StockTalk

Ferg suggested I post this in a new thread so it wouldn't get overlooked where it was posted which I agree was in a bit of an obscure place.

Thanks for the suggestion mate as the contents are part of a legacy of some of my knowledge I want to pass on to others.  Just for context I am eligible for super next year so this approach suits my risk profile at my age and I acknowledge there are all sorts of other ways to approach investing and others have done extremely well using complete different investing methods and younger investors by all means may want to take a higher risk approach with technology companies.  Just one correction.  Turners CAGR in dividends for the last decade is actually 14%.

Anyway, herewith is a repeat of the earlier post I made in another section of this forum.  I hope those of you that missed this post earlier find something in here that may be helpful.

Just very briefly, these are some of the key things I take into consideration with my dividend hound and value investor approach.

As I am sure you guys can appreciate with my long career as an accountant I am a numbers man and what matters most to me is earnings per share.  I believe in the long run share prices follow earnings per share, i.e. the market is a weighing machine not a voting machine.  (Ben Graham / Warren Buffet).

I put a heck of a lot of emphasis on recent past performance and the last 5 years with all the challenges over that period of Covid, the flow on effects from that and the almost endless recession here that's followed is a truly brilliant litmus test for how resilient a business is.  We may never get a better litmus test in our lifetimes.

I'm basically retired now, (although I keep my practice going on very much a part time basis and look after clients I have helped over the decades that I like, which keeps my mind active and keeps me in contact with likeable business people...complete retirement and doing no work at all is overrated in my opinion), but that won't last indefinitely and at some stage I'm looking to replace that remaining part time practice income with dividend income.  That's my focus area at present.

Looking at the last 5 years earnings per share for any company during this tumultuous period and their dividends per share gives you the perfect opportunity to test the resilience and reliability of a companies ability to continue to pay dividends.  Any company that has passed this litmus test with flying colours is worthy of further investigation...sadly there are not many on the NZX.

At my core I am a value investor, dividend hound and a show me the money sort of guy.  I want to pay as cheap as possible a price for growth companies (growth at a reasonable price).
My key filter I use is a derivative of Ben Graham's valuation formula.  I pay a no growth PE of 8.5 and then only 1 PE more for every 1% I forecast a company can consistently grow its earnings over the next 5 - 7 years.   I use the forward next years multiple, (FY26).  Ben Graham used historical PE multiple and paid up to 2 times the expected growth rate + 8.5 PE.   This deep value for growth approach sounds quite easy and prescriptive and of course it is prescriptive and rules out a vast number of growth companies on the NZX, but it ensures, as best as I can forecast it, that I am getting growth in EPS on the cheap.  Accountants are mean bastards and don't want to pay much for anything lol  The real skill here is of course determining how you think a company can grow its earnings over the next 5-7 years.  I look for factors around what are their key competitive advantages, what moat if any exists, what's driven the growth in the past and is that likely to continue into the future as well as looking at the stage of the economic cycle we are at and how that will affect earnings going forward.  How long is their runway for growth is also a key consideration.

Couple of worked examples might be useful.  HLG has a 5 year CAGR of 9%.  I believe with the runway of growth in Australia, (they have very low market penetration there with Glassons stores), they have a very long runway of growth at that sort of rate going forward.  I estimate circa 20 years.  To me this stock screens as extremely good value as its well within my valuation screening criteria.  It would be good value up to no growth PE of 8.5 + 9, 9% being the historical growth rate = FY26 PE of 17.5.  Brokers are forecasting eps of circa 76 cps in FY26 so its very good value up to 17.5 times that at $13.30 and therefore very, very deep value at its current share price of $9.  They have a very strong balance sheet with no debt and circa $1 per share in cash.  HLG is N.Z's oldest listed company and Tim Glasson has an 18% stake.  Execution with Glassons Au by James Glasson has been brilliant and he's obviously tied into the business with inheriting some of his father's stake in due course.  I have a large allocation to HLG.

Likewise Turners has grown EPS at a 5 years CAGR of 10%.  I see them doing similar for the next 5-7 years and deserving of a similar metric to HLG noted above.   My valuation screener says they're good buying up to no PE of 8.5 + 10 = 18.5.  They currently trade on a forward PE of 14.5 and are one of the  very. very cheapest GARP stocks on the NZX and have built an extraordinary track record of resilience and dividend growth over the last 5 years.  The board and management have a circa 30% stake in the business and a clear runway ahead for growth. Turners also commands a large foundational sized portfolio allocation and will be one of the key ways I enjoy growth in dividends in the future.

My view is once you start paying PE multiples over 30 for anything, you're leaving yourself wide open to that growth company disappointing you in the future.  Paying that sort of multiple or higher you're basically making the call that company XYZ is going to keep growing really fast for the foreseeable future.  This doesn't sit comfortably with my value and GARP M.O. at all.

If there's no growth its okay to me to buy a share for income if I think the company can reliably pay me a gross dividend of equal to or more than 5% above the official cash rate.  Ideally no growth companies should be on a no growth PE of 8.5, (which is the benchmark Ben Graham used) but cashflow is very much a factor here and if a company can reliably pay high gross dividends its worth owning for income provided you buy it at a good price.  Watch out for agricultural companies with wild cyclical swings in commodity prices, they're very risky, disease, pestilence, wild cyclical changes in commodity prices e.t.c.

Apart from the numbers I'm looking for what makes a business resilient.  What's their special sauce.  Watching the cash flow, are the earnings real or just on paper, how strong is the balance sheet and do senior management and directors have real skin in the game.  Overseas studies have shown where senior management / directors interests are aligned with shareholders and they have a serious stake in the business, those business's consistently outperform.

I put a hell of a lot of stock on past performance, probably 80-90% and 10-20% on what a company says they're going to do in the future..  Have management already built a track record of earnings per share over this treacherous 5 year period in business that impresses me ?  Have they earned my respect ?  I'm not really looking to take meaningful positions in companies where management might or might not earn my respect in the future.  This is a function of my age and lack of desire to invest in speculative positions.  Speculative investment should be kept under 10% of one's portfolio for someone in their semi retirement or full retirement in my opinion.

Dividend per share growth.  Its okay to keep holding companies that are paying less than OCR + 5% if they have a demonstrate-able track record of strong DPS growth, Turners a very good example, arguably the best example on the NZX.  Although the forecast FY26 gross dividend is only about 6.5%, it should keep growing at circa a CAGR of 10% per annum so only takes a couple of years to get back above OCR + 5% and after that all future growth is cream on top.

Of course there are exceptions to the above fundamental principles.  Two good examples are current significant positions in Tower and MCK.  Towner doesn't have a 5 year track record of earnings and dividends that impresses because of the extreme weather events of the summer of 2023.  Sure extreme weather like that could happen again but I believe the very high yield I am forecasting and significant changes in their business model in recent years makes this a great emerging dividend payer.  I see it as somewhat speculative and high risk so my portfolio allocation is less than 10%.  MCK is a takeover play pure and simple and I think there's an excellent chance there's another takeover attempt coming in 2026 at a significant premium to the current share price.  Index inclusion events are another favorite place this hound looks for a feed.

Watch out for certified B Corp companies and any company that runs amuck with ESG.  Any company that puts people and the planet on exactly the same footing as shareholders and spends vast amounts of management time meeting all the requirements for that...just run for the hills.   Such a company has lost sight of the very reason they exist to put shareholders interests first and foremost.  Sure, respect the environment and be fair to employees and other stakeholders but shareholders come first and I always look at a companies culture to make sure they really know what they're there for and who they are serving.

This is just a very, very brief overview of some of the key ways I go about being a value investor.  One day I might write a book but that will be years away if it ever happens.  In closing, there are many ways to skin a cat and others have done well using different approaches to mine and that's fine.  This is what has worked well for me over the years and what I feel comfortable with.  Happy to answer any questions or expand upon any topic that you want me too.

As someone who started investing late in life I have learnt a lot from reading this and the other forum over recent years.
I haven't posted previously as I don't feel I have anything to contribute.
But I can't let this post go by without saying a huge thank you to you Basil for taking the time to share your investing principles, expertise and wisdom in this very informative post.
It is much appreciated and I have learnt so much from you and the many others who regularly share their wisdom, research and thoughts. Thank you all.

Quote from: Acol on Sep 22, 2025, 11:13 PMAs someone who started investing late in life I have learnt a lot from reading this and the other forum over recent years.
I haven't posted previously as I don't feel I have anything to contribute.
But I can't let this post go by without saying a huge thank you to you Basil for taking the time to share your investing principles, expertise and wisdom in this very informative post.
It is much appreciated and I have learnt so much from you and the many others who regularly share their wisdom, research and thoughts. Thank you all.

Everyone's post is valued here. There are too many people who don't contribute anything which is evident by the lack of posts and number of guests on the site. So well done on your first post. Look forward to many more.

Welcome to Stocktalk Acol.

Great post, Basil. I first started reading your posts when I was a teenager, hard to believe that was over a decade ago now...

Thanks to your sage wisdom I'm certainly a lot better off financially now because of you. At times I went against your advice usually to my own expense but I guess some lessons need to be learned the hard way.

I hope you keep sharing your views on these forums long into your retirement!   

Locked (but not yet loaded)

(https://i.imgur.com/VRcOkAj.jpeg)

Thanks for posting, hope to see more related posts in the thread :)

Companies are worth sum of discounted cash flows. Not discounted earnings.

Distinction not necessarily that important for most companies, especially stable / no growth companies.

But...

Companies that are declining may have cash flows that exceed profit whilst balance sheet runs off.

Companies that are growing quickly may have cash flows that lag profit for a long time as they have to make investments in fixed assets, working capital etc.

Companies that are float generating have cash flows that exceed profit as they grow, for example negative working capital (supplier funding business), any model where you receive payment upfront then render the service later (customer funding) etc. And vice versa.

Thats some good insight there Basil.

On the agri comment, you could say the same about insurers, banks or infrastructure businesses really, just different cycles.  I would say rather than watch out for them, pay attention to the place in the cycle, and be sure that your investment horizon is longer than the cycle length.  In other words, ensure that you are exposed to average profitability by planning to hold for at least an entire cycle, rather than a temporary peak or trough, which you know will come, but not when.  (Unless you are a speculator)

So long as you are not totally reliant on a cyclically volatile stock, and have a sufficient mix of either cyclically offsetting (the holy grail) or sufficient less volatile stocks, bonds or deposits, there is no reason to be scared of such investments, provided that they are a well run business that management understands how to manage through the cycle, how to emerge stronger from a trough etc. (Basils track record comment)

For example, I bought some Tower a few years back when they were in the doldrums and very unfashionable.  The thinking was that they were at the bottom of the cycle, they had developed a good consumer front end attractive to the customer who wanted to control their own insurance, and they were very focused on taking on profitable business through risk pricing and avoiding the more risky business (as opposed to being open to all business).  Although they seem to have executed this strategy quite well as well as benefiting from an extended period of relatively few disasters, I have no illusions that it is only a matter of time before something unexpected happens (it is insurance after all) and the bottom line suffers temporarily.

I would restrict my comments to industries with obvious cycles, otherwise you are just trying to 'pick the bottom' which is more like speculation and more risky.  Also, pay attention to businesses facing emerging competition or changing market dynamics which might threaten their ability to ride out an industry cycle (MPG anyone?)

Keep the thoughts coming, there are quite a few of you who have plenty to say worth listening to so dont be shy.

Watch out for agricultural companies with wild cyclical swings in commodity prices, they're very risky, disease, pestilence, wild cyclical changes in commodity prices e.t.c.

I think one also has to be quite watchful of insurance companies. They get to choose how they determine the value of outstanding claims - an example is the Canterbury earthquakes where the bucket needing to be filled got bigger and bigger. On the plus side Tower is a short tail insurer.

Thanks Basil for the insight you offer into your rules.
Certainly I think I might have done a bit better with my investing journey to have been more disciplined, around sticking harder to some of my so say rules. Aside from as you say sometimes hard rules for one stock aren't quite so relevant to the merits of another company investment.

Can I please get some insight around the % amounts you run with in regards to weightings of an individual stock or asset class say to your total portfolio, to garner is it restricting to within that percentage of current SP, or more around the amount of dollars you will actively invest into BUYs?

I personally find my money psychology helps me sleep well by tending to buy the cyclical stocks at low points of the cycle and getting cash out perhaps a year or two later at high points, and think of the dividend yields ( as market sets them because I am free carrying often ) as the average of last 5 years to determine if I will continue to hold.  Hope clear, thanks.

Good thread and good discussions.

The aim of all good NZX investing is to get a return on your investments that is better than money in the bank and/or (say) NZX50 averages, KiwiSaver funds etc while at the same time minimising your risk.

The annual share picking competition is a useful tool to compare % returns for different NZX investing strategies as chosen by various of NZ's guru investors.

See the latest here; https://docs.google.com/spreadsheets/d/1BMjhgAabOBtpBYvjKytRq1d_b7oEx-HcbZZBQd0X3WU/edit?gid=0#gid=0

Thanks for your kind words folks.  We can all learn from each other and I am grateful to many for their help and their posts and insights shared over the years.

Quote from: Otago K on Sep 23, 2025, 07:12 PMCan I please get some insight around the % amounts you run with in regards to weightings of an individual stock or asset class say to your total portfolio, to garner is it restricting to within that percentage of current SP, or more around the amount of dollars you will actively invest into BUYs?

Sure mate. I think the guys at Discovery are pretty smart and their rule is no more than 10% to any one stock at cost price.  How far they let their winners run is something that I think is a closely guarded commercial secret.  Textbook investment theory suggests that with stock selection you need 13 different companies in completely different industries to achieve effective risk lowering diversification, (apart from portfolio allocation to other investment classes like property, bonds, and alternative assets like precious metals). Any financial planner worth his salt will ensure their clients have a proper sized allocation to overseas assets, bonds, property and alternative assets classes according to their investment objectives and risk tolerance....but portfolio allocation is probably best left for another thread sometime and is very much client specific.  For example, someone in their twenties might have very different asset allocations that someone in the eighties.

I stick to Biblical principles when it comes to diversification.  The Bible tells us:-

QuoteEcclesiastes 11:2
Key Verses on Diversification
Ecclesiastes 11:1-2: "Cast your bread upon the waters, for after many days you will find it again. Divide your portion among seven, or even eight, for you do not know what disaster may befall the land."
This verse encourages taking prudent actions with resources and spreading them across multiple ventures to safeguard against potential misfortunes. It highlights the unpredictability of life and the wisdom in diversifying investments to ensure stability

In a perfect world it would be easy to find more than 8 very high conviction investment positions but that's easier said than done and for those with a moderate / high tolerance to risk, 8 high conviction positions may give a better long term return than a broadly diversified investment portfolio provided you are very skilled with your selections and monitor them very closely.

One seventh of my portfolio at cost price is generally my limit for a very high conviction position, i.e. 14.3% but there have been very rare times where I was so sure of the investment case I have gone well beyond that for a short period of time.  For example, pending index inclusion with Turners a while back was one of those occasions but I have subsequently rebalanced my portfolio and its in the mid teens now as a percentage of my portfolio, most of which is free carry.

How far do I let something really successful run ?  Generally if something performs really well and gets to ~ 20% of my portfolio I'll pause for thought and usually rebalance.  Work in progress for me, (probably when I turn 65 next year), is to let go of control of so much of my portfolio.  Investing about one third - 40%, (yeah I know its not a lot because I have control issues...none of us are perfect, certainly not me lol), with some good fund managers overseas which will free up more time.  I might move that up to 50% with ETF's and fund managers at some stage in my late 60's.

Hi,

What are the thoughts on shares such as BRM which have a decent & predictable PIE return. Apart from a big spike & drop they have been relatively consistent in SP (no growth to speak of)?
I understand the gains of a growth AND div stock, but I am currently after income primarily.

I have concerns over the likes of Temu / whatever the other one is called eating in to the future HLG market as more people get comfortable with online, and the much lower prices make it more worthwhile. Doesn't look like that is happening currently though?

Quote from: SmallSteps on Sep 27, 2025, 12:40 AMHi,

What are the thoughts on shares such as BRM which have a decent & predictable PIE return. Apart from a big spike & drop they have been relatively consistent in SP (no growth to speak of)?
I understand the gains of a growth AND div stock, but I am currently after income primarily.

I have concerns over the likes of Temu / whatever the other one is called eating in to the future HLG market as more people get comfortable with online, and the much lower prices make it more worthwhile. Doesn't look like that is happening currently though?

Not really personally going to fully address your questions, suspect there maybe other's more articulate to address say the use / merit of a suitable BRM long term investment strategy that can also see very real personal portfolio gains.

Temu and HLG customer bases shouldn't be confused as overlapping, as would I contend the lifetime use / perception of the quality of product (think Temu one time wear in this matter I suggest.) At the risk of being even more derogatory I would say anything sourced through TEMU might at a distance seem to be of some quality but it will degrade quickly, and having shown how a great value duvet sourced from Temu rather than one from WHS burned I wouldn't want to have much of Temu product in my vicinity if a fire was to occur. The person who once held a contra view to Temu being a bad value proposition couldn't endure the toxicity of fumes arising even if they still denied it was way too flammable.

Thanks Basil,  I bought HLG at an average price of $5.78 I now find it difficult to buy more shares in the company @ $9, in a similar position with CEN and TRA

Quote from: FatTed on Sep 27, 2025, 10:12 AMThanks Basil,  I bought HLG at an average price of $5.78 I now find it difficult to buy more shares in the company @ $9, in a similar position with CEN and TRA

From a behavioral psychology standpoint, it's easier to average down than up (buying more of a stock as its price increases.) Averaging up feels counterintuitive but it is actually a much more rational strategy.  Our psychological hurdles make it feel unnatural. It's because it flies in the face of the desire to get something for as little as possible. As consumers we've become super conditioned to seeking discounts and sales. Buying more of something for a higher price feels contradictory to this ingrained behavior.  To average up, you have to acknowledge that the stock was even better than you thought it would be, or that you could have bought more sooner. It requires celebrating success, not trying to fix a past 'mistake'. Well that's my unqualified cod -psychological take on it on this lovely spring morning!

Quote from: SmallSteps on Sep 27, 2025, 12:40 AMWhat are the thoughts on shares such as BRM which have a decent & predictable PIE return. Apart from a big spike & drop they have been relatively consistent in SP (no growth to speak of)?
I understand the gains of a growth AND div stock, but I am currently after income primarily.

I have been a BRM shareholder and am presently only a warrant holder.  They had built a track of matching the benchmark sector after fees up until 2024, i.e. you get benchmark returns and the cost of running the fund is covered by their outperformance but performance in 2025 has been extremely disappointing.  I will be hounding Robbie Urquart the investment manager at this years annual meeting for an explanation and asking him why he persists with some of his losing picks and pays exorbitant PE ratio's for some of his picks with modest growth. 

Before 2025 I would have said, great returns and they match the index so the 8% tax free PIE distributions are an ideal way to boost income.  As you've quite rightly noted, there has been little growth, (10 years ago the share price was 66 cents) so its all about the income.  While 8% tax free is fabulous, keep in mind it hasn't grown so income in real terms from capital invested has diminished significantly, as has the value of your original investment.

How big a factor this is will vary from one investor to another.  Inflation has really surprised since Covid and I did an exercise recently for a client and he was shocked that the cumulative effect of inflation since covid hit was 23%.  Even if inflation can be contained to say 2.5% in the years ahead, someone entering retirement now at 65 and investing say $100K into BRM and getting $8K income, the compound effect of 10 years of inflation will see the costs of goods go up 28%, rates and insurance are sure to increase much faster than that, so that $8,000 isn't going to go as far in the future.

There's a fair bit of evidence that retirees spend less in their latter years, one retirement commentator I have observed calls the 65-75 year range as the go-go years where retirees travel and spend a lot, and the 75-85 range the go slow years, wherein they spend a lot less so the likely reduction in spending power over time from an investment in Barramundi may not be as concerning for many.

Finally, its well worth noting that many other PIE funds allow regular withdrawals which you can set up when you invest.  I suggest say half a percent per month, (6% per annum) and if the fund is performing at say 10% per annum average that allows some of the income to be reinvested for growth to cover inflation.

Maybe use the same diversification principle I've noted above and have no more than 14% in any one fund.

I think Otago K has made the point well and Temu probably serves a different sector of the market.
Its very important with income investing to not just focus on the current return but to think about how its going to grow over time.

Maybe a worked example best illustrates this.  When I first bought into HLG at $2.70 in August 2016, ironically enough I only ever invested for income.  They had built a very, very long and stable track record of paying excellent dividend returns and as you can see from the 2016 annual report here file:///C:/Users/user/Downloads/3367_HG_Annual_Report_2016_FINAL_WEB.pdf , see page 3 were paying 30 cps in dividends, fully imputed, worth 30 / 0.72 = 41.7 cps gross.  41.7 / 270 = 15.4% gross return.
I'd be happy as a pig in mud collecting those dividends forever and a day, and I figured with their very long history I could rely on them.  Little did I realise that James Glasson was about to start driving growth with Glassons Au and sales there have grown from $41.2m in 2016 to $251.5m in FY25, that's a 9 year CAGR of 22.3% !  That's transformed the company from a no growth mainly N.Z. operation to a strongly growing Australasian company which now has more than 53% of its sales with Glasson's Au.

The share price has more than tripled and dividends have grown nicely.  To be honest, I faced a barrage of criticism on the other forum about this strategy.  All sorts of people told me that Zara for one and many others were suggested, in fact a whole host of other overseas retailers would destroy Glassons market share.  Its never happened and their market share in Australia continues to grow very strongly.

At the core of my belief is that the target market, women in the 13-30 year's demographic want to inspect the clothes for themselves, feel the fabric and check the fit and most importantly of all, try the garments on so they can be sure they look their best.  For many, the ethical ESG approach Glassons take is also important.  Aside from that is the joy of going out shopping and shopping in a friendly, modern welcoming environment.  The times I have gone into Glassons stores to buy gift vouchers for my kids and now grandkids, I have been very impressed with the stores and how friendly and welcoming the store manager has made me feel.  The modern stores that are well lit, well laid out, welcoming staff and mid price point are some of their key attributes.  Keep in mind Hallensteins can trace its roots back 149 years https://shareinvestornz.blogspot.com/2010/06/history-of-hallenstein-glasson-holdings.html#:~:text=His%20first%20store%20opened%20in%20the%20Octagon%20in,and%20in%20Wellington%20and%20Oamaru%20the%20year%20after. and Glassons started in 1918, 107 years ago.  Imagine all the challenges both brands have withstood over the years.

Quote from: Hectorplains on Sep 27, 2025, 10:29 AMFrom a behavioral psychology standpoint, it's easier to average down than up (buying more of a stock as its price increases.) Averaging up feels counterintuitive but it is actually a much more rational strategy.  Our psychological hurdles make it feel unnatural. It's because it flies in the face of the desire to get something for as little as possible. As consumers we've become super conditioned to seeking discounts and sales. Buying more of something for a higher price feels contradictory to this ingrained behavior.  To average up, you have to acknowledge that the stock was even better than you thought it would be, or that you could have bought more sooner. It requires celebrating success, not trying to fix a past 'mistake'. Well that's my unqualified cod -psychological take on it on this lovely spring morning!

Brilliant, its so nice to see you back making contributions...that's one of your very best.  I bought more HLG at $8.95, not really celebrating my success, maybe I should be ?, but simply because the metrics are  compelling, (I think its Australasia's cheapest growth story) and I think they have only just hit critical mass with Glassons Au and have a massive runway for growth there over the next ~ 20 years.  Additionally you get paid really well with dividends while it grows strongly and that makes it a perfect dividend hounds stock just like Turners. 

Quote from: Basil on Sep 27, 2025, 11:08 AMBrilliant, its so nice to see you back making contributions...that's one of your very best.  I bought more HLG at $8.95, not really celebrating my success, maybe I should be ?, but simply because the metrics are  compelling, (I think its Australasia's cheapest growth story) and I think they have only just hit critical mass with Glassons Au and have a massive runway for growth there over the next ~ 20 years.  Additionally you get paid really well with dividends while it grows strongly and that makes it a perfect dividend hounds stock just like Turners. 

Hika, thanks for the kind words! My best capital destruction has been  through averaging down.   I took awhile to me to twig (my wife will tell you that is my strongest character trait) but the odds on this strategy are poor. Hey, it might work for smarter folk than me but I'd take a really compelling case for me to engage in the practice. 

Quote from: Hectorplains on Sep 27, 2025, 10:29 AMFrom a behavioral psychology standpoint, it's easier to average down than up (buying more of a stock as its price increases.) Averaging up feels counterintuitive but it is actually a much more rational strategy.  Our psychological hurdles make it feel unnatural. It's because it flies in the face of the desire to get something for as little as possible. As consumers we've become super conditioned to seeking discounts and sales. Buying more of something for a higher price feels contradictory to this ingrained behavior.  To average up, you have to acknowledge that the stock was even better than you thought it would be, or that you could have bought more sooner. It requires celebrating success, not trying to fix a past 'mistake'. Well that's my unqualified cod -psychological take on it on this lovely spring morning!

Apologies if this sounds to diminish the validity of your averaging up logic expressed but I do have a hesitancy to blindly adopt a traditional dollar cost averaging approach to investing into a particular stock, if I see it has value at the time I will continue, but cease if I think it is a bit overvalued by Mr Market. Just had your subsequent post hit the thread, it really is I take it you say a question of de-personalising the decision to BUY more or not I find: a consequence of a human ego.
FSF for me was an over-weighted option to buy in the past years now long past, but looking forwards I would struggle to be a buyer at present, not to say that Mr Market will not likely reward new investors, but I need not consider further FSF investment. discl a current seller despite holdings being free carried, partly due to for me the current portfolio value % of my holding is rather high, and also I think the chances of a lower dividend in the next trading season is heightened.

Quote from: SmallSteps on Sep 27, 2025, 12:40 AMHi,

What are the thoughts on shares such as BRM which have a decent & predictable PIE return. Apart from a big spike & drop they have been relatively consistent in SP (no growth to speak of)?
I understand the gains of a growth AND div stock, but I am currently after income primarily.

I have concerns over the likes of Temu / whatever the other one is called eating in to the future HLG market as more people get comfortable with online, and the much lower prices make it more worthwhile. Doesn't look like that is happening currently though?

Once BRM and the other fisher funds were no longer default kiwisaver products, I realised it was that fact that was "propping" them up. Now i may be wrong, I usually am, but it seems to me historically that ever since that announcement BRM and others have performed poorly.

Quote from: Otago K on Sep 27, 2025, 12:00 PMApologies if this sounds to diminish the validity of your averaging up logic expressed but I do have a hesitancy to blindly adopt a traditional dollar cost averaging approach to investing into a particular stock, if I see it as value at the time I will continue, but cease if I think it is a bit overvalued by Mr Market. Just had your subsequent post hit the thread, it really is I take it you say a need of de-personalising the decision to BUY more or not I find: a consequence of a human ego.
FSF for me was an over-weighted option to buy in the past years now long past, but looking forwards I would struggle to be a buyer at present, not to say that Mr Market will not likely reward new investors, but I need not consider further FSF investment. discl a current seller despite holdings being free carried, partly due to for me the current portfolio value % of my holding is rather high, and also I think the chances of a lower dividend in the next trading season is heightened.

Absolutely, I'm not advocating for blindly averaging up :)

On FSF, I agree also with your point about portfolio weighting and dividend risk as good reasons to trim.  As was Basil's early point about FSF being a cyclical stock and around the top of the cycle.

Quote from: Cod on Sep 27, 2025, 01:42 PMOnce BRM and the other fisher funds were no longer default kiwisaver products, I realised it was that fact that was "propping" them up. Now i may be wrong, I usually am, but it seems to me historically that ever since that announcement BRM and others have performed poorly.

Performance is dependent on your goal.  If  you are only after dividends - 8.39% is pretty hard to beat with basically no tax deducted. And its quarterly.  And the DRIP price is a fair bit lower than the price on the day.
What BRM is not is a dividend growth stock like say TRA -  I am not buying BRM for share price appreciation - i'm buying with profits I make from growth stocks.

Quote from: HAWKDOG on Sep 28, 2025, 09:45 AMPerformance is dependent on your goal.  If  you are only after dividends - 8.39% is pretty hard to beat with basically no tax deducted. And its quarterly.  And the DRIP price is a fair bit lower than the price on the day.
What BRM is not is a dividend growth stock like say TRA -  I am not buying BRM for share price appreciation - i'm buying with profits I make from growth stocks.

Thanks everyone for the info (esp. Basil for the clear reasonings), I've learnt a lot quite quickly! I compared BRM with a bank term deposit, so in my over simplistic way 8%+ on a relatively safe investment was much better than a bank deposit, and assuming the share price doesn't go down, inflationary impact is the same between the two (with added benefit of Warrants). I'm kind of similar to you, but back to front as in I don't have much in the way of growth shares, so was looking at investing a chunk of the divs from BRM into growth shares from this point on.
I have been on this site and the other for a while, so was interested to get current opinions on BRM and the other stocks. Definitely looking into HLG / TRA / maybe Tower. It's not a vast sum, but will add up over time. I'm not a trader, just buy and hold unless something compels me to sell (e.g. WHS).

Ok so one thing about BRM I have some trouble getting my head around - you are essentially paying a huge management fee for stocks that are all publicly listed?

For instance in the last 2 financial years the dividends BRM received from the companies it invested in, were basically fully consumed by the management fees and associated costs of running BRM.

For example:

2025:
Dividends received from its investment portfolio: $4.266m
BRM operating expenses: $3,990m

2024:
Dividends received from its investment portfolio: $3.839m
BRM operating expenses: $4.104m



The dividends being paid to BRM are coming from selling down investments and/or warrants being issued.

One would instead have dramatically better performance if they instead just purchased the same investments they list in their investment holdings.

In the latest BRM annual report they have a chart showing total return from October 2006. Starts at $1, and today the total return including dividends is worth $3.

By comparison the S&P500 total return (including dividends) over that same period is $7.56.

https://barramundi.co.nz/documents/nav/mktupdte-brm-brm-december-2024-quarterly-newsletter-436320.pdf
This unpacks a bit more about what I was talking about earlier.  2025 has been a shocker for BRM but if we have a look at the ten years before that, we see in the five years to 31 December 2024 their gross return was 13.6%, NAV to NAV return 11.1% and the benchmark was 9.0% so they outperformed the benchmark after fees and tax.

https://barramundi.co.nz/documents/nav/mktupdte-brm-barramundi--december-2019-quarter-newsletter-315574.pdf
In the five years before that to 31 December 2019 their gross return was 14.4%, adjusted NAV to NAV return after fees was 11.0% and the benchmark was 11.5% so they came very close to matching the index after fees and tax.

Overall, over the 10 years to 31 December 2024 they outperformed the benchmark index after fees and tax.

2025 has been such a shocker the question presents, do you throw the baby out with the bathwater or hope that after a short period of underperformance, they might outperform ?  The jury is out and they need to outperform between now and August 2026 to make me inclined to exercise my considerable holding in BRM warrants.

I for one don't think comparing Australian performance with the S&P adds anything to this thread.  People will make their own decisions about asset allocation and many will already have exposure to US markets which are trading at record ever metrics, especially the tech sector.

Owning the underlying shares yourself for many is an option, for others, they are happy with a simple approach with the 8% per annum PIE distributions and regular warrant issues.  Horses for courses, whatever you're more comfortable with.  I tend to only buy BRM when they're at a reasonable discount to NAV, such as 6% or more and I think that, together with my experience in valuing the warrants and taking advantage of mispriced opportunities there as they occur from time to time, keeps me interested in the company but as mentioned before, I consider FY26 to be a "show me your investment methodology works" year or I will have to consider alternative Australian strategies going forward. 

One question that I am unsure about is if they are a true "buy and hold" company (in which case the fees look high) or if they also short-term trade a bit in some of their holdings (e.g. F&P)? I'm sure that someone is smart enough to work it out given the nta,SP and declared dividends?
(oops - this was in realtion to KFL not BRM - but the same question applies to BRM e.g. with their Xero holding)?

Quote from: LaserEyeKiwi on Sep 29, 2025, 11:16 AMOk so one thing about BRM I have some trouble getting my head around - you are essentially paying a huge management fee for stocks that are all publicly listed?

For instance in the last 2 financial years the dividends BRM received from the companies it invested in, were basically fully consumed by the management fees and associated costs of running BRM.

For example:

2025:
Dividends received from its investment portfolio: $4.266m
BRM operating expenses: $3,990m

2024:
Dividends received from its investment portfolio: $3.839m
BRM operating expenses: $4.104m



The dividends being paid to BRM are coming from selling down investments and/or warrants being issued.

One would instead have dramatically better performance if they instead just purchased the same investments they list in their investment holdings.

All good points.
Its possible you could make better performance purchasing all the same investments - one would have to go thru the exercise of determining the trading costs of buying them, what the dividend withholding tax level is and the cost of reinvesting those dividends (sharesies is pretty cheap if you pay the montly $15 fee).  Good exercise for someone smarter than me.

Also I would have to spend time monitoring all those stocks.
I would much rather spend that time looking for potential multibagger spec stocks where returns are >100%

I have a couple S&P 500 ETFs in the mix but really trying to get my divi yield up. The FIF rules definitely hinder this process.

1.  "Dollar cost averaging" is an old theory that was developed for mutual fund investors - the forerunner to today's passive index funds, super funds, and ETFs.  Its about regularly putting your savings into the market (aka managed fund) and taking advantage of the power of compounding over long periods of time.  It is NOT about buying more of an individual stock as the price falls, or rises.  Do not confuse the rules for passive investing, with those for active investing.  

2.  As you all should know by now, DO NOT BUY SHARES IN A DOWNTREND.  This one act is responsible for the vast majority of portfolio destruction.  When it comes to an individual share, you cannot dig your way out of the hole like an index fund can, if its in a downtrend there is usually a fundamental reason as to why.  It won't just "come right" like an index does (because an index simply replaces all the loser stocks with winner stocks every 3, 6 or 12 months).  An index will never go bankrupt, while a company often does.

3.  The trend is your friend until the end.  This means stick in the stock until the trend changes.  Then sell it, and buy something else that is in an uptrend.  Do not give all your profits back to the market once the stock starts a downtrend.  Do not sell based on some random "valuation" metric that you have in your head - the market is irrational and great stocks will always go up way past any fundamental "value" that is placed on it.  This is because prices are determined by future expectations, not past performance.  How do you value the next 5 years of revenues and profits?  You usually cant, and the human tendency towards optimism means the share price will keep going up until the company reaches the point where those expectations start to become more certain (at which point the share price will then collapse back to earth due to market disappointment).

4.  Buy more of a stock that is going up at a rate that is outperforming the general market.  This is how you get rich.  Owning shares of the market's very best stocks.  Likewise, exit quickly the stocks that start losing you money.  Dont sit on losses waiting "to be right".  You may be wrong, or you may be too early which is the same as being wrong.   This is also known as "water your flowers, and pull your weeds".

Thanks for your excellent points KW.
For those that are interested.  My thoughts on those matters are:-

Point 1. Compound growth has been described as the eighth wonder of the world.  Never underestimate the power of it.  The earlier most working investors can start making meaningful contributions to a high growth Kiwisaver fund the better.  Dollar cost averaging works extremely well for high growth funds over a long period of time.  Young people would do well to find a high growth Kiwisaver fund and contribute more than the statutory minimum of 3%, suggest at least 5% of earnings.

2. Agree. Buying shares in a downtrend is a very, very dangerous game even if the fundamental's are compelling.  I only ever do it these days if the fundamentals are truly compelling, I am 110% sure of my conviction on a stock and even then, apply a very modest amount of capital gradually averaging into a new position.  Put simply, swimming against the tide is bloody hard work and swimming with it is almost always far more rewarding.

3. My approach outlined in the opening post of this thread is to find stocks which offer compelling value and generally, with very rare exceptions, only ever buy them in an uptrend.  The big gains I have made over the years are when something is a screaming bargain in terms of its fundamental's but also has started an uptrend.

4. Where KW who is a great and highly successful investor in her own right, and I differ is I will only keep buying in an uptrend while the fundamental's remain compelling.   KW more a momentum trader whereas I very rarely buy on momentum only, other than for the speculative part of my portfolio, (not more than 10%).  Very rare I buy shares with no fundamental's at all but I acknowledge some pure momentum traders have done extremely well over the years which brings me full circle to a point I made in the opening post of this thread.  There's more than one way to skin a cat.

I guess in terms of the BUY in question to a trend, I try to hesitate chasing a train that seems to have left the station so to speak, certainly in a down trend I will await till things settle and consider to BUY at that time, always want a sense of fundamentals to justify as I always look towards holding a stock for a few years if not longer.
Tend to be willing to hold a lower quality stock than Basil would if I consider the value is sufficiently compelling while knowing it is what it is, and perhaps tend to have a longer term time frame allowance for it to rectify. Mid term I am aiming to get this category towards being free carried on my invested funding.
That said in recent times as I feel more financially comfortable I have noticed I have developed a tendency to BUY in initial uptrend while I take time to assess the fundamentals to justify investment, if I suspect Mr Market will give me a likely out at no loss, last time on BRW which I sold down to free carry a minimal holding a few weeks after taking an initial position. Not that I would consider BRW any sort of dividend holding, so example off topic somewhat.

Quote from: Basil on Sep 29, 2025, 09:21 PM4. Where KW who is a great and highly successful investor in her own right, and I differ is I will only keep buying in an uptrend while the fundamental's remain compelling.  KW more a momentum trader whereas I very rarely buy on momentum only, other than for the speculative part of my portfolio, (not more than 10%).  Very rare I buy shares with no fundamental's at all but I acknowledge some pure momentum traders have done extremely well over the years which brings me full circle to a point I made in the opening post of this thread.  There's more than one way to skin a cat.

I was looking at the history of Broadcom this morning (AVGO) and it went from a market cap of $77B in 2015 to $1.5T as of today.  Would the fundamentals have justified buying it all the way up?  Most likely not - its on a current P/E of 84 lol.  But there is a lot of money to be made from continuously buying a stock like that.  It went from $13 to $375.  Stocks are like sports - winners keep winning (until they get old and retire, also like a stock)

My point is that dont let "valuation" keep you out of a stock, or stop you from buying more of it.  Big winners will always look expensive and over valued.  I remember a poor sod many years ago who insisted that ATM/A2M was worth 50c when it was about $2.50.  The stock ran to $20.  He really missed out on one of the very few big winners on the NZX as a result. 

PME is one of the big ASX winners, running from $2.30 in 2015 to $336 this year.  Everyone has always scoffed at how over priced it was.  Anyone could have jumped on that bullet train, and gotten on at any of the stations along the way.  Its stil ridiculously expensive, and still "over valued" (P/E of 274).  But the millionaires who rode that train wont be caring much lol

Quote from: KW on Sep 30, 2025, 12:35 PMI was looking at the history of Broadcom this morning (AVGO) and it went from a market cap of $77B in 2015 to $1.5T as of today.  Would the fundamentals have justified buying it all the way up?  Most likely not - its on a current P/E of 84 lol.  But there is a lot of money to be made from continuously buying a stock like that.  It went from $13 to $375.  Stocks are like sports - winners keep winning (until they get old and retire, also like a stock)

As the thread title suggests, I'm a value investor so that doesn't fit my M.O.   Are we in tech bubble territory ?  I prefer not to speculate on the answer to that question or invest and take the risk the answer might be yes.  FWIW I'm getting a real year 2000 tech bubble sense from the US tech sector.  I feel zero sense of FOMO.

Quote from: LaserEyeKiwi on Sep 29, 2025, 11:24 AMIn the latest BRM annual report they have a chart showing total return from October 2006. Starts at $1, and today the total return including dividends is worth $3.

that's an annualised rate over 19 years of 5.95%

I see no problem with buying in a downtrend provided that you understand very well what is behind the downtrend and are confident in your assessment of the (positive) fundamentals and prospects of the business, and are prepared to be patient ie. you have a long-term horizon  In the lightly traded domestic market I have seen numerous examples of stocks that somehow became unfashionable and drifted downwards from lack of investor interest.  Sometimes for good reason, sometimes not.  Oftentimes there was a majority consensus on chat boards like ST that they were dogs, it was a falling knife, they were heading to zero etc. With at least one besieged contrarian, who was occasionally right. So keep an open mind.

All else the same, the recommendation never to buy in a down-trend and only buy in an up-trend has some logic, as you avoid fighting gravity in the short-term.  But a good business getting sold down due to temporary negative sentiment will always be a good buy, even if you have to wait, as market insanity can last years.

HP's comments on the behavioral psychology of wanting to buy on the cheap and reluctance to buy in after a run are very good.  Personally I do not watch my investments day-to-day, or keep front of mind what I bought in at.  I generally just check in when it comes time to buy or sell, and make the optimal call at that time based on whatever the market tells me my shares are worth today.  It seems to me that frequent agonising over stock prices makes you more wedded to individual picks than is healthy, so unless and until you have a buy or sell decision to make, you may as well save yourself the mental anguish of a hundred ups and downs and put your energy into something more rewarding.  Speaking as an investor anyway.

Disclosure, I have had success and failure buying in both down trends and up trends, cutting losses and letting stocks run.  The most success has been with least emotional or snap decisions, so dont discount that factor.

Likewise I have had great success with buying good companies on sale due to some market freakout that had nothing to do with underlying company fundamentals. Inevitably if it's a good company with good fundamentals trading at an abnormally low valuation multiple then you are going to be rewarded most of the time if you have patience.

Quote from: Popeye on Sep 30, 2025, 04:22 PMAll else the same, the recommendation never to buy in a down-trend and only buy in an up-trend have some logic, as you avoid fighting gravity in the short-term.  But a good business getting sold down due to temporary negative sentiment will always be a good buy, even if you have to wait, as market insanity can last years.

The problem is that time is your enemy with beaten down stocks.  Sure, the stock might bounce back and return 50%.  Great, you say.  "See buying in a downtrend works"  But if it takes 10 years to get that 50% then you only got 4.14% per annum before inflation - you could have done better putting your money in the bank. 

Meanwhile, I'm sure you could have found a dozen stocks that delivered 10% plus gains each year, in that 10 years.  And if and when that beaten down stock returned to the land of the living and delivered that 50% return, you could have just bought it when it started to go up.  Skip the years in the middle. 

Quote from: LaserEyeKiwi on Sep 30, 2025, 05:59 PMif it's a good company with good fundamentals trading at an abnormally low valuation multiple then you are going to be rewarded most of the time if you have patience.

With the exception of the bottom of a bear market, a good company with good fundamentals will never be trading at an abnormally low valuation.  If its doing that, it means that there is something seriously wrong with it.  Look at all the people who got burnt on Ryman and Spark thinking it was "a good company trading cheap"

If it is the bottom of the bear market, then indeed, buy everything.  But in a bull market, good companies go up in price.  Bad ones fall. 

Quote from: KW on Sep 30, 2025, 06:30 PMThe problem is that time is your enemy with beaten down stocks.  Sure, the stock might bounce back and return 50%.  Great, you say.  "See buying in a downtrend works"  But if it takes 10 years to get that 50% then you only got 4.14% per annum before inflation - you could have done better putting your money in the bank.

Meanwhile, I'm sure you could have found a dozen stocks that delivered 10% plus gains each year, in that 10 years.  And if and when that beaten down stock returned to the land of the living and delivered that 50% return, you could have just bought it when it started to go up.  Skip the years in the middle.

That is a valid point.  Sometimes the market is very slow to change its mind, whether on the upside or on the downside.  I remember mistertea arguing long and persuasively that the market had got SKT wrong, in the end even he lost patience and waved the white flag (he should have had more patience!).  There were a few in 2020 that tanked and turned around very quickly, so there are short and sharp turnarounds when people lose their sanity then recover in short order....

Quote from: Basil on Sep 30, 2025, 12:44 PMAs the thread title suggests, I'm a value investor so that doesn't fit my M.O.  Are we in tech bubble territory ?  I prefer not to speculate on the answer to that question or invest and take the risk the answer might be yes.  FWIW I'm getting a real year 2000 tech bubble sense from the US tech sector.  I feel zero sense of FOMO.

Dont' be this guy.  He though NVDA stock was in a bubble in Feb 2018.  When it was $5.80 (the stock split adjusted price)
https://www.investopedia.com/news/nvidia/

That illustrates my point.  People get some valuation idea in their heads, and it keeps them out of the very best stocks in the market.  Instead they buy some dog of a stock that looks cheap, which then loses a further 90% of its value or goes to zero.

Quote from: KW on Sep 30, 2025, 06:37 PMWith the exception of the bottom of a bear market, a good company with good fundamentals will never be trading at an abnormally low valuation.  If its doing that, it means that there is something seriously wrong with it.  Look at all the people who got burnt on Ryman and Spark thinking it was "a good company trading cheap"

If it is the bottom of the bear market, then indeed, buy everything.  But in a bull market, good companies go up in price.  Bad ones fall.

That is simply not true - good companies trade at abnormally low valuations often.

Quote from: KW on Sep 30, 2025, 06:30 PMThe problem is that time is your enemy with beaten down stocks.  Sure, the stock might bounce back and return 50%.  Great, you say.  "See buying in a downtrend works"  But if it takes 10 years to get that 50% then you only got 4.14% per annum before inflation - you could have done better putting your money in the bank.



I think might have missed Laser's point in his comment.  Stocks do go on sale outside of bear markets.  Liberation day is classic example.  Skellerup for example dipped below 4 bucks in April and has bounced back over $5.   I think apple stock dipped recently as well due to lawsuit - but they won and the stock went back up. 

As you pointed out the market can be irrational and over react both up and down - good stocks go on sale when investors over react to the downside.

Be good to start another thread on investing strategies as this thread was originally for dividend stock discussions.

Liberation Day was the bottom of a bear market, which started in Jan/Feb and ended in April. 
(Note: market going up = bull, market going down = bear.  % moves are irrelevant, only direction)

Screenshot 2025-10-05 162501.png

Some good stuff in here to try and wrap your head around.
https://www.sloww.co/psychology-of-money-book/

Thanks Basil,
Enjoyed this one - "Stories are, by far, the most powerful force in the economy. They are the fuel that can let the tangible parts of the economy work, or the brake that holds our capabilities back."

"The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true."

Thank you Bev for highlighting the most important part of that article.
Investors by and large are an optimistic bunch, they want to believe the story a company tells them is going to come true.  The sad fact is that a lot of inexperienced investors only read the Chairman and CEO's story in the annual report, look at the glossy pictures and that's it.  This is analogous to "drinking the company cool aid" without trying to figure out if its going to be good for your financial health.

Every Chairman and CEO wants to tell a good story to impress their investors and justify their pay, its just basic human nature we're talking about here.

Sadly, far too often, the stories told and the earnings per share simply don't line up.  I call this corporate B.S. and its widespread.  In my book companies are either "making results or making recipes"  Recipes are a combination of excuses about past performance and stories about how the future is going to be so much better. 

Management often stir into their recipes a mixture of how their performance by metrics other than earnings per share show tremendous growth, e.g. sales growth, asset growth, in some cases earnings growth, (without mentioning its on a vastly expanded number of shares on issue), ESG accomplishments, health and safety accomplishments, staff engagement and satisfaction, customer satisfaction and so on.  All of these things are important to varying degrees but what's most important of all is are earnings per share growing, stagnant or going backwards.

I would reiterate this from my opening post in this thread.
I put a hell of a lot of stock on past performance, probably 80-90% and 10-20% on what a company says they're going to do in the future..  Have management already built a track record of earnings per share over this treacherous 5 year period in business that impresses me ?  Have they earned my respect ?

I would add that some companies have earned a reputation as a "show me" story where they have obfuscated things and talked so much corporate B.S. in the past, its best to simply ignore their story altogether and put 100% emphasis on past earnings per share.  Until they can prove otherwise with increased EPS, treat them solely on past performance.     OCA wins my Beagle wooden spoon award for being the best example of a show me story.

Well said Basil.

Thanks for the thread Basil and also the link to the article per your post #45.  The author of that article, Morgan Housel, is on the Board of Markel (NYSE: MKL) which is like a mini / early stage Berkshire Hathaway.

I agree with your approach and comments and I want to add 2 more 'rules' or principles I abide by when selecting good stocks and good dividend yielding stocks.

1) Warren Buffett's rule #1 : never lose money...this can't be helped sometimes but keeping this in mind forces me to ignore feelings of FOMO, avoid what I call 'gambling' on stocks, and to do my own research.  I focus on the same things as you.....EPS growth, dividend sustainability, financial health, status of the relevant business sector etc.

2) Warren Buffett said this in a shareholder address in 1997: "Would I be happy buying this stock if the market closed for five years?".  I take this view nowadays.....if I had to ignore a stock's daily SP movements for 5 years, would I be comfortable owning that stock that long?  If the answer is 'no' then either I'm not buying (because that would be gambling on getting out before others) or I'm selling it and replacing with others that I am happy to hold for 5 years.  WB went on to say this: "Because then you're buying a business if you say yes to that. If you don't say yes to that, you may not be focusing on the proper thing."

Doing this has transformed my portfolio and "liberation day" per KW's post provided fantastic buying opportunities.  Bring on another 'liberation day' event please......

But then everything in  moderation, including application of the rules, so I have <5% in 'fun' stuff.

Source: https://acquirersmultiple.com/2024/12/warren-buffetts-mindset-would-you-hold-this-stock-if-the-market-closed-for-5-years/

Quote from: KW on Oct 05, 2025, 04:25 PMLiberation Day was the bottom of a bear market, which started in Jan/Feb and ended in April. 
(Note: market going up = bull, market going down = bear.  % moves are irrelevant, only direction)

Screenshot 2025-10-05 162501.png

Define it how you will - Liberation day was single event. 

Based on the arrow on your chart you identify the bear market as March 25  to April 25 - that's a correction IMO not a bear market.  Market overreaction which quickly corrected.

Quote from: HAWKDOG on Oct 06, 2025, 03:44 PMDefine it how you will - Liberation day was single event. 

Based on the arrow on your chart you identify the bear market as March 25  to April 25 - that's a correction IMO not a bear market.  Market overreaction which quickly corrected.

I define it as a bear market as it was a clear technical break down and a change in trend (and it was Feb-Apr, or Dec-Apr if you look at the Dow and Nasdaq).  A "correction" is a price dip that still keeps the bull market intact.  

July to Aug 2024 would be my idea of a "correction".  

Screenshot 2025-10-07 125421.png

I'll agree to disagree.



Your chart looks like a 10 month bull market with a few corrections.  up and to the right baby.

Technically speaking bear markets are drops of at least 20%, it was close but don't think we got there.

Quote from: HAWKDOG on Oct 07, 2025, 03:55 PMTechnically speaking bear markets are drops of at least 20%, it was close but don't think we got there.

Thats not "technically speaking" at all - if you are into technicals.  Its just a random and meaningless number assigned to it by the media, for people who dont understand markets.  It has nothing to do with the trend of the market.  You can have a 20% correction without breaking the bull market run, and you can have a 15% bear market that does. The only thing that is important is whether there is a change in trend.  

I bought stocks at two points - Dec 2023 and May 2025.  Both on the turn from bear to bull markets.  

Quote from: HAWKDOG on Oct 07, 2025, 03:55 PMYour chart looks like a 10 month bull market with a few corrections.  up and to the right baby.

Yes, that was my point.  That was a bull market with corrections.  The uptrend was never broken.  As opposed to Feb-Mar this year when it was clearly broken. 

Quote from: KW on Oct 07, 2025, 06:31 PMThats not "technically speaking" at all - if you are into technicals.  Its just a random and meaningless number assigned to it by the media, for people who dont understand markets.  It has nothing to do with the trend of the market.  You can have a 20% correction without breaking the bull market run, and you can have a 15% bear market that does. The only thing that is important is whether there is a change in trend. 

I bought stocks at two points - Dec 2023 and May 2025.  Both on the turn from bear to bull markets. 

What is a Bear Market?

A bear market is a finance jargon used to describe a steep drop of 20% or greater in an asset from its most recent high, which may happen over the course of weeks or months and may be attributable to many reasons. The term is most commonly used to describe a sustained fall in the level of a stock market index, such as the S&P 500, the FTSE 100, or the Nikkei 225.

Quote from: KW on Oct 07, 2025, 06:33 PMYes, that was my point.  That was a bull market with corrections.  The uptrend was never broken.  As opposed to Feb-Mar this year when it was clearly broken.

I have been talking about liberation day which was In April so maybe that's why we aren't connecting

Maybe it's a good idea for you guys to start a TA thread so we keep the TA tactics in one place ?

Quote from: HAWKDOG on Oct 08, 2025, 07:20 AMWhat is a Bear Market?

A bear market is a finance jargon used to describe a steep drop of 20% or greater in an asset from its most recent high, which may happen over the course of weeks or months and may be attributable to many reasons. The term is most commonly used to describe a sustained fall in the level of a stock market index, such as the S&P 500, the FTSE 100, or the Nikkei 225.

I prefer to take market definitions from actual traders, not the media or academics.

Jesse Livermore didn't provide a single numerical definition for a bear market but described it as a period when leading stocks fail to make new highs, indicating market weakness, and the "path of least resistance" for prices is downwards.

In other words, when a downtrend has begun.  If you dont understand whether you are in a bear market or a correction, because you're fixated on whether or not its hit a ficititious number, then you're trading blind.  If you identify that you are in a bear market when its only dropped 10% you get to get out in front of everyone else, who is stupidly sitting there waiting for the magic number of 20%.  By then its too late, and you've doubled your losses. 

I'm just here to help others with 25 years of trading advice, not argue.  You can put me on ignore if you dont like what I have to say.

From LEK on the other channel......

Divi stocks (Craigs Oct 2025) according to craigs dividend projections

Top 10 based on forward 12 months

1. SKT 12.6%
2. SPK 12.1%
3. GNE 8.1%
4. SPG 8.0%
5. HGH 7.7%
6. KPG 7.5%
7. ARG 7.3%
8. PCT 7.2%
9. CNU 6.8%
10. DGL 6.4%

Top 10 based on 24 months out (2027)
1. SKT 12.6%
2. MHJ 12.2%
3. TWR 10.9%
4. SPK 9.8%
5. HGH 9.0%
6. WHS 8.3%
7. GNE 8.2%
8. SPG 8.0%
9. KPG 7.7%
10. PCT 7.2%

Interesting.... no mention of HLG, FSF and a few others ?

Quote from: Left Field on Oct 10, 2025, 11:30 AMFrom LEK on the other channel......

Divi stocks (Craigs Oct 2025) according to craigs dividend projections

Top 10 based on forward 12 months

1. SKT 12.6%
2. SPK 12.1%
3. GNE 8.1%
4. SPG 8.0%
5. HGH 7.7%
6. KPG 7.5%
7. ARG 7.3%
8. PCT 7.2%
9. CNU 6.8%
10. DGL 6.4%

Top 10 based on 24 months out (2027)
1. SKT 12.6%
2. MHJ 12.2%
3. TWR 10.9%
4. SPK 9.8%
5. HGH 9.0%
6. WHS 8.3%
7. GNE 8.2%
8. SPG 8.0%
9. KPG 7.7%
10. PCT 7.2%

Interesting.... no mention of HLG, FSF and a few other omissions?

The percentage divi is a function of share cost -- Example 1: SKT stayes the same because the share price stayes the same or the divi and the share price rises in unison maintaining the same percentage. Example 2: MHJ wont have a divi in the next 12 months but towards the end of 24 months will issue a divi (if it was sooner, the price would rise to lower the divi percentage).

Quote from: Left Field on Oct 10, 2025, 11:30 AMFrom LEK on the other channel......

Divi stocks (Craigs Oct 2025) according to craigs dividend projections

Top 10 based on forward 12 months

1. SKT 12.6%
2. SPK 12.1%
3. GNE 8.1%
4. SPG 8.0%
5. HGH 7.7%
6. KPG 7.5%
7. ARG 7.3%
8. PCT 7.2%
9. CNU 6.8%
10. DGL 6.4%

Top 10 based on 24 months out (2027)
1. SKT 12.6%
2. MHJ 12.2%
3. TWR 10.9%
4. SPK 9.8%
5. HGH 9.0%
6. WHS 8.3%
7. GNE 8.2%
8. SPG 8.0%
9. KPG 7.7%
10. PCT 7.2%

Interesting.... no mention of HLG, FSF and a few others ?

I was told by a Craigs client quite recently that they don't cover HLG which is surprising given its now an NZX50 constituent and arguably one of the cheapest growth stocks on the NZX in terms of its metrics.   

Quote from: Basil on Oct 10, 2025, 11:58 AMI was told by a Craigs client quite recently that they don't cover HLG which is surprising given its now an NZX50 constituent and arguably one of the cheapest growth stocks on the NZX in terms of its metrics.   

Years ago they were all over HLG.Bit like a Beagle at feeding time.
Then HLG had a shocker year and Craigs stopped following them.

Quote from: lorraina on Oct 10, 2025, 12:32 PMYears ago they were all over HLG.Bit like a Beagle at feeding time.

LOL.  I remain well positioned sitting in front of the dog bowl waiting for my huge December divvy feed.
Now my #1 listed investment position, slightly bigger than Turners, (sorry Tina, I still love you heaps too lol).

Quote from: Basil on Oct 10, 2025, 11:58 AMI was told by a Craigs client quite recently that they don't cover HLG which is surprising given its now an NZX50 constituent and arguably one of the cheapest growth stocks on the NZX in terms of its metrics.   

yeah I find Craigs quite patchy in what stocks they decide to cover.

One thing income investors to really watch out for when investing for yield, is the forecast is one thing

Top 10 based on 24 months out (2027)
1. SKT 12.6%
2. MHJ 12.2%
3. TWR 10.9%
4. SPK 9.8%
5. HGH 9.0%
6. WHS 8.3%
7. GNE 8.2%
8. SPG 8.0%
9. KPG 7.7%
10. PCT 7.2%

But how reliable has each company on that list been with dividends over the last 5 years, (suggest people put much more weight on history than prospective yield).  Some of the companies in that list have been very disappointing with the reliability of their dividends in recent years. 

Take care they are unreliable.
Just too many mistakes.

Very nice thread to read. Thanks to all for their contributions. Especially Basil and KW. I think if you combine a bit of Basil's value investing + a bit of KW's momentum investing you will do very well.

The only thing I will add is to throw away the DCF models. what a waste of time they are. I have read a lot of Forbar and Craigs reports and they are forever changing their inputs... honestly it cracks me up. What you are far far better to do is read every announcement and watch every webinar and wait for the company to tell you what the next 12-24 will look like. Not all companies do. The reason is because it is very difficult (impossible?) to predict the future. If the people actually running the business cant do it, what makes you think an analyst can from the outside? This is why most funds underperform the index because its all guess work.

Anyways, sometimes management are confident enough in the direction the company is going that they will tell you the future. its like cheating. Most recent example is AFT which im current up 20% on in 2 and a bit months just because they told us what the future (FY27) is going to look like. I have found management will put their names/reputation? on the line with forward looking targets/forecasts only when they have great confidence in the direction of the company. As long as the direction of the company is moving forward the news flow will be positive which will create SP momentum and hopefully you get in on an uptrend + re-rate situation and ride it until the next opportunity arises.

Disc. im still relatively new to investing so take all this with a grain of salt. Just adding to the discussion  :)

Quote from: FatTed on Sep 27, 2025, 10:12 AMThanks Basil,  I bought HLG at an average price of $5.78 I now find it difficult to buy more shares in the company @ $9, in a similar position with CEN and TRA

As a value seeker who loves a bargain, buying additional shares at higher prices is something I've always struggled with, while I've previously been happy to buy additional shares at lower prices. However, following a share down has done me no good with FDV, MIN and PLS on the ASX, and so it is something I'm actively seeking to correct.

Far better to buy more of your winners (if still a realist price) than more of your losers.

Quote from: Mousehold on Oct 21, 2025, 04:08 PMAs a value seeker who loves a bargain, buying additional shares at higher prices is something I've always struggled with, while I've previously been happy to buy additional shares at lower prices. However, following a share down has done me no good with FDV, MIN and PLS on the ASX, and so it is something I'm actively seeking to correct.

Far better to buy more of your winners (if still a realist price) than more of your losers.

I too had that affliction, on reflection, at the time I was in denial that I was in effect merely trying to average down my DCA. A better focus was to address the question is this stock of a quality that would justify an increased portfolio percentage allocation, and is there something I don't know that the sellers do know.

Often no point rushing to DCA down anyway if it is trending that way ( not that TA is any strength of mine ) avoid any FOMO mindset, and look to do the DCA BUY at nearer where the low SP point is if you have confidence in the quality of the stock. Nowdays I like too only over weight my portfolio percentage when I see that Mr Market is perhaps sleeping on the value of a stock, or it's just not the flavour of the month, as I saw to be the case in late April 2025 on the REITs

Think I will have a greater inclination than say Basil to justify some investment into a stock that might be well enough discounted in my view knowing it's not the cream of the market.

Don't know FDV, but MIN and PLS being mining sector I invest as a cyclical ( average of 5 years trading style of valuation assessment) with a view to the future, and need to avoid any hype or flavour of the month times to be looking to BUY.

But I remain human and get things wrong, hence what % of the portfolio investment fund has proved a saviour of the worst errors I have made.