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  1. #11
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    Nov 2011
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    Quote Originally Posted by born2invest View Post
    How growing up formed my investment ideas:

    - Was particularly good at science and maths. This led me in good stead analysing/forecasting and quickly identifying patterns and ability to grasp financial figures quickly.
    Did you end up majoring in one of these or double major in one of each?

    Great that you have done this and are aware of this at a 'young' age. I'm still trying to pay off 15 years + of living on credit cards. Awesome to see what you have done and hope it inspires others.

  2. #12
    born2invest
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    Quote Originally Posted by toast2success View Post
    Did you end up majoring in one of these or double major in one of each?

    Great that you have done this and are aware of this at a 'young' age. I'm still trying to pay off 15 years + of living on credit cards. Awesome to see what you have done and hope it inspires others.
    I ended up studying agribusiness/horticulture at Massey. I enjoyed papers in import/export and supply chain mostly.

  3. #13
    born2invest
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    4th Investment:

    - Once I sold out of Coca Cola Amatil, I had the $12k or so from the investment and another 6k to invest.
    - I wasn't in such a big rush to invest it anywhere so I waited several months for a good opportunity
    - Credit Corp Group (CCP) was a company I came across after scrolling through every single ASX listed company.
    - I did all the research I thought I needed to do and put around $3k into the investment. I was very nervous when I initially bought the company because it was a smaller, less well known company. I thought every day about selling it so I could sleep better at night, but resisted the urge. I bought them at exactly $6.00 around April 2012 and I have held them since for a near 50% return on the investment thus far.
    - I used the remaining 15k to put $10k into my student loan, reducing the amount down to about $15k outstanding and the remaining $5k into savings.
    - I learnt from this investment that I should trust my judgement after I have bought the shares and that a 10% or so drop (like what happened soon after I bought them) is temporary, good companies will recover from the volatility.
    - This company purchase was a big learning curve for me as it was a smaller company ($250-300 million market cap) when I first bought it. I'd always preferred big and best when it came to companies but this taught me that there is much better opportunities to uncover "hidden gems" that aren't widely talked about and that they could be a much better investment that big companies that everyone knows about and that is widely followed by financial media and investors.
    Last edited by born2invest; 23-12-2013 at 02:39 PM.

  4. #14
    born2invest
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    5th/6th "Investments":

    - After my purchase of Credit Corp Group in April 2012, I still had 5-6k left in savings. I kept accumulating money from my wages and my savings account kept growing. I couldn't find anything I wanted to invest into for another 12 months and I had about $18k in savings by March 2013.
    - It just so happened that I needed both a new car (my old one kept breaking down, so spent $5k on a new more reliable one which I hope to keep for many more years), I had to spend over $2k on medical bills in order to sort out digestive problems that arrised and also had to pay $1k in a court claim and replace my road bike which cost $1k also after the court claim on a cyclist vs car incident was sorted through. This wiped out almost $9k of my savings so I was reduced to 10k left by April/May 2013.
    - I decided to put this remaining $10k into a term deposit to earn 4% instead of 3% in my savings account. What a mistake this was!
    - While my term deposit was locked away I saw the price of several shares plummet to good prices. McMillan Shakespeare (MMS) was one. Supply Network Limited (SNL) was another that dropped from $1.90 down to $1.25 or so. Another mistake was not breaking the term deposit and investing in the company at this rediculously cheap price. My term deposit finally matured in late July and I bought $12k worth of SNL for around $1.40. It is now trading around the $1.90 mark again, a 35% increase not including the dividends.
    - Lesson I learned from this episode was that at the end of the day, the difference between 3% and 4% in a savings account or term deposit over 3 months on $10k is around $20-30. If I had bought SNL at $1.25 as opposed to $1.40 I could have made 50% profits as opposed to 35% so I essentially lost almost $2000 or so in potential gains by earnig an extra $20 on my term deposit. Lesson learned!
    - Lesson is to keep cash available to use immediately when good oppotunities arise and not have it locked away in term deposits/fixed interest.
    Last edited by born2invest; 23-12-2013 at 02:43 PM.

  5. #15
    born2invest
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    7th Investment:

    - After my July purchase of SNL, I only had around $1-2k left in my savings account.
    - I continued to save $1200 per month or so on average in my savings account and was ready to pounce at any opportunity.
    - After my SNL purchase, I begun to look for a concrete forumla that allowed me to put a value on a company. After continuing to read various books, I started to become frustrated that they talked about intrinsic value, margin of safety, etc but never showed any calculations on how to achieve this. I started looking at discounted cashflow analysis, but found this too difficult to put into practice. I looked at book value, net nets, etc but these didn't seem to fit well with businesses with bright futures, just the bottom of the heap pure value stocks which I wasn't particularly keen on. I wanted to be a "sit on my hands investor" like Charlie Munger talks about. Make one good decision and sit on it for years to come.
    - I found a university textbook at my cousins house who was studying finance at Otago. I had all these business valuation methods and talked about the pros/cons of each and simple examples of each. Dividend Discount Model is what I had been looking for.
    - I spent weeks on excel after work tinkering with putting together a spreadsheet for all these different companies I'd been looking at to put a value on these companies.
    - It worked out well, but all the companies I was looking at were 20-60% overvalued by my calculations.
    - I waited from July to December and nothing was looking great. Savings were building up to just under $10k and I was looking everywhere for anything that would provide a return on the ASX or NZX. I looked at arbitrage possibilities but was always late to the party and the returns were minimal.

    - Credit Corp Group was getting ever closer to my target price until a few weeks ago it dropped from from over $9.00 to $8.59 in one day. I decided to buy with $3k at $8.60 increasing my holding in the company.
    - I also put a few thousand into my student loan, reducing the value outstanding to under $7k
    - Lesson I learned from this is to put together a game plan or "formula" that works in concrete numbers that doesn't cloud my judgement or allow my emotions to get involved.
    - I also learnt that having cash on hand to act quickly is essential to getting good opportunities before others see them.
    - Third lesson was that not to overlook companies that I already own for further investment.
    Last edited by born2invest; 23-12-2013 at 02:04 PM.

  6. #16
    born2invest
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    Since my first investment in early 2010 in RYM I've felt I've developed my investment skills immensely and continue to read and learn everyday. I've found that learning the basics of investing is the easy part. Controlling your emotions and acting with a clear, logical thought process is the hardest part to master. Not getting caught up in the "hot" opportunities of the day and sticking to what you know is the best lesson I've learnt along the way. i.e. not investing in momentum stocks, technology or mining companies but sticking to basic easy to understand industries like debt collection, truck/bus parts, banks, insurance, paints, retirement homes, ports, transport companies and all those boring (but profitable) things.

  7. #17
    Guru
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    Nov 2013
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    Do you have an exit strategy?

    Any reason why you are now focusing on the ASX? or is that just a coincidence?

  8. #18
    born2invest
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    Quote Originally Posted by Harvey Specter View Post
    Do you have an exit strategy?

    Any reason why you are now focusing on the ASX? or is that just a coincidence?
    Exit strategy is if I made the incorrect analysis when I first bought or the business deteriorates after buying (such as Coca Cola Amatil). If the business becomes overvalued significantly, I'd probably still hold it if the longer term outlook is still ok.

    I don't aim for so many % increase then I sell, etc because then I just have to do all the work and look for another buy.

    Just coincidence I own 2x ASX stocks. I would prefer to own NZX companies but haven't found any cheap enough recently.

  9. #19
    born2invest
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    Quote Originally Posted by KW View Post
    I have a feeling you are about to get a stonking big lesson in the benefits of technical analysis.
    To be quite honest. I couldn't care less what a squiggly line on a screen is doing.

  10. #20
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    17,222

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    Quote Originally Posted by born2invest View Post
    To be quite honest. I couldn't care less what a squiggly line on a screen is doing.
    Tis the time of year for Ho Ho Ho.!!!,and squiggly lines giving big warning signals,ho,ho ,ho.!!
    Some lessons come at great cost,ho,ho,ho!!!! lol.

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