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How do you select your buy-in price?

Discussion in 'Shares' started by Bran, 26th Sep, 2016.

  1. Bran

    Bran Member

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    Perhaps an inane question, but I really have only established a buy-in price based on previous purchases... eg NAB at 24.90 , MLT at 4.18 etc.

    @twisted strategies - you mentioned a topup of TLS in a dip - how do you define when its reasonable for you?

    Another example... BKI... near a 12 month low and something I've been watching...

    I'm reasonably sure that @austing maintains we can't get the timing right, and that's of course a consideration.

    I'd be grateful for your thoughts.
     
  2. austing

    austing Well-Known Member

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    Not exactly. It depends on one's level of skill (and some luck). What I've said at times is mostly in relation to LICs. Obviously at a discount in a poor market is ideal. That said there are plenty of investors who just use the DRP then take advantage of discounted SPPs and Rights Issues etc and still do very well. Main thing is to have a strategy and stick with it.

    Just for the record I generally try to time my purchases. But with LICs I didn't want investors with little interest in the market to think this is mandatory for success! After all the older LICs were originally created for those who didn't want to do it themselves.

    And being nothing more than an amateur investor my posts should be judged accordingly.
     
    Last edited: 26th Sep, 2016
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  3. twisted strategies

    twisted strategies Well-Known Member

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    FIRST the current news ( does it look bad or is it REALLY terrible )

    i establish what i consider 'a fair price ' , purely judgemental but using past earning/div. payments plus a guesstimate of near future divs normally 10% below the last div. ( our economy has trouble coming it will probably ripple into the divs ,

    so TLS @ $4.95 looks like an achievable price ... but let's set that as a MAXIMUM price as see what the market will give us lower .

    on a good day the shorters start the dip and they trigger stop-loss events which worries others which triggers extra bot activity ....

    BKI i am looking at adding a few now and then as a de-facto safe-haven ( a good chance of paying some div. in the worst of times )

    say $1.55 maximum for them ( at the share divs in the stocks held should face pressure )

    we can't get the timing right because the power-brokers are stalling , delaying and throwing cash (they don't have ) at the problem .

    normally we would have a 'lottery ticket chance ' of picking it

    BUT we can watch for hints of genuine recovery just in case the economy ( and 3rd world nations ) start to do the heavy lifting alone .

    i agree with austing the bottom will be difficult to pick ( my pick is already 2 years late )

    so i have resorted to small 'average down' buys .

    MLT is was hoping for $3.50 after share split ( confusion in retail share-holders ) but would consider below $4 .

    i am not in a hurry with MLT because it's investing style still has some popular support , and doesn't do enough differently to what i can do myself ( doesn't short-sell , take out options , buy hybrids etc.)

    and i have a reasonable amount of time ( except this week ) to watch and stalk prices .
     
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  4. austing

    austing Well-Known Member

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    Yes spot on. That's all I generally do. Although small is relative to ones asset base. In our case issues like brokerage are a negliable cost. Obviously it can be riskier with direct stocks (valuations matter) where I've seen the occasional unfortunate investor average down to zero! But with LIC's (being diversified investments) which is my main game nowadays it's unlikely you'll be left with nothing. So averaging down with LIC's doesn't generally carry the same level of risk.

    In a relatively somewhat normal market I prefer my LICs to be at a discount or near fair value. I tend not to buy much in strong markets. However in times of gloom / crashes / bear markets etc I'm prepared to pay a bit of a premium. As I've said many times I'd rather pay a premium on a favorite LIC down 40% in a crash vs buying it at a discount at its all time highs in a strong bull market. It can be advantageous to apply some judgement rather than just blindly buy a LIC because it's at a discount.

    As @twisted strategies has mentioned previously no one knows when a crash or opportunities etc are coming but it can be very rewarding for those who are prepared. I always have some cash and LOC(s) at the ready for such times. So my approach to timing is not about prediction but knowing which shares / LIC's are my target and being in a position to take advantage of opportunistic events when they arise!
     
  5. twisted strategies

    twisted strategies Well-Known Member

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    of course in highly active LICs like WAX NTA is almost meaningless , because the whole portfolio may have changed by next year ( or several holdings two or three times )

    so LICs like WAX i disregard NTA as of minor importance
     
  6. austing

    austing Well-Known Member

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    Yes, I should have been clearer. I was mostly referring to LICs with low portfolio turnover such as MLT, BKI, ARG and WHF etc.

    That said, if WAX dropped over 50% with a decent discount at that time I'm sure there would be some lining up to accumulate it as a long term opportunity. Provided of course the strategy hasn't changed greatly and key personnel haven't retired / jumped skip.

    Personally I don't hold WAX much preferring MIR (Ex-50) and QVE (Ex-20). These are still relatively low turover compared to WAM / WAX / WAA. WAA in particular is a brokers best friend, the turnover is unbelievable at times.
     
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  7. twisted strategies

    twisted strategies Well-Known Member

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    with WAX ( now without cash at risk ) effectively i bought a strategy ( style ) i am not set up for .. opportunistic trend trading .

    i would be surprised if they still hold a single company that was in the portfolio in 2011 ( when i bought in )

    i have a theory .. when you are not good at something hire someone who is ( and try to learn a little bit of it )

    i also hold CAM , and more recently BKI BECAUSE they have reduced ( portfolio turnover )
     
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  8. austing

    austing Well-Known Member

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    He he, I'm not much good at anything especially nowadays given how lazy I am with investing. Hence the boring old LIC's are a big improvement on me doing it myself:). The thing that I like though is that I can hire those at the likes of BKI, MLT and ARG etc damn cheap at around 0.12 - 0.16% of FUM. Why would many bother trying to do it themselves with fees so small when they can be out enjoying life with hobbies, family and friends instead.

    I suppose in some ways participating on the forum is a bit of a hobby. It comes and goes. I just ramble on boring the hell out of poor members here. I remind all out there the ignore button is there if you tire of me.
     
    Last edited: 26th Sep, 2016
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  9. twisted strategies

    twisted strategies Well-Known Member

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    my Grade 11 maths teacher told me i had brilliant potential as a mathematician

    a mathematician should find the easiest way to do things .... and i was the laziest b@stard he had ever seen

    i took in to heart and attended maybe 5 lessons in 2 years, opened the book twice and slept for an hour each paper in Senior and barely missed a PASSING GRADE .

    PS only once opened the book in Physics and passed that ( and had a nap )
     
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  10. austing

    austing Well-Known Member

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    I was a drummer in rock, rock and roll, cabaret bands all through high school and up until around age 30. Gigs ranged from 2 - 6 nights a week. Hence most of my time at school was spent sleeping and out till very late most nights of the week. Still managed to pass somehow. And after I finished senior level at high school I held down a day job whilst still doing numerous gigs each week. I reckon I spent most of my early life living on 2 - 5 hours sleep a night. Wasn't the most productive of employees:).

    In late 20's went back to uni, gave up drumming and started a career in IT. Quit work around 40 to allow my wife to pursue her career and took a much greater interest in investing. Wife retired a couple of years ago at 52. Household income was high but sensible investing also played a major role is enabling us to retire early. Our life now couldn't be more blissful. Financial freedom can be a wonderful thing.
     
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  11. twisted strategies

    twisted strategies Well-Known Member

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    did the 'wild child' thing , jobs , race tracks TABs , pool halls ... all before i was 5 foot tall or 15 ( and didn't slow down much for the next 40 years , either .

    not so much 'retiring' as BURNT out , but i did half of it to myself ( for fun and profit )

    the doctors are busy revising down my life expectancy by the month , and won't believe i have been MUCH SICKER than this , ( LOL )

    i want to test my investing prowess in a crash ( to see if i got it right )

     
  12. austing

    austing Well-Known Member

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    I was 6' 7" (200 cm) at age 15 and I still am. That's how I was able to play in bands at nightclubs from age 14 without anyone questioning my age. I think they thought I was a young Mick Fleetwood without a beard:):cool:. Meant I was also drinking from a very early age. I can tell you I was well and truely burnt out by 30. From 14 to 30 living on next to no sleep (day job and multiple gigs on week nights) and hard living takes its toll. Surprised my kidney and liver tests are still ok at 56!

    But making up for it now. Life is very peaceful and sleep plentiful.
     
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  13. twisted strategies

    twisted strategies Well-Known Member

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    LOL at 45 i took up body-building and put on 15 kgs in 3 years ( briefly ) without using 'roids

    in my only contest ( 3 sections ) i took off 4 kg in 3 hours ( during the contest 68 Kg to 64 kg )

    all body rhythms gone

    at 50 i bragged i had 3 fully functioning body parts left ( but i can't remember what they are ) .

    this year i was finally dragged along to the doctors and scored 'high priority' with my first echo-cardiogram ... then i had a second ( a month ago ) now the doctors are really filling my appointment books .. dye injections ... etc. etc seems the 24 hour heart monitor readings weren't the good news they were expecting . ( LOL they tell me QLD health has waiting lists )

    ..... i still have my sense of humour ... damned if i can remember that other body-part ....




    i wandered off the mainstream of Music when i discovered Alice Cooper and Masters Apprentices



    and once you start exploring .....
     
  14. austing

    austing Well-Known Member

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    I hope that's not you at the back (The sumo wrestler) of the picture above your username. If it is I certainly wouldn't be game to argue with you:D.
     
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  15. twisted strategies

    twisted strategies Well-Known Member

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    nope !! small in size , big in attitude ( and ambition )

    back to 55 kg , my metabolism just burns the fat off ( i can't even float , not enough body fat )

    .... and metal head
     
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