Thai society’s con man unmasked: Smooth criminal pledges to change his stripes

[bbabythai]

Do you currently invest in the domestic equity market in oz?

Have you ever heard of the 'motley fool' marketing guy? He sends out a daily market chat via email and obviously tries to get you to hand over your money in exchange for advice about what stocks to buy.

Im thinking of investing in fully franked dividend stocks to effectively chase the yield. The banks are paying record low interest rates at the moment.

Whats your take on the aussie stock market atm?

cheers

[wordchild]

i am invested in some ozzie stocks (and also in some other markets as well). FWIW i think its a good market in which to hunt for some yield esp if you buy (as you mention) companies paying fully franked dividends (ie no further withholding tax). I also happen to quite like the ozzie dollar at these levels. One issue is that dividend investing in this market will tend to lead you into the obvious big commodity names (ie rio and bhp) plus the financials, so,for the sake of diversification, you might want to combine investments there with some in other markets as well eg HK,SING, UK. All of which have a selection of good dividend yield stocks and are tax efficient for an international investor.

[Suradit69]

I've invested in Australian via the IAE and IAF closed end funds in the US. IAE includes other Asian Markets, but IAF is pure Australia. Both are selling a steep discounts to NAV and pay decent distributions. IAE uses option writing to augment income.

In the US market I buy individual stocks, but for most investments out side the US, I use closed end funds.

http://www.cefconnect.com/Details/Summary.aspx?Ticker=IAE

http://www.cefconnect.com/Details/Summary.aspx?Ticker=IAF

[Brickbat]

Aussie market definitely pricey at the moment but with more interest rate cuts expected, the hunt for yield could drive it up more. The thing to remember is we are btuning businesses and business have to make money to pay dividends. Economy not the best. A correction is quite likely acc to some tech analysis. Good time to buy.

A good segment is the small caps. Well run, low cost, market leaders that could also show a capital growth. I subscribe to " under the radar" report.

[bazza40]

Banks are definitely overpriced at present. BHP is good buying at anything below $30 due to its unceasing cashflow. Any hiccups in the financial system ( e.g. Greek default, Middle East flareup ) could see the banks lose quite a bit.

There are any number of share touts around, e.g. Fat Prophets, Intelligent Investor, Motley Fool etc. They tell you all about their successes, and downplay failures. Their aim is to get you to subscribe to their newsletter products, which is where they really make their money. Ask the question - if your advice was really so good, why would you want to tell me?

Then there are the "pump and dump" advisers, who want to suck you into the 1 cent stocks while they are short-selling the same stock. Mongrels - don't give them oxygen.

[F4UCorsair]

People selling their 'expertise' make more from selling info than from investing, in my opinion.

MF sends me daily 'updates', and stories of their huge successes investing, but very seldom do they admit to taking a hit.

If you invest only in the top 10 or 15 companies, and further refine the choice to those paying fully franked dividends, you shouldn't go wrong.

Your choice on whether you subscribe to MF, but I think they're a waste of money. On tbe credit side you only need one tip from them that gives you a few% on a 10k investment to cover their membership cost.

[tigerbeerz]

I've been a Motley Fool (US and UK) member for over 10 years and never had any reason to regret it, recently renewed a 5 year membership They recommend holding stocks over a long term, don't promote 1 cent stocks and not all their recommendations make money. I'm retired and living in Thailand, I expect their foolish advice to keep it that way for the foreseeable future.

[marquis22]

Motley Fools are a bit of a rip off IMHO

Add a gold stock to your portfolio

NCM

or SLR (They will surge if gold price rises above $1220 and they reopen one of their mines that has been closed because of the low returns at present.)

[Brickbat]

I agree. In this market, they are all bragging how good they are when its been a stellar rise. Name 20 stocks and you can't miss one doing a ripper of a run and then they brag about just that one.

NST ( Northern Star Resources) for a gold stock. Currently just above $2 and VectorVest analysis tool has a value of $4. On pure technical and earnings analysis.

[graexx]

I looked into M Fool and they seem alright.

But I SWING-TRADE the S&P500 index i.e. I buy IVV when it closes below ma100 on a down day on a >3%dip. And sell on the subsequent flat spot (two spinning tops or 3 days sideways etc...). I also like Jim Cramers tips. As you can see I like the US market - the ASX has too much currency weakness and is poorly regulated by ASIC. Also the brokerage is much cheaper in the US.

All my money is in $USD - this has profited me 15% in the past year - I think the $AUD needs to fall to the mid 60s yet.

[F4UCorsair]

Banks are definitely overpriced at present. BHP is good buying at anything below $30 due to its unceasing cashflow. Any hiccups in the financial system ( e.g. Greek default, Middle East flareup ) could see the banks lose quite a bit.

There are any number of share touts around, e.g. Fat Prophets, Intelligent Investor, Motley Fool etc. They tell you all about their successes, and downplay failures. Their aim is to get you to subscribe to their newsletter products, which is where they really make their money. Ask the question - if your advice was really so good, why would you want to tell me?

Then there are the "pump and dump" advisers, who want to suck you into the 1 cent stocks while they are short-selling the same stock. Mongrels - don't give them oxygen.

I don't think there is such a thing as overpriced bazza. A share is worth what the market is prepared to pay on any day for that share. Tomorrow is another day, and the market may decide that it's worth less, or more.

In my opinion, banks aren't, and it's the dividend that's driving the price, e.g., CBA is just over $92.00 today (down 93 cents) and the dividend paid in the past 12 months is almost $4.50 + $1.50 franking credit, so that's $6.00 on $92.00 or 6.52%. When bank interest is generally down around 3% and less, investing in, rather than saving with, banks is the way to go. Investors will be prepared to pay a fair bit more to secure the dividend return. If the dividend dropped to $4.00, then I'd expect to see a significant drop in CBA's share price. The CBA's capital gain has been quite remarkable also.

As a self funded retiree, a fair part of my portfolio is in banks and Telstra, the big dividend shares currently.

Investing versus saving is no contest. 3% interest on savings with a bank, and with inflation running at about 3%, leaves you with nothing, and that's before tax. After tax, you've getting a negative return. The same amount invested in high yield shares will return 6.5%, less inflation and tax, and you'll still have a few percent return, and then there is the potential for capital gains if you've chosen wisely.

I agree with your assessment of MF, FP, II, etc. They make more out of 'advising' than they do out of investing themselves.

Interestingly, some years ago, one of the local newspapers, Sun Herald I think from memory, ran a competition for picking shares that would show the best capital gains, giving participants a sum of 'play money' to invest, and the results were published every Friday for a month. Participants were a school kid, teacher, housewife, astrologer, a dart board, and professional investor/adviser in the particular competition I followed. The dart board won, and the guy from Fat Prophets came in last!!! That says a lot about the professional's skill, and I took great pleasure recently when FP called me to try to milk a subscription out of me. Of course the caller had no knowledge of the competition.

Edited April 17, 2015 by F4UCorsair

[tifino]

we've pulled out of all - but investing in the Banks themselves. (Another equivalent 3million baht's worth) transferred out of pitilessly low interest accounts, all went into Westpac stocks just last week...

there's a Westpac deal going on right now, till the end of the month, where the first au$50 fees for each settlement is being given back

so we did two settllements, normally costing $55 each, so the whole activity set us back just au$10 to do it

[Brickbat]

Everyone is piling in , in the hunt for yield. And I suppose with low interest rate agenda, the hunt will get ferocious. PE ratios will rise. Until the next big correction, which is inevitable. But with sensible stocks, it's not the timing as much as the time in the market.

Heard an interesting story by an ex stockbroker on a radio show. The best returns made from all the clients he had were 2 old ladies who just piled into one good stock. They just bought and bought.

[bazza40]

Everyone is piling in , in the hunt for yield. And I suppose with low interest rate agenda, the hunt will get ferocious. PE ratios will rise. Until the next big correction, which is inevitable. But with sensible stocks, it's not the timing as much as the time in the market.

Heard an interesting story by an ex stockbroker on a radio show. The best returns made from all the clients he had were 2 old ladies who just piled into one good stock. They just bought and bought.

During the GFC, Westpac from memory was down to $20, now worth nearly double that. So that's one good stock, except very few people remember Westpac was on its knees in the early 1990's.

It doesn't matter how good a company is, it only takes one or two CEO's to really crunch the share price with poor decision-making. Think back to BHP and its Magma Copper acquisition.

There's not much point to getting a half year ninety cent dividend out of a $36 stock ( 5% yield ) if the company's share price drops by $3-$4 on the capital invested. And PE ratios are already unsustainable.

[bbabythai]

we've pulled out of all - but investing in the Banks themselves. (Another equivalent 3million baht's worth) transferred out of pitilessly low interest accounts, all went into Westpac stocks just last week...

there's a Westpac deal going on right now, till the end of the month, where the first au$50 fees for each settlement is being given back

so we did two settllements, normally costing $55 each, so the whole activity set us back just au$10 to do it

anz e trade have $500 worth of free trades ie 17 free trades

[saroq]

Banks are definitely overpriced at present. BHP is good buying at anything below $30 due to its unceasing cashflow. Any hiccups in the financial system ( e.g. Greek default, Middle East flareup ) could see the banks lose quite a bit.

There are any number of share touts around, e.g. Fat Prophets, Intelligent Investor, Motley Fool etc. They tell you all about their successes, and downplay failures. Their aim is to get you to subscribe to their newsletter products, which is where they really make their money. Ask the question - if your advice was really so good, why would you want to tell me?

Then there are the "pump and dump" advisers, who want to suck you into the 1 cent stocks while they are short-selling the same stock. Mongrels - don't give them oxygen.

Agree. The touts will overload you with a gazillion names that you could invest in and then when one of them performs that's all you'll hear about, the other hundred rubbish recommendations are never mentioned again. Here's a site to get some education for free http://www.informedtrades.com/f154/ and Google "dividend trade strategy" for some other reading about your specific interest. Dividends can remain quite stable regardless of what happens to the share price in the short term so buy good companies whose stock price have taken a beating is a good strategy because hopefully you'll collect a dividend and get the benefit of an increasing stock price (eventually) as the economic cycle brings the good times back to those companies.

Edited April 18, 2015 by saroq

[F4UCorsair]

Everyone is piling in , in the hunt for yield. And I suppose with low interest rate agenda, the hunt will get ferocious. PE ratios will rise. Until the next big correction, which is inevitable. But with sensible stocks, it's not the timing as much as the time in the market.

Heard an interesting story by an ex stockbroker on a radio show. The best returns made from all the clients he had were 2 old ladies who just piled into one good stock. They just bought and bought.

During the GFC, Westpac from memory was down to $20, now worth nearly double that. So that's one good stock, except very few people remember Westpac was on its knees in the early 1990's.

It doesn't matter how good a company is, it only takes one or two CEO's to really crunch the share price with poor decision-making. Think back to BHP and its Magma Copper acquisition.

There's not much point to getting a half year ninety cent dividend out of a $36 stock ( 5% yield ) if the company's share price drops by $3-$4 on the capital invested. And PE ratios are already unsustainable.

Nobody likes seeing their capital eroded bazza, but if income stream is your thing, does it really matter if the dividend continues at 5%? Provided the company is in good shape, and often they are with no more than hysteria driving the market, the share price will recover, and all will be well with the world.

Unfortunately, a poorly performing CEO and board can cause significant capital losses, but that's investing, and when all things are considered, it's not much above gambling. If we bailed out before a change of management and waited for a new CEO to prove his competence, we may have missed on huge capital gains. It's why I stick with the best of the top 10 - 20 companies, mostly in the top 10, and those paying the best dividends. They're not all going to go bad simultaneously.

I'm holding a lot of TLS I bought at $2.70 and CBA at $30.00, so the share price can take a beating before I'm suffering any real losses on my investments. The bonus is that I'm getting 13%+ dividend on my buying price of TLS, and `15%+ on CBA. It doesn't get much better than that......until TLs goes to $10.00 and CBA to $150.00!!

Edited April 18, 2015 by F4UCorsair

[bbabythai]

Banks are definitely overpriced at present. BHP is good buying at anything below $30 due to its unceasing cashflow. Any hiccups in the financial system ( e.g. Greek default, Middle East flareup ) could see the banks lose quite a bit.

There are any number of share touts around, e.g. Fat Prophets, Intelligent Investor, Motley Fool etc. They tell you all about their successes, and downplay failures. Their aim is to get you to subscribe to their newsletter products, which is where they really make their money. Ask the question - if your advice was really so good, why would you want to tell me?

Then there are the "pump and dump" advisers, who want to suck you into the 1 cent stocks while they are short-selling the same stock. Mongrels - don't give them oxygen.

Agree. The touts will overload you with a gazillion names that you could invest in and then when one of them performs that's all you'll hear about, the other hundred rubbish recommendations are never mentioned again. Here's a site to get some education for free http://www.informedtrades.com/f154/ and Google "dividend trade strategy" for some other reading about your specific interest. Dividends can remain quite stable regardless of what happens to the share price in the short term so buy good companies whose stock price have taken a beating is a good strategy because hopefully you'll collect a dividend and get the benefit of an increasing stock price (eventually) as the economic cycle brings the good times back to those companies.

i think this is a sound comment. Ive read that if you dont know what the last 5 years earnings of a company are then you are gambling...

[bazza40]

Everyone is piling in , in the hunt for yield. And I suppose with low interest rate agenda, the hunt will get ferocious. PE ratios will rise. Until the next big correction, which is inevitable. But with sensible stocks, it's not the timing as much as the time in the market.

Heard an interesting story by an ex stockbroker on a radio show. The best returns made from all the clients he had were 2 old ladies who just piled into one good stock. They just bought and bought.

During the GFC, Westpac from memory was down to $20, now worth nearly double that. So that's one good stock, except very few people remember Westpac was on its knees in the early 1990's.

It doesn't matter how good a company is, it only takes one or two CEO's to really crunch the share price with poor decision-making. Think back to BHP and its Magma Copper acquisition.

There's not much point to getting a half year ninety cent dividend out of a $36 stock ( 5% yield ) if the company's share price drops by $3-$4 on the capital invested. And PE ratios are already unsustainable.

Nobody likes seeing their capital eroded bazza, but if income stream is your thing, does it really matter if the dividend continues at 5%? Provided the company is in good shape, and often they are with no more than hysteria driving the market, the share price will recover, and all will be well with the world.

Unfortunately, a poorly performing CEO and board can cause significant capital losses, but that's investing, and when all things are considered, it's not much above gambling. If we bailed out before a change of management and waited for a new CEO to prove his competence, we may have missed on huge capital gains. It's why I stick with the best of the top 10 - 20 companies, mostly in the top 10, and those paying the best dividends. They're not all going to go bad simultaneously.

I'm holding a lot of TLS I bought at $2.70 and CBA at $30.00, so the share price can take a beating before I'm suffering any real losses on my investments. The bonus is that I'm getting 13%+ dividend on my buying price of TLS, and `15%+ on CBA. It doesn't get much better than that......until TLs goes to $10.00 and CBA to $150.00!!

All I can say is you've been lucky, skilful or a combination of both. And at those prices I agree you're very well insulated. It depends on what stage of life you're at as well. I'm primarily cash with about 10% of capital in Westpac and BHP. My thinking is with my Thai living costs, a life expectancy of 15 years and not much at risk my capital should not be seriously eroded by the time I cark it. I won't be driving a Merc or Beemer like it sounds you can afford; however, I will be living quite well - even at 2% interest on cash. And yes, I'm buying precious metals.

[F4UCorsair]

I don't think I've been either lucky or skilful bazza. My investment philosophy has always been to buy only in the top 20 companies, preferably the top 10, but my interest in miners has long gone. BHP and RIO have been good, but they're now like property to me, and I wouldn't touch them.

My big kick was when BHP dropped from $12.00 to $8.00, for no apparent reason, in about 2003. I did what I shouldn't have done, and put all my eggs in one basket, everything I owned went in, and I was hoping for a quick 50% return as it bounced back to $12.00, but I hung on and sold out at almost $50.00 in 2007, or maybe it was early 2008. I didn't see it as a gamble, and as things turned out, it wasn't.

I can afford a swish car, but why buy a depreciating asset, and I've always driven modest cars, never having had a tax deduction for a vehicle.

It sounds like we're both doing OK, and what more can one ask for?

Edited April 19, 2015 by F4UCorsair

[ghworker2010]

I recently tried a subscription to motley fool and was disappointed by the website. The authors write pure waffle. One was writing about a stock for a few paragraphs and then 3 to 4 paragraphs were written about the history of the internet. I couldnt understand what relevance this had to the first couple of paragraphs.

Im unsure but suspect that the authors of motley fool follow the major press in oz and write tips from what they read each day.

I asked for a refund...