Collapse followed by strategy

[noirua]

Following on from the "waffling at Random blog".
After losing virtually everything after the 1987 stock market crash, I stayed long enough to put my affairs in order. Then I left, and only returned to Australia on four occasions in the 20 years that followed.
Having worked away on three other occasions there were no fears and no encumbrances left. As always the answer is "just go".
My first trip back four years later fortunately coincided with a takeover of one of my many crashed investments. Mr Atkins offered 3.5c a share for Endeavor Resources (St Barbara Mines) and advised shareholders not to accept. He was forced to make the offer on buying the shares of the then bankrupt Mr Bond.
I saw a way back and bought as many shares as I could afford. It was a rags to riches story as the stock rocketed upwards not much short of 3 dollars.

After this I decided to remain 70% to 80% in cash or bonds.
Fortunately I've kept absolutely to this rule which is nearly faultless. Sudden falling share prices can suddenly raise the percentage of cash and bonds held, and that's something we learned about in 2008/9.

Good luck in your investments, take care my friends. As my losses in 1987 nearly cost me my life.

 

[noirua]

Three years ago I had solid ideas but unfortunately only partly followed them.

Moving to 70% cash immediately at the start of 2011 was the idea - but only did so slowly. As a result losses reached 35% of my savings in the first half year and of course 70% cash was reached because of this; not the idea at all.

In the second half of 2011, moving to taking short positions in ASX100 and FTSE100 shares worked very well and profits covered all the previous losses. Unfortunately, I kept my gold stocks far too long and UXA and WEC were sold down slowly, thus my red position was not by any means covered.

During 2012 I moved sideways, only slowly taking the advice to reduce trading and the amount riding in each position by the end of the year. All the profits in 2010 were wiped out by now and one third of my Felix Resources gains in 2009/10. Losses now well into six figures.

In 2013 trading only lightly at about 10% of 2010. Cash at 75% meant losses must reduce and a few USA stocks, sold in December, produced much needed profits. Careful long and short positions went well during the year and only small punts on ASX, TSXV and AIM shares reduced my continuing losses. This time reducing cash and buying more American stocks would have been far better: I new what to do and failed to take my own advice.

2014 has gone quite well with a few AIM punts working well early on Bought a lot of JMS before trading on ASX was halted, now a private unquoted company -- director buying prompted this and time will tell.
Looking around the bombed out mining sector now and just picking up a few stocks with solid cash positions or, in my opinion, crazy low prices.

Cash position at 50% again with money sitting in many friendless resource shares. The weak Aussie should turn them round in due course and it takes, a sort of, bravery to keep with them.

Good fortune - noi

 

[Sean K]

Nice to see you post. We all went through an absolutely amazing investment period. We will rise again!

 

[noirua]

In the last 19 months investing or gambling really has gone well though luck seems to have played a big part in that - maybe little good fortune for 5 years may just be that, luck returning.

One improvement has been taking losses more quickly, might just be nervousness though hopefully a good bit more than that. Ignoring sudden jumps in stock prices has helped as jumping in often means sitting on losses and having a portfolio of losers - selling losers means you have none or very few.

A timely moving of A$s into US$s helped a lot though should have moved C$s to US$s as well, still it's worked out well. May move back into Aussies and quite soon.

Even won the ASF stock competition and runner up the month following - nowhere in the 9 years before that. Punted a lot on the stocks and sold out at the top - unusual for me.

Gradually adding to gold stocks but carefully and a few other miners. Keeping a lot of cash as markets are stressed and putting too much cash in transfers the stress to me and sleepless nights follow.

Stopped taking short and long positions about 4 months ago and pleased about that as recent market moves show what a gamble that is now.

Take care my friends as aimless investing will bring us down easily and recovery is always difficult and financially painful - good fortune noi