Have you ever let it ride?

[Ken]

hi just a question????

have you ever been that confident ina stock that you have put more than 50% of your capital into that stock, or even 100% of the funds you would use to invest, or do you diversify into different sectors?

for example: if you had 50k, would you be that confident in your judgement to put it into one stock with the view that it may double, or multiply.

or are you not that confident in your abilities to choose a winning share.....

 

[cuttlefish]

never done it, though do sometimes go above 20% of total capital on one stock. (thats 20% of capital allocated to share trading/investment which only forms a subset of all investments across property, cash etc.).

I don't think its about backing your own judgement but about managing risk - no matter how good your stock picking and research abilities there's always the risk of getting side swiped by a completely unexpected event. (e.g. fraud by the business owners, war or some sort of political change, law changes etc). So allocating all capital to one stock is a recipe for coming unstuck one day.

 

[tech/a]

I have a seperate account for Smallcaps.

If I find one that is CLEARLY making new highs and in a trend I have and will pyramid.I have gone as far as 60% of funds.(I trade a max of 5 positions so 60% is equal to 3 trades,normally I only have 1 or 2 trades going at once,if any at all).

Never all at once.

Each pyramid I have its own stop loss and each trade has its exit---this is normally common to all pyramids.
If the stop is hit before the exit on a pyramid trade then thats closed out.
If the exit (Normally a trailing stop) is hit then all positions are exited.
Ive only ever pyramided 3 times once. Often twice.

Getting it "Right" is one thing--- maximising return another.
As you can see above its a risk adverse strategy.

 

[Ken]

good to know different strategies.

If you look at CQT it has gone from 4 cents to 90 cents in 12 months,

For those that have held all the way i think its amazing and credit due.

there have been other similar stories with ACB, MTN, PDN, where the price has soared after downward movement.

Would a buy and hold method be the only strategy to get the big returns?

Often stocks are manipulated to trigger the stop losses correct?

 

[tech/a]

If your talking 100s of % then yes.
Ive held QBE in my longterm potfolio (Different trading methodology to that explained above) since $7.90 and ZFX since $5.

But each trading timeframe is traded differently---well mine are.
You'll suffer fair sized Peak to Valley Drawdowns whilst holding very longterm trades.Where as short term trades wont suffer as badly.

 

[son of baglimit]

im aware of someone who is 100% with NMS - not exactly sure of total, but approx $80K worth

tripled his money lately, so doing ok.

while im not as 'focused' as he is, it certainly maintains 100% of my 'spec' cash.

doing ok.

 

[bvbfan]

Yes, did it with OXR

Bought a lot of it in 2000-2001 at 10c, then it proceeded to drop to 5-6c, and had told friends to get in then, no one did....

Held firm, actually bought some of them again for the first time in 4 years for long term account last week.

 

[imajica]

I have 100% in a single stock at the moment - sounds crazy but if the stock is solid, then why diversify and minimise profits?

I agree it is riskier - but investing in the stockmarket is always a risk.

 

[fleathedog]

What stock is it if you don't mind my asking?

 

[imajica]

INL - Intec

 

[thidoan]

yup i am in the same boat with imajica.
100% of my capital is in AZZ

 

[nioka]

I don't believe in having all my eggs in one basket, but I am often tempted. I am tempted at the moment to put everything into AGM but then do I sell ADI and AUT and find that Sugarloaf is an elephant and could rocket. Do I sell MOS when I have held for so long and they may have something going and TAS for the same reason. The same applies to YML and VPE.
I have a policy of having 14 different stocks with half of them speculative and the other half reasonably safe. Slow and steady wins the race and the ride is more enjoyable.

 

[larry123]

Depends what stock, I wouldnt put all my money into a speculative stock( common sense) but if It was a safer blue chip stock then I may be inclined to. Depends what you want to achieve.

 

[rico01]

I'm still riding ZFX from 3.15 and MLM from 19c and hope the metals still hold.
Cheers

 

[imajica]

having everything in one stock is riskier but can also be more rewarding. It all depends on your situation - I'm still fairly young and don't mind risking a bit to increase my portfolio - everybody is different

 

[speves]

I know it's not a smart tactic to load half of your investment into one area but sometimes you just get a warm and fuzzy over a single stock. Bought into IMA six months ago at 53c and have been adding as each ann confirmed the HM discovery. Now sitting at 50% with an average price of 98c and an SP of $2.50.

This time it paid off .......many a time it did not

Still letting it ride.....not only because I believe there is more growth but also because I dont want to give the tax man his share just yet....need to hold for a year!!

 

[thidoan]

have a look at BLR's shares/options holders.
if they sold at 10cents they'd be spewing.
i dont hold

 

[exberliner1]

When I first started speculating in Australia last July I took $10k and spent the lot buying AUM (CDU) at 3.50 - sold at $7 the next day.....

I then took my now $20k and put half each into THXO and CQTO - both of which doubled as well.....I had a very good July and August.

EB

 

[Knobby22]

Putting all your money into one stock and following the stock closely is a proven way to get rich.

Stockbrokers often come across people who do it. Unfortunately they also come across people with same attitude who have had disasters.

 

[vida]

The stop loss thing is something I never use. Its easy to set up now with the online brokers, to happen automatically. It makes them a lot of money, as the brokers don't care if clients sell at a loss, as long as they make their brokerage fee on every trade. The best investment is probably ETrade cause they will be raking it in with the set up of automatic stop losses such a big thing now and so many online traders buying/selling in short term. THere was recently the big rise in Benitec from .02cents to 09cents and then to .48 cents then down to .125 cents lately, which all happened during a four month period. The volatility was incredible on the way up and down and the stop losses triggered would have made the brokers a lot of fees. I avoid them personally, and ride it out as in the long run it makes more sense. I am trying to time the market, but to buy when a good investment when it is undervalued and then I keep it for many many years no matter what happens.

good to know different strategies.

If you look at CQT it has gone from 4 cents to 90 cents in 12 months,

For those that have held all the way i think its amazing and credit due.

there have been other similar stories with ACB, MTN, PDN, where the price has soared after downward movement.

Would a buy and hold method be the only strategy to get the big returns?

Often stocks are manipulated to trigger the stop losses correct?