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King of the Wild Frontera

Published: 16:28 28 Mar 2017 BST

Man lighting cigar with a dollar bill

Welcome to “how to lose £10k in just ten weeks”, otherwise known as the ‘Bombed Out but Bouncing Back’ (BOBBB) virtual portfolio.

This week the 50-day moving average buy/sell signal told us to sell everything we own and, hallelujah, two of them were exited at a profit.

Sadly, we lost a packet on the others and this virtual portfolio remains a cautionary tale for those of you who think they could give up the day job and make a living as a trader.

Maybe you could, but you’ll need a better system than I’ve devised in this series of articles. We’ll continue with the experiment in the hope of some kind of Lazarus-like miracle and then we’ll probably review where it all went wrong – not filtering out stocks with wide bid/offer spreads would be my first thought – and maybe tweak the filter, reset, and go again.

Easy come, not so easy go

BOS GLOBAL HOLDINGS (LON:BOS): Sold 12,525 at 9p each. Raised £1,112.25. Gain/loss: -£249.19.

We were sitting on a profit on this one at one time but the 50-day moving average “magic trigger” let us down.

BlueRock Diamonds PLC (LON:BRD): Sold 25,100 at 4p each. Raised £989. Gain/loss: -£343.75

The bid/offer spread did not help, but the stock ran out of steam soon after we bought in.

ECR Minerals PLC (LON:ECR): Sold 58,000 at 2p each. Raised £1,145. Gain/loss: +£144.

The last of the original portfolio checks out, and with a bona fide profit to boot.

Had to happen one day …

Flowgroup PLC (LON:FLOW): Sold 20,300 at 4.5p. Raised £898.50. Gain/loss: -£436.

We took a punt on the combined heat and power boiler specialist and … we got burnt.

Frontera Resources Corp (LON:FRR): Sold 510,000 at 0.4p each. Raised £2,025. Gain/loss: +£684.

Wow! We finally hit a six of Freddie Flintoff proportions.

This stock started shifting higher almost the minute we bought it and it was also tipped by ‘King of the Charts’ Zak Mir the following day, who said: “It looks as though we’re now ready to retest the best levels of the year within a rising trend channel from the beginning of February.”

I put that into Babelfish translate, but it came up with nothing.

“While we’re above the 0.2p level the stock could head as high as the top of last month’s trend channel at 0.5p on a two to three month timeframe,” according to Mr Mir, but we’re heading for the exits just as the surge shows signs of fading.

Snoozebox Holdings PLC (LON:ZZZ): Sold 220,000 at 0.4p. Raised £865. Gain/loss: -£470.

In terms of membership of the BOBBB portfolio, it has been in and out like a fiddler’s elbow.

Both times we have bought and sold it the stock has cost us the proverbial arm and a leg.

This time round it cost us £470, and the first time it cost us £300, give or take a few pence – and this stock has taken a few.

I wonder if there is some kind of Traders’ Anonymous organisation where you can arrange to be barred from ever trading this stock again.

I know it is only virtual money, with the bid/offer spread on this representing 25% of the share price it is simply not worth trading.

So, that’s the entire portfolio sold off, for a weekly loss of £670.94, and that’s with the lucky strike of Frontera Resources.

The only consolation – and it is a pitiful one – is that the amount we are losing each week is declining:  in the first week it was £1,554.25 (22.2%); in the second week we lobbed out five stocks for a loss of £738.52 (12.1%); and this week we sold six stocks for a loss of £670.94 (8.7%).

We’ve owned 18 stocks and made a profit trading just two of them, which is a recipe for disaster.

Nevertheless, we press on in the hope of finding several more Frontera Resources type stocks.

Seven more stocks for the pot

Circassia Pharmaceuticals PLC (LON:CIR)

This stock is almost the very definition of “bombed out but bouncing back”. Nine months ago the share price plummeted as its flagship cat allergy treatment failed a pivotal trial, then earlier this month it revived sharply after it secured the rights to a couple of pharma giant Astra’s drugs.

I am hoping this stock will benefit from a re-rating in the market, which come to think of it, is probably what this portfolio should be looking to identify rather than short-term punts.

Bought 930 shares at 106.5p.

Laird PLC (LON:LRD)

A profit warning and the passing of a final dividend all combined to put a serious dent in the share price of Laird late last year.

An old-fashioned metal basher, the company had somewhat unexpectedly found itself taking on the guise of a glamour stock as its technology, which protects electronics from electromagnetic interference and heat, became in demand for use in smartphones.

Cue the bursting of the smartphone bubble – round about the time everyone and his pet wallaby had one – and the concomitant bursting of the Laird bubble.

The shares have been steadily recovering this year, with the company’s balance sheet bolstered by a rights issue in February.  

Bought 670 shares at 147.75p.

Lansdowne Oil & Gas PLC (LON:LOGP)

The shares ticked higher today on no news at all. Let’s hope someone in the market knows more than I do.

Bought 70,600 at 1.4p.

Nektan PLC (LON:NKTN)

This one has been going up like a rocket since the business-to-business gaming solutions provider’s US operating subsidiary signed its first major contract with a big US casino operator.

Mind you, you know what happens to rockets on Guy Fawkes Night…

Bought 2,350 at 42p.

Plant Health Care PLC (LON:PHC)

Another stock rising on zero news flow. One of those investment sites with content written by robots says it is “showing positive momentum”, which is true, as the share price has doubled this year.

Bought 3,220 at 30.75p.

Proxama PLC (LON:PROX)

Here’s a stock we know very well. It’s a proximity marketing firm, which basically means that when you walk past a KFC, your phone buzzes and asks if you are hungry. Or something like that.

The shares received a boost today as Darwin Capital converted the last of its loan notes into equity, so that won’t be hanging over the shares anymore.

Bought 220,000 at 4.5p.

SpaceandPeople Plc (LON:SAL)

Yesterday’s preliminary results from the brand experience specialists were fairly awful but the company expects to return to a sustainable level of profitability this year.

Bought 4,300 at 23p.

Scores on the doors

Company

No. of shares

  Total cost

Average price paid

Current bid price

Current value

Profit/ loss £

Profit/ loss %

Circassia

930

£1,005

108.11p

106p

£985

-£20

-2.0%

Lansdowne Oil

70,600

£1,003

1.42p

1.25p

£883

-£121

-12%

Laird

670

£1,005

150p

147.75p

£990

-£15

-1.5%

Nektan

2,350

£1,002

42.64p

40p

£940

-£62

-6.2%

Plant Health

3,220

£1,005

31.22p

30p

£966

-£39

-3.9%

Proxama

220,000

£1,005

0.46p

0.35p

£770

-£235

-23%

Spaceandpeople

4,300

£1,004

23.35p

21p

£903

-£101

-10%

 

  • Cash: £16.36
  • Total value of original £10k portfolio: £6,443.59
  • Total dividends: 0
  • Profit/loss on closed trades: -£2,963.71
  • Unrealised profit on current holdings: -£592.71
  • Total profit/loss: -£3,566.42

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