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  1. #1
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    Default The Intelligent Investor

    Just been reading Ben Graham's book as I am all over the place with my investing. I would fit his definition of defensive investor "Freedom from effort, annoyance and the need for making frequent decisions".

    I thought I should be more business like with my investing so was looking to use the book as a basis for some intelligent investing. How I apply that in practice might be tricky but I need to start somewhere.

    The 50/50 Stock/Bond portfolio can vary to 75/25 or vice versa depending on the market.

    My first question is, as the portfolio split will depend on whether you think the market is higher than normal or lower than normal. Where would you go to get the Average Earnings, Average P/E, Average dividend yield for the NZX, ASX & S&P 500 over time to get an idea if the market is more richly priced or more conservatively priced historically speaking?

    Is there such a site?

  2. #2
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    To answer my first question this was helpful re the S&P 500

    I guess the NZX is never going to be big enough to get this sort of coverage or maybe someone making the effort may not want to give it away for free.

    https://www.currentmarketvaluation.c...e-earnings.php

    S&P overvalued.

    One for the ASX

    https://www.marketindex.com.au/statistics

    About normal currently although it looks like the covid period mixed it up. Probably reduced E while monetary policy improved the P. What does this mean for investing today. Ben liked dollar cost averaging and always being at least partly in stocks to counteract inflation. I think he wrote the version of his book I read in about 1972. Nixon broke the connection to gold in 1971. Inflation protection more important than ever. Ben did not have any proof that gold was effective back in 1972, real estate could work but the price you buy it at is important, much like stocks.
    Last edited by Aaron; 07-02-2024 at 12:05 PM.

  3. #3
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    Default

    Quote Originally Posted by Aaron View Post
    To answer my first question this was helpful re the S&P 500

    I guess the NZX is never going to be big enough to get this sort of coverage or maybe someone making the effort may not want to give it away for free.

    https://www.currentmarketvaluation.c...e-earnings.php
    Try SimplyWallStreet, I think I've seen P/E averages of the nzx50 index there before. Not that I recommend that site for investing.

  4. #4
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    Quote Originally Posted by ValueNZ View Post
    Try SimplyWallStreet, I think I've seen P/E averages of the nzx50 index there before. Not that I recommend that site for investing.
    Thanks for that.

    My next issue is for stocks he suggested 10 to 30 companies for diversification but they needed to be large. I tend toward companies on the NZX (imputation credits and I care more about what is happening locally) which precludes the largest companies in the world. I guess I will reread his stock selection criteria for the defensive investor and see if anything on the NZX fits the bill. Move out one to the ASX if necessary.

    Bond selection is also tricky as I only know how to buy bonds on the NZDX secondary market. Term Deposits are not company bonds but current 1 or 2 year TD rates seem better than what is on the NZDX after fees. Again I need to reread the criteria for selection.
    Last edited by Aaron; 07-02-2024 at 01:19 PM.

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