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@ SBQ
"I think he may be wrong on his massive investment in Alibaba."
https://finance.yahoo.com/news/munge...152046657.html
Maybe,
What his thinking seems to be
He would rather invest in China and would not invest in Russia
Alibaba 1/3 PE cf Amazon
Has a weight of money to invest
No investment is perfect, weighted risk vs reward
Last edited by kiora; 21-02-2022 at 08:20 AM.
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Originally Posted by kiora
@ SBQ
"I think he may be wrong on his massive investment in Alibaba."
https://finance.yahoo.com/news/munge...152046657.html
Maybe,
What his thinking seems to be
He would rather invest in China and would not invest in Russia
Alibaba 1/3 PE cf Amazon
Has a weight of money to invest
No investment is perfect, weighted risk vs reward
Well if Putin attacks and takes over Ukraine, and the western world puts economic sanctions on Russia, Munger will have to realize that Russia will be using China as their main trading partner. So indirectly, it could easily end up Munger owning China based companies that have a huge involvement with the Russian economy.
As far as Alibaba's PE, it is not comparable to AMZN for the simple reason... I don't believe in their #s. I use to as I use to own BABA since IPO and unloaded it at $206. Are the financials GAAP checked? before you make any risk vs reward analysis, you have to find out if the data is real and i'm afraid for many Chinese companies (ie. Luckin Coffee) the figures are too easy to fudge.
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No doubt easy to fudge but those are the figures Munger suggested.
Re Russia vs China he was making a business judgement not a political judgement
Last edited by kiora; 22-02-2022 at 08:15 AM.
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Member
You only need one fund.
Total world fund (TWF). We invest 100% in here outside of our own home and up front $1000 ‘play money’ that I stock pick on NZX via Sharesies
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Member
One strategy for dividend yield might be to invest in US stocks that pay a consistently high yield. The higher the yield, the lower the capital investment needed. There are several types typically used by income investors namely, REITs, cc ETFs, BDCs, CEFs, ETNs, and MLPs.
By contrast, to take an example of a bluechip stock, J&J pay quarterly 1.06 USD. So the total amount of stock needed would be (3*$4000)/1.06 = 11,320 shares. At current price of $174.34 that would a total investment of around $1,970,000. That would be quite a bit of cash in one holding too.
An REIT such as Realty Income (NYSE:O) pays a monthly div of 0.2465 cents per share. Currently trading at USD 66.90, the total amount of investment to receive $4000 per month would be around half the investment in a bluechip stock, $1,086,000. There are many other types to choose from with higher yields and diversification would be essential.
In NZ, there doesn't appear to be companies dedicated to income generating assets, and therefore the US market appears attractive. There is of course, taxation to consider. For NZ residents, there would be capital gains tax under the FIF regime on an amount over NZD50K, but on balance, these funds don't appear to appreciate in capital, and therefore little capital gains tax would apply.
One idea would be to accumulate these types of shares as a saving strategy, that would eventually pay a liveable income.
Your thoughts.
Last edited by Fred114; 24-03-2022 at 02:57 PM.
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Originally Posted by Fred114
In NZ, there doesn't appear to be companies dedicated to income generating assets, and therefore the US market appears attractive.
I don't know why you say that. There are plenty of NZX shares listed paying decent yields. And for NZ investors, our imputation credit system works to boost yields further
Originally Posted by Fred114
There is of course, taxation to consider. For NZ residents, there would be capital gains tax under the FIF regime on an amount over NZD50K, but on balance, these funds don't appear to appreciate in capital, and therefore little capital gains tax would apply.
One idea would be to accumulate these types of shares as a saving strategy, that would eventually pay a liveable income.
Your thoughts.
You misunderstand the FIF tax, with its optional FDR/CV implementation. For most NZ investors in listed companies it is a FDR (fair dividend rate) tax which is nothing to do with capital gains. The exception being that in poor years (returns <5%) , the CV (Comparative Value) method option can be used which is a tax on unrealised capital gains if it applies (if you lose money over the year, while including the dividend contribution, then there is no tax liability).
SNOOPY
Last edited by Snoopy; 24-03-2022 at 08:11 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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@Fred114: Snoopy is correct. NZX provides MANY listed companies that pay decent dividends. You forget that in the US market, the emphasis is more about capital gains and any ETFs that are in the dividend income stream are on most part 'out of favour'. This is due to the preferential tax treatment on capital gains vs interest from bonds vs dividend income.
Warren Buffet is very staunch about the issue of collecting dividends from a tax efficiency perspective. He says individuals should not focus on dividends whatsoever. If you want a decent return, own stock like BRKB and watch the capital gains over several years. He says WHEN you want an income, "You simply sell a portion of the shareholding". In Buffet's case,for the past 20 years he's been trying to gift away his stock in Berkshire, but what's happened is the share price value has increased far more than what he can gift out. This is a far better way than the corporation issuing dividends (which is taxed), and then taxed again when the shareholder receives it. Since NZ has no formal CGT, FIF was brought in purely to address this preference that in America, capital gains is the preferred approach to investing. When a company draws down it's cash reserves on the balance sheet, so does the Equity section gets drawn down, thus lowers 'book value per share'. This has a negative impact on the share price (a direct correlation). Berkshire Hathaway continues to grow it's cash and when it acquires new businesses or buys shares, the book value per share does not get hit; but dividends do nothing more than draws down what the company is worth.
When I invest in a company, I view it as a partner in the business. That means i want to preserve the equity in the business... not being forced in a tax situation when dividends are issued.
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Junior Member
From Ryman Thread (Sideshow Bob 16/5):
As foreshadowed for a couple of months, Ryman Healthcare shares will fall out of the MSCI Standard Index after May 31.
Forsyth Barr estimates that will mean about $232.3m worth of shares will be sold by index funds and other fund managers hugging the index
So where does this fit into the debate on passive investing and ETFs?
The ETFs that use this index for passive investing, does this selling pressure benefit them and their investors?
Something similar happened with Contact and Meridian stock prices last year when their prices spiked because of large capital inflows into ETF/s (ICLN-maybe others?).
Maybe passive investing and ETFs are causing further chaos in an already chaotic system.
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Last edited by Valuegrowth; 26-06-2022 at 03:32 PM.
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This bit lost to investors in the haystack?
"Whatever your investing goals, if you’re focused on growth, then shares are the most suitable investment."
Volatility just needed to weighed against time risk
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