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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.
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
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!
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
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.
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.
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.