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Sell x 2 EQN
Yet more activity in this mining stock. Actually I have found out that this is s dual listed stock, the other listing being on the Toronto Exchange.
I think I have mentioned it before as one that AIM has picked almost all the tops and bottoms since I have been trading it using my Very LD-AIM.
Its like magicing money out of thin air, I wish now that I'd put more into this one in the beginning. I have none of my original money in the stock now and so it is riding on the market wave.
I'm going to try a first for me to see if I can post a picture
As you can see, AIM has done what most of the trading systems I have used over the many years have never managed to do.
Regards
Neil
Hello Aimster
From what I have read on Buffets methods I can't see why you would want to AIM the stock anyway (even if you could AIM a fraction of a stock), you are buying his good judgement and risk management methods.
Buffet takes the risk out a stock by knowing it inside out before he buys where as the rest of us diversify and use AIM because our analysis skills leave a lot to be desired.
From what I have read, his 46 year compounded annual return is 23.5%, that is far better than any system I have used over the long term.
Regards
Neil
Hello Jerry
It is a very informative lecture & he speaks with quite a conviction about his subject.
All I can suggest regarding any articles written would be to check out his website at www.clime.com.au
I found a research note on his website at
http://www.clime.com.au/eNews/COMPANY_VALUATION_IV_PRO_2005.pdf
so that may be worth a read also.
Regards
Neil
Sell on PMP & CDO
Flurry of activity at the sales counter.
I sold my remaining shares of Colorado Group (CDO.AX) as they have been gobbled up by some private equity mob.
Quite a nice return over a short period for that one, original buy price at $4.00, added to at $3.29 then sold some at $4.70, finally it paid out a huge dividend of 53c to use up its franking credits so I sold the shares at $4.18.
It was more efficient to get the return as dividend rather than capital gain as the capital gain is taxed at 30% while the dividend is tax free.
PMP Ltd (PMP.AX) Just sold today, second sell on this stock, bought at $1.30, first sell at $1.66 and a second sell at $1.875, very nice.
I am beginning to try to make more of an effort to analyse balance sheets a bit more rather than relying on AIM to try and "Make silk out of a sow's ear" I think the term is. I've picked some pretty shonky companies in the past and AIM has helped but it still can't do much with a dog.
A very good podcast that you may like to download (there are a few that are quite good) is available from the Australian Stock Exchange website at
http://www.asx.com.au/resources/podcast/index.htm
The one I would recommend is the most recent one by Roger Montgomery (the Buffet one), he talks in a very informative way on how to value a company and helped me understand quite a bit more about what to look out for.
He also manages Clime Capital, a small listed fund manager.
If you listen to it a few times you will get something new each time.
Regards
Neil
Sell in Technology One
I had a sell in company Technology One (TNE.AX) through the week. It was an order I'd placed around 2 weeks ago and it got taken out on wednesday.
I've had some nice returns from TNE both capital gains and dividends.
Initial purchase price was at 48c, now trading at 85c since purchased in around 2003.
One question I have that just occured to me.
I can't remember now, with the AIM algorithm, how does it cope with the increase in stock price when selling off?
Now, what I mean by that is as we all know stock price increases tend to occur by percentage moves so that a stock priced at $1, if it moves 10% will then be worth $1.10 and absolute difference of 10c. A stock costing $10 has a 10% move goes to $11, an absolute move of $1.
I think AIM takes this into account and spreads the sells out and the sells become progressively wider apart in absolute dollar terms, that is correct isn't it?
Regards
Neil
Nice car
I came across the Tesla Motors website around a month ago and was blown away by the car.
If I had a spare $100k that would be the car for me, and it only needs servicing every 100,000 miles, just think of the savings there.
I think the company are going about the marketing the correct way. Instead of aiming at a consumer electric car they have gone for a stylish high end car that demonstrates all the potential that an electric car can have.
That error that a lot of the big car companies have made is looking to build a low end electric car, most of them look like the designer is on drugs they look so awful, no one would buy one.
Hopefully the trickle down effect will work in this case, get a few celebs to buy them and everyone else will want one.
I hear that one of the Google creators is a shareholder in the company.
I'm hoping that companies like this can eventually show us the potential that Ford and General Motors can't. They are old "horse & Buggy" companies and deserve to come to an end.
Long live the electric cars.
Regards
Neil
Hello Mark,
I'm having a few problems with Automatic Investor.
On starting the software I have been getting error warnings that I have never seen before.
The are as follows:
Internal Error 335: System Error &H8007007E
Also Error 380
I have no idea what lead to this error as it closed normally last time I used it.
It seems to have lost my portfolio, I'm sure it is still there as a file but it is not loading.
If you have any advice I would appreciate it.
Regards
Neil Donaldson
Hi Mokew,
I came across this website a few weeks ago, its a very impressive vehicle and the cost is comparable with other sports cars but this one needs far less maintainance.
A service every 100,000 miles, now that is my kind of car.
I think we have been conned by the big car companies and big oil for years, any rival technology tends to get bought out and shut down so we can keep on driving around in the equivalent of a horse an buggy.
Down with the Internal combustion engine, past its use by date, welcome the car of the future.
I noticed they have a very interesting slide show demonstrating how ethonol or biodeisel cars are not really the answer either as the land space required to grow the fuel would be huge.
Regards
Neil
Buy on Equinox Minerals (EQN.AX)
A bit of opportunism here.
I had a buy level at $1.53 indicated by A.I. but the price was around $1.63 at close yesterday.
Today I checked the price while at work and noticed it was down 16c in morning trade, quite wild volatility.
I placed a buy order in for $850 of shares at $1.47 which I got straight away. By the end of the day the price was at $1.50.
This stock has had some excellent volatility over the less than 1 year I have had it.
History so far:
Buy at $1.03
Sell at $2.16
Buy at $1.39
Sell at $2.10
Buy at $1.47
Now if I could get it to do this every year I'd be very pleased.
Regards
Neil
Hello Steve,
Umm a little hard to descern a pattern, but maybe that is due to the number of shares in your portfolio over the years.
I'm trying to keep a portfolio of around 20-25 shares, I think that would be a good number to generate a decent number of trades over the course of a year.
At the moment I have not been using the system long enough to come up with any conclusions.
Regards
Neil
Hi Grabber,
Good to see your picture on the forum taking that Wall Street bull on (in both sense).
I must admit it is very hard to picture what people look like just from the postings.
We are heading into the traditionally volatile September-October period and it will be interesting to see if we get any more activity our accounts.
Has anyone done any checking to see which periods during the year seem to have more activity than others. I can't tell at the moment as I have only been running the system for around 2 years.
Regards
neil
Sell on INV.AX
I'm a little slack sometimes in reporting my AIM activity during the week, so as I have soem spare time and I've done my 8km beach walk (in very windy conditions) I feel I can sit at my PC for a while and write a few lines.
Week before last I had a sell trigger in Invocare Ltd (IVC.AX) thsi is a stock I hold with a full service broker so I have to wait for a decent move before I sell any. I have a minimum order size set of $2K.
Funny thing is I got into IVC probably a year or so after the IPO. I was offered stock in the IPO by my broker but I turned it down because I was spooked by the industry, namely, funeral homes.
So, instead of picking it up at $1.80 I bought it at $2.96. Ive had a sell at $4.23 and now, at a short term high of $5.32.
I was so glad I placed a GTC order in at that level and it touched it intraday then sold off.
I also added a little more Rinker Group (RIN)to my holdings, I only need to add another qty to get to my LD-AIM start level and looking at the weakness in the US price on friday, that could occur in the next few weeks.
In reply to Don Carlson, sorry I could not reply to your postings but I can't send private replys on this board but in reply to your question. The code for Goedynamics is GDY.AX (if you are using Yahoo data)
Regards
Sell on Equinox Metals
This stock (EQN.AX)is demonstrating a nice oscillation from my initial purchase at $1.03 to the sale at $2.16 to the purchase at $1.34 to the just triggered sale today at $2.10.
Judging by the candlestick pattern it looks like a reversal is about to take place again, so, I may pick up some more in a month or so.
Here in Australia we are mourning the death of Steve Irwin who you may or may not have heard of, otherwise known as The Crocodile Hunter. Died while diving of Port Douglas, Queensland from a Stingray barb. A larger than life character who will be sorely missed.
Very sad news.
Regards
Neil
FIFO Gain 0% LIFO Gain 86%
Had a sale in Geodynamics (GDY.AX). This is the company developing the Geothermal resource in South Australia.
In the short period I have had it, it has been on a wild old ride.
Initially bought at $1.25, drilling problems ensued and the price fell, so bought more at $0.90, shareholders stampede for the door so I bought more at $0.725 and finally one more time at $0.665.
Each time only buying around $1000 shares.
The price recovered as people reaslised that the selloff was overdone and it probably wasn't as bad as they thought.
Today the price hit my original buy price of $1.25, I sold a quantity at just under that level.
This whole round trip has taken just over two months.
So, I'm well ahead at the moment, somthing that would have never have happened in my old momentum trading days.
Three cheers for AIM
Regards
Neil
Sell on Smorgon Steel (SSX.AX)
Just when things had gone quiet on the sell side of the account one blade of grass popped its head up and promptly got harvested.
Smorgon is being taken over by Bluescope Steel.
The funny thing is that after the initial price increase on the news some 4 weeks ago the price just moved sideways at the price of the takeover.
Then midweek the ACCC (Australian Competition watchdog) came out with concerns that it might cause lack of competition in the market.
The shares had a one day plunge of some 6%, enough to trigger all the momentum players stops, who would have placed them under the strong support at $1.65.
Next day the sentiment changed and the stock made new highs where my market order at $1.81 was waiting. Its now back down to $1.70
I read a small news article on a gold website saying that it was time to buy before the september rush, umm I thought, lets check this out.
Sure enough in a majority of cases gold rises in price from the end of August until the end of October, interesting.
Will it follow through this time I wonder.
Regards
Neil
Hi Adam,
Wow, that is a large order, I can see why you say that the brokerage I'm paying is large, it is relatively.
I have got some holdings with a full service broker, legacy kind of stuff that I'm gradually AIMing out of.
When I do that I set my minimum order to $2000 as the brokerage is around $93.
It would be good to have brokerage as low as you do over there but I don't think it is going to happen.
As I have only been using AIM for around 18 months my first priority was to get a number of accounts up and running. This has been done now, I hope now to grow them and gradually I'll increase the min. order size to get more efficiency out of the brokerage.
I must assume that by your large min. order size you must have a large AIM accound per stock, although you are probably using these ETF's I would assume?
I don't have access to this diversity of ETF's hence the reason I AIM individual stock and use far smaller order sizes especially on the smaller cap stocks.
Regards
Neil
Hello Adam,
Yes, I realise commission costs are a greater part of the overall equation but it is something that gradually plays a smaller part as the position builds.
If I make three buys of a stock from my initial buy and limit that psychological factor of having to buy into a falling stock when my initial capital is losing value I think it is value for money.
I have found that on one stock, when I have made 4 buys of $1000 by the time I get to sell, my first profit is very small, maybe only $10 when the brokerage is taken into account.
On the next sell, the profit might be $300, the next $500 etc.
I have tried, by using this 6:1 LD-AIM to cast a wide net over the market, a portfolio of 25 stocks, this keeps the volatility on an individual basis but gives the protection of both diversity and AIM.
It would be nice if I could get a cheaper brokerage but there is not as much competition in Australia as in the U.S.
My only other option is to trade larger minimum order sizes and that would then limit my diversity.
Just out of interest, what is your minimum trades size set to?
Regards
Neil
Hello Adam,
Unfortunately, commission costs are a larger part of trade size, probably working out at around 4-5%, this is a tradeoff that I am prepared to take to lower my risk.
In an example below I'll show the difference on a live stock in my portfolio.
Geodynamics:
13/6/06 Buy 800 @ $1.25
20/6/06 Buy 842 @ $0.90
10/7/06 Buy 1103 @ $0.725
26/7/06 Buy 1353 @ $0.665
Total Spend $3457.22 + $131.80 brokerage
at last price the loss is -$863.85
Using LD-AIM my losses would have been as above but with a larger initial purchase of 2400 shares
Total Spend $5457.22 + $131.8 brokerage
Loss -$1799.85
Comparing both as a percentage of standard LD-AIM we have
-15.4% against -32.2%
Of course as I mentioned that better downside is at the expense of the upside profits.
Regards
Neil
Hello Adam,
You should try my method if you are wary of those deep divers.
As I have mentioned before, instead of setting up an LD-AIM account using 50% or 33% of a standard account I just make an initial purchase of between $800 and $1000 of a stock on the assumption that I only have a 33% probability of it trending in the desired direction.
Why tie up $3000 in a stock that is going to go sideways or down.
I then set up Automatic Investor to give me buys based on a $10,000 account 40/60 cash/equity and 10% buy safe.
Ok, so if it goes up then your profit side is limited (I sell half the position if the price doubles) but preservation of capital comes before profit I believe.
I have found that I have had more stocks where I have had to make secondary and even 3rd purchases than I have had stocks trend anywhere near an 'official' sell point.
It makes you feel a little better when you make a second and third buy that you don't see as much red ink as you would with LD-AIM.
Regards
Neil
Spend spend spend.
Executed another buy in Geodynamics Ltd (GDY.AX) at 66.5c and have now increased the buy SAFE to 20% to limit any more buys, but with the volatility of this stock that is probably not going to deter it much.
I have put it on a 30 day waiting period now after 3 buys from my initial entry point.
I seem to have had quite a few buys over the last few weeks due to the wobbly markets, it would be nice to balance them with a few sells.
The Australian market threw a bit of a fit today when the inflation figures were released and the number was up near 4%, the market promptly fell by 1% as the probability of a rise in interest rates increased substantially.
The joke was that it was due to the increase in the cost of bananas (you can't be serious) as the entire crop was wiped out by a cyclone earlier in the year.
I haven't had a banana for 6 months, since the price went up from $1.50/kg to $15/kg, a 1000% increase.
Gee, if there was a banana futures market you could have made a killing
Regards
Neil
New Program on RIN.AX
Just started a new LD-AIM program on Rinker Group, was a former Australian company (A spin off from CSR as I remember)that is now headquarted and conducts most of it's business in the US.
It's in the building products business and has been beaten down recently from it's highs (using the US figures from Bigcharts)of $83.46 to $51.28 currently a drop of around 38% from its high.
People have probably been spooked by the possible effects of the rising interest rates on housing in the US and the flow on to profits. Rinker is pretty diverse though and housing is only one part of their sales.
The current year P/E and the forward P/E are low at around 11 and it seems to be getting a good ratings from the analyst's.
It's about time I added another large cap stock to my portfolio.
Regards (from a chilly Adelaide)
Neil
First buy of the week!
I had an order trip today in Andean Resources (AND.AX) a small gold explorer.
Its been a bumpy ride on this little colt. I first purchased at 40.5c when it was the target of a takeover by a larger gold company.
The shareholders didn't sell out so the takover lapsed and since then the price has softend.
I made a second purchase at 31c and now my third purchase at 27c.
Once again I reduced the risk by only buying a very small initial quantity and then building into a lower average price LD-AIM Position.
My software is flashing up that I need to place some more buy orders, another in AND.AX and another in GDY.AX.
I'll put AND.AX on a 30 day breathing space and look at the other position first.
Regards
Neil
Buy EQN.AX, Sell CDO.AX
Just when I thought things were getting off to a slow start we get some activity the spice things up.
I had two limit orders trip yesterday, the first one to go was a buy on Equinox Minerals.
I orginally bought small qty at $1.03 and sold half the position at $2.16, don't ask about my SAFE to sell at that price as I'm using an AIM variation.
I did my usual buy $1000 then use AIM to buy more at lower prices or sell half the position if the price doubles, I have found this gets me in at better prices.
After ,my first sell at $2.16 the price advanced to over $2.50 where I intended to close out the position. Due stuffing up my order I didn't sell.
I then put a 20% buy SAFE on the stock and that triggered yesterday at $1.39, I wanted a considerable discount due to volatility.
My sell order was in Colorado Group. Bought at $4.00, secondary buy at $3.22 only a couple of weeks ago. Now due to takeover the price is $4.60, I sold some at $4.59 which I was quite pleased about.
I'm now thinking that there may be some buying in the gold stock area what with the gold price shooting up and down like a yoyo.
Regards
Neil
Buy on GDY.AX
This company is going through a little turmoil at the moment.
Geodynamics are drilling a geothermal power generator in the Cooper Basin in the north of South Australia.
They have had all sorts of problems drilling into the hard granite rock to a depth of 4km.
I purchased $800 of stock to open the account at $1.25, A drill casing got stuck in the well, the stock plunged so bought another $800 at $0.90. The CEO got pushed (resigned) and it fell further so I picked up some more at $0.725.
Now one might call this foolhardy but the company has some big backers in the form of Woodside and Origin, both large energy companies her in Australia worth over a billion.
So I don't mind spending a few $ as I know if the project does collapse, which I think is a remote possiblility, that the main backers will be out of far more $ that myself, I'll ride their coat-tails.
Volatile it certainly is!
Regards
Neil
Hello AIMster
I think you would find that AIM would not digest currencies very well due to the fact that you buy and sell a contract which is I believe the equivalent of $100,000, there is a mini available where the contract size is $10,000.
There is a hell of a lot of leverage involved and I know many people that have gone into Forex and come out the other side with empty accounts.
It's a fast thrill a minute game if that is what you like.
A pip is $10, no brokerage but pay by the spread of about 4 pips.
If you thrive on stress then it is for you, otherwise leave well alone.
As far as I'm concerned it is just another way of the big brokerage houses have of separating you from your money.
Regards
Neil
Hello David,
How is the metals trading going at the moment. Was the rise in gold price enough to trigger sells in gold and buys in platinum was it?
I really liked the idea of what you were doing, my main problem was that it was very hard to access e-gold from Australia. There were no companies that offered a purchase of e-gold using a credit card it was all bank cheque etc and that elevated transaction costs.
There is a company now on the Australian exchange with the code GOLD that is a based purely on the gold price. It is fully backed by gold bullion and looks very interesting as you dont have storage problems and other associated costs. All you pay is the brokerage, the spread seems fairly reasonsable at less than 0.2%.
It would be great if they had other metals like this.
Regards
Neil
Australian Update
The Australian All Ordinaries index closed the week 6 points lower than the previous friday close. The highs and lows during the week had been in the range of 138 points, the volatility has been higher since early May, peaking in early June but now dropping off slightly.
The purchasing department was busy at the end of the week and added some more Hutchison Telecom (HTA.AX) and, after a 30 day moratorium Norwood Abbey (NAL.AX)
NAL.AX is a deep diver which I started out as a Very LD AIM with just $800 down at 48c. I did manage to sell some at 62c but after three more buys it is down to 23c a 23% discount to it's previous buy.
I think some tax loss selling is going on at the moment as we are alomost at the end of our financial year (30th June). Interestingly some of the large Australian banks are still substantial shareholders so they would be feeling a small amount of financial pain there.
An earlier buy on Colorado Ltd (CDO.AX) is looking better, after a purchase at what looks like the low of $3.22, rumours of takover have propelled the price up to $4.32.
Even Geodynamics (GDY.AX) which got hammered when they jammed the drill casing down the well has been put into perspective and buyers have returned after I picked up more stock at 90c, it is now $1.10.
AIM gives a great amount of satisfaction, even when dealing with some stocks of dubious quality.
Regards
Neil
Buy on GDY.AX
Wow talk about fast moving stocks.
I posted about purchasing some Geodynamics around a week ago for $1.25, it just collapsed through a support line due to some bad news (They have the drill casing stuck in the hole) so I purchased some more at $0.90.
Once again I am glad I'm only putting up a small $ amount initially on the assumption that I'll be 66% wrong on the direction of the movement.
I'll start a 30 day countdown now on this one.
Regards
Neil
Down Down Up Up
Isn't it amazing listening to the stories the commentators come out with to explain the gyrations of the market.
As the market plunges we are informed that investors are suddenly worried about inflation and rising interest rates (whereas they weren't months earlier?) and that is why they were in a selling frenzy.
Next the shoal changes direction, the market shoots up and suddenly investors are not worried about inflation and interest rates after all, everything is rosy again.
I think it goes to show the commentators know nothing and probably have list of prepared explanations to choose from depending upon what the market does that day.
The Aussie market, after movements of 100 points, up and down through the week ended up 5 points away from where it closed the previous Friday.
As for my purchasing department, it bought some Colorado Ltd (CDO.AX) a clothing retailer after shares were thrust into its hands by desparate sellers.
Almost bought some more Equinox Metals except the bank refused to take its hands off the cash. Grrr
Regards
Neil
Full moon fever
Wow the market took a big slap in the face today, can definitely see the analogy of up the stairs and down the elevator.
The Aussie market was down over 2% today or 120 points, I think nearly all my AIM stocks were red today.
I started a new account (non but the brave) on GDY.AX (Geodynamics Ltd) they are a renewable energy company that are building a demonstration hot rocks power plant to be followed by a full size station. I was interested in this renewable because unlike wind and solar this provides the all important base load supply and apparently there is a hell of a lot of heat energy down there.
A few resource stocks are not far off their first purchase point.
EQN.AX (Equinox Metals) which only 2 weeks ago was $2.64 is now $1.55, a 41% drop, looks like a duck being shot out of the sky.
Must keep chanting the mantra, "check your sell order when you place it, typo's can be expensive"
Regards
Neil
Buy on AND.AX
I'm really glad that I have been doing Micro AIM purchases recently as it give a lot of scope to weather a decline in price.
I started a AIM program by buying a small quantity of gold explorer AND.AX (Andean Resources) on 27th April when it was 41c. The gold price would have been around the $700+ mark at that point.
With the subsequent decline in the gold price to $608 ( a 16% fall from the peak)this also caused AND to fall by around 25% to 31c where I was waiting to scoop up some more.
The 31c level is just above a long term support line so if this holds then it would be a nice point to make a buy at.
In regards to Al and the safe settings of 10/0 giving it a selling bias, this is probably a good idea after an extended bull run when markets are approaching highs and maybe can be reversed at times when pessimism was the order of the day back in March 2003.
Regards
Neil
Metal prices
Interestingly, with Australia being a big commodities exporter, the government was raking in all this tax revenue from the mining companies and as is usual with governments these days, they don't think much about the distant future only the next election.
So, they give the money way as tax cuts rather than use it for useful purposes such as tackling greenhouse problems and environmental degredation, building infrastructure.
Now metal prices are falling and therefore tax take also one wonders what they are going to do make up any shortfalls. After all when you project out to the future what happened in the past, as we all know you usually end up looking very silly.
If no new taxes, maybe we can call them levy's ))
Regards
Neil
Blood on the street.
Well a few grazes anyway. Quite a volatile on the markets way out here to the east.
The Aussie market was down 118 points or over 2%. Japan was down over 400 points ouch.
I'm just starting to add some juice to the AIM engine, filling the account up ready to get the purchasing department into gear.
I think I'm going to have a selection of stocks to buy so I'm going to give more attention to the dividend payers before the more speculative stocks.
I'm quite relieved now I was using my special low low down AIM at the time and so only had small holdings in the resource stocks.
My initial purchases were for just $800, I will follow these up later when they sink sufficiently low.
At one time this sort of correction would have induced quite a bit of stress in me but now I feel as calm as if I had just come out of a session of meditation.
Well, wasn't that good timing, I mentioned before about my brother getting his trading account up and running, he hit the peak of the market like a bullseye.
Regards
Neil
Hi Aimster,
In the Selengut book I believe that the way he works is as follows.
1. Buy a stock at >20% below 52 week high.
2. Sell on 10% gain or
3. Double up stock quantity if stock falls by 1/3 (33%).
4. Work out average price and sell all stock at average + 10%
The gain is still 10% of the holding but would in fact give you a slightly bigger gain just by the virtue of making a second buy and putting more capital to work.
Regards
Neil
Hello Adam,
Surprisingly is does better than you might imagine.
As always when I get presented with a new method I go out and research and test test test.
I have tested it on stocks that are in a long term downtrenda and still managed to squeeze out profits from this method.
Its all to do with turnover and the fact that stocks quite often retrace some of their falls over the course of a year.
So, look for a stock 20% below 52 week high, for it to briefly rise to half that loss is surprisingly easy. As you are also moving forward for checking the 52 week high, that will start to get lower if you are in a downtrend so you will be buying at successively lower prices.
Pick a few stocks and try it.
Regards
Neil
Hello Ray,
I enjoyed Steve's book and as you say it has elements of AIM but the turnover is greater and you would not end up with situations where your portfolio value is 20% 30% or 40% above your working capital as it would have been sold off before that time.
I'm not sure which is the most efficient method of trading yet, Steve's or LD-AIM but I like his methodology and he also has a long history of walking the walk.
I emailed him to tell him I enjoyed the book and he put me on his email list and he regulary sends out articles each month which are quite interesting.
Regards
Neil
Time difference,
Actually though, I was expecting to see the date to be the 18th of May, I forgot you are still on the 17th!
You are there after all.
Neil
Deadly silence,
Hey guys, what is happening over there? Here I am on a cold Thursday morning, switch the radio on and hear that you are all in a selling frenzy (or rather, being contrarians, a buying frenzy).
Well Tom your warnings have been timely to say the least.
I predict we will be down around 100+ points today, that is what our futures market is pointing to.
Earlier in the year I made a guess at where the Aussie market would be by June 30th (End of our financial year)and I said 4500, currently it is around 5100. It is looking more possible now.
Regards
Neil
Hello Tom,
I think you are trying to teach us a lesson here about patience and I think it is a lesson we should heed well.
I have not been starting any fresh AIM accounts for a while, if you can exclude a bit of a punt on Andean Resources (AND.AX) which I purchases a small (Less than LD-AIM) amount of as it is subject to some takeover action.
My cash reserves are starting to build which I'm happy about for 2 reasons.
1. They have just increased interest rates by 0.25% over here to stand at 5.75%, that will help my cash. The recent government budget was also quite generous and there is speculation that it may feed into inflation and warrent another rise in interest rates.
2. The Australian market has doubled in value since March 2003 with the last 6 months having the steepest incline in the index.
Once again I get echoes of "It's different this time, growth in China & India mean the market level is justified" umm, I'm skeptical. Think I prefer to let cash build for a while.
Very good description of the feelings we have about having a rising cash reserve in a raging market.
Rememeber the old saying about "When the shoeshine boy is recommending what stock to buy it is time to get out"
Well just wondering if the same thing can be said for this, my brother has decided to open an online account and start to buy stock after not doing anything in this area for years. I asked why and he said he was frustrated with his cash in the bank earning 4% while everyone was making dollops of money in the stockmarket. I did recommend he read and thoroughly understand the Lichello book and to take his time before leaping in.
Regards
Neil
Sell in SAI.AX
Well seems like there is a selling frenzy going on over your side of the pond, I'm sure that is going to mean monday is going to be a bit down here as well.
Funny thing is, when I was an option trader I would now be pulling my hair out with stress of the expectation that there will be a rush for the door in many of the commodity stocks. With options being a lot less liquid that stocks that means there will be no buyers, only sellers falling over each other to get out.
See the thing is you have to be a trend follower with options, you can't afford to take opposite bets to the trend unless you have very deep pockets and a strong psychological makeup.
Anyway back to the week.
The sales department sold the third batch of SAI Global (SAI.AX), a stock purchased for $1.25, this sale was for $3.30 so happy about that.
The sales department did slip up though this week. It was supposed to sell out of Equinox Metals (EQN.AX) a stock bought at $1.03. This was one of my double and sell stocks where I sell out if the stock doubles (as I only bought $1200 worth) or use AIM to buy more. I sold half the position at $2.16 a few weeks ago so then I gave it a higher hurdle to breach, get to $2.50 and close the entire position.
Well, on wednesday the price was $2.44, next day while at work I checked the price and it had shot up 25c, I better get an order out I thought. As I could only see 20 minute delayed data I opened my online broker site and checked, it had slipped back a little to $2.64 on the bid. I put a limit sale in at $2.64 then got back to work.
On checking in the afternoon, it had not sold, must have been pipped at the post. I checked again and the bid was down to $2.59, I amended the order to a limit of $2.59.
I checked again at the end of the day and still no sale, on closer inspection I realised that I'd put the limit at $3.59, one dollar above the current price, a typo, the order had been purged as it was too far away aarrggghh.
So, I still have my stock and now the price is $2.50.
Lesson learned, if you want to get out without a problem use a market order not a limit.
Regards
Neil