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Thread: Black Monday

  1. #4031
    The past is practise. Vaygor1's Avatar
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    Quote Originally Posted by Cricketfan View Post
    I honestly don't know how people can sleep at night doing that! It's hard enough worrying about losing your own money, but at least if it happens I don't have to pay myself back!
    Quote Originally Posted by couta1 View Post
    The difference between what [iceman] and I are doing is that no matter what happens to the market, we can't get a margin call, if the market crashes, good companies will still pay divvies which should more than cover our interest only mortgage repayments. All the bank cares about is that we continue to pay the interest on our loans, which is lower than the interest on a margin account(Mine is about 4.5%) although as you say, it depends on how high the gearing is, in the case of Vaygor 1, that gearing is very low and he has done very well.

    It's an interesting topic/argument isn't it.
    Had it not been for margin lending I would never have got to the position I'm in now.
    Difference between a bank loan vs ML is you can't use the shares you've bought (using the loan) as security to buy even more.

    As I type, RYM (for example) will need to drop from circa $10.50 per share to about $1.85 per share before I get a margin call.
    If that happened, then I have a range of shares (not subject to margin lending and with volume) to sell and reduce my ML account to zero, but I'd probably just go to the bank at that point and borrow the amount required.

    Then the dividend income stream continues... the bank loan (principal and interest) would get paid off all by itself just like the ML account is doing now... only small problems being the frequency of payment from dividends meeting the banks expectations and I would have to manage my cashflow more closely.

    The reasons I keep my ML account (and pay an appreciably small amount more in interest) instead of getting a bank loan are:
    * I currently live off the ML account for cashflow.
    * I can take from it and add to it as-and-when I like, as often as I like.
    * There is no mandatory regular payment required by the bank
    * The incoming dividends as-and-when they arrive are more than adequate to keep the account under control, and with considerable headroom
    * My current (comparatively) small borrowing off it is working well for me
    * There is a substantial amount sitting there to borrow off immediately when buying opportunities present themselves.

    So I sleep easy Cricketfan.
    If one can borrow at 6.5% and consistency make 15%+ per annum out of it, then one could argue it would be bad business to not borrow.

    Everyone's risk appetite is different and I understand, respect, and accept that.

    Disc: The above is in NO WAY a push or plug for anyone to jump into margin lending with any provider out there.
    Last edited by Vaygor1; 11-02-2018 at 09:10 PM. Reason: word-smithed

  2. #4032
    Advanced Member Valuegrowth's Avatar
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    Intelligent investors and money managers are focusing on value now. That may be reason for them to like some overseas stocks. There could be some window of opportunity after bouts of volatility and sell-off in global markets. Going forward value stocks should shine and volatility could be new normal in 2018. In my opinion this market sell-off isn't over yet. As I said, we should see bouts of volatility and sell-off for both stocks and commodities to take out heat from global markets. Finally, there going to be healthy correction in global markets. Speculators are also unwinding positions on various asset classes including risky asset classes to avoid further losses from their holdings. Algorithms trading also could make situation worse during market sell-off or volatility.

    https://www.thebalance.com/how-to-re...tments-4056941

    How to Research Stocks and Choose Good Investments

    Sell-off and markets volatility are also new normal. There had been sell-off in 2016 as well.

    http://nbr.com/2016/01/08/keep-calm-...in-a-sell-off/

    Keep calm and carry on: Investing in a sell-off

    https://nz.finance.yahoo.com/news/lo...191259977.html

    Losing your retirement password is solid investment advice

    https://www.bellinghamwallace.co.nz/...s-it-important

    WHAT DOES A STRONG BALANCE SHEET LOOK LIKE & WHY IS IT IMPORTANT?
    Last edited by Valuegrowth; 11-02-2018 at 12:24 PM.

  3. #4033
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    Quote Originally Posted by Jerry View Post
    Looking at stocks that have dropped more than NZ50 (4.6%) since 12th Jan, I wonder why HBL is down 8.13%. Our interest rates are steady and not set to change.
    Others that puzzle me are CNU (-7.1%) and EVO (-9.6%).
    I presume currency variation-fears are responsible for ERD (-9.67%) and SKL (-8.3%).
    I bought more CNU last week and find the % drop a bit odd for a core infrastructure stock with no profit downgrades, it hit a 52 wk low on Friday. On a pretty good PE as well.
    Last edited by couta1; 11-02-2018 at 02:49 PM.

  4. #4034
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    Expect some carnage tomorrow morning when Fletcher's trading halt is up and it takes the market down with it. Hopefully put some bargains out there as far as buying is concerned. There's a trend of a big dip at opening last week and as the day goes on the nzx50 recovers.

    As an aside, I wonder how much the Fletcher announcement hinders peoples kiwisavers out there. I imagine quite a few fund managers are starry eyed about the company.

  5. #4035
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    Quote Originally Posted by value_investor View Post
    Expect some carnage tomorrow morning when Fletcher's trading halt is up and it takes the market down with it. Hopefully put some bargains out there as far as buying is concerned. There's a trend of a big dip at opening last week and as the day goes on the nzx50 recovers.

    As an aside, I wonder how much the Fletcher announcement hinders peoples kiwisavers out there. I imagine quite a few fund managers are starry eyed about the company.
    Not sure I agree, with the US markets running positive last session,I doubt Fletcher's is going to create carnage across the market in the morning.

  6. #4036
    Speedy Az winner69's Avatar
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    Quote Originally Posted by couta1 View Post
    Not sure I agree, with the US markets running positive last session,I doubt Fletcher's is going to create carnage across the market in the morning.
    Agree mate .... FBU is just a side attraction if it does start trading again. Rest of market will just go on it’s merry way

    Fence all finished? Hope you got the paint from PlaceMakers — Fletcher’s need all help they can get eh .....but PlaceMakers doing pretty well they say.

    PS — Above about the rest of the market not quiet true ...Metro Glass might pack a sad again ....esp if Fletcher’s mention that Alexandra Park job.
    Last edited by winner69; 11-02-2018 at 08:01 PM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #4037
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    Quote Originally Posted by MARKETWINNER View Post
    Intelligent investors and money managers are focusing on value now. That may be reason for them to like some overseas stocks. There could be some window of opportunity after bouts of volatility and sell-off in global markets. Going forward value stocks should shine and volatility could be new normal in 2018. In my opinion this market sell-off isn't over yet. As I said, we should see bouts of volatility and sell-off for both stocks and commodities to take out heat from global markets. Finally, there going to be healthy correction in global markets. Speculators are also unwinding positions on various asset classes including risky asset classes to avoid further losses from their holdings. Algorithms trading also could make situation worse during market sell-off or volatility.

    https://www.thebalance.com/how-to-re...tments-4056941

    How to Research Stocks and Choose Good Investments

    Sell-off and markets volatility are also new normal. There had been sell-off in 2016 as well.

    http://nbr.com/2016/01/08/keep-calm-...in-a-sell-off/

    Keep calm and carry on: Investing in a sell-off

    https://nz.finance.yahoo.com/news/lo...191259977.html

    Losing your retirement password is solid investment advice

    https://www.bellinghamwallace.co.nz/...s-it-important

    WHAT DOES A STRONG BALANCE SHEET LOOK LIKE & WHY IS IT IMPORTANT?
    Thanks for the links MW

  8. #4038
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    couta would you mind checking on your margin account interest rate
    Mine is 5.5% with asb and if yours is less I need to do some negotiating

  9. #4039
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    Quote Originally Posted by fish View Post
    couta would you mind checking on your margin account interest rate
    Mine is 5.5% with asb and if yours is less I need to do some negotiating
    I don't have a margin account, im using the excess equity in the house to buy shares, hence the 4.5% interest rate.

  10. #4040
    The past is practise. Vaygor1's Avatar
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    Quote Originally Posted by fish View Post
    couta would you mind checking on your margin account interest rate
    Mine is 5.5% with asb and if yours is less I need to do some negotiating
    Can you double check fish? Im on 6% even. Might be me that needs to do the negotiating.

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