ATM - A2 Milk Corporation Limited

[Snoopy]

Part of that profit was 4000 bought at $7.36 in Oct 2017 and sold for $19.15 in May 2020. You are right. I agree with you. I will try and loose about 80 to 90% of that years profit by financial years end and replace it with divs from other stocks, so as to keep my tax bill down. What ever tax I pay will double because IRD will also make me pay provisional tax on top of normal tax. So far haven't had to fork out any tax for last couple of years but have received refunds.

We are getting off topic here. But I got 'fined' by the IRD a couple of years ago, even though I followed the tax rules, because my 'income' (as a result of the FIF regime and asset value increases so no cashflow associated with my 'income' increase) increase was significantly more than the standard method 'previous years income + 10%' for estimating future income. Hence I underpaid my provisional tax. This year my 'income' has crashed (again mostly because of the lower FIF income input,- my cashflow is down but hasn't crashed) and now I have drastically over paid my provisional tax. according to standard IRD estimating procedures. In theory I will get interest from the IRD on my over paid provisional tax (that is what the IRD tax consultant told me when I talked to them about my fine from the previous year and they explained what would happen if I had paid too much tax as a counter example). But we shalll see.

The reason why I am mentioning this Seeweed is that provisional tax has a way of evening out. Yes if you make a good profit on A2 trading one year, you will pay a big whack of provisional tax for the next year. But that isn't 'extra tax'. It is a down-payment on next years tax. And if you do end up paying too much by following IRD rules, you should get your money back with interest. So by saving on provisional tax, by not cashing up your best trades, all you are doing is pushing a greatly increased mega tax bill out into the future. And the only way around that is to have a really bad year and actually lose money to wipe out your previous years of mega paper profits. Surely not a great investment objective to have? Then if you do have mega profits at the conclusion of your investment fling, you will suddenly find that everything is taxed at the top tax rate reducing your overall profit at the end. So to me this 'minimizing tax paid today' doesn't make much sense as eventually the IRD will catch up with you, as they always do. Just making these comments as I am wondering if you are really saving any money by forcing yourself to crystallize other trading losses today just to reduce your trading profit and hence tax bill today?

SNOOPY

[Beagle]

I think, as you say, everyone should find an investment strategy(s) that suits their style and circumstance. if someone is "addicted to trading and extreme risk taking" then they should go with that - after all, that is part of their natural style. That is not intrinsically bad, as long as it is constrained by strategy and discipline. Also, the only statistical certainty is that the more diversified you are the more your return will be pulled to the mean and, as I said, the harder it is to exceptionally lose money and the harder it is to exceptionally make money. Having said that, personally I am extremely diversified - I don't need exceptional return and I have other things to do with my time than constantly think about investment.

That's okay provided it doesn't impact on the family. I would be profoundly ashamed if through taking extreme risks I had drastically reduced the value of our family investment portfolio back to where it was many years ago.

ATM may or may not meet its 2H sales forecast. I think the risks are very clear. There could be a place for it in a very well diversified portfolio but I think at least in the short term the risks outweigh the likely returns so I see better near term opportunities out there. Looking further out, long term it should be clear the growth rate will be a lot lower than it has been historically. Further, nobody is talking about the new CEO risk. Remember what happened last time with Herdlicker ? A forward PE (if they can meet their forecast and I am very skeptical) of 28 in all the circumstances is not cheap, in fact it looks expensive to me.

What happens to the share price if they badly miss their forecast and the market rerates the future growth down ? Back to a PE in the low 20's on eps of maybe mid to late 40's ?
I think $10 is one possible outcome.

[Waltzing]

"owner of stainless steel"

does it give them gains in production and how much?

Mr B states what a professional should always counsel to ones clients. Most investors experience those big gains or even trade those big gains at some point but surviving a very risky world market is the goal.

Monetary systems are not a given.

[HKG2301]

... I'm not sure on this, but if Couta1 recognised himself that he was trading (not investing) 90% in one stock, that could be a sensible allocation of resources. With where ATM opened on the 18th, and where it had traded by 1pm there was a lot to be made trading. A sell in the morning and a re-buy later is likely to have gained at least 60c and $1/share is entirely possible. Did Couta1 make 1%, 2%, 5% or maybe even more relative to a straight by and hold strategy on that one day? Only he, any accounting support and possibly the tax man will know that. How many times has he made good gains in a similar way - again only he knows. I'd be amazed if the gain relative to a buy and hold that day wasn't a 5-figure sum. A 6-figure gain is within the realms of possibility.

This is one of my problems with couta1 continually pumping the share on this thread - he was very obviously talking his book.

Not that book-pumping is unusual, it's quite natural and leads to healthy debate on share outlook, etc. So long as you put your money where your mouth is.

But at the same time couta (the ATM buy & hold guy) was talking the share up, on the morning of the Annual report it appears he was also selling big!

[bull....]

This is one of my problems with couta1 continually pumping the share on this thread - he was very obviously talking his book.

Not that book-pumping is unusual, it's quite natural and leads to healthy debate on share outlook, etc. So long as you put your money where your mouth is.

But at the same time couta (the ATM buy & hold guy) was talking the share up, on the morning of the Annual report it appears he was also selling big!

yep and did not like it when someone talking against his positioning

[Gregnz]

I cant believe your all still talking about couta1 after he said he's gone for the time being. Who really cares what he said or if he pumped a share he was selling, surely you dont all base your investment strategy on whats discussed here?? Just my two cents.

[Biscuit]

I cant believe your all still talking about couta1 ....

Says the man still talking about Couta. I think its sad he felt he needed to leave the forum, he often had useful comments to make.

[alokdhir]

Following the market trend is the most common way of making small money on stocks for the traders . All the buy reports from well renowned Analysts become public after main trend reversal has already taken place . So people quoting reports and public voices of brokerages against the odds of ATM is just trying to fool us more in selling down a stock which already has become medium term buy for those very people but to their paid clients or own accounts .

70 -80 % of the worst expected out of ATM near term is already priced in . To put is money term ...downside risk of notional losses is $ 2.5 to upside reward of $ 10 in next 12-18 months ...IMHO .

So think logically and DYOR and invest accordingly .

Dont get swayed by already old data .

Buying divvy stocks now like the retail investors are chasing will only burn them in the near future ...Remember all buying ZEL at $ 8 for its 45 cents divvy ...

Buying BRM at 19% premium to NAV is only going to end in disaster for many many ...still many so called experts are advising people to do that but not the ETFs selling at NAV giving equally reliable PIE income dividends .

So I see lots of bad advise in the market ...of all sorts .

My advise ...only Trust your own advise and research

[Davexl]

Despite the medium term upside potential, perhaps a timely reminder of what's at stake geopolitically
with A2 and Dairy for NZ (and the mechanisms at work within China)

Disclosure: significant holder of A2

https://www.interest.co.nz/rural-new...+3+August+2020

[alokdhir]

Despite the medium term upside potential, perhaps a timely reminder of what's at stake geopolitically
with A2 and Dairy for NZ (and the mechanisms at work within China)

Disclosure: significant holder of A2

https://www.interest.co.nz/rural-new...+3+August+2020

Thats exactly I was referring to in my last post .

When media starts warning you about something which is about to happen ...making their financially sensitive information public ...be very very wary to act on it .

Free advise is always risky advise ...lol