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Hypothetical share purchases.

Discussion in 'Other Asset Classes' started by Steven Ryan, 18th Jun, 2015.

  1. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    I thought this would be a fun chance to make some hypothetical purchases. No doubt this forum will be around for a long time, so it'll be interesting to check back.

    State the amount, company and minimum hold period.
    • $500,000 - Tesla motors - 10 years
    • $100,000 - Solar City - 5 years
    • $500,000 - Google - 10 years
    • $500,000 - Spread across top 20 biotechnology/artificial intelligence/robotics companies at present
    • (future) $5,000,000 - Space X (the day it goes public) - 30 years
    • (future) $1,000,000 - Craig Venter's first public company - 5 years
    I believe that's a good spread with enormous potential

    I will be putting (some) of my money where my mouth is. I don't quite have a spare $1.6m to get going on those immediate purchases though.

    Current prices:

    Tesla - $261.89USD
    Solar City - $57.78USD
    Google - $536.73USD
     
    Last edited: 19th Jun, 2015
  2. The Falcon

    The Falcon Well-Known Member

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    Ok let's have fun with this. Make it a ten year hold, list today's SP and list 5 positions only, equal weight. Call it 100k in its listing currency. Measurement will be total return across the portfolio in percentage terms. SP only, not total return (this puts me at a real disadvantage as I prefer dividend stocks, but that's ok) Let's check back in 2025. I'll list mine later. Let's close this at 30 June, the winning punter will be revealed on 1 July 2025.

    The more the merrier!
     
    Last edited: 19th Jun, 2015
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Given the use of foreign companies you should also value these using the present AUD / USD rate.
    Is your $1.6m cost in AUD ? So how many shares ?

    Our dollar might become a South Pacific Peso and be akin to the old Italin Lira. 40,000 to the dollar or something.
     
  4. The Falcon

    The Falcon Well-Known Member

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    Nope, currency too hard. This is about stock picking. For the purposes of this (fun) exercise we assume listed currency is already held - we are looking for percentage growth in listed currency.
     
  5. The Falcon

    The Falcon Well-Known Member

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    Ok, I am going first, not going to bother to time in the next 11 days :)

    From last nights close in no order;

    1. Berkshire Hathaway B Class , NYSE , USD 142.67
    2. Fairfax Financial Holdings, Toronto Exchange , CAD 645.90
    3. Markel Corporation, NYSE , USD 804.99
    4. Jardine Matheson Holdings, Singapore Exchange , USD 56.01
    5. Google Inc, NASDAQ, USD 536.73

    Now, if this was a total return comp (incl. dividends) I would pick differently, but this will do for a 10 year punt! :)

    In 2025 we can adjust all entrants holdings to allow for spin offs, stock splits and acquisitions.

    Good Luck all!
     
  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Hang on, if the shares are US based the currency MUST be a factor. It can never be ignored. If the shares double in market value (USD) and the currency tanks one can take the other out. In the past few years there are a number of investors who sold out their US shares and broke even - Due to the dollar.
     
  7. The Falcon

    The Falcon Well-Known Member

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    Paul, its a hypothetical fun exercise mate.
     
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  8. HorribleWestie

    HorribleWestie Member

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    1,000,000 In Nickle.

    over the next few years nickle will soar.
     
    Last edited: 24th Jul, 2015
  9. cdchi1

    cdchi1 Well-Known Member

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    If you are a big believer in Tesla (and electric cars) then I would suggest considering graphite mining companies in your 'fun' hypothetical portfolio. Graphite is the key component in a lithium-ion battery (yes more than the lithium). Every electric car battery has around 50-80kgs of graphite. There is also a big move towards battery energy storage (which Tesla is getting into as well) again demanding even more graphite. Personally I can't wait to be powering my house with a battery.

    There is currently only one graphite company I would consider (and I've been a large holder since its infancy) as they are targetting both this new growing use of graphite as well as the old traditional sources such as recarburisers - its the largest one by far in terms of mkt cap on the ASX. Course you could punt on the more junior ones, but mot of them are cons imo.
     
  10. Azazel

    Azazel Well-Known Member

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    A lazy pick, but I'd just dump all of my money with them as long as the old fella was going to be around for another 10 years.
     
  11. joel

    joel Well-Known Member

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    For share price appreciation in the ASX over 10 years I'd go:

    SAR- $0.545 (gold)
    VLW-$2.08 (property)
    BPT- $0.59 (oil)
    WSA - $2.64 (nickel)

    In that order.
     
  12. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    6 months on, posting for my own record, just because. I will keep coming back to this. Good learning experience.

    Tesla - $230.46USD -12%
    Solar City - $56.92USD -2%
    Google - $739.31USD +37%

    Hypothetical position:
    +$123k (8%)
     
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  13. johnpendlebury

    johnpendlebury Well-Known Member

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    Hi mate, let's say $1.6million is what you had to invest. Do you really believe you'd have the stones to invest it in that sort of portfolio? Entirely possible, that apart from Google the other companies cease to exist in 10yrs. On the other hand the portfolio could be worth $50million. But, surely if it was a real portfolio one might be far more defensive than that.

    This exercise is fun, but its like playing Poker with fake money. Happy to call with pocket 3s, just to try your luck.
     
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  14. johnpendlebury

    johnpendlebury Well-Known Member

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    10 years eh.....

    ok something like that following:

    $250,000-Apple
    $100,000-Disney
    $250,000-Amazon
    $50,000-Nike
    $500,000-Berkshire B Class
    $100,000- Ramsay Health
    $50,000-Telstra
    $50,000-BHP
    $100,000-Vangaurd High Yield ETF
    $200,000-Vangaurd REIT ETF
    $100,000-Vangauard Total Stock Market ETF
    $50,000-Vangaurd Emerging Markets ETF
    $50,000-Vangaurd Total Bond Market


    something like that
     
  15. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    It's entirely possible that Google won't exist in 10 years too ;)

    If $1.6mil was my net worth, not in a million years. Were it 25%, in a heartbeat.

    However, some context is needed.
    • I'm 30, single and have a range of assets and income streams to provide for me–a 100% loss on these would not adversely affect my lifestyle. These picks were for me, not recommendations for others.
    • Thus they'd form part of my portfolio, not my complete portfolio.
    • They're not primarily wealth-centric choices. They're all connected to companies/industries I feel will make an enormous, disruptive, positive impact on the planet and its inhabitants. Providing some capital for world-changing ideas and companies is ok with me, regardless of return.
    • I am acutely aware of the risk of making large investments in few companies–the above selection would be very high risk with a proportionally high potential return. My capital city properties are my index funds.

    I'm actually working to this next stage of my investment journey and will be loading up on biotech/genomics/robotics/ai/nanotech etc companies with surplus cash outside of what is needed for my first property development. I expect at least 90% of those particular investments to go to $0.

    Its the other 10% I'm interested in.
     
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  16. Heinz57

    Heinz57 Well-Known Member

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    ASX index, Vanguard fee structure, revisit Christmas 2025? Is this cheating?
     
  17. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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  18. datto

    datto Well-Known Member

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    Syrah Resources..... the new black gold. Had this one afew years ago for one dollar something.

    I'll slap 100K on her.
     
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  19. chindonly

    chindonly Well-Known Member

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    Do you mind naming the company? Interested in this space as well.
     
  20. Heinz57

    Heinz57 Well-Known Member

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    Rule of 72 - 7% return 2 x