General Markets Talk

Gingerbread man

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Aug 14, 2016
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Just looking for a little advice, long story short, decided to blindly buy some shares off 15 min of research on Google, put $750 into Telstra to see it down 6.5% but with dividends has only dropped $15.
I also put $750 into PWH which has made a profit of 55% but has a very poor dividend. The question is should I sell my PWH shares, it just seems crazy to think that this level of price rise can continue.
 

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Big Cox 88

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Just looking for a little advice, long story short, decided to blindly buy some shares off 15 min of research on Google, put $750 into Telstra to see it down 6.5% but with dividends has only dropped $15.
I also put $750 into PWH which has made a profit of 55% but has a very poor dividend. The question is should I sell my PWH shares, it just seems crazy to think that this level of price rise can continue.
Frequent trading just eats up your capital with all the brokerage and tax burdens. Try to hold shares long term and you will be better off, unless the company fundamentals have changed. Looks like you haven't really looked in to the companies books and P/E ratio too much so maybe do that and then make your decision.
 

Engimal v3

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Sep 21, 2017
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Can someone explain dividends to a complete novice?

Currently TLS shares are sitting at $3.370, give or take.

So if I have 150 shares (around minimum buy in), I'd spend $505.

So in March, they payed a dividend of 8c per share, which for this example would pay out $120.

Now, I must be missing something here, because this seems like an easy way to make money. Of course, if it was this obvious then everyone would be doing it. I know Telstra's revenues are falling, so it may dip below 8c, but what's the risk here? If you hold a blue chip stock like this for long enough, how wouldn't you make your money back over time, without even considering if the stock rises and makes you money that way?
 

Engimal v3

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The thing that you're missing is that the dividend payment would be $12, not $120.
Haha, I can't believe I did so much research before even realising that 8 cents is 0.08, not 0.8.

So that's the answer. The reason you can't just sit and wait is that you're only receiving $12 a quarter, and you'd have to sit on your shares for 40-ish years without your stock losing any value to make money from this alone.

Is that fair what I'm saying?
 

Jimmy_the_Gent

Above the law
Dec 25, 2004
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Haha, I can't believe I did so much research before even realising that 8 cents is 0.08, not 0.8.

So that's the answer. The reason you can't just sit and wait is that you're only receiving $12 a quarter, and you'd have to sit on your shares for 40-ish years without your stock losing any value to make money from this alone.

Is that fair what I'm saying?
Yeah that's fair although you've picked a terrible example.

Not to get onto a soapbox and sorry to come across as preachy but I'm just going to have at it because I have time on my hands.

When you look at the Boston Box below, you'd say that Telstra is either a cash cow or dog.

It's fair to say that communications aren't exactly a growth market in Australia (who doesn't already have a phone, mobile and internet) and Telstra's market share is borne out in what you said about their revenue - it's falling. You can't really do anything with that stock... at least I would bet that's the general consensus.

1557388008016.png


Now, if you go back in time to 1999 and for whatever reason decided to buy shares in a Cochlear Limited, you would have been buying a question mark at about $8.80 per share. As it turns out, this stock was the one in a million that made a lot of itself and became a Star.

Cochlear took to about 2009 to pay out $8.80 per share of dividends. Since then it's paid out another $21 per share of dividends and it's share price has risen to $192.

Basically, what you're angling for can be done but probably not with a safe, steady, blue chip company like Telstra. It would take more speculative stocks (riskier) that took off. Finding those is obviously really ******* hard.

There's also a discussion that needs to be had about shares being better for capital gains than income (see Cochlear's $30 per share in dividends since 1999 but $183 per share price appreciation).

Anyway, hope that post was good food for thought.
 

Engimal v3

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Yeah that's fair although you've picked a terrible example.

Not to get onto a soapbox and sorry to come across as preachy but I'm just going to have at it because I have time on my hands.

When you look at the Boston Box below, you'd say that Telstra is either a cash cow or dog.

It's fair to say that communications aren't exactly a growth market in Australia (who doesn't already have a phone, mobile and internet) and Telstra's market share is borne out in what you said about their revenue - it's falling. You can't really do anything with that stock... at least I would bet that's the general consensus.

View attachment 670263

Now, if you go back in time to 1999 and for whatever reason decided to buy shares in a Cochlear Limited, you would have been buying a question mark at about $8.80 per share. As it turns out, this stock was the one in a million that made a lot of itself and became a Star.

Cochlear took to about 2009 to pay out $8.80 per share of dividends. Since then it's paid out another $21 per share of dividends and it's share price has risen to $192.

Basically, what you're angling for can be done but probably not with a safe, steady, blue chip company like Telstra. It would take more speculative stocks (riskier) that took off. Finding those is obviously really ******* hard.

There's also a discussion that needs to be had about shares being better for capital gains than income (see Cochlear's $30 per share in dividends since 1999 but $183 per share price appreciation).

Anyway, hope that post was good food for thought.
Oh yeah, completely understand what you mean, at a basic level at least.

Not trying to make bank from dividends, just wondering what I was missing. Turns out, it was my shit maths.

Thanks for your help though. I'm really enjoying it.
 

Jimmy_the_Gent

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Considering how few were predicting a Liberal victory, and that fact that Labor was talking about abolishing franking credits refunds to some (very few) people, it'll be interesting to see what the ASX does on Monday.
 

Big Cox 88

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Considering how few were predicting a Liberal victory, and that fact that Labor was talking about abolishing franking credits refunds to some (very few) people, it'll be interesting to see what the ASX does on Monday.
I'm calling a minimum 1.5% rise which will continue on Tuesday. Not just for the franking credits, also to account for the result and it's impact on the economy.
 

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Kram

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On further analysis, I see that you're right. The ASX 200 dropped at the start of this year (and 2016), but not in 2017 and 2018.

Should have looked at a larger dataset. Cheers.
At the end of the year there is often a bit of a 'santa rally' as they call it.
 

Engimal v3

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At the end of the year there is often a bit of a 'santa rally' as they call it.
Well my initial thought was that people were pulling money out of the stock market ahead of 'holiday season 'for presents, holidays, etc.

Seems it's often the exact opposite. Never heard of that term 'Santa rally', thanks.
 

Kram

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I also put $750 into PWH which has made a profit of 55% but has a very poor dividend. The question is should I sell my PWH shares, it just seems crazy to think that this level of price rise can continue.
I'm still a bit of a noob in the market but a very quick glance at it that seems ok, if you put in like 5k+ instead you could take profit but when it's only $750 you may as well imo just hang on unless there is something that changes about them you don't like.
 
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Jimmy_the_Gent

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Lots of significant stuff has happened lately (markets hitting all-time highs, the Fed cutting rates for the first time since 2008 and the AUD touching 10 year lows) but this is all I want to share:

 

Kram

I'll brik u
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Positive is it can create buying opportunities that you can use.
 

Jimmy_the_Gent

Above the law
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Was that it?

European markets are up and the US is set to open higher tonight. If they manage to hold the course, our region should follow tomorrow.

I was hoping for some serious carnage but this has been a slight shudder.
 

Kram

I'll brik u
May 2, 2007
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US sold off fairly strongly last night, another rough day for the ASX coming up.

Spewin haven't been long in anything gold except a mob just developing a mine.
 

yeah_nah_yeah

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Sep 14, 2008
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All Ords only down by .4% today, so they haven't been hammered too badly.

It's interesting times at the moment:

- US vs China (tariff wars)
- All Ords up near record highs
- Gold & Silver near AUD highs
- AUD at a 10 year low
- Housing markets on a slight recovery after 20-30% losses

There's some big opportunities coming, but I'm not 100% sure where at the moment!. I'm diversified with some ETFs but I wouldn't mind getting into some international shares (US/EU) at some stage.
 

Engimal v3

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Anyone know a good resource for bond investment strategy? Exploring my options at the moment for diversification, and want to do some reading.
 

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