ASX Shares A Closer Look at the Big 4

CBA at/around $74 mark. I have never held CBA before , this could be the chance may be.

 

CBA is sitting around 75.710 and even with the low volume there is more buyers then sellers..

 

Important updates on Big 4

Before looking at these updates, suggest re-reading original forecasts made in OP on 15th December 2017. There are lots of great opportunities emerging at precisely the expected time and price zones posted here over 3 months ago.

Worth noting that CBA has the larger exposure to retail banking sector which seems to the focus of the royal commission so many professionals are considering limiting exposure there for the short term. ANZ & WBC are the most attractive from pure charting and pattern POV.

Suspect this train won't be stopping at the station for too long so if you have any interest in these ideas don't spend too long waiting for your golden ticket.

Also while this opportunity looks technically sound for a potential major low, be mindful that we could be in early phase of a bear market and there is still a chance of lower lows coming later on.

ANZ


CBA


NAB


WBC


No advice

 

Hi Alex,

Since these charts were able to predict the current price zones at precisely the expected time, are they able to see if we are in fact in the early phase of a looming bear market and whether lower lows are potentially coming for these big 4 ?
Thank you for sharing your amazing work

 

Hi Alex,

Thank you for your update and for posting your insightful charts as usual.
I am curious as to whether you have any views on the royal commission or if perhaps individual elements like this do not matter for your charts given their holistic nature?

 

Thanks @VanillaSlice

It's difficult to say if there will be lower lows on individual stocks going forward and for income seeking accumulators it doesn't matter for a high quality income producing stock..

Finding the ideal entries is a case of following patterns and the current pattern is leading to what should be a low. All we can do is keep taking advantage of each expected low price zone and hope it was the last one for that stock.

Another way to answer the question about the general market conditions over the coming year is in this thread. Individual stocks can behave differently to the general market, so not everything will track the indices they belong to, but it sure gives a great sense of where the main game is at

World Indices Roundup - Jan/Feb 2018 Major Top?

 

Some pretty decent price reactions to the forecast levels this week for ANZ and CBA.

ANZ


CBA


No advice

 

CBA at $72.760

 

Anybody buying Nab shares? Considering its ex div date is round the corner? Any insights to share while the negativity going round the banks. Thanks

 

I notice this post hasn't received a reply.

It's interesting - when I hear that something is "the safest in the world" I become immediately suspicious.

The more important thing though for property investors is the doubling up on risk. One only has to look at the GFC in the USA to see how one event can tank both property values and bank shares in one fell swoop. For me, this is a "black swan" risk that I just can't afford to take - regardless of how likely I think it is. It's about preserving some wealth at least to start again in the case of the worst happening.

I wouldn't normally mind leveraging up into bank shares or Oz index funds (which are of course heavy banks) but I would want to get rid of some properties first...

AMP is down 20% now courtesy of a few questions asked in the royal commission, revealing matters that, to me at least, aren't all that surprising. Obviously the same or worse can happen to the big 4 at any time this year - I certainly wouldn't be surprised going by what we have heard already. I heard ANZ is spending circa $50m on royal commission costs - they wouldn't do that if they weren't worried about something... and no doubt the others are the same.

That's a risk I just don't need in my life right now and I just don't see it being priced in - yet.

 

Probably a good time to sit on the sidelines and see what happens with the Banking royal commission.
A good indicator will be the half yearly reports and how much profit they make , or dont make.
According to some ,their funding costs will/are going to go up, but at present it is probably not a good time to raise rates out of cycle.
Some bad numbers in their half yearly results would give them some breathing room to push up interest rates.

 

my portfolio is 45% nab ex div is around 16/05, and I will be buying more.

I'm not really concerned with all the negative noise, if anything I'm buying more

 

There's some fairly significant levels in the banking sector across the board at the moment - if I see a few closes below them I'd be pretty happy to short a few on the rallies.

 

Huh? Do I have this right?
45% of your portfolio in one individual stock?
And your considering purchasing even more?

Current negative noise should be the least of your problems if the above is true.

 

I have a friend who owns only a few stocks, and most of her portfolio is in Telstra, quite a few bought at $5. She is not happy.

 

I understand your concern @Lemmy a fiver - this is the opposite of diversified. However, just to be a Devil's advocate:
- a lot of us are invested in Australias LICs / ETFs with high exposure to banks. The chances of one of the big 4 going under is very very low so in some ways it isn't that far away from a diversified Aussie portfolio.
- a barbell strategy is where you invest with great conviction in something you are certain is good value. Pretty sure that's how many investors like Buffet made their wealth. The caveat here is that you would only buy NAB when it is extremely undervalued.

That's not my strategy but it could work.

 

I sometimes think of it as since the big four control 80% of the Australian mortgage market. So having invested in them let's say 25% in each is akin to having share in 80% of the mortgages in Australia (includes residential and commercial).

Big four currently are returning between 8.5% to 10% gross yields. Similar to say commercial property. Which one is more safe. One commercial property worth $1million returning 9% or $1million invested in share of 80% of mortgage market earning similar 9%? I think second option is less risky.

I am not advocating anyone do the above. But just saying there are lot of investors who invest in commercial property for their high returns. Just investing in banks only can be similar to investing in commercial property (in terms of income) but with less risk IMHO.

Cheers,
Oracle.

 

today I picked up another $10k worth of CBA (early on in trade)

 

I remember the 90's where bank stocks were quiet volatile and there were periods of months to years of negative prices.. i held bank stocks, i received dividends... and i lost money.

With many bank stocks now hovering near 5 year support levels, I think we may be heading there again sometime in the next few months.

Party is over in terms of ever increasing wage increases and the ability to take on further debt..

 

Lets not forget Westpac almost went under in 1992.

No company is a sure bet.

pinkboy