Comments for Fureyous

Comment on ASX200 to go through 5000!!! by BB

BB — Thu, 02 Feb 2012 10:04:31 +0000

Hmmm, maybe? It would seem that such a return would require a few key outcomes, basically in line with your thoughts but I’ll attempt to be specific

1. A flow of positive US economic news that doesn’t just beat market expectations but also proves that this time it really is different.

2. An EU bank liquidity and quasi capital injection so large that the market suddenly know deems EU financials as ‘solvent’ (or at least solvent enough to withstand the assets write downs to come) and;

3.An ECB printing press funded sovereign bailout so large and/or an ‘EU agreement’ so unexpected that market participants are confident GFC v2 has been postponed for another few years.

But does it really even matter? None of the above ‘solves’ anything and although temporary liquidity issues may dissipate and immediate solvency issues once again dodged, underlying economic growth & debt deleveraging issues will persist.
Investing for the ‘long term’? 5-7 years? Well given current risk asset valuations, corporate earnings and margin levels (excluding maybe Euro stocks) probability/history suggests investors wont be holding onto those 21% returns for that long.

Comment on Managing Market Risk using Variable Beta Funds by admin

admin — Fri, 27 Jan 2012 09:34:22 +0000

The analysis I performed was from March 2003 to Oct 2007 and across the whole period K2′s beta was ~0.55 which is pretty low and not where you necessarily want your Aussie share manager to be. My analysis over this period when looking at Fama French factors also showed a significant small cap and value bias to their portfolio…so I’d say its a combination of being low beta and low value that has resulted in the underperformance…although risk adjusted they still come up trumps with annualised alpha of 1%.

Comment on Managing Market Risk using Variable Beta Funds by AFundie

AFundie — Thu, 26 Jan 2012 21:52:22 +0000

Did K2 underperform in all years 2003-07 by being low beta or was the low beta only in part of that period? I could understand the lower beta in say 2006 and especially 2007 as the PMs may have viewed the market as overvalued.

Comment on Promoting the wrong Financial Planners by admin

admin — Sun, 15 Jan 2012 10:25:32 +0000

Agree…not too much truth there…I’m pretty confident her Storm client base wasn’t too loyal and no doubt the Economic Society of Australia would be quite disappointed with her claim.

I have to admit my annoyance at the perception of the ability to sell financial product apparently makes someone a ‘leading financial adviser’.

Comment on Promoting the wrong Financial Planners by BB

BB — Sun, 15 Jan 2012 06:32:43 +0000

My God,

A google search on this woman makes you want to throw up! Its Jodie Nolan or McIver.

“Jodie McIver has been recognised as one of Australia’s leading financial advisers. A respected financial adviser, author and keynote speaker”

Jodie accumulated extensive experience in the financial planning industry with major financial firms and institutional banks alike – both in Brisbane and on the Sunshine Coast – including a national management role with the largest private financial firm in Australia at the time. Her personal, yet professional manner generated a very loyal client base and she was recognised with many performance awards within these adviser roles.”

What do you say to that? This woman is borderline and outright fraud! On her face book page she claims she is an “economist” as well.

Why it it we are trying to make an honest Living again?

Comment on Buy-hold strategy may have had its day…I don’t think so by BB

BB — Sun, 15 Jan 2012 05:49:35 +0000

The AFR at it again, whats a retail investor to do??

Nothing wrong with “Buy & Hold”, if you understand the risks and truly have the time horizon. I always understood the “hold” part to be derived from the assumption that you have purchased an asset to which you have sufficient confidence in its underlying value (i.e probability of producing a given long term return). You are then willing to “hold” that position regardless of market movements provided your confidence in the assets ability to generate that return remains constant.

This is distinctly different from buying any asset, asset market (or mix of) at any price, at any time simply based on the premise that regardless of its current fundamentals it will generate a positive return over time (affectionately sold as “the average long term return”). This strategy is more accurately known as “buy and hope”.

The later is frequently confused with the former and (in my experience at least) its the one we all happen to be paying $$ for (whether its your friendly industry super fund investment committee or your local branch financial planner)

Of coarse the AFR article fails to get the point and I agree that it’s “strategy” as implemented by your average investor has a lower probability of decent returns that even buy and hope!

Comment on SPIVA Results – Active Managers still struggling by » Buy-hold strategy may have had its day…I don’t think so Fureyous

Sat, 14 Jan 2012 03:47:50 +0000

[...] Whilst there is a little bit if truth in each of the above statements, unfortunately the main reason behind the buy-hold strategy is ignored altogether. That is, that timing markets is very very hard and after transaction costs and potentially other costs are taken into account, there is more evidence to suggest that buy-hold is a far more successful method of achieving sharemarket returns than active management. This belief has the foundation in numerous academic articles, most notably Brinson, Beebower and Hood’s “Determinant of Portfolio Performance”, and the consistent failure of active managers to outperform benchmarks (see recent SPIVA results). [...]

Comment on I Still Hate Structured Products – JB Global’s Latest by Charles Mauro

Charles Mauro — Tue, 10 Jan 2012 19:15:14 +0000

My complaint has been with FOS for over 12 months (late 2010) and has not moved to resolution because of their refusal to co-operate with COS. I know of other complaintants who are in the same position via FOS and years later still without resolution.

In my situation I am out of pocket $300K and have an additional substantial debt (via a loan) from Macqquarie Bank. I was taken advantage of with their promise re the capital was protected and the predatory lending practices and false disclosure of my financial situation to max me out with a Macquarie bank loan.

Comment on Euro Breakup…very painful indeed by BB

BB — Wed, 16 Nov 2011 11:39:37 +0000

Agreed on the expanded mandate for the ECB, the math I have seen suggests there is simply no other way to raise the capital required if short term bailouts remain the preferred option over managed defaults and subsequent asset right downs (even the later will almost certainly require ECB intervention) either way, it’s painful! painful now, or very painful sometime in the future? Centralized fiscal authority? I’m not a political expert by any means, but here way have a region that doesn’t seem to have the political will to correctly negotiate and manage what now seem to be relatively small issues. Anything can happen and I also agree that no one really knows what the outcome will be, but as an investor you have to keep in mind the balance of probabilities here, on that basis you would have to question the assertion that the balance of probabilities lies with sudden continent wide political agreement and co-ordinated action across a range of issues so large and unprecedented in scale no one is really sure what ‘coordinated action’ is actually necessary.
What are we trying to coordinate anyway? The survival of the Euro currency experiment is but one issue, regardless of its survival the primary issue remains….. there is simply too much debt and to much leverage, secured against assets that not worth their book value…. someone needs to take that loss at some point in time and the process of doing so will have significant economic impacts? All that is being co-ordinated is how to extend that time frame as long as possible and how best to spread that burden of loss among those exposed. My quip re conflicts of interest refers to this macro issue, namely those providing the advice on how to “manage” those losses are the ones whom should stand to take most of them, of course their advice suggests (among other things) a very different approach.
What does that mean for asset markets? Who knows? My issue here is that the level of uncertainty and potential for real danger does not seem to be fully reflected in equity prices, Aussie equities certainly don’t look expensive and in some cases I’m prepared to accept they are looking ‘cheap’ but to suggest that “equities are as cheap as they have ever been” well that just over the top and I am yet to see any statistically significant data that backs up such a statement (to clarify, I’ve seen plenty of data, powerpoints and forward P/E ratios but I’m interested in the statistically significant part) And that’s only domestic markets.

Should all the above culminate in asset prices falling to levels that one can honestly assess as being “cheap” then I will be prepared to tow the party line and suggest a contrarian view, right now, a large scale sovereign debt / repeat banking crisis does not quite seem consensus to me, just like a full blown banking crisis wasn’t in 07/08. That’s not to say that ECB QE would not result in the mother of all risk on trades, but is that something you concern yourself with on a 5-7 year time frame?

Comment on Euro Breakup…very painful indeed by Afundie

Afundie — Wed, 16 Nov 2011 04:02:52 +0000

I am certainly not one to tow the party line, however I am not sure that there is any conspiracy on the part of Aussie fund managers to hoodwink their clients. He bottom line is nobody here really has a clue what will happen in Europe. The decisions to be made are political ones not economic ones, the Euro CAN be saved with the necessary political will. You may doubt whether that will exists, but a centralized fiscal authority and an expanded mandate for the ECB means the Euro remains. I would not make any bets on whether we’ll have a Euro as it is now in 5 years, but I would take bets that the Euro will still exist this time next year. Always remember the Euro is a political project over an Economic one.