Thursday 3^rd March 2022

An interesting article titled ‘The Top 1% Invest 61% of Their Wealth In One Asset Class’ popped up on Livewiremarkets.com. That one asset class is equities and it sure created some debate.

I don’t understand why. Actually cancel that, I know exactly why and it’s stupid. Ego and attachment doesn’t serve anyone well long term. While I have my investment preference, it’s doesn’t blind me to the reality great returns can be made on any asset class with the right temperament.

The comments alone are worth checking out.

https://www.livewiremarkets.com/wires/the-top-1-invest-61-of-their-wealth-in-one-asset

 

Friday 4^th March 2022

The devastation from the floods in the Northern Rivers area of New South Wales continues. The need for drinking water, food, clothes, bedding, hygiene products, cleaning products, gloves, phones, batteries, board games for kids and the list goes on.

I’ve been donating what I can and helping out when possible. It’s humbling to see the damage. We humans aren’t much in this world without tools. It’s also wonderful to see communities in different towns and people from out of town using social media to connect, share up to date information on what’s needed and where.

The market is down a couple of percent again here in Australia, following on from the red session over night in of shore markets.

 

Saturday 5^th March 2022

Mystery solved… http://whyyourepoor.com/

 

Tuesday 8^th March 2022

Lots of red overnight in the USA, with the worst day since October 2020, while yesterday the ASX was also down.

Something I’ve been thinking about for a while is the correlation between martial arts training and market fluctuations. I feel the reality/confrontation of martial arts training (grappling and striking arts) is lacking in society these days. Quality martial arts training keeps us accountable and humble in ways people who don't practice might find it difficult to understand. Plus the peace of mind it can bring pays greater returns than any investment.

I also see similarities between combat training and market drawdowns. I find 'holding my nerve' investing easy compared to escaping mount, being in guard with strikes or wrestling sessions with tough skilled training partners.

I find doing these things far more challenging than doing nothing, which most of sound passive investing (outside of dollar cost averaging) is about. Investors (or speculators more likely) need to get a grip and do difficult things, mainly physically, regularly in life. It makes the gyrations of the share market pale in comparison, at least in my experience.

Nickel prices up 100’s of percent and a guy apparently lost a billion dollars… ‘Enough’ is something most people never comprehend. It’s along the lines of ‘when you’ve won the game, stop playing’. It’s a vital to understand ‘enough’ if you don’t already.

Interestingly Joe Rogan recently talked about having a stash of cash as FU money so you never have to worry again.

 

Thursday 10^th March 2022

Overnight Amazon announced a 1:20 stock split and a share buy back. Buy backs are a way of many ways companies return value to shareholders.

 

Thursday 17^th March 2022

Over night the FED signalled numerous interest rate rises ahead for 2022 and surprise surprise the market ended the day strongly in the green! Who’d have thought?

My uncle, who we went down to visit last month, sadly took his last breath this morning, passing in his sleep. Knowing this was coming doesn’t change the emotions once it’s happened. He lived an amazing life, added enormous value to everyone around him, and was positive, happy and kind.

He was an integral part of the surfing industry here in Australia and had a bunch of funny stories. One, when he was still living at home with his mum, dad and sister (my grandparents and mum) he was asked by surfer movie maker to mind the money made from the movie premier, while everyone went out to party. It was thousands of dollars, so my uncle went home (he never drank or partied) only to have his mum find the money and accuse him of selling drugs and stealing! That couldn’t be further from the truth! He always got the short end of the stick, literally, from Nana!

Rest in peace mate.

Morgan Housel’s blog is sensational. Over the past month I’ve read all of his articles. I don’t recommend anything investing wise, but I do recommend investing a portion of your time digest his fantastic written observations over on his blog at The Collaborative Fund.com. https://www.collaborativefund.com/blog/the-big-lessons-from-history/

https://www.collaborativefund.com/blog/alternative-forms-of-wealth/

 

Friday 18^th March 2022

Dividend day. For the new readers, this is when companies pay part of their profits to the owners (shareholders) and we owners have the option to automatically reinvest these profits into buying more shares of the company or receiving the profits as cash in our bank and saving them, spending them or investing them elsewhere.

Not all companies pay dividends and that’s ok as they can return value to their owners via:

1. Dividends
2. Share buy backs
3. Reinvesting in the business
4. Paying down debt
5. Mergers and acquisitions

Saying strong personal biases exist when it comes to this area of investing would be an understatement. I’m not going to open this can of worms now as I’ve covered it in prior entries. Each of us as to figure out what suits us best. The behavioural aspects of investing should not be under estimated. They are the reason I write this Project Passive diary. The shortest pencil is better than the longest memory…

 

Thursday 24^th March 2022

Speaking of returning value to shareholders, Australian bank NAB recently announced a $2.5 million dollar share buyback. That’s now three of the four big banks in Australia returning billions of dollars of value back to their owners.

Then we have STW (which is the ASX 200 index) projected to distribute $0.72 cents for the March 2022 quarter, up from $0.52 cents in the March 2021 quarter. That’s around a 38% increase in distributions for the quarter. Considering ‘official’ inflation is running around 8%, shares are doing their job in protecting purchasing power. This is an incredibly underrated but most important aspect of investing.

 

Friday 25^th March 2022

According to the Australian Financial Review, ANZ bank have created a stable coin pegged to the Australian dollar. Stable coins are a gateway to crypto-currencies. ANZ said ‘we anticipate the digital asset economy will accelerate and a foundational element will be a digital Aussie dollar’.

Interesting…

 

Monday 28^th March 2022

The famous Trinity study of the 4% Safe Withdraw Rate for investors was recently re-done up until 2021 using real market returns. The original study was conduced in 1995 so the originator of this concept wanted to re-test it. It’s worth checking out: https://thepoorswiss.com/updated-trinity-study/

Also today TSLA announced they intend to do a stock split too. From my understanding (and I could be wrong) stock splits are a sign of bullishness from companies but also a helpful to company employees. Splitting stocks 1:10 or a 1:20 doesn’t change anything fundamentally but it does make the price of a company stock much lower enabling company employees to more easily buy shares and become part owners in the company they work for. Using TSLA for example, if their stock price is roughly $1000 now but they do a 1:10 split (just an example, I have no idea of their plan) stock is now $100/share and easier for their employees to accumulate shares with a part of their wages.

 

Tuesday 29^th March 2022

Parts of Northern NSW and southeast Queensland have flooded again. Unfortunately the same parts… I copped it this time as well, enjoying a couple of 16hr days moving furniture, mop and bucket in hand and washing machine in overdrive!

Vanguards Australian Share fund (VAS) today announced as estimated March quarter distribution of $1.99/unit. A 160% increase in income from the previous corresponding period. Talk about shares doing their job protecting our purchasing power!

I read online it’s probably got a lot to do with BHP’s rebalancing in the index, meaning the index would have had to sell parts of the 300 companies that make up the index creating capital gains/losses returned to us as distributions. We’ll find out the details soon enough.