Friday, July 15, 2016

Why You Should Stay Away From Stocks Right Now

To answer my question in the title, because they're bloody expensive, way over priced and there's far better value, especially if your funds are substantial, in parking your funds in a "safe place" - in cash in New Zealand.

But that's the thing, apart from cash, and you saw my piece written about property last week , which by the way could relate to commercial property as well, there is no other place that funds are now going.

And one does not know how big this latest investment bubble will go until it bursts but you can expect them to continue for a few years yet, as the struggles in China intensify, Europe breaks up over Brexit, Japan starts to look like a giant helicopter, the rest of Asia struggles along and the rest of this world in Australia and New Zealand move along at a modest pace.

The DOW is at record levels and has gone up 5 days in a row now - stocks are at VERY high PE multiples and there is so much risk built in BUT the stock market continues to climb and is likely to until we get a significant number of interest rate hikes - Janet Yellen ought to just make a decision instead of wondering what she might do will have an effect in London or Anchorage Alaska.

As well debt levels are starting to get scary: 
"The United States is less than two decades away from exceeding its highest recorded level of federal debt, according to the non-partisan Congressional Budget Office (CBO).
The CBO projects that U.S. federal debt will pass 106 percent of the country's gross domestic product (GDP) by 2035, in its second long-term budget outlook report of 2016. That level was recorded once before, in 1946, shortly after World War II.
The current federal debt is worth 75 percent of the country's GDP. It's expected to reach 86 percent by 2026, and 141 percent by 2046." The Hill
Debt is likely another story back here, with latest figures showing NZrs as a whole owing $255 billion overseas and the Govt roughly $247 billion. Trading Economics 

Surely we should get on top of this pile while we can.

Simply stop buying houses - because that is where it is going.

Until then, here in New Zealand we are likely to see stock markets climb to maybe 10000 by this time next year as people, and increasingly foreign money finds a place (saw a chap on Bloomberg yesterday mention New Zealand and Australia with the highest returns and a place where he would park money for the foreseeable future.) to put their moola.

I agree.

But watch out, eventually you will see the music stop and you might be left holding the parcel - and it might contain.


Share Investors Portfolio @ 15 July 2016

Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions) by Benjamin Graham
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Sunday, July 10, 2016

Share Price Alert: New Zealand Refining Ltd 4 (UPDATE)

Chart forNew Zealand Refining Co Ltd (NZR.NZ)

New Zealand Refining Ltd [NZR.NZX] we last looked at this stock back on July 5 2011, since then it has been higher than its current price of $2.47 certainly higher than its recent low of just about $1 and a half coming up around 16 months ago but this gem is set to rocket when things fall into place.

Get this if your going to buy it Monday, you will get it for just shy of its net tangibles which are, according to ASB Securities $250.01 per share.

There are so many variables as to when to buy this share; the price of oil, the US/NZ dollar cross, the refining margin, what the company is spending at present on capital expenditure and what the company pays you in divs.

You cant get it for less than its asset backing though, but in this case you can.

I myself am going to put a few shekels down on Monday, its the only share on the NZX I think is worth buying.

*currently my buy is in at $2.45, I won't go higher . Its up 8c on low volume. 

NZR @ Share Investor

c Share Investor 2016

Saturday, July 9, 2016

New Zealand's House Price Crash: It Will Happen

I'm going to do something I don't usually do here.

I'm going to give you some advice that you should take.

If you are thinking of buying a house any time soon for reasons to put your family in a cosy little place for a long time - think again.

If you are an investor or speculator, ill talk to you latter.


Just look around everyone is talking about it and writing about it, Fran O'Sullivan is practically chomping at the bit this week with at least 3 pieces of writing out about the "housing crises".

On Friday Stuff followed a house for a day - and kind of had a ode to the house, they had John Key on the grill answering live questions in a special q and a thingy - and by the end of the day when it was sold we found out it "made" something like 350 bucks in a day.

Last weekend the Herald papers were filled with stories of this quirky little place - just shy of 75sqm - was passed in at $950,000 but latter on in the day were were given an update and guess what it sold - it was probably well over $1,000,000 and the other extreme the "Chrisco House" in Albany, where I am, probably went for well over $40 million.

In amongst that a "house" in Papakura was selling for half a million - this was a box not much bigger than my 40sqm place.

Stories like these.

Politicians are talking (that's ALL they do instead of staying out of our way) about it - almost all of them opposition.

In fact the leader of Labour Andrew Little is going to announce something "momentous" on Sunday to coincide with their 100th anniversary - something to do with housing and tax but you can bet that it will involve your money and that it wont "work".

Building State houses was something that Labour did in the 1930's 1950's 1970's it didn't work then and it won't now.

The Key Govt are being pressured to do something but their hands are really tied because of the oppositions resistance to the removal of size restrictions of Auckland - they are opposed against letting it grow hence the rocketing prices.

If you are an investor your probably sane or savvy enough to be avoiding the market at the moment.

You'll come back to the market when prices ease.

If you are indeed a specman that's a different story. All credit to you your trading an asset to make a quick buck, i'm with you there, on the other hand if you lose money i couldn't give a flying fuck.

And both you and me, well you reading this because i'm not going to get into the market, yet, are kind of stuck in this non stop world of turn on the TV, screen, whatever, see what the latest story on such and such a house and get caught up in the idea that something i bought for $1 or $1 million - a house - is going to keep increasing in price.

It just simply isn't.

He or she will simply say no, eventually.

Prices will crash, it is going to happen.

Its just a matter of when.

Whether its a new political party being elected, like  The Greens/Labour and you get the current immigrants inbound to go outbound or the Reserve Bank does something your going to get a reversal of the current "problem".

The point is are you ready for all this, because no matter what talking head or "expert" on property - or that vacuous woman on the Paul Henry Show, Nikki Connors will tell you.

Its your money and you deserve to have it spent wisely, now is not the time to be doing it.

Buy when things are cheaper, they will come down in price, its happened before in history and those who don't learn from their history are doomed to repeat it.

Discuss on Share Investor

c Share Investor 2016