# Fundamental Positions II



## ducati916

> End of week update;
> 
> Ticker.............Opening Price..........Current Price...........%change
> EGY...................$4.61...................$6.4 2......................+39%
> HNR...................$8.39...................$9.0 0......................+7.2%
> CALL.................$4.76....................$4.6 1.....................(-3.2%)
> SAFM................$26.45..................$24.85 ....................(-6.1%)
> FORD................$10.74..................$8.95. .....................(-16.6%)
> UST.................$41.25..................$39.08 .....................(-5.2%)
> ISSC................$13.68..................$14.78 .....................+8.1% closed
> CTT.................$4.00....................$4.99 ......................+24.8%
> CQB.................$17.47..................$17.58 .................... +0.00%
> TOL.................$29.78..................$33.34 .....................+11.9%
> GKIS................$14.05..................$13.80 .....................(-1.7%)
> KND.................$21.94..................$21.83 .....................+0.00
> 
> Aggregate .................................................. ...............+4.85%





jog on
d998


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## ducati916

Buy Long
LRT @ $2.56............(LL&E Royalty Trust)

jog on
d998


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## ducati916

Weekly update;

Ticker..Opening Price....Current Price....%Change


EGY.......$4.61............$7.10.........+54%
HNR.......$8.39............$9.65.........+15%
CALL......$4.76............$4.64........(-2.5%)
SAFM......$26.45...........$23.33.......(-11.7%)
FORD......$10.74...........$8.94.........(-16.7%)
UST.......$41.25...........$40.55........(-1.6%)
ISSC......$13.66........closed$14.78......+8.1%
CTT......$4.00.............$4.85.........+21.0%
CQB......$17.47............$17.39.........0.00%
TOL......$29.78............$33.00........+10.8%
GKIS.....$14.05............$12.22........(-13%)
KND......$21.94............$22.73........+3.6%
LRT......$2.56............$2.56..........0.00%

Aggregate................................+5.15%

jog on
d998


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## ducati916

Weekly update;

Ticker..Opening Price.............Current Price..........................%Change


EGY.......$4.61........................$5.90....................................+28%
HNR.......$8.39........................$9.73....................................+16%
CALL......$4.76.......................$4.52....................................(-5%)
SAFM......$26.45.....................$20.97..................................(-20.7%)
FORD......$10.74....................$8.39.....................................(-21.8%)
UST.......$41.25.....................$40.52...................................(-1.8%)
ISSC......$13.66......................closed$14.78........................+8.1%
CTT......$4.00........................$4.00......................................0%
CQB......$17.47......................$18.10...................................+3.6%
TOL......$29.78......................$31.39...................................+5.4%
GKIS.....$14.05......................$11.72..................................(-16.5%)
KND......$21.94......................$23.38...................................+6.5%
LRT......$2.56........................$2.25....................................(-12%)

Aggregate.......................................................................(-0.8%)

jog on
d998


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## It's Snake Pliskin

Duc,

Are you averaging down or not? :cup:


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## ducati916

*Snake* 

For the purposes of these positions, no I am not averaging down. The positions are simply as stated.

jog on
d998


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## tech/a

Duc.

Your initial premise to purchase these stocks was I believe that Fundamentally the stocks chosen were undervalued.
Now that some are more than 20% less why are they not extremely good value NOW--infact 20% better value than before?

If your not prepared to purchase more now at a 20% better price why are you still in the trade?

Has the premise altered?


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## ducati916

*tech/a* 



> Your initial premise to purchase these stocks was I believe that Fundamentally the stocks chosen were undervalued.
> Now that some are more than 20% less why are they not extremely good value NOW--infact 20% better value than before?
> 
> If your not prepared to purchase more now at a 20% better price why are you still in the trade?
> 
> Has the premise altered?




Fundamentally sound stocks, correct.
Their value has improved, and I would have no problems buying more, and may well have done so. However the thread started on Reef, where I was challenged to provide a portfolio by MB, who as you remember stated that he would keep track of, and update the portfolio.

That he has signally failed to so, has meant that I have to update it each week, which is fine, but in the initial agreement I stated that "no averaging down would take place" therefore I am simply sticking to my agreement.

Every single stock will upon exit, show me a profit, and unleveraged returns will aggregate circa 30%, but, it will run for the 12 months+ and we shall see the results.



jog on
d998


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## tech/a

Duc.
Have no problems watching the exercise run its course.
T/T collected all sorts of Flak in its early days.

But as an aside and I'll keep seperate records,which would you average down and how much on each?

Cant see the point in running an exercise if its not the way you'd trade it in real life?


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## ducati916

*tech/a* 

I'll send you a PM with the details.

jog on
d998


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## happytrader

Hi Ducati

Also watching your positions with interest. I noticed EGY was up 54% at one stage. Just curious as to when you would take some money off the table?

Cheers
Happytrader


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## It's Snake Pliskin

happytrader said:
			
		

> Hi Ducati
> 
> Also watching your positions with interest. I noticed EGY was up 54% at one stage. Just curious as to when you would take some money off the table?
> 
> Cheers
> Happytrader




I was wondering the same thing.

Maybe some tecchies took profits......... :bite:


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## ducati916

*Happy & Snake* 

I take profits or exit at my profit target, which is the calculated "intrinsic value of the share.

As a minimum this must indicate at least a 50% return.
I prefer there to be a 100% return.
Every now and then you find an indicated return far greater than 100%

Did tecchies take a profit?
Most likely, they are a pretty clueless bunch after all.

jog on
d998


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## ducati916

Just using the EGY example, today it is up circa 7%
Oil is currently pretty volatile, and production based companies, rightly or wrongly, are going to be exposed to that volatility.



> EGY quote Real-time quotes
> 6.30  +0.40 +6.78%fyi
> Volume 378,500 EGY Intraday Chart
> AMEX Exchange
> 
> 
> Avg Daily Volume 908,700
> Day's High 6.30
> Day's Low 5.90
> Open 6.00
> Previous Close 5.90
> Bid 6.28
> Bid Size 200
> Ask 6.30
> Ask Size 6,200 Current Div. Yield NA
> 52 Week High 7.49 Market Cap. 362.7 Mil
> 52 Week Low 3.05 Tot. Shares Out. 57.58 Mil
> Instit. Ownership 37.3% Forward P/E NA
> P/E 11.80 Sales 84.9 Mil
> Earnings/Share 0.50 Return on Equity 37.30
> Div/Share NA Beta -0.34





So you just ride out the volatility.
Unless, of course you think that you can "time" the volatility.

jog on
d998


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## ducati916

The other Oil production position, HNR, also showing intra-day volatility.



> HNR quote Real-time quotes
> 10.32  +0.59 +6.06%fyi
> Volume 315,900 HNR Intraday Chart
> NYSE Exchange
> 
> 
> Avg Daily Volume 284,100
> Day's High 10.45
> Day's Low 9.78
> Open 9.79
> Previous Close 9.73
> Bid NA
> Bid Size 3,600
> Ask NA
> Ask Size 500 Current Div. Yield NA
> 52 Week High 12.85 Market Cap. 382.8 Mil
> 52 Week Low 7.83 Tot. Shares Out. 37.09 Mil
> Instit. Ownership 90.8% Forward P/E 8.20
> P/E 7.40 Sales 236.9 Mil
> Earnings/Share 1.32 Return on Equity 17.10
> Div/Share NA Beta 0.17




jog on
d998


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## tech/a

Any chance of the Target "fair" values for those traded?


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## ducati916

You want the secret to the BLACK MAGIC BOX!!

jog on
d998


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## It's Snake Pliskin

ducati916 said:
			
		

> So you just ride out the volatility.
> Unless, of course you think that you can "time" the volatility.
> 
> jog on
> d998




A misconception of the use of technical analysis. :twak:


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## tech/a

ducati916 said:
			
		

> You want the secret to the BLACK MAGIC BOX!!
> 
> jog on
> d998





No.

By giving the values you consider to be fair value isnt disclosing how you came to those figures.

What it does do is give all following you an opportunity to look at the exit.(not how you have determined it).
Just as we disclose our exits if we dont adhere to the Rules then all can see and query.

For you to determine a definative 30% + return you must then have established your exit figures.How youve been able to establish a timeframe of a year is interesting.
If however your valuation can vary from time to time how then can you determine a positive expectancy of 30% + ?

And if your wrong?
At what point do you determine your wrong or is that not a possiblilty? (That your valuation and indeed your determination of Goodvalue could be wrong).


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## happytrader

ducati916 said:
			
		

> *Happy & Snake*
> 
> I take profits or exit at my profit target, which is the calculated "intrinsic value of the share.
> 
> As a minimum this must indicate at least a 50% return.
> I prefer there to be a 100% return.
> Every now and then you find an indicated return far greater than 100%
> 
> Did tecchies take a profit?
> Most likely, they are a pretty clueless bunch after all.
> 
> jog on
> d998




Hi Duc

Thanks for your answer. I also notice you closed ISSC at a profit of 8.1% 
What was the reasoning there, as I notice it doesn't quite fit in with your minimum requirement?

Cheers
Happytrader


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## It's Snake Pliskin

ducati916 said:
			
		

> *Happy & Snake*
> 
> I take profits or exit at my profit target, which is the calculated "intrinsic value of the share.
> 
> As a minimum this must indicate at least a 50% return.
> I prefer there to be a 100% return.
> Every now and then you find an indicated return far greater than 100%
> 
> Did tecchies take a profit?
> Most likely, they are a pretty clueless bunch after all.
> 
> jog on
> d998




Duc,

That stock was over 50%! You didn`t sell.

Are you hoping, praying, or prophesising that you`ll get 100%?

What are your exit parameters exactly? :dunno:


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## It's Snake Pliskin

:sleeping:


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## ducati916

The calculated exit prices are as follows;

EGY...............$10.23 - $14.01
UST...............$49.44 - $60.10
KND...............$28.63 - $36.81
FORD.............$27.84 - $35.53
CQB...............$32.31 - $41.43
CTT...............$10.10 - $12.96
SAFM.............$45.36 - $58.25
TOL...............$58.56 - $75.06
HNR...............$21.00 - $21.89
GKIS..............$19.03 - $24.28
CALL..............$6.90 - $7.30
LRT................$8.00 - $9.00



> Thanks for your answer. I also notice you closed ISSC at a profit of 8.1%
> What was the reasoning there, as I notice it doesn't quite fit in with your minimum requirement?




That was a change of mind.
Purely discretionary.
Naughty, naughty breaking the rules, slapped wrist for me.



> For you to determine a definative 30% + return you must then have established your exit figures.How youve been able to establish a timeframe of a year is interesting.
> If however your valuation can vary from time to time how then can you determine a positive expectancy of 30% + ?




That's a fair question. I shall attempt to answer it in a follow on post.



> And if your wrong?
> At what point do you determine your wrong or is that not a possiblilty? (That your valuation and indeed your determination of Goodvalue could be wrong).




If the fundamentals and intrinsic valuation change in a material manner.



> Duc,
> 
> That stock was over 50%! You didn`t sell.
> 
> Are you hoping, praying, or prophesising that you`ll get 100%?
> 
> What are your exit parameters exactly?



 __________________

See above.

jog on
d998


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## ducati916

Weekly update;

Ticker..Opening Price....Current Price....%Change


EGY.......$4.61............$6.32.........+37%
HNR.......$8.39............$10.66........+27%
CALL......$4.76............$4.28.........(-10%)
SAFM......$26.45...........$21.16........(-20%)
FORD......$10.74...........$8.14.........(-24%)
UST.......$41.25...........$40.64........(-1%)
ISSC......$13.66........closed$14.78......+8.1%
CTT......$4.00.............$3.48.........(-13%)
CQB......$17.47............$17.27........+0.0%
TOL......$29.78............$34.99........+17.5%
GKIS.....$14.05............$12.52.......(-10.8%)
KND......$21.94............$24.60........+12.2%
LRT......$2.56.............$2.19.........(-14%)

Aggregate................................+0.69%

jog on
d998


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## ducati916

Buy SGTL @ $10.30

jog on
d998


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## ducati916

For those that may be curious in regards to a Fundamental analysis;

Debt;
There is no long term debt, and non-significant bank lines due within the 12mths period.

The capitalization is therefore 100% 
This provides less risk than a highly leveraged business.

Volatility;
As is the case generally with a bear price action, volatility increases even with reasonably stable business models. There is however great volatility within the earnings (-1.36)
This has in turn increased the volatility from 22% to 84% within the common.

Cash Position;
Strong, with $1.25/share of working capital
A Current ratio of 2.76

GAAP Earnings/Actual Earnings
$1.07/share as opposed to $1.51/share
Where's the cash?

In discretionary earnings.
Less $0.81/share of intangibles, 
+$0.13/share within Cost of goods
+$0.82/share within Capital expenditures

These discretionary cash-flows allow the manipulation of GAAP earnings quite legitimately, allowing a safety factor for bad periods of business within the GAAP earnings, just the CapEx alone accounts for the intangibles, and is confirmed via the expansion of CapEx to depreciation.

Intrinsic Value based on GAAP earnings.................$16.63 - $21.45
Intrinsic Value based on Cash-flow earnings...........$24.00 - $30.28

jog on
d998


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## nizar

ducati916 said:
			
		

> For those that may be curious in regards to a Fundamental analysis;
> 
> Debt;
> There is no long term debt, and non-significant bank lines due within the 12mths period.
> 
> The capitalization is therefore 100%
> This provides less risk than a highly leveraged business.
> 
> Volatility;
> As is the case generally with a bear price action, volatility increases even with reasonably stable business models. There is however great volatility within the earnings (-1.36)
> This has in turn increased the volatility from 22% to 84% within the common.
> 
> Cash Position;
> Strong, with $1.25/share of working capital
> A Current ratio of 2.76
> 
> GAAP Earnings/Actual Earnings
> $1.07/share as opposed to $1.51/share
> Where's the cash?
> 
> In discretionary earnings.
> Less $0.81/share of intangibles,
> +$0.13/share within Cost of goods
> +$0.82/share within Capital expenditures
> 
> These discretionary cash-flows allow the manipulation of GAAP earnings quite legitimately, allowing a safety factor for bad periods of business within the GAAP earnings, just the CapEx alone accounts for the intangibles, and is confirmed via the expansion of CapEx to depreciation.
> 
> Intrinsic Value based on GAAP earnings.................$16.63 - $21.45
> Intrinsic Value based on Cash-flow earnings...........$24.00 - $30.28
> 
> jog on
> d998




which stock are you referring to here ?


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## ducati916

*nizar* 

Sorry, SGTL
The one I bought this morning at $10.30

jog on
d998


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## tech/a

Duc.

Just as a comparison From 12/1 to tonight T/T has returned 15.5% on investment at 12/1.

Still reckon you should be executing a stop.
What would your return be with that stop if executed at 10% plus the opportunity cost lost of finding other out performers.


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## happytrader

Hi Ducati

Just wondering if this portfolio would have covered this months costs of borrowings for those using leverage? 

Cheers
Happytrader


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## Sir Burr

happytrader said:
			
		

> Hi Ducati
> 
> Just wondering if this portfolio would have covered this months costs of borrowings for those using leverage?
> 
> Cheers
> Happytrader




Happy,

Capital                                = $1000000
BT Margin Lending_Online loan = 8.20%
Total interest                       = $6834
Profit @ 0.69%                     = $6900

YES!

SB


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## ducati916

*tech/a* 



> Just as a comparison From 12/1 to tonight T/T has returned 15.5% on investment at 12/1.




Comparisons are fine, but you must compare apples with apples.
Is your 15.5%  a cash return on investment, and thus including any leverage? 

If it is a 15.5% return on aggregate share price within that period, then that is impressive.

My return is measured on the %return in the stock price of the portfolio.
This then will not include the effects of any leverage.



> Still reckon you should be executing a stop.
> What would your return be with that stop if executed at 10% plus the opportunity cost lost of finding other out performers.




Stoplosses are specifically designed to lose you money.
They are a requirement for all technical systems, as you are engaging the market blind, and of course adhere to EMT.

My risk is managed very differently.
EMT is not a factor, as I adhere to IMT.
Business risk, is the risk that I must manage.
If I executed a 10% stoploss, I would have actualised losses.
It is my intention to return 30%+ compounded (unleveraged) with zero loss of cash.

*happytrader* 

I personally would only leverage from a source that would not incur a margin call, so brokers loans would be out, but house equity would be in. This really means that the interest should be payable out of a salary or savings.
I would not want to rely on market returns to cover interest charges.
This is conservative.

However, if dividend returns covered margin lending, then you could *risk* it if you were a little more aggressive. Two stocks I hold generate dividend yields of 5.6% & 10.9% (UST, LRT) all the others however do not.

jog on
d998


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## ducati916

Add to that SAFM that has added a dividend of $0.48 (2.10% yield)
CQB $0.40 (2.3% yield)
jog on
d998


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## ducati916

*Weekly Update* 

EGY.......$4.61........................$6.71........................+45%
HNR.......$8.39........................$10.59......................+26%
CALL......$4.76........................$4.04.......................(-15%)
SAFM......$26.45.....................$22.67......................(-14.3%)
FORD......$10.74.....................$10.00......................(-6%)
UST.......$41.25.....................$40.86......................(-0.5%)
ISSC......$13.66.................closed$14.78....................+8.1%
CTT......$4.00.......................$3.48.........................(-13%)
CQB......$17.47.....................$17.22.......................(-1%)
TOL......$29.78.....................$34.35........................+15.3%
GKIS.....$14.05.....................$12.75.......................(-9.2%)
KND......$21.94.....................$24.13........................+10%
LRT......$2.56.......................$2.43.........................(-5%)
SGTL....$10.30.....................$10.28........................+0%

Aggregate.............................................................+2.88%

jog on
d998


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## tech/a

Duc

Its the resturn on funds during that period.
12/1 till now.

Starting capital at 13/1 $263,000
Finishing Capital last night $304,000

15.5%

If we look at Total initial leveraged funds Of $100K
Then over that period its 41%

If we then look at funds initially put up to trade 
on Margin ($30K) then its 136.6%

But thats why I trade like that.

Anyway youve touched on a topic which I feel is the most important topic of all---RISK.
As not to fill up your thread with discussion I have started a new thread on RISK.


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## ducati916

*tech/a* 

I am just leaving for the weekend, so I'll jump in on Sunday evening.


jog on
d998


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## ducati916

Buy EVCI @ $1.44

jog on
d998


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## ducati916

EGY.......$4.61........................$6.66..........................+44.4%
HNR.......$8.39........................$9.72..........................+15.8%
CALL......$4.76........................$4.46.........................(-6%)
SAFM......$26.45.....................$22.40........................(-15.3%)
FORD......$10.74.....................$10.70........................+0%
UST.......$41.25.....................$41.60.........................+0.8%
ISSC......$13.66.................closed$14.78..... ...............+8.1%
CTT......$4.00.......................$3.24..........................(-19%)
CQB......$17.47.....................$16.77.........................(-4%)
TOL......$29.78.....................$34.63.........................+16.3%
GKIS.....$14.05.....................$12.64.........................(-10%)
KND......$21.94.....................$25.15.........................+14.6%
LRT......$2.56.......................$2.32...........................(-9.3%)
SGTL....$10.30.....................$8.74...........................(-15%)
EVCI....$1.44.......................$1.45............................+0%

Aggregate......................................... ....................+1.42%

jog on
d998


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## ducati916

Open Positions 


CALL......$4.76........................$4.20...... ...................(-11.7%)
SAFM......$26.45.....................$20.91....... .................(-20.9%)
FORD......$10.74.....................$9.69....... .................(-9.7%)
UST.......$41.25.....................$42.15....... ..................+2.2%
CTT......$4.00.......................$3.20........ ..................(-20%)
CQB......$17.47.....................$16.06........ .................(-8%)
TOL......$29.78.....................$32.74........ .................+9.9%
GKIS.....$14.05.....................$11.93........ .................(-15%)
KND......$21.94.....................$24.56........ .................+11.9%
LRT......$2.56.......................$2.22........ ...................(-12.8%)
SGTL....$10.30.....................$8.60.......... .................(-16.5%)
EVCI....$1.44.......................$1.10......... ...................(-23.6%)
DRYS....$10.59......................$10.08...........................(-4.8%)

Aggregate......................................... ....................(-9.15%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%

Aggregate..............+30.5%


jog on
d998


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## tech/a

Duc.

On the surface appears profitable.But is a nett loss.
Some 3 are now -20%+

Hope your not going to claim a 30% return on those positions closed while allowing losses to sit in the background un realised?


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## Sir Burr

"Hope your not going to claim a 30% return on those positions closed"

Tech, do you run you equity curve on closed OR closed + open? :bayer: 

SB


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## tech/a

Sir Burr

Tested systems have all statistics based upon closed trades.
At the end date of testing all trades are closed (regardless of exit criteria and regardless of trade p/l) so that this can occur.

T/T in its live trading has only a few trades that have been closed and many trades are still open some have been for 2 yrs.
The running tabulation of results and the equity curve published by Daryl is of all trades closed and open at the date of reporting---usually weekly.

Duc and I have been jousting over the issue of open and closed trades as a matter of correctness when reporting results for sometime.

Duc's view is that it should be only of trades closed.
Mine is both.

My veiw is that at anyone point in time closing all positions would gleen the Nett profit at that point.
Duc's is that it is not accurate due to the fact that there are trades which are incomplete.
While Duc is correct the point I make is that at that point in time all trades are closed and the P/L can be seen.

Having 30% profit against initial equity on 3 trades is of little comfort if you have a nett loss of 9% on initial equity on 13 open trades.

But then thats just my feelings.


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## ducati916

*tech/a* 

I have separated out the closed trades from the open trades for the sake of clarity...........if you wish to run a what if every trade was closed as of right now scenario, then the aggregate would be (-0.68%)



jog on
d998


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## ducati916

Buy SEPR Convertible Bonds @ $92.50
Convertible @ $67.00
Redeemable @ $100.00 in 2009

jog on
d998


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## ducati916

Open Positions 


CALL......$4.76........................$4.36...... ...................(-8%)
SAFM......$26.45.....................$24.77....... .................(-6%)
FORD......$10.74.....................$11.00....... .................+2.4%
UST.......$41.25.....................$43.31....... ..................+4.9%
CTT......$4.00.......................$3.30........ ..................(-17.5%)
CQB......$17.47.....................$16.09........ .................(-8%)
TOL......$29.78.....................$34.31........ .................+15.2%
GKIS.....$14.05.....................$12.35........ .................(-12%)
KND......$21.94.....................$24.61........ .................+12.1%
LRT......$2.56.......................$2.47........ ...................(-3.5%)
SGTL....$10.30.....................$8.95.......... .................(-13.1%)
EVCI....$1.44.......................$1.06......... ...................(-26.3%)
DRYS....$10.59....................$10.03........ ...................(-4.9%)
SEPR....$92.50..................................................................
Aggregate......................................... ....................(-4.97%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%

Aggregate..............+30.5%


jog on
d998


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## tech/a

Duc.

Notice your biggest winning stocks are ASX listed and the biggest losers are US stocks.

Might be worth trading in the bourse with strength?


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## ducati916

*tech/a* 

I don't trade ASX stocks at all.

TOL which I assume you are referring to, is a US housebuilder, that has excellent fundamentals, and some speculation as to a future takeover if Mr Tol decides to sell his majority share.

As regards the ASX market generally, remember the Rothschilds...."buy low sell high"........why on earth would I want the ASX currently?

jog on
d998


----------



## tech/a

ducati916 said:
			
		

> *tech/a*
> 
> I don't trade ASX stocks at all.
> 
> 
> As regards the ASX market generally, remember the Rothschilds...."buy low sell high"........why on earth would I want the ASX currently?
> 
> jog on
> d998





Hmm could be that you wouldnt mind the 24% rise in your portolio over the last 2 mths (Un leveraged),that T/T and other have?

($65K gain on $270K equity 24/02/06)




> ...."buy low sell high"..




*Buy High and SELL HIGHER.*


----------



## Shane Baker

Sadly there is a big difference between being "right" and being profitable


----------



## ducati916

*tech/a* 



> Buy High and SELL HIGHER.




Also known as *the greater fool theory* 
Works well in bull markets.

*Shane Baker* 



> Sadly there is a big difference between being "right" and being profitable




Nonsense.
If you are *right* you will be profitable.
If you only think you are right, but in point of fact are wrong.......then you will most likely not be profitable.

jog on
d998


----------



## tech/a

> Also known as the greater fool theory
> Works well in bull markets.





The greater fool being the one who takes it or the one who doesnt.
Duc its simply another way of taking an entry.
Its designed to work in trending markets/stocks.



> If you are *right* you will be profitable.




Its very possible to be right and still fail to be profitable,you know that!
I could be "right" 7/10 times and still make a loss,even wipe out an account.


----------



## ducati916

*tech/a* 



> Its very possible to be right and still fail to be profitable,you know that!
> I could be "right" 7/10 times and still make a loss,even wipe out an account.




Well, yes that's true enough for all you committed techies.

jog on
d998


----------



## ducati916

Open Positions 


CALL......$4.76........................$4.18...... ...................(-13%)
SAFM......$26.45.....................$26.51....... .................+0.0%
FORD......$10.74.....................$6.39....... .................(-40%)
UST.......$41.25.....................$43.93....... ..................+6.5%
CTT......$4.00.......................$3.25........ ..................(-18.7%)
CQB......$17.47.....................$16.22........ .................(-7%)
TOL......$29.78.....................$32.15........ .................+7.9%
GKIS.....$14.05.....................$13.39........ .................(-4.6%)
KND......$21.94.....................$24.26........ .................+10.6%
LRT......$2.56.......................$3.10........ ...................+21.1%
SGTL....$10.30.....................$6.69.......... .................(-35%)
EVCI....$1.44.......................$1.02......... ...................(-29.1%)
DRYS....$10.59....................$9.49........ ...................(-10.3%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................(-7.97%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%

Aggregate..............+30.5%

jog on
d998


----------



## tech/a

Duc.

Still -1.25% aggregate.
With opportunities abounding in such a strong bullmarket and some losses 40% and 35%,surely your analysis of "value" needs some attention?

Simply by taking a stop at 10% you would be net profitable.

Being "right?" seems to be costly.


----------



## Bobby

tech/a said:
			
		

> Duc.
> 
> Still -1.25% aggregate.
> With opportunities abounding in such a strong bullmarket and some losses 40% and 35%,surely your analysis of "value" needs some attention?
> 
> Simply by taking a stop at 10% you would be net profitable.
> 
> Being "right?" seems to be costly.



 Go Tech,

Maybe a lesson how to go broke   .

Bob.


----------



## cashman

Hi Duc

Why not make your universe fundamentally based and then use TA as an entry and exit criteria, best of both worlds ?

Based on the theory of buying "value", should you be short some of the stocks that are "over valued" as part of your strategy and risk management ?

The FA is in the chart, "perception is reality", and fashion is fashion, why are some people more popular than others, some places more popular than others, some companies more popular than others.
"Value" is a house in the "outback" with no view,no friends,no neighbors, no shops, but really, who the hell wants to go there ?

Sentiment is just as much part of the price, and value as any other criteria.


----------



## ducati916

*tech/a* 



> Still -1.25% aggregate.
> With opportunities abounding in such a strong bullmarket and some losses 40% and 35%,surely your analysis of "value" needs some attention?
> 
> Simply by taking a stop at 10% you would be net profitable.
> 
> Being "right?" seems to be costly.




The implementation of a stoploss strategy is one form of risk management.
For a technical based methodology it can be made profitable.

For a fundamentally derived strategy there are other *risk management methodologies* that can capitalize and manage far more effectively the downside volatility.

However I chose to specifically to show the methodology in it's worst light.
If you can live with the worst, then adapting to the best, is very easy.
This exact same portfolio can be converted via risk management to +5.2% return on invested capital while incurring zero actualised losses.(This is utilizing the open profits/losses method of accounting)

Drawdown.
The worst so far is I believe currently at 9.5%
If you examine the majority of technically derived systems, what are the worst case scenario's regarding drawdowns? 10%, 15%, 20%?
Therefore, drawdown in month #4, is really not an issue.

Actualised losses.
Are currently zero.
In a technically based system actualised losses = your drawdown + open loss
To my mind actualised losses are a good starting point to improve performance and this can be accomplished via a fundamental approach.

*cashman* 



> Why not make your universe fundamentally based and then use TA as an entry and exit criteria, best of both worlds ?




*ZipZap* and I have actually been looking at this.
We or I should say, he has developed a three indicator model that improves the initial entry quite dramatically on the current selections.

Of course, with only 16 odd examples, how robust is this model?
Who knows.



> Based on the theory of buying "value", should you be short some of the stocks that are "over valued" as part of your strategy and risk management ?




I no longer *short* stocks.
Risk management can easily manage the risks associated with going long, and downside volatility.............going short is not the same thing at all.



> The FA is in the chart, "perception is reality", and fashion is fashion, why are some people more popular than others, some places more popular than others, some companies more popular than others.
> "Value" is a house in the "outback" with no view,no friends,no neighbors, no shops, but really, who the hell wants to go there ?




For exactly that reason.
Who is the fashion leader in reality?

Technical analysis is as popular with the masses, as it's dictums are fallacious.
Sentiment is just that sentiment. It is created in emotion, and discarded in emotion, it has no tangible worth and therefore no investable worth. If you pay a premium for that emotion, then be prepared for the discount when the wind changes.

jog on
d998


----------



## tech/a

Duc.

This is certainly not meant as a knife in the throat to the Ducster.Below I set out my flip side to the arguements presents--this is mine.

I accept what your saying about drawdown.However *TIME IN * drawdown particularly initial drawdown must be considered synegistically with amount of drawdowns.

Incidently average initial drawdowns in the methods I use are less than 8% most 5 and 6%.Longterm methods tend to have upto 18% in peak to Valley maximum drawdowns.Shorter term methods less.

Perhaps when considering your approach that to take a small loss is admitting a loss you may think of it in another way---You are creating an opportunity to find a profitable stop.

*EXAMPLE*
Lets take the rudimentary 10% of Purchase price initial stop with 10 positions so thats a risk of 1% of initial capital.
Your argument is that by taking that loss you are liquidating loss.
While a position is open even with a loss OR profit that has not been liquidated then you have neither lost or profited until taken.

Well lets now take your 4 biggest losses so far.
-40
-35
-29
-18

My argument is that you have in effect taken the equivalent of 10 losing trades relative to new trades which I would have purchased---10 new opportunities may have gone begging.(-40 means 3 new trades could have been taken at a 10% stop---for others following--).

On the other side of the coin of those closed 
ISSC has risen a further *20%* from your sale price
HNR has risen a further *50%* from your sale price and 
EGY has risen a Further *10%*


*Thus far shall----we say---cutting losses and letting profits run would have been/is far more profitable.*

What has happened now is that you are locked in trades some of which have to rise in price 50% or more to *BREAKEVEN!!*
This is likely to take months or indeed years---if ever!!
*OPPORTUNITY cost* is left wide open as funds are tied up not only doing nothing but actually diminishing!!
Every trade which has made a profit has continued to do so.
*ONLY 4 * of your trades are working to make your portfolio profitable.
The aim is and has been achieved to have all trades in a portfolio profitable and ideally then working on bettering rate of return on a complete set of WINNERS.


----------



## tech/a

So quickly those watching will see that a Trading method can be profitable *DESPITE* Selection approach, Fundamental.
Its the business management that can refine,tune and maximise return.

Mind you no business plan will help a business that doesnt have a positive expectancy.Duc tells us it does.


----------



## ducati916

*tech/a* 



> Incidently average initial drawdowns in the methods I use are less than 8% most 5 and 6%.




So on current form the drawdown has been worse by some 2%



> Perhaps when considering your approach that to take a small loss is admitting a loss you may think of it in another way---You are creating an opportunity to find a profitable stop.




There is no such thing as a profitable initial stoploss.
If an initial stoploss is activated, you lose money.

My goal, is not to lose any money.
Second, my goal is to return 30%+ annually, and compound that return.

A drop of 40% of initial entry price, while not welcomed, should make no difference to the stated goals. As previously mentioned, via risk management techniques other than a stoploss, this drawdown becomes a viable strategy for increasing the return. It is simply a position size calculation with incremental buy points on the way down........a reverse pyramid strategy.
Thus you reduce your average purchase price, drawdown on capital, and increase the % returns to the upside.

Based on this methodology, SAFM would show a 4.5% profit, LRT a 25.6% profit and SGTL would still be building in size, but showing a reduced absolute drawdown. The numbers do not display the effect of money management, and simply display the *worst case scenario*. If the *raw* figures don't scare you, it is actually a very easy system to trade.

It of course attacks exactly the most vulnerable area of a traders psyche.
That is the belief that following the market and buying because price rises, and selling because price falls is the way to consistent profit in all market conditions.

That by joining the crowd, there is safety.
SGTL has had two nasty gap opens, that would have made redundant any stoploss strategy, thereby throwing question as to the absolute validity of any tested results that did not take such common happenings as part and parcel.



> What has happened now is that you are locked in trades some of which have to rise in price 50% or more to BREAKEVEN!!
> This is likely to take months or indeed years---if ever!!




Well time will tell. There are a further 2yrs 8mths before a trade is required to be closed based on the rule of 36mths being the maximum holding period.
Currently there should be adequate time to turn the trade around.



> ONLY 4 of your trades are working to make your portfolio profitable.




There are three closed profitable trades, four trades that are open, currently in the black, and six in the red, with one at breakeven. So currently market risk is panning out at approximately 50%

It's still rather early days for some trades, having only been open a couple of weeks at the most.



> So quickly those watching will see that a Trading method can be profitable DESPITE Selection approach, Fundamental.
> Its the business management that can refine,tune and maximise return.




Yes it can.
You just have to be prepared to take losses, and hope that your backtested methodology is actually as robust in reality as tested.

jog on
d998


----------



## tech/a

> There is no such thing as a profitable initial stoploss.




Sorry brain malfunction,meant stock or trade.

The thing that worries me Duc is that this drawdown is occuring in arguably the most bullish trading period we have seen or will see.

Sure early days but think some adjustments could have a positive effect.

Would be interesting to have a dabble with your trades not knowing anything about the exit and entry strategy only working with what you have and see what happens.
I'd keep those profitable in the portfolio and cull those with a 10% loss.
I'd add trades if I could (If capital was available) and not close those below their 180 day M/A to keep them in as long as possible allowing profits to run.
We would end up with different portfolios mine with possibly less stocks but I'm sure they would be working harder.


----------



## ducati916

*tech/a* 



> The thing that worries me Duc is that this drawdown is occuring in arguably the most bullish trading period we have seen or will see.




The US is coming off of a period of consolidation in chartie terms.
There have been sectors that have been outperforming, energy & commodities being the obvious ones.

Take the chicken's.......SAFM & GKIS, both suffering from negative sentiment regarding the bird flu, and reduced exports due to that fear.
Their prices will come back and return some 100% + on my investment. It's simply a question of when.

They were both down some 25% + at their worst, but possibly starting their comeback.

LRT, an oil trust that suspended dividends due to damage in the Bay of Mexico after the hurricanes..........assuming they escape them this year, will yield a 13% dividend on purchase price, and if returning to an equal bond yield some 400% return on capital

DRYS, a way to play the boom in commodities world wide. Shipping is hugely undervalued.........why pay a premium for zinc, copper etc, buy a 12% dividend yield in a company with a 48% operating margin.



> Would be interesting to have a dabble with your trades not knowing anything about the exit and entry strategy only working with what you have and see what happens.




Dabble away.
The portfolio's would be very different, no question.

jog on
d998


----------



## happytrader

Hi Ducati

DRYS 12% dividend yield is notable. Just wondering what sort of dividend yield the other stocks in this portfolio are returning? 

Thanks in advance

Cheers
Happytrader


----------



## ducati916

*happytrader* 

SAFM....2.9%
UST......5.8%
LRT.......12.8%
DRYS.....8.4%
SEPR.....0.38%

I do not necessarily purchase for dividends, that is no criteria of value taken as a single metric, but if given the choice I would prefer a dividend to be paid.

Tech stocks, SGTL, FORD to an extent, do not pay dividends thus will exhibit higher volatility as there is no base for buying pressure. This can be utilized to your advantage in the long term, but in the short term can look very ugly.

jog on
d998


----------



## ducati916

Sold LRT @ $3.31

Interestingly, received the annual report yesterday.
Contained in the footnotes are a highlight to the indenture. This stated that should there be no income paid for 24 months, the shares could be liquidated at book value, or $0.12 per share.

jog on
d998


----------



## ducati916

CALL......$4.76........................$3.91...... ...................(-17.8%)
SAFM......$26.45.....................$27.55....... .................+4.1%
FORD......$10.74.....................$6.05....... .................(-43.6%)
UST.......$41.25.....................$44.17....... ..................+7.0%
CTT......$4.00.......................$3.16........ ..................(-21%)
CQB......$17.47.....................$15.41........ .................(-11.7%)
TOL......$29.78.....................$30.85........ .................+3.6%
GKIS.....$14.05.....................$13.32........ .................(-5%)
KND......$21.94.....................$25.58........ .................+16.5%

SGTL....$10.30.....................$6.84.......... .................(-33.5%)
EVCI....$1.44.......................$0.92......... ...................(-36%)
DRYS....$10.59....................$9.92........ ...................(-5.7%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................(-10.5%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998


----------



## markrmau

What is SEPR? I assume it is not SEPR on the NASDAQ which closed at $46.23 as it hasn't been $92.50 in the last year.

So basically your portfolio is sitting on a circa 30% loss (assuming equal capital in each trade) when the S&P500 has gone up about 4-5% in last 3 months.


----------



## tech/a

Nett loss on 17 trades is 1.317%
If a 10% stop was used then Profit would be 2.68% on the same portfolio.
Stop and let profits run then 2.8%.


----------



## markrmau

Ah yes, where the hell did i learn maths?


----------



## ducati916

*markrmau* 



> What is SEPR? I assume it is not SEPR on the NASDAQ which closed at $46.23 as it hasn't been $92.50 in the last year.




Indeed it is on the NASDAQ.
I however hold the Convertble Bond at $92.50 or $925.00 per bond. Par value $1000.00

This is a longer term methodology.
The chicken's were showing a paper loss of circa 30%, they have come back.
LRT showed a paper loss of circa 30%, closed with a profit.

Patience.

jog on
d998


----------



## markrmau

ducati916 said:
			
		

> Patience.



Certainly. 1-2% drawdown is nothing. I have a broker held ASX portfolio based on F/A positions. It did nothing for 6months (traded between +/-3% of initial value), but then over last 2 months shot up to almost 40% gain, and looks like rising a lot more now the techies are on board.


----------



## tech/a

> Certainly. 1-2% drawdown is nothing.




Mark dont know that I agree with that.
Given that this is supposedly a screaming Bullmarket and that others I know of have returned 15%+ over the same period and some stocks in the portfolio have to move up 80% just to breakeven,*I personally would be questioning my allocation of capital.*
Opportunities and emotion like this doesnt come along everyday,to not be taking advantage of it is plain foolish.

A torrid rigidity toward being right and the inflexability of conviction will I'm sure prove to be very expensive.

Ever thought how the portfolio would perform in even a moderate downturn?


----------



## markrmau

Don't forget Duc's method is for the US markets though.


----------



## tech/a

markrmau said:
			
		

> Don't forget Duc's method is for the US markets though.




True and that I would be questioning as well.

"Go where the money is and go there often"


----------



## ducati916

CALL......$4.76........................$3.81...... ...................(-19.9%)
SAFM......$26.45.....................$28.36....... .................+7.2%
FORD......$10.74.....................$5.51....... .................(-48.6%)
UST.......$41.25.....................$42.58....... ..................+3.2%
CTT......$4.00.......................$3.26........ ..................(-18.5%)
CQB......$17.47.....................$13.78........ .................(-21.1%)
TOL......$29.78.....................$28.72........ .................(-3.6%)
GKIS.....$14.05.....................$14.08........ ..................+0.0%
KND......$21.94.....................$23.14.... ......................+5.46

SGTL....$10.30.....................$5.86...... .......................(-43.1%)
EVCI....$1.44.......................$0.91........ ...................(-36%)
DRYS....$10.59....................$9.29...... ....................(-12.2%
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................(-14.39%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998


----------



## ducati916

CALL......$4.76........................$3.55...... ...................(-25.4%)
SAFM......$26.45.....................$30.00....... .................+13.4%
FORD......$10.74.....................$5.34....... .................(-50.2%)
UST.......$41.25.....................$43.00....... ..................+4.2%
CTT......$4.00.......................$3.95........ ..................(-1.2%)
CQB......$17.47.....................$14.28........ .................(-18.2%)
TOL......$29.78.....................$27.83........ .................(-6.5%)
GKIS.....$14.05.....................$14.65........ ..................+4.3%
KND......$21.94.....................$23.89.... ......................+8.8%

SGTL....$10.30.....................$5.58...... .......................(-45.8%)
EVCI....$1.44.......................$0.94........ ...................(-34%)
DRYS....$10.59....................$8.86...... ....................(-16.2%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................(-12.8%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998


----------



## ducati916

CALL......$4.76........................$3.72...... ...................(-21.8%)
SAFM......$26.45.....................$29.10....... .................+10.4%
FORD......$10.74.....................$5.22....... .................(-51.2%)
UST.......$41.25.....................$44.53....... ..................+7.9%
CTT......$4.00.......................$3.24........ ..................(-19.0%)
CQB......$17.47.....................$14.60........ .................(-16.2%)
TOL......$29.78.....................$29.08........ .................(-2.3%)
GKIS.....$14.05.....................$15.14........ ..................+7.7%
KND......$21.94.....................$25.39.... ......................+15.7%

SGTL....$10.30.....................$5.71...... .......................(-44.5%)
EVCI....$1.44.......................$0.87........ ...................(-39.0%)
DRYS....$10.59....................$9.16...... ....................(-13.5%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................(-12.7%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998


----------



## Bobby

Anyone like to do a Translation on this ?

Bob.


----------



## ducati916

CALL......$4.76........................$3.64...... ...................(-23.5%)
SAFM......$26.45.....................$31.08....... .................+17.5%
FORD......$10.74.....................$5.11....... .................(-52.2%)
UST.......$41.25.....................$44.12....... ..................+7.3%
CTT......$4.00.......................$3.07........ ..................(-23.2%)
CQB......$17.47.....................$14.60........ .................(-16.2%)
TOL......$29.78.....................$28.83........ .................(-3.1%)
GKIS.....$14.05.....................$15.26........ ..................+8.6%
KND......$21.94.....................$25.98.... ......................+18.7%

SGTL....$10.30.....................$5.50...... .....................(-46.5%)
EVCI....$1.44.......................$0.88........ ...................(-39.0%)
DRYS....$10.59....................$9.53...... ....................(-10.0%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................(-12.4%)

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998


----------



## tech/a

For those interested in Duc and my discussions on his method we are here 

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=8;t=000433;p=10

A new member MichaelD has joined in the discussion with some thought provoking posts.

The fun starts from 4/06/06


----------



## ducati916

CALL......$4.76........................$3.62...... ...................(-23.9%)
SAFM......$26.45.....................$28.67....... .................+8.3%
FORD......$10.74.....................$4.54....... .................(-57.7%)
UST.......$41.25.....................$44.06....... ..................+6.8%
CTT......$4.00.......................$2.57........ ..................(-35.7%)
CQB......$17.47.....................$13.51........ .................(-22.6%)
TOL......$29.78.....................$27.17........ .................(-8.5%)
GKIS.....$14.05.....................$13.39........ ..................[-4.6%]%
KND......$21.94.....................$25.39.... ......................+15.7%

SGTL....$10.30.....................$4.46...... .....................(-56.5%)
EVCI....$1.44.......................$0.81........ ...................(-43.0%)
DRYS....$10.59....................$9.18...... ....................(-13.3%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................[-18.0%]

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998


----------



## It's Snake Pliskin

Hi there Mr Ducati  

Are you still providing us with your purchases etc.


----------



## ducati916

*Snake* 

No, I've been a bit lazy, I only updated Reef.
http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=8;t=000433;p=27#000397

However they are fully updated each week.
Here is this weeks summary.

CALL......$4.76........................$3.08...... ...................(-35.2%)
SAFM......$26.45.....................$26.30....... .................[0.0%]
FORD......$10.74.....................$4.99....... .................(-53.5%)
UST.......$41.25.....................$52.71....... ..................+27.8%
CTT......$4.00.......................$2.29........ ..................(-42.7%)
CQB......$17.47.....................$15.96........ .................(-8.6%)
TOL......$29.78.....................$25.98........ .................(-12.7%)


SGTL....$10.30.....................$4.78...... .....................(-53.5%)
EVCI....$1.44.......................$0.89........ ...................(-38.1%)
DRYS....$10.59....................$13.50...... ....................+27.4%
SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.61............................+5.8%
WON....$6.65.....................$7.10..............................+6.8%
NAFC...$20.52....................$21.27.............................+3.6%

Aggregate......................................... ....................[-12.5%]

Paper trades
CD.....$2.25....................$2.00...............................[-11.1%]

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%

Aggregate..............+32.1%

jog on
d998


----------



## nizar

ducati

would u mine rationalising why u think that ford's sp would recover?

and what does ur fundamental analysis tell us about its value?

thanks


----------



## ducati916

CALL......$4.76........................$3.08...... ...................(-35.2%)
SAFM......$26.45.....................$31.69....... .................+19.8%
FORD......$10.74.....................$5.20....... .................(-51.5%)
UST.......$41.25.....................$52.71....... ..................+29.0%
CTT......$4.00.......................$2.49........ ..................(-37.7%)
CQB......$17.47.....................$17.18........ .................(-1.6%)
TOL......$29.78.....................$26.48........ .................(-11.0%)


SGTL....$10.30.....................$4.89...... .....................(-52.5%)
EVCI....$1.44.......................$0.89........ ...................(-38.1%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.80............................+6.3%
WON....$6.65.....................$7.36..............................+10.6%
NAFC...$20.52....................$23.01.............................+12.1%

Aggregate......................................... ....................[-11.5%]

Paper trades
CD.....$2.25....................$1.93...............................[-14.2%]

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

jog on
d998


----------



## ducati916

*nizar* 

Only just noticed your post, will come back to it with the analysis.

jog on
d998


----------



## ducati916

*Correction to UST* 

CALL......$4.76........................$3.08...... ...................(-35.2%)
SAFM......$26.45.....................$31.69....... .................+19.8%
FORD......$10.74.....................$5.20....... .................(-51.5%)
UST.......$41.25.....................$53.23....... ..................+29.0%
CTT......$4.00.......................$2.49........ ..................(-37.7%)
CQB......$17.47.....................$17.18........ .................(-1.6%)
TOL......$29.78.....................$26.48........ .................(-11.0%)


SGTL....$10.30.....................$4.89...... .....................(-52.5%)
EVCI....$1.44.......................$0.89........ ...................(-38.1%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.80.......... ..................+6.3%
WON....$6.65.....................$7.36............ ..................+10.6%
NAFC...$20.52....................$23.01........... ..................+12.1%

Aggregate......................................... ....................[-11.5%]

Paper trades
CD.....$2.25....................$1.93............. ..................[-14.2%]

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

jog on
d998


----------



## Bobby

Well Duc ,

You do have guts to post & post your position   

Bob.


----------



## ducati916

*nizar* 



> would u mine rationalising why u think that ford's sp would recover?
> and what does ur fundamental analysis tell us about its value?




With any value purchase you are looking for potential catalysts that will trigger a change in fundamentals, and/or a change in sentiment.

*Catalysts * 

*External
Industrywide consolidation, viz. M&A activity.
Cyclical, industry is coming out of an operating trough.

*Internal
Asset sales, Spinoffs, Share repurchases.
Organizational changes, operational adjustments, strategy changes.

There are any number of other variations to the very broad outlines described above. They all however have one thing in common, and that is changing something.....hopefully for the better. Even assuming that the structural change fails, the perception of activity is often enough to change the sentiment enough that share price improvement is a result in the short-term.

jog on
d998


----------



## ducati916

CALL......$4.76........................$3.05...... ...................(-35.9%)
SAFM......$26.45.....................$31.05....... .................+17.4%
FORD......$10.74.....................$4.99....... .................(-5.5%)
UST.......$41.25.....................$54.05....... ..................+31.0%
CTT......$4.00.......................$2.41........ ..................(-39.7%)
CQB......$17.47.....................$16.50........ .................(-5.5%)
TOL......$29.78.....................$26.11........ .................(-12.3%)


SGTL....$10.30.....................$4.42...... .....................(-57.0%)
EVCI....$1.44.......................$0.67........ ...................(-53.4%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.63............................+5.8%
WON....$6.65.....................$7.06..............................+6.1%
NAFC...$20.52....................$23.77.............................+15.8%

Aggregate......................................... ....................[-10.2%]

Paper trades
CD.....$2.25....................$1.93...............................[-14.2%]

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%


jog on
d998


----------



## tech/a

Duc

Need some adjustment.

FORD is -55.5% not -5.5%

Could you also show your nett aggregate P & L on all positions?


----------



## ducati916

*Whoop's a daisy..........* 

Correction;

CALL......$4.76........................$3.05...... ...................(-35.9%)
SAFM......$26.45.....................$31.05....... .................+17.4%
FORD......$10.74.....................$4.99....... ...................[-53.5%]
UST.......$41.25.....................$54.05....... ..................+31.0%
CTT......$4.00.......................$2.41........ ..................(-39.7%)
CQB......$17.47.....................$16.50........ .................(-5.5%)
TOL......$29.78.....................$26.11........ .................(-12.3%)


SGTL....$10.30.....................$4.42...... .....................(-57.0%)
EVCI....$1.44.......................$0.67........ ...................(-53.4%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.63.......... ..................+5.8%
WON....$6.65.....................$7.06............ ..................+6.1%
NAFC...$20.52....................$23.77........... ..................+15.8%

Aggregate......................................... ....................[-13.9%]

Paper trades
CD.....$2.25....................$1.93............. ..................[-14.2%]

Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%


jog on
d998


----------



## tech/a

Nett profit on capital invested.

2.26% since January.


----------



## ducati916

CALL......$4.76........................$3.02...... ...................(-36.5%)
SAFM......$26.45.....................$33.50....... .................+26.7%
FORD......$10.74.....................$5.49....... .................(-48.8)
UST.......$41.25.....................$53.99....... ..................+30.8%
CTT......$4.00.......................$2.70........ ..................(-32.5%)
CQB......$17.47.....................$17.14........ .................(-1.8%)
TOL......$29.78.....................$28.15........ .................(-5.4%)


SGTL....$10.30.....................$4.78...... .....................(-53.5%)
EVCI....$1.44.......................$0.62........ ...................(-56.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.56............................+21.8%
WON....$6.65.....................$7.24..............................+8.8%
NAFC...$20.52....................$24.64.............................+20.0%
CAR....$18.48....................$18.81.............................+1.8%

Aggregate......................................... ....................[-8.9%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%


----------



## tech/a

Some improvement!!


----------



## ducati916

Just in case anyone was curious as to what happened to CD, the paper trade, this stock was a restructuring, with three spin-off's.

The parent stock CD became CAR, which I bought last week and added to the portfolio.

jog on
d998


----------



## ducati916

Current Price $18.81
Code CAR
Yield 23.5%
Market Capitalization $25226.0 million [adjusted]
TCI Price Target $207.00 to $282.74
Investment Car Rentals
P/E Ratio 2.32
Recommendation Buy

Industry Statistics

Market Capitalization:	21B
Price / Earnings:	15.8
Price / Book:	2.9
Net Profit Margin 	6.8%
Price To Free Cash Flow 	-6.3
Return on Equity:	11.9%
Total Debt / Equity:	1.6
Dividend Yield:	1.2%

In a direct comparison;

Price Ratios	Company	Industry	S&P 500
Current P/E Ratio	2.8	20.9	21.3
P/E Ratio 5-Year High	NA	40.7	149.6
P/E Ratio 5-Year Low	NA	8.3	13.7
Price/Sales Ratio	0.11	2.41	2.70
Price/Book Value	0.18	3.68	5.14
Price/Cash Flow Ratio	0.70	14.60	15.80

The value metrics utilized in the ratio analysis between CAR, the Industry and the S&P500, leaves very little requiring explanation.
The undervaluation in all areas makes this a very interesting proposition 



Profit Margins %	Company	Industry	S&P 500
Gross Margin	31.1	30.0	36.0
Pre-Tax Margin	6.0	12.0	19.3
Net Profit Margin	4.2	10.7	13.4
5 Yr Gross Margins (5-Year Avg.)	35.4	25.1	35.6
5Yr Pretax Margin (5-Year Avg.)	10.1	6.9	16.2
5 Yr Net Profit Margins (5-Year Avg.)	6.7	5.3	10.9

Over the five year aggregate returns, the security has been on a par with the Industry averages.
This bodes well for the future, in that, barring total disaster, CAR should continue more or less as it has on aggregate.

Financial Condition	Company	Industry	S&P 500
Debt/Equity Ratio	1.49	1.00	1.21
Current Ratio	1.0	1.3	1.3
Quick Ratio	1.0	1.0	1.1
Interest Coverage	4.5	10.1	36.5
Leverage Ratio	59.8	52.5	28.4
Book Value/Share	104.75	12.33	17.29

Interest coverage is lower than a pure investment would require for safety. I suggest however that this could be an attractive speculation. That although the Interest coverage is below investment grade,[ by 0.5] that the discount from Book value is so substantial, [$18.81 purchase price, against $104.00 Book value] that even in the event of a liquidation, there is enough asset value to see the holder of the common through a restructuring, or liquidation.


Hidden Cash-Flows

There are hidden cash-flows within Cost of Goods and Selling, General  & Administration.
These cash-flows amount to $1.63 per share, a quite substantial sum. These cash-flows may well have been incurred during the current spin-offs.

Spin-off

There have been two businesses spun off from the parent company [CAR] in the last month or so.
This restructuring of the capitalization has resulted in the current situation.
The result, has been, transparency. The earning power of CAR has become easier to recognize, and thus should generate appreciation in the market after the value has been recognized.

Operating Leases
The Operating leases constitute a substantial commitment on the Balance Sheet.
They are however adjusted into the capitalization and the earning power calculated against the capitalized value.
The earnings against capitalization are 10.9% currently, and 8.1% over five years.
This would suggest that they [leases] have value and may in point of fact represent a barrier to entry.

Common Stock
At only 7.5% of the capitalization, the common stock is extremely leveraged.
This has the effect of large swings in both directions. Currently, I feel that the most likely direction is up.
There could be some extreme volatility, so be warned, this could be a wild ride.

Dividend & Dividend Yield
With a 23.5% dividend yield, your purchase price could be amortized in four years, assuming no change in the payout.
At a 33.2% payout ratio, the dividend should be sustainable.
Should earnings increase, then the payout may be increased, should earnings fall, and the dividend be reduced, you still have a fair margin of safety.

Potential Takeover Candidate
At the current valuations, this stock has to be a takeover candidate.
There have in point of fact already been rumors to that effect.
Book Value + premium would be the starting point……. $104.00

Brand Name
Avis & Budget are strong brand names and have intangible value.
How much value is the question, but certainly enough that this is a further justification to a Takeover or Merger offer?

Summary
All in all, this appears to be a gross undervaluation.
It’s not a perfect stock, debt is high in relation to the common, Interest coverage is marginal and Current assets [Working Capital] is at a ratio of 0.59 to Current Liabilities, thus liquidity could become an issue. Having said that the plusses that might come to pass make this an extremely attractive speculation.


----------



## ducati916

*There will be no updates for the next 3 weeks, as I am away on business.*


CALL......$4.76........................$2.77...... ...................(-41.8%)
SAFM......$26.45.....................$33........ .................+28.1%
FORD......$10.74.....................$5.12....... .................(-52.3%)
UST.......$41.25.....................$54.52....... ..................+32.2%
CTT......$4.00.......................$2.62........ ..................(-34.5%)
CQB......$17.47.....................$15.73........ .................(-9.9%)
TOL......$29.78.....................$27.81........ .................(-6.6%)


SGTL....$10.30.....................$4.71...... .....................(-53.8%)
EVCI....$1.44.......................$0.62........ ...................(-56.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.67............................+21.9%
WON....$6.65.....................$7.14..............................+7.4%
NAFC...$20.52....................$22.80.............................+11.1%
CAR....$18.48....................$18.27.............................[-1.1%]

Aggregate......................................... ....................[-11.0%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

jog on
d998


----------



## Realist

ducati916 said:
			
		

> Current Price $18.81
> Code CAR
> Market Capitalization:	21B
> Price / Earnings:	15.8
> Price / Book:	2.9
> Net Profit Margin 	6.8%
> Price To Free Cash Flow 	-6.3
> Return on Equity:	11.9%
> Total Debt / Equity:	1.6
> Dividend Yield:	1.2%
> 
> 
> Summary
> All in all, this appears to be a gross undervaluation.




I totally disagree....

PER of 15.8, PB of 2.9, and crappy dividends of 1.2%

This is fairly valued at best.


----------



## Realist

ducati916 said:
			
		

> CALL......$4.76........................$3.02...... ...................(-36.5%)
> SAFM......$26.45.....................$33.50....... .................+26.7%
> FORD......$10.74.....................$5.49....... .................(-48.8)
> UST.......$41.25.....................$53.99....... ..................+30.8%
> CTT......$4.00.......................$2.70........ ..................(-32.5%)
> CQB......$17.47.....................$17.14........ .................(-1.8%)
> TOL......$29.78.....................$28.15........ .................(-5.4%)
> 
> 
> SGTL....$10.30.....................$4.78...... .....................(-53.5%)
> EVCI....$1.44.......................$0.62........ ...................(-56.9%)
> 
> SEPR....$92.50.................................... ..............................
> OFIX....$37.44....................$45.56............................+21.8%
> WON....$6.65.....................$7.24..............................+8.8%
> NAFC...$20.52....................$24.64.............................+20.0%
> CAR....$18.48....................$18.81.............................+1.8%
> 
> Aggregate......................................... ....................[-8.9%]
> 
> 
> Closed Trades
> 
> ISSC...................+8.1%
> HNR....................+21.6%
> EGY....................+61.8%
> LRT....................+29.2%
> KND....................+34.0%
> GKIS..................+37.8%
> DRYS..................+34.0%
> 
> Aggregate..............+32.4%





I make it your current (not sold yet) aggregate is -9.6%

And overall including those shares you have yet to sell you are up 5%. Which after 40 lots of brokerage (when you sell them all) and tax, and inflation indexed means you are down, certainly not up 32.4%!

But have you included dividends?

And SEPR is $47 what is going on?


----------



## ducati916

*Realist* 



> I totally disagree....
> 
> PER of 15.8, PB of 2.9, and crappy dividends of 1.2%
> 
> This is fairly valued at best.





Your lack of attention to detail should be of great concern, but I suspect otherwise. I am going to *highlight * the relevent section that you seem to have missed................In fact after a quick review, I see that in point of fact that you have *modified and tampered with my original post.* 
I shall check with the moderators on this rather poor showing.



> Originally Posted by ducati916
> Current Price $18.81
> Code CAR
> Market Capitalization: 21B
> Price / Earnings: 15.8
> Price / Book: 2.9
> Net Profit Margin 6.8%
> Price To Free Cash Flow -6.3
> Return on Equity: 11.9%
> Total Debt / Equity: 1.6
> Dividend Yield: 1.2%




And the correct original posting;


*Industry Statistics*

Market Capitalization: 21B
Price / Earnings: 15.8
Price / Book: 2.9
Net Profit Margin 6.8%
Price To Free Cash Flow -6.3
Return on Equity: 11.9%
Total Debt / Equity: 1.6
Dividend Yield: 1.2%

So you see, as a comparison to the *INDUSTRY* CAR, is quite severely undervalued.



> I make it your current (not sold yet) aggregate is -9.6%
> 
> And overall including those shares you have yet to sell you are up 5%. Which after 40 lots of brokerage (when you sell them all) and tax, and inflation indexed means you are down, certainly not up 32.4%!
> 
> But have you included dividends?
> 
> And SEPR is $47 what is going on?




*If we take it to two decimel places, then the correct figure = [-8.96%]
*Dividends are not included
*With regards to open positions, I have had every peanut in Australia argue this same point; *profit or loss, is only calculated on closed, banked, profits or losses.*  I include the open positions for transparency, and, to illustrate the reality of this methodology; viz. there can be quite severe drawdowns.

The closed positions are *realized profits & losses* 
At this time, the aggregate gross profit = 32.4%
This will be reduced by tax & brokerage, but as they are individual metrics, there is no necessity to calculate for demonstration purposes.

As regards SEPR, if you had completed just a modicom of research, you would have found the answer to your question, SEPR is a Convertible, that guarantees a 2% profit, or, the return on the common, if, converted.

jog on
d998


----------



## Realist

ducati916 said:
			
		

> *
> Your lack of attention to detail should be of great concern, but I suspect otherwise. I am going to highlight  the relevent section that you seem to have missed................In fact after a quick review, I see that in point of fact that you have modified and tampered with my original post.
> .*



*

I did delete some stuff. Yeah.




			The closed positions are realized profits & losses 
At this time, the aggregate gross profit = 32.4%
		
Click to expand...



   Whatever.*


----------



## ducati916

*Realist* 



> I did delete some stuff. Yeah.




Well actually no.
You tampered with the original content that completely changed the context and factual basis of the post.

You in point of fact committed *fraud* 
Now I have had some doozy dust-ups through the years with all manner of posters, but I have never experienced up till now, outright fraud of the kind that you just perpetrated.

You should be banned.
Whether you are, or not, is irrelevant as your ethical code is on plain display.
Stupidity is forgivable, you can't help your genetic potential.
Reputation however is earned over a lifetime, and lost in a heartbeat.


----------



## Sean K

ducati916 said:
			
		

> *Realist*
> 
> Well actually no.
> You tampered with the original content that completely changed the context and factual basis of the post.
> 
> You in point of fact committed *fraud*
> Now I have had some doozy dust-ups through the years with all manner of posters, but I have never experienced up till now, outright fraud of the kind that you just perpetrated.
> 
> You should be banned.
> Whether you are, or not, is irrelevant as your ethical code is on plain display.
> Stupidity is forgivable, you can't help your genetic potential.
> Reputation however is earned over a lifetime, and lost in a heartbeat.




Holy cow dudes. this is a friendly forum. 

Duc, you need to substantiate the claims mate. I can't see fraud, just deletion of unnecessary stuff. Did what was deleted really change your voice?


----------



## doctorj

ducati916 said:
			
		

> *Realist*
> Well actually no.
> You tampered with the original content that completely changed the context and factual basis of the post.
> 
> You in point of fact committed *fraud*




Duc,

I really think he just misread your post and confused the industry stats with that of the company and wound up quoting the wrong bit.  While Realist either hasn't admitted it yet or hasn't realised, I'm pretty certain it was just an honest mistake.

As for closed v open, I'm not going to touch that arguement with a 40ft pole as I can see the merits of either method.

Happy trading.


----------



## tech/a

> Whatever.




Duc's always had a problem valueing his portfolio.

I agree with you but Duc has 3 yrs to prove his point. (2.3 left)


----------



## ducati916

*Kennas* 



> Duc, you need to substantiate the claims mate. I can't see fraud, just deletion of unnecessary stuff. Did what was deleted really change your voice?




Easy to substantiate.
And it materially changed the post.

Altered post;



> Originally Posted by ducati916
> Current Price $18.81
> Code CAR
> Market Capitalization: 21B
> Price / Earnings: 15.8
> Price / Book: 2.9
> Net Profit Margin 6.8%
> Price To Free Cash Flow -6.3
> Return on Equity: 11.9%
> Total Debt / Equity: 1.6
> Dividend Yield: 1.2%




The two originals that were utilized to create the fraudulent post;



> Industry Statistics
> 
> Market Capitalization: 21B
> Price / Earnings: 15.8
> Price / Book: 2.9
> Net Profit Margin 6.8%
> Price To Free Cash Flow -6.3
> Return on Equity: 11.9%
> Total Debt / Equity: 1.6
> Dividend Yield: 1.2%






> Current Price $18.81
> Code CAR
> Yield 23.5%
> Market Capitalization $25226.0 million [adjusted]
> TCI Price Target $207.00 to $282.74
> Investment Car Rentals
> P/E Ratio 2.32
> Recommendation Buy




As you can see, the alterations to the two originals, that result in the fraudulent post differ materially;

*yield 23.5% against 1.2%
*P/E 2.3 against 15.8
*Capitalization $25226.0 million against $21Billion

*doctorj*



> Duc,
> 
> I really think he just misread your post and confused the industry stats with that of the company and wound up quoting the wrong bit. While Realist either hasn't admitted it yet or hasn't realised, I'm pretty certain it was just an honest mistake.





These are not small or inconsequential differences in a valuation.
Taking *Realists* level of claimed expertise into account in everything from Real Estate valuation to the valuation of common stock, the evidence would suggest, not stupidity, but malfeasence.

I feel no requirement to hunt around the site finding examples of postings that substantiate the charge of "expert", the forum generally has accepted that *Realist* is [within Fundamental Analysis] an acknowledged practitioner and expert.

There is also the frank admission of;



> I did delete some stuff. Yeah.




What was deleted, modified?
Areas that have been the subject of possibly hundereds of posts by *Realist* viz. P/E ratio's & Dividend Yields.

These two topics have resurfaced in any number of posts, where, *Realist* has been attempting to educate misguided traders to the fallacy of their short time frames, and missing out on the value of steady and increasing dividends. 

Likewise, with the P/E ratio, the primary valuation tool of the *Realist* many posts where a criteria for purchase is volunteered, it is the P/E ratio that has been produced as evidence for the undervaluation.

Therefore, there is no doubt that rather than an innocent error, that this was a premeditated attempt to commit fraud. He has been weighed, he has been measured, and he has been found wanting.

*tech/a* 



> Duc's always had a problem valueing his portfolio.
> 
> I agree with you but Duc has 3 yrs to prove his point. (2.3 left)




Which is why I report the results the way that I do.
They are transparent trades.
They are posted and called in real time.
The results are easily verifiable
They show the good, the bad, and the ugly.
The valuation thereof, is left to the individual to decide for themselves.
To be fair, there is not enough information to value it precisely, but the point of the exercise was to demonstrate the validity of analysis in a specific timeframe [3yrs] Win% [90%+] Return% [30%+]

jog on
d998


----------



## Realist

This thread is quite ridiculous.

Ducati will lose money but not sell some shares so he'll claim he made money and accuse anyone who disagrees with him of treason.


----------



## happytrader

I like checking this thread out because it is actually an excellent example of how with logic and rationalisation one can become attached to an outcome especially in the face of some quite large drops. Huge mental toughness required to manage so very many stocks.

Personally I think this is a great strategy for ASX banking stocks as they don't halve in value too often. 

Cheers
Happytrader

Disclaimer

This is not financial advice. Do your own research and take responsiblity for yourself.


----------



## ducati916

*Realist* 



> This thread is quite ridiculous.
> 
> Ducati will lose money but not sell some shares so he'll claim he made money and accuse anyone who disagrees with him of treason.




The defence against the charge of fraud consists of evasion.
Quick, change the subject, and hope it all gets forgotten.
Unfortunately, you have overstepped the mark by directly stating as a fact, a complete fabrication and falsehood.



> Originally Posted by ducati916
> Current Price $18.81
> Code CAR
> Market Capitalization: 21B
> Price / Earnings: 15.8
> Price / Book: 2.9
> Net Profit Margin 6.8%
> Price To Free Cash Flow -6.3
> Return on Equity: 11.9%
> Total Debt / Equity: 1.6
> Dividend Yield: 1.2%




By quoting 







> "Originally Posted by ducati998"



 you identify yourself as the *liar* that you are.

By doctoring the post, you compound your crime by committing fraud.
Obviously your ethics are not worth the steam off my piss.

That you either do not accept, or are too stupid to understand, you have committed a major faux pas, in finance, your word, and the strength of your word are important. Your word is worth nothing.

I hope you will not contaminate my thread further.


----------



## Realist

I did indeed delete stuff that made CAR's figures wrong, by mistake. I admit it!!

Now admit you're not up 30% as you say, because most of your shares that are supposedly "grossly undervalued" have infact plumetted. And you should be counting all your shares not just the ones you have sold.


And in reality if you were to take into account all factors like brokerage, tax and inflation you are losing money!


----------



## It's Snake Pliskin

I enjoy reading Duc`s posts and the commitment to posting his realtime investing.

Realist, respect Duc`s wishes please and exit left.


----------



## nizar

Snake Pliskin said:
			
		

> I enjoy reading Duc`s posts and the commitment to posting his realtime investing.




So do I



			
				Snake Pliskin said:
			
		

> Realist, respect Duc`s wishes please and exit left.




I second that


----------



## Realist

I've had my say, I'll leave...

where's me coat?


----------



## cuttlefish

ducati916 said:
			
		

> *Realist*
> 
> Your lack of attention to detail should be of great concern, but I suspect otherwise.




ducati - realist demonstrates considerable lack of attention to detail as a general rule - which is why I'm fairly confident it was a typical realist style mistake and not deliberate fraud.




			
				ducati916 said:
			
		

> I feel no requirement to hunt around the site finding examples of postings that substantiate the charge of "expert", the forum generally has accepted that Realist is [within Fundamental Analysis] an acknowledged practitioner and expert.




If realist is in fact accepted as any kind of expert on fundamental investing on this forum then fundamental investors are poorly represented here.


And I also concur with snake and nizar.  
<<<=====================


----------



## ducati916

*Chap's* 

Ok, storm in a tea-cup, case closed.

There will be no updates for the next 2 weeks, as I am away on business, and there is incredibly, no internet access.

jog on
d998


----------



## ducati916

Sold UST @ $55.72

jog on
d998


----------



## ducati916

CALL......$4.76........................$2.70...... ...................(-43.2%)
SAFM......$26.45.....................$28.29........ .................+6.9%
FORD......$10.74.....................$5.78....... .................(-46.2%)

CTT......$4.00.......................$2.61........ ..................(-34.5%)
CQB......$17.47.....................$12.98........ .................(-25.7%)
TOL......$29.78.....................$29.22........ .................(-1.6%)


SGTL....$10.30.....................$5.61...... .....................(-45.5%)
EVCI....$1.44.......................$0.66........ ...................(-54.1%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$47.16.......... ..................+25.9%
WON....$6.65.....................$7.50............ ..................+12.8%
NAFC...$20.52....................$25.00........... .................+21.8%
CAR....$18.48....................$19.46........... ..................+5.3%

Aggregate......................................... ....................[-13.7%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]

Aggregate..............+32.7%

jog on
d998


----------



## tech/a

Portfolio value Nett  + 3.9%


Fairway from the 30% a year. (I know 2 to go).


----------



## tech/a

Ducster.

I reckon your snaffoood.

Your plan is to prove that you can trade 30% or more each year over 3 yrs with your method.Pulling your trades out at 30 or so % leave you well short.
(You wouldnt be much better had you held them I worked it out--35%).
At the end of 3 yrs you will have to sell all losers---unless you *dramatically * increase your winning trades you have no hope!!
OR dramatically increase your % profit OR dramatically decrease your losses---currently all back to zero loss would do it!


Carry on


----------



## ducati916

*tech/a* 



> I reckon your snaffoood.
> 
> Your plan is to prove that you can trade 30% or more each year over 3 yrs with your method.Pulling your trades out at 30 or so % leave you well short.
> (You wouldnt be much better had you held them I worked it out--35%).
> At the end of 3 yrs you will have to sell all losers---unless you dramatically increase your winning trades you have no hope!!
> !




The current eight trades under; *closed trades* have returned on aggregate the 30%+/- in under the twelve month period, thus these results exceed the assertion originally stated.

The issue that you quite rightly raise has validity, however, you are raising it rather prematurely, based on the current evidence, as you posted a little ASX speccie that rose 400% in a couple of months. Therefore, market price can adjust very quickly based on sentiment.

Sentiment can change very quickly. Fundamentals can change quickly, but generally take a longer timeframe. Therefore, while evolving economic forces adjust the fundamentals of say, CQB, sentiment will be generally negative.
As the fundamentals improve, so the price [sentiment] can adjust very quickly.

The purpose of a fundamentally selected portfolio is to limit the losses. There are some six stocks showing currently circa 50% drawdown. This has without a doubt caused concern within the technical crowd. However, this is the point in which *the time factor * becomes important.

CAR provides a 25% dividend return on my purchase price, this approximates [without any capital gain] my requirement of 30% compounding, should I reinvest the dividends at the same price [or lower].
Therefore, on this stock, time, is less of a factor.

However, as we enter year two, [February 2007] I will need on closed trades an aggregate of 60% to maintain the stated 30%, and year three will require 90% on aggregate.



> OR dramatically increase your % profit OR dramatically decrease your losses---currently all back to zero loss would do it




As first stated, there should be no losses.
From the trades taken initially, to the later trades, I have tightened three criteria. The result has been [so far] a very large reduction in drawdown [I dislike drawdown as much as anyone]. OFIX, WON, NAFC, CAR all suffered minimal drawdown. That said, there should be no losses, and an aggregate 30%+ after three years.

jog on
d998


----------



## markrmau

ducati916 said:
			
		

> Sentiment can change very quickly.




eg. on asx TEN.

I bought it at $3.58 about a year ago, because there was a takeover possibility if media laws were relaxed.

I sat on massive losses (but received divs) - it got down to about $2.6 or so.

However, I don't use stop losses. I only sell if the reason I bought in the begining is no longer valid.

So at $2.6 I said to my self, 'are the reasons I bought it for still valid?'. 'Yes', I replied. So I hung on.

I am not saying this is an ideal way to trade, but this is what can happen. In the comming week, the market is going to become enamoured with the idea of 'private equity' buying both TEN and MMM (youth music station), and creating cross advertizing posibilities. I should be able to sell over $4.3 I think.


----------



## ducati916

Let's try a couple of charts;


----------



## ducati916

CALL......$4.76........................$2.67...... ...................(-43.2%)
SAFM......$26.45.....................$25.67....... . ................[-2.9%]
FORD......$10.74.....................$5.14....... .................(-52.1%)

CTT......$4.00.......................$2.60........ ..................(-34.5%)
CQB......$17.47.....................$13.40........ .................(-23.2%)
TOL......$29.78.....................$28.23........ .................(-5.2%)


SGTL....$10.30.....................$5.00...... .....................(-51.4%)
EVCI....$1.44.......................$0.52........ ...................(-63.8%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$43.08.......... ..................+15.1%
WON....$6.65.....................$7.92............ ..................+19.1%
NAFC...$20.52....................$26.16........... .................+27.5%
CAR....$18.48....................$19.46........... ..................+5.3%

Aggregate......................................... ....................[-16.1%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]

Aggregate..............+32.7%

jog on
d998


----------



## ducati916

Sold NAFC @ $26.48


----------



## ducati916

CALL......$4.76........................$2.82...... ...................(-40.7%)
SAFM......$26.45.....................$26.34....... . ................[0.0%]
FORD......$10.74.....................$5.08....... .................(-52.7%)

CTT......$4.00.......................$2.63........ ..................(-34.2%)
CQB......$17.47.....................$13.52........ .................(-22.6%)
TOL......$29.78.....................$27.41........ .................(-7.9%)


SGTL....$10.30.....................$4.65...... .....................(-54.8%)
EVCI....$1.44.......................$0.50........ ...................(-63.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$43.67.......... ..................+16.6%
WON....$6.65.....................$6.59............ ...................0.0%

CAR....$18.48....................$20.44........... ..................+10.6%

Aggregate......................................... ....................[-17.0%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%

Aggregate..............+32.3%

jog on
d998


----------



## tech/a

Total portfolio value if sold today.
+1.957%


----------



## ducati916

CALL......$4.76........................$2.80...... ...................(-40.9%)
SAFM......$26.45.....................$26.79....... . ................+1.3%
FORD......$10.74.....................$5.04....... .................(-52.9%)

CTT......$4.00.......................$2.44........ ..................(-39.0%)
CQB......$17.47.....................$14.04........ .................(-19.6%)
TOL......$29.78.....................$29.89........ .................(0.0%)


SGTL....$10.30.....................$4.68...... .....................(-54.2%)
EVCI....$1.44.......................$0.49........ ...................(-63.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$43.44.......... ..................+16.0%
WON....$6.65.....................$6.78............ ...................+1.9%

CAR....$18.48....................$20.92........... ..................+13.2%

Aggregate......................................... ....................[-19.8%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%

Aggregate..............+32.3%

jog on
d998


----------



## ducati916

CALL......$4.76........................$2.79...... ...................(-40.9%)
SAFM......$26.45.....................$27.12....... . ................+2.5%
FORD......$10.74.....................$4.84....... .................(-54.9%)

CTT......$4.00.......................$2.61........ ..................(-34.0%)
CQB......$17.47.....................$14.29........ .................(-18.2%)
TOL......$29.78.....................$30.98........ ..................+4.0%


SGTL....$10.30.....................$4.60...... .....................(-54.2%)
EVCI....$1.44.......................$0.49........ ...................(-63.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.19.......... ..................+20.7%
WON....$6.65.....................$6.56............ ...................+0.0%

CAR....$18.48....................$20.71........... ..................+12.0%

Aggregate......................................... ....................[-18.9%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%

Aggregate..............+32.3%

jog on
d998
http://grantmacdonald.blog.co.nz/


----------



## nizar

Duc,

How long will you hold Ford for?
When will you decide that perhaps you simply got it wrong?


----------



## ducati916

nizar said:
			
		

> Duc,
> 
> How long will you hold Ford for?
> When will you decide that perhaps you simply got it wrong?




As per the initial strategy;
*if the fundamentals change materially for the worse
*three years

Dependant on which criteria first presents, will mandate an exit.
jog on
d998
http://grantmacdonald.blog.co.nz/


----------



## ducati916

CALL......$4.76........................$2.75...... ...................(-42.2%)
SAFM......$26.45.....................$27.72....... . ................+4.8%
FORD......$10.74.....................$4.39....... .................(-59.1%)

CTT......$4.00.......................$2.65........ ..................(-33.0%)
CQB......$17.47.....................$14.65........ .................(-16.4%)
TOL......$29.78.....................$32.40........ ..................+8.7%


SGTL....$10.30.....................$4.48...... .....................(-56.5%)
EVCI....$1.44.......................$0.55........ ...................(-61.8%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$43.50.......... ..................+16.8%
WON....$6.65.....................$6.57............ ...................+0.0%

CAR....$18.48....................$21.35........... ..................+15.5%

Aggregate......................................... ....................[-18.6%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%

Aggregate..............+32.3%

jog on
d998
http://grantmacdonald.blog.co.nz/


----------



## ducati916

CALL......$4.76........................$2.86...... ...................(-39.9%)
SAFM......$26.45.....................$31.98....... . ................+20.9%
FORD......$10.74.....................$4.45....... .................(-58.5%)

CTT......$4.00.......................$2.69........ ..................(-32.7%)
CQB......$17.47.....................$15.13........ .................(-13.3%)
TOL......$29.78.....................$31.30........ ..................+5.1%


SGTL....$10.30.....................$4.25...... .....................(-58.7%)
EVCI....$1.44.......................$0.60........ ...................(-58.3%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.74.......... ..................+22.2%
WON....$6.65.....................$6.76............ ...................+1.6%

CAR....$18.48....................$22.13........... ..................+19.8%

Aggregate......................................... ....................[-15.9%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%

Aggregate..............+32.3%

jog on
d998


----------



## ducati916

Buy CHDW @ $0.32

jog on
d998


----------



## ducati916

Company Name: China Digital Wireless 
Date:  December 10, 2006
Current Price: $0.32
Code: CHDW.OB
Yield: 0.0%
Market Cap. $5.5 million
Tci price target: $1.50 - $2.12
Investment Sector: Communication Equipment
P/E Ratio 3.2
Recommendation: Buy

Business:

China Digital Wireless, Inc. is engaged in providing value-added information services, cellular phone distribution and advertising services through its Chinese operating subsidiaries. The Company conducts its business primarily through its wholly owned subsidiary, Sifang Holdings and its wholly owned subsidiary TCH Data Technology Co. Ltd. China Digital renders value-added information services in China by purchasing content from third-party providers and reformatting that content. It also provides entertainment-related services, including icons, screen savers, multiplayer games, Western horoscopes, jokes, and sports and entertainment news. China Digital distributes various mobile phone brands manufactured by SAMSUNG Electronics Co., Ltd. and NOKIA Corporation. The Company also provides digital advertising and other advertising services.

Holdings

With a market Capitalization currently of $5.5 million and a 100% common stock capitalization, it is interesting to note that three holders account for 69% of the total shares issued. This is without doubt an “insiders” stock. This could be both a good thing, and potentially dangerous in the longer run. In the short run, selling pressure can really go no further, as the holders are resolute. Into the future, if, and when the share price rises, their selling [if they sell] will certainly bring possibly substantial selling pressure to bear. 

Holders
*Caihua [Tai] 9million shares
*Ying [Shi] 1.8million shares
*Chinamerica Fund 1.1million shares

Are they justified in their cornering of the common shares?
It would seem a fairly resounding positive at the current market price of $0.32. For that price you receive;
*$0.10 per share in cash
*$0.33 per share in Working Capital [thus Working Capital exceeds the market price]
*All liabilities are paid.
This therefore qualifies as a legitimate undervaluation

Balance Sheet

The Balance Sheet receives a clean bill of health. There are no hidden capitalized costs that should be expensed in the Income Statement.
There could be a query on Accounts Payable, as they have increased by 100%, this can in part be explained by increasing Revenues up 51%, but really this is a component of Cost of Goods & Selling General & Administration, which both need to be brought under control.  Their business model is dependant upon purchasing content from third parties, and costs have obviously escalated, this does require watching.

Income Statement

The Margin of Profit decreased materially and quite alarmingly, and this has been due to the spiraling cost structure previously mentioned. If margins can be restored, and they should be in time, the increase in earnings will be leveraged tremendously by the tiny current market capitalization.
There are no discretionary cash-flows hidden in the cash-flow statements. The quality of earnings is good, only a small part is due to the selling of assets that pump up the earnings.

The very poor return on retained earnings to this point may also have influenced the downward slide in the share price. I would expect to see this improve going into the near term future [12mths] and be reflected accordingly in the share price.

I have a valuation of between $1.50 & $2.12 this; I feel is quite conservative if you believe in the growth potential of China in particular, and Asia in general. With such a large concentrated holding in place, I don’t see too much downside, and of course we can also track closely the insiders in their selling decisions.

jog on
d998


----------



## ducati916

CALL......$4.76........................$2.76...... ...................(-42%)
SAFM......$26.45.....................$31.28....... . ................+18.3%
FORD......$10.74.....................$4.11....... .................(-61.7%)

CTT......$4.00.......................$2.58........ ..................(-35.5%)
CQB......$17.47.....................$16.07........ .................(-8.0%)
TOL......$29.78.....................$32.44........ ..................+9.0%


SGTL....$10.30.....................$4.12...... .....................(-60.0%)
EVCI....$1.44.......................$0.58........ ...................(-58.3%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$47.44.......... ..................+26.7%
WON....$6.65.....................$6.97............ ...................+4.8%

CAR....$18.48....................$21.95........... ..................+18.7%
CHDW.$0.32.....................$0.35.................................+9.3%

Aggregate......................................... ....................[-13.7%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%

Aggregate..............+32.3%

jog on
d998


----------



## ducati916

Sell OFIX @ $47.85


----------



## ducati916

CALL......$4.76........................$2.56...... ...................(-46.0%)
SAFM......$26.45.....................$31.34....... . ................+18.5%
FORD......$10.74.....................$4.43....... .................(-58.7%)

CTT......$4.00.......................$2.51........ ..................(-35.9%)
CQB......$17.47.....................$15.81........ .................(-9.5%)
TOL......$29.78.....................$31.58........ ..................+6.0%


SGTL....$10.30.....................$4.43...... .....................(-56.9%)
EVCI....$1.44.......................$0.40........ ...................(-72.2%)

SEPR....$92.50.................................... ..............................

WON....$6.65.....................$6.99............ ...................+5.0%

CAR....$18.48....................$21.73........... ..................+17.5%
CHDW.$0.32.....................$0.34.............. ...................+6.2%

Aggregate......................................... ....................[-18.8%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%

Aggregate..............+32.3%

jog on
d998


----------



## ducati916

CALL......$4.76........................$2.61...... ...................(-45.0%)
SAFM......$26.45.....................$30.79....... . ................+16.5%
FORD......$10.74.....................$4.35....... ..................(-59.4%)

CTT......$4.00.......................$2.45........ ..................(-38.7%)
CQB......$17.47.....................$15.48........ .................(-11.3%)
TOL......$29.78.....................$31.06........ ..................+4.2%


SGTL....$10.30.....................$3.74...... .....................(-63.6%)
EVCI....$1.44.......................$0.44........ ...................(-69.4%)

SEPR....$92.50.................................... ..............................

WON....$6.65.....................$7.07............ ...................+6.3%

CAR....$18.48....................$22.25........... ..................+20.4%
CHDW.$0.32.....................$0.24.............. ..................[-29.4%]

Aggregate......................................... ....................[-20.7%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%

Aggregate..............+32.3%


----------



## ducati916

CALL......$4.76........................$3.01...... ...................(-36.7%)
SAFM......$26.45.....................$33.41....... . ................+26.3%
FORD......$10.74.....................$4.45....... ..................(-58.5%)

CTT......$4.00.......................$2.67........ ..................(-33.2%)
CQB......$17.47.....................$14.85........ .................(-14.9%)
TOL......$29.78.....................$31.60........ ..................+6.1%


SGTL....$10.30.....................$3.67...... .....................(-64.3%)
EVCI....$1.44.......................$0.40........ ...................(-69.4%)

SEPR....$92.50.................................... ..............................

WON....$6.65.....................$7.18............ ...................+7.9%

CAR....$18.48....................$27.40........... ..................+48.3%
CHDW.$0.32.....................$0.21.............. ..................[-34.3%]
LNX....$4.19.....................$5.17.................................+23.4%

Aggregate......................................... ....................[-15.3%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%

Aggregate..............+32.3%

jog on
d998


----------



## ducati916

CALL......$4.76........................$2.88...... ...................(-39.4%)
SAFM......$26.45.....................$31.68....... . ................+19.7%
FORD......$10.74.....................$4.36....... ..................(-59.4%)

CTT......$4.00.......................$2.81........ ..................(-29.7%)
CQB......$17.47.....................$13.44........ .................(-23.0%)
TOL......$29.78.....................$29.57........ ..................+0.00%


SGTL....$10.30.....................$3.55...... .....................(-65.5%)
EVCI....$1.44.......................$0.43........ ...................(-70.1%)

SEPR....$92.50.................................... ..............................

WON....$6.65.....................$6.59............ ...................+0.0%

CAR....$18.48....................$25.69........... ..................+39.0%
CHDW.$0.32.....................$0.19.............. ..................[-40.6%]
LNX....$4.19.....................$5.07............ .....................+21.0%

Aggregate......................................... ....................[-19.0%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%

Aggregate..............+32.3%

jog on
d998


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## tech/a

Total return on portfolio over 12 mths
*3.09%*.

Long way short of your 30%/ annum Ducster.
I know 2 yrs to go but already 1 year and you'll need well over 30% next to catch up to the 30%/ year on average--on the exercise.


----------



## ducati916

Positions closed today;

SAFM @ $35.41
LNX @ $5.72
CAR @ $28.05

jog on
d998


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## ducati916

CALL......$4.76........................$2.69...... ...................(-43.4%)

FORD......$10.74.....................$4.31....... ..................(-59.4%)

CTT......$4.00.......................$3.22........ ..................(-19.5%)
CQB......$17.47.....................$13.86........ .................(-20.0%)
TOL......$29.78.....................$29.61........ ..................+0.00%


SGTL....$10.30.....................$3.15...... .....................(-69.5%)
EVCI....$1.44.......................$0.42........ ...................(-70.1%)

SEPR....$92.50.................................... ..............................

WON....$6.65.....................$6.64............ ...................+0.0%


CHDW.$0.32.....................$0.32.............. ..................+0.0%


Aggregate......................................... ....................[-28.0%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%
CAR...................+51.1% [not inc divs]
LNX...................+36.5%
SAFM................+33.8% [not inc. divs]

Aggregate..............+33.8%

jog on
d998


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## IFocus

Hi Ducati

Always, always enjoy your posts 

After looking at your on going account (thanks for posting) and not have spent time looking at the method of taking positions using fundamentals a couple of questions 

Do you review your method at any point?

What research have you done to verify your method?

When looking for stocks “under valued” do you consider possible future trends, sectors, business cycles, the baby boomer thing, etc or just pick at random.

Thanks
Focus


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## ducati916

Buy TELOZ @ $9.96

jog on
d998


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## ducati916

IFocus said:
			
		

> Hi Ducati
> 
> Always, always enjoy your posts
> 
> After looking at your on going account (thanks for posting) and not have spent time looking at the method of taking positions using fundamentals a couple of questions
> 
> Do you review your method at any point?
> 
> What research have you done to verify your method?
> 
> When looking for stocks “under valued” do you consider possible future trends, sectors, business cycles, the baby boomer thing, etc or just pick at random.
> 
> Thanks
> Focus




I review each position on the release of the annual 10K if I am still holding the position, if it reaches a profit target, then I will generally sell.

I have a mixture as I am testing some other screening methods, but generally I will perform my own analysis [examples on this board inc. BHP, RIO, HSP, RIN and possibly a couple others] There are examples in this thread also of some of the stocks held.

No not really, it is mostly a bottom up approach, although I try to stay cognizent of over-all market and economic trends [see blog]

Lots of research going back to circa 1900.

jog on
d998


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## ducati916

Sell TELOZ @ $10.49


----------



## ducati916

CALL......$4.76........................$3.29...... ...................(-30.8%)

FORD......$10.74.....................$4.17....... ..................(-61.1%)

CTT......$4.00.......................$3.44........ ..................(-14.0%)
CQB......$17.47.....................$14.42........ .................(-17.4%)
TOL......$29.78.....................$29.62........ ..................+0.00%


SGTL....$10.30.....................$3.79...... .....................(-63.2%)
EVCI....$1.44.......................$0.49........ ...................(-65.9%)

SEPR....$92.50.................................... ..............................

WON....$6.65.....................$6.75............ ...................+1.5%


CHDW.$0.32.....................$0.21.............. ..................[-34%]
X [delta neutral].................................................................
CENT..$14.71...................$14.79...............................+0.0%


Aggregate......................................... ....................[-23.7%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%
CAR...................+51.1% [not inc divs]
LNX...................+36.5%
SAFM................+33.8% [not inc. divs]
TELOZ...............+5.0%

Aggregate..............+31.7%

jog on
d998


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## tech/a

Current NETT return on liquidated portfolio *5.64%* 
over *16 mths *or *4.23%* annualised.


----------



## ducati916

*tech/a*

Actually, if you annualise the return, it will be far higher.
But annualised returns can be misleading, which is why I don't report them as such.

TELOZ actual return = 5% capital gains + 5% dividend yield = 10%
TELOZ annualised = 440%

If I annualised the returns, I'd look like Buffett+

jog on
d998


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## tech/a

Sorry I'll rephrase that.

Current NETT return on liquidated portfolio *5.64%* 
over 16 mths or *+.352%* / Month


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## ducati916

*tech/a*

Incorrect.
The *liquidated* or closed portion is 32%+

jog on
d998


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## tech/a

Yes this is as always where we differ.

*I sit on open equity.(Until exited)
You sit on open losses.(Indefinately--evidently)*

We also differ on portfolio valuation.
I include all open equity and all closed trades.
You only include closed trades and *ignore open losses*.

You could if you had enough capital hold 100s of losses and just close out those which attain 30% or so. Believing when you do that you've made another 30% within your portfolio---well actually you do.

Happy to differ.
I'd rather hold open profit which has no defined top.
Than open loss which could drop to zero.

I *dont* continue to post the alternate figures for your benifit as you know Duc.
But to *balance the veiw *for others with regard to portfolio valuation.

delude on.
tech


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## x2rider

hi Folks 
Just wanting to throw my 2 cents in 

Do you us a portfolio tracker of any sort Duc? I know myself that all wins and losses are calculated at the end of the day and the portfolio return is recalculated. 
It just sounds a bit to me like a "credit card" approach. You don't make the loss until you have to finally pay the bill. 
Some of those losses seem to be pretty high Duc. What is your criteria for selling or do you never sell? If you never sell then how do you know if you are making any money?
I haven't been in the market to long but I am always a bit loath to exit a position that is a winner. I was always told to cut my losses and let my profits run. Sometimes this approach bites me but other times has reaped great rewards.

Anyway cheers Martin


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## ducati916

Martin

The exit criteria are;

*If the entry criteria [fundamentals significantly change/deteriorate]
*After 3 years

If you take say CTT as an example at one point it was at [-42.7%] currently at [-14.0%]

The reason is that the catalyst that was holding the shareprice down, has been resolved.

What you will also notice is that the worst drawdowns were taken in the early picks, subsequently I have modified the analysis, and significantly reduced the drawdowns.

To be fair, I don't like drawdowns anymore than the next person.

jog on
d998


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## ducati916

Buy HMA @ $10.99

jog on
d998


----------



## tech/a

Duc.

You about?
Looking for you over on Reefcap.(Planters/Nobbys).


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## theasxgorilla

tech/a said:


> I sit on open equity.(Until exited)




Is that 'open equity adjusted for risk and commissions'??


----------



## tech/a

ASX.
I dont follow you.

Its simply the equity in the trade which is unrealised until I close it.
I have some trades over 4 yrs old.
EG QBE.Bought in 2002.

$7.85-$32.00 Coms have little bearing.
Risk---relative to what?


----------



## happytrader

ducati916 said:


> *tech/a*
> 
> 
> 
> Fundamentally sound stocks, correct.
> Their value has improved, and I would have no problems buying more, and may well have done so. However the thread started on Reef, where I was challenged to provide a portfolio by MB, who as you remember stated that he would keep track of, and update the portfolio.
> 
> That he has signally failed to so, has meant that I have to update it each week, which is fine, but in the initial agreement I stated that "no averaging down would take place" therefore I am simply sticking to my agreement.
> 
> Every single stock will upon exit, show me a profit, and unleveraged returns will aggregate circa 30%, but, it will run for the 12 months+ and we shall see the results.
> 
> 
> 
> jog on
> d998




Hello Mr Ducati

Are you able to provide an update for us on this thread?

Cheers 
Happytrader


----------



## MichaelD

Seemed like a good time to resurrect this thread given the recent discussions on averaging down.

The results are...interesting. I have interspersed the last position statement that Ducati provided with the current status of the positions and then provided a summary at the end.


CALL......$4.76........................$3.29...... ...................(-30.8%)
 it is now 2.76 (-42%)
FORD......$10.74.....................$4.17....... ..................(-61.1%)
 it is now 2.46 (-77%)
CTT......$4.00.......................$3.44........ ..................(-14.0%)
 it is now 2.50 (-37%)
CQB......$17.47.....................$14.42........ .................(-17.4%)
 it is now 15.10 (-13%)
TOL......$29.78.....................$29.62........ ..................+0.00%
 it is now 19.71 (-34%)
SGTL....$10.30.....................$3.79...... .....................(-63.2%)
 acquired by Freescale at $3 per share. (-71% lost on closed trade).
EVCI....$1.44.......................$0.49........ ...................(-65.9%)
 it is now 0.06 (-96%)
SEPR....$92.50.................................... ..............................
 it is now 19.29 (-79%)
WON....$6.65.....................$6.75............ ...................+1.5%
 it is now 1.05 (-84%)
CHDW.$0.32.....................$0.21.............. ..................[-34%]
 it is now delisted. Last traded price $0.20. (-38%)
CENT..$14.71...................$14.79............. ..................+0.0%
 it is now 4.41 (-70%)
HMA..$10.99
 it is now 6.46 (-41%)
Aggregate......................................... ....................[-23.7%]


Closed Trades 

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%
CAR...................+51.1% [not inc divs]
LNX...................+36.5%
SAFM................+33.8% [not inc. divs]
TELOZ...............+5.0%

---------- Overall Summary of Results

Results
ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%
UST...................+35.2% [not inc. dividends]
NAFC.................+29.0%
OFIX..................+27.8%
CAR...................+51.1% [not inc divs]
LNX...................+36.5%
SAFM................+33.8% [not inc. divs]
TELOZ...............+5.0%

CALL -42%
FORD -77%
CTT -37%
CQB -13%
TOL -34%
SGTL -71%
EVCI -96%
SEPR -79%
WON -84%
CDHW -38%
CENT -70%
HMA -41%

14 winners - 445%
12 losers - 682%



The numbers speak volumes.


----------



## BSD

Please don't confuse Ducati with either:

a. A good fundamental analyst
b. A good money manager

On these points, his numbers do speak for themselves.


----------



## tech/a

All failures seem to be judged that way.
*At least he had the guts to do it.
*
More so than some critics.


----------



## ducati916

MD/BSD/tech-a

I stop by every now and then, so this just caught my eye.

Judged purely on the numbers generated by MD, the experiment must be judged a failure, no question.

However, as tech-a suggested way back when... a simple exit criteria could turn these numbers around very quickly, so an easy lesson to be absorbed.

However, the initial argument that I promulgated was the absence of a stop-loss. In it's current form, as previously stated, that must be judged a failure.

However, again, there are some easy lessons learned, that allow a "no stop" rule, that does not result in the above numbers.

jog on
duc


----------



## BSD

tech/a said:


> All failures seem to be judged that way.
> *At least he had the guts to do it.
> *
> More so than some critics.




Some people get paid for their views mate.

You give them for free.


----------



## MRC & Co

BSD said:


> Some people get paid for their views mate.
> 
> You give them for free.




Not meaning they are worth that payment. 

F/A or T/A.  

Very few worth handing a cent too, or spending a minute even thinking about it.


----------



## tech/a

BSD said:


> Some people get paid for their views mate.
> 
> You give them for free.




Haa

"If stock market experts were so expert, they would be buying stock, not selling advice."

and another favorite.

'An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."


----------



## warezwana

tech/a said:


> Haa
> 
> "If stock market experts were so expert, they would be buying stock, not selling advice."




 thats so true...


----------



## investorpaul

Wow, Awesome thread to read and prob a thread that those new to trading/investing should browse. It really shows that having no clear stop loss can smash your trading/investing system.

What ever happened to this guy? did he just stop updating and slip into the background?


----------



## tech/a

No Duc's still around.
He wont be far away and will see this post.

In all fairness Duc had an idea which failed.
Had the guts to put it out there and the guts to admit it didnt work.

As far as I can work out the only form of trading Duc is involved with is arbitrage.


----------



## Sean K

I wonder how these positions will look in 10 years time.


----------



## ducati916

investorpaul said:


> Wow, Awesome thread to read and prob a thread that those new to trading/investing should browse. It really shows that having no clear stop loss can smash your trading/investing system.
> 
> What ever happened to this guy? did he just stop updating and slip into the background?




IP,

I'm still about. 

Stoplosses, or some form of money management, including an exit strategy, that allows winners to run, would have transformed the basic strategy. Of course, at the time it was implemented, we were in a strong cyclical bull market, that helped.

Buy and hold, with no stops etc, would work well only in one market scenario, buying at the bottom of a secular bear market, and joining a new secular bull market.

jog on
duc


----------



## So_Cynical

ducati916 said:


> Buy and hold, with no stops etc, would work well only in one market scenario, buying at the bottom of a secular bear market, and joining a new secular bull market.




I would think that there's some possibility that the above scenario is what we have just seen (October 08 to April 09) assuming this/now is the beginning of a new bull.?


----------



## ducati916

So_Cynical said:


> I would think that there's some possibility that the above scenario is what we have just seen (October 08 to April 09) assuming this/now is the beginning of a new bull.?




Well that's debateable, personally I see this as a cyclical bull move [again] on a secular bear market.

Actually, buying Preferred shares, on a fundamental basis, or Convertible Bonds on a fundamental basis can work out well.

jog on
duc


----------

