for a certified JORC resource) that nothing else needs to happen other than people get wind of it - Remember the markets not as efficient as a lot of people would like to claim.

For me, in addition to having one or more of the above the company should have a low market cap, available cash, low shares on issue and active management.... long dated options and the like are also a nice bonus.

$10k doubled 7 times = $1.2mil... Certainly doable, but it won't happen overnight and it takes more than just good luck

shasta
08-03-2011, 08:35 PM
Mmmmm that doesn't sound too bad, maybe $1m is the goal then! haha

shasta, I've read through your low EV resource and healthcare and it is really good. I guess just as a newbie question, what are the key things to look for in the micro-cap shares? It came pretty apparent to me that the foundamentals have different emphasis in micro cap market. How do I even began to find those promising companies out of all the companies on ASX?

SOrry to sound so newb, but in the past, my comfort zone has been NZX50 and only in the last year, ASX 200.

I havent gone into the healthcare ones in much depth, it was really just a filtering exercise.

The ASX site has lists of the sectors, healthcare, pharmaceuticals, resources, energy, Utilities, bitotechs, industrials etc

I use stocknessmonster to obtain PDF announcements, but the ASX site has that as well

petechewy
10-03-2011, 08:20 PM
Did quite a bit research on the net just getting my head around micro-caps and how to research them. Most suggest micro-caps are shares under $250mil cap which is a hell of a lot larger than $10mil cap which we are discussing here. just a quiestion, how do i find a list of those companies (aside from reading shasta and SF's posts)? probably the most overwhelming thing with reading the reports is how will I know if the management is good/active? What should I look for in directors?

I've also been doing some research on mining and its process. one thing i'm not sure is, is it better to farm in/out with major companies or other smaller companies? what are some of the risks with interest in projects internationally (especially in Africa)? Do these microcap companies ever get into the actual mining or do they pass it on to other larger companies?

shasta
11-03-2011, 12:56 PM
Did quite a bit research on the net just getting my head around micro-caps and how to research them. Most suggest micro-caps are shares under $250mil cap which is a hell of a lot larger than $10mil cap which we are discussing here. just a quiestion, how do i find a list of those companies (aside from reading shasta and SF's posts)? probably the most overwhelming thing with reading the reports is how will I know if the management is good/active? What should I look for in directors?

I've also been doing some research on mining and its process. one thing i'm not sure is, is it better to farm in/out with major companies or other smaller companies? what are some of the risks with interest in projects internationally (especially in Africa)? Do these microcap companies ever get into the actual mining or do they pass it on to other larger companies?

With small cap mining stocks you'd be better off with a limit of say $50m, as getting up to $250m is among the producers, which is fine if thats what you are after, but the small companies under $50m are usually at drilling stage, the ones above $50m may well be in the feasibility/development stage.

Getting a handle on Management/Boards can be difficult, but you are looking at what they have done previously & were they successful etc, also a key component is, how much "skin" have they got in the game, ie have they a decent holding in the company & bought on market?

You have picked up on a good point, companies that can attract large JV partners to mostly fund drilling campaigns usually have decent projects, always pays to notice who they neigbours are in nearby permits, this can indicate the potential for a takeover should a large company make a large discovery.

Theres no easy way to find companies like Steve Fleming & i do, its all research, i can give you some sites to look at ("The Australian" is pretty good)

Hope to catch up with you in Wellington & explain all this to you.

DarkRed
27-03-2011, 09:24 PM
Petechewy

Bank student overdrafts are amazing! Did the same as well. Found another way of raising capital with relatively cheap interest rates lately...

This may or may not work for a student investor as it requires a credit rating that allows for lending but heres a sneaky trick to raise a bit of cash at a super low interest rate.
Banks have been selling the idea of transferring your credit card balances for people that have maxed out their cards and are on huge interest rates. They are offering 4.99%-5.99% on transfered balances. ANZ has come out and offered 2.99% for 6 months recently! ANZ's 2.99% got me thinking.

So heres what I tired/am trying.
1. Open a Kiwibank Gold Card with a 10k Limit, currently banking with ANZ also so increase my limit on ANZ card to 10k also.
2. Talk to ANZ about doing a balance transfer from the Kiwibank credit card. They usually only allow a 95% transfer of the card limit so 9.5k.
3. When it is all set up and approved do a cash transfer of 9.5k out of the kiwibank credit card to a bank account and transfer the 9.5k credit card balance to the ANZ card at 2.99%.
Now you have 9.5k for 6 months at 2.99%. Now what to do with it! The whole process can be done over the phone in less than an hour. Scary!
This may work for you or not, just an idea I thought I would put out there.

I am a young investor also, one of the hardest things Ive found about investing is finding young people that are interested in it. I always find it easy to talk through ideas with someone to get it clear in my own head. What i'm putting out there is A) Is there already a young investors association or social gathering that people like you and me could jump into? or B) Is it worth making a social event for young investors to go to? would you be interested in going if one was available?

buns
27-03-2011, 10:39 PM
Nice thinking out of the box re raising capital - it's something I'll think about.

However right now extra (borrowed) capital isn’t my number one priority. I'm still in the stage of portfolio allocation and figuring out the best mix of investments, to achieve my goals. Your idea about a young investors group, I like. I suppose I would qualify being 25 and generally still unsure about things.

However what is the point of it exactly?

Ways for young people to get started and raise fast capital? Everyone wants cheap capital.

General portfolio allocation and strategy? Everyone has different goals, risk tolerance, experience and education. Unless you find someone similar to you, talking with a group of others may distract or confuse you from your own goals and thought or even turn into an argument (from my experience).

However, I think there are some general ground rules in investing which everyone kind of adheres by, and simply listening to someone else talking and agreeing to this kind of thing defiantly instills confidence in your own techniques.

I think the key ingredient for us youngsters or anyone new to the game is learning how the game works, and learning from experienced investors - there techniques, strategies and mistakes. Being surrounded by some seasoned campaigners can fast track this learning curve. That’s what I like about share trader.

I’m not shooting down your idea. However (from experience) I’m just cautious on whom I take advice from at this stage. FEEL FREE to contact me about any of this stuff.

Note- This is all coming from a guy who has never attended an investing group meet up

buns
27-03-2011, 10:51 PM
What I am interested in from young investors/accountants is career paths, and thoughts on using your direct employment to reach your future wealth goals yet enjoying yourself on the way.

I’m a CA, and have worked in a NZX listed company (in corp division) since Uni. Now I’m ready to move on.

I’ve learnt a ton at my current work, and understand companies and the market in general a whole lot more than most of my graduation class. However those guys are all well above me in the technical accounting sense having all gone to the big 4.

That is what gets me thinking, what job (location, industry, company size….) should I be looking for to best round of my knowledge in business and investing? I like my current work and understand it (the role and industry) quite well, but wonder what I’m missing out on being removed from the (I call it boring) nitty gritty month end/technical accounting type work. Or would moving into another industry/environment help as well?

I one day want to work (by choice) in small companies (don’t like the hierarchal/red tape, slow changing, never get things done attitude in large coys) with potential to grow. What do I need to learn to fit into these companies and help that growth?

At this stage the enhancement in knowledge and being able to invest with it for me equals job satisfaction. But then there is the big one of lifestyle ( You can’t easily go fishing, camping or golf in Sydney/Melbourne/London!!), which to me is number one as a enjoyable lifestyle is the end goal of wealth creation, hence if I can find that (or as much as possible now) investing will become secondary.

DarkRed
27-03-2011, 11:12 PM
Nice thinking out of the box re raising capital - it's something I'll think about.

However right now extra (borrowed) capital isn’t my number one priority. I'm still in the stage of portfolio allocation and figuring out the best mix of investments, to achieve my goals. Your idea about a young investors group, I like. I suppose I would qualify being 25 and generally still unsure about things.

However what is the point of it exactly?

Ways for young people to get started and raise fast capital? Everyone wants cheap capital.

General portfolio allocation and strategy? Everyone has different goals, risk tolerance, experience and education. Unless you find someone similar to you, talking with a group of others may distract or confuse you from your own goals and thought or even turn into an argument (from my experience).

However, I think there are some general ground rules in investing which everyone kind of adheres by, and simply listening to someone else talking and agreeing to this kind of thing defiantly instills confidence in your own techniques.

I think the key ingredient for us youngsters or anyone new to the game is learning how the game works, and learning from experienced investors - there techniques, strategies and mistakes. Being surrounded by some seasoned campaigners can fast track this learning curve. That’s what I like about share trader.

I’m not shooting down your idea. However (from experience) I’m just cautious on whom I take advice from at this stage. FEEL FREE to contact me about any of this stuff.

Note- This is all coming from a guy who has never attended an investing group meet up

I was just testing the water with my first comments on having a young investor group.
What I am thinking in my head is a way of getting off the computer I am typing on now and into a social situation with similar people. I throughly enjoy investing (still really learning) but I find that a lot of time is spent in the office by myself doing reading and analysis (to some degree). This is of course fundamental and needs to be done but it would be great if there was some way of combining the interest of investing with socializing and networking. Being young its fun to have a few brews and enjoy life, be good fun to have events and social interaction with other young investors. Seasoned pro's might even be kind enough to help us along with some snippets of advice.
A way to explain would be grabbing this newbies thread and making it social and a bit of fun in the real world...

Heading to start-up weekend in Auckland this Fri..pondering.