Process of Research

Hey ShareTraders,

Interested to find out what your process of research and due diligence is? So that i can learn to adopt good habits in evaluating a share to invest in. Please.

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Originally Posted by BullishBear

Hey ShareTraders,

Interested to find out what your process of research and due diligence is? So that i can learn to adopt good habits in evaluating a share to invest in. Please.

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The 5 steps".......7 steps ......10steps.
How to research shares and influence people
Boats and Shares


Or this
http://www.intelligentinvestor.co.nz...-Yearbook.html

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Originally Posted by h2so4

The 5 steps".......7 steps ......10steps.
How to research shares and influence people
Boats and Shares


Or this
http://www.intelligentinvestor.co.nz...-Yearbook.html

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Thnaks h2so4,since you are the only one bothering to reply I will follow your influence.

Cheers, and prosperous investing...

Book ordered.

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Originally Posted by BullishBear

Hey ShareTraders,

Interested to find out what your process of research and due diligence is? So that i can learn to adopt good habits in evaluating a share to invest in. Please.

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I'll let you know when I know. I am thinking that I am too lazy to do a lot of research so am formulating a plan to look at just dividends. Possible set a hurdle rate of 7%-8% yield before tax. I am also risk averse so will be looking mostly at property companies, power generators, Ports (if they ever come down out of the stratosphere), infrastructure (Chorus, Vector) etc. Mostly sectors with huge political risk.

That way I only need to research dividend history and maybe look at operating cashflow/dividends to see how many times the dividend is covered by earnings and hopefully how likely the dividend is to continue. That is in my head no actual steps taken as yet. Also will be implementing this after the next financial market meltdown and ideally at the peak of the next interest rate cycle.

Mostly I just tend to troll baby boomers on this site.

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Originally Posted by Aaron

I'll let you know when I know. I am thinking that I am too lazy to do a lot of research so am formulating a plan to look at just dividends. Possible set a hurdle rate of 7%-8% yield before tax. I am also risk averse so will be looking mostly at property companies, power generators, Ports (if they ever come down out of the stratosphere), infrastructure (Chorus, Vector) etc. Mostly sectors with huge political risk.

That way I only need to research dividend history and maybe look at operating cashflow/dividends to see how many times the dividend is covered by earnings and hopefully how likely the dividend is to continue. That is in my head no actual steps taken as yet. Also will be implementing this after the next financial market meltdown and ideally at the peak of the next interest rate cycle.

Mostly I just tend to troll baby boomers on this site.

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Thanks Aaron, trolling the correct generation how do you know they are a babyboomer, that seems to be a feat as fun as picking the prosperous investment?

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Originally Posted by BullishBear

Thanks Aaron, trolling the correct generation how do you know they are a babyboomer, that seems to be a feat as fun as picking the prosperous investment?

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I don't mean to troll them I just point out some things about NZ's National Superannuation that I think is unfair and they tend to fly off the handle in an apoplectic rage mumbling things like "paid taxes all my life" "20% mortgage rates" etc etc. They take it as a personal attack rather than reasoned debate. Good to see Bill English joining the debate and sad to see the other parties acting like spineless weasels trying score points and win votes. Labour may have just lost my vote, which is probably good news for them as they had my vote last election and that went really badly for them. I don't think voters will allow a govt in that will change anything.

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Originally Posted by Aaron

I don't mean to troll them I just point out some things about NZ's National Superannuation that I think is unfair and they tend to fly off the handle in an apoplectic rage mumbling things like "paid taxes all my life" "20% mortgage rates" etc etc. They take it as a personal attack rather than reasoned debate. Good to see Bill English joining the debate and sad to see the other parties acting like spineless weasels trying score points and win votes. Labour may have just lost my vote, which is probably good news for them as they had my vote last election and that went really badly for them. I don't think voters will allow a govt in that will change anything.

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Hey Aaron, Change is not something Governments are useless at, it is a matter of best slight of hand wins in my opinion. Superannuation should be started with teaching the young to save their pocket money. Financial literacy from the youth is appalling.

We wait far too long and allow life to dictate our focus on financial matters and life as you might have gathered is not fair at all.

I will never forgive the Finance company that allowed my to go into debt for 82k buying a BMW convertible at the age of 26, we need safeguards all along the life's path and if the government can not manage their affairs successfully and allow for planning for things like superannuation what hope have we to address these issues unless they are taught early.

Have you looked at The Opportunities Party, some radical policies being proposed there. ( I know some dont like the cat slayer ) but let's talk policy rather than personality.

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Originally Posted by Aaron

I don't mean to troll them I just point out some things about NZ's National Superannuation that I think is unfair and they tend to fly off the handle in an apoplectic rage mumbling things like "paid taxes all my life" "20% mortgage rates" etc etc. They take it as a personal attack rather than reasoned debate. Good to see Bill English joining the debate and sad to see the other parties acting like spineless weasels trying score points and win votes. Labour may have just lost my vote, which is probably good news for them as they had my vote last election and that went really badly for them. I don't think voters will allow a govt in that will change anything.

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Maybe if they laid off the smashed avocado salads, trim lattes and sky tv they'red find funding their retirement incomes more easy?

;)

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Originally Posted by BullishBear

Hey Aaron, Change is not something Governments are useless at, it is a matter of best slight of hand wins in my opinion. Superannuation should be started with teaching the young to save their pocket money. Financial literacy from the youth is appalling.

We wait far too long and allow life to dictate our focus on financial matters and life as you might have gathered is not fair at all.

I will never forgive the Finance company that allowed my to go into debt for 82k buying a BMW convertible at the age of 26, we need safeguards all along the life's path and if the government can not manage their affairs successfully and allow for planning for things like superannuation what hope have we to address these issues unless they are taught early.

Have you looked at The Opportunities Party, some radical policies being proposed there. ( I know some dont like the cat slayer ) but let's talk policy rather than personality.

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I have great respect for Gareth Morgan and will consider voting TOP closer to the election even if it is looking like a wasted vote at this stage. Shame that the cat thing has defined him as he has taken the time to look into and think about various issues.
Hope you enjoyed driving the beemer back in the day. Why would you blame the finance company? I would go off my nut if my kids suggested doing something similar.

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Originally Posted by Aaron

I have great respect for Gareth Morgan and will consider voting TOP closer to the election even if it is looking like a wasted vote at this stage. Shame that the cat thing has defined him as he has taken the time to look into and think about various issues.
Hope you enjoyed driving the beemer back in the day. Why would you blame the finance company? I would go off my nut if my kids suggested doing something similar.

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Yes, I like Gareth's Policies very much, his evidence based mantra is refreshing.
The Finance company well that was because they approved my loan when i was on commission only income, unfortunately the wisdom of my parents did not come into consideration on the application, fancy cars and brick car mobiles were all the rage in the eighties as a yuppie I had to have one, alas I have learnt the hard way to live within my means and most importantly to enjoy doing so.

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Originally Posted by Aaron

I'll let you know when I know. I am thinking that I am too lazy to do a lot of research so am formulating a plan to look at just dividends. Possible set a hurdle rate of 7%-8% yield before tax. I am also risk averse so will be looking mostly at property companies, power generators, Ports (if they ever come down out of the stratosphere), infrastructure (Chorus, Vector) etc. Mostly sectors with huge political risk.

That way I only need to research dividend history and maybe look at operating cashflow/dividends to see how many times the dividend is covered by earnings and hopefully how likely the dividend is to continue. That is in my head no actual steps taken as yet. Also will be implementing this after the next financial market meltdown and ideally at the peak of the next interest rate cycle.

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I am finally giving up doing nothing waiting for a market crash. Janet Yellen was probably saying she can lower interest rates and make enough money available to keep things going for the rest of her life when she said she doesn't expect another financial crisis in our lifetime.

If I have a 7%-8% hurdle rate I think some property companies are getting close to that sort of yield and power companies are cracking that with special dividends (so much for electricity costs being high so they can reinvest in new generation. It is going to the shareholders as dividends. maybe national shouldn't of sold these).
What do people think of a simple strategy like this, not expecting huge gains but build up a steady income from shares. If a crash happens I will have to be happy that the yield is OK and maybe leverage up if >10% opportunities arise.

I am getting depressed doing nothing but will wait until January next year so I at least have a target date where I will need to start researching in earnest.

How I diversify will be an issue but probably set minimum and maximum amounts for company investments and maybe sector investments although that said industries described as "bond surrogates" appeal to me most.

I could do this or put everything into a chunk of land. The capital I have available for investing means I am limited. Small chunks in stocks or one big chunk in land. What sort of land would be best? rural land in the boondocks is all I could probably afford, or a small commercial building, or a rental house. None of these returning anywhere near 7%-8% that I can find locally in the North.

No leverage at this stage but maybe after a crash if I am not too scared and opportunities arise.

All opinions appreciated.

Heck Aaron - that's a real change of heart

Probably means the crash is a near certain next April/May once you become 'fully invested'

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Originally Posted by winner69

Heck Aaron - that's a real change of heart

Probably means the crash is a near certain next April/May once you become 'fully invested'

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You could almost guarantee it based on my brief investing history but I can't wait any longer. Central banks could keep digging this hole for a lot more years yet and people with money in the bank are the ones they are screwing over.

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Originally Posted by winner69

Heck Aaron - that's a real change of heart

Probably means the crash is a near certain next April/May once you become 'fully invested'

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Oh dear, someone had to say it

This is always the case and why you should never be out of the market,
Aaron, just choose quality, and diversify, and slowly does it. Even if you overpay on a short term basis , quality companies will get through any tough patch and come out
intact and recover.
Yesterday I talked someone out of buying FPH, coz its a crazy price, but even if you bought it now and had a five year view you will almost certainly come out alright.

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Originally Posted by peat

Oh dear, someone had to say it

This is always the case and why you should never be out of the market,
Aaron, just choose quality, and diversify, and slowly does it. Even if you overpay on a short term basis , quality companies will get through any tough patch and come out
intact and recover.
Yesterday I talked someone out of buying FPH, coz its a crazy price, but even if you bought it now and had a five year view you will almost certainly come out alright.

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It would have been nice if I could have bought companies on sale at half current prices though. It will be a bitter pill to swallow if there is a big fall after I have purchased. We avoided a depression in 2008 things are now more precarious than ever, you might be waiting longer than 5 years for the economy to recover from a depression. The trend of easier money and lower interest rates has been going for decades a reversal might last until long after I am dead. Although the current trend might last long after I am dead as well, who knows.

Not many of us are old enough to remember Jim Slater, Aaron, but for what it's worth, here's a present day take on his 10 "mature bull market" signals. Apply with care - different times, different rules, perhaps?

https://www.livewiremarkets.com/wire...7f811-82636925

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Originally Posted by macduffy

Not many of us are old enough to remember Jim Slater, Aaron, but for what it's worth, here's a present day take on his 10 "mature bull market" signals. Apply with care - different times, different rules, perhaps?

https://www.livewiremarkets.com/wire...7f811-82636925

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Quote from article "So of the ten signals here I’d say only three - valuations, liquidity and interest rates - are really flashing red. I’m personally nervous and have a higher cash weighting in my portfolio than for many years. Perhaps that’s the most positive sign anyone could ask for."
My change of view is that interest rates aren't really going up far. I think one or two percent rise in Japanese govt bonds and the entire govt budget is required to service debt. Every crisis since the 1990,s has been met with a lowering of interest rates. Ken Rogoff suggests the need to do away with paper currency so central banks can take interest rates negative. I am unsure about the US and China in regard to govt and private debt but from what I read it has all been rising considerably making it impossible to raise interest rates without crashing everything. If interest rates go negative asset prices no longer matter only your ability to access credit.

Valuations seem high on a risk/yield basis but as Warren Buffett points out share values aren't too bad compared to bond yields. This won't change if we are stuck in a low interest rate environment. Only deflation will make bonds a better bet and that won't be allowed by central bankers.

Liquidity I don't really understand. I assume this is cash sloshing around financial markets. Central banks again will guarantee liquidity. The Japanese Central bank already has bought a large chunk of the Japanese stock market. I don't suppose there is a plan to ever sell again.

Everyone also needs to be euphoric as well which is definitely not the case. I am concerned a few billionaries are joining the nay sayers but asset prices remain propped up indefinitely by central banks.

I'll give it another couple of months before partially throwing in the towel.

Read the newspaper according to National the world will end if Labour get in power. Bill should know how fear works to encourage belief and support. He won't be burning in hell for all eternity when he dies.

Maybe I will wait a bit longer before buying.
http://www.zerohedge.com/news/2017-0...ash-dead-ahead

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Originally Posted by Aaron

Maybe I will wait a bit longer before buying.
http://www.zerohedge.com/news/2017-0...ash-dead-ahead

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There's a quote on that page linked - On a long enough timeframe the survival rate for everybody drops to zero

Go on Aaron - may as well havea go now before its too late

I think it depends on what you are looking to achieve and what your risk appetite and timeframe looks like. Yep most things definitely look expensive right now but there are options. Being in is better than being out over the long term. Even if you diversified into some ETF's etc you could take advantage of dollar cost averaging. Fear of a crash is legitimate and personally I do think there's likely something in the offing but fear can also paralyse.