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Money and Investment

Roger Keays — Tue, 21 Feb 2012 10:35:12 +1000

Money and Investment

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Roger Keays — Tue, 21 Feb 2012 10:35:12 +1000

"Some Important Things To Note"

Roger Keays — Sat, 14 Jan 2012 12:20:06 +1000

From the UBank Term Deposit terms and conditions:

There are some important things to note when you request a withdrawal or reduce your UBank Term Deposit account balance prior to maturity:

We may reduce the interest generated on your term deposit by what we consider to be a reasonable estimate of the costs to us. This cost, known as a Pre-payment Cost, may include the accrued interest amount on the day you close your account.

Ha ha. As if a bank is ever going to let you off.

Investing In Index Funds

Roger Keays — Mon, 21 Nov 2011 10:03:27 +1000

After calculating my returns on ten years of investing in more or less whatever sounded good I realized that I really needed to learn something about investing.

So I read and read and read everything I could find about investment (not really everything - there is a whole aisle dedicated to investment at the university library). The idea of Value Investing grabbed me most. It's the method made popular by the world's most famous investor, Warren Buffett.

The idea is simple. Buy good companies at good prices. So first I went about finding good companies. To me these are those with

a simple business model
relatively few staff
high margins
a track record of reducing expenses
dominance in their niche
high return on equity

I spent months going through the market meticulously reading annual reports and calculating fair prices for the companies that met my criteria. Then I bought shares in those whose prices gave me the biggest margin of safety.

Now, two years down the track I'm excited to bring you the results.

Term Deposit Scam

Roger Keays — Tue, 27 Sep 2011 13:42:53 +1000

I thought I was pretty cool when I set up my term deposit with a 6% interest rate. With such low risk 6% is not a bad figure for doing absolutely nothing. I figured I had the best bank in the world. Reliable, honest and with great products. Not like those big bullies with all their fine print, hidden fees and dodgy products.

But now I want to move my money into more fertile pastures. My deposit has matured and is already half way through another 6 month term. So I contacted the bank to see how much interest I would get if I closed that term early. I rang them twice to confirm and the figure they gave me each time was actually just more than half the total interest at maturity. This seemed like a good deal, so I asked them to close the account.

Oops. Epic fail. It seems even the bank staff where duped by their own wordiness. The figures they gave me still needed to be minced, diced and broiled to come up with the real total of ... practically zero.

Running To Stand Still

Roger Keays — Mon, 19 Sep 2011 17:06:42 +1000

In the rainforest in Brazil there is a tribe called the piraha whose language does not have a future tense. Why? Because they don't need it. They don't have to think about the future. They get up, fish, eat, play, talk and that's their life. Their technology extends mostly to rafts and spears.

Meanwhile, in the industrialised world mass production is delivering food, goods and energy at an alarming rate. Hungry? Where do you go? Normally the fridge, but in the worst case scenario you might have to skate, cycle or (God forbid) drive to the supermarket. Our machines are selflessly harvesting the land, drilling the ocean and crisscrossing the skies just so we can snack on corn chips while we watch cats doing backflips on YouTube.

So why are so many of us running to stand still?

Managed Funds Hidden Fees

Roger Keays — Fri, 22 Jul 2011 05:36:43 +1000

Have a read of this from a Colonial First State PDS and let me know if you can make head or tail of it. The PDS lists two figures for their funds: Management Fees (1.4%) and Management Costs (1.5%).

The terms ‘management costs’ and ‘management fees’ mean different things.

Management costs include management fees, estimated performance fees (if applicable), investment expenses and custody fees. Management costs are deducted from the performance of the fund (ie they are not charged directly to your account). They do not include contribution fees, transaction costs or additional service fees. The management costs for each fund are either an estimate or based on current financial information. They are expressed as a percentage of each fund’s net assets and, together with any applicable transaction costs, are outlined in the table above.

Management fees are the fees payable under the Constitution for the management of each fund. Management fees are calculated from gross assets of the fund. For details of the maximum management fees allowed under the Constitution, see table above.

Returns on Investment

Roger Keays — Sat, 11 Jul 2009 07:58:00 +1000

The market statistics here are from the All Ords Accumulation Index or the All Ords, where I couldn't find the AOAI return. The figures vary from different sources, so I wouldn't exactly reference them or anything. My returns are calculated including imputation credits (which increases the figures), and treating reinvested dividends as part of the contributed capital (which decreases the figures). CPI figures come from the ABS website.

Year	CPI	Market	Me
1999	1.8%	16.1%	7%
2000	5.8%	3.6%	11%
2001	3.1%	10.1%	9%
2002	3.0%	-8.8%	-16%
2003	2.4%	15.9%	-2%
2004	2.6%	27.6%	7%
2005	2.8%	21.1%	18%
2006	3.3%	25%	20%
2007	3.0%	18%	22%
2008	3.7%	-43%	-37%
Avg	3.15%	8.56%	3.9%

Une Autre Perspective

Roger Keays — Sun, 14 Jun 2009 22:30:00 +1000

Actuellement, je cherche nouvelles occasions d'investissement. J'ai aussi viens de finir lire un livre sur Warren Buffet et sa approche d'investissement. Une chose qu'il dit souvent est "investissez dans les affaires que vous aimeriez posséder". Je sais, bon sens. Mais après j'ai regardé de près mes investissements, j'ai pris conscience qu'ils ne sont pas vraiment ce type de affaires que je voudrais posséder moi-même.

Alors, quel type d'affaire voudrais-je posséder? Je préfère surtout les affaires avec peu d'employés et grande marges. Voila une comparaison de plusieurs entreprises et leurs importance et marges. Les différences entré ces statistiques sont très évidente.

Enterprise	Employés	Bénéfice	Bénéfice / Employé	Marge
Berkshire*	19	4,994M	262M	4.6%
ASX	542	365M	673K	58.5%
Google*	20,222	4,226M	208K	19.4%
Westpac	28,000	3,859M	137K	33%
Telstra	46,649	3,711M	80K	14.8%
H. Norman	4,760	385M	81K	6%
Qantas	37,000	1,400M	26K	5.9%
Wesfarmers	200,000	1,050M	5K	3.1%

* US Dollars

Mes Achats

Roger Keays — Sat, 16 May 2009 17:49:00 +1000

Coles, mon local grand magasin, sont maintenant en ligne à http://www.colesonline.com.au. Je ne pense pas que je vais acheter en ligne à ce moment, mais c'est encore très pratique parce qu'on peux voir toutes les prix. Et aussi, on peux voir les unit prix par 100g ou 100mL. C'est intéressent comparer les produits comme ça. Pour votre commodité (et à cause je suis un peu frugal) j'ai fait une liste de prix de les choses que j'achète :)

J'ai choisi le moins cher produit pour chaque cas.

Finally, An Understanding Of Value

Roger Keays — Mon, 8 Dec 2008 02:22:14 +1000

For several years, a concrete understanding of the concept of value has been eluding me. It all began when I was developing the object model for Sunburnt Accounting which was to support multiple currencies. I didn't want to simply translate every transaction involving foreign currencies into a global base currency because this didn't seem to model the real world. If I exchange one sheep for two pigs, who cares about the price of sheep or pigs in Australian Dollars or Mexican Pesos or toothpicks? My sheep is worth two pigs.

This is okay until it comes to reporting. For example, your balance sheet shows what you are 'worth'. You could continue without a base currency and say your net worth is two pigs, $100, 20000 pesos and 4 broken toothpicks, but the question remains - what is this worth? You might even decide to convert it all to AUD and declare the total value to be $300, but what is that worth? In Australia in 2008 it's worth about a iPhone, but for rural Vietnamese it could be worth food for a family for several months.

More Legal Bollocks

Roger Keays — Tue, 26 Feb 2008 13:48:09 +1000

So I've just found another funny letter while writing my last blog about debt collectors. This one is from the solicitor of some bevan who wrote off his car and nearly killed his girlfriend when he drove into us on a mountain road. They were both very shaken by the accident. She was crying and he just kept apologising.

"Well at least he admits it was his fault", I thought. Right? Wrong. Here is an excerpt of the letter we received a few weeks later: