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Markets continue to be treacherous
Goodness gracious.
(That's the polite way of putting it, make up your own version using your favourite swear words I really don't mind)
Markets continue to be, treacherous is the word that best sums it up and excited to see I spelt that right first time (I think)
Those overtrading will find it has become a giant casino where whatever you trade will inevitably be closed out at a loss by the casino. And the more chips you scatter about the more the casino will rake in off you.
It really is better to simply sit back during uncertaintly, a trade is not compulsory. Any trades which in hindsight could be dodgy should be closed up and cash on the table for future use. Or, to buy something from the shops...
I feel a lot of people are chasing share prices about up and down, wondering why whereever they stick stop losses they get closed out. (It is always someone else's fault, usually the spreadbet firm or your broker and nothing to do with you. Of course the bastards closed you out, they were waiting all day just to get you. Ha ha!!)
More seriously it is very hard going at the moment and patience is the key. I have 6 trades in mind I would like to make at certain prices but I am happy to wait for the right time and the right price. I'll discuss those with those of you coming to the seminar on Friday.
I actually think a lot of shares have been re-rated to what is a fair level not an inflated one, so bargains are beginning to appear.
Another point is that the more it goes down at the back end of Nov and early Dec, the best chance we have of a massive Santa rally!
So I haven't been doing that much, outing the odd trade that hasn't worked, taking a small loss on the chin before it becomes a massive one, taking the odd profit here and there, a bit of topslicing too. And simply waiting and being patient for a time to buy the bargains.
Carpetright (LON:CPR) looks pretty worn around the edges. It looks too high despite recent falls and I really wish I'd shorted some more at 650. Well, I did short some more at 550 though did not declare it here and also at 500 and now have a hefty short on. Indeed I shorted yet more and will add this one to the website another tenner at 444. Its recent statements are pretty gloomy. Its debt isn't too bad which is the only upside apparent and my thoughts are it'll sink to 300 ish. At which point I hope to bag an enormous profit. Downside? Well. I guess someone could make a bid but I can't think who. Still I guess it is possible so some risk.
I've also shorted Imagination (LON:IMG). Actually it's a pretty good company, gets lots of royalties and it has cash so this is a short-term idea and only looking for 50 points or so if I can get them. I just think it is slightly too high and could come back a bit as tech companies are being rerated down a bit. I shorted at 439.
And Halfords (LON:HFD) is back on my shorting list and I've shorted that for a tenner at 328. It's been in my bad books ever since they refused to sell me a bike that was sitting there. I went and bought it elsewhere instead... but with retailers under the cosh this could bring a few points to the downside, though to be fair it doesn't look in dire straits. Looking for about 280-290 on it.
Don't remind me that recently I took out a Thomas Cook (LON:TCG) short in the 70s ! I know I took profits on it and if I had waited those profits would have been enormous. Poo.
I've taken some profits and losses, reducing what I have a bit more...
I took a loss of in SportingBet (LON:SBT) of £535 - it came down to the stop and once there level 2 continued to look bad so I activated it. An easy decision and it has since gone a little lower so taking the loss before it got bigger worked here. It is looking very cheap now though and there is probably money to be made but judging when the bounce will come could be hard.
Profits taken in Exillon (LON:EXI) spreadbet, it hit its target though I missed it, but sold a bit lower down, profit is £610. TT just hasn't been going anywhere for so long boredom closed me out for a loss of £100 at 136.
Afren couldn't get through the 100 barrier and then began to sink, with sellers crowding in on the order book it was time to grab profits, should have done it earlier, still profit of £617 at 89.75. Actually considering a buy back at around the mid to late 70s perhaps as it seems to have support there with a tight stop as a drop below say 70 would look bearish.
Gulf K (LON:GKP) shot higher up to 200p. Oh why oh why didn't I take profits Dumbo? Greed, I guess. I let it drift all the way back to 172 before taking the profit of £1,320.
That's total profits banked today of £2,012 - those could have been a lot higher if I had acted quicker in this much more volatile markets to take profits faster.
Those of you who came to the follow up seminar know from my accounts I have a nice FTSE short at 5730 and another at 5570, though I haven't put these on the website but they are obviously going well!
The porftfolio has held up really well during the ftse mauling I think mainly because good companies can often hold their value and they are a little bit off radar.
I am thrilled with some of the excellent reports made by a number of the companies in the portfolio in the last couple of days and many of gone up very nicely against a falling market which is very rewarding!
Amazingly they are all good. Looking at them I do wonder if we are talking ourselves into a new recession. Each report does say something like, we're doing really well but with all the talk of gloom and doom, we have to be mindful of the future etc...
Looks to be as if the newsmakers could look at some of the good news, and there is some around that would be rather helpful!
So some comments on portfolio companies reporting.
Wow! Is all I can say about the fabulous statement from MS International (LON:MSI) - a share I guess that is simply under the radar - what great management here!
All its divisions have had a fantastic half year, both forecourts and defence have been doing well. I thought that might be the case given MS were advertising recently for staff. Looks like they might do 8-9m in the full year throw in the cash they have and despite a rise on the report it still looks undervalued and looks good value up to 400-450. The dividend has been increased by 50% too showing confidence. Big well done to the management at that company. Anyhow should be 100p higher than it is.
Telecom Plus (LON:TEP) reported too - looks good, in particular the dividend rise of 25%. This is my big income earner, with more than £300,000 worth in real life the yield brings in a fantastic income every year - I should pick up around £13,000 in divs in the net year. The share price looks about right for now but at the current rate they'll probably be rerated again at some point up towards a tenner and watch for FTSE 100 entry in 2020 ! (Hope I am still around to see it!) Total profits here are well in excess of £90,000 and way more than that personally - plus all those lovely dividends.
A fantastic report from Kentz (LON:KENZ), all on track - some huge contracts, plenty of visibility, long-term work and a whole heap of cash - this ought to hold up if the market tanks further and still looks very cheap - I hope this will be a big winner in 2012.
And Avon Rubber (LON:AVON) reported half year figures, nice rise in profits here, obviously a question mark over defence spending but even so, a great set of figures, and its dairy business is also doing well. Nice rises for all the above companies!
CML (LON:CML) reported a decent set of figures too, and there are some hints in the statement that look interesting about next year, maybe something they can't explain fully but looks like there is some confidence about the markets they are in. I also wonder whether this looks like a potential takeover story, a bigger rival could easily buy this out for loose change.
And the brilliant Coastal Energy (LON:CEO) has put out yet another encouraging drill report. with upgrades all over the place and now pretty much a doubler for me and a pretty fast douber too! Glad I topped up last week. This good news story just keeps getting better and better...
New Brit (LON:NBPO) also reported: excellent profits here and also a pretty good outlook statement, very nicely in profit since the first buy on this one. Carclo's (LON:CAR) statement was inline. We await news of developments in its CIT technology. If it pulls it off the shares could get rerated a lot higher. There is some risk as if it doesn't they will get hammered but risk reward looks weighted to more reward. I bought at well under half the current price anyway so it would just be lost profit if anything goes wrong as the business without CIT is worth 180-200p. If I was in charge I would rename the company Touchscreen Tech, get it relisted under tech and see an immediate 100p upside! The market seems happy to wait events for now.
Entertainment One (LON:ETO) looks like it will stay where it is for a bit. I actually think a bid is now in this one for next to nothing! To me the shares are pretty much worth 190-200 quid each without a bid and I would now imagine any bidder would have to pay nearer three pounds than 250.
Long-term superstar Dialight (LON:DIA) remains where it is for now. But it is in a rapidly growing market. Much is in the price admittedly but with patience there is a tenner to come. Well, I have been patient all the way from 150p to 750 and as those of you who have to my seminars have seen from my accounts my profits in real life are something like £70,000. For the website profits are more than £40,000 - and of course there have been dividends on top.
The shorts continue to shine: Ocado (LON:OCDO) continues to gradually drift down: I keep wondering whether to bank the rest of the Ocado short as there is a profit there of more nearly £4,000 It doesn't go up much with the main market but wonder if I am being too greedy expecting any further falls.
I tend to forget about little LOQ (LON:LOQ) but it has made me some very super profits and indeed I haven't looked at it for months except noted the share price stays strong. Last week it announced a smartphone trial which could prove very promising indeed. The share price is rising nicely again and it could surprise some more to the upside so I'm staying in there!
Overall I am getting excited because I have some cash and bargains galore are appearing everywhere. Remember especially when there is fear around shares will overshoot on the downside - there could be a lot of money to be made in December. I am ready with my ideas.
Biggest three winners in the portfolio are: (rough profits!)
1. Telecom Plus (LON:TEP) profit £92,000
2. Dialight (LON:DIA) profit £43,000
3. Microgen (LON:MCGN) profit £27,000
(which doesn't include thousands of pounds worth of dividends from all three!).
