MARKETS
It has been an interesting year on the markets.
I've made some nice gains overall. As ever of course ups and downs. but on the whole I'm happy with this year which even after withdrawing some money to buy more property I'm still one of only 200-odd ISA millionaires. (very odd most of them I bet)
A bit of a problem with that as it means I have 65 positions open in the isas! I have to to ensure one dud doesn't hit my capital. However most are in good profit and I intend to run them for years longer
in some cases.
Main thing for me is always to not lose capital at the very least and ensure losses are never too big while trying to get big gains out of a small selection of shares.
An in depth review of the year coming up including some thoughts on what I did right and wrong and some changes to the market and how I've changed things a bit. Thanks to some amazingly good suggestions that came up at the two seminars I just did, I have enough likely decent trades to last me well into next year.
Thanks so much to those of you who came up with some inspired suggestions, you know who you are. I'm not going to publish them all here. Some things are best kept to yourself...
Talking seminars I booked a new date, February 1st - so if you fancy a fun day out with me and live markets and hopefully a decent trade or three arising email me at robbiethetrader@aol.com
with "Feb seminar interested" in the subject line. Giant very early bird discount on offer too.
First off the Santa rally. I tried a couple of times to enter around the 6,000 mark and lost £200 twice trying it. We had a go at the follow up on Monday and well done to Ben who got the best
entry price of all!
The best price I got was 5939 and I bought heavily all the way up to just under 6000. As I write I've made about £20,000 on paper. I've put all stops into at least break even or small profit now which is fantastic, worst comes to worst I shall make something.
Exiting? Tricky one - would love it to be 6400 where I am sure I would take some profits. If it comes back I'd probably be silly not to bag at least some of that profit.
As we discussed on the day if history repeated itself last year the rally started Dec 14th, petered out Dec 30th but then carried on in January. We are entering the second strongest week usually then it is the strongest.
Interest rate rise in the US has been well received. Anyway who knows? This isn't my area! Next two weeks should be strong with the strongest day of the year Xmas Eve! I have had a giant clearout of stocks that weren't performing, some that just weren't moving, and some that have done very well long-term and time to bank final profits and some that were losing. All in all banked some giant profits, and then moved that cash into some new ideas, quite a few, or which I will discuss a handful now. I really like the packaging sector at the moment - the low oil price is really helping them a lot.
The packaging company I like the most and I bought some is Robinson (LON:RBN) (Here's to you.. er... Mrs Robinson....) No not the stuff they drink at Wimbledon this is packaging and this
one came up at the seminar. I hadn't come across it but like what I see. Lovely company, great prospects and it looks cheap too. I suspect the low oil price helps companies like this and they
make the packaging for a lot of popular products and some very big names.
I also noted Robinson said higher plastic resin prices were causing problems but looking at those prices they have come down a lot recently so I think Robinson should be benefitting bigtime.
I do also wonder whether a bigger company might snap up Robinson at this cheap price - any bid would have to be around the 3 quid area. But on its own I do feel it is worth a lot more.
Anyway I have packaged up a nice parcel of shares. And talking packaging I also bought shares in larger packaging company RPC (LON:RPC).
Possibly not so much upside as Robinson but they are doing well and I like the acquistions so I've bought there too.
I also like the look of Total Produce (LON:TOT)
This is a good looking Irish company that distributes mainly healthy food to outlets including fruit and veg. Many people are trying to eat more healthily and that shows in the rapidly increasing share price of Total.
The company looks in good shape and is in the middle of share buyback programme which should at least support the share price or even increase it.Looks cheap around a quid and I'm looking for upside to 125-30p.
I've bought into Softcat (LON:SFT) - a very interesting new issue. And I bought a few more live at the seminar.
A recent update shows it is expanding everything it does, hiring new staff, expanding premises which all leads me to think the company thinks there is big growth to come here. It seems to be in a decent growth area of the market so I am in!
I have bought into NCC - now this one is in a huge growth area of the market, that's internet security. I already had some free shares from when they took over a company I had shares in - Accumuli. I really like the big acqusition the company has just made and it raised a bundle for that in its rights issue and I got a few shares in that at the rights offer price. One riskier one to mention! That's yprotex (LON:CPX) bought some for the sipp recently and topped up for the isa today after a superb trading statement.
CPX expects results to be "significantly" ahead of market expectations - this nice under the radar company is helping to stop cruel testing on animals and is producing systems to phase out
animal testing altogether. Admirable, and potentially profitable too, what you might call a win win. Risky but a potential doubler.
I bought some new shares in Entertainment One (ETO) as it seemed to be terribly oversold, unfairly in my view.
ETO - my goodness who'd have thought what I'd considered to be a safe quiet share would turn into such a crazy one. The interest rate they got on borrowings seemed to spook the market but I don't see why.
Actually it was probably some shorting, some stops getting hit more than anything else and a lot of fear.
I didn't want to sell any but my hand was forced and couldn't go against the falling market - so I had to sell some. Difficult to know what to do for the site because I bought a load a lot lower down and a few higher up so for the site I'll cancel out some of the trades bought higher and one bought lower to bank a loss of £470.
In real life I sold some and kept the rest including the rights shares - when the shares got to 140 ish that was enough for me and I bought some new ones at prices around there. Anything under 2 quid looks way too undervalued. I can imagine these hitting over 350 in time.
I also have bought some new shares in QP. after having to sell the original ones for a loss.
This one has proved a puzzle, there seemed to be no buyers around so I took a loss of £3,032 overall. However I have bought some back lower as the fundamentals look good. I made an error of sticking with something for too long that the market didn't like - I'm usually pretty good at avoiding that but of course we all make mistakes. Main thing is when you do that to learn from it and reinforce why it's best to sell up when things aren't going right with a share.
The Vlk trade never worked out, I could have taken a nice profit as it went higher for a while but failed to and ended up bailing out for a tad over breakeven.
It's always hard to know when to sell some of a share that's in good profit but I figured IOM had had a fantastic run so I sold about half for the website that yields a profit of £5,950. Happy to hold onto the rest where an excellent profit still builds and chance of a bid.
I also sold a part of my holding in NFC after a good run but again holding onto the rest, for the website then a profit of £2,313. I ran into boredom with non mover Caretech so exited for a profit of £436.
Ald kept falling and had to be sold and that went for a loss of £418. Last of Nah went for a profit of £896 (Budget worries). Time to exit the final bits of two long-termers, e2v for a profit of £2,725 and sfe for £1,275. OPG has gone for a profit of £2,220. Sdm wouldn't go up so exited for breakeven (sold in two lots at116.17 and 117.01)
With all those losses and profits the website gets a profit of £11,895
Year Review:
One thing I would say has changed a lot this year is volatility on everything which makes a change in stop loss policy essential. Just a reminder that personally as I'm around all day I only use real stops with higher level spreadbets and not in ISA stocks. But of course I have an idea of where I want to exit. Beginners though I think should have auto stops on not just ideas where I might cut manually like me.
As discussed in the book (and in more depth in the next one) and at seminars is my new strategy of "Get out Quick" if in at the wrong price (say top of a spike up) and treat stops as something like a bottom line insurance policy way below the current price just in case. In other words I would never expect a stop to really be hit. nI should already be gone.
It's more a question of just getting out with a very small loss and then evaluating a new re-entry. I usually try three times then call it a day. It's not possible for me to replicate on the site (well I could but that would be a full time job updated daily). I'm working on lots of examples on this for the next edition of NT.
The reasons for volatility rests with market movers and shakers and brokers and spreadbet firms etc all need volatility to make money - they need to force everyone to press sell and buy buttons as much as possible as each time they do that there is a profit of some sort.
There are so many reasons for prices to be manipulated and on mid cap stocks it is incredibly easy for robots to be programmed to push prices up and down to depress investors into selling up.
Then inevitably panic sets in causing crazy falls in good companies as stops get hit.
So either you decide "I definitely have a good one" and hold on grimly or get out fast and wait for re-entry lower.
And sod's law always comes in - whenever you are depressed about a share and you finally decide to throw in the towel, you should of course actually be buying it!
Generally this year I had a few very big gains and some smaller losses - the big gains easily outweigh the losses. And a lot of shares just remain long-term holds and I hardly look at them.
Spreadbetting in particular has made me at least £200,000 as those of you who come to seminars know - but I can't put up the trades here as again, it would be a massive job for me and indeed
I'm trying to run the site down a bit. As I said at the top very happy with this year - I'm not a spreadsheet guy so I don't know but going on two new Isas money this year I started with 30k which is now 38k so if that pretty much mirrors it, I've done around 25% which is exactly and all I am after every year. Add in dividends and over the years if you can manage 20-25% your money will grow nicely.
If you try for more, that's when trouble usually ensures. Best to make money slowly and cautiously. I managed to avoid stuff that went bust (a lot of those this year) and as usual steered clear of oil, energy and commodity and concentrated on quieter companies with good prospects.
Overall I would say the best money came from six or 7 big winners and I tried to take smaller losses on ones that didn't work out. If I could pick out a mistake I made this year was holding onto one or two for longer than I should and losing some paper profits that I could have banked.
Thing is doesn't matter how long you've been in the markets, mistakes will always happen and a bigger loss or two will inevitably happen however careful you try to be. Overall though 20-25% is achievable even given some errors.
Best gainers of the year for me came from ones that got bid for, in particular AGA where I gained personally by more than 30 grand as I got a lift from 80p to somewhere like 180p.A lot also gained from Al Noor (LON:ANH) which was bid for. Optimal Payments now called Paysafe (LON:PAYS) made me a fortune in spreadbets as those who came to seminars saw, roughly up over 50 grand at the mo.
New issues really went my way with some very nice winners such as Kainos, Worldpay, Equiniti, Ibstock. Disappointing newby was Aldermore.
A bit of a risky one, Xeros trebled for me. Pets at Home was a massive winner especially on spreadbets for me. Dignity has produced big profits.
No really terrible stinkers this year - you'd always expect one or two. My worst stinker ever still remains Coffee Republic in 2001 when I did eight grand!
Probably the worst was Quantum, looked good fundamentally but the market hated it giving me the biggest loss. I played Shoe Zone terribly losing more than a grand. A dip into India cost me a few quid. I lost a lot of nice paper profits on ETO which surprised from being a safe solid stock into a crazy oil type stock (amazing how the market can surprise). However on the whole I managed to get out of shares that started to slide badly in time.
Looking at longer-term ones, Renew has been a massive winner this year now pushing 400. Fantastic one. Powerflute has been wonderful and a bidding war might be on the cards. Avon
keeps heading higher. Dignity has been marvellous with massive profits - if I added them all up probably over £50,000 now. Tep has provided wonderful dividend income.
There are others but I have things to do and people to see so signing off now till mid January. I wish you all the very best in your trading and I wish you all a very happy and prosperous 2016.