Melrose Industries Share Discussion Threads

[brexitplus] 01/5/2018 09:50

Minerve, interesting book. Lots to take in. Thank you.

[brexitplus] 01/5/2018 07:35

Will Melrose now go after Senior and integrate it into the GKN divisions? Similar markets, decreasing operating margins, poorish medium term share price performance.

Perhaps a rights issue to please MW!!!!

[brexitplus] 30/4/2018 16:04

Thanks minerve

I have downloaded the book for free. Will have a read this evening.

[minerve] 30/4/2018 15:17

brexitplus

I think it will benefit you. It certainly did me. If anything it teaches you a bit more about entry and exit points which can be the difference between an average investment and a good one, for example.

Here is a book that I recommend you should read.

[brexitplus] 30/4/2018 14:39

Thanks all. I don’t intend to actually invest any money. Just fancy looking at the methods and see where it would take me.

[sogoesit] 30/4/2018 14:15

If you're an "investor" with (longer) term views in my experience it is unlikely you will have any success as a "trader", b+.
Day trading is trading on "noise" and requires a totally different mentality. It is extremely difficult to switch from one to the other.
I tried it, lost money and stopped.
The worst thing is that it clouds your views on your (longer term) investments... detrimentally. So the risk is that both suffer. Not a good place to be imv.

The only time i had any success on short term trading (3 to 6 months view) was during the dot-com build-up from 1995 to the bubble in 2000 on the US markets (much cheaper and more liquid compared even to today's UK markets). Even this could be regarded as a longer term theme but my average holding period was no longer than 6 months for any stock. The compound gains were substantial (250x over 5 years) to the top of the bubble but that was probably a once in a life time event (apart from buying the trough in 2009).
But day trading is pure random noise imv.

[yertiz] 30/4/2018 10:15

Tried Options trading some 20+ years ago - without the tools, knowledge and great big chunks of luck you become the fodder, supplying the profits to those that do. I think the same could be said of day trading?

In today's environment, that is ever more the case, with banks of bots applying their algorithms to each and every transaction and share price movement and acting on them within milliseconds, the wannabe day trader has much to contend with. And with my luck never being great, I reckon its not for me. But good luck if you do try it.

[minerve] 30/4/2018 10:14

brexitplus

I'm going to mention it anyway because it is important for you to make sure you don't lose money.

With 'day' trading it is the case that some trades will always be losers. Therefore it is important to limit losses and ALLOW your stop-loss points to execute. The biggest mistake people make here is to enter a stop-loss point that is too close to the current share price. In this case, what can happen is the share price dips a little, your stop-loss executes, and you have no trade and you have lost some money.

So you limit losses by trade size, and here is how you do it:

Say you have £10,000 to play with and you want to limit your loss to 2% which is £200. You have spotted a share which currently trades at 100p. You look at the chart and see that the share has been down to 98p a few times and 95p only once. Many make the mistake of placing the stop-loss at just less than 98p and are likely to get stopped-out. You make the stop-loss at, say, 94p.

OK, so your stop loss is 94p. The current share price is 100p. The loss per share on this trade could be 6p a share. You have limited your losses to £200 of the £10K so your trade size is:

20000p (£200) / 6p (allowed loss per share) = 3,333 shares ⬅️ This is your trade size.

So your initial trade is 3,333 shares which cost £3,333. Not the £10K.

You set-up the stop-loss at 94P BEFORE you buy the shares or soon after. You know you will not lose more than £200 and you can added further trades if it moves North and becomes a successful trade. The beauty of this is you have set a wide stop-loss and the trade is allowed to work away rather than being stopped-out immediately.

When the trade moves North, if it does, you look at setting a new stop-loss point to cover your trade costs and eventually your initial £200 risk.

I find day trading difficult but found using these same methods over a few weeks to a few months boosted my returns. I often do this sometimes on stocks I am watching but have no real interest in holding them for long-term.

If I was to execute one of these trades today, ITV, Lloyds would be contenders to start a trade.

[brexitplus] 30/4/2018 09:47

Minerve, that is very kind of you. I have a lot of reading and watching YouTube videos to get a feel for the subject. Will let you know when I am ready.

[brexitplus] 30/4/2018 09:45

Getting..

That is what the articles on the web say. I don’t intend to invest but it will be interesting to have a go for fun. The 1% a day got me interested.

[minerve] 30/4/2018 09:44

brexitplus

Yes, I have. One of the most important things is risk management and generally this is done by determining trade size and stop loss points. I would be more than happy to help here if you want my advice.

[gettingrichslow] 30/4/2018 09:42

B+, I haven't, but my boss (who is a pretty serious investor with good knowledge of the markets etc) did a few years ago and didn't do well at all. Lost a fair bit of money I think.

[brexitplus] 30/4/2018 09:34

Has anyone here tried day trading? I am thinking of running a dummy for a month just for fun. No money involved.

[meanwhile] 29/4/2018 22:48

Yes, Minerve, from my memory of that time, Gorbachev was even then given a lot of credit for his own domestic reforms, which lead to the rapid chain of events in 1989.
Maybe their greatest achievement was that the 2 men became quite close friends and were able to persuade their respective people that the other side were much less of a threat than previously believed.

[brexitplus] 29/4/2018 20:51

It takes two to tango.

[minerve] 29/4/2018 20:49

MEANWHILE

I don't study US/Russian relations that much, especially their history, but I do know some historians at present and there is reasonable argument that most of the movement and peace offerings was actually made by Gorbachev and not Reagan. Some accounts actually paint Reagan as a hawk during those times. What we read, especially here in the west, and especially from the US, could create this pro American historical account and of course the same in Russia. I am not saying that you are wrong but we take these things for granted and sometimes they are nowhere near to what we originally assumed.

[losos] 29/4/2018 19:43

yertiz - "a bit like Provident Financial's APR"

OMG please don't mention Provident Financial again my whole body goes into deep shock and I'm trying to forget I ever heard of them haha.

[yertiz] 29/4/2018 19:30

MW - good, sensible post, well done, knew you had it in you! (Ticked up).

B+ - Just coming back down to earth after watching Argyle steal victory from the jaws of defeat - what a game! Pity Gloucester didn't provide you with something to cheer about, but as you say there's always the Cardiff game to look forward to... (did you see the York v West Wales result today? 144 - 0, a little one-sided and a record for the pro game!)

Next week sees us into May, and the old adage, "Sell in May and go away, come back on St.Ledger's day" used to work fairly well, but in the last 3 years between May and September there were big profits to be made in the market. Wonder if this year will be any different?

[meanwhile] 29/4/2018 10:29

The news of North Korea's apparent change of policy towards the west reminds me of a period of events around 30 years ago and suggests, to me at least, that there's something to learn from these 2 periods.
In 1989, a second rate movie actor called Ronald Reagan, reportedly short on intellect & judgement and totally unskilled in the art of diplomacy, had just concluded his 8 year U.S. Presidency during which time, to mention just a few positives, the U.S. economy flourished after many years of stagnation, living standards rose steeply and he persuaded Gorbachev & the Ruskie regime to give up on the Berlin wall.
Now we have a crude, vulgar, narcissistic U.S. President, even less skilled in diplomacy, (in fact probably not even believing in it), whose judgement is considered to be very poor, and behold, he may be doing the same again. We'll have to see how it turns out.
So maybe the replacement of so-called 'diplomacy' with 'common sense' can get results. And maybe you have either one or the other. Maybe when you learn diplomacy, you have the common sense extracted from you. I think that happened to Obama.

So what's this got to do with Melrose. Well, perhaps the lads at Melrose apply a bit more common sense & logic and a bit less of the 'management methodology' (the diplomacy equivalent), preached by the academics and consultants hovering around. I think GKN was run that way.
This could spell the end of 'Management Mentoring'.

You can dispute all of this argument but, at the end of the story, your only measure should be 'the results', by that I mean the 'full results'.

[brexitplus] 29/4/2018 09:26

Yertiz

Good wins for Argyle and Exeter. You must be pleased.

Gloucester loss disappointing. Have been inconsistent all season. Too many changes. They had lots of ball but breakaways did for them. Ludlow try disallowed for some reason. Saw 6 Nations tries given in same circumstances, and ref got in the way for a second potential try. Still the European Champions Cup final to look forward to in May v Cardiff.

[minerve] 28/4/2018 10:10

Airbus said it was on track to meets its guidance for a solid increase in earnings this year despite a slump in first quarter sales. - FT, yesterday.

[minerve] 28/4/2018 10:09

I don't know anything about Stirling Industries. Sorry.

[gettingrichslow] 27/4/2018 21:23

Minerve, I never thought I'd say this but that's a really constructive post! What's going on? Are you feeling unwell? But seriously, I don't think any of them go off 'physical' (unlike say gold ETFs) but yes, you make some good points. Any serious views on Stirling Industries whilst we've got you in helpful mode!?

[minerve] 27/4/2018 21:12

gettingrich

I would try and find out how they go about tracking the price of crude. Are they buying spot as tournesol points out, are they buying futures, where is the delivery, or is it via complex derivatives? That will give you some indication as to how successful they might be at tracking and what promises or asset you will be left with if a crisis happens. It also may give you some idea of supply and demand which may be not the same as for real barrels. Also, you will need to find out which oil they are following, is it Brent or WTI (West Texas Intermediate) because the spread between those two can become quite wide at times.

Personally, if I was buying a tracker, I would try and find one that actually owns the real stuff as close as is possible. You never know how well derivative based trackers will play out in crises due to increasing counterparty risks and the web and chains these derivatives sometimes have.