ASX Shares Selling IP's to invest in Telstra Shares (TLS)

Discussion in 'Shares & Funds' started by John Ferguson, 6th Dec, 2016.

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  1. John Ferguson

    John Ferguson Well-Known Member

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    Would now be a good time to sell any Investments Properties that have seen significant growth and might be at the top of the cycle and invest your cash into shares. Telstra at around $5 a share paying a near 9% fully franked dividend looks pretty attractive for someone with a large cash pool to invest.
     
  2. 158

    158 Well-Known Member

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    By the time you sell a property, Telstra might be $6 and poor value, or it could be $4 with a slashed dividend.

    I would not invest solely in one company just for the dividend, unless it was an LIC with proven history (and even just 1 would be a stretch).

    Beware the dividend trap.

    pinkboy
     
  3. Kangabanga

    Kangabanga Well-Known Member

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    Telstra is probably about fairly valued at the moment at $5.

    It was $7 at it's peak before the whole NBN business caused investors some fear and crashed it to $3. Now that NBN has blown out of budget but needs to be delivered as promised to the taxpayers, NBN has to pay Telstra billions for using it's network and everything is hunky dory :D Unless there are some regulatory changes to the telco market, Telstra should still be raking in the $$ in the next 5-10 years.

    Definitely a good place to park some spare cash in a true blue chip of ASX. But do note that ASX is trading near its highs. It would be better to go into stocks when the stock market has tanked or has had a bit of a correction.

    AUD could go lower if Aus loses AAA rating and if carry trade unwinds from rising rates elsewhere. So maybe some hedging in USD would be a good choice too.
     
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  4. radson

    radson Well-Known Member

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    yikes, yeah an LIC or ETF at least. Aside all the usual risks of investing in one company, Telstra seems to be lumped into utilities stocks if and when interest rates rise in the US and could see further downfalls.
     
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  5. Perthguy

    Perthguy Well-Known Member

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    ASX:IPE has a dividend yield of 46.76% for a share price of 17c. I can't see any issues there? ;)
     
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  6. Bayview

    Bayview Well-Known Member

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    Would you not consider trying to access some IP equity? (subject to Bank hoops for serviceability and LVR's etc on borrowing for shares)..that way you get to keep the footprint of property, plus the shares?
     
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  7. willair

    willair Well-Known Member Premium Member

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    There seems to a massive trading volume today with TLS..But the chart above may give you some idea..Plus once you add up all your exit costs from the sale of one property
    in simple after tax dollars you may think different,and there is no way i would put everything in TLS alone..CBA was in the fast bucks range at short time ago at 70bucks plus range,a minute ago CBA was $79.30--up 1.6 %--and up $1.29 today..
     
  8. radson

    radson Well-Known Member

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    Its crazy how market darlings can turn on a dime. Now its TLS falling, a while back CBA was getting close to 3 figures and then whooshka, down to 70. Those poor ol' folk owning BAL must be wondering what the hell happened as well. WOW went from nudging 40 to drop back to high teens.
     
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  9. Blueskies

    Blueskies Well-Known Member

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    One thing I know for sure with share investing, it is never a good idea to have a huge overweight position on one single company. I don't care how good they are, how high the dividend, history, trajectory, competitive advantage, whatever. There are always black swan events that can come along that no one sees coming and if you have all your eggs in that basket your capital can evaporate faster than you can blink. Telstra as part of a diversified portfolio, sure, but not in isolation.
     
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  10. Blueskies

    Blueskies Well-Known Member

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    Yep, and everyone is an expert in hindsight. What gets me is the company analysis reports done by the big broking firms that rate companies as a strong buy, doing +20% growth in the next twelve months, then the company comes out with an earnings downgrade or an impairment or whatever else that tanks the share price and in the next report they are re-rated to sell. That's great, thanks for that useful analysis, I'll just hop in my Delorean and act on that timely advice!
     
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  11. standtall

    standtall Well-Known Member

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    On first glance I thought it read Tesla and not Telstra. It wouldn't have surprised me if you were going to invest in Tesla.

    Telstra is a dying white elephant (literally full of old white men). The future belongs to smaller specialised telcos offering high speed wireless internet and once Telstra starts losing its corporate customers to these agile players, its share is bound to tank. After all, there's a reason they are paying 9% franking dividends.

    Unless your IP has worse fundamentals (like being situated in a regional non-growth area) and banks are not giving you optimal leverage, it is surely a bad trade.
     
  12. willair

    willair Well-Known Member Premium Member

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  13. MTR

    MTR Well-Known Member

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    Telstra $4.81, nice yield play...... comments???
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Out of interest what do the figures look like?
    How much CGT
    How much rent currently
    How much cash left over after payment of taxes and loans and all costs?
     
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  15. Barny

    Barny Well-Known Member

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    Read yesterday to hold out till $4. More to drop?
     
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  16. Perthguy

    Perthguy Well-Known Member

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    Risky. It could go either way. If you are prepared to take a gamble with money you can afford to lose, why not?
     
  17. wombat777

    wombat777 Well-Known Member

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    This is what Motley Fool said:
    Clearly the Terry Ryder of share advice!
     
  18. Perthguy

    Perthguy Well-Known Member

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  19. PerthPadawan

    PerthPadawan Well-Known Member

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    Interesting that others have been looking at Telstra too, the dividend sure makes it stand out. Here are some numbers to help your own investment decisions:

    Telstra will pay a 3.2% dividend in the coming months. With 100% franking, thats 4.6%. They pay dividends twice a year.

    Please be aware that when they pay the dividend, the share price will reduce roughly in line. So when the share goes ex-dividend in a week or so, and the share price was still $4.81, this will go down 3-4% to $4.60-$4.65 on that day.

    So you have traded dividend income for capital loss, all things being equal.

    Then you need to consider if Telstra can (i) keep up their dividend at these rates and (ii) actually have profit growth sufficient to increase the share price.

    If you need further information (but not financial advice), I work in the industry.

    PP
     
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  20. Sam Yue

    Sam Yue Well-Known Member

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    Telstra is one of the most diversified and multi-culture company I know. There are old people, but also graduates.