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The Naked Trader

Robbie has been trading full-time since 2001. His book The Naked Trader has become one of the biggest-selling finance books, reaching the top 150 books on Amazon. Trades made and published by Robbie’s have amassed profits over £600,000. You can read about his buys and sells daily on Proactive Investors.


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Well, so far the main markets are playing out....

December 10 2014, 3:54pm

Well, so far the main markets are playing out as they usually do.

This week is always a bad one which is usually brilliant as it sets up for the traditional Xmas rally.

And so far this week anyway it's been a nice downmarket which should set up the upside for Xmas, though remember this is never guaranteed.

Indeed the one topic that always lands in my inbox this time of year in December is:

"How do you play the Xmas rally"? 

Now you don't have to send me this email as I hope to answer it here saving me loads of individual replies.

End of December markets are usually hot! Historically the strongest week of the year for the market is the 51st week. And the second strongest? The 52nd!

The probability of positive returns in December is a high 69%. The market's only had one significant fall in December since 1981. Both mid and large-cap stocks perform equally well.

Why are the markets so good at the most wonderful time of the year?

I suspect it is down to something as simple as human psychology.

We all feel good with the approach of Christmas, then there are New Year's hopes and dreams. And probably funds want to end the year on a good note. Some say it is to do with big funds wanting to make their end of year books look good.

But by the end of January we tend to be left with a bit of a hangover and that's why February isn't so good. Indeed I suspect we may be in for a bumpy January if the Xmas rally is good.

The period between Christmas and New Year often sees stocks squeezing higher on thin volumes.  Many stocks race higher during the holidays; there is frequently no one selling and institutions are shut. This often has a good effect on stocks at the smaller end of the market.

Of course, I am making it all sound too easy ... it's never going to work out every year. But the use of  stop losses should ensure that when you meet a year without a Santa bump, your losses will be minimal.

Way I play it  is a ftse or Dow long spreadbet soon, probably early next week - just a rolling as we're only looking short-term. Though it depends obviously on how the ftse is looking.

A trailing stop loss of say 100-150 points (to ensure no sudden spike out) might work out.

I usually  sell it in early January  and then maybe go short for the January blues.

This worked nicely in 2013 when I bought just before Christmas at 6445 and the market had a lovely festive rally and in January went to near 6800 for a tremendous profit!

Note: You see this year was a whole load of nothing as far as the main companies were concerned.

But do remember: the market can never be totally predicted so beware, maybe this is the year it won't happen. In which case I'll get stopped out for a loss and so be it.

I find December is also a good time to have a look at some of the smaller, tiddler stocks in the market and sometimes have a bit of a gamble on a few stocking-filler shares. But only a little gamble, mind. Let's not be idiots.

Looking at specific days, would you believe it the short half day on Xmas Eve is the strongest market day of the year, with the 23rd being the strongest day.

Which suggests buying stuff on the 22nd might work!

But watch out, the first week in January is the weakest market week.(You can imagine this is when people look at their credit card spending in December and reality hits)

On the downside, one thing to watch out for is companies sneaking out bad news between Christmas and New Year. It's the same as political parties burying bad news on a day when a big story emerges elsewhere.

With so many people away, the companies hope the stinker will go unnoticed. So it's worth keeping an eye on news that's related to your stocks. 

I get out quick if any kind of bad company news is released on one of my shares at this time.

So, to sum up... long the FTSE usually works from sometime around this week or next but by the time we hit January a switch to a short might pay.

If you're going to play the Xmas game, good luck,  but remember markets often don't do what is expected, so beware! And if you get in at the wrong time maybe get out fast and try again!

And maybe I could kindly ask you not to mail me directly on the Xmas rally topic - this really is all I have to say on it!

Best spreadfirm for ftse trading is here

http://www.spreadco.com/nakedtrader

As it has a spread of only 0.8 on the FTSE which beats most others.

On the shares front death is a pretty good business to be in.

After all it's a business where you never run out of customers!

That business is Dignity (LON:DTY) which owns funeral parlours.

Those who come to seminars know I have already doubled my money on Dignity having bought in the 700s and 900s a while back.

And as I always say I never mind buying more of something.

Dignity generates a lot of cash and it tends to return that to shareholders so often it comes up with 100p or so as a special dividend. It is highly rated but in the business of death so it should be!

My trading plan? Well probably hold it for years but try and ensure that I do sell it before I have to use its services myself...

After all I don't want to take the shares to the grave with me! ps, you don't get any discount on your coffin as a shareholder. (Well I thought I'd ask....)

I've bought two shares this very afternoon!! I literally just bought Caretech (LON:CTH) this afternoon which is a care organisation and picks up a lot of Government contracts. It came to my attention as I was looking through company results early today.

Although it has big debt it has massive property assets valued at £275m which is £100m more than the debt. The statement was confident and it pays out a very nice dividend of over 3% - (try getting that from a bank).

Though the spread looks wide you can get a good price and I got 2,000 shares this afternoon at 226.2 though the advertised buy price was 229.

My thought is a long-term isa tuckaway to pick up a decent capital lift and a nice income.

And I bought some more Audioboom (LON:BOOM) this afternoon. It came down to what looked like a very value price around 10-11 pence and I've bought some more aiming for it eventually to ride back up to the 15-17 area. Managed to sell out at 17p last time for a very nice profit.

We were in the middle of doing level 2 at the last seminar and one level 2 stood out, that was the one in Renew (LON:RNWH) where I have already doubled and more my initial stake made on the site a while back.

However it was so strong I bought some live there and then at 269. I had been looking to buy a few more after already doubling my money on them and this seemed a great opportunity.

I also did a spreadbet on it too - hard to find SB companies that will offer spreads on the small ones though this one does and I did the bet with them

http://www.spreadex.com/nakedtrader 

Fundamentals look great in this fab little company and looks like there is more upside to come, and level 2 gave me a great entry point at the then low of the day.

(If you'd like to do level 2 live with me at one of my seminars next is Jan 26th)

Oil services companies have been badly hit by the oil price slump although I think one or two unfairly.

However there is no point going against market forces so two subject to oil price worries went.

So I flogged off GMS (LON:GMS) for a loss of £580   . I think this one has been unfairly marked down and I expect to buy back shortly. Especially as it continues to announce new contracts, there will be some major money to be made there if I can get a new entry price right.

I also sold the last of the old PFC I had from ages back for a profit of £5,023  . I'd made many thousands on it a long time ago by banking it way higher. 

Pressure came... er... under pressure from the oil slump and I sold my last lot to take a small profit after already banking half profits previously However I then stupidly tried to be clever and bought some at what I thought was a good price at 550 area and then got caught out by a trading statement causing a loss, though it was only a couple of hundred quid. Lesson: wait and be patient on a falling sector. However one to keep an eye on and keen to buy back at lower levels.

 I've banked some profits in one or two long-termers on the site.

 I've ding donged out of the last Chime for a profit of £3,108 and I sold half the remaining Avon for a profit of £4,910, keeping the rest.

All of which gives me a nice total profit banked of £12,461 for the site  which raises a nice load of cash for buying stuff at hopefully lows during the probable Jan/Feb gloom.

 Let's have a look at a few in the porfolio starting off with announcements

Recentish buy Amino (LON:AMO) put out a sparkling statement with what I always love, it expects to be ahead of market expectations and this has lifted the price some more, and I am staying put for more!

Iomart (LON:IOM ) put out half-year, it looks reasonably on track to me though one or two slight question marks over customers coming in and out caused a fall.

 I suspect this will get taken out so I've stuck with it, in a profit still from one trade and a loss from the other. Still, I made a great gain on the last bid offer so hoping for the same again. Both The Times and Investors Chronicle comment on how cheap it looks now, any price under 200p looks cheap for this now.

BTG (LON:BTG ) raised another £150m to help fund another acquision. In tremendous profits here having timed my money by nearly 8x now making mega thousands. I'm sticking with it I suspect for at least another couple of years and I think in time more upside is to come from FTSE 100 inclusion late next year.

Pets at Home (LON:PETS)produced some very decent figures and it seems to be it is worth more, at least up to 220 so I remain a  holder and in a good profit.

OPG (LON:OPG)put out a strong statement with higher profits and a new contract.

GB Group (LON:GBG )stated it expected "significant full year growth" and that keeps me in this fantastic shares where I have made a fortune (£12,000 profit for the site so far) I'm now hoping for a bid to take it out in the 200-250 area. 

Seeing Machines  (LON:SEE)has raised some more money to support its expected growth next year, been a frustrating one this year as it hasn't really moved much overall. However being a jam tomorrow share that can happen. A major contract win could change things. In the meantime it is in a holding pattern in the 5-7 area.

Sprue Aegis(LON:SPRP) put out a fantastic report, expecting to beat market expectations - a really strong update. As I mentioned when I bought this lower recently it looks like a lovely company in a growing area.

Recent buy Carclo (LON:CAR)hasn't done much yet though Quartix has shone brightly.

Telecom Plus LON:TEP reported well recently and I should get a massive cheque next week which should fund a brilliant time in Dubai! Simply a nice sleep at night tuckaway that should continue to provide good income and capital growth in the years ahead.

Spire - LON:SPT- continues to shoot up and Flow Group continues to look strong.

Energy Assets - LON:EAS - still looks a good thing. I can't believe I did do well out of the British Airways spreadbet now up 100 points, or whatever it is called International Consolidated..

GVC - LON:GVC  continues to be a lovely share. Super profits but the dividends are simply amazing and  I got a nice juicy payout of nearly £2,000 recently.

 

Nakedtrader  was created after I left my full-time job as a finance editor for BskyB to trade full-time. I had been writing an diary page for its teletext service since 1998 and decided as I was leaving to transfer that to the internet.

These articles are simply a "diary" of my life, or what you would now call a "blog". I detail what I've bought, sold or shorted and briefly why. I use various spreadbetting companies and stockbrokers to carry out the trades. I ignore commission but also dividends and I reckon the two balance each other up.

So you should be aware this is not a "tipping" site and I do not consider myself, nor do I want to be, a "tipster". In other words tipsters will urge you to "buy" something - and they generally are regulated to do so by the FSA. I simply state I have already bought or sold something personally. Because of that I am not "regulated" - so I am not an authorised "tipster". I am simply a trader who states his positions.

That is quite a big difference. I am not allowed to give what is called "Individual investment advice". And quite right too - I am not trained to do so. What that also means is if you e-mail me and ask me anything along the lines of "Should I buy or sell this share?" I cannot answer you except to say it is your choice! Of course I am more than happy to answer anything to do with general market/educational questions.

You should understand I always have an interest, and sometimes a big interest, in any stock I talk about. For website purposes my buys will often be to smaller stakes than in reality. So although my buys are real enough, as are the prices, I can and often do buy much bigger stakes in the shares. I may also "top up" in shares without declaring it and I will  sometimes deal more often than I mention on the site - mainly because of time pressure, if markets are busy. So though the buys on the site are around the £5,000 mark I may well deal in reality is sizes of £10,000 - £30,000.

My reasoning for this is I simply do not want to encourage people to blindly follow me into something when they do not understand the potential risk. It's ok for me because I can afford to lose money I put into the market. It may not be the case for you.  I am generally a medium term investor holding my shares usually between 1 week and on occasions up to 3 years. Average holding time is probably about 3 months.

So one of my main messages is: don't be tempted to follow me blindly into my choices. Quite often, as I play momentum, a share I have bought may already be much higher than when I bought it, especially as I do not update every day. If you follow me blindly you may be buying at a much higher price and you may end up selling at a much lower one.

You should ALWAYS do your own research and come to your own decisions on share purchases. If you follow me into something and lose money, you only have yourself to blame and not me. You should learn about markets and understand what you are doing before entering them.

The most risky way of trading of all is spreadbetting, which I do quite a bit. You should carefully read all the warnings that the spread betting firms issue together with all the warnings in my books. And never, ever, play with money you cannot afford to lose.

The aim of this site is to entertain, and perhaps stimulate debate, and that is the condition of entry !I really hope you enjoy reading about my triumphs and mistakes, but please, just watch and enjoy my triumphs and learn from my mistakes. Consider this site as entertainment. If this is your first visit to the Nakedtrader website site, I thank you for visiting me, and hope you will find this site useful. 

After reading and agreeing to the disclaimer, click the "I accept" button below. Please remember, I cannot give any specific advice, as to whether you should buy, hold or sell any individual share.

"The investments and other products referred to on the Naked Trader website should in no way be considered "advice" to buy or sell anything.  Naked Trader information is given in general terms only and does not constitute personal advice to any individual.  Investors are responsible for formulating and applying their own strategies based on their own personal circumstances. Naked Trader recommends that you obtain independent financial advice from an FSA-authorised intermediary before investing money.  Information given in previous editions of Naked Trader daily updates may become outdated and should not be relied upon unless confirmed by recent comment