Long Term strategy

[#1]

Werner-your arguement makes absolute sense.

[louisg]

Werner stick to your strategy and it will create you great wealth over time. Buy, hold, adapt.

[Shaun_Siddall]

Where do you buy a 1 bedroom student flat for R850k?? And then only get R2.5 - R3k per month nobody would pay that much. You can buy 35sqm appartments in CBD's for R300k and get R2.5k with full electronic access control and managed by an agent??? I hope your long term portfolio calcs make more sense.

[Werner_1]

mose, thanks for the comment, atleast some guys agree with me...

[Werner_1]

Louisg, thanks, i have full confidence in our approach and we will prove that over time... we should make a alert for about 5 and 10 years from now... what you think? I just added it to my outlook calendar.. will post comment "A blast from the past - how we faired" in 5 and 10 years.

[geordie1]

I am long term guy-I have held Liberty International for over 20 years,Standard Bank for 15 years etc.I live off my divs.basically look for share wuth div around 5% and pe of 10 ish.I do sell shares when div falls below 2% and reinvest money.Basically I am aiming to increase my divs every year ideally ahead of inlation.I gave up work 12 years ago and have a stress free life.I have an individual portfolio( my pension) and a cc portfolio-I am and having been buying quite a lot recently although my timing is not always perfect-Ie I could have a few shares cheaper eg Sasol but I will probably keep Sasol for the long term-I welcome these corrections as buying opportunities -a high value market does not really please me.I am confident I will never have to work for someone again.

[#7]

Hi there shaun - YOu been to stellenbosch lately? All those rich Spoilt Joburg chicks, daddies girls, needing a safe place to live & get kwela'd while studying are pushing up the prices. No 2 bedroom flats here anymore for that price !!! ps 35sqm is hardly more than a bed, baisin/toilet & couch

[louisg]

Geordie Lad, would you describe your strategy as a real compounding dividend model?ie. investing in companies that offer an initial relative high dividend yield with the prospect of a sustainable real increase in distributions over the long term. With your experience, how many companies would you consider prudent in a high dividend paying portfolio?

[Werner_1]

Geordie Lad, if you like you can email me at [email protected], Louisg, if Geordie Lad approves we can discuss ideas via email? interested? I have a very similar idea, but require some portfolio building to get there... well done Geordie!

[louisg]

I'll look forward to that day Werner. God willing.

[Werner_1]

that i have to agree to, Stellenbosch is full of people with WAY too much money!

[Shaun_Siddall]

Just comparing investment opp's for you.

[geordie1]

I would not try to pretend I am very clever although I have been lucky and have made a few correct calls.Liberty international is not exactly a high div payer but I like it because it is property and a rand hedge-it may not shoot the lights out but I think it will be around in 20 years and with an increasing div.If you think 5% is high div then I guess that is what I look for but I also want to think the company will be around for the rest of my life-chasing high divs only can lead you into poor quality and I have made that mistake.I think it's more time in the market than timing the market although you can tell when the market is expensive or a share is expensive and then I do not buy.Currently a lot of shares look attractive-my best recent buy is city Lodge(recent I mean last 4 years)-I also quite like pikwik in current times.I like to buy good shares on bad news and sell bad shares on good news-if I get more than 50% correct I move forward in my strategy-my approach is pretty boring and lacks major excitement.

[geordie1]

I do not wish to appear rude but I am not a financial advisor and I have been pretty lucky to get my independence.It would be wrong of me to push my ideas on other people.It's pretty simple buy good companies at a reasonable price-stay invested for a long time and get rid of debt.Sounds simple but quite difficult to achieve-do that for 25 to 30 years and stop working.There was no quick fix for me so I would hate to mislead anyone.

[#15]

the issue i have with fund managers and most people that hold the view that you should have a long term strategy. when do you start this long term strategy of betwen 5 to 10 years. i shall now only consider the jse top 40. if i bought the top 40 one year, two years three years ago, i would now be at a loss. if i bought the top 40 four years ago i would be only 10 % up. so do i start now. only problem is if i did start three years ago i would be at a loss and will not have more money to invest. my friend went on retirement this year. guess what. the fund managers he trusted with his money the last 25 years and was working with his money and earned millions over the past 25 years gave him back his money to the cent that he deposit over the past 25 years. not even one cent interest. now that is long term. their excuse, the markets are down and we are sure you know that, and we cannot control the markets, can you may be postpone your retirement. if we consider all the bear markets the last 100 years most of them took 18 years to get to where they were when the trend started. so your 5 to 10 year strategy won't get you to where you were when the trend started, the nikkei still did not get back to where it was in 1989.

[Werner_1]

Geordie Lad, we understand your point, i think nobody is asking advice, just bouncing ideas off each other. i don't know if you like, but we are working on a small project to help us long term investors discuss opportunities, strategies, etc. So if you interested, email me and i will tell you more about the ideas and show you what we have so far... This will be an invitation only site so we can control who is allowed to log in and read our comments... hope you are interested... we are not looking for any advisors, or so, but rather fellow investors to discuss market opportunities and gneral long term investing issues.

[Werner_1]

My strategy doens't include buying the general market, so recovery times are way faster and when selecting shares that offer a large value, one can select the better shares that will make money. My view is that one needs to start as early as possible, have a consistent contribution system, say, monthly one should put cash into the portfolio and re-invest dividends, then one can buy when cash accumilates. I think short term is more dangerous than long term, just a few small mistakes would eliminate retirement totally. I think the problem comes in when people look at the overall markets for comparison, there are always the outperformers, these are what we look for.

[Mr_S]

i know im a rookie but i once noted this and no1 answered me. i said as a long term investor, wouldnt you want to sell your stock when there is an obvious and deep downturn in the market (not 2 day downturns but serious ones. selling your stock would allow u to preserve your previous gains, and enter then same fundamentally strong stock at even lower prices...i dont see the point in having capital appreciation over 5 years, then hitting a bear market, doing nothin about it, losing yr previous gains, then waiting for the market to recover. werner please give your opinion

[Werner_1]

I believe if the company is not doing what one likes anymore, or not performing like when one did research on acquisition one should not hold it, but if the earnings and dividends are growing well, i would hold. Trying to time the market can work sometimes, but also can get one wrong, when does one know that a significant downturn is coming, etc. So i would say, if the share is considered highly overvalued and one is not confortable with its future prospects, maybe one should get rid of it, but if all is well, i would buy more in the downturn. Some people don't like this strategy, but we are after a consistent dividend and as long as these factors are present we would possibly hold. I don't try to time the market, one can be wrong and loose out.

[louisg]

Boring is profitable as long as one is patient. My portfolio is as boring as they come. I bought CLH about the same time. I sold it earlier this year as I thought it was overvalued. In hindsight I believe I erred. However a lesson was learned: "remain invested in quality companies". I will be taking a position in CLH again soon. PWK was my first share I bought. I remain a holder and just add to my position on price weakness. PWK has not been the greatest performer the last few years but they have made a lot of changes to their business model recently. We should see the positive results from their next financial year onwards. Franklins is still a bit of an Achilles heel though.