I don't know much about Aston but he doesn't seem to like those north of the tweed much by the sounds of things, i'm north of the tweed but not too bad, maybe it's a state of origin thing..... Go the Maroons.!
When i first started trading i was also a technical trader although my old man would give me a list of tickers i could trade, he wouldn't let me just trade anything and because he was a retired partner from Coopers and Lybrand i thought that was probably a good idea because back then i had no understanding of books etc and fundamental analysis. So i basically worked on the timing to buy and sell using charting Ta, volume anomolies etc, etc. This was mainly on small cap shares as i never use to use leverage or CFD's, just put 5k a share/per trade with up to 8 shares at once. Small cap SP's can and do move alot and because of my small amount of capital i had to go for bigger % returns, and boy do they pump some of those little shares, some i did very well out of, but the 2000's was a bullish time for the ASX and 10%-20%pa doesn't cut it for me, never has and never will. Pre '09 i was on HC as Skitzy. The problem with the small shares is volume or liquidity, if you've got more shares than on one line in the depth the p.a. returns can be effected because 1 pip represents a large %, therefore investing in the small cap or micro cap sectors comes with capital investment limits because losses have to be kept to a minimum which inturn limits actual $ profits but not the % p.a.
As time went on working with my old man he slowly but surely taught me stuff with the books, fundamentals etc and general principles he thought was good knowledge. As time went on and i understood more things i realised that fundamentals was the key to this game and Ta could somewhat help with timing and if one can get the fundamentals right, excluding black swans, one will generally always win, whereas Ta trading will always find losses no matter what. Also as i created more money i had to invest more so i've had to move to bigger shares for the liquidity and now with things like CTD i feel like a right minnow.
I'm not sure how you deem prudent in your imperial wisdom that fundamentals are good here or with any company and because of my lack of "higher education" its very hard for me to explain fundamentals as i see them and try to work out, it can take me weeks or even months sometimes to get the answer i'm looking for, which is what is the SP going to do from where it is now within a certain timeframe which sometimes can be a little open ended.
Unfortunately my Father has passed away and i do all the work myself these days but one thing always sticks in my head that he use to say..... We never use to do books like they do these days, they push the limits and the wiggle room of accounting assumptions a lot more than i would have done for a public company, we were responsible to the public. He did an experiment to show me the differences practically. I have two older brothers who are Cpa's, one doesn't do accounting anymore he hated it, but anyway the three of them sat down seperately to individually value a certain share and also project an SP a year down the track, all three of them were proper bean counters and they all gave me different projections, risks and valuations. This mean't that depending on who did the valuation from the same set of accounts differed depending on their own assumptions for entries throughout the books and the future valuations. It's no exact science.
Here in the link below the article explains things like i try and share with you and other HC users with a little snippet i've copied and pasted.... -" The commercial imperatives behind the consultancy big sell are explicit in the firms’ own targets. KPMG UK’s first two “key performance indicators”, for example, are “revenue growth” and “improving profit margin”, followed by measures of staff and customer satisfaction (which won’t be won by giving them a hard time).Exposing false accounting, fraud, tax evasion and risks to economies – everything that society might actually want from its accountants – do not feature." https://www.theguardian.com/news/2018/may/29/the-financial-scandal-no-one-is-talking-about-big-four-accountancy-firms
The worrying thing for investors is, especially little retailers like myself is that these large global accounting/auditing firms make some mistakes, in fact far too many mistakes for my likeing if im understanding it all properly. It makes you wonder when looking at any companies books if they are a fair and reasonable account of whats really going on or are the companies paying these big firms ridiculous amounts of money to make their profits, books and businesses look as good as they possibly can on paper rather than keeping it real.
It is also worrying that this example here with EY knew it had a high % of auditing issues way back in 2013 and i'm sure if i dug further they would have known for longer than that. Another worry is that governments like ours also seem to be giving the books a wee little massage, take our recent LNP news that we might be able to get to surplus soon, yeh sounds good but when one has a little lookie in the detail they only allow for $1 bil of bad tax revenue debts out of a $12 bil receivable number......... as if they will only lose $1 bil with bankruptzys rising and the global growth enviroment along with the Australian property market declines, tighter lending etc...... They're dreaming if they think they'll achieve such a result but because of accounting rules they can shout surplus from the roof tops when its really a very big IF.
I'm guessing here but with the VGI 20+flags and CTD responses i'm thinking VGI might be thinking the Pwc auditing here may be below par or thats the conclusion i'm coming to. EY's little lookie and CTD's notes on what EY said doesn't really mean a lot to me as EY didn't have the time i would have though it needed to give a thorough explanation and account of related matters. It will be interesting to see the upcoming accounts and anything further EY may say or even Pwc for that matter.
Apologies for a lengthy post but theres not much posting going on round here so plenty of time for everyone to have a gander. It may well turn out everything is ok here and VGI were wrong but as you know i think they are right but just like anyone i get things wrong sometimes.
Dyor Fish
CTD Price at posting:
$24.12 Sentiment: Sell Disclosure: Not Held
(20min delay)
