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Interesting times, What to Buy?

Discussion in 'Shares' started by stephenb465, 16th Oct, 2008.

  1. stephenb465

    stephenb465 Member

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    Have been following the market and can not stop thinking that to make money you should do what others are not.

    So from that, over the next couple of months I would like to purchase stock, but really don't have an idea which is best,

    One condition I have is that it must be in the 200ASX.

    from the forum I have knoted some to watch:
    David Jones DJS
    JV HiFi
    Conic Healthcare SHL
    Woolworths WOW
    OneSteel

    My pick:
    CBA, NAB, BHP and maybe ANZ

    What indicaters should I watch, which will tell me what is best

    What would you pick???
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Cash.

    Until the market starts to settle down.

    Especially if you don't know what you are doing.

    Seriously - any other move right now would just be a gamble.

    All the old rules have gone out the window.
     
  3. stephenb465

    stephenb465 Member

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    I'm not into Gambling, thats why I've discided to only deal with the 200ASX, purchase and hold for the long turn,

    But the question still remains, and whilst the shares are not doing so well for the next couple of months or so, what hand fill of shares should I keep an eye on in view to purchase?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I think the banks have generally been oversold - that's probably a good place to start.
     
  5. Billv

    Billv Getting there

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    I agree, although any problems with NAB or ANZ could drag down the whole sector.
    If you have to buy go for CBA and WBC but do it slowly because the market might fall further.

    cheers
     
  6. Chris C

    Chris C Well-Known Member

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    I tend to agree with you, though I think that this rule generally is much more applicable when you are in a position where you are better informed than the general public.

    Plus at the end of the day there is a very instinctual reason why animals move in packs/herds - safety. Sometimes breaking from the herd (ie investing in the market while others are selling) means you get tackled by the pride of lions that the herd was running from (ie cop some heavy losses). There are some very valid reasons there are a lot of people selling, and I'm personally of the opinion there will be more bad news to come.

    At the moment I think a lot of very smart people are still sitting on cash, and there is no need to try and guess the bottom of the market and expose yourself to excessive risk. When you can earn reasonable returns sitting in cash waiting for some more positive news.

    No one knows how deep this rabbit hole goes...


    If you don't really know what is best, then why not put a big portion into some low fee index fund or something similar and have a little on the side to play around with. That way rather than try and bet on which companies are going to survive the best as the world economy walks through this mine field, you can sit back with a truly diversified portfolio and focus on your core competencies (ie. your job).

    Just my two and a half aussie cents.

    With all that said, I'm of the opinion (it being a relatively uninformed opinion) that the health care and consumer staples sectors will remain reasonably strong over the coming months, not to mention are pretty solid bets in the medium long term as well.

    Consumer staples includes companies like Woolworths, Fosters, Coca Cola etc.

    Health Care includes companies like Cochlear, Sonic Healthcare, Ansell.

    I'm not recommend any of the companies on an individual basis, they are just the sort of companies I'd be looking at right now. I also think the financials have probably been a bit oversold and people have framed Australian financials as risky in the current climate despite Australian banks "apparently" being semi-insulated from collapse due to their good regulation. Though with that said, I also think they will probably be a sector that struggles more in the medium term. IMHO, financials are one of those tricky ones to pick at the moment.

    I'm not sure what the general consensus is but I personally will probably be staying away from the resources for awhile with commodity prices being smashed. I think they are good buying if you are thinking 5 years+, but I'd expect some pretty sub par results over the next 12 - 24 months.

    Once again this is just my two and a half aussie cents - which isn't even worth 2 cents US these days... so take it with a grain of salt.

    :p
     
    Last edited by a moderator: 17th Oct, 2008
  7. Alwayslooking

    Alwayslooking Well-Known Member

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    Hi stephenb

    What's the rush, it's a great time to educate yourself.

    "Smart Trading Plans", Justine Pollard, I highly recommend this book.

    Is the smart money jumping in? I don't think so, from what I have been reading experienced traders are in cash and their clients have been in cash for some time waiting for a rising trend.
     
  8. bj

    bj New Member

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    Hi, I've been looking at this as well, to me HVN is about the only decent blue chip that appears to have been really undervalued - could be volatile in the near term but looks like a good prospect over a longer time frame.
     
  9. GunnerGuy

    GunnerGuy Index & Property Investor

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    Buy Index fund(s). Buy and Hold.
     
  10. Billv

    Billv Getting there

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    bj

    Retail activity is down and will probably stay down,
    and our $ has lost nearly 30% of it's value since July so all electrical goods are becoming more expensive so I doubt that Harvey Norman is a good buy

    cheers
     
  11. Billv

    Billv Getting there

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    Considering the problems in the resources sector is anyone recommending BHP, RIO or other resource stocks and if so for what reason?

    cheers
     
  12. Alwayslooking

    Alwayslooking Well-Known Member

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    Hold off till 2009 as there may even be better opportunities, unemployment figures are on the rise. Sky last night reported that we are actually in a recession even though Government not confirming.

    I hate this doom and gloom stuff but I must admit I am concerned, we are in business and we have had to lay off 3 staff members, our end users are mining companies and some of our orders have either placed on hold or have been canned.

    CHeers, AL
     
  13. Chris C

    Chris C Well-Known Member

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    I must admit that I'm starting to think that things may be a little worse in Australia than I originally thought and whilst no one is talking about it much, I'm starting to think that Australia may not be immune to recession...

    I only say this because I work part time for my father's business, which is a small business that employs around 25 people, and in the last 6 weeks he believes that things have slowed down substatially. He is already looking at laying off 3 workers before the end of the year, and obviously if things continued he would consider further layoffs as needed. Three people losing jobs doesn't sound like a lot but that is over 10% of his company...!

    Obviously my father's business isn't representative of the entire Australian economy, but I'd be very surprised if a lot of other small businesses aren't experiencing similar slowdowns and are starting to think about cutting costs.
     
  14. Alwayslooking

    Alwayslooking Well-Known Member

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    I am surprised at how quickly things are happening.
    I think there are many reports where various businesses are suffering, motor vehicle industry for one.

    We employ 20 people, only small business but it was only 3 months ago where we were advertising for staff with no success and here we are now sacking staff. Its a tough call.

    With slowing of the economy and lack of confidence I think unfortunately this will continue to effect all asset classes. It is just a sea of red at the moment and this is why I do not see the need to rush but to be patient and see how this unfolds.


    CHeers, AL
     
  15. cheeyeen

    cheeyeen Member

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    I am interested in infrastructure that are paying distributions from free cash flow and less volatile earnings. APA, DUE, SPN, SKI and HDF. Well, I read that they meant to be good in this environment but they are being sold down heavily these few days (My understanding was because funds are deleveraging and selling. I hope that was the reason rather than there are issues with the infrastructure companies themselves). They are yielding more than 10% in a falling interest rate environment.