Thought I’d share an email I sent to two of my kids, who are in their mid-20’s:
Dear (deleted) and (deleted), Given you both seem to have been active in the share market over the past year or so, I thought I might share some of my thoughts on share trading based on my experience: - Share markets fluctuate - mostly gently, but sometimes by a great deal. As is now happening. - Crashes occur - as now. But the sharemarket will always recover. - You only actually make a profit or loss when you sell. - Paper losses are just that - paper; not reality
Reasons for selling today: - You can't stomach it any longer. That's valid, but not practical. - You are facing a tax bill because you've realised profits already this year. So it might be a good idea to sell some shares at a loss to negate those profits. But bear in mind if you then buy back in, you would have to hold the new shares for 12 months so that you only pay 1/2 tax on future gains. And if you are buying back into the same company all you are doing is deferring your tax. - You feel the shares you now own will decrease further in price, and you can buy back in later at a lower price. That's valid, but be careful. - The fundamental reasons why you bought into a certain company have changed - you now feel that company is not worth investing in. That's valid and practical. Do it.
My thoughts on TNT specifically: - I have a lot, and am very happy they are on the right track under the right management team and Board. Very happy to discuss my many reasons if you wish. But a share price is determined by the feelings and interpretations of investors - it's not reality. - I'm disappointed I didn't have a crystal ball to tell me that a market crash was coming and I should not buy any until now. Oh well - but I've held them all for more than 12 months, so whenever I sell, I'll only have to pay 1/2 tax. - They will report on their full year results at the end of July. I'm expecting the price to recover a bit in the lead-up. And my fingers are crossed the results will be so good, the price finally takes off. - My intention now is to hold for at least another 2 years - if this year's results are good, followed by next year's then the price will be stratospheric. So maybe I’ll hold longer. - I'm not blinded by wishful thinking. If at ANY time I feel they are unable to achieve the results I expect, I'll sell. So I'm keeping a daily eye on them. I’ll keep you updated on my thinking.
Bear in mind, I'm not an expert in the share market - no one is. All of the above is my opinion only. Make your own decisions.
