# Vishy's Trading Blog



## vishalt

I will be making posts on basically my day trading activities, I think its pretty cool to see exactly what moves other traders make.


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## vishalt

Hi, 

I'm Vishal, a little bit about me: 

I'm 21 now - I used to be a chef, but that didn't get me to Europe fast enough, Dad encouraged me to play in shares, so with the money I saved up from being a chef, I put it into BEN (Bendigo Bank) - and my money doubled instantly and off I was to Europe. 

I love shares, finance, and I'm studying journalism at the moment, and I have my heart bent on being a good finance journalist. 

---- 

My trading style: 

I trade in what I think the most simplest way possible, when a share bounces off support I buy it, when a share breaches resistance I buy it, and I use stop-losses on most of my trades, unless its a long-term investment. 

I long/short the Aussie200 index too, and I short stocks on speculation of them being punished. 

I also play in international shares, my avatar is my most successful trade (thanks Alcan). 

Dad and me made a special signal on FCharts that gives a fairly accurate signal on when to buy.


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## vishalt

VBA (Virgin Blue Airlines) recently announced a 97% jump in profit, I think its a well managed company, with a low P/E of 10, I think the share price has corrected enough to warrant a buy. 

Going long on the open tomorrow, with stops at 1.75ish. 







I currently hold Rio Tinto as a long-term investment. I believe taking Alcan was a very good move, the drop in earnings was just a blip, Rio still has tonnes of projects and earnings potential. 






I also sold off shares today: 

CTX: Bought at $22, $23, $24 - dumped at $24.40. 
BNB: Bought at $19, $20, $21 - dumped at $24.25. 
DJS: Bought at $5 - dumped at $5.25
RMD: Bought at $5.20 - stopped out at $4.99


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## Sean K

Are those charts VBA? Still going in with the US falling over? I suppose you might get it a bit cheaper!


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## vishalt

The first one is VBA yeah, I'm not really concerned with getting it as cheap as possible as I might risk missing the ride. 

I feel I have my stop-loss in the right place so a few cents isn't a biggie, I bought yesterday at $2.15.


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## vishalt

Yesterday I decided to long-term accumulate SGB, St. George Bank. I think I have it around the bottom of this correction (unless it turns into a crash lol) - I like it because its the most liquid of the banking stocks, capable of moving up to $2 a day unlike Westpac/ANZ, barely any exposure to sub-prime and a very profitable, low-risk business. 


Moved in after it bounced off support at $32.60, bought it at around $33.30, if it keeps dropping I'll just keep buying!






Also bought BSL (Bluescope Steel) as its teetering at support, moved in at $10.17, stop at $9.98. 






I think the markets are poised for a rebound today seeing as how Japan's machinery orders surged, which may provide some relief to the rest of the globe, and there's no important data out in the US today. 

Its September 11 though, don't know if that'll have any pyscological implications.


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## vishalt

Today I sold off my shares in Bluescope Steel & Virgin Blue to reduce my gearing below 10% and secure profits before a big session on Wednesday.

S*old VBA @ $2.24 after buying it at $2.15 *- VBA continues to make higher highs, I feel that the correction in the share is over and it can move a long way with its huge profits. 

*SOLD BSL @ $10.41 after buying it at $10.15* - Bluescope respects support at the $10-$10.20 region well and I'd expect a bounce up to $11. 

I pulled out of these short term stocks because of the FOMC meeting, I'm not sure what Bernanke will do, I think that he will hold interest rates because he doesn't want to bail out speculators. 

Should he hold interest rates I think the market will experience several sharp drops, which will be good buying points. 

Should he drop interest rates the market will probably rally, in which case I'm holding long-term posiitions in Rio Tinto & St. George Bank anyway. 

- Vish


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## vishalt

What timing!

As soon as Bernanke said .5% drop I was in contracts with DJIA @ 13,550, 100 points up already lol!!!!!!!!






I also added positions into SGB @ $32.65 (support), and another small buy of Rio Tinto at $98.


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## vishalt

Paladin to lead Summit & other Uranium hopefuls?

PDN consolidated around 6 & 6.50 for a while and then stormed out of the gates, Uranium prices have fallen to $85US, but they're still high, Uranium demand is still going strong with US wanting to triple its Uranium mining activities and India wanting our Uranium. 

My plan is to go LONG on SMM after it breaks $3.14.


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## vishalt

With the market almost near its all time highs I withdrew my positions, I was too tempted to nest my gains. 

Sold RIO @ $103 (bought @ 91, $97, $101)
Sold SGB @ $34.30 (bough@ $32.65, $33.30)

Time to play it Warren Buffet styles - 

"We only look for good companies that are at low prices," 

The market is due for a pull back and shares of Orica, Caltex, Rio, look very tempting.


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## vishalt

I heard a nice piece of advice on Bloomberg the other day. 

"One must search the world for high quality assets," and so I did ... and I concluded that I want Exxon Mobil to be my main energy exposure. 

If you didn't know Exxon Mobil, or just Mobil, is a US company, and the worlds biggest company with a market cap of $500b, its chart is nothing short of impressive as it has withstood recession and stock market crashes. 






It pays a quarterly dividend of about 35 cents (although the rumour is US companies could start giving more back), and it simply prints money out, its stability and liquidity are unparalleled. 

I bought XOM today at $92.97, I've put more buy orders in @ support prices ($86, $81.50), I think it'll hit a $100 soon with oil prices surging this much. 

Bought a small amount of Rio at $102 (after my sell off), more orders in at $101/$100. I have an estimate of $120 for Rio, its testing its all-time highs in US/UK, im sure itll do it here either, but fundamentally because Rio is a very high quality investment anyway. 

The volume of my purchases is extremely low, 40 shares of Mobil & 50 of Rio (simple tip, the more expensive company the less shares you buy!) My gearing is currently only at 3%.


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## moneymajix

lol.


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## vishalt

whats so lol about that?


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## vishalt

This is it, we are poised to reach 7000 by the end of the year, maybe even sooner! The economic backdrop is good, our miners are in super-strong shape, energy is in mega-demand, and techonology/bio shares are going hard. 

Bought shares of Seek Limited (the jobs website) - a stronger USD means Seek pays less for the US products Seek uses to run its site in the first place (servers, databases etc), and I think it could be a takeover target by a media conglomerate may want to add a jobs section. It also has strong job earnings and with the bureau tipping the jobless rate to go below 4% its all the better. 






As for Rio & Mobil, every dip is a buy, commodity demand & prices are going to surge after these rate cuts, Rio Tinto Alcan is yet to be one entity, and Mobil just makes too much money!


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## moneymajix

Nice charts.


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## vishalt

I had a good buy on Seek, the share jumped right off resistance and up nearly 30 cents from where I bought it to resistance at $9.25, hopefully it'll be able to break that today. 

MFS & Bendigo Bank are looking really good, if you see Macquarie/BNB/AFG/Westpac they're all starting to take off, and MFS is lagging, and as it appears in the market people are cycling through the stocks till it goes some significant amount higher. 

I'm looking to enter with decent quantities in the open today. 

Cheerios and have a nice week of trading!


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## vishalt

Exitted SEK, made no other moves today. 

I advise caution, the market has been up for 6 days now.


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## vishalt

I've cluttered my portfolio a bit because I didn't realise the woeful margin CMC gave me with Teck Cominco, just 120 shares gives me a margin of $400, which is pretty massive if you're looking at low gearing. 

I've put a stop on the stock, the TSX still hasn't approached its all time high.. if anyone had massive amounts of cash to spare with high gearing I'd seriously go into TCK, as its P/E is only 10 and the company, like BHP & Rio, just prints money. 

I sold Rio Tinto right at the top! $112.50, sometimes greed can be good, so I took my profits. 

I bought into BHP as Kloppers is now at the helm, an upgrade to Olympic Dam, and the prospect of the chinese flowing their trillions into it. 

I'm accumulating National Australia Bank as the banks are starting to rally and NAB is the lagger - but I'm confident it'll start catching up because its reporting soon, and NAB is one of the more liquid banks. 

I continue to hold onto Exxon Mobil as my favored big cap energy play, with the AUD rising its giving more momentum to profits made.


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## vishalt

Every dip is a buy in this bull market. 

*Rio Tinto Alcan* is almost here - the trend for both BHP & Rio has definitely slowed a bit, theres some consolidation but these guys have moved almost $24 and $52 North respectively and along with many analyst upgrades, low P/E ratios, I firmly believe that there is a lot more to come in this commodities cycle. 

Accumulated @ $111.50, $109.30, $108.50
(small quantity buy orders down every dollar movement)

*National Australia Bank* - Is the best looking buy in the banking sector. I'd recommend it for anyone looking to gain from the banking sector as its finally rallying after some lengthy consolidation and NAB is the only one of the majors still sufficiently below its all-time high, while all others are cracking theirs. 

Accumulated @ $40.50, $40.80, $41, $40,47 (more buy orders @ support zone, $38)

*Exxon Mobil* is moving slowly but steadily, I believe oil will keep rallying and Exxon is one of the best and most secure plays to capitalise on making money out of oil, with 50 projects due to come on in the next few years, thats massive!

Accumulated @ $92.60, $91.90, $90.90, more buy orders @ next support level ($86 zone) 

*Boral Limited* - Boral is looking like a nice play, breaking resistance past $7.30 strongly today, hopefully it has a small dip tomorrow which would be a good buy. 

Stop @ $7.25 (the previous resistance zone should act as support).


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## vishalt

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJXHiNjxjTis    - *PetroChina Surpasses GE as Second-Biggest Company *

http://www.bloomberg.com/apps/news?pid=20601109&sid=anI76aDJGi6Y&refer=home - on Hong Kong being at a ridiculous discount to China shares. 

It's close to overtaking Mobil, which is currently near $500b, PetroChina is $440b, I think the US markets will have less and less influence as Chinese companies grow more and more. 

PetroChina costs $19HK = $2.7 AUD, I'm buying this as my oil asset, stuff Mobil lol - China markets are going gangbusters!


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## vishalt

I bought PetroChina @ $18.90HK and it has already surged 4%+ to $19.60 in today's trade, how insane!

I sold Exxon Mobil off when I read PetroChina overtook GE as the world's second-biggest company, and after reading the site and seeing how many projects PC has, and the hype about the Chinese government trying to cool the Chinese market down by allowing their people to buy Hong Kong shares made it all the more tempting. 

I bought PetroChina @ $18.90HK and it has already surged 4%+ to $19.60 in today's trade, how insane!

Bought more NAB as it dipped to $41.70 yesterday, its the only major bank that hasn't approached/hit its all time high because everyone is paying attention to WBC/ANZ as they're reporting sooner. 

I'm still firm on Rio being an extremely strong performer with the merger of Alcan just on the horizon of completion. 

Longed Newcrest as it broke bounced off support and gold surged overnight. 

Shorted the index because the Dow took a pummel. 

Nice $$ today!


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## vishalt

Bought NCM @ 28 and sold @ $29.60 as it approached its all time highs. 

The market is experiencing increased volatality (not that it wasn't volatile already). 

Expect these hiccups along the way, remember the Dow has been in an uptrend since July 06 to July 07, that's 1 year of upward run, expect periods of shock & consolidation. 

The US economy still continues to grow (stuff what the media paints), the Fed will act as needed to stimulate growth, and earnings HAVEN'T even been that bad and they're predicted to be double digits next quarter. 

It's a testing time, but its a time to hold on and if you have low gearing and hedging abilities you can ride this out.


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## moneymajix

Congrats, on NCM.


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## Sean K

I bought more last week on likely breakout from the pennant. Looks like it may fail a tad....

Or, perhaps the fall will be short lived and it's an opp to buy more.....


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## vishalt

I think you may be right in your analysis Kennas, NCM is looking good for further gains with a US cut.


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## vishalt

I recently went against my discipline of maintaining low gearing, a maximum of 20%. 

I was hitting it pretty fast when I decided to buy PetroChina and do some other trading, it makes me uncomfortable. 

I sold PetroChina at $19.26HK after buying at $18.88 and AMAZINGLY I took a small loss due to Hong Kong's high interest rates! 

To hedge against the big market fall of yesterday not that I was worried anyway) I hedged my portfolio by shorting BHP at $45.66, luckily for me it came out with a quarterly update that analysts didn't like so I closed it for a small profit. 

I shorted the Nikkei225 as its a pretty weak market and very sensitive to US news, shorted at 16,400 and was stopped out at 16,500 when the US reversed course. 

I continue on to Rio Tinto and NAB, it seems I can only handle a maximum of 2 stocks at a time with the gearing policy I use, the rest are trades with strict stop-losses. 

I hope the market falls further, the lines are points where I'd buy more.


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## vishalt

Well since its a blog why not, thanks to the stock market my savings have doubled in 2 months and I'm still going strong!

It's unusual being an investor, I recently sold NCM at $29.60 - its now $31 today. I sold NAB yesterday at $42.01 and it surged to $42.70 today. 

I say its unusual because timing is impossible, but there are just endless opportunities in this market!

Anyway my gearing has dropped to just below 5%, very nicely in my comfort zone and I think Rio will really start kicking ass soon. 

-- 

Rio Tinto has stepped up to the next level in the commodities fight, I hope everyone who holds Rio is excited as I am about the Alcan acquisition. 



> Alcan joins Rio Tinto to create global aluminium leader
> 
> Alcan today joined the Rio Tinto group following the successful Offer for Alcan by a subsidiary of Rio Tinto. The expanded aluminium product group, formed by the combination of Alcan and Rio Tinto's existing aluminium assets, today became the new global leader in aluminium and will be known as Rio Tinto Alcan.
> 
> Rio Tinto chief executive, Tom Albanese and Rio Tinto Alcan chief executive, Dick Evans hosted special events at Rio Tinto Alcan's Montreal headquarters and highlighted the opportunities created by bringing Alcan into the Rio Tinto Group, and the potential for continued strong growth in the aluminium sector. Similar employee events took place in Brisbane.




Last I checked analysts at Morningstar & I think UBS and several others rated it $122+, but I think it could go much much higher given aluminum's potential and the ongoing boom. 

-- 

My average price for Rio stands at $109 with 205 shares, it's up 8 per cent in 2 days in London (but that usually doesn't translate onto our market for some reason


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## vishalt

My Rio Tinto Alcan shares now average around $110, I added another lot today at $110.60 which just soared to $113 in the last 30 minutes, momentum at its finest!

I sold NAB a bit too early, my plan had conviction, I just dogged it , its now $43.50!! lol, oh well these things happen. 

Imo the world is waiting on the European stock markets to break past all-time highs, they're close to doing it but SO bloody slow..


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## vishalt

Big caps for the win, moderate gains and moderate risk!

I bought SGB at $35.40 as it had a pretty nice correction and well its a fantastic, liquid and mostly secure stock anyway . 

I was quite lucky today... I didn't know it was reporting lol so it smashed estimates and surged a $1+ - I'm quite lucky!

SGB is the best bank to hold in my opinion. It moves really fast, has a nice dividend and is the most likely takeover target because of its size. 

I continue to hold Rio Tinto Alcan even though it fell today, I'm confident it'll rise in the medium/long term.


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## vishalt

wow these things surged today, w00t $1200!


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## prawn_86

Looks like your set with Rio today Vishy. Alcan offer has reached 90% acceptance threshold


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## vishalt

getting smashed today but never to fear, ill just short BHP/index and buy more rio as it drops


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## vishalt

The Japanese index is actually a pretty damn easy one to make money in because its so weak and so laggy!

Once the US futures started tumbling, taking the SPI200 and FTSE down with by a good 1%, Japan's Nikkei index was the only one in gains ... essentially still lagging. 

I shorted the Nikkei at around 16300 and woke up to see at 16100, a 200Y gain, and then the US market started suddenly recovering, the FTSE and the Aussie futures made rapid gains, and once again the Nikkei, still in losses, lagged. 

So I went long at 16100 and sold it when I came home at 16295, an easy gain. 

The Jap stock market might be slow and painful but its a damn good market for short-term index trades. 

I bought SGB at an average price of $35.90 and dumped it at $36.92 today, I just want to lock in my gains as I go and find a cheaper bank. 

I continue to hold Rio Tinto Alcan as my major asset.


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## vishalt

BHP made a bid for Rio, 

Rio holders rejoice, coz we're going to see it $145-$150 tomorrow. 

YES!!!!!

I also longed the FTSE & Nikkei and making gains of 60 pounds and lots and lots of yen (i can barely count that currency)


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## vishalt

Okay this is how it works, BHP and Rio are hand-holders who catch up to each others price, Rio always outperforms BHP in the short-term but BHP starts steaming soon after. 

If you're holding Rio, DUMP IT tomorrow and buy only a few more, incase BHP makes a higher offer.

I've checked the premiums now, Rio's P/E has SURGED to 22, while BHP is still 16, there is a LOT of room to make money in BHP! 

I'm dumping Rio tomorrow and looking to buy around 2000 shares of BHP.

And hey you never know, Rio could gang up Teck/Xstrata to make a hostile bid for BHP in return - I know that sounds crazy, but BHP making a bid for Rio was NOT conceivable itself in the first place.


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## vishalt

Well Rio is officially super-expensive, I do not touch stocks with a P/E of 25, I sold it off at $135, it felt crushing to see it surge to $150 today ... but hey, I'm the one who called on Rio as the best stock to invest in!

BHP is getting extremely cheap and these prices are just irresistible. 

The worlds biggest miner is just on a P/E of 16, Rio is at a staggering 25, imo its suicidal to make a bet on Rio unless you love lottery tickets.  

BHP introduced a sweetener today, a $30b buyback should they agree for a merge, but its not enough for Rio. 

I think BHP will launch another bid, but its just too risky to buy it at such a price, and whats the most it can do, probably $160-$200? And if it falls it'll slide to a $100. 

Should the bid fail or not pass competition regulators then people will pull out of Rio and restore their stakes in BHP again, BHP is at a ridiculous discount!

I've bought at $44, $43, $42 and $41.50, I hope it falls down to $38.50 where there is some heavy support, but even then it's still a fantastic buy!


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## frosty

hope your right i brought BHP for 4350and 4250 last week lets hopeit goes back up to 4700!


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## vishalt

I see no reason why it shouldn't, a broker I read in the Fin Review says $55+, most analysts I spoke to at work say this is an easy buying opportunity. 

Just hold on and don't buy big, I wouldn't be surprised if it falls a bit more to those support points on my chart.


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## vishalt

BHP has fallen around 15% from its all-time highs now so it presents a good opportunity. 

I'll just reinterate that this stock is the worlds biggest miner, it has all the fundamentals behind it like the Australian Cricket Team. 

The world's biggest copper mine in Chille, Olympic Dam, Pilbara Iron Ore with its own rail line, plenty of other Zinc/Aluminum/Coal mines/projects and its bloody big petroleum division. 

Is there any reason why this stock should fundamentally perform bad? No!

If you're worried about BHP going down I suggest you not look at the computer screen for several weeks/months, its extremely natural for predator stocks to go down when they make a bid. 

There's no doubt that its takeover for Rio would be an expensive one, but just think about the upside it would have? Rio's big mines, Alcan, more Pilbara, Ranger mine. 

A merge between BHP and Rio will take a year and could get knocked back by the EU, and I seriously doubt investors will focus on it too much till it passes all regulatory approvals. 

BHP's P/E has fallen to around 14, almost 10% below the market and sectors average P/E of 16. 

This is free money! 

I keep topping up at the lines on my charts and I've also shorted 10% of the capital I have long - to the British variant of Billiton, which I've shorted to make money while the stock continues to fall in the short-term.

*ALUE	Company	All Ords	Sector	
P/E ratio	14.78	16.45	15.42	

Earnings and Dividends Forecast (cents per share)
	2007	2008	2009	2010
EPS	275.0	302.9	347.2	311.5
DPS	55.4	62.0	73.3	76.8*


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## overule

Interesting and i firmly believe BHP will perform well in the long term.

How much more do you think BHP will fall ? I am looking forward to be filling up anytime next week.


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## vishalt

I'd say this is a pretty good price, its almost $8 or around 20% from all-time highs, I wouldn't be surprised if it goes down to $38 and I'd also be ready to have enough capital to buy more down $32, really doubtful but you always have to be ready!

(Hence me shorting the UK BHP)

The brokers still have good targets, rumours of a Rio counter-bid, extremely strong fundamentals, and some of the signals my Dad uses encouraged him to buy today, so we're going on a joint venture of massing BHP ;D.


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## vishalt

I've bought more, its hit $40, pretty nice discount. 

I've added more shorts to the British "BHP Billiton plc" to hedge and make money during the down fall. 

I'm hoping this is the bottom but obviously a good trader thinks ahead and I'm ready to tackle it if it comes down to $38 or even $36.


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## vishalt

I've been through a phase once where I almost got wiped out by over gearing and received a margin call, but this time I'm ready. This time I'm going short on things that are getting killed to hedge against falling markets.  (God bless CFD's) 

*US Mortgage Stocks:* There is no such thing as support and resistance for US Mortgage shares, as long as the bad news keeps piling on, the further the stock will plunge. I've shorted 100 shares of Fannie Mae (Federal Mortgage Association). 

I followed legend Jim Rogers recommendation that FNM still has a lot of problems to sort, it may cut its dividend and its not fully revealed its mal-practices in accounting. 

You may think "oh but that price is so low its a great buy" - its not! These things don't have money to go up, and take a look at Countrywide Financial. 

*BHP Billiton: *I have a feeling the market will take BHP with it, unfortunately, however I do believe the fundamentals are very strong. I suggest if you don't have enough capital that you just hold on, on the other hand keep buying at critical support points. 

If you can short the British/US ADR's of the stock so you can profit on the downside (which is what I've done). 

*Dow Jones:* Many traders say the critical point is 12,800, I agree. However what does a critical point mean? Will it mean the Dow plunges to 12,800? It could suddenly stop at 12,400, consolidate for months and then charge to 15,000. So I think you have to use strict stop-losses.


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## vishalt

woohoo! A 4.5% surge in BHP as far as I can see on my screens. Of course Rio (my earlier call) is doing fabulously, up almost $10. 

I think today's big moves bring a lot of confidence in the market, hopefully enough to close this correction but can never be too sure. 

Anyway BHP is still trading very cheaply, 14-15 multiple compared to Rio's 22, I'm strongly biased towards accumulating BHP and getting ready for a big run. 

As the newspapers have reported, Rio's prospects are amazing, its African iron ore mine and Noyju (forgot the spelling, the one in Nepal) and Alcan etc etc - if Rio's prospects are THAT good, what do you think BHP's prospects are like?

Considering BHP stole the Olympic Dam, and has nickel and petrol divisions, and a whole pipeline that it hasn't even told investors about yet. 

At prices this low I don't know what to say if you're not buying BHP.


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## vishalt

US stocks have wiped off over 10% of their all-time highs and the Dow has broken primary support at 12,800. 

It's only 10% but I would be keeping an eye on this, I think if the Dow cracks below 12,000 that would start to be a worry and I would look at going market neutral or shorting. 

I'm still firm on accumulating BHP.


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## vishalt

It's fair to say a lot of people who were exposed to Allco, MFS, Centro, ABS - and god knows how many others in the same - had their blood shed. 

So my question (I'm not trying to be insulting, but critical) is was it worth it?

Was it really worth investing in a not-yet mature business that has such a complex structure of making money? With layers of complex debt and a spider's web of cross funding and god knows what in the closet?

As opposed to BHP which is simply "we dig earth, we get copper, we send to China". 

Or Woolworths - "We sell food because everybody needs it. 

Or Woodside who has gargantuan amount of petrol to come for the billion drivers on the road?

Or even a bank - "Need a loan?" 

Even Telstra's yield would have sufficed. Everybody needs phone and the internet, the company makes a lot of money but is out of favor because analysts are just a bunch of toolheads. 

What I learned from watching this bloodbath is that you really don't need to invest in complexity for simple returns. No aircraft leasing , or debt fueled property expansion that can have seasonal and cyclical factors, no ultra wind farm out there in the Netherlands. 

Not invest with debt atleast anyway. 

If everyone was in the top 20 stocks today - other than News Corp (which shouldn't even be there) everyone would have been pretty happy.

So as is the way I am only going to put my money into liquid, big and secure companies rather than try out the dodgy scum of the market despite FMG tripling 500% in one year. 

I can atleast sleep at night and not worry about Twiggy running away.


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## Aviator33

Too true! Even though I'm only day trading, rarely will I wander outside the top 20 except for a VERY quick stab at something. The top 50 used to be pretty safe.......

Cheers
AV


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## vishalt

As you know for the past few months I have been rabbiting on about how BHP was undervalued and people need to hold out and be firm in their convictions. 

Well I couldn't: 
*
Maintain conviction -* Because as lovely as the fundamentals sound, who knows how much the price will be punished. After all like one other ASF reader said price is a "human idea". 

And also, what if BHP acquires Rio, has too much trouble integrating the business and gets raped on its debt?

*Hold on -* The higher funding costs have gotten to me and I was sick of seeing cash seeping out of my account everyday to maintain it. 

*Wasn't ready myself -* I was saying in my blogs earlier that traders should be ready for a 30% correction. Well that happened, and even I wasn't ready. I had to top up my account with plenty of my reserve savings to avoid a margin call. 

And then I made a stupid move of shorting the British BHP at the bottom and then the criss-crossing between Aus/British BHP got too complicated. 

Anyway, I'm still very happy . I had a 400% profit increase last year, I'm still up YTD and I've got my cash napping in the savings. 

And most importantly - I actually had a good night's sleep last week because I didn't hold any CFDs and worried about metals/Dow each morning. 

I bow out of CFDs and margin lending humbly. A margin call is something I do not want to worry about when I go to bed, I've had enough!

After this, and hopefully this is something I stick to: I want a diversified portfolio of mainly blue-chips and I don't want to use margin lending to buy them (so I can sleep at night!).


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## prawn_86

Good to see someone who can admit their mistakes and see the upside from bad situations.

You may bet a chance to get some bluechips at low prices the way the market is shaping up... 

Good luck with it all


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## Garpal Gumnut

I agree with prawn's comment. good on you vishalt.

gg


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## vishalt

Hi everybody, I'm back to blogging again!

I'm now looking to build a long-term portfolio with sustainable investments that will have capital appreciation and pay yields nicely over a 10+ year period. 

Previously, I was a short-term CFD trading mulling around trading BHP, Rio Tinto, Exxon Mobil and other shares that proved pretty successful till January where I vaporized a fair chunk of my gains. 

I've been buying up good companies without using gearing for months now and so far I've been emotionally happy, not worried and parts of my portfolio are flat or have made gains. 

So here goes my portfolio, I would most appreciate ideas from other members of ASF to fill in the gaps!

Here is my portfolio, I have descriptions and price targets and often track financial statements/management on them. 

*Bought in Beach Petroleum (BPT) at $1.44 (now $1.50+)* - South Australian petrol company which has been turned around from a two-decade dud to Australia's fourth-biggest energy company. 

BPT is a proven producer extracting oil from the Cooper/Eromanga and Gippsland Basin with nearly a decade of oil reserves.

I expect this company to be $6+ within two/three years if it keeps production up and a long-life of reserves and by luck, finds more oil. 

*Bought in SP AusNet, utility, @ 1.26 (now $1.20)* - This is an energy and gas distribution company with a monopoly in Victoria which is reaping benefits off high electricity prices.

It has a good plan to expand but its gearing level is around 58%, sustainable at the moment but under close watch. 

Would prefer it if management paid more debt down before expanding furthermore. 

I think this company will grow to $3 within two/three years, perhaps faster depending how quickly the credit-crunch becomes `so yesterday'.

*Bought in Oxiana, miner, $3.465 (now $3.20)* - I'm very confident Oxiana is going to be a winner. 

The company's gearing level is only 10% and is making mountainloads of profit from record copper and gold prices and I think it will be a great fit with Zinifex and a great takeover target.

The proven production, Prominent Hill expansion and Martable Gold project in Oxiana's books plus cash reserves and Izok/Dugald river projects from Zinifex are making the combined company like a mini-Rio Tinto star. 

I think Oxiana could blaze $10 or $15 within a year or two (BHP certainly did). 

*Bought in Neptune Marine Services, engineering, @ 65c* - The way I understand this company's business makes it a simple investment. 

It employs people and wields technology that allow divers and machines to fix oil rigs and oil pipes under water. 

It's generating money and its order book is full at the moment. 

It's a tad on the speculative side because of its short history but if it continues to generate revenue and increase in market size then this will be another winner hopefully. 

I don't know where this will go, depends on how much of a market darling it becomes, but atleast back at the $1 within a year with dividends (assuming the company's financials are factually stable). 

*Bought into ASX @ $36.05* - Pretty straightforward, ASX is a monopoly with puny debt that generates money off market volume and pays it back to shareholders. 

AXE and LiquidNet are planning to set up here but so what? BHP competes with Rio, CBA competes with Westpac, nothing new about competition! 

ASX is well-placed to use its financial strength to keep a lot of the trading volumes and over the long-term I think this a no-brainer. 

$80+ within five years, back to $50 within two.

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## vishalt

Here is a pie chart of my positions at the moment:







I'm looking to be overweight on financials in the short-term as the banking stocks are an absolute bargain. 

As Buffet said - be fearful when others are greedy and be greedy when others are fearful. 

People are pretty damn scared of the banks at the moment so I'm looking to pick up some Westpac if it goes below $21 and BoQ if it goes below $15. 

Of course I need to keep diversifying the portfolio and need some health care, IT, telecom and property stocks in there.

I have learnt the importance of diversity, BPT is holding my portfolio up at the moment while the others are continuing to be bearish/flat.


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## Sean K

Other suggestions to round it out a bit may be:

WOW. Consumer staple.
AMP. Wealth management.

And maybe even CWN as a growth stock, if you're not put off by the ethics, or lack of them....

Not 'recommendations' of course. I just see them fitting your new philosophy of longer term solid return. These stocks are part of Lonsec's Model Portfolio, which has outperformed for years.

DYOR, blah, blah, blah...

(not holding any - still playing the spec game)


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## Sean K

Another sector to consider is insurance.

QBE, IAG, ??


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## vishalt

Oh yeah WoW and QBE for sure, thanks Kennas. 

I'd like to see WoW go down to $24 before I buy it though, its P/E and price are too high in my opinion, but the sad thing is there's not really any choice - I don't understand Metcash and am not touching Wesfarmers due to its huge debt.

AMP and QBE are good ideas, I hope QBE softens a bit more, considering it use to be $35 its a good buy at the moment. 

Today I bought Westpac @ $22.25 - Imo Westpac's current position is that of a fortress in terms of liquidity and a good reputation with Gail Kelly as leader. 

They picked up St George at a cheap price and the bid makes sense to me. 

Far too attractive to pass up @ $22.


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## golfmos123

All fairly solid sorts of companies - not allocating a small part of the portfolio to some speccies????


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## Naked shorts

The reason why you would go out of the top 20, is because thoese stocks are far far more likely to go up 1000% in a day then BHP. 

It comes down to the age old rule, if you want a bigger return, you gota take more risk


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## Sean K

I'lll definately be looking at BHP soon, once the correction is over.

I think the supercycle is in tact, and this is a necessary correction after the free money dished out by the banks over the past few years. Well, many years. 

BRIC, then the rest of Latin America (especially Mexico) will run, and then in 100-150 years Africa. 

A very long term boom of resources, with the usual corrections on the way.

Keep the powder dry to make the most of the opportunities coming up.


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