How can you invest in a market like this?
How can you invest in a market like this? Just not possible until things settle down. Of course great conditions for day traders and quick in and out index traders - well done them, never been much good at it myself. Thank heavens for the shorts for the time being which have made me decent money in absence for the moment of being able to make much on the upside.
I guess we are living through a time of market history and everyone is scared and fearful. We're all worried we're going to lose all our money.
Dramatic goings on... huge falls followed by a rise and nothing at all matters except whether the US bailout is approved or not! Our shares are going up and down on that and nothing else. Not even results or good news makes any difference. Looks like this week is going to be very important. But one way or another our fates should be decided by the end of the week.
I'm sure many of you have found all these strange moves very stressful. But in the end of course one doesn't have to trade! I suspect over the last few weeks the best trade has been no trade.
Thing is even if the bailout gets passed it still could be rocky times for a while. Even though things seem good and the FTSE is rising fast at the moment I'm just not sure.
However I'm going to try and look ahead and some GOOD news! With the market always looking to the future it WILL bottom out at some point and there are lots and lots of bargain shares about.
My thoughts are not to be too hasty but spend the back end of this year gradually tucking away good strong shares at bottom prices for some hopefully great profits in the future.
My plan is to scale in very very slowly. I don't feel the need to try and chase bounces up as they could be the dead cat variety. So slow, and cautious for me.
I think we also have to remember - capitulation like we've seen often means we're close to the bottom. Maybe we're not there yet but maybe we're not far off. And in the end better to take small losses now and ensure the capital is there to make money again when it turns.
What have I been doing? In summary I sold a number of shares for small losses as they turned down (tight stops helped). The last lot I bought to small stakes but because of the US turmoil the timing was wrong. What do I do when the timing is out? Get out fast to small losses rather than waiting for bigger ones. Then I try and scale back in slowly. Finding the bottom of this market is not easy. But I reckon generally it's better to get out then get back in.
So after selling off things at small losses I also made a few small bargain basement buys (I hope). The idea behind these are some good strong companies that look bargains. However of course they will go down if the markets continue to tank so I'll sell up using tight stops if I'm wrong. If they have nearly bottomed I'll hold medium term. If the bailout fails or the turmoil worsens I'll quit.
Sales first: mostly small losses thanks to stops! As I'd kept stakes small and stops tight not too much damage was done.
Charter 678 (-£133) Galliford 53.5 (-£273 ) Hardy Oil 455.5 (-£205) Optos 116.35 (- £161) Celsis 154.3 (- £24) Fidessa 750 (-£87) Dragon Oil 215.36 (+ £245) Unite 247.28 (+£202).
Now onto the profitable FTSE shorts! Sadly I came out of the first way too early closing before the crash at at 5155 for a profit of £830. Oh, why didn't I just stay with it for way bigger profits?
At the seminar I kept the other running live and couldn't decide whether to close. However delegates urged me so I did! I should have gone against the crowd. Anyway it was closed live at 5143. However, I did reopen at 5000 on Monday which I closed at 4836 - so for website ease rather than displaying 2 positions, the short is closed at 4836 minus 143 points missed over the weekend for a profit of £1,610. Total short FTSE 100 profits of £2,440. (That's profits of £715 missed because I trusted my delegates - always nice to have someone else to blame...)
Now some small bottom fishing! All small stakes with tight stops to exit fast especially if the US bailout doesn't happen..
Petrofac (PFC) 500 shares at 581.31p. (Seminar pick!), Charter (CHTR) 500 at 616, Fenner (FENR) 1,500 at 170.4, Dragon Oil (DGO) 1,000 at 179.4. Stops and target will appear in the trades table tomorrow.
I'm fairly obviously playing a dangerous game here as it the bailout is blocked these could easily be losers. However, all these companies look great value at current prices and I think it's worth a bit of risk for small stakes. If the market mood changes I'd scale back into them a bit more. And I'd keep them for a while.
Great news from Telecom Plus - plenty of new offers including lots of ways for their customers to save even more on their fuel bills, plus a decent pay as you go mobile offer. They've also shown a lot of confidence by buying up their office building for £9m so they can expand. Shares hold up well and I'm still confident of a great performance over the next year and remains a long-term hold with profits still up near the £30,000 mark. It's held pretty steady recently.
Brilliant deal for Redhall which is buying Chieftain and has confirmed a placing. The market makers marked it down to the placing price so I'm holding on here. Long-term this looks a continued grower and I'm up nearly 4X since buying for my pension. Yet more director buying from Vislink, quite amazing confidence being shown here and now very nicely in profit there.
Still holding those profitable shorts in Next and Travis Perkins even though of course they are up today. Next is being squeezed and Travis has a massive debt.
Well done to any of you who made a decent profit on HBOS recently.. I just didn't have the nerve!!
Well, who knows that the week will bring. One thing for sure: if they don't pass this bill, all bets are off apart from shorts!
NO INVESTMENT ADVICE
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...FOR OUR FULL DISCLAIMER CLICK HERE