I haven't given up - I've been doing two things:
1>watching as everything slide further and further downwards during September (with a mixture of horror and amusement). I think Michael Pascoe got it right when he said it would be funny if it wasn't peoples retirement savings that was being hit. The ASX plays out the most dramatic possible scenario after each evenings news from around the world : a report says China may not grow as fast this year: drop by 3%, the next day China's growth will be compensated by recovery in the eurozone, up by 2%. American have a good meeting, up 2%, Europeans say the wrong thing after a dinner with some banking mates: down 1%. The whole affair is like a teenage romance, up and down with every wind. Suck it up guys, there'll be good and bad days - don't sell. Unless you bought on speculation, not because there was any real value in the stock, but you wouldn't do that, right?
2>trying to decide how to resolve the 80-20 rule as it comes to this index. After the last post, I have really been wondering about the split, and whether I should bother with the bottom companies which represent individually less than 0.5%. (80-20 rule here is actually 80-30, where 80% of the index funds would be in 30% of the companies in the list).
The bottom 10 companies in the list (by capitalisation) represent 2.5% of the index - hence if they all rose in value by 50%, the impact would be about 1% growth in the index. That's not a lot of bang for your buck.
Secondly, until I've got a lot money to invest, it'll cost almost as much in brokerage as the value of the shares. And I'd like to actually buy some of the these share, because while they're all heading south, surely that means they just represent a bigger opportunity.
What I really want to do is re-sort the companies using some of the principles of fundamental indexation, but there is nothing compelling directing me which fundamentals to use. This has been the real drag on my 'getting' on with it, if I can have an excuse other than my own attention span. Fundamental indexes use revenue, employees, cash flow or sales instead of market capitalisation, but none of those things seem perfect to me - why would a company with a larger revenue go up more (or down less) than a company with a smaller revenue - perhaps they'd be more stable, but if you are talking about the companies here, a lot of them have negative revenue, or are really at a stage when revenues are no where near stable..
Can a fundamental index include such things as P/E ratio - to me this seems the most logical criterium on which to decide which stocks to buy - the stock with a lower price compared with it's earnings seems more likely to grow than one with a higher P/E, well it would if the earnings were positive and there was some hope of a distribution - which in this sector there doesn't seem to be much hope.
And further to that, I started to wonder if I couldn't use renewable ENERGY GENERATED as one of the factors in the buying decision. It seems unlikely that I can get that data without some serious mining, but maybe. This would knock out some of the spuriously large companies - like SLX, which as far as I understand, doesn't make anything from its solar business at this stage - it's positive looking numbers coming from nuclear fuel processing.
To start making some notes on the companies, I've created a 'page' on this blog (http://cleanenergyindex.blogspot.com/p/complete-list.html) where I'll collate any info that I find on the companies - starting with the market cap based ranking that they have.
Oh, and I downloaded the rest of the data - just to prove to myself it really did make no difference whatsoever. You can see for yourself below:
1>watching as everything slide further and further downwards during September (with a mixture of horror and amusement). I think Michael Pascoe got it right when he said it would be funny if it wasn't peoples retirement savings that was being hit. The ASX plays out the most dramatic possible scenario after each evenings news from around the world : a report says China may not grow as fast this year: drop by 3%, the next day China's growth will be compensated by recovery in the eurozone, up by 2%. American have a good meeting, up 2%, Europeans say the wrong thing after a dinner with some banking mates: down 1%. The whole affair is like a teenage romance, up and down with every wind. Suck it up guys, there'll be good and bad days - don't sell. Unless you bought on speculation, not because there was any real value in the stock, but you wouldn't do that, right?
2>trying to decide how to resolve the 80-20 rule as it comes to this index. After the last post, I have really been wondering about the split, and whether I should bother with the bottom companies which represent individually less than 0.5%. (80-20 rule here is actually 80-30, where 80% of the index funds would be in 30% of the companies in the list).
The bottom 10 companies in the list (by capitalisation) represent 2.5% of the index - hence if they all rose in value by 50%, the impact would be about 1% growth in the index. That's not a lot of bang for your buck.
Secondly, until I've got a lot money to invest, it'll cost almost as much in brokerage as the value of the shares. And I'd like to actually buy some of the these share, because while they're all heading south, surely that means they just represent a bigger opportunity.
What I really want to do is re-sort the companies using some of the principles of fundamental indexation, but there is nothing compelling directing me which fundamentals to use. This has been the real drag on my 'getting' on with it, if I can have an excuse other than my own attention span. Fundamental indexes use revenue, employees, cash flow or sales instead of market capitalisation, but none of those things seem perfect to me - why would a company with a larger revenue go up more (or down less) than a company with a smaller revenue - perhaps they'd be more stable, but if you are talking about the companies here, a lot of them have negative revenue, or are really at a stage when revenues are no where near stable..
Can a fundamental index include such things as P/E ratio - to me this seems the most logical criterium on which to decide which stocks to buy - the stock with a lower price compared with it's earnings seems more likely to grow than one with a higher P/E, well it would if the earnings were positive and there was some hope of a distribution - which in this sector there doesn't seem to be much hope.
And further to that, I started to wonder if I couldn't use renewable ENERGY GENERATED as one of the factors in the buying decision. It seems unlikely that I can get that data without some serious mining, but maybe. This would knock out some of the spuriously large companies - like SLX, which as far as I understand, doesn't make anything from its solar business at this stage - it's positive looking numbers coming from nuclear fuel processing.
To start making some notes on the companies, I've created a 'page' on this blog (http://cleanenergyindex.blogspot.com/p/complete-list.html) where I'll collate any info that I find on the companies - starting with the market cap based ranking that they have.
Oh, and I downloaded the rest of the data - just to prove to myself it really did make no difference whatsoever. You can see for yourself below:
