Facilities By Adf Share Discussion Threads

[sword of truth] 24/6/2001 18:54

Seeing as Ashley James is a proven Liar and Ramper does it not make it hard to accept anything he says?

I am not a memeber of the PBB but if I was I would be elated at the news that Ashtray was no longer going to post there!

[mr ashley james] 24/6/2001 17:45

Kayak,

In your post 106, you ignore the fact that companies need to provide three year business plans, fundamentalists, the Ayatollah included, can then review a company's performance against stated objectives.

What can a chartist do?

Best regards

Ashley

[gausie] 24/6/2001 17:36

Madge

Go ahead and create value if altruism is what motivates you. I'd rather create profits.

Gausie

[mr ashley james] 24/6/2001 17:34

Gausie,

I agree shorting by definition, ie destroying value in a bear market, is far easier than going long, ie creating value!

I understand most PBB quite rightly shorted most TMT stocks down from March 2000, the way to go IMHO!

It is however a little tough to create value, unless you invest in undervalued jewells, in a bull run in the sector!

Best regards

Ashley

[gausie] 24/6/2001 17:31

Karl - good post.

I'd add that experienced traders also make money by selling low and buying lower. Refusal to accept this strategy as legitimate is, of course, the nub of Madge's problem.

Gausie

[lady mary hinge] 24/6/2001 17:05

Ashley James, I would like to put a different slant on the term "Buy low, sell high"

As we know, perhaps the best known investment paradigm is "buy low, sell high". I believe that more money can be made buying high and selling at even higher prices. I used (I am retired) to buy stocks that have already had good price moves, that are often making new highs and that have positive relative strength. These are stocks that are in demand by other investors. What is the risk? Obviously, the risk is that I'm buying near the top. But, I would much rather be invested in a stock that is increasing in price and take the risk that it may begin to decline than invest in a stock that is already in a decline and try to guess when it will turn around.

Kayak, TBH I have not got time to.

[kayak] 24/6/2001 16:36

"I've got a lot to say, it's been storing up for months." Oh well, off again soon then :-)

[mr ashley james] 24/6/2001 16:31

Chartist,

The point I am trying to make is IMHO one needs to:-

BUY LOW, SELL HIGH

RUN YOUR PROFITS, CUT YOUR LOSSES

NOT TRADE VERY OFTEN, ie why make mms loads of dosh, pay SD (unless CFD's)Bkge commission, etc all guarantee to wipe you out.

Traders seem to forget, all of the above are on the OVERALL purchase value, and ex SD on the OVERALL sales value

An example, if I am investing £10,000 in a stock at 10p per share, buying 100,000 shares, if I buy via the market my costs in simple terms might be:-

Spread 1p to 1.50p, ie cost £1,000 to £1,500
SD 0.50%, ie cost £50
Bkge 1% (I know frequent traders pay 0.40%) say £100

In short I have spent £10,150 to buy something on selling I will only receive:-

Say £10,000 less 1p spread £9,000, less 1% Bkge, ie £8,910 net absolute, with 1.50p spread I would only get £8,500 less 1% Bkge, ie £8,415 I would have lost between £1,090 and £1,585 before I have even started.

If I back a minor cap, with a long term view below £10m market cap, with IMHO the probability of going to £50m market cap within 18 months, it makes sense, for a 500% return but not going in and out of things for a 25% return, the spread, SD and commission eat up my profit.

Even with a five bagger 10p to say 50p, assuming a 1p spread, I only get £50,000, less 1p spread to bid say £49,000, less 1% commission £48,510, so my net profit will only be £48,510 less £10,150, ie £38,360, before tax man takes his 35% if subject to tapered relief after 18 months, my net profit is £24,934, a worthwhile sum to have taken the risk of losing £10,150 in the first place, the risk/reward dynamic stacks up.

The same person trading to risk £10,150, to say sell at a 25% profit gross, ie 12.50p, 11.50p net spread, less 1% bkge only gets £11,385, a profit of £1,235 less 40% tax is £741, but he or she has still risked losing £10,150, to me the risk reward dynamics do not stack up!

Why the hell risk £10,150 to win a paltry £741 net, net?

No wonder most traders get buried alive!

Best regards

Ashley

[lady mary hinge] 24/6/2001 16:28

Crocodile, I don't think it will happen, do you ?. I've got a lot to say, it's been storing up for months.

Time will tell.

HRH Mary Hinge

[rolandp] 24/6/2001 15:41

LMH
A lot of truth in what you say.
I agree that if one adopts a "fundamentalist" approach, this has to be consistently applied in that the "facts" must always be upto date. As you say today's truth may not be next years and the investment decision to hold should reflect that. This unfortunately doesn't mean just reading the press releases! I agree the market is a flawed process for valuation and it is, of course, precisely that which permits it to be exploited.

For some, operating in a niche area helps - the Resource community is a small world and information can flow from surprising directions. Even the BB!

And I accept that momentum trading works - if you can stand the pressure.

Sheds
like you I agree the charts certainly help plan the entrance and exit......
I think I can guess which company you're referring to....

Cheers
Roland

[crocodile] 24/6/2001 15:00

A
Look forward to seeing you back on the PBB, we miss your postings!
D.

[lady mary hinge] 24/6/2001 14:26

I believe in the trade it's known as 'alpha' and 'beta' value. If you just do what the market does, you have a high 'beta', however if you consistently outperform the market then you have high 'alpha'. Obviously the high alphas are fewer and further between.

Momentum trading does work as long as you have discipline.

[kayak] 24/6/2001 13:51

Quite right Roland, but then you are the exception rather than the rule.

[lady mary hinge] 24/6/2001 13:50

A stock's price is rarely the same as the company's value. The reason for that is the valuation process is flawed. Stock prices are heavily affected by market dynamics and by investors' emotions. These emotions swing widely from pessimism to optimism.

Also, many investors buy stocks with the intention of holding them for 1 to 5 years based upon information that really only applies to a short-term time horizon. While the information they are using to invest may be valuable, it is often the wrong information for their investment timeframe. If people invest in a company based on current information, they have to be prepared to act on any changes in that information in a much shorter time frame than most investors are prepared to do.

HRH

[mr ashley james] 24/6/2001 12:59

Chartist,

If it works for you carry on doing it, but remember you have the help of an established name ie you work "for an investment bank from a screen, pure momentum technical analysis."

Well done, anyone can make money trading for a brand name!

Hurrah!

PS I have not tried to get my head around the subject, the study of what happenned yesterday to read tomorrow, by definition, the decision is based on "past performance", I can not see why people allow "retroactive analysis" to predict "future occurrence", on a short term scale!

Long term, yes it makes sense, on a 6 year wave cycle, short term IMHO you are gambling, which in summary is my problem with chartists, you do not "gamble" on something going up and down, subject to herd sensibilities, you logically endeavour to make it happen!

[energyi] 24/6/2001 10:08

Ashley's got a point.
I think I get £5 of value from the PBB.
But it could be a whole lot better.

I just started a thread to collect suggestions.
Thanks for starting the ball rolling Mr. James

[lady mary hinge] 24/6/2001 10:02

Anagram of Mr Ashley James =

"Majer Sham, Yes"

[dead cat bounce] 24/6/2001 09:47

Assagai - great post!

dcb

[chartist] 24/6/2001 07:50

HI again Ashley
You definately sound confused. As I say you don't have a grasp of the subject. "Anyone can make money trading for a brand name" this just shows you don't get it. Today with a real time screen you or I can trade on a level playing field, the info is the same for everyone. In the future trading via an online exchange will make trading much easier and more transparent.

To clarify my position I now trade full time from home. I do hold positions and rarely daytrade.

Regards
Alex

[mr ashley james] 24/6/2001 01:04

Did you know that Crocodiles are responsible for more deaths in Africa than poisonous snakes?

Cheers

Ashley

[kayak] 24/6/2001 01:03

... whereas the fundamentals you look at, Ashley, e.g. revenues, profits, net assets, ratios etc etc, are nothing to do with "retroactive analysis to predict future occurrence". At least charts are up to date, whereas fundamentals are always several months out of date...