PGW - PGG Wrightson

[Baa_Baa]

Thanks everyone. Really interesting perspectives, appreciate you taking the time to share.

[couta1]

Couta, I would argue that in fact the decline this week could be foreseen. The event was the FY16 outlook on 11 Aug, followed by the confirmation that 20-25% of earnings are in dairy.

I was thinking more in terms of the sudden devaluation of the Chinese currency and the Macro effect that has had on all stocks and more so on stocks like PGW.

[noodles]

I was thinking more in terms of the sudden devaluation of the Chinese currency and the Macro effect that has had on all stocks and more so on stocks like PGW.

Maybe a bit of both (event and macro). But in any case, it is rear screen mirror stuff now. Best of luck.

[Beagle]

Thanks everyone. Really interesting perspectives, appreciate you taking the time to share.

You're most welcome mate. The tactic that can work well when people really like a share and are investing for the long term, but expect a short period of SP weakness, is to sell half and look to buy it back at a lower price. This achieves a number of things. Firstly there's an acknowledgement that you can't be completely sure at any point in time, despite the appearance of a short term price trend, exactly what a SP will do next so completely selling out vs 50% sale acknowledges one's attempts to effectively "time the market" are often fraught with considerable execution risk.

Secondly there's the very useful psychological backstop of consoling oneself that if the price does go up in the short term after selling half, despite one's expectation of a short term period of SP weakness, at least you didn't sell all your shares. Thirdly if it does go down as expected for a short time, you still feel "connected" and a sense of involvement with your chosen company and console yourself that the short term reduction in the value of your position was mitigated by selling half but also you feel empowered for the long term because you're actively looking for a weaker price point to re-enter your original more fulsome market position. Indeed one might buy slightly more at the point of re-establishment of a more fulsome position at the lower price point because of your previous 50% sale at the higher price point generating the funds to do so.

I think this is a useful way to "manage" a short period of expected SP weakness both from a financial and psychological perspective and acknowledges that one's personal attempts to time the market will never be correct anywhere even remotely close to 100% of the time. i.e. anyone who claims they can time the market right 100% of the time is quite simply "full of it". I reckon if you can time the market right 70% of the time you're doing well.

[amalgam]

I have followed this debate with much interest. Over the years I have followed a buy & hold policy..rebalancing my portfolio when a holding gets too high in value..or selling if the original reasons for investing in the company should change
Always in the back of my mind is I don't wish to be classified as a trader by the IRD
As some posts have mentioned it is not possible to time a buy or sell perfectly ...& following this technique I have had a number of multi bangers which make up for any loss on a particular share. After all the most one can loose on any company is 100 percent, but by buying smaller cap companies particularly in Australia it is possible to do very well
Just a few thoughts from my respective..we are all different but chasing the same reward

[nextbigthing]

.... many of us long term investors believe that over time PGW can sustain fully imputed dividends of 4 cps.....

Hey Roger,

Can you please expand on this bit? How do you come to this conclusion?

Cheers,

NBT

disc hold.

[Beagle]

Hey Roger,

Can you please expand on this bit? How do you come to this conclusion?

Cheers,

NBT

disc hold.

Hi mate,

Broker consensus forecasts for FY16, FY17 & FY18 are for EPS of 4.4cps, 4.8cps and 5.1 cps respectively.

The majority shareholder needs a lot of those earnings each year by way of dividend to fund their balance sheet.

Hope that helps. explain it.
Cheers

http://www.4-traders.com/PGG-WRIGHTS...13/financials/

[Beagle]

Nice bounce today from a heavily oversold position. Anyone who was brave enough to buy recently at 42.5 cents cum the final divvy is already up nearly 6% in a couple of days

[nextbigthing]

Hi mate,

Broker consensus forecasts for FY16, FY17 & FY18 are for EPS of 4.4cps, 4.8cps and 5.1 cps respectively.

The majority shareholder needs a lot of those earnings each year by way of dividend to fund their balance sheet.

Hope that helps. explain it.
Cheers

http://www.4-traders.com/PGG-WRIGHTS...13/financials/

Cool, thanks Roger.

Yes 42.5c was crazy level buying!

[zymwh]

should I buy before tomorrow 4:45pm to get the div? (just want to conform ;-)

Thanks!