Your questions answered Vol 2 - IM Private Clients
Discussion
2Btoo said:
I'm an investing amateur - nay, complete beginner - but at what point does one start to think about getting out of things that are dropping kinda briskly?
You've left it a bit late. Best get out before the losses start.Yes, I know. Easier said than done.
So...... ride it out, is the answer, otherwise you will be selling near the bottom and then buying back in near the top.
I've done it.
mikeiow said:
Burwood said:
I think the more important question being, why would you sell. The market is offering you a price. Why are you compelled to accept it given by default, you’re investing
Isn’t the question “could Fund X continue to tank even further…..& will it *ever* bounce back?”Not that anyone will be able to know the answer…
Exhibit A: the NASDAQ history:
Peak to ‘getting back to that peak’ varies from many short spans right up to several years, after the dotcom & GFC.
Are we hitting one of those?
I don’t *think* so…..but what do I know!!
The question is whether the price will indeed be worse tomorrow and in a week's time. However I'm not sure why you use the word 'compelled' in your question.
The Mad Monk said:
2Btoo said:
I'm an investing amateur - nay, complete beginner - but at what point does one start to think about getting out of things that are dropping kinda briskly?
You've left it a bit late. Best get out before the losses start.Yes, I know. Easier said than done.
So...... ride it out, is the answer, otherwise you will be selling near the bottom and then buying back in near the top.
I've done it.
My 2p opinion is the markets are going to fall further, possibly much. I also don't think the the big rises in stocks last year were genuine (by that I mean a lot of dumb/free/cheap/etc money flowing in). However, I'll be staying invested and will continue adding - history shows trying to time the markets, or dipping in and out is counterproductive. Best to have a long-term strategy and stick to it. No real harm in switching out of a portfolio and into something else if the fundamentals agree, and having a bit of cash on the side to 'buy the dip' is a proven strategy, but overall keeping in the market is the path to long-term compounding.
2Btoo said:
Mr Pointy said:
2Btoo said:
OnTheBreadline said:
PHE and PHO both taking a kicking this last week or so.
Not the only ones. I know this isn't the Fundsmith thread (because there isn't one) but that's down from 672 at the very end of last year to 608 today. 9.5% drop in less than a month.
I'm an investing amateur - nay, complete beginner - but at what point does one start to think about getting out of things that are dropping kinda briskly?
e's drawers in the last month. A 9 year timeframe would have been far more lucrative.
Burwood said:
Some stocks fall and won't come back. You don't need a wider market correction to witness this. Plenty of bubble stocks were cut in half well before Dec/Jan (the last 4 weeks). What we are seeing is nothing like 2008 (the cause), the effect in my opinion will not be the same for the simple reason, quality businesses will report great numbers starting tonight.
Looking at the bubble stocks. Was it that hard to spot Docusign. A business that makes it easy to sign a document and which generates $2B annual revenues at the peak of its cycle (covid) yet losses money. valuation $60B pre plummet. Just think about that number. The business has almost zero competitive advantage other than 'it's a ball ache to switch' which is not good enough. Peloton, a $50B fitness fad (and we have one)
Then you have MSFT which generates tax paid earnings of 70B and growing at a double digit clip. It is not over valued. The implied yield including dividends is around 5%.
There are dozens of similar examples of quality businesses, thriving and growing, which have a competitive advantage. These will continue to appreciate over time. So if Mr Market offers you a good price to buy, why wouldn't you (and if you have no spare $$ just don't sell). Yes, tomorrow or next week you may get offered an even lower price but it's a fact that prices of good businesses go up over time.
Selling good companies in a down cycle really is foolish because you are then on the side lines and you will not time the entry point. And no you don't know the price will be lower next week. Fear is creating this down turn, mainly fear of what the other guy is going to do 'is he selling?' which is really dumb.
Word like this are very valuable. Thank you Burwood. Looking at the bubble stocks. Was it that hard to spot Docusign. A business that makes it easy to sign a document and which generates $2B annual revenues at the peak of its cycle (covid) yet losses money. valuation $60B pre plummet. Just think about that number. The business has almost zero competitive advantage other than 'it's a ball ache to switch' which is not good enough. Peloton, a $50B fitness fad (and we have one)
Then you have MSFT which generates tax paid earnings of 70B and growing at a double digit clip. It is not over valued. The implied yield including dividends is around 5%.
There are dozens of similar examples of quality businesses, thriving and growing, which have a competitive advantage. These will continue to appreciate over time. So if Mr Market offers you a good price to buy, why wouldn't you (and if you have no spare $$ just don't sell). Yes, tomorrow or next week you may get offered an even lower price but it's a fact that prices of good businesses go up over time.
Selling good companies in a down cycle really is foolish because you are then on the side lines and you will not time the entry point. And no you don't know the price will be lower next week. Fear is creating this down turn, mainly fear of what the other guy is going to do 'is he selling?' which is really dumb.
Burwood said:
There is a discrete number of principles to follow which gives you a far greater probability of avoiding the turds. Buy companies (funds holding companies) that have an edge (a moat) which can defend against competition. Does the product or service have a huge addressable market and is there a good margin in it! If it's a commodity with many vendors chasing, are the margins poor. Don't overpay! This isn't as difficult as it sounds.Paying 50X revenue and losing billions is a good sign you're speculating. Then.....do nothing
There are a few other points to think about during inflationary times such as, has a company got real pricing power. EG a quality health insurance company definitely has pricing power and a customer would probably default on his car payment before his health cover. Apple, Google, MSFT, McDonalds, just a few examples of pricing power. So when input costs go up they pass them on. Food, drink is the same.
A hugely capital intensive business on the other hand will find it tougher and that is the same in good times too. Say you have much greater demand but you need to deply a lot of cash to increase capacity. Now compare this to say a cloud hyperscaler like AWS or Azure or Google cloud. They serve clients on demand. The point is if they had a 2X increase in demand it won't cost 2X the infrastructure cost of 1X. It may be as low as 10%
And on that. These (cloud guys) companies are going to grow a lot bigger than they are today for many reasons but the biggest one is that big data is required to train AI models and that is where technology is going. Machines that can use inference to predict outcomes. It is the key to things like FSD, cancer research and drug discovery.
This all sounds soooo sensible (but I know nothing There are a few other points to think about during inflationary times such as, has a company got real pricing power. EG a quality health insurance company definitely has pricing power and a customer would probably default on his car payment before his health cover. Apple, Google, MSFT, McDonalds, just a few examples of pricing power. So when input costs go up they pass them on. Food, drink is the same.
A hugely capital intensive business on the other hand will find it tougher and that is the same in good times too. Say you have much greater demand but you need to deply a lot of cash to increase capacity. Now compare this to say a cloud hyperscaler like AWS or Azure or Google cloud. They serve clients on demand. The point is if they had a 2X increase in demand it won't cost 2X the infrastructure cost of 1X. It may be as low as 10%
And on that. These (cloud guys) companies are going to grow a lot bigger than they are today for many reasons but the biggest one is that big data is required to train AI models and that is where technology is going. Machines that can use inference to predict outcomes. It is the key to things like FSD, cancer research and drug discovery.
). I hope that the IM boys are reading this to help them build PHTech. First post …..long overdue…..serial lurker…..but wanted to pass on my thanks to the IM team and many posters on this thread.
Always considered myself financially savvy but had my eyes opened to a comment on this thread - some time back - that uncashed private pensions remain out of inheritance tax (currently!) - how did I miss that ??? It has made me relook at all my financial planning over the last year.
The openness on this thread, by the IM team, to me is quite unique - it certainly encouraged me to have a dabble in IM, to get my toe wet. Followed by an excellent conversation with Nick approx 6 months ago. Nick proved an excellent soundboard to ensure my understanding was actually correct -no hidden agenda at all - simple explanation of the facts.
I have never met anyone at IM …..but I owe Julian, Nick & Coops a beer or 3 to say thanks. Currently I have gained far more from the relationship.
Always considered myself financially savvy but had my eyes opened to a comment on this thread - some time back - that uncashed private pensions remain out of inheritance tax (currently!) - how did I miss that ??? It has made me relook at all my financial planning over the last year.
The openness on this thread, by the IM team, to me is quite unique - it certainly encouraged me to have a dabble in IM, to get my toe wet. Followed by an excellent conversation with Nick approx 6 months ago. Nick proved an excellent soundboard to ensure my understanding was actually correct -no hidden agenda at all - simple explanation of the facts.
I have never met anyone at IM …..but I owe Julian, Nick & Coops a beer or 3 to say thanks. Currently I have gained far more from the relationship.
duckson said:
SimonTheSailor said:
maccboy said:
SimonTheSailor said:
Did PHR take another hit today ?
Can't remember all the stocks in it, might top up a little......
PHR is closed for investments. Can't remember all the stocks in it, might top up a little......
Benjy911 said:
duckson said:
SimonTheSailor said:
maccboy said:
SimonTheSailor said:
Did PHR take another hit today ?
Can't remember all the stocks in it, might top up a little......
PHR is closed for investments. Can't remember all the stocks in it, might top up a little......
be reet.
SimonTheSailor said:
Just transferred some cash I to IM - unclear whether it's actually there yet or how to move it into something ?
Not exactly very clear ?
Also sent an email a day or so ago regarding not being able to open a file downloaded but no response yet.
it should show up in your dashboard as Cash when its processed. Not sure how long that will take but certainly a few days.Not exactly very clear ?
Also sent an email a day or so ago regarding not being able to open a file downloaded but no response yet.
You will then be able to click a button next to Cash "manage" and that will allow you to transfer the cash into what ever fund you want and the amount. ie partial and an amount or Full as in all the cash.
then when the funds are in whatever PHE or PHO or index you can do the same again there will be a manage button to move funds around.
It will be clear when the dashboard is updated im sure.
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