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Messages - gcr

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601
Shares / Re: Sygnia - Could this be the next Coronation?
« on: October 22, 2015, 06:04:29 pm »
There is absolutely no harm in speculating hoping a particular share will shoot the lights out. I hold 9,800 Alert Steel which was doing well until they over extended themselves which will probably cost me R 22,000 when they are finally liquidated but they are .1% of my portfolio. I also hold 1.5 million Nutrition at 1 cent a share and which are currently trading at 3 cents so I have a paper profit of about R 30,000 but I can't imagine that I could unload this many shares to realize the profit so would have to dribble the shares into the market which just ramps up broker costs - again this only represents 1.3% of my portfolio. Some people will say that you can speculate with anything between 5 and 10% of your portfolio but I prefer to keep it below 5% for safety sake and to avoid any big disappointments.
Also you can use your speculative portion to reduce your CGT by selling off some counters at a loss
So as they say there are many ways to skin a cat - just use the appropriate method at the right time :)

602
Shares / Re: Sygnia - Could this be the next Coronation?
« on: October 22, 2015, 02:02:57 pm »
So you bought some Sygnia at R 16.00 and they are now at R 14.50 (or thereabouts).
The question is why did you buy them in the first place, once you answer that question you need to go through a series of questions - has the company changed fundamentally since you made your decision to purchase, has management suddenly sold off large parcels of shares, were institutional buyer locked in to hold their allocations for a few years, what was your time horizon for holding these shares, were you looking for price growth or dividend streams. Also what makes this company better than many other companies which have come to market and failed.
All these question are rocking chair questions and there are many more but the real issue is examine your original decision to purchase and decide whether it was a wise move or an emotional decision based on market hype- this will help you make a decision as to whether you hold or sell.
I have been invested in the JSE for almost 50 years and I have made mistakes in purchasing specific shares - but the beauty of all of this is that knowledge and experience only come from your mistakes and the big thing is try and not repeat a mistake.
Learn and move on

603
Shares / Re: Managing your grandmothers money
« on: October 22, 2015, 10:35:27 am »
I think on the 8th November the Sunday Times will have their Top 100 companies awards insert in the business section. If you are interested in investing in the market have a close look at the winners and also those companies who have dropped down the rankings.
This annual supplement always gives me pointers to which companies you can rely on for picking a good cross section of shares to create a portfolio

604
Off topic / Re: When do workers stop getting increases
« on: October 21, 2015, 12:07:42 pm »
Patrick - there are 2 options open to you - change your job where pay scales will allow you to get the increases you believe you are entitled to - this could mean moving companies with the real threat of getting a job that may pay well but is downright boring and soul destroying.
The other alternative is to make yourself indispensable but within  job environment that you thoroughly enjoy and look forward to going to work everyday. You then need to do a reality check and determine what your driver is the monetary route or the job satisfaction and enjoyment and a degree of being indispensable. The latter does give you opportunities to negotiate with your bosses for a salary adjustment over and above the norm - the upper level of the scale is only there based on the people who actually earn those salaries so bracket creep can be engineered with skillful negotiation. Also freedom to operate within your space is very important, or it was to me, as the last thing you need are bosses who breathe down your neck daily and constantly

605
Shares / Re: Managing your grandmothers money
« on: October 19, 2015, 01:58:22 pm »
Quote from: Patrick on October 19, 2015, 01:00:23 pm
I have no experience with income funds so this is more an idea of what I would do if I had a family member in a similar situation and I had to make a call right now. I'd probably try set them up to get as much tax free income as possible while keeping the fees as low as they can.

This example was based on a younger person, so for someone older you could adjust the numbers up due to the increased tax breaks: http://investorchallenge.co.za/can-you-retire-by-40/

Obviously you could only put R30k per year into the TFSA, and I would do that, and then every year move another R30k from the taxable account to a TFSA.

The tax thresholds increase a fair amount as you go over 65 or 75 years, so you could take advantage of that if you wanted for REITs:
Under 65 ​R73 650
65 an older ​R114 800    
75 and older ​R128 500

If she's 75+ she could put R2,138,177 into a low cost property ETF like the stanlib sa propert ETF for R128,500 income a year, R30k into a TFSA fund like the DIVTRX for another R1000 or so dividend income a year, and the rest of the funds, R831,000 or so into a taxable account. If you used the STXIND there and sold shares for capital gain, you could sell R33,240 a year and never run out, while earning another R10,595 for dividends after taxes. That would give an income per year of R173,335 with very low risk of ever running out. In fact I think the income would actually increase year to year. That works out to about R14,400 a month.

The most important thing though is to do is get it out of that money market account as it's actually losing her money to inflation, and into something inflation beating.
Patrick - there are two issues which are under consideration at present by treasury:-
1) older people may be allowed to make their life time investment into TFSA as a once off consideration - still needs to be discussed more fully
2) SARS are looking to discontinue giving tax payers who receive interest income the tax break in future - in other words interest will be fully taxable in the hands of the tax paying recipient
Also the way medical aid deductions are being treated these days does not auger well for many tax payers so this this ladies cash pile needs to be invested very astutely

606
Shares / Re: Choosing an annuity
« on: October 12, 2015, 06:44:20 pm »
Quote from: bushwakka on October 12, 2015, 03:50:34 pm
Quote from: gcr on October 12, 2015, 01:19:39 pm
There is a very interesting article on Moneyweb titled Your RA must have a plan

Also it is not true that proceeds of a draw down on an LA have a tax advantage - they don't. Draw downs from an LA are added to your pension income and tax based on your total income and of course the company holding your LA pool of funds also levies charges for administering the LA and sending you quarterly updates
So my advice read up on all these issues prior to diving in and making rash decisions

The taxable aspect is correct but you can save on levies/admin fees in you go directly, e.g. Allan Gray - zero charge other than the TER which is built into the unit price.
So there are levies?

607
Shares / Re: Choosing an annuity
« on: October 12, 2015, 01:19:39 pm »
There is a very interesting article on Moneyweb titled Your RA must have a plan

Also it is not true that proceeds of a draw down on an LA have a tax advantage - they don't. Draw downs from an LA are added to your pension income and tax based on your total income and of course the company holding your LA pool of funds also levies charges for administering the LA and sending you quarterly updates
So my advice read up on all these issues prior to diving in and making rash decisions

608
Shares / Re: Choosing an annuity
« on: October 11, 2015, 11:54:16 pm »
Maybe just to clarify the situation
You invest in an RA which on maturity is switched into a LA or a guaranteed annuity.
The RA can be accessed from age 55 but you can extend until age 70 - but be wary of the fact that each time you extend you could incur additional fees for the extension.
Supposedly current RA are better than historic RA's mine with OMSA was a dreadful disaster. Sanlam are advertising a kind of pension fund which will determine what your payout/drawing would be on retirement - maybe the question needs to be asked what the value of money will be when you do ultimately go on retirement.
With LA you are permitted to draw down 2.5% to 17% per annum in terms of value of your funds in the LA and present calculations are that if you draw down between 6% and 8% per annum you should not run out of funds. You can revise your draw down annually
Be wary of the guaranteed annuity as residual funds upon your death do not go to your spouse/partner but go to the provider as they have supposedly taken all the risk. So look at an LA which upon your death the pool can be paid out as a lump sum or the surviving spouse can elect to continue to managed the LA as if he/she was the owner of the LA.
With your LA many investment advisors will advise you to split your pool 75% riskier equities and 25% in more conservative counters - this could compromise you down the line as it may affect the % draw down that you can decide on annually - I personally have moved my entire fund into riskier shares where it is in the Coronation T20   fund and I take a 2.5% annual draw down as I don't need the funds

I think it is very important that you look at your total financial position in terms of earning capacity, whether you have insurance on your bond, overdraft, motor vehicle and any other large debt, that on your death these debts are covered by the insurance and your spouse doesn't inherit massive debt. If you cover these items and have a reasonable pension fund then you also need to examine whether you really need carry any form of life cover especially if your kids are off your hands.
Both my kids have been encouraged to set aside 22% of gross income towards pension funding which will ensure that on retirement they will both be comfortable whilst on pension
In my opinion RA's are not the most ideal mechanism for providing for retirement and in fact if we had SATRIX type instruments 35 years ago I would have opted for them over an RA any day as fees and growth are either exorbitant or overstated
 

609
Shares / Re: Which one is your pick?
« on: October 09, 2015, 01:13:10 pm »
One way of testing these new listings is to buy them up into the annual share competition - no money sunk into them and if they don't perform as expected you can always dump them without losing any money

610
Shares / Re: Which one is your pick?
« on: October 09, 2015, 10:18:11 am »
Moneyweb had a reasonable analysis of the respective companies - see your link.
Listings by relatively unknown tend to be more about hype than fundamental

611
Shares / Re: Recommended short term trades.
« on: October 09, 2015, 09:24:24 am »
I took a punt on African Rainbow - so was in and out in 10 days and made a small net profit of R 12,800 >:(

612
Shares / Re: Which one is your pick?
« on: October 09, 2015, 09:22:10 am »
Quote from: Fawkes85 on October 09, 2015, 08:15:55 am
Some new listings on the JSE:

http://www.moneyweb.co.za/news/companies-and-deals/are-you-ready-for-the-new-jse-listings/

-Capital & Regional

-Sygnia

-International Hotel Group

-Balwin

-Capital Appreciation (My pick)

-Trellidor

-Waco

Which one is your pick?

None of the above

613
Shares / Re: Securities Transfer Tax....?
« on: October 07, 2015, 03:59:35 pm »
Are you buying your shares and then retaining certain of these purchases in a nominees account and others having registered in your own name?
The charges I pay are:-
Brokerage
Strate Settlement Costs
Investor protection levy
Vat
Securities Tax

All my shares are held in a nominees account

614
Shares / Re: AQUARIUS PLATINUM
« on: October 06, 2015, 08:47:57 pm »
Where Froneman is involved be very cautious - my opinion not a person to be trusted

615
Shares / Re: My Beginner's Portfolio Blog(Experiment)
« on: October 01, 2015, 09:52:21 am »
I find it quite difficult to quantify how one goes about reinvesting ones dividends back into the share declaring the dividends

Examples ( I am using these 2 companies as they recently paid dividends into my personal trading account)
Bidvest dividend -R 3694.95 (after withholding tax) Bidvest price R 330.97. Re investing the dividend and paying broker fees would result in the purchase of 10 Bidvest shares
Cashbuild dividend - R 2856 (after withholding tax) Cashbuild price R 310.00 Re invest the dividend and paying brokers fees would result in the purchase of 8 Cashbuild shares

To me the more sensible route is to allow your dividends to accumulate and then invest further into one of your holdings or expand your holding by investing into another counter. The essence of reinvesting into the counter which created the dividend is a costly way of increasing your holdings. Also in our volatile market the benefit of investing the dividend immediately could be wiped out very rapidly, to me it makes more sense to hold the cash in the trading account and buy on dips to gain a greater advantage on pricing.
From my own personal perspective I don't ever plough back my dividends into the counter declaring the dividends - I use it to diversify my portfolio or just purchase more shares in a counter that has performed well over a lengthy period
It does depend on what your strategy is at the end of the day - mine is not concentrated on dividend streams but rather capital growth which will ultimately have a bearing on dividend growth - but I rather see dividends that my shares attract as partial offsetting of CGT at time of sale of any of the shares I hold. I do record dividends earned merely as a bi-product of investing in shares 

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