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Below is good link to explain easily what a passive and active managed fund is
So basically in large 5 years especially most funds now that run trillions and trillions of usds of funds have moved to passive, which creates bubbles in some shares and keeps some shares very depressed until they finally turn around and then it can have a long self fulfilling bear or bull run as money chases it or leaves it in passive investment.
Ie say it was a Dow Jones passive fund, which has to track the Dow, which has 30 stocks in it. The passive manager buys an appropriate amount of each 30 companies that constitute the index. But say Apple due to its large mkt value constitutes 20 per cent of the Dow movement. Effectively as apple goes up and the other stocks don’t the passive fund has to buy more Apple shares and if passive funds have trillions in them it becomes a self fulfilling rise higher as more and more are bought, making the share go into overvalued or possibly bubble territory.
So effectively going back to rmg. As the share falls and becomes a less percentage of an index the passive funds need to sell some and sell more as it falls further, so it represents the correct weighting in a index in a passive fund. But when rmg do finally trend higher then the passive funds have to buy more etc.
Therefore what I’m saying is as most passive funds are in equities weighted around the globe for diversity, you can see that when uk domestics etc finally start to turn themselves around then all that passive fund money will chase them up too.
So I do believe maybe in next 6 months we will get a trigger of fang type stocks going significantly lower and the value uk domestics will go up and as the passive funds are so huge in size the turnaround could eventually be dramatic.
For instance Hargreaves lansdown alone has a million investors invested nowadays in passive funds. So imagine the size of these funds and the movement of money within the fund when a stock sp has a turnaround.
It’s really academic reading to try and understand the potential of many stocks going into bubble territory and many that look dirt cheap, which has happened more so in last 5 years and I believe passive funds are quite a contributor to this phenomenon. So be aware of the potential size/movement of reverSal trends
Fruitster, I have not heard of this sort of investment strategy before as I don't generally dabble in other shares but nonetheless it is quite fascinating and sounds quite smart as long as the investor stays within their limits.
In your opinion, do you think that this passive/tracker investment has played a part in the current RM share price and do you think that it may have been a contributing factor to the £6.31 spike that we saw in October 2018?
200iq - very engaging comment
Your usual pointless drivel
Well said heallywood. Its not a good advertisement to the site, if you just have abuse and lemmings jumping on bandwagons when a sp has served their argument. That adds no value whatsoever to anyone, what adds value is articulate comments on why theres an opportunity here etc or good technical analysis etc or of course just general flows or anything that the street hasnt recd in news.
But just trying to be vile and angry and aggresive helps noone.
OK, whilst I've got the opportunity I'd like to say thanks for your thoughts and posting your views. I think we are seeing a similar story here but others may see things differently. Everyone's entitled to their views however I'm shocked by the amount of people bashing going on. What's the point! I don't chat much on these boards but If I do its only on the shares I'm interested in and If I'm looking /posting its because I want to buy, not because I want to **** someone off.
Bit of a side line. But a thesis im working on and see in the mkt at mom.
One of the trendy investment vehicles globally at the moment is passive investment, its same as tracker investment, which effectively, buys more of the shares as they increase in value and sells the shares that decrease. So many trillions has moved into passive investing over stock picking funds over the last few years specifically, which for me and your starting to see it in the mkts now creates the best performers to go into bubble territory and the bad performers to continue to be sold, just on money movement as passive investment doesnt care about valuations, but same time creates demand for stocks that perform and supply for stocks that are performing badly but creates real stretching of valuations.
I honestly believe over next year, it will be about stock picking and the passive funds, which have done incredibly well over the last 5 years, as low commissions too. But because of the money in them now and like all bubbles, when it turns it will be ugly and the undervalued stocks will go back up and the fangs will come down quickly in value.
Heallywood - I forgot to say. At end of day thats all i really have interest in achieving on here to inform and share my own experiance to hopefully help others make money too. Dont get me wrong i will be wrong some of the time too, but i try and put some facts behind my argument. To be honest there are quite a few that i believe are on here for the same outcome too and thats derek, jb, wolves, red, pp, alaninvesotr, feline, pod, carrington and i know ive missed others.
Additionally bears are invited too of course, but not to just abuse and just engage in discrediting people. Its about good facts that the reader can believe or not.
You have done great from it by listening but still of course using your own judgement. Thats great trader mentality and thats the point really of this forum.
Thanks Fruitster, I was quite pleased with that trade as I'm rubbish at it generally. I normally start buying shares when they look cheap and then buy more tranche's when they get cheaper and only sell when they rise about 25% from that buy point. Its a strategy that has worked well for me in the past. I was so tempted to sell just before the election result thinking I'm well up here but your comment about 2.50 was part of the reason I held for a bit longer and I'm glad I did. I genuinely believe we will be OK here, UK letters business practically valued at 0 so there is no more downside for me, this is a parcels business now and the only one that can also do letters so we have that as a nice little earner on the side. Post will always be here and it will add to the bottom line. I think the rise up will be gradual unless the USO gets binned or we sell off parts of the business. I also think royal mail needs to make more of their land value assets and numbers of vehicles.
Well done heallywood. Good shout selling at that 250 plus. Sadly I didn’t but I’m in for very long term and sadly has fallen back for me but over 5/10 year horizon it’s difficult for me to trade too many with my overall objective as would take risk missing the big move when it happens.
But great trading by you mate and agree every chance of short term move now to 190/200 for a recovery again. But I just am accumulating at moment from dividends I get. So I have buy on dip mentality at moment rather than trading it
But it makes me and you a better player at the poker table in your long term investment
My avge without dividends is 19 ish p higher as that’s 24.5p paid on majority my holdings but some purchases obviously haven’t collected the full 24.5 as bought later .
Basically the simple maths is total amount spent on shares (including stamp duty and dealing costs ) divided by amount of shares less the total dividend recd on the shares which is so far over gbp90k. Which I’ve reinvested most and re equated included that figure in the maths of total avge.
You cannot exclude the dividend from your return as that’s mathmatically incorrect on total return.
Ie if this share price remain at 213 for 5 years and you paid 213 and recd 15p a year for 5 years you wouldn’t be flat you would be 35 per cent up on dividends alone. Hence as long as dividends continue and the sp is fundamentally cheap vs net asset value is the reason I’m really invested and I also believe in the company (especially gls ) in long term to be able to sustain the current dividend at worse case.
The price is undervalued and I understand why as there are other uk value stocks undervalued too. Just tune into Bloomberg tv one day and you’ll hear many economists saying uk mkt cheapest in world at moment. It’s a mathematical fact as the mkt thinks UK plc deserves that discount due to brexit and the uncertainty to it. It’s like the pound most economists all say fair value is 1.50 vs usd but again it’s discounted due brexit and lack of investors still sitting on sidelines. The fangs are still bubbling in their valuations and all of the us mkt increase is basically down to the fangs which alone have added 160 points to the sandp this year whereas it has only gone up 70 points, so all other stocks have fallen vs the fangs.
However timing is the impossible thing but fair will usually return to historic avge over time and hence uk stocks are cheap but they have been cheap for 3 years now and until the true brexit uncertainty lifts will rmg and uk domestics will go back to fair value vs net tangible assets and avge historic p.e ratios.
So I don’t really care about cwu as over long term the Balance sheet matters and a week or two strike doesn’t really change that balance sheet.
However sentiment and real money in uk when the stocks I mentioned are virtually half price vs fundamentals will be the big mover. But of course when will that be. I don’t know but I’m convinced it will be within a year or two more.
So even though this could stay rangey 190/250 for a while that’s ok as I’ll collect dividends and reinvest, which will continue to improve avge the more and more dividends are paid over time. In a way the longer it stays here the bigger my position will be in free dividend shares and when it fulfills it’s true value then I’ll make even more.
So daily noise is yes tradeable and i also like keeping all informed with mkts and what there upto to try and educate some that don’t have that knowledge and gain a skill level themselves ( that does
Fruitster has been completely on the Mark several times. I saw his prediction of 2.50 come in and I was thinking it wont go that high but I held on and then sold the majority of my shares at 2.50 as I thought that might be a barrier to further gains short term. I thought RMG would fall back based on the punishing drop we got on the last results and the fact no deal is also a possibility again. I will be buying back in again soon if we get near 2.08 and then another tranche below £2.00 if it gets there but I'm in no rush. Keep up the comments Fruitster and good luck with your investment. I am a long term investor in RMG but I think RMG is ripe for a kicking at the moment so trading it the best I can with 2 small positions currently on hold.
"""I’m on here for daily info and advice."""
So why try to dismiss anything that is posted that doesn't suit your investment?
You claim to have an average of 211p. I have no reason to disbelieve you. Is this a good place for you to invest then?
Your average is only shored up by the dividend. What happens if Mr Back decides to cut the dividend like he did last year?
How much higher would your average have been if the dividend had not been cut?
What is your average without the dividend?
Have you re-invested the dividends to increase your holding? Or are you just re-adjusting your actual investment?
I have a feeling that you may be buying more shares in the not too distant future, just to keep your investment in the positive. Dividend based of course.
Charlie you have no investment here. You said a while ago you were out after stopping out and won’t be on this chat
Why are you still bothering then? Or a true troll.?
Fruitster, I'm sure Warren will be flattered by the comparison.
By and large, this is not a forum for sophisticated investors. Some punters are likely to be swayed by the macroeconomic patter and large holding, but of course I don't have to tell you that .
Fruit. There are a number of people here that blow hot and cold. I am "once bitten twice shy" If someone shows you what they are believe them!
There are also some that walk a straight line. You know where you are with them even if you agree to differ. Not mentioning any names because they stand out.
Then there are a handful who are just low life. They stand out also, you just mentioned one who is probably in actual fact a handful of identities on his own. So maybe my "handful" should not include multiple personalities.
My avge is still 211 including dividends as was 206 for a lot but raised it due to higher buys recently mainly at 227 area
I’m on here for daily info and advice. End of day a profit is not a profit or loss till position closed. If investing for long term there is very good chance on start of investment you will be up and down on daily basis. In long term more likely to be up as dividends accrue
But std is pure vile on here adding no value but abuse
PP & Fruit. Listen to the STD he knows everything. I bought the other day @ 117 and you both bought circa 140s. That in the STD world means I am the Messia and you are both pond life. Suits me and no doubt he will acknowledge my omnipotence by return.
Except we know it's BS.
The SP was rising due to various factors and all things being equal your buys should already be making money. It's not equal of course because you can do all the assessments but you cannot be in the mind of those that possess circa 75% of the shares and want more.
Your take on the situation on any given day is we know not to be followed blindly. It's an opinion based on experience but there is still free will. I did not follow that day because I thought it could hit a bump which it did. So this time I was lucky. Keep up the good work, there are many that appreciate the POV.
So Charlie your saying all best investors work for the company. You mean like Rico.
So you think likes of Warren Buffett needs to get a job in each company he works for before investing lol
I called 2.50 in couple weeks about month ago when it was 2.20. It happened pp sold some up there and just rebought them at 2.40. That’s called a profit. Well done pp for trading it and improving your long avge.
Yep surprised we have retraced off, but that’s due to reasons tied up with other uk domestics if you look at their performance in same period, due to uk growth concerns as well as brexit deadline in negotiating trade deal being possibly dragged out.
STD says every single possibility that eventually one will be right I quote you a std comment on 23rd Dec he made. So many conflicting statements
What a plankton and in meantime after my defence I’ll switch him back off again as everyone sees what a lonely loser he is seeking attention.
“By the way, my average is doing rather nicely too...I personally think there is every chance of £2.60+ come the figures for the Christmas period. And if not? May well consider buying a few more.”
Sadly PP, you probably do. Why does someone with industry expertise put credence in the posts of an anonymous contributor with no such background and whose RMG share price intuition has to date proved misguided. I hope you don't lose money, but if you do, I hope you learn a lesson.
Oli, I know seems implausible but I was a north Manchester postie with in 2012 a 911 convertible (brand spanking new and bought with real money; no finance). And it was never a secret with my colleagues. I just led a very boring life!
PP, it may surprise you to learn that my previous moniker was GigoloFerrari.......lol......Then I woke up...