The return of the idiot index

[Stranger_Danger]

I've always placed a lot of weight on watching what the least informed people I know are doing.

There are two constants

- Houses, houses, houses, will make us all rich, forever, hahaha!

- On everything other than houses, a monkey with a dart knows more.

We're talking the people that chase trouble - lost money in the dotcom bubble, put what was left in safe first ranking debentures etc etc.

These are people I begged to buy stocks in 2008/2009. They didn't.

The last 6 months, I've noticed them all getting back into the market, and, in many cases, starting to ask me for advice.

Yesterday, I had my first warning sign of the next stage - one of them has started giving me advice!

Them : I can't believe you don't own XRO or GEO. I thought you knew what you were doing with investing?

Me, quietly : I don't know everything. Do you have some sort of price target in mind with XRO or some idea of what you think it's intrinsic value is?

Them : Well, they're going to be on Nasdaq soon and a lot of those stocks are worth $500 or $1000 a share, look at Google or Apple or Priceline.

Me, quietly : What would XRO's market cap be at $1000 a share?

Them : What is a market cap?

(He has 60% of his net worth in the stock)

--

Anybody else out there that makes use of an idiot index?

If so, is yours starting to flash red?

[blackcap]

I do make use of it and yes it can be telling but till now I have not had the big flashing red lights. This site is pretty good for the same thing too, when "investors" start to forget fundamentals and start talking about "target prices" as a justification for purchasing stocks.
Cheers for the anecdote.. good to know its starting. I must start taking a few more taxis to get the feel :)

[Harvey Specter]

(He has 60% of his net worth in the stock)Hes probably made a lot of money recently. The sad fact is that he could be extremely lucky and sell up to buy a Ferrari just before it crashes, so he will have a ferrari and you will have you sensible investments.

[Nigel]

Yesterday, I had my first warning sign of the next stage - one of them has started giving me advice!

Them : I can't believe you don't own XRO or GEO. I thought you knew what you were doing with investing?

Me, quietly : I don't know everything. Do you have some sort of price target in mind with XRO or some idea of what you think it's intrinsic value is?

Them : Well, they're going to be on Nasdaq soon and a lot of those stocks are worth $500 or $1000 a share, look at Google or Apple or Priceline.

Me, quietly : What would XRO's market cap be at $1000 a share?

Them : What is a market cap?



Stranger Danger, you know that I do visit this site aye? Please stop posting our personal conversations in a public forum.

PS. Got any GEO yet? Sure fire thing mate. Just wait for a Nasdaq listing - all the way to $500 mate. All the way to $500. (What's a "Nasdaq" anyway?)

[craic]

When I was in Penang recently, I chatted with a local very successful businessman and explained in detail my processes for making a bit of money from the markets. He was most attentive and suggested that I should look at teaching a few oldies how to do the same. I told him that I have or had many friends who were intrigued with my successes and always asked for advice but then ignored it and went to "experts" and lost their money. One friend inherited a small fortune and decided to go to her daughter-in-law, an accountant who directed her into a major finance five minutes before it crashed. Fortunately she had some left over and thats now safely in a bank - making money for the bank. Another who always asked for advice suddenly decided that his son, who had moved to Aussie for work, was getting hot tips about mining companies and he lost his lifes savings in total. Another told me that she had a financial advisor who told her that he could get her up to 30% in six months. For me its simple, keep your advice to yourself, buy them a beer and offer some sympathy when they hit the wall.

[JohnnyTheHorse]

the key is finding stocks before brokers, instos and idjits start saying "buy, buy, buy!". I remember the day after Snakk listed a major brokerage was quoted as saying "we have no f***en idea what they do" (some still don't!). I thought, perfect, I am in. those kind of places are now sitting up and taking notice of the "minnow" and paying a premium.

Leave the GEO's and XRO's to the silly buggers right now. its the littlies that will give you some bags of gold ;

Did anyone end up working out exactly what Snakk does?

[Harvey Specter]

Did anyone end up working out exactly what Snakk does?Aren't that just a copy of the French cheese dip company??

5060

[J R Ewing]

the key is finding stocks before brokers, instos and idjits start saying "buy, buy, buy!". I remember the day after Snakk listed a major brokerage was quoted as saying "we have no f***en idea what they do" (some still don't!). I thought, perfect, I am in. those kind of places are now sitting up and taking notice of the "minnow" and paying a premium.

Leave the GEO's and XRO's to the silly buggers right now. its the littlies that will give you some bags of gold ;

Wow. The placement was at 12c provided you bought a few shares at say 15c first. They are currently at 12.8c. Moose is saying buy buy buy and Balance says we should all say bye bye. What to do??

[blackcap]

Aren't that just a copy of the French cheese dip company??

5060

Nice one :) I dare say at a quess though LeSnak makes more money than Snakk!

[BIRMANBOY]

Moosie, are you sure you're not moonlighting as a Taxi driver?
the key is finding stocks before brokers, instos and idjits start saying "buy, buy, buy!". I remember the day after Snakk listed a major brokerage was quoted as saying "we have no f***en idea what they do" (some still don't!). I thought, perfect, I am in. those kind of places are now sitting up and taking notice of the "minnow" and paying a premium.

Leave the GEO's and XRO's to the silly buggers right now. its the littlies that will give you some bags of gold ;

[BIRMANBOY]

Craic, the guru of Galway...
When I was in Penang recently, I chatted with a local very successful businessman and explained in detail my processes for making a bit of money from the markets. He was most attentive and suggested that I should look at teaching a few oldies how to do the same. I told him that I have or had many friends who were intrigued with my successes and always asked for advice but then ignored it and went to "experts" and lost their money. One friend inherited a small fortune and decided to go to her daughter-in-law, an accountant who directed her into a major finance five minutes before it crashed. Fortunately she had some left over and thats now safely in a bank - making money for the bank. Another who always asked for advice suddenly decided that his son, who had moved to Aussie for work, was getting hot tips about mining companies and he lost his lifes savings in total. Another told me that she had a financial advisor who told her that he could get her up to 30% in six months. For me its simple, keep your advice to yourself, buy them a beer and offer some sympathy when they hit the wall.

[BIRMANBOY]

Good laugh to go with bagel and coffee.
Wow. The placement was at 12c provided you bought a few shares at say 15c first. They are currently at 12.8c. Moose is saying buy buy buy and Balance says we should all say bye bye. What to do??

[BIRMANBOY]

So everybody happy....I just love the stockmarket..everyones a winner.
Hes probably made a lot of money recently. The sad fact is that he could be extremely lucky and sell up to buy a Ferrari just before it crashes, so he will have a ferrari and you will have you sensible investments.

[MAC]

Isn’t TV the greatest lubricator and indicator of market sentiment and thinking ?

Remember the plethora of home improvement and rental property development shows on the box in 2007.

I counted a total of seven gold mining shows on sky TV in 2012 when the gold market topped out.

[Schrodinger]

Wow. The placement was at 12c provided you bought a few shares at say 15c first. They are currently at 12.8c. Moose is saying buy buy buy and Balance says we should all say bye bye. What to do??

I suggest for my first piece of advice to read The Intelligent Investor. Most people are afraid of effort and this works 100% of the time in getting rid of the taxi drivers. Even if you indicate you can just read 3 chapters, this is still too much.

The ones that actually bother to attempt to read it and talk about what it has said are maybe worth talking to.\

Another way to look at it is: Are you in the market for the long term and do you want to make 25% returns consistently per year or do you hope to strike it lucky like at the casino.

Are you investing or speculating?

[Schrodinger]

Moosie, does Snakk have their own technology or do they licence their platform?

[ratkin]

Isn’t TV the greatest lubricator and indicator of market sentiment and thinking ?

Remember the plethora of home improvement and rental property development shows on the box in 2007.

.

Worst part is they still all on the living channel and the wife loves them :-( Phil Kirsty and Beeny drive me nuts))

[ratkin]

Another way to look at it is: Are you in the market for the long term and do you want to make 25% returns consistently per year or do you hope to strike it lucky like at the casino.

Are you investing or speculating?

Iv been in the markets for twenty five years , if you think your going to average 25% returns your in for a shock

[couta1]

Ratkin yes he is isn't he!!

[kiora]

Great thread I,ve ordered a Ferrari for next year.Now I'll order up some Snak to pay for it :cool:

[Casino]

If so, is yours starting to flash red?

Not across the board. The roulette table distracts from NZX stocks, which offer good dividend and growth.

[blackcap]

Me too (in the market for more than 25 years) ... I've had two shocker years that - like any good gambler does - will take out and I've exceed and average 25%.

Alas, and with absolute honestly, if I include those two years I'm just under an average 20% and I've been very lucky in at least two other years not to have been badly beaten by 50/50 calls which would have dropped me down to below 10%.

.

Wow that is impressive. Up over 90 fold over 25 years. Well done.

[janner]

Do these averages include the " endless " top up's ?

I would think that there are very few if any on this site that just stuck with their original investment ..

[winner69]

Wow that is impressive. Up over 90 fold over 25 years. Well done.

In the example Belg gave - the average of the annual returns doesn't usually equal the compounding annual rate, especially if the shocker years are really shockers

[blackcap]

In the example Belg gave - the average of the annual returns doesn't usually equal the compounding annual rate, especially if the shocker years are really shockers

I'd like to think that when one quotes "average return" we are talking about compounding return. I mean over 25 years an average 7% per annum gives you a total return of 542 %. But if we average that out over a period of 25 years that would be just 21.68%. Does not really sound right to me. I'm all for showing compounding or "internal rates of return" when talking about averages as that determines true ability.
But I digress and am going off topic so rest my case.

[winner69]

I'd like to think that when one quotes "average return" we are talking about compounding return. I mean over 25 years an average 7% per annum gives you a total return of 542 %. But if we average that out over a period of 25 years that would be just 21.68%. Does not really sound right to me. I'm all for showing compounding or "internal rates of return" when talking about averages as that determines true ability.
But I digress and am going off topic so rest my case.

The 542% you mention is actually a 442% return (and still 7% pa compounding)

Using your logic that averages 17.76% (442% /25) As you say doesn't sound right because that bit of math doesn't take into account the compounding

if each and every year is 7% you will get an average annual return of 7% as well as a compounding return of 7%. But as annual returns can very year to year in reality the average annual return will not be 7% (even if compounding return is 7% pa)

Like 24 years at 20% and then last year at 93% wipe out still gives a 7% pa compounding return - even though average annual returns are 15%

Numbers and maths are a funny thing eh

Agree with you ... we digress

[blackcap]

The 542% you mention is actually a 442% return (and still 7% pa compounding)



Ah yes, I stand corrected, forgot to take away 1. Math is a funny thing as is the value of understanding the compounding effect.

[Casino]

You couldn't make this up:

Chief executive Rod Drury, whose personal stake in Xero is worth about $700m, tweeted this morning that he had been given a free ride to the airport by a taxi driver who he had persuaded to buy shares in Xero "a couple of years' ago".
http://www.stuff.co.nz/business/industries/9426196/Broker-downgrades-Xero-forecast

[peat]

yeh that's good Casino. perfect timing regards this thread.


So, interest in Sharetrader forums has really picked up in the last year or so huh
:p

[Xerof]

Peat, you old vet you :cool: it was a recent observation of mine (only to myself) that indeed we have a lot of new posters on ST. Wondering if there is a correlation with market cycles.....

[Lizard]

Peat, you old vet you :cool: it was a recent observation of mine (only to myself) that indeed we have a lot of new posters on ST. Wondering if there is a correlation with market cycles.....

Then again, the ASX side has been very thinly posted of late...

[Whipmoney]

Its gone very quiet since the whole mining sector fell over, lots of posters have disappeared. Just us hardcore industrial (and a bit of biotech) stock lovers left.
The ASX also doesnt have stocks like XRO/DIL/PEB that taxi drivers are invested in. Perhaps we should all start taking taxis and plug AHZ - that should spread the word :-)

I don't think any taxi drivers are interested in DIL.. hence why i'm looking at it.

[Casino]

yeh that's good Casino. perfect timing regards this thread.


So, interest in Sharetrader forums has really picked up in the last year or so huh
:p

I would have posted earlier on but I was busy polishing shoes.

[amalgam]

Its gone very quiet since the whole mining sector fell over, lots of posters have disappeared. Just us hardcore industrial (and a bit of biotech) stock lovers left.
The ASX also doesnt have stocks like XRO/DIL/PEB that taxi drivers are invested in. Perhaps we should all start taking taxis and plug AHZ - that should spread the word :-)
Dont rubbish AHZ....lol.....made a very quick profit ...bought & sold within a few days....but certainly wouldnt call it a solid long term hold

[Casino]

I went looking for the tweet but he must have deleted it.

https://twitter.com/roddrury (https://twitter.com/roddrury)

But I found another taxi-related tweet that is noteworthy:

In Sydney with the @xero (https://twitter.com/Xero) team. Why are taxi's so much cheaper? Airport to CBD $40. Less than half Auckland and almost palatable?
https://twitter.com/roddrury/status/344927058381635584

Funny from the CEO who offers

three versions of its software for New Zealand customers, which cost $29, $49 or $64 a month. Its three US versions cost US$19, US$29 and US$39.
http://www.stuff.co.nz/business/industries/9395761/Xero-price-hikes-face-criticism

[amalgam]

Not rubbishing it. Just wanting to give it a bit of nudge (HC is not enough!) so that its valued like MSB. No reason why not LOL

Anyone with Herpes will be buying shares & hoping it all works out for AHZ....perhaps they are all the guys on HC....some of the posts are a real laugh

[ratkin]

To think i was called mad for buying during the hight of the GFC , most of those now posting daily were not even around then .
Would far rather buy in times of gloom than boom . Havent bought anything for months now, just dont see any bargains at the moment, and cant really be bothered looking.

[warthog]

To think i was called mad for buying during the hight of the GFC , most of those now posting daily were not even around then .
Would far rather buy in times of gloom than boom . Havent bought anything for months now, just dont see any bargains at the moment, and cant really be bothered looking.

Ah Ratkin, there are a few old layabouts other than you still wandering around.

The hog notes it's the same old Ratkin, though: everyone else is wrong, Ratkin is right, and life is so un-serious that Rakin can't be bothered.

Plus ça change, plus c'est la même chose.

[Lizard]

... for the idiot index... comedians discussing share purchases on "7 days"...

(not implying that the comedians are idiots!)

[ratkin]

Ah Ratkin, there are a few old layabouts other than you still wandering around.

The hog notes it's the same old Ratkin, though: everyone else is wrong, Ratkin is right, and life is so un-serious that Rakin can't be bothered.

Plus ça change, plus c'est la même chose.

Why would i bother? its not compulsory to continually buy shares. Sometimes doing nothing is the best policy. Not sure what promted the personal attack , but thats your issue not mine