Capital & Regional Share Discussion Threads

[crosswire] 11/11/2009 11:49

An Interesting read posted on another thread:

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DON'T KID YOURSELF

Any amateur can gain live access the markets from their office desks or their iPhones. It's mesmerizing stuff. And it's all too easy to start kidding yourself that you are an experienced day trader. You might get lucky riding a few peaks and troughs ... but when the wider market is still trading in the bottom 30% of it's historic curve, you will likely ultimately miss out on much bigger profits from simply holding some well-researched prospects. Witness my Barclays example above.

Accept that markets are volatile, and don't beat yourself up about wild swings that are outwith your control (or the control of the companies that you are invested in).

AIM markets are more volatile than most, especially the lightly traded shares, where the spreads are elastic. Only the most experienced day trader can hope to truly profit on short-term plays. And I'm talking about the top 2-5%. Anyone else who can consistently turn a quick profit by calling the peaks and troughs, is either lucky or a liar. You always hear from the guys who made a quick buck, but you never hear about the many other trades where they lost out. It's a dangerous game, because the markets can move so so fast, particularly on news (positive and negative).



SPIKES

There is another type of trader (not investor) who chases momentum, volume, spikes. This type of trading exaggerates rises, and exacerbates falls. It's a fact of life and should in no way be confused with honest market sentiment about the longer term prospects of a company. It's a snapshot of exaggerated emotion at one small moment in time. If you are skilled enough to capitalise on it, then great. But the vast majority of us are not blessed with such foresight or intuition. That's why we resort to fundamentals (solid research), technicals (to time entries and exits), or ideally both. Rational as opposed to emotional pillars on which to base our investments.

Never jump in on a spike. You might get impaled on it.

Accept that you may have to hold a stock that trades flatly for many months before the potential you saw in it is realised, and it finally rockets. It's difficult to hold while you see other stocks fly. You may feel like you're missing out. But there is an old saying that it is better to be sitting on the plane and strapped in for take-off, than trying to chase it down the runway. If you end up trying to chase other stocks, you will overtrade ... and you could well be selling out of a perfectly good position to catch a temporary spike elsewhere. And remember, the people who make most money out of shares that rocket, are the ones that bought and held while it sat on the launch pad.

Always buy into the company, not the share price. And just accept that you can't be in them all. As long as you back more winners than losers, you'll be OK.



BOTTOMS AND TOPS

We all know the adage: 'buy low, sell high'. Sounds deceptively simple, doesn't it? But it's a surefire way to make money. Especially when markets remain depressed. Really, unless the core fundamentals of your investment take a sour turn, there should be little reason to sell anything at a loss as the market primes itself for recovery.

Warren Buffet never bought a share at the bottom. And he never sold at the top.
So don't beat yourself up for not calling the bottom. In such volatile times, if you can stay within a 30% deficit on a share that you expect to deliver 100%+ profit at some point, then you are doing fine.

You've also heard the saying: 'love to take your losses, and hate to take your profits.' That may be true in a more stable market, where a 20% dip in a share may be indicative of something really alarming. But in a volatile market where shares like YELL can drop 24% in a day and then post two days of 30% rises, the less stressful and more profitable option may be to simply stick to your guns and hold.


THE ART OF SIMPLY HOLDING

If I've learned one thing over this last year, it's that Holding is an underrated strategy. But it's not easy. The only way to do it successfully, is to do your research and stick firmly to the reasons you bought in the first place. It also helps to remind yourself of a few core realities when markets turn sour:

1. Accept that you have invested directly in a company at a volatile time on the stockmarket.

2. Recognise that all stocks will go up and down, and that some will experience wild swings on certain days in either direction. Nothing goes up in a straight line.

3. Take heart that lot of these swings will be precipitated by factors that are not within the control of the company: e.g. low or high volumes / sector slumps and boosts / wider market gloom or optimism / ii buying or selling / MM games etc. etc.

So really, your only hope of beating the market is to do your research, and buy or sell on the basis of that research ... and the known news/facts. And, provided the fundamentals and news do not change, there is little point in selling out. Certainly, you would be foolish to take a loss on a share if the fundamental reasons you bought in remain unchanged.

How many times have people got spooked by a short-term slide, then sold up, only to see the share kick back up as quickly.

Example: I held SKR for a long, long time recently at around 15p. It seemed to do nothing for months while all around me, other shares rocketed. Many times I felt tempted to sell ... especially as it would rise to 19p, then slide back to 12p. But I stuck to my guns (and my research). And it recently broke 45p.

There is an old saying that it is better to be sitting on the plane and strapped in for take-off, than trying to chase it down the runway. If you have researched your prospects, and you like the potential ... and you have a target share price in mind (and a timeframe to achieve it), then provided the fundamentals remain intact, you should hold your position.

The more confident you are in the core fundamentals, the more cool-headed you can be about holding, or even seeing dips as buying opportunities. With market makers capitalising on the opposing emotions of rampant greed and abject fear, it is the cool heads who will make the money.


THERE IS A TIME TO SELL AT A LOSS

And that time is only when the fundamentals turn against you.

The biggest loss I ever took was about 40% on TRP ... when they hit a duster. The share price recovered a little, but I put the money to work elsewhere. I didn't sell on sentiment, I sold on bad news. That's OK, because the fundamentals had changed. Sometimes this happens. You have to take it on the chin. It could have gone the other way.

But it's worth reflecting that my biggest 'losses' by a COUNTRY MILE were on all those shares that I sold out too early (even though I might have sold at 100% profit). Examples: Taylor Wimpey bought at 5p and sold at 13p. It's now 39p having touched 55p. Barclays bought at 50p and sold at 90p. Now look at it. Vedanta bought at 740p and took fright at 540p. Today it is 2209p.

Not making that mistake again.


PATIENCE: THE MOST VALUABLE COMMODITY

There is another saying that the stockmarket is just a mechanism to transfer money from the impatient to the patient.

Sadly, the tools we now have to access the markets actually encourage us to be impatient. Direct access to live prices, second-by-second Level2 analysis, instant RNS notification ... no wonder we're all jumpy!

And no wonder we overtrade. The brokers must be loving it. The Market Makers are capitalizing on it. Even shares that experience little volume get walked up and down to create the illusion that there is a liquid market, prompting us into hourly re-evaluations of some relatively safe and static holdings.

Warren Buffet (again) said that you should not invest for 10 minutes in something that you would not be prepared to hold for 10 years. It's taken me a year to see the true virtue in this statement. I am now prepared to hold all my shares for years if needs be, to realise a strong profit. I'm 39. I have time on my side. I intend to use it.

Thankfully, when the markets are feeling bullish, most well-researched prospects put in some strong upward moves. You tend to find that, regardless of short-term volatility, the fundamentals will always win out. It is far less stressful to just sit tight and let your desired share price come to you.

Example: One of the first shares that I truly researched was Afren (AFR). I first bought them at 28p and watched them slide to 14p, when many were urging 'SELL'. But this didn't tally with what I knew about the company at where it was going. So instead of selling, I bought all I could at 14p. And I still hold 80% of them today at 90p+


GREED v FEAR

The market is just a tug-of-war between fear (bearish) and greed (bullish). It is important to take a position right in the middle. If you let either extreme govern your trading decisions you will, most likely, lose out.

So don't be too fearful. If you've done your research into your investments, you should have nothing to be afraid of. This gives you a real advantage and puts you in control of your investment.

And don't get too greedy. If you have hit your desired share price target, then take some profit. That is, after all, why we're all invested. And it never feels bad taking a profit. You have beaten the market. You have earned it. Go do something nice with it!

We are trading in extremely volatile times when these opposing emotions can be manipulated, for better or worse. So it strikes me that it might be advantageous to try and remove as much emotion as you can from your trading strategies.

Easier said than done, I know. Especially if you rely on these BB's to inform your trading decisions ...

[crosswire] 11/11/2009 10:44

Fund Valuations

The Company will provide more commentary on these valuations and current market conditions in its IMS which will be issued on 12 November 2009.

[nickcduk] 11/11/2009 10:41

IMS out tomorrow. Hopefully CAL will respond favourably to it in the same way GPOR has today.

[crosswire] 11/11/2009 10:21

A rapid recovery in UK commercial property values from the deepest slump on record to near bubble-like conditions could see the sector turn positive this year, a leading property consultancy has forecast.

Real estate values are set to overturn most of the losses suffered in the first half, according to research by Colliers CRE, as booming investor demand has taken prices back to near peak levels in some sectors.

The strength of the rally could lead to a second price correction, Colliers cautions, with analysts warning that a bubble is being created.

[hungry wolf] 06/11/2009 18:22

thanks man. have a good wknd.

[edward hopper] 06/11/2009 09:03

HUNGRY WOLF

Have a look at NYO is well undervalued and its real value is about to be recogised very soon.ie next week

seemed a bit mean keeping it to myself

dyor

[postiga08] 05/11/2009 10:09

what happens on the 12th of nov? i hold these at 42.75...silly me!

[monkeywrench] 04/11/2009 09:18

Hungry, I admire your constant optimism, BUT
there could possibly be another reason why the share price is
going in the wrong direction for longs.

[hungry wolf] 03/11/2009 15:03

there you go





remember guys. as long as mm's are happy to buy in the 34 to 35 region, it is because they either have mr big loading up or they know that soon they can sell their stock of bananas at a much higher price; I HOPE. LOL

[edward hopper] 03/11/2009 14:40

WOLF

what is the addresss of the acticle i would like to post it on the iii board?

[edward hopper] 03/11/2009 14:39

WOLF

what is the addresss of the acticle i would like to post it on the iii board?

[edward hopper] 03/11/2009 14:27

THANKS WOLF

I must admit the share price is a bit of a shame ,however lets not forget the 12th of NOV .If it does go any lower i will be topping up.

[das3] 03/11/2009 13:24

HW: wish they'd light a bonfire under CAL! All this international investment is making f all difference here.

CAL looks to be under a continuous deluge of sales every time it picks up a bit.

There still seem to be opinions around that it will head for the 90s again, but I'd settle for 40 right now.

[hungry wolf] 02/11/2009 18:11

there you go buddy. the guy says after each touch down we go up.
well, third time lucky we might fly but some how that does not fit my way of thinking since realism is more my cup of tea.

[edward hopper] 02/11/2009 16:53

checkout iii and read trademarters post shows chart.

i can cut and paste sorry

[hungry wolf] 02/11/2009 16:11

lets have a look at this chart, Mr eazy rider yeah!

[edward hopper] 02/11/2009 15:43

my chart tells me it will be 38p by friday

[wongman] 02/11/2009 11:55

I don't like the way the long term chart shows a bit of space below 0 lol

[nick rubens] 30/10/2009 11:01

CAL has a market value of £125m at 35p.

Are any followers of the company able to briefly summarise any attractions here in terms of NAV? The recent pacing I presume is to be used to pay off some debt. Is debt still significant though? Cheers in Advance.

[dpeach] 28/10/2009 09:19

sid - rampers

[nickcduk] 28/10/2009 09:18

Sector getting hammered and the higher end of the risk spectrum getting hit more. CAL fits into that category. Pump and dump merchants exiting doesn't help. Its funny how they go a bit quiet on days like these.