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So I do wonder to myself... could I have just taken August off and not worried about the volatility at all?

Last updated: 12:43 08 Sep 2011 BST, First published: 11:43 08 Sep 2011 BST

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What a rotten stinking mother f of an August that was!! (Does that sum it up nicely?)

 

They moan about no growth but what do they expect with these silly high taxes?

 

Cut the top rate immediately by 15p and the bottom rate by 5p. Now watch and see. You'd get growth for sure I reckon and I bet a higher tax intake as well. Everyone knows the top rate at 50p generates nothing at all. 

 

And in reality the top rate is nearly 60p - what incentive is there to grow and create jobs? This move would work immediately bringing back confidence and desire. 

 

Something needs doing and a dramatic and instant move like this is what I would be doing. So there!

 

In fact I wonder how about something even more dramatic? A flat tax of 15p for one year for all is announced up to say £500,000 when 40p kicks in.  As a trial. For a year we let you keep much more of your money in return you go for it and earn as much as you can and get the country's growth going again.  A kind of "Let's all go for it" campaign.

 

After a few months we can see whether it worked or not. if it did work, keep it, if it didn't then, well, okay it didn't work but at least we tried something different. I do wonder. I think it could work and benefit all. And bring back so much business to the UK.

 

Of course governments are always too scared to try anything radical. Or interesting.

 

August 2011 has to go down in my book as the hardest month in 12 years of trading that I've ever encountered. It was really hard for anyone to handle whether beginner or experienced. 

 

It was almost like we were all being robbed/mugged by someone somewhere, the rotten stinking swines!

 

The volatility appears to still be with us. Markets are worried about a double dip. Every single small economic stat is met with a rise or fall of hundreds of points.

 

Or anytime anyone in America says something. Or if Ben Bananas looks slightly worried. And oh no Obama is speaking tomorrow and the moment he starts speaking the markets start tanking! (He has been a disappointment hasn't he?).

 

Indeed it looks like the market is up today because some kind of US stimulus package is expected to be announced by the man himself tomorrow. Expect a sell off again if he disappoints. Life is a roller coaster.

 

It doesn't seem to matter to the markets what happens in the UK. UK stats are neither here nor there and markets barely move on those. It's all about America.

 

Which is why the markets make their dramatic moves at 1.30 our time when US stats get released.

 

Of course it is all crazy. Psychiatrists reckon if the markets were really a person, said person would need urgent treatment for bipolar disorder, panic attacks, multiple personality disorder and a host of other serious conditions!

 

Fear and greed is all around us. Darn, why didn't I sell my shares at the top. S***!!!! Why didn't I buy some at the bottom!

 

Of course as per usual when was the best time to buy? Yes, exactly. Just at the biggest moment of panic. 

 

It's actually very easy to say "Buy when all others are fearful" but very hard to do.

 

I did do it a little, to smaller stakes than I would normally.

 

Now the good news in my opinion...

 

I had a look round some bulletin boards for the first time in months (I gave up with them a long time ago on the basis that life is too short and there is more interesting things to do with the short time we have on the planet).

 

What was interesting was the doom and gloom, gurus retiring from the scene, people saying they were in cash, or fed up, etc...  people trying index trading instead (usually means they just lose their money faster)

 

This seems to me like good news. It is nearly always when private traders give up that the market starts to go back up - the markets have sucked all the money out of them it can... and.. well... it shows the genuine fear about, and yet again, fear like that often preceeds better times.

 

Secondly, I've been reading a huge number of reports from companies producing very decent results but who also said the outlook was fine. 

 

So while a double dip is possible there isn't a big sign of  it in any reports I read. 

 

And finally there is a whole wall of cash out there waiting to get back in. If fear can somehow be sidelined, it is there, waiting.

 

All in all I'm reasonably happy with the way I handled the tough times though in hindsight maybe I overtraded.  Well, okay would have been nice if I sold everything at the top and bought everything back at the bottom but I am not that clever sadly. 

 

And surely this blog is more interesting when it is all a bit harder, no?  The general upshot is overall in August I lost a few quid off the table like everyone else. I took some profits on some positions but not too much as I was already defensive and had already banked a lot of profit in July. In fact my really defensive shares stayed level or even went up a touch.

 

However to counter some of the lost profit  I made some nice profits on FTSE shorts and the ETF FTSE supershort and used a covered warrant in my pension to collect money from the downside - all of which I will be covering in depth for those of you coming to the seminar next week.  

 

With shares and markets getting tossed about in thin trading, moving hundreds of points sometimes in minutes it was not a place for the faint hearted.

 

I made some very decent sums from FTSE downbets but I won't take the credit for that here - I probably made around £8k from them very roughly over the month. And I got some nice 20% profits in my ISA from using the supershort. Again, I won't take any credit for the money made from the downside - they were much shorter time-scale trades than normal.

 

However they have been great as they have brought in some money to cover some of the shares going lower.

 

I've also made quite a number of shorter-term trades, most of which I closed out so for the website I'll ignore those and concentrate on anything bought in the last couple of days given it's been a while since the last update.

 

Okay ... this was really bargain hunting, using the buy when all is afraid idea I tried hard not to be afraid and bought the odd share or two on the nasty days.

 

Yesterday I saw the report on Kofax (LON:KFX) and thought it looked okay and it was marked up at first. Then it went down like a stone, way far too fast so I spend a while on level 2 waiting for the inevitable turn and though I didn't quite get the bottom at around 250 or so but I did collect 1,000 at 272.96. I wonder whether a predator might come in after the big dip? Considering it was at a fiver recently someone may be tempted? It's very volatile so will need some courage to stay with it!

 

I bought a few Cape (LON:CIU)  on a spreadbet at 477. This one has moved to the main market and I liked the look of the last few reports. The potential downside is it is crazily volatile and it would tank with the main market if it slumps further so I would be quite tight on a stop here especially if Obama does not come up with something.

 

I've been tempted into Shaft Sinkers again (LON:SHFT). Last time I got scared of them and came out fast as it started to, er, well, sink. 

 

However I just bought some this afternoon (3,000) at 142.75 and might try and stay with it this time.  The figures looked really good and the shares are trading very cheaply indeed after they got sold off from the 180 area. I've tucked them away hopefully for a while unless the market really tanks as this looks a share that could leap higher once the market is back on an even keel and I would look for a return up to 180. Downside should be fairly limited at this kind of price. (He says hopefully).

 

What can I say about New Brit (LON:NBPO). It's been a brilliant profit maker and dividend payer for me over the  last 2-3 years - I did take some profits last time of over £3,000 and sitting on a near £7,000 profit still on my original buy.                

 

Despite the climb from where I bought in the 100s judged from the latest report they do still seem cheap and also tend to be relatively unaffected by market falls so I bought some back (500) at 849.9. I would hope to hold these for the longer term for around 1200 mark.

 

Oxford Instruments (LON:OXIG) where I might nice profits on in July came back to a lovely bargain basement price so I picked up 500 at 774.4, targetting the 900s. And I picked up a spreadbet in TT Electronics (LON:TTG) at 141 on the basis it looked cheap after a sell off.

 

As to sells, one or two more to tidy up after my last manic sell off. But in the main I'm either being brave or stupid and hanging onto the companies I really like.

 

So, to tidy up a bit from the manic sell off last time, Latchways (LON:LTC) went at 1240 for a profit of £520, IG (LON:IGG) has been a very good market but I've taken profits there at 447 for a profit of £360. Hyder (LON:HYC) went at 365 for  a profit of £1,807. 

 

Elsewhere it's interesting that in the main I hold cash producing companies with strong balance sheets and they are doing okay in all the chaos.

 

Telecom Plus (LON:TEP) remains the star of the show at just under 7 quid with those buys on fear days looking good. Total profits are well in excess of £50,000 and way more than that personally - plus all those lovely dividends. I suspect 700 ish  is the limit of upside for right now but 1000 looks on the cards for next year. ish

 

Kentz (LON:KENZ) produced a super fabulous report and in better times I'm sure they would be over a fiver, as it is still in a nice profit on these and feel sure eventually the ones I bought recently will pay off. They head into the FTSE 250 in a few days time.

 

Coastal Energy (LON:CEO) too came up with a decent statement today and that's going well, it keeps coming up with successful drilling reports and this overlooked company could have massive upside in my opinion and already up nearly £2,000 on it.

 

Dialight (LON:DIA) has held up pretty well too as has shares like Alternative Networks (LON:AN) and Avon Rubber (LON:AVON) has bounced back higher.

 

Character (LON:CCT) is in a nice profit now, Entertainment One (LON:ETO) has held well (that one has a new movie out which has been getting good reviews). Risky Cadogan (LON:CAD) has stayed strong with institutions picking up shares.

 

London Capital (LON:LCG) spreadbet is really paying off now, they must have made a lot in August and there has been some heavy buying coming in with the spreadbet up nearly £1,500, looks like more to come. 

 

The Ocado (LON:OCDO) short has worked like a dream!! It has come down enormously and I'm on the verge of banking at least some of the £6,000 plus profits.  

 

So the stategy contines for me.

 

Buy the odd bargain on a really bad day. Use FTSE spreadbets and the supershort for the ISA to short on the good days. 

 

At the moment the strategy is working reasonably well. While it isn't making me a massive amount for right now neither am I losing much either. And I have some decent cash waiting on the sidelines. I think for right now it's important to preserve capital.

 

I suspect it will continue to be rocky ride though I do wonder if quite simply we'll end up the year in  the 5000-5500 area which given current economic malaise, would seem about right.

 

Indeed with FTSE bets I'm currently thinking short around 5500, take profits and buy back in the low 5000s.

 

You may remember I run my multi millionaire sister's isa.. as she doesn't care whether she loses it all I experimented by not touching her isa at all in August and leaving things alone.

 

And you know what is interesting? It's only down by a small amount.. she has things like Telecom Plus, Avon Rubber, Devro (LON:DVO), Hilton Food (LON:HFG), Entertainment One, Coastal Energy (LON:CEO) in it. 

 

So I do wonder to myself... could I have just taken August off and not worried about the volatility at all? Time will tell!

 

Although as many of you know after 12 years I do want to quit doing these updates sometime soon, I feel though while things are rocky it might be of even more interest to see how I handle the bad times so on that basis I am going to keep going for a while longer! However please do not be shocked if also I suddenly retire. One mad email too many could knock me over the edge. But I think I will see this year out though, and do intend to at least start the next!

 

I've earmarked next year to write a novel (fiction not finance) - that's my number one aim so if the website gets in the way of the time I need it will have to go. Or maybe I should just take a year off. We'll see.

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