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i know all products can make money if you buy at a "correct" value and maybe right time also. But i never like perpetual products. i just can't accept the terms of perpectuality.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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all stocks are perpetual in nature. then you should not accept investment in stocks.
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04-03-2012, 12:32 PM
(This post was last modified: 04-03-2012, 12:36 PM by Temperament.)
Really? i have been investing for 24 years and i don't think so. Every product has its own "criteria" and our Great Mr. Market will tell you so; If only you pay a little attention to him.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Posts: 2,113
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Joined: Dec 2010
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5
04-03-2012, 12:53 PM
(This post was last modified: 04-03-2012, 12:54 PM by freedom.)
With your 24-year experience, please enlighten me why stocks are not perpetual?
Is there a date that the issuer will be buying back your stocks from you?
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i don't really know the term "perpetual" is to you. For me i like the FREEDOM to choose when i want my money back. For this reason i also don't like to buy very low liquidity stocks no matter how good its fundamental value. i am sure you have a different perspective of the Market. That's the beauty of the Market. That is to say, everyone of us has his own way of prospering in the market. IMHO.
Actually, i never even buy BONDS except FDs for short term parking.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Posts: 2,113
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Joined: Dec 2010
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5
then you should term it as "illiquidity" instead of "perpetuality".
perpetual simply means, it will not be redeemed, which applies to all equity, be it common stocks or preferred stocks.
perpetuality has nothing to do with liquidity.
plenty of equity stocks within STI are quite liquid. plenty of non-perpetual bonds listed in SGX or any other exchange probably are illiquid.
and most of bonds are non-perpetual.
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04-03-2012, 01:39 PM
(This post was last modified: 04-03-2012, 01:44 PM by Temperament.)
perpetuality has nothing to do with liquidity.
Unquote:-
Yes to you word by word is correct. To me buying a perpetual product is as good as kissing my money "goodbye". That is where we were different. Sorli!
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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21
While temperament appears to have replied rather oddly, i tend to agree that perpetual preference shares (particularly perpetuals which also give the issuer the right to recall at their leisure) lack one critical feature of a fixed income instrument (a gaurantee of your principal back by the issuer) while offering none of the potential upside of an equity instrument. I would tend to stay clear.
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05-03-2012, 09:53 AM
(This post was last modified: 05-03-2012, 10:00 AM by Temperament.)
Exactly! Yes, the issuers of perpetual preference shares are playing with us
the game of HEAD they win Tail we lose. Of course many other investors in the market may have different opinions. That's why we still have these products. Some of them will make money if they don't mind:- "they don't mind whether or when they can get their capital back". Though you can sell them in the secondary market, it is usually not a "lucrative market". So the meaning of the term "Perpetual" here for preference shares is vastly different in meaning when applying the same term "Perpetual" to common stocks. At least to me only, for common stocks i can get back my invested capital anytime i want. i can roll my capital when opportunity comes knocking. And opportunity does not wait for no man.
For i have not reached the status of too much money to tie down some of my money where i don't know when or whether i can get it back at any time i want.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Posts: 775
Threads: 5
Joined: Dec 2010
Reputation:
16
> But i never like perpetual products. i just can't accept the terms of perpectuality.
Perpetual bonds and corporate bonds with term tenure have big difference - they promise to pay bondholders back. So perpetual bonds should give higher premium.
> Perpertuality and Liquidity no relation?
If the company dont promise to pay me back, I got to find a market to sell it. So I need to find a market with liquidity. If the bond issue too small, or no liquidity, mati liao... Similar to property...
Better to buy Starhub with a > 6.5% yield for next 1 year. Can get dividend, can run... hahaha
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