Hi Vader,
The last 6 months or so will (no doubt) have provided a tumultuous introduction to trading the market/s. Would you care to share your experiences?
Did market trading and behaviour prove to be just like you thought it would be?
If not, what aspects were different from expected?
I haven't been on the forums that much lately, so missed this thread popping back up, but you're right - it's been about 6 months now, so well past time for a little update.
Cutting right to the chase - as of today I'm down a little under 2% (taking into account all dividends received and all interest charged)... not exactly fantastic, I've certainly made some mistakes, but it's been an interesting period. I've learnt a lot and managed to have a few good wins in amongst it all, so am by no means disillusioned about anything and from all warnings the initial 'learing period' hasn't been too costly (at least not yet).
Have I stuck to what I thought would be my initial plan during this six months? Absolutely not. My approach has changed a couple of times as events unfolded and I've taken notice of what's happened, I acknowledge that I'm still not completely there.
So let's start with the mistakes shall we?
One of the first companies I bought was
CSR. After lots of reading, I formed a conclusion that they had plenty of cash and were ready to take advantage of the housing market when it eventually starts to track upwards (I felt that the building industry couldn't get much lower, so just about anything is up from here)... I bought in at $1.52 and almost immediately saw it drop into the $1.30's... some panic started to creep in and I sold out after about a month at $1.38. In hind sight... I'd purchased them for a long term reason and sold back after some (further) short term drop - I was spooked by the continuation of the downward trend and wasn't confident enough in my initial appraisal to back myself.
Today, CSR are at $1.89 and while anything can still obviously happen, they've been performing really well over the past couple of months... I'll probably have another look at them in the near future, they still may be worth buying, but I'll need to get past a psychological hurdle of them being my first realised loss.
Another mistake I made was with
CCC, a small coal company in South Africa that were expanding their operations with a new mine due to start production in September... I bought in at 10c, kept watching the train wreck for far too long and eventually sold out at 6c (they are currently 4.2c). Not only did I hold them too long, but the more experience I got watching their share price educated me that I really shouldn't have bought them in the first place. A dropping share price is one thing, but CCC seem to have a history of continually sliding on what on the face of it seems to be relatively good news and expectation. They keep failing to deliver despite promising much - this also isn't helped by having nearly 500m shares on issue that trade extremely fast... maybe there is money to be made there one day, but it's definitely not a 'beginner friendly' stock and has now got big red lines through it for me never to invest in again.
...this now brings me to
SDM - it's too early to tell if they are a mistake or not, although the fact that I have ridden them down so far doesn't exactly look good. SDM are a top quality mining contractor IMO - yes, they are under pressure with the issues suffering the mining industry, but they seem to have take a way bigger hit than they should have. Their main saving points IMO is that they've got a management team who have hit a number of home runs in the past several years and they have no net debt and $69m in additional funds to see them through.
I bought them at an average price of $1.375, sold off a third of my holdings at $1.07 as I wasn't comfortable with the weighting they had in my overall portfolio (about 15% of my funds at the time). The share price currently sits at $0.88. From a total portfolio perspective they represent a loss of approx. 6% at their current price, so have had a major bearing on my overall results. I'm not prepared to admit defeat on them yet though - I do believe they are a quality company and will be a good long term investment. The sliding share price is softened a little by the good dividend yield they pay (and their strong cash position should help maintain that too), but I'm going to be faced with a decision soon as to whether I average down again, now they've really dropped off in the last couple of weeks or just sit back and ride it out (I'm pretty sure somewhere early on in this thread I said I definitely wouldn't average down, lol... having a high opinion of the company, offset by no net debt and a good dividend seems to have changed my mind though... whether for better or worse I guess we'll find out in the next 12 months or so)
So what have been the wins then?
Well, the first ever shares I bought were in
CSE. To cut a long story short, they own 11m shares in SYR who found a lot of graphite and have had a nice run over the last 6 months or so... I didn't get on the early big multi-bagger action, but the CSE share price is obviously tied very closely to SYR who have been bouncing around between $2.30 and $2.90 pretty consistently every couple of months. After watching the cycle through a couple of these bounces, I finally figured out that these are a good candidate for some short-term trading. I've bought and sold them a couple of times now (current round bought at 17.5c and sold off half last week at 20.5c - holding the other half to see what SYR does, hasn't crashed back to $2.30 yet, but hasn't closed above $3 either - which will be a telling factor I reckon... see, getting some technical analysis in there, lol)... end result, up over $3,000 ($1,000 unrealised) on CSE so far... having lots of fun
Next up is
OKN. As mentioned on their company thread, I work for these guys, bought in at an average price of $1.10 and was targeting $1.30-$1.50 over the next 12 months. They ended up jumping pretty quickly to high $1.40's and I sold off the majority of my shares at $1.37 before offloading the remaining ones at $1.22 last week on the announcement that the ACT office is struggling with a slowdown of federal spending and earnings are likely to be impacted. I don't think it'll be that long before positive news starts to flow again (probably not before at least February though as the Christmas period is typically really slow), so am planning on buying these back once the price drops back down below $1.10 again (shouldn't be too long, and will represent a good dividend yield there too).
A few others that have done really well...
GXL - Purchased at $2.36, sold half at $2.88, have watched them continue to climb to $3.20
CZZ - Purchased at $2.03, current price $2.20
YTC - (small holding) Purchased at $0.24, sold most at $0.305, bought some back at $0.23, currently at $0.28 (another fun little one)
...and finally, one that I'm hoping will be a star in the making:
HDG - Coal explorer in Botswana... sitting on a huge resource on what I think is pretty high quality, near surface coal. Recently completed a measured JORC resource, doing a feasibility study and looking to bring on a partner to help setup a little power station that will help fund future expansion. Currently taking up a fairly high weighting in my portfolio, and I bought in at an average of 13c (currently at 12c), but they just released a research report they commissioned (so take with several large grains of salt, but I agree with most of it - available from their website), that rates them as a speculative buy and gives a 12 month target price of 58c... let's just say if it gets anywhere near that I'll be laughing
Anyway - so what is the #1 thing I've learned over the last six months?
Don't rush out and buy because you think you'll get left behind when the price rockets up (usually on the back of some good news coming out)... it's possible that you might, but more likely that you'll get another chance fairly soon anyway... unless it was realy, really good news in which case you're probably already too late to benefit from it anyway.
...I've fallen for that trap a couple of times (CCC was one example, but there have been a couple of other less disasterous ones).
Thanks for reading... I'll probably do another update in another six months (hopefully SDM and HDG are in really nice positions by then, lol), but given the prior speed this thread took off at I doubt I'll stoke the fires much more than that as it was just starting to derail and wasn't helping anyone