Toxxic graph

Morning all,

I started this thread because toxxic's post was in charting and muppets reply etc is about global risks etc. etc. -

I think it's an important area and I thought - hmmm, sooner or later this will get modded for being off topic - so, hence I thought - start a new thread just in case.

Toxxic's post

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muppet's reply

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"It's a real quandary isn't it? The world is on tenter hooks trying to figure out if this is 2008 again or worse. In the meantime I've never been more convinced by an ASX minnow before than with AJX. The question is whether it can sustain these valuations and hit the goals anticipated if the world economy does stumble. I'm thinking it can for now and that perhaps things in the US aren't quite as bleak as everyone is imagining. Then again I'm an optimist (as are most people when it comes to investments)...

2015 was clearly a rough one for corporate earnings although most analysts are predicting somewhat of a rebound for 2016 (are they drinking the Kool aid?). One bazooka the US has left is to cut their corporate tax rates to something more similar to other mature economies and/or allow repatriation of US profits from overseas at a discounted rate for a short period. IMO that would have been a far better option early on than tax breaks for the wealthy who just horde the money or spend it outside of the US economy.

Last nights earnings from IBM and Netflix were okay (although on much revised estimates...). I don't think there's likely to be a massive collapse in the next few weeks, so we should at least have time to digest the 4C and half yearly plus the commentary around them. It might be best for all concerned for global equity markets to slowly drift down for a few months to more realistic or even undervalued levels, that could provide the springboard for an AJX listing just as the company is becoming profitable."



Ok - this is my thoughts -

Assuming the wheels stay on with the personalities etc. - I put as a very low risk AJX falling behind as per the business -

'no matter what the state of markets or economies'

Sure - we might do better if things are rosy - but, IMO we are going to do strongly if the poo hits the fan.

To that end - I see 2016 as a massively strong year for AJX (business) no matter what and 2017 as being huge for revenue.

Now - in the face of that -------- SP's believe it or not can still come under pressure. I have told this story before - but, I bought a larger parcel of HSN in the fear of the weeks of starting the GFC --------- there is no way the GFC was going to effect HSN.

That said - it recovered strongly and had  several good years of earnings/growth - and paid strong dividends and has done so since.

I always thought it was cheap --------- but, then - all of a sudden for about a year - the SP went ballistic - to me - it HAD to happen.

It didn't matter when the SP was just growing nicely - and bit of down here a bit of up there - who cared - the dividends were flowing in EVERY six months - a big fat juicy deposit in the bank.

Now - for AJX -- the growth and earnings will be far higher and far faster than that - and, I seriously believe that they will start a dividend stream in 2017 -- maybe even this year - and, if not this year for divvies - then, maybe a capital return or similar.

For long term investors - unless you wanted to take some capital off the table - it should be a very very easy hold - no matter what happens in the big markets.

America is just not going to let it's soldiers etc. go to war in their undies or dressing gowns.

Ditto every other military in the world.

Airbus and Boeing are going to be looking for any advancement they can to keep their planes safe - and at the least cost.

Bed manufactures and all other manufacturers are going to be looking for the cheapest ways to produce - and, not only that absolutely fighting for any differentiation in product that will attract people -

now, of course they do that all the time - BUT, when times are hard ----------- they work harder at it.

Since we have the cheapest product - and, the most effective in safety and green - they will be going harder than ever towards us.

This is where also that the cost for customers in the setup is so important - it doesn't cost them much - and, sometimes, it can give more than just a FR protection in the one process - how good is that.

Also - the customization really comes into it's own here - we really work well with the customer.

So - in summary ---------- I would say - that business and investment wise - we are probably as safe as houses -- of course, that doesn't mean the SP will not move around - and, move around a lot --------- but, my experience in HSN told me that a bargain doesn't stay a bargain for long --------- as soon as a panic is over - prices begin to adjust ---

especially if the company is paying out money to shareholders - which, in bad times - is a very very desirable thing - to see that deposit in your bank twice a year.

I look back to history where the wheels most definitely fell off for years --------- and, I see a similar thing - the only real lights on the horizon were the companies that paid divvies -------- they did well whilst all around them burned.

Lets see what happens ------- and, good luck to all of us.

Pinto