Comments on: For the record: March 2010

By: Plornt

Plornt — Fri, 06 Aug 2010 19:17:49 +0000

“I think theres alot more upside in other stocks with less downside risk tho. Citigroup I have 2012 intrinsic values between 9.50$-14$ and Walmart 100$-150$ 2012 (I wonder why Buffet just went big ). Brambles I’m getting fair value around 9$? But if GDP tanks 2nd half I wouldn’t wana be on that!!”

Walmart = 51.65$ down ~6%

Citigroup = 4$ ~flat

Brambles = ~5.50 down 27%

This is why its dangerous to overstay cyclicals! 2nd Half looks slow, although Greg could be right on longer time frames as he mentioned his timing can be off.

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Greg Atkinson

Greg Atkinson — Thu, 29 Apr 2010 03:05:19 +0000

Well maybe my plan to sell of BHP and hold onto BXB will actually turn out alright? At the moment BXB looks to be gaining ground whilst BHP looks like it will fall below $40.

In my twisted world I see hard commodities prices falling as supply ramps up but the expected demand (boom) is not as strong as nations like Australian expect. As a result manufacturing related companies will benefit from lower raw materials costs and be able to do okay as demand in the U.S (and even Europe) slowly increases.

Or maybe I need to have my head examined!

By: Ned S

Ned S — Mon, 22 Mar 2010 14:43:22 +0000

“Populous China heads toward labor shortage” :
http://search.japantimes.co.jp/rss/nb20100322a4.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+japantimes_news+%28The+Japan+Times+Headline+News+-+News+%26+Business%29

“this is an indication that China is clearly moving from a labor surplus toward a labor shortage” -- Goodo Greg -- That will give America’s unemployed an opening -- They can move to China and lay railway lines -- With the wearing of queues possibly being optional in this enlightened day and age?

Additionally :

http://www.smh.com.au/opinion/politics/an-empire-in-decline-as-the-world-turns-upside-down-20100322-qr2t.html

I do believe it was the Brits who played “The world turns upside down” as they marched off to Charleston’s departure lounge/port back in the late 1700s or some such?

It’s all go, go, go in the world of international politics and competition I reckon! But we’ll see … I’m not taking much for granted these days.

By: Anon

Anon — Mon, 22 Mar 2010 12:55:53 +0000

“Anon I heard NAB have increased their stake in BXB. It is early days but I am starting to think I may look back fondly on BXB sometime in 2011.”

Yeah I saw the substantial share notices re:NAB. Theres likely to be some good news comming no doubt. What that is…all we can do is guess.

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Greg Atkinson

Greg Atkinson — Mon, 22 Mar 2010 12:12:51 +0000

Anon I heard NAB have increased their stake in BXB. It is early days but I am starting to think I may look back fondly on BXB sometime in 2011.

By: Anon

Anon — Mon, 22 Mar 2010 11:13:17 +0000

“professional hedge fund shorties who had been honestly calling the actual reality of things for as long as two years or more before it went pear shaped, got their ultimate “payday” curtailed by governments banning shorting … I suspect??? Vicious damn game! ”

Yep Governments suck So many variables…probably poker is easier to learn ? haha

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Anon

Anon — Mon, 22 Mar 2010 11:03:32 +0000

BXB looks good today Greg, materially up on a down day. Cant do better than that!
The price action looks very suss, is there a takeover in the wings?

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Ned S

Ned S — Mon, 22 Mar 2010 10:37:47 +0000

Shorting -- “before the GFC where you could literally throw a dart and you would have made money” -- And even then Anon, when the truly professional hedge fund shorties who had been honestly calling the actual reality of things for as long as two years or more before it went pear shaped, got their ultimate “payday” curtailed by governments banning shorting … I suspect??? Vicious damn game!

By: Anon

Anon — Mon, 22 Mar 2010 09:30:05 +0000

“He mentioned that one could go short but didn’t recommend it unless one figured they were especially skilled or somesuch is my recollection.”

I think going short is very difficult unless its in very obvious situations. Like just before the GFC where you could literally throw a dart and you would have made money. But, generally, the amount of homework required to get an edge short selling is phenomenal. I’ve seen some hedgies thesis for shorts and the work they put in is just mind boggling. The fact you have unlimited downside and limited upside is very difficult to stomach if you’re not 100% certain of your findings. I’m not sure non-professional investors, on balance, have the contacts and knowledge to get an edge here.

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Ned S

Ned S — Mon, 22 Mar 2010 07:19:52 +0000

“I dont like my chances in any type of bear market” -- Only ever read one basic little book on stock market investing in my life Anon and the author reckoned that in a bear market you wanted your money safely on the sidelines. He mentioned that one could go short but didn’t recommend it unless one figured they were especially skilled or somesuch is my recollection. Which would pretty much rule out anyone who was reading a book written at that level I guess? And he certainly didn’t attempt to teach the skills that were required to short the market.

By: Greg Atkinson

Greg Atkinson — Mon, 22 Mar 2010 02:55:39 +0000

SV from what I am reading it looks like the Japanese property market has bottomed out or is bottoming out. From what I recall land prices fell nationally around about 6% last year (10% in some places) so it was a correction but not a disaster. What is being worked out of the system now is the oversupply of apartments (condo’s) mainly in Tokyo. Also the office vacancy rates are a touch high in some places, even in some of the prime areas like the Marunouchi area in Tokyo.

I was burnt by investing in some JREIT’s listed on the ASX so I am a touch cautious about these stocks now. Some foreign property trusts borrowed far too much and ran into trouble when their shares prices got smashed and their lenders starting telling them to get their debt levels down. As a result some sold buildings a knockdown prices and plenty of shareholder equity went down the drain as a result.

I agree with your comments about some of then having very high levels of debt, but I guess they figure if they can borrow in yen a low rates that they can manage this level of debt.

So I guess my overall mood about the Japanese property market could summed up as “cautious optimism”.

But please remember this is just my own view, I am by no means a property guru.

By: Anon

Anon — Mon, 22 Mar 2010 01:29:39 +0000

“Anon I am not sure what my hit rate is. I try and aim for 60-70% but the problem is that the 30% that fail can really fail in a big way! During the GFC for example some company’s I held stocks in were wiped out and so it will take a few years of getting it 70% right to repair that damage.”

I think we’ve all experienced these wipeouts, if we didn’t admit it we’d be talking out our butts !

“I have also done fairly poorly from my foray into speculative stocks. I have had some great moments of joy to be sure, but these have been canceled out by some spectacular flops!”

Yeah speculative stocks in bear markets is almost suicidal. I’m not sure there are any places to hide except cash for non-professional investors. Trying to beat the market in those types of markets is almost impossible. Infact I dont like my chances in any type of bear market. If we have a Japan like scenario, I think the bank account looks very attractive

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: SV

SV — Mon, 22 Mar 2010 00:29:27 +0000

Greg,
What is your general view on Japanese commercial and residential property?
There is this ASX-listed property trust that invests in these assets. Yields look tempting, but gearing looks scary (naturally). What is the general feel on the ground about Japanese property?
Another question… maybe you know… how can a property trust survive with 75%-80% gearing? In Australia, this certainly means negative cashflow. Is there a different relations between rent and property value in Japan?

By: Greg Atkinson

Greg Atkinson — Sun, 21 Mar 2010 23:43:02 +0000

Anon I am not sure what my hit rate is. I try and aim for 60-70% but the problem is that the 30% that fail can really fail in a big way! During the GFC for example some company’s I held stocks in were wiped out and so it will take a few years of getting it 70% right to repair that damage.

I have also done fairly poorly from my foray into speculative stocks. I have had some great moments of joy to be sure, but these have been canceled out by some spectacular flops!

By: Anon

Anon — Sun, 21 Mar 2010 06:37:43 +0000

Heres some interesting US inflation Data:

TMS (True money supply) has risen by over 13% in the past year.

M3 is down 5% in the last 12 months.

So superficially, the US is actually suffering from monetary inflation. M3 is showing deflation, but because this tends to overstate monetary inflation we cant rely on this (altho alot of people do).

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Anon

Anon — Sun, 21 Mar 2010 06:18:38 +0000

“Anon I am not good a riding cyclical stocks in general and usually get the timing wrong, but I am hoping I get a break this time around with Brambles. (BXB)”

Well you’ve got the trend with you for sure. Your intuition is usually spot on aswell. I’ve been against your intuition a few times, to my detriment !
The main thing that bugs me about Brambles is its historical highs. We know 14$+ represents the peak of 2007 favourable economic conditions. If the global economy never gets back there you cant expect to get too close to this figure (assuming no significant changes to business models/takeovers etc); so then theres a limit to how much it can grow. So the risk/reward becomes abit average here imo. But I guess its not what hands you have, its how you play them. I’ve turned some real dogs into capital gains by just sticking with em until they reached fair value, then other times i’d been stabbed and bled to death
I dunno what your hit rate is but I generally get it right about 70%-80% of the time. 70% are great and 30% are just WOOFS and I feel Keven Rudd has become chariman and CEO.
If you look at my general market timing…well thats just bad I reckon its just a flip of a coin when I do this…looking back at things…i tend to be too early alot of the time.
BTW with Citi be prepared for much volatility. The loan loss cycle is not over yet but when you have the government owning a big position in the $3.20s (where my position is) you never bet against the government . Look what the US is doing to Toyota now they own GM. The tax payers will get anaethma if the US government doesn’t make a sizeable return on its investment here. Especially in light of how much they have forked out in the credit crisis.

And of course…
Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.

By: Greg Atkinson

Greg Atkinson — Sat, 20 Mar 2010 22:44:56 +0000

Anon I am not good a riding cyclical stocks in general and usually get the timing wrong, but I am hoping I get a break this time around with Brambles. (BXB)

Your point about investing in cyclicals is absolutely correct. The theory of riding them on the way up and selling them before they head down sounds easy to do, but in practice it is a tricky thing to do!

Walmart and Citigroup sounds interesting..I will have a look at them. Thanks.

By: Anon

Anon — Sat, 20 Mar 2010 02:12:06 +0000

Good Article Greg.
Brambles looks nice technically…altho I’m avoiding the cyclical sector like the plague; rode cyclicals for 6 months, wont push my luck. Its dangerous to invest in cyclicals because if you dont time your exits correctly you’ll end up giving back what you made.
That said you might get abit of upside on Brambles it looks undervalued on a historical basis. I think theres alot more upside in other stocks with less downside risk tho. Citigroup I have 2012 intrinsic values between 9.50$-14$ and Walmart 100$-150$ 2012 (I wonder why Buffet just went big ). Brambles I’m getting fair value around 9$? But if GDP tanks 2nd half I wouldn’t wana be on that!!

Above definitely not advice, just commentary — see financial advisors for financial decisions/info/advice etc.