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  1. #1
    Guru justakiwi's Avatar
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    Default The beginners struggle

    (Moved from the Heartland thread as don’t want to hijack that one.)


    As a beginner I struggle so much with threads like this one. I’m constantly asking myself “if all of these experienced investors have such vastly different perspectives/opinions on a particular company, how on earth am I ever going to get my head around it to the point where I can make good decisions about my investments?”


    I’m not criticising or complaining, just making an observation. Investing is really fun but heck it’s hard!

  2. #2
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    Everyone has different goals, situations and investment methods. It is not about being right or wrong but about finding out and deciding what suits your personal circumstances. I feel much better informed when I see debates like we've seen recently on the HGH thread for example, agree with some and not others. But in the end make my own decision based on what I belief suits my investment style and goala

  3. #3
    Reincarnated Panthera Snow Leopard's Avatar
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    Quote Originally Posted by justakiwi View Post
    ....how on earth am I ever going to get my head around it to the point where I can make good decisions about my investments?”
    This is the very same question I ask myself regularly even though I have been investing longer than I care to remember and it is our only source of income.

    Quote Originally Posted by justakiwi View Post
    I’m not criticising or complaining, just making an observation. Investing is really fun but heck it’s hard!
    It can be as easy as making regular payments into a fund or range of funds through good times and bad.

    But I take the hard road and do my own and it can be fun.

    Forums such as this and the opinions on them have very little influence on my decisions.
    Sometimes the chatter alerts me to companies I should take a look at, but they are mainly just part of the fun, especially when you are in cafe because it is raining cats & dogs outside.
    om mani peme hum

  4. #4
    FEAR n GREED JBmurc's Avatar
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    One must always take comments on all forums and even media plus Company mgmt. with a grain of salt ... you must make up your own viewpoint why you want to ,or not invest in "said" company and what your target price is to sell(+stop loss point) or are you happy to hold for the Long term for the yield etc ...

    Coming up 15yrs trading the market and I look back on myself as a much more emotional investor when I started always caring what other though of what I was invested in .. companies I really liked and put to others I just didn't want to sell even when they look to be on the wrong path ... emotional attachment the hunt for peer approval is the worse path to take in investing/trading
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  5. #5
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    Quote Originally Posted by justakiwi View Post
    (Moved from the Heartland thread as don’t want to hijack that one.)


    As a beginner I struggle so much with threads like this one. I’m constantly asking myself “if all of these experienced investors have such vastly different perspectives/opinions on a particular company, how on earth am I ever going to get my head around it to the point where I can make good decisions about my investments?”


    I’m not criticising or complaining, just making an observation. Investing is really fun but heck it’s hard!
    The beginners struggle is a marathon not a sprint and should not be shortchanged, by learning from your mistakes you will become a better investor or trader, most on forums like this are quick to announce all their successes but few are willing to admit their mistakes openly. The market is a complex beast and will always have a new lesson to teach you so always stay humble and be thankful for your succeses, be wary of greed driven hype. PS- I call trading fun not investing, the former is like a double espresso and the latter like a flat white, I do both.

  6. #6
    ShareTrader Legend Beagle's Avatar
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    A good idea for starting out might be to simply tap into the collective wisdom of others.
    https://sites.google.com/view/nzshar...020-commentary
    Top 15 shares picked by people on here is probably more likely than not to give you very close too, or slightly better than market performance.

    Reality as a newbie is any shares you pick yourself is unlikely to beat the collective wisdom of some very experienced investors on here.

    Add additional picks you like during the year as funds allow.
    Last edited by Beagle; 05-01-2020 at 06:30 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  7. #7
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by Beagle View Post
    A good idea for starting out might be to simply tap into the collective wisdom of others.
    https://sites.google.com/view/nzshar...020-commentary
    Top 15 shares picked by people on here is probably more likely than not to give you very close too, or slightly better than market performance.

    Reality as a newbie is any shares you pick yourself is unlikely to beat the collective wisdom of some very experienced investors on here.

    Add additional picks you like during the year as funds allow.
    Yes 15 NZX shares make up 50% of the picks ..shows how tiny the NZX is..

    I see the ASX our closes market is 14x times larger in value (yet Aus population is only around 5x times larger than NZ)
    Last edited by JBmurc; 05-01-2020 at 07:27 PM.
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  8. #8
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    Quote Originally Posted by justakiwi View Post
    (Moved from the Heartland thread as don’t want to hijack that one.)

    As a beginner I struggle so much with threads like this one. I’m constantly asking myself “if all of these experienced investors have such vastly different perspectives/opinions on a particular company, how on earth am I ever going to get my head around it to the point where I can make good decisions about my investments?”


    I’m not criticising or complaining, just making an observation. Investing is really fun but heck it’s hard!
    I think that if you are looking for investments that everyone can agree on as a 'good' investment at a 'good' price then you might be looking for while. A market requires a buyer and a seller on either side of a transaction. If everyone agreed, then as a buyer you would have no-one willing to sell to you!

    Both Beagle and I make assumptions when we came up with our own fair valuation of Heartland. We both document what these assumptions are. But assumptions require some degree of judgement. It is up to you to decide if you believe in the judgement of that poster on the day. If you have a different assumption then take out whatever figure(s) the poster has put in their modelling and put in your own figure(s). Then crank the handle of the valuation model and see what comes out.

    As you continue to read that Heartland thread, you will no doubt find that Beagle's and my position on a fair value for Heartland shares are not as different as you might have thought.

    SNOOPY
    Last edited by Snoopy; 11-01-2020 at 09:12 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  9. #9
    Guru justakiwi's Avatar
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    Yep. Already beginning to see that. Thanks everyone for your input.

    Quote Originally Posted by Snoopy View Post
    As you continue to read that Heartland thread, you will no doubt find that Beagle's and my position on a fair value for Heartland shares are not as different as you might have thought.

    SNOOPY

  10. #10
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    Quote Originally Posted by justakiwi View Post
    (Moved from the Heartland thread as don’t want to hijack that one.)


    As a beginner I struggle so much with threads like this one. I’m constantly asking myself “if all of these experienced investors have such vastly different perspectives/opinions on a particular company, how on earth am I ever going to get my head around it to the point where I can make good decisions about my investments?”


    I’m not criticising or complaining, just making an observation. Investing is really fun but heck it’s hard!
    Investing is not hard. The problem with investing (for most part in NZ), is the misinformation spread among the masses and the way the NZ gov't taxes it. They spread the myth that share investment is difficult and should only be left to the experts ; and therefore you should look only at Kiwi Saver funds and not invest directly abroad individually. This is very different to the models overseas (for which are more transparent).

    Warren Buffet for decades reminds investors that all you have to do to win the investment retirement game is buy a low cost S&P500 index fund and wait, and "just forget about it". However, he has a big problem with those 'active or managed' funds that claim to have superior returns when the stats show nearly all of them do worse than the benchmark index return.

    In his Berkshire Hathaway fund he's done exceptionally well over a typical person's retirement time frame, and as he explains in this interview that they don't have any need to wanting to swing (or make a move to buy or sell shares):

    https://www.youtube.com/watch?v=qsV3NPGqBgY

    and this is an older video but his principals still apply today. Of course for the NZ perspective, you would be a fool to limit your investment only to the NZX. But because the way the NZ tax is structured, there 'may' be a tax incentive for buying NZ shares. I disagree with this incentive as the investment environment in NZ is geared towards dividend payments for which is taxed no different than dividend payments received on foreign shares.

    Following link Buffet reiterates the importance of keeping management fees down (and indirectly from the NZ perspective, keeping taxes down). Unfortunately for the NZ residents, we are stuck with FIF which imposes a 5% FDR on the entire fund portfolio value - effectively acting the same as a 5% management fee as you lose compound returns):

    https://www.cnbc.com/2017/05/12/warr...-the-time.html

    Of course most people have the instinct that they can do better returns than the index. They have an inclination to believe pick this stock is good, and after a year later when it shows that move is not looking so well, they tweak it, because they don't want to make themselves look bad year after year, and the same pitch keeps going on while investors are not fully understanding what's going on. Few years ago i asked some local financial advisors on the implication of taxation on such NZ managed funds etc. and they all say I need to look to a tax specialist. I mean get real, I want to know how much of the FIF / FDR each managed fund is paying and how much of their claimed % return on their prospectus accounts for taxation?

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