Stirling Assd Share Discussion Threads

[indieman] 28/12/2000 00:57

As I indicated, I look for a coming together of charts and indicators, but will only trade if the force (ie. the major trend) is with me. I ran validations on my methods and noticed that pay-backs fell off drammatically after I called the Bull market top until the bear market ended in Oct 98. At that point pay-backs reverted. Ditto after the April/May high and October low of 1999, both of which I called within a couple of days.

Counter-trend trading can be very profitable but I am fairly risk averse. Overcoming my aversion cost me dear in the second half of this year. Jack Schwager says it is vital to find a method you are comfortable with and to have an edge. Technical or Fundamental Analyses are NOT an edge. Both are tools which can allow you to develop an edge. Most daytraders lose most or all of their money in a year or so; to beat these odds, you need a considerable edge.

I feel more comfortable in the calmer waters of major signals and trends. I was quite shocked when I first looked a Bulletin Boards at the huge disparity in understanding amongst those who wanted to or were trading. I cannot understand anyone expecting to trade successfully without spending at least a year reading up on the subject and running theoretical trades with realistic dealing costs allowed for. This is the boring bit, but no investor/trader is going to succeed otherwise.

Having flown that provocation, I await the proof that I am wrong.

[chester] 27/12/2000 16:11

Accepted. Why don't you try the PBB ? Or are you on their already ?

[stewjames] 27/12/2000 16:05

Fair enough Chester, sorry. I've seen some pretty weird ideas on investing posted recently - yours (if serious) wouldn't have been the worst!

Stew

[chester] 27/12/2000 13:36

Analyst,

I agree with most you have to say.The bit about the 'dot-coms' I'm not so sure about. But basically even though it seems many are laughing, which I can't understand why, a majority of your points were spot on.

[taximania] 26/12/2000 21:42

Indieman yes dxns rings a bell!!! Done very well for me this year although got a little sticky towards the end. Have held all you mention except Tadpole and did well on all except RR which let me down on a t20 , also lost on twst but glad to be out of that one ! Best money spinners for me this year imi (in 8 times)Vod (lost count)and Arriva.

[fahd] 26/12/2000 20:17

Indieman

I think we are all a very sad bunch!
The above made an interesting reading and
gave an insight into how other people
trade.

So do you mainly trade by following the charts?

Thanks

[indieman] 26/12/2000 08:30

What a sad bunch we are. It's 8am on Boxing Day and I'm sat at my PC answering queries on my stockpicking methods etc. Oh well....

Shares which have shown me a good return this year, not in date order:-

Abbey National- bought at 826p (April), more bought at 864p 4 months ago.
No brainers, both purchases-My indicators showed trend changing at about 800p, and a quasi-triangle penetrated upside at about 855p. Still holding.

Rolls Royce- A dullard, but worth buying in March at 193p to sell near the
resistance level at 250p in mid-May. Helped by the fact that I knew the market generally was heading up from the late Feb low.

Tadpole-The only tiddler on the list. Bought when it ignored the implications of a descending triangle in early March and broke out upward. Sold a few days later at 71p.

Dixons- (Ring a bell Taximania?) Bought at 252p in late Feb/early March at major support level. Sold 9 weeks later at 349p, at resistance level. Charts+ indicators.

Tesco-Missed out badly; got in twice around 195p but gave up both times. It promptly rose through its resistance levels and shot away.

Glaxo Wellcome- Bought on results day which coincided with the expected market bottom generally. Sold a month later at ca 1800p for a 25% profit.

Similar stories with Rentokil and Arriva.

I have made my share of balls-ups as well, including Telewest, Dixons (when the 250p support finally gave way) and shares bought on the dreaded feeling that something was going to break. It usually did-badly. Strangely, shares I owned where I got a bad feeling and sold were usually good calls eg. ARM at 717p.

Basically, I try not to trade against the market. This year has reinforced that in spades. Of course it helps if you know which way the market is going- no longer possible in this part of the economic cycle.

[taximania] 25/12/2000 00:41

Stew - Very often no believe it or not! a case in point this week that springs to mind would be BPB (bought at 211 about three weeks ago)went through it's ex date and kept up it's steady rise but nothing about the co has changed it's just that it's been too cheap (WH did the same). When the price does drop it often happens a few days after the ex date maybe people get confused between ex and record?. As regards divis next two on my list are airtours ( can be picked up on a bad day for 195)divi of 9p soon & less of a sure thing Enodis(13p)i would be very suprised if either of these two drop by the amount of the divi although you need to go in fairly heavy to make it worthwhile! maybe 5k or so. Re my previous point my computer showing eurasia(?) 1046 messages just clicked on the chart started in jan at 25pish finished now at 30pish take out the costs and the spread and that looks to me like a complete waste of time yet it creates unbelievable attention and a little bad news could see it dive - hence the title of my post. All the best Chris.

[stewjames] 25/12/2000 00:21

Just read your post properly (oops! Sorry.) and that's an interesting point about waiting for the start of the uptrend. Worth looking into, I reckon. On the dividend point, isn't it normal practice for the price to be discounted by the same amount as the dividend on the ex date?

[stewjames] 25/12/2000 00:18

Those 2 companies are perfect examples why I'd say there's not much value in the FTSE 350.
Hanson before the rise were on a PE of 8, now it's 12. Both values are middling to high for the sector.
WHSmith have moved from a PE of 7 to 11 on minimal growth, again values which are commonplace for the sector.
Fair value covers quite a broad range IMO, and all we've seen in these cases is a move (albeit 50%) from the low end of the range to the top end. Since it's completely sentiment that drives these changes, what's to stop the prices staying static for years?

[sanderstwo] 24/12/2000 22:22

Yes I completly agree with Analyst. Using this technique I now have a small fortune. The only slight draw back is that I started with a large fortune.Christmas greetings to every one.

[fahd] 24/12/2000 16:54

Analyst

Wow and Wow and Wow

[taximania] 24/12/2000 16:50

Analyst - can you send me some of whatever you are on please if possible via santa tonight a xmas day on another planet is just what i need. Merry xmas .Chris.

[stewjames] 24/12/2000 16:45

Analyst, LOLOLOL!

Err...you were joking, right?

[fahd] 24/12/2000 14:09

Indieman

Would you like to name some of the
stocks that you track and the methods
you use in deciding when to enter and
exit given that the market has been
so volatile this year. One cannot afford
to sit on any stock for any lenght of time.

[taximania] 24/12/2000 13:55

Exactly !!! Personally i start to look at getting out at 15% - 20% but it has cost me in the past and there have been many times i should have held longer having said that if you are patient it's rare to see a loss.

[indieman] 24/12/2000 13:43

I agree with Taximania. Mid and large caps have profits (usually) and dividends, this makes them attractive to institutions and maintains liquidity.
There is usually sufficient volatility to make a tidy (20-40%) profit in 2 to 10 weeks with little danger of a major sell-off.

A lot depends on your age. Up to age 50, you can afford to take real gambles; if it works out great, if it doesn't you can make it up. Beyond 50, you will need to be more cautious; opportunities for making up lost capital are fewer.

It also depends on how you want to trade. A day trader will want volatile stocks and probably fewer than 10 of them so that he can keep track easily. I am looking for fewer but more valuable trades-ones which stick out like a sore thumb. This means I need to track more stocks. I actually track about 30 but only actively follow about half these at any one time and would probably be invested in about 10 for the long term anyway. Thus I am looking to trade only 2 or three stocks at a time. End result is similar to the day traders except that mine involves less effort and risk. It isn't better; it just suits my needs, limitations and temperement. Chacun a son gout.

[sunset] 24/12/2000 12:50

StewJames

I agree you do need to be good to get it right with FTSE 350 but it doesn't have to take a timescale of years to make significant gains. Who would have thought that if you'd sold all your tech shares around Feb/Mar (before the tech crash) and put it all on a FTSE 100 stock like Abbey National, you would of just about doubled your money by now? A mate of mine did just this. I thought he was mad at the time - pulling out of tech. But who was the smart guy eh?

[taximania] 24/12/2000 11:22

Some interesting replies , thanks , there is little doubt that buying a good small cap company and holding for the long term would produce outstanding gains but how many of the investors that contribute to this site would do that? not many i fear. I am sure if i posted a thread on here along the lines of ' Chorion to fly on monday' it would attract 10 times as many replies all saying how wonderful the company is and that we should all get in now before it's too late!Can not agree with the comments that there is no value in 350 stocks if anything i would say the opposite is true. Many are out of favour simply because there is no short term interest , with a few exceptions of companys whose long term market share is declining (M&S perfect example),this interest often returns and drives the price forward. Two recent examples might be Hanson from 315p to 450p in a few weeks or WH smith 310p to 450p again in a few weeks and the great thing is there are loads more out there!The good thing is that many will sit at there year low for quite a while so there is no need to rush in ,simply wait for a small change in the trend, it also helps that many offer a decent yield if you follow the ex date there is often a rise as the ex gets closer which then carries through and gives you not only the divi but also a decent increase in your capital.All the best Chris

[lord c.] 24/12/2000 10:51

It's all to do with research.

One should buy shares in ANY company ONLY after in depth due diligence. Trouble with the large cap co's is that there is plenty of information out there which all can share in quite easily and which is reflected in the share price.

Some of the small caps can be seriously undervalued because the market doesn't want to understand them or has not bothered to do so. Kicking the tyres - (especially contacting ceo's and arranging visits) is much easier.
Value can also be had when an institution takes a decision to exit a tiny company simply because they will no longer take a long term view of prospects.They will often drive the price way down as they get out in dribs and drabs.

Getting in and out and the spread are the real problems with any small cap co (which is why I never invest in Ofex but am quite happy to buy into Aim stocks).An easy exit is the one great advantage of investing with the big boys.

If you are a long term player I still think that it's not size that matters but good research!

Lord C.

[the quack] 24/12/2000 02:46

Taximania has made a point here. However, there are some Corps. that have not yet taken off. In five years time when these Corporations are worth billions, we will all be wondering why we didn't pick them when they were young... And cheap!

Buy and hold will make you rich in the long run, but this is not good for the Co. because the market is not liquid. It depends on people like us speculating on short term gains to give the stocks a chance to rise smoothly.

Quack quack !

[stewjames] 24/12/2000 01:47

What I meant by a timescale of years is that traders are often successful for a few months (this is why so many people get suckered into it) and the gains can be fantastic; 3-5% regular gains compound surprisingly quickly. But over the course of years, the bad runs will outweigh the good for most people. It's a lot like people getting caught up by fruit machines because of a lucky streak when they start playing them.

Congratulations to your friend, but he made an investment decision rather than a trading gain. The banking and building sectors were the only thing that really caught my eye as being good value earlier this year in the FTSE, but I have an irrational fear of investing in them!