High Yielding Shares Reloaded

Hi All,

New to this thread. But really interested in shares. I was lucky and bought a bunch of bank stocks Just after GFC and just sat on it. dividend on that now is really attractive. However I do want to invest more frequently and get dividends.

My investment philosophy has been to invest in stocks of companies whose products I use. APPLE, GOOGLE, FACEBOOK, WESTFARMERS (Coles), IINET, CBA, TELSTRA., ASICS, MAZDA. I figured that I use products that most of population use. All of those companies cater to the masses. So far this strategy has served me well.

At the moment the market is showing a few good stocks. Just as The Flacon im interested in IFL. There has been a lot of media beat up. Although the big worry is China. But they might do what US has done and just print money to prop their market.

BHP does look attractive too but Iron price is forecast to go down another $5. So I think BHP around $24 would be reasonable price. Any thoughts?

What do you guys think of buying into company that has dividend coming up (top asx 50) and buying to get dividend and then just wait until the price comes back up to break even or more then sell and repeat?

Cheers

.

 

Head over to this same thread at Somersoft. Search for a guy named 'china' who bought BHP at $35.77 and WOW at about $35 and tell us what you think about 'waiting for the price to come back up to break even'.


pinkboy

 

Maybe he is still waiting! heheh
I get your point. Always better to buy for company value than just for the dividend.....

 

I think there would a lot of conversations in board rooms around the world at the same time trying to work out what will happen with the above company,over a simple prior 9 year span the low was below 15 bucks the high above 40 a few times,and looking at a 15 day trend below 20bucks maybe on the cards,from my experience which is very limited never go below the previous lowest 8 year span,unless they go belly up and your left holding the can,and ending with a whole lot of tax credits.imho..

 

July note to shareholders from Rich Handler (Jefferies / Leucadia National). Some great wisdom in here ;

To Our Clients:
Wide Open For Business, Always.
We remain focused, while also keeping our eyes wide open.
Our recently announced solid second quarter results reflect a world that is open for business and abundant in opportunity. More significantly, every one of us at Jefferies can see, feel and hear the many good things that are occurring across our firm: our Equities business globally is getting stronger, better and bigger; Investment Banking has terrific momentum, with much opportunity for further expansion; and Fixed Income continues to strengthen, with our team focused on filling the void left by others. The two of us are in the race with all of our team, regularly meeting with clients, and doing everything possible to recruit additional talent and strengthen our platform globally.

Despite a punch in the gut with the Greek volatility, indexes of stocks in the U.S. and several other major markets are at or near all-time highs. Interest rates, while up slightly, are still close to zero. Unemployment is down considerably. Productivity, thanks to the amazing innovations in technology, seems to be improving daily. Mortgage rates are still highly attractive, and financial institutions globally have mostly cleaned up their balance sheets. Capital markets across asset classes and geographies are wide open, mergers and acquisitions are happening daily, and even the market for private companies to access equity and debt capital is readily accessible from a variety of buyers. The declining price of oil has created a windfall for transportation companies and consumers alike. The Chinese stock market, while corrected from a probably unsustainable high, still has generated meaningful wealth creation. Japan continues its transformation. And back to Greece for a moment−while we hate to see people in pain in any country, to us the situation does not appear as systemically dangerous as it was just a few years ago.

During our professional careers, the two of us have lived through challenging market dislocations of various proportions in 1980, 1987, 1990, 1994, 1998, 2001, 2008 and 2011. There are only three things that are 100% certain:

1. There will be another period of extremely painful, scary and expensive volatility.
2. Nobody knows when it will happen. It could be tomorrow or a decade away.
3. The cause likely will be something only a very few people will see coming.

We are not saying that good times are over and it is time to panic and prepare for calamity. We have no clue when/how/where/why the next real problem will occur. However, we do try to live by two fundamental philosophies throughout our business careers:

1. Remain humble and do our best to do nothing stupid or arrogant during the good times,
2. Which will allow us to be in the best spot possible to take advantage of all the opportunity that is readily available during the bad times.

These two simple thoughts may sound very obvious, but in reality they are really hard to live by. When things are good, it is very easy to forget how bad things can get. When things are bad, it feels good times will never return. Good times have people reaching for yield in places they don’t understand.

Good times often wrongly means more leverage because perceived risk is so low. Good times can lull you into thinking you can do less work, make quicker decisions, and not worry so much because the odds are stacked in your favor. Liquidity is abundant and, if something goes wrong, you can just sell the position, division, or company because there are many exits at your disposal−we know how that one goes! You can justify overpaying for people or even businesses because on a pro forma basis, everything can be justified. Bad times have people tossing (sometimes puking) out good investments, people, divisions or companies. It is almost impossible to pull the trigger on any new investment because the daily fear and pain make it almost impossible to step back and have a long-term perspective. Relative values are nearly impossible to assess because everything seems to correlate and who wants to take any chances in times like these anyway?!

This relatively good period may last for years, and hopefully it will, but we have to make the smart decisions that will allow us to remain robust and well-positioned when the climate eventually does change. We must only take smart risk in support of our clients and avoid being too aggressive by following the herd. We do not have to supersize any risk−anywhere. That doesn’t mean we aren’t fully engaged, playing offense, supporting our clients, and actively planning for the future. We just need to accept the world for what it is today and preserve our wonderful liquidity, use our capital intelligently, make only the smartest hires or acquisitions, and in the case of Leucadia, only make investments that stand out uniquely in a world where true value is elusive.

Periods like this can be great ones for our clients and for companies such as Jefferies and Leucadia. Investors can make money, companies can grow, returns can be reasonable and people can smile. Keep smiling, but everyone should have their eyes wide open and make sure we are all protecting our foundations.

 

Dow down 2.1% and NASDAQ down 2.8% last night.

Might be a grim Friday for the ASX today.

What Im most interested is seeing if BHP continue their 'progressive dividend policy' after the South32 spin-off. They said they would, so Im interested to see at least a USD$0.62 in their report. Time will tell.

pinkboy

 

Pity anyone that bought into the ASX 12 weeks ago, you add the new consequences in Greece,add on the shame of more financial loss then the money would be safe just sitting in fixed term at less the 3%
or face social utopia bankruptcy,plus I had seveal calls this morning pre warning me,some I know are down over 28% in capital value over the last 12 weeks,and black October is not that long away..imho..

 

I'm at a loss as to what the panic is about, 28% capital value in 12 weeks? what they piled in their life savings at the top of the market? went too hard on energy / materials and they now need to sell? Need liquidity to meet margin or other debts? Its a very long game, perhaps they are playing the wrong one. XJO last December was 5150....how soon we forget

 

At least he didn't invest in Santos...Santos touched a low of $5.18 at one point this morning, the lowest since 2000 Origin energy also took a hit going back to pre-GFC levels.

 

Ouch forgot about China, meanwhile he could have invested in Sydney property and made 30-40%.

 

BHP is at 24, I will be buying....

I was looking at Oil search (I prefer them over Santos). I will be buying them at 5.50.

Both will be long term investments.

 

Having a nibble on QOZ...adding.

 

I have been hovering over the buy button on ETFs QOZ, VHY and LICs ARG, AFI and MLT.

Maybe Monday.......

 

Hey all

Not investment advice, not ramping and certainly do not encourage anyone onto my path - having said that, have been nibbling away at AWC (Alumina) for a few months (not trying to catch falling knives.........I hope )

Smelling a bit of a propensity for a dividend trap but I don't think that will be the case.

Looking at accumulating further over the next mid term and I think it represents good value. For the very patient investor me thinks

regards

 

Big LICs looking decidedly bad value at the moment, great for holders as they are proving a good sea anchor!

 

Yeah AWC is an interesting company. That CEO has the best gig in Oz. Just sits around waiting for a divi cheque from Alcoa and then decides what to give shareholders. if you are light on materials and wanted to have a stab you could do worse I suppose. Bear in mind people thought it was cheap at 180-200cps and morningstar have been talking it up as a value play since then.

 

Yep Falcon, it is a good gig......down the food-chain chain I am trying to emulate it by buying a (hopefully) increasing dividend at realistic prices.....we will see

Great article you posted from Leucadia earlier and got me thinking in addition to a recent post by Keith. Chopping and cutting the article / note to make more meaning for me

Overall

Keep smiling, keep eyes open, protect foundations, don't follow the herd, accept things for what they are, protect liquidity & use capital intelligently


Good times

- Remain humble and don't do anything stupid based on the
current euphoria

- Don't take on excessive leverage solely on the basis of low perceived risk

- Make smart decisions that will will fit when the environment
changes & allow us the flexibility to take advantage of
opportunities in the bad times

Bad times

- Don't toss out good investments

- Take a longer term perspective

- Be prepared to enter good opportunities

Again, excellent article and I have copied it and put it in my 'coffee file ' - sit in the backyard with a coffee sometimes and just flick through some great wisdom - thanks

 

I was hovering in case there was a sharp drop but it didn't eventuate.

pinkboy

 

They won't. Due to the nature of the typical LIC holder - non trader / non insto the money is very sticky. Intra day / week movements are less than ETFs.

Only in GFC type end of the world conditions do the holders after months of media barrage capitulate. Interestingly the NTA discount historical charts suggests that large NTA discounts in the big 3 are a great buying signal because maximum pessimism is close to being reached. The converse is also true!

 

Agree that popular LICs are expensive at the moment. They are our major holdings and always will be. And yes we were huge buyers of them in the aftermath of the GFC. Plenty of cash is always stashed away for what is becoming rarer opportune buying times for them. In the meantime topped up STW today given the market is a bit on the nose. Who knows it might get a lot worse. Cash is more valuable that the pathetic interest it earns when buying opportunities arise. Doesn't hurt to have some LOC available as well.