The top chart below shows the crude oil price (http://www.macrotrends.net/1369/crude-oil-price-history-chart) over the past 30 years, and the bottom chart is the Santos stock price since 1988.
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Wednesday, 25 January 2017
Took up part of my Santos Share Purchase Plan entitlement
I decided to purchase $5000 worth of Santos shares under the SPP that closes next week (31 Jan). The issue price will be around $4.00. As I also have some long crude oil CFDs, I'm obviously punting on the oil price going back up a bit in future. My current holding of Santos shares is around $15,000 market value, so this will increase my investment in Santos by around 1/3. While the oil price has fluctuated wildly over the past 30 years (from below $20 to over $140!), there seems to be some support around the $40 mark, which corresponds roughly to a Santos share price around $4.00. So, overall, it seems that the downside risk is for the share price drop to as low as $2 (or the company to go broke in a period of prolonged low oil prices), whereas a continuation in the current rise in oil prices (if there is stronger global growth in future) could see oil hit $60-$80 again, and the Santos stock price rise to $6-$8 again. While this share purchase is a bit of a gamble, as the amount only represents about 1% of my geared stock portfolio, and 1/4% of my net worth, so either outcome won't have a big impact on my net worth.
The top chart below shows the crude oil price (http://www.macrotrends.net/1369/crude-oil-price-history-chart) over the past 30 years, and the bottom chart is the Santos stock price since 1988.
Subscribe to Enough Wealth. Copyright 2006-2017
The top chart below shows the crude oil price (http://www.macrotrends.net/1369/crude-oil-price-history-chart) over the past 30 years, and the bottom chart is the Santos stock price since 1988.
Subscribe to Enough Wealth. Copyright 2006-2017
Buy, Sell or Hold? Who knows...
With the recent run-up in the US stock market, my boss has recently been moving his (and his parent's) investments out of equities and into 'cash'. He claims he moved out of equities and into cash in early 2007, so perhaps he knows what he's doing? However, while the US market certainly looks similar to the pre-crash phases seen in the dot-com bubble from 1996-2000, and the 'frothiness' seen in 2006-2007 just before the GFC, the Australian market looks quite unremarkable at the moment.
So, I'm not about to liquidate my stock portfolio (in fact I recently bought $10K worth of the Vanguard Australian Shares Index ETF (VAS)). However, if the US stock market does suffer a large 'correction' in the next year or so the Australian share market may well drop a bit also - but I'll probably view that as a buying opportunity. Looking at the graph comparing the All Ords and the S&P it is clear that the long-term trend (at least in Australia) has been for a fairly steady rise over the decades, but that there have been many substantial deviations both above and below the trend line. If you are heavily into stocks, deviations well above the trend line are probably a good opportunity to reduce exposure to equities (or at least reduce gearing), and deviations substantially below the trend line are good times to move any available cash into equities. Bearing in mind, of course, your personal risk tolerance and chosen long-term asset allocation.
However, human nature dictates that many people will be tempted to start investing in the market during bull runs, and then move into cash after a stock market crash - exactly contrary to what logic dictates.
Subscribe to Enough Wealth. Copyright 2006-2017
So, I'm not about to liquidate my stock portfolio (in fact I recently bought $10K worth of the Vanguard Australian Shares Index ETF (VAS)). However, if the US stock market does suffer a large 'correction' in the next year or so the Australian share market may well drop a bit also - but I'll probably view that as a buying opportunity. Looking at the graph comparing the All Ords and the S&P it is clear that the long-term trend (at least in Australia) has been for a fairly steady rise over the decades, but that there have been many substantial deviations both above and below the trend line. If you are heavily into stocks, deviations well above the trend line are probably a good opportunity to reduce exposure to equities (or at least reduce gearing), and deviations substantially below the trend line are good times to move any available cash into equities. Bearing in mind, of course, your personal risk tolerance and chosen long-term asset allocation.
However, human nature dictates that many people will be tempted to start investing in the market during bull runs, and then move into cash after a stock market crash - exactly contrary to what logic dictates.
Monday, 23 January 2017
Diet & Exercise update - 2017 Weeks 2-3
I hadn't managed to get back into the swing of sticking to my diet plan, so my weight continued to creep up for the past couple of weeks. Aside from eating some junk food, I think a lack of exercise due to the recent run of hot (38C+) and humid weather hasn't helped - I haven't been going for long walks at lunchtime or in the evenings, or doing my weekend session of squash with the kids while they were staying with my parents up at the lake house.
Now the kids are back in Sydney and school term is about to start, things should settle back into the normal routine. I managed to get the pool filter working again last week, and finished cleaning the pool on the weekend, so I'll do some laps after work if it is too hot to go for a walk.
. Fibre Carbs Fat Protein kCals Avg Wt Steps
g/dy % % g/dy /dy kg /dy
2017
Week 01 41.4 58.8 21.0 136.7 3,134 97.2 5,368
Week 02 43.4 63.7 17.0 126.1 3,022 97.7 5,259
Week 03 38.4 63.3 18.7 128.8 2,972 98.1 5,931
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Now the kids are back in Sydney and school term is about to start, things should settle back into the normal routine. I managed to get the pool filter working again last week, and finished cleaning the pool on the weekend, so I'll do some laps after work if it is too hot to go for a walk.
. Fibre Carbs Fat Protein kCals Avg Wt Steps
g/dy % % g/dy /dy kg /dy
2017
Week 01 41.4 58.8 21.0 136.7 3,134 97.2 5,368
Week 02 43.4 63.7 17.0 126.1 3,022 97.7 5,259
Week 03 38.4 63.3 18.7 128.8 2,972 98.1 5,931
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Friday, 20 January 2017
Benchmarking my NW performance
My usual benchmark for NW performance is to compare it to the 'cut-off' NW reported in the annual BRW 'rich list'. However, that benchmark has a couple of deficiencies:
- the cut-off is for a fixed number of 'richest' Australians, which due to population growth becomes a more and more selective group, hence pushing up the 'cut-off'
- the NW estimates in the 'rich list' are estimates of debatable accuracy
I therefore view it as more of an aspirational target than a realistic benchmark of my NW performance.
The annual HILDA report that came out last year offers a more robust metric for comparison - Table 5.1 in the report provides Australian household net worth estimates (based on a statistically significant sample), for the years 2002, 2006, 2010 and 2014. The values of mean, median, top10% and top1% are provided in '2014' dollars (ie. adjusted for inflation).
For comparison purposes I used my monthly NW estimate from networthiq.org to calculate my average annual NW figures, and then used the online inflation calculator from the ABS to calculate the equivalent values in constant 2014 dollars.
Plotting these NW values against the mean, median, top decile, and top "1%" figures from the HILDA report show that my NW suffered more from the GFC (due to my use of gearing in my stock portfolio I presume), but bounced back by 2014. However, while my relative NW increased substantially vs. the mean (up 51%), median (up 50%) and top deciles (up 44%) between 2002 and 2014, it barely 'kept pace' with the household NW reported for the top "1%".
But looking at the 2010 figures, my relative performance was down slightly vs. the mean (down 9%), median (down 14%), and top decile (down 8%) groups, but substantially worse that for the top "1%" (down 43%). So I'm hopeful that going forward my NW should also gain ground vs. the 'top 1%' metric. I'll have to wait until the 2020 HILDA report to find out!
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- the cut-off is for a fixed number of 'richest' Australians, which due to population growth becomes a more and more selective group, hence pushing up the 'cut-off'
- the NW estimates in the 'rich list' are estimates of debatable accuracy
I therefore view it as more of an aspirational target than a realistic benchmark of my NW performance.
The annual HILDA report that came out last year offers a more robust metric for comparison - Table 5.1 in the report provides Australian household net worth estimates (based on a statistically significant sample), for the years 2002, 2006, 2010 and 2014. The values of mean, median, top10% and top1% are provided in '2014' dollars (ie. adjusted for inflation).
For comparison purposes I used my monthly NW estimate from networthiq.org to calculate my average annual NW figures, and then used the online inflation calculator from the ABS to calculate the equivalent values in constant 2014 dollars.
Plotting these NW values against the mean, median, top decile, and top "1%" figures from the HILDA report show that my NW suffered more from the GFC (due to my use of gearing in my stock portfolio I presume), but bounced back by 2014. However, while my relative NW increased substantially vs. the mean (up 51%), median (up 50%) and top deciles (up 44%) between 2002 and 2014, it barely 'kept pace' with the household NW reported for the top "1%".
But looking at the 2010 figures, my relative performance was down slightly vs. the mean (down 9%), median (down 14%), and top decile (down 8%) groups, but substantially worse that for the top "1%" (down 43%). So I'm hopeful that going forward my NW should also gain ground vs. the 'top 1%' metric. I'll have to wait until the 2020 HILDA report to find out!
Subscribe to Enough Wealth. Copyright 2006-2017
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