# How are you going to spot bargains? Opportunity isn't far away - how will you know?



## tech/a (16 March 2011)

So Far on this forum the best advice Ive seen (which is pretty terrible) is keep buying as the knife falls.
*Broadway* made a very astute observation before the market turned (In the XJO thread) and I'll be very supprised if the majority of stocks smashed right now dont display a very common pattern.
This will present a brief opportunity to some who know what they are looking for to take advantage of a correction in those stocks to around 50% of that lost.

You may well see it in the Index/s

So what are you looking for?


----------



## Logique (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> So Far on this forum the best advice Ive seen (which is pretty terrible) is *keep buying as the knife falls*....
> ....So what are you looking for?



Geez Tech, what's the worst advice then.
I think we'll need to see some positive news coming out of Japan, and when will that will be. So much for them to work through.


----------



## explod (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> So Far on this forum the best advice Ive seen (which is pretty terrible) is keep buying as the knife falls.
> *Broadway* made a very astute observation before the market turned (In the XJO thread) and I'll be very supprised if the majority of stocks smashed right now dont display a very common pattern.
> This will present a brief opportunity to some who know what they are looking for to take advantage of a correction in those stocks to around 50% of that lost.
> 
> ...




Not too sure about this tech, I learnt "never try to catch a falling knife."

One needs to stand back and wait for a confirmed bottom and only back in on a rise with some strength to it.


----------



## tech/a (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



> So Far on this forum the best advice Ive seen (which is pretty terrible) is keep buying as the knife falls.




It appears *sarcasm* is hard to spot here.

Its already underway in the Index. (SPI)


----------



## explod (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> It appears *sarcasm* is hard to spot here.
> 
> Its already underway in the Index. (SPI)




Who *me.*?

The terrible issues in Japan in my view based on their nature and behaviour throughout history is that the problems will be understated.  Confirmed in a communicated with a mate who lives in that area of the world overnight.

I may be wrong but this situation has potential to become worse before it improves.  The markets may be in for further downside and it is only sensible to front these possibilities.

However volatility of course is very good for the short term trader and there is plenty of it.


----------



## explod (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> It appears *sarcasm* is hard to spot here.
> 
> Its already underway in the Index. (SPI)




Over my head Tech, but is know as "the lowest form of wit" so reap as sewn.


----------



## Julia (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



explod said:


> Who *me.*?
> 
> The terrible issues in Japan in my view based on their nature and behaviour throughout history is that the problems will be understated.  Confirmed in a communicated with a mate who lives in that area of the world overnight.
> 
> ...



explod, I don't mean to be putting words in Tech's mouth, but I imagine the sarcasm to which he referred was his own remark about "the best advice" in his initial post.
He will correct me if I'm wrong.


----------



## Gringotts Bank (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

What broadway said is that a whole range of stocks were making similar looking pattern and that they were also reflecting the the XJO's patterns.  That doesn't just happen at market turning points, _it happens every single day of the year!_


----------



## tech/a (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



Julia said:


> explod, I don't mean to be putting words in Tech's mouth, but I imagine the sarcasm to which he referred was his own remark about "the best advice" in his initial post.
> He will correct me if I'm wrong.




Yes your right Julia.---not directed at anyone.



> What broadway said is that a whole range of stocks were making similar looking pattern and that they were also reflecting the the XJO's patterns. That doesn't just happen at market turning points, it happens every single day of the year!




Yes right.
But while they may show similarities its pretty obvious that at *IMPORTANT* turning points many not even listed in the XJO display strong top patterns/price action and at bottoms strong bottoming patterns and price action.


----------



## explod (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



Julia said:


> explod, I don't mean to be putting words in Tech's mouth, but I imagine the sarcasm to which he referred was his own remark about "the best advice" in his initial post.
> He will correct me if I'm wrong.




I did eventually pick that up Julia.

But do love you for your continued care of an old foot in mouth  

Called male schetoma, if it is in front of one it is not there.   Or as an old collegue used to say "read the screen james"


----------



## skc (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

Look for charts after 9/11 terrorists attack for some possible behaviour...


----------



## professor_frink (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



skc said:


> Look for charts after 9/11 terrorists attack for some possible behaviour...




red line is the day before the attacks:




For another view, here's the nikkei, sp500 and all ords after the kobe quake in 1995:


----------



## tech/a (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



skc said:


> Look for charts after 9/11 terrorists attack for some possible behaviour...




yes agree.


----------



## professor_frink (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> yes agree.




agree on which part of the picture though?

2 things happened after sept 2001:

1. there was a rally shortly after.
2. the market fell by 25% in the 13 months following.


----------



## Gringotts Bank (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

I'm using CDU for that purpose.  Different scenario but more recent, therefore I'm hoping a bit more representative of traders' moods.


----------



## Intrinsic Value (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

Well it is relatively simply if you are a value investor.

You look for good quality stocks,(companies with low levels of debt, high and increasing ROE, competitive advantage) that are trading at a significant discount to their intrinsic value.

Trying to time the bottom of the market is almost impossible and buying bad companies because their share price has gone down is also not a bright idea.

Hope that helps.


----------



## notabclearning (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

For me Woolworths is a screeming buy considering todays price action.


----------



## tech/a (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



professor_frink said:


> agree on which part of the picture though?
> 
> 2 things happened after sept 2001:
> 
> ...




Most of it.
My analysis tells me this is a wave 3 (arguably that wave has ended) and we are going into a wave 4 with will see a retracement of between .382 and .618 of Wave 3 followed by wave 5.

So similar in many respects
.
*I find that the wave theory reflects emotional sentiment time and again.*

Eg (on a down move) the 5 waves

(1) Some selling so some join the crowd.
(2) Some buying as the selling has made things look cheap for some.
(3) Selling renews with vengence and sellers come in---this is the longest wave and extends as it is sold off harder and harder.
(4) The first wave of bargain hunters enter and pick up "seemingly" bargains.
(5) Those caught take advantage of the new buyers in Wave 4 and sell out this is why this wave will be choppy and appear directionless---for some time often a triangle.
But once the low of 3 is taken out selling resumes UNTIL we see the EXHAUSTION of supply at Wave 5's end.


----------



## professor_frink (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

so you think we'll rally from here before new lows, but your not sure if it's a bear market or not?


----------



## namrog (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



Intrinsic Value said:


> Well it is relatively simply if you are a value investor.
> 
> You look for good quality stocks,(companies with low levels of debt, high and increasing ROE, competitive advantage) that are trading at a significant discount to their intrinsic value.
> 
> Hope that helps.




I agree that this is when you will know if you're spotting a bargain or not, you then need an entry strategy, at this stage I use a phased entry, just in case...


----------



## sammy84 (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



notabclearning said:


> For me Woolworths is a screeming buy considering todays price action.




Beg to differ. The price action of Woolworths(WOW) has not been screaming anything for a long time. Chart below is from April 2009 until now.


----------



## tech/a (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



namrog said:


> I agree that this is when you will know if you're spotting a bargain or not, you then need an entry strategy, at this stage I use a phased entry, just in case...




By The time you work that put opportunity will be well and truly gone
Of be interested on some examples to follow say 5 or so
Anyone?


----------



## toocool (16 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



sammy84 said:


> Beg to differ. The price action of Woolworths(WOW) has not been screaming anything for a long time. Chart below is from April 2009 until now.
> View attachment 41893




Also a bit of uncertany over their cap-ex with the hardware store venture too.


----------



## Intrinsic Value (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

If you are looking at ASX 200 where there really is not much value at the moment you could do worse than consider ANZ it is now trading at about 15 percent discount to my IV and of course they pay quite good dividends.


----------



## VSntchr (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



Intrinsic Value said:


> If you are looking at ASX 200 where there really is not much value at the moment you could do worse than consider ANZ it is now trading at about 15 percent discount to my IV and of course they pay quite good dividends.




I have ANZ roughly the same as you...I admit to holding a decent amount. Although I beleive CBA is still the dominant force in AUS, ANZ's growth in Asia is exciting me enough to hold on at least...


----------



## BrightGreenGlow (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

My thoughts would be if you want long term results.. maybe 1 year? I'd seriously looking by buy back into the market very shortly and especially in alt. energy, oil and gas and coal. These stocks have fallen due to massive media hype. I pray nothing worse happens for the Japanese people but the market has fallen too far. If you want a punt/gamble get into uranium shortly and sell on a quick rise if we get some good news.

Trying to pick a bottom is far too hard on uncertain news in Japan... if you feel the Japan thing wont get too much worse then BUY just about anything.... everything has fallen due to this tsumani and nuclear damage. 

These are just my thoughts and views. I highly doubt many of you guys will agree but we'll see how things are in a year?


----------



## namrog (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> By The time you work that put opportunity will be well and truly gone
> ?




What do you mean ?  there's nothing to work out, if a share is trading at $1 for example having fallen from say $1-50, and has asset backing of a dollar a share, then you know you're in the ball park roughly, from there I would usually study the chart, have a nibble with say 20 % of allocated funds, and then play it at something like 25 cent increments, averaging either down or up or both..
I'm not talking about penny dreadfulls here even though i've used $1 as an example

It could be argued that opportunity will be well and truly gone if you wait for the same share to bottom at say 70 cents and by the time the trend is reversed and confirmed, is back trading at $1-20... 

What we're taking about here, is shares being sold off during a market rout, and not something that's company specific....

So tell me , how would you play that situation, say we're at the stage where the sp is 95 cents, and you're intersted in buying into this company...


----------



## explod (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



BrightGreenGlow said:


> My thoughts would be if you want long term results.. maybe 1 year? I'd seriously looking by buy back into the market very shortly and especially in alt. energy, oil and gas and coal. These stocks have fallen due to massive media hype. I pray nothing worse happens for the Japanese people but the market has fallen too far. If you want a punt/gamble get into uranium shortly and sell on a quick rise if we get some good news.
> 
> Trying to pick a bottom is far too hard on uncertain news in Japan... if you feel the Japan thing wont get too much worse then BUY just about anything.... everything has fallen due to this tsumani and nuclear damage.
> 
> These are just my thoughts and views. I highly doubt many of you guys will agree but we'll see how things are in a year?




If the Dow has a couple of more days like the last it will break below an uptrend line established from its low in March 09.  With the carry trade in trouble overnight we see a similar situation (to 08/09) arising whereby margin calls are forcing sales for cash.

So I would not be calling any bottom yet.  It may be as you say but for mine I prefer to await some confidence in the markets first.  We are a long way from that IMHO


----------



## tech/a (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



> So tell me , how would you play that situation, say we're at the stage where the sp is 95 cents, and you're intersted in buying into this company...




Price /Volume/Pattern.
No more no less.
Not interested in anything else but how the buyers and sellers percieve price NOW.
If Im wrong Ill be wrong for a very short time --Ill cut loss fast.
If I'm right Ill be right for as long as Price/Volume and Pattern tell me I am.
Takes seconds to trade.

If it tells me nothing then thats what I'll do.


----------



## namrog (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> Price /Volume/Pattern.
> No more no less.
> Not interested in anything else but how the buyers and sellers percieve price NOW.
> If Im wrong Ill be wrong for a very short time --Ill cut loss fast.
> ...




That's fair enough if you're trading it for a very short period , and seconds matter.
I understood the header, maybe mistakenly to mean " how will you spot a bargain, as regards investing as opposed to a trading opportunity..

I should clarify, and I could have done with a lot less words, that using asset backing per share is a starting point, thats all, no more no less..

I do understand what you're geting at and where you're coming from, I listen to what you have to say on the various threads and in radges rag as well..


----------



## tech/a (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



namrog said:


> That's fair enough if you're trading it for a very short period , and seconds matter.




No I can and have used the exact same nethod for longer term ---not years but weeks.
I can and have used a weekly chart.Right now its short term SPI and FTSE index trading with 2 open Share trades.



> I understood the header, maybe mistakenly to mean " how will you spot a bargain, as regards investing as opposed to a trading opportunity..




An opportunity is an opportunity time is quantified by the purchaser.



> I should clarify, and I could have done with a lot less words, that using asset backing per share is a starting point, thats all, no more no less..
> 
> I do understand what you're geting at and where you're coming from, I listen to what you have to say on the various threads and in radges rag as well..




Yes you could but that would give you a sizable list I would argue.
That list could be then best traded (in my view) if you had a trigger that you looked for to best time a low risk High reward opportunity.
If its wrong then I personally would be out with minimal damage but if right holding opportunity.

The technical list will be shorter I would argue.


----------



## namrog (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> No I can and have used the exact same nethod for longer term ---not years but weeks.
> I can and have used a weekly chart.Right now its short term SPI and FTSE index trading with 2 open Share trades.
> 
> 
> ...




I can't disagree with anything you've said there, but it would apply to trading any market, top to bottom and little to do with spoting a bargain.

Having said that,  I guess there are bargains when shorting an overbought top, same as buying an oversold bottom, again it's a personal thing and what your definition of a bargain is, coupled to your trading / investment style..


----------



## tech/a (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



namrog said:


> I can't disagree with anything you've said there, but it would apply to trading any market, top to bottom and little to do with spoting a bargain.
> 
> Having said that,  I guess there are bargains when shorting an overbought top, same as buying an oversold bottom, again it's a personal thing and what your definition of a bargain is, coupled to your trading / investment style..




No

There are Price and volume Patterns which alert specifically to turns in very fast moves.
They point to exhaustion.
If you can spot it then there is opportunity for low risk entries.
Many thought it was yesterday!
But there was/is little to indicate exhaustion of supply.


----------



## namrog (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> No
> 
> There are Price and volume Patterns which alert specifically to turns in very fast moves.
> They point to exhaustion.
> ...




It seems that no matter what I say, your first word is going to be "NO"

There is no such thing as a price volume pattern that can guanantee a turn in an equity or index, there are times that those with an experienced eye can latch onto market action, and act, with a high expectation that they will be right , but how does this become a bargain, again I think you're confusing the term Bargain with trading opportunity..

Enough of this, I'm off for a few pints of Guinness, Happy St Pats day...

Let us know when you spot a bargain,  cheers...


----------



## tech/a (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

No such thing really
PEN
Thread #1004 post well before the down turn
XAO thread at the turn 7th March
Check my comments there

Now you should know why I say
NO!!!


----------



## professor_frink (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> No such thing really
> PEN
> Thread #1004 post well before the down turn
> XAO thread at the turn 7th March
> ...





When you say NO it's just as likely to be wrong as right. Just like everyone else in this game.


----------



## tech/a (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



professor_frink said:


> When you say NO it's just as likely to be wrong as right. Just like everyone else in this game.




Fair enough I'll keep to myself then
Thought there maybe some interesting content an perhaps learning for some
Obviously not
No problem


----------



## namrog (17 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



tech/a said:


> No such thing really
> PEN
> Thread #1004 post well before the down turn
> XAO thread at the turn 7th March
> ...




Had a look at your PEN post, great call, I'll have a guess what it was based on, but you'll probably tell me  No  it wasn't.
An abc correction after a 5 leg up, with a fib retracement into the typical 50 to 61.8 area...

Havent looked at the XAO thread but I'm aware of your stance there going back a couple of months, and have silently agreed with you...

Everyone gets it right sometimes and can come up with past examples, ( steady ),, you, I believe get it right a lot more than most, and I would put that down to sheer experience.

I still say, what you have are trading opportunities, so I'll leave it at that, we obviously interpret the term spotting bargains differently..


----------



## suhm (18 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*

Have to agree with tech here, i doubt this is the bottom, no fear in the streets, some blood esp in the uranium sector and japan but otherwise its more like a rapid correction, the news report aren't bearish enough and far too many people still trying to catch the falling knife and positioning for an upswing. Just look at the great day to deploy capital thread, the market goes down for 2 days and people are already ready to go all in.

Even if this is the bottom you will likely have a long time to deploy your capital as there is too much volatility for this to be a bull market, there should be slow steady gains not this bs up down movement with my portfolio going -4%, +3% purely on sentiment.

That being said I always hedge my bets, during downturns i only trim the stocks that I think have the least upside which is now and I still buy on news, so in that way I am a perma bull. 

To each their own, everyone makes money in the market or loses it in different ways or else there would be very little trading as we'd all be doing the same thing, but I've learnt my lesson about relative value, just because you think something is below "intrinsic value" that doesn't mean that you will make money from it. The market has already taken the price of your company below its fair value so there is no reason why it can't go down more.

The share price will only go up on a sustainable basis if the company improves fundamentally and helps drive away selling supply or selling supply is exhausted, I.e. everyone who wants to sell already has and you will see the share price creep up again.


P.S. On a personal note I find the posts from people quoting specific figures of what the price of a company should be worth ridiculous, its a reasonable tool and fine to use it for large stable companies like WOW but it is just one valuation like, PE, P/B, PEG, DCF and the many others. To me it seems like Roger Montgomery is the head of a cult, an Australian version of Buffet but at least Buffet has a decent track record. Look at Montgomery's time at clime capital backed CCP to the hilt, then blamed management for misleading him and losing money, bails out when they are nearly at their bottom and misses the huge run up in SP, his mantra is to buy at a discount to intrinsic value and sell when it is a premium to it but he did the polar opposite.


----------



## Intrinsic Value (18 March 2011)

*Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*



suhm said:


> Have to agree with tech here, i doubt this is the bottom, no fear in the streets, some blood esp in the uranium sector and japan but otherwise its more like a rapid correction, the news report aren't bearish enough and far too many people still trying to catch the falling knife and positioning for an upswing. Just look at the great day to deploy capital thread, the market goes down for 2 days and people are already ready to go all in.
> 
> Even if this is the bottom you will likely have a long time to deploy your capital as there is too much volatility for this to be a bull market, there should be slow steady gains not this bs up down movement with my portfolio going -4%, +3% purely on sentiment.
> 
> ...




RE - RM I am pretty sure he wasn't using the same valuation techniques when he was at Clime Capital as he is today. He was I think using ROE as the main tool for valuing companies.

Secondly of course no matter what valuation method you use you will never get it right everytime.

Thirdly the Buffet or RM method is probably still the most risk adverse approach of all methods. The amount of speculation and gamble which is inhererent in any invesment is mininised by the approach outlined by Buffet and adapted by RM.

Lastly RMs track record is pretty good over the last year. The three star performers that he plugged FGE, MCE and MLD nearly all tripled in value over the year. 

I didn't see anyone else come up with these sort of companies or tip them?


----------



## mr. jeff (18 March 2011)

*Re: How are you going to spot bargains? Opportunity isn't far away - how will you kno*

prolly the wrong place for it but want to post this quick so that if you feel it may be a good time to step aside just in case this escalates, you have the chance...




Could be the start of some international political clashes but I declare I don't know anything about what is happening really may be just getting affected by the media...


----------



## Huskar (1 April 2020)

suhm said:


> *Re: How are you going to spot bargains. Opportunity isn't far away - how will you kno*
> 
> Have to agree with tech here, i doubt this is the bottom, no fear in the streets, some blood esp in the uranium sector and japan but otherwise its more like a rapid correction, the news report aren't bearish enough and far too many people still trying to catch the falling knife and positioning for an upswing. Just look at the great day to deploy capital thread, the market goes down for 2 days and people are already ready to go all in.
> 
> ...




Could not agree more suhm, especially about Roger and CCP I have watched that for a long time and remember him sprouting it big time just before its fall from grace from $12 to 15c... Of course, he was correct in the long-term because if you held the whole way through you could have got out at $30 .

What are thoughts on CCP now and similar eg MNY?


----------

