ASX shockers

[mcgrath111]

SRX 09/12/2016 35%! Ouchhh

 

[galumay]

Did VOC get mentioned?

 

[skc]

SRX 09/12/2016 35%! Ouchhh

Ouch indeed.

Did VOC get mentioned?

It was second name mentioned on the first post.

 

[galumay]

It was second name mentioned on the first post.

Yeah....well I can see that now. *heads off to optometrist*

 

[mcgrath111]

How about AAD - 22/11/2016

Beyond me why people are buying into this considering the dreamworld shutdown & lawsuits to follow.
Each to their own.

 

[So_Cynical]

How about AAD - 22/11/2016

Beyond me why people are buying into this considering the dreamworld shutdown & lawsuits to follow.
Each to their own.

Contrarian
noun
1.
a person who opposes or rejects popular opinion, especially in stock exchange dealing.
"it has become fashionable to be a stock-market contrarian"

 

[UMike]

Contrarian
...
"it has become fashionable to be a stock-market contrarian"

Yea but is it profitable????

 

[pixel]

Yea but is it profitable????

that depends...
Some traders decide to take a contrarian stance where the Market at large got it wrong.
e.g. buying PRG in November around $1.40 could be considered contrarian.
Or when BAL comes out of its t/halt, I might again take a contrarian approach.
But those occasions are few and far between.

 

[So_Cynical]

Yea but is it profitable????

Sure can but like all strategy's some discipline in capital allocation and stock selection is required.

A falling share price sparks the interest, an examination of the reasons why the price is falling and the fundamentals of the business leads to an assessment of the level of over selling or not.

Knife selection - some knifes are judged to be too difficult and or to dangerous to catch, others not so and then its a decision of when to catch, choose your knife and then choose the time, half the time you wont have much time before the knife transforms into a rising knife.

------------------------------

Example: CKF floated in late 2011 at $2.50 a couple of shock announcements later and the SP was trading at around $1 per share, that got my interest and started some discussion at ASF.

https://www.aussiestockforums.com/forums/showthread.php?t=23212

I entered a little early at $1.06 and watched the knife fall at little further to around 90c from memory and then witnessed the slow and steady rise, i did my usual de-risk part exit a month later at $1.11 a little early as per usual and then held my remaining shares for the next 4 and a half years collecting many dividends along the way the selling half my shares yesterday for a profit of 504%
~

 

[galumay]

Yea but is it profitable????

As others have posted, it certainly can be. I did very well with CDA after the market slashed their price on the back of some events I considered to be one offs and not reflective of the true value of the business, I also have done well with buying MMS after they were hammered by proposed legislative change (that I correctly assessed would never happen), and NWH - a case where I held prior to bad news that absolutely crashed the price, i grabbed at the 'falling knife" all the way down and am now over 100% in profit. I recently bought VOC at low $4 believing the market was wrong again - time will tell if i am correct or not. I have got it wrong too sometimes! VET i lost everything - but i did have a very small position due to the catastrophic risk.

 

[ROE]

As others have posted, it certainly can be. I did very well with CDA after the market slashed their price on the back of some events I considered to be one offs and not reflective of the true value of the business, I also have done well with buying MMS after they were hammered by proposed legislative change (that I correctly assessed would never happen), and NWH - a case where I held prior to bad news that absolutely crashed the price, i grabbed at the 'falling knife" all the way down and am now over 100% in profit. I recently bought VOC at low $4 believing the market was wrong again - time will tell if i am correct or not. I have got it wrong too sometimes! VET i lost everything - but i did have a very small position due to the catastrophic risk.

Contrian works provided you do the homework and know the business, buying just because something has fallen could be bad for your capital as in my case with VET

I lost on VET but there is no love lost there, it part of the risk most other pick paid off handsomely to cover a few of VET event.

I put in 30-40K in VET and lost it all but that didnt even make much difference to my return for the year the others stock more than covered it.

in hindsight VET was a bad move and I take steps not to do it again , I was having a lot of
cash back then as I cash out some of the large wind fall and rush to deploy the cash, bad move just like Warren Buffett when he has too much cash he buy ****ty business like Airlines

 

[ROE]

Yea but is it profitable????

Very profitable, I been doing it for years not a single year of negative return even with a flop and ****ty pick throwed in every now and then.

A lot of stocks the guys mentioned here I do own and bought during their fall like CKF, CCP, SIQ, PGH etc ... look at them now crazy return

and many years ago I have DMP when it beaten and bruise by the keyboard warrior about people not eating pizza cos it is unhealthy but that the one I sold way too early hehe

 

[mcgrath111]

Contrarian
noun
1.
a person who opposes or rejects popular opinion, especially in stock exchange dealing.
"it has become fashionable to be a stock-market contrarian"

Nearly all the stocks I pick are falling, so that would make a fashionable contrarian

I like to think theres a difference between being contrarian in stocks that are no long loved & stocks that have heavy future law suits to follow.

...on a side note PAC looks like its heading back down again.

 

[So_Cynical]

Nearly all the stocks I pick are falling, so that would make a fashionable contrarian

I like to think theres a difference between being contrarian in stocks that are no long loved & stocks that have heavy future law suits to follow.

AAD ok, the market hates big legal action, AAD will have insurance of course, Insurance company may well write them a small check and walk away, could be any of those last resort insurers.

I made a great trade on Suncorp once after that massive SEQ flood, shareholders panic first and ask questions later, disaster can be very profitable, one of my first ever successful trades was STO after their plant blew up.

...on a side note PAC looks like its heading back down again.

Double bottom, $3.60 ish???

In comparison this is SP weakness without disaster.

 

[PZ99]

LWP... down 80%; there's a dedicated thread on another site for investors who lost money on this, some in the tens of thousands

 

[skc]

PRU 16/12/2016
TRY 15/12/2016

RE: discussions on contrarians.

Interesting discussion guys. The contrarians approach wouldn't suit everyone because many people
- don't have to skill to analyse the situation clearly
- don't have the discipline to size position correctly
- don't have the stomach and patience to hold, especially when things get offside

This was a great piece by Forager earlier this year one BAL vs WHC.

On 10 February this year, Whitehaven’s share price hit a low of $0.365, giving it a market capitalisation of $362 million. On that day you could have bought the entire company three times over with the market capitalisation of Bellamy’s Australia (it closed at $11.55 per share, giving it a market capitalisation of $1.1 billion).

https://foragerfunds.com/bristlemouth/why-coal-could-be-a-better-bet-than-baby-food/

Today WHC has market cap of $2.7B while BAL has shrunk to $650m... and the ratio will look even worse/better when BAL comes out of suspension later this week.

Being contrarian is all about questioning the prevailing expectations. ASX shockers are names where prevailing expectations turned out to be very wrong.

 

[galumay]

We can probably add MYX, down nearly 50% on year highs, another potential contrarian play.

 

[skc]

We can probably add MYX, down nearly 50% on year highs, another potential contrarian play.

Careful using that as your starting point (I am sure your analysis runs deeper than that). It's down 50% from year high which was 100%+ from the start of the year. It could mean the stock is oversold or it could mean the stock was simply overbought (the answer's somewhere in between no doubt). And on that basis I don't qualify MYX as shocker.

As I said I think a lot of stuff got overbought this year prior to the last quarter. It's not showing on the capitalisation-weighted index because asx20 is doing so well. But there's a correction happening in that space whether there are seemingly bad/one-off news or not. Good examples include IPD, CAT, IFN, NTC, PME, ADA, WEB, NXT etc.

 

[craft]

Being contrarian is all about questioning the prevailing expectations. ASX shockers are names where prevailing expectations turned out to be very wrong.

But in the long run will it be the prevailing expectations before the price plunge or after the price plunge that turn out to best represent the long term prospects of the company? However severe, short term price action doesn't seem to me to contain a lot of thoughtful information about long term prospects. Welcome back stock pickers market - I have missed you as the P/E's climbed in some of the area's that I like to hunt.


I hate the term contrarian - As an individual with individual opinions and ideas about some things, sometimes I disagree with the market and sometimes I agree. So am I a conformist or a contrarian? Taking action tends to be most wealth creative when you disagree (and the big caveat - you are right) with the market, so the action from that perspective may be generally contrarian, but being contrarian at all times and in all aspects which is how the contrarian label tends to be popularly conceived is not descriptive at all of good investing IMO.

 

[skc]

TCH 21/12/2016