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What Tools do you use to "Select the Right Stock"..

Discussion in 'Shares' started by branson, 22nd Sep, 2016.

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  1. branson

    branson Member

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    Most people these days only focus on the in-betweens on a company's earnings and profits,but too take the whole system serious,you can obtain a larger picture by looking at the Total shareholder return,/TSR/,Dividend per Share/DPS/,Price to earning/PE/,Return on equity/ROE/,and a few other ways but the TSR is a vital way to look at the ratios when comparing stocks against the sectors counterparts
    but some technical analysis has it's own benefits and limitations..
    Then one can make the own simple line charts ,which can provide a line in which a security price movement and the price fluctuations on any scale by day or weekly or by the hour,what do you use ?..
     
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  2. Hodor

    Hodor Well-Known Member

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    All those returns, ratios etc are well known and although important don't give you any advantage over the market (as they are known to all). I now avoid stock picking due to this (and a few other things) and invest in LICs and let them do the work for a tiny fee.

    It is unlikely that I will look at direct stocks as it is very difficult to constantly think differently and correctly enough to give yourself an edge on the market significant enough to outperform. I am just not willing to put in all the effort for a maybe.
     
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  3. twisted strategies

    twisted strategies Well-Known Member

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    branson ,

    i normally ignore TSR , simply because plan A. is to hold ( some ) of that share forever ( actually 5 years minimum )

    this rule is flexible ( depending on events ) , but if the share is not good enough to keep why buy it in the first place .

    exceptions to that rule where buying REC to deliberately accept the INM offer , and buying SKE as a side-door into increasing my PRG holding .

    i also consider D/E ( debt v equity ) and the composition ( is the debt at high or low interest rates )

    apart from setting tougher limits than most , ( PE < 11 , DPS > 5.5% stuff like that )

    not a lot difference , except i might wake up Monday and check out (say) Consumer Staples first , Telcos second , and then scan the ASX anns.
     
  4. branson

    branson Member

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    I don't blame you "LIC,s" for some people depending on the age factor would be the way to go..
     
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  5. branson

    branson Member

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    There is a lot of different opinions out there on that..
    Banks are good to watch,from the 10 dollar up to the 70 above range,they all follow different depressing aspects ..
     
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  6. twisted strategies

    twisted strategies Well-Known Member

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    there is also a lot of difference in investing styles .

    especially with a common theme of liquidating , your super/SMSF investments on retirement ,

    should i find ( buy ) a solid div. paying stock ( or LIC , or REIT)

    i would tend to keep it for the steady income it provides .

    i hold WBC ( av. SP $20.50 ) should WBC return to $20 , i would most likely buy extras , currently i use the DRP with WBC but on retirement , i may exit the DRP plan or switch to 50% cash divs. 50% shares

    i expect inflation to start being an issue within 5 years so would be looking to grow the asset base ( No. of shares/units ) if possible .

    in most plans for retirement i see few to factor in inflation ( surely they aren't conceding at last, we are actually in a recession ,
     
  7. branson

    branson Member

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    It's only those 3 words "DRP",that once you add the compounding factors just becomes a number on a page..
     
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  8. twisted strategies

    twisted strategies Well-Known Member

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    until you retire .... the VAS i bought in 2011 when DRPed have grown 22% ( by share number )

    say the VAS has grown 25% by 2020 that will be 25% more divs swelling my income in retirement ( plus keeping track of the market , inflation wise )

    ( imo) opinion if there is anything sillier than having a very large holding of one investment vehicle , it is having that asset at full cash risk , when a sensible profit-taking option is available ( not sell all of it but enough to recover the investment cash and costs )

    if there is a savage crash ( i haven't been through one of them yet ) maybe you can add extras at a 50% discount . let the holding build recover the cash again , rinse and repeat ( if you are young enough )
     
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  9. Bran

    Bran Member

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    All of mine are at cash risk, capital wise up about 6% across the porfolio, only been buying shares 6 or so months, about 100K worth. To get your cash back, they would need to double. Are you advocating selling at this point? This will also impact your compounding down the track...

    (I'm 36 - plenty of time (?) I'd happily retire NOW)
     
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  10. twisted strategies

    twisted strategies Well-Known Member

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    my MAJOR issue with most planners .... is how much do you need to retire on

    now as some might have noticed , i live in the FRUGAL camp and depending on govt sliminess retire in 2020 , 2021 ( or whater they shift it to )
    ( they do two part terms of Parliament and are set for life ( and still allowed to keep working , or blackmail their way into directorships .

    so does anyone known what the CPI ( inflation rate ) in 2020 , or is it 2021 , or 2025 will be ??

    if no , i will have to guess ( just like to RBA )

    not only don't i know the CPI but i don't know what interest rates will be ... BUT i am supposed to plan how much i need .

    my strategy for free-carrying ( cash rescue ) ( this is flexible , but the point i start THINKING about it )

    i know my buying price i add THREE SETS of brokerage ( buy , cash rescue PLUS another batch in case of an exit ) and approximate CGT and then wait for the ( calculted) price is 120% higher ... (double + 20% ) and decide IF a free-carry is a sensible move ( sometimes it isn't )

    so the answer is yes , lets free-carry this, ... but at what price i try to sell 40% of the holding ( keeping 60% )

    now because Mr. Market moves around so much , this free-carry chance can happen more often than you think ( not every share but often in surprising places )

    sometimes even within a year ( of buying )

    VAS is unlikely to rise above $140 any time soon ( say before 2021 )

    so when i retire , i will most likely alter the DRP scheme to 100% cash divs ( they pay 3 monthly ) and use the income ( others with be part shares part cash ).

    also sometimes a compelling moment turns up like when i exited BKL ( swapping each BKL for 3.25 WES ) once you calculate the divs , it was just common sense at the time .

    when considering buying any share ( hybdrids are different they have maturity dates ) i buy with the plan to hald some for life , ( plans may change after buying like BKL but i didn't expect them to rocket up from $22 either )