Foresight Share Discussion Threads

[pugugly] 27/10/2010 07:23

Morning all: Re posts 140-150. These should be published (imo) as very good basic philosophy. Having been up and down in the last 12 years, investment portfolio was down 50% plus post Lehman here are some thoughts which you may find helpful.

Set a unit of investment and try and keep to it. While very tempting to go ver y heavy on a "sure winner" the nag usually falls unexpectedly.

Diversify. Possibly the most important rule. There will be disasters (unpredictable by most) along the way and a good spread should give you the ability to absorb them.

Keep with your winners and try to avoid selling too early. It is very tempting to take a 100% plus profit but if you have the right company in the right industry the 100% profit can grow to a 1000% plus in under 10 years.

Keep a significant percentage of your portfolio in cash or very safe bonds/treasuries so you have the ability to realise liquid funds towards the bottom of a crash. [ I was able to recover post Lehman by realising liquid assets and investing in well oversold stocks with strong repeat sales and robust balance sheets (such as Weir, Fenner, Renishaw, etc which had always seemed too expensive before.

However in the end it will always come down to the investing style which make you feel most comfortable.

[cockneyrebel] 27/10/2010 07:00

Getting off topic so here's a new thread for trading questions

CR

[felix99] 27/10/2010 06:42

Penpoint. - you got to go with markets and have a mix if longs and shorts. At the very least short an index as a hedge. All good hedgies have a mix so whether mkt moves for or against you you have winning trades to cash whilst the other stuff is adverse.

Helps the psychie as well which is what this whole game is about. I find my initial thoughts usually win out but you can kill yourself fighting the mkt if u time it wrong. I tend to plan a trDe and if it doesn't work then stop yourself out. Often taking a hit when it would be well in profit later.

With that strategy and circa 20k capital I have averaged 15k a year profit on leverage. I am starting to try and run positions more but it's hard running a big loss on that amount of capitals I will be slowly adding to it and trying to run positions better. I always like to take a profit and inevitably trade out too early is my weakness.

But as they say you will never go bust taking a profit

[pro_better] 26/10/2010 21:48

imo the most important is all about management of pot and have always a strategy in place...and stick to it!

[felix99] 26/10/2010 21:23

if you can work from home and invest at same time then why stop working - best of both worlds.

Hardest I think is pressure to perform. As has been said SIPP works best as least pressure and you don;t need to live off that.

I would love to do it full time too but quite happy working and trading at same time as I can do both liek you. Made oodles in my SIPPs and a steady 15-20k a year from CFD / spreadbets.

But its hard outside sipp especially when you have a few good wins you think your great and then you lose it all on a bad bet without a stop or something.

[cockneyrebel] 26/10/2010 20:53

By August 2008 I was out of equites bar about 5% and in UK short dated bonds dasv. Fortunately they rose about 10% while the stock market tanked 35% on the Lehman Crash. I've learned over the years not to fight the market - trying to be long when the market clearly isn't going in that direction clearly is a no-no imo. I think if I'd stayed in equites through that period and not sold up I wouldn't be here now to tell the tale. It also meant perhaps that I was feeling a bit more confident come Jan 09 than many were perhaps - which meant I went back into the market quit heavily and fast - doub't I'd have done that had I taken that extra 45% drop and been totally lacking in confidence.

Longer you do this the more you learn too - you can pay to go on trading courses but you can't buy experience. I think you make more as you get longer in the tooth so if you're not hitting the level of return you desire when you've only been doing this a few years don't think you won't improve imo.

CR

[dasv] 26/10/2010 20:43

CR - Impressive. in the 2008/2009 crash did you sell up or did you stay exposed ot the market?

--

I want to build up way beyond 150k outside the SIPP before I pull the plug on the job. I am lucky I can work from home and I can fit in the markets around my work.

I too find the pension easier to trade than the other accounts. I can sit on a volatile investment much easier - much wider stop or no stop - in the SIPP.

Pension return - I've just worked out is 363% gain since jan 2008.

I reckon I only got good at this game from about March 2008 before that I was like a monkey with a dart board except for my gold investments which saved my bacon.

[cockneyrebel] 26/10/2010 19:30

envirovision - I use Proquote for watching stocks, Sharescope for screening.

Returns tend to be hard to gauge on a year to year basis and also where you invest your money. I expect a better return that 20% p.a in my portfolio but then I have a fair bit in ISA's that don't get taxed so the pot compounds. I'd say over the last 10 years I've grown the pot by 400% and taken a fair old income from it of around 20% pa..

I also invest within a pension - there's no tax there and it all compounds. That has done far better because I take more risk there and don't need the income. From March 2003 I'm up over 5000% with divi income reinvested, or 80% p.a in those 7 years so you can make far higher returns if you avoid tax and don't draw an income and you're more relaxed about risk imo.

CR

[davidosh] 26/10/2010 18:39

Incidentally it is not just the amount you have as a pot but also the way that you structure your portfolio that is important. For example whether you need regular income and so need divi payers or can afford to lock stocks away...Do you need to sell to pay bills at certain points of the year etc ? I certainly would not recommend having less than 15 stocks across various sectors. That way your portfolio is unlikely to collapse overnight and send you back out to work again ...

Anyone considering this needs to fully assess their outgoings and then based on say a 5% minimum return set the level of pot needed to start the ball rolling. I think anyone expecting a 20% annual return is getting a bit ahead of themselves in the early years at least. Many had that return straight after the 2008/9 lows but an average of the last three or four years would probably be single digits for most.

Good luck to any who feel they can go for it though..

[choppa] 26/10/2010 18:08

As Ghekko said "its all about the game..."

[envirovision] 26/10/2010 17:58

CR do you use any particular stock screening package or charting software / web site?

[cockneyrebel] 26/10/2010 17:48

I invest for a living too these days. £150K is the minimum imo - if you're not geared using s/b or CFD's. If you are using s/b or CFD you might be able to get away with less but you run th risk of losing a lot of your pot fast if we haver a surprise mkt downturn imo.

It also helps if you're not really dependent on the money. I find I do better in my pension that I do in the port because I don't worry about falls in the pension as much as I can wait for a recovery. Like interceptor2 it is more like a game to me. The money I make is less important than the number, the percentage gain and the performance. Bit like catching a fish to be in something like STAF last week before the t/s. It's the fun of playing the game rather than the amount you get paid for doing it - unlike Rooney perhaps :-)

CR

[interceptor2] 26/10/2010 17:39

steg - I guess if you can average a 20% return each year then 150k should be enough as long as you haven't a mortgage etc. I decided to do it because I had enough of working for a company, and I have always loved investing. It's a bit like a treasure hunt for me, always searching a good investment. Very exciting imv. Just like fsg............

llwyd - I'm not sure about setting up an account without their knowledge, but as long as you have access to their passport and details it could be done I guess. Maybe best to speak to the company first.I just sat down with my nephew and went through the process with him.

Remember that it's important to set up an account with a company that doesn't charge an inactivity fee, ifs your trades are likely to be infrequent. Halifax offer this, and seem ok.

Regards ic2........

[llwyd] 26/10/2010 09:42

Inter2. Re.136,
I have a similar intention for my nephews, nieces etc. How do you go about setting up share accounts, also without their knowledge?
Thanks
P

[stegrego] 25/10/2010 21:28

ic2,

O/T

What sort of figure do you realistically need to start trading / investing full time?

What made you decide to do it?

[interceptor2] 25/10/2010 20:07

Couldn't help myself, and brought some more today. But not for myself, it was for my 18 year old nephew who I opened a share a/c for recently.

Hopefully this is the type of company that should gain his attention,(whatever) and put him on the road to a profitable future. When I was 18 I was given a share certificate in Cable & Wireless from my Auntie, if it wasn't for that I wouldn't have stopped working at 44 years old and doing this full time now.

Regards..........

[stegrego] 25/10/2010 12:45

Bought a few thousand this am.

I held this a while ago in the 30's and 50's, it seemed to do sod all and spread was huge. I gave up and went elsewhere.

Hoping this is third time lucky ;)

[nurdin] 25/10/2010 11:36

cheers simon :o)

[simon gordon] 25/10/2010 11:32

HB Markets - 25/10/10:

Focus Solutions Group (LON:FSG) (FSG, 96.0p, £28.56m) has extended its contract with Bank Of Ireland Life for its focus:360 wealth management product. The contract extension is expected to be valued at c.£0.675 including £0.3m of license fees over the next five years and £0.375m of professional services. The contract extension highlights the strength of implementing a single platform solution that can extend to new audiences in line with an organisation's growth ambitions. As expected the recent upbeat trading statement has encouraged the market has upgrades 2011 PBT to £3.5m and EPS of 8.2p. The stock trades on 11.7x 2011 earnings and 7.9x 2012 earnings. We continue to believe the current share price does not reflect the strong order book and the high quality of earnings. We reiterate our BUY recommendation and our target price to 128p – equivalent to 10.5x 2012 earnings.

[dasv] 25/10/2010 10:32

yep - there's your long term low PEG making this a bagger imo.

[cockneyrebel] 25/10/2010 10:09

yes interceptor2 - totally agree.

CR

[interceptor2] 25/10/2010 09:55

The real excitement will come when we start to see contract announcements from the Mastek contract to resell focus 360 worldwide. Mastek only signed up 6 months ago, so not sure how long until we start to see the new contracts. But I suspect they will be the key to a very interesting future.

'Moving forward, the contract win with Mastek will help underpin the ambitious
global growth plans we have for the Group over the next financial year. Mastek
will resell focus:360 across North America, Europe and Asia Pacific regions,
and has also become a systems integrator for direct engagements with clients
outside of the UK, providing Focus with scaleable resource capabilities on a
global basis.'

[nurdin] 25/10/2010 08:28

I know the software is being trialed at a number of organisations....just matter of time before they get converted into major contracts..