Investing my first $1500

[WonkeyDonkey]

Have just read through the whole thread.
Big thank you to nioka for actually putting up his hard earned to demonstrate that it is possible. I too am a newbie who has just decided to invest and this thread was one that helped me make that decision.
Cheers

 

[youngone]

Have also just read the whole thread. Thanks Noika.

 

[luckyforteja]

Have just read the whole thread.
It is really unbelievable to see someone actually invest so much time, effort and his money to prove that you can start investing with $1500/-

This thread has been very educational.

I have a question for you on your quote

I agree with yr later post that says 5 x 1K positions is preferable to 1x5K

It makes sense that you are spreading your risk across 5 different stocks and I completely agree with you. What do you think about taking 1k (2k or 3k based on your financial position) position on a stock per month than investing 5k(10k or 15 k) at once?

You might miss some opportunities but you are learning and investing slowly. This makes more sense to me rather than saving 1k(2k or 3k based on your financial position) for 5 months and invest all at once. At the end of 5 months you still end up with 5 positions.

Any thoughts ?

Cheers,
Sri

 

[nioka]

Update.
Sold the existing TXN @ 80c today, net yield $1343.05. Add to the EKA return of $1550.05 last week. This will purchase 4441 TXN which are now @80c (as compared to the SPP price of 65c). Value will be $3552.80. When the TXN are available to trade I will sell off TXN to the value of $2000 and invest in two other stocks for $1000 each.

Todays announcement is that the TXN SPP has been filled and all applications will be granted 100%. That means that this account will now have 4441 TXN shares which today look like trading at 93c. Value now $4130. I expect TXN to reach $1 in the near future so will put 2041 TXN for sale at $1 and buy something else to spread the risk. At this stage it is a proposition , in my opinion, to buy back some EKA that were sold to fund the purchase of the TXN and take advantage of the SPP.

 

[youngone]

So this is what a trading plan is?

This is a new level of investment strategy. My current trading plan has been to BUY and HOLD like any newbies around this forum. Thanks Nokia for demonstrating what it is that makes you a successful investor.

I can see that you actively read the companies announcements, in particularly, taking advantages of every SPP. What basic information do you look for to determine that the price may be heading $1 soon?

 

[burglar]

...You might miss some opportunities but you are learning and investing slowly. This makes more sense to me rather than saving 1k(2k or 3k based on your financial position) for 5 months and invest all at once. At the end of 5 months you still end up with 5 positions.

Any thoughts ?

Cheers,
Sri

When I got serious, I put in one trade and waited to see how it went, ...
When it went well, I added another.
It's a good a way to start.

During a Bull Market my answer would be different.
"Anyone can be a hero in a Bull Market!"

 

[nioka]

So this is what a trading plan is?

This is a new level of investment strategy. My current trading plan has been to BUY and HOLD like any newbies around this forum. Thanks Nokia for demonstrating what it is that makes you a successful investor.

I can see that you actively read the companies announcements, in particularly, taking advantages of every SPP. What basic information do you look for to determine that the price may be heading $1 soon?

If you follow the presentations put out on the company website you will see that this company is growing its asset through proving an increase in productivity. The companies fundamentals no matter which way you look at them are all positive. They have moved from being a prospector to being a producer. Analysts reports suggest target prices well over $1. Prices though are relative. If the price falls then it is probable that the share I want to buy will fall in proportion so there will still be an opportunity to get value in a sell and buy something else senario.

The immediate goal of taking advantage of the SPP has been achieved. The goal now is to trade some TNZ for another stock to spread the risk. That has always been the "grand plan". Remember the plan was to end up with a minimum of 5 stocks.

 

[nioka]

Todays announcement is that the TXN SPP has been filled and all applications will be granted 100%. That means that this account will now have 4441 TXN shares which today look like trading at 93c. Value now $4130. I expect TXN to reach $1 in the near future so will put 2041 TXN for sale at $1 and buy something else to spread the risk. At this stage it is a proposition , in my opinion, to buy back some EKA that were sold to fund the purchase of the TXN and take advantage of the SPP.

Not good news but here is an update.

Because of the current market conditions I have decided to sell some TXN and buy EKA now rather than wait until TXN reaches $1. Probably when TXN reaches the $1 EKA will not still be available at 33c.

So now it is 4000 EKA @ 33c and 2700 TXN 79c value $3433. We have lost some ground on both of these but have increased our share numbers. I'm confident that the market correction for these stocks is ending and look forward to increasing values that will allow some diversification in the near future.

We are still ahead of where we were before the TXN SPP so at least participating in the SPP has more than offset any fall in the market.

 

[Glen48]

Sell all and buy some silver and some in June

 

[tothemax6]

Sell all and buy some silver

Everyone is saying 'buy some silver', hence its a bad idea.

 

[warennie]

Keep in mind the brokerage you will pay. If you buy $500 (minimum share purchase via commsec) worth of shares, you will pay a minimum of $20 on the purchase and $20 of the sale. So to recoup the cost of brokerage your investment will need to yield $40 which is a 8% increase...

But getting your foot in the door is a great step to make at any cost.

 

[youngone]

Not good news but here is an update.

Because of the current market conditions I have decided to sell some TXN and buy EKA now rather than wait until TXN reaches $1. Probably when TXN reaches the $1 EKA will not still be available at 33c.

So now it is 4000 EKA @ 33c and 2700 TXN 79c value $3433. .

Please dont stop Nokia. With the current roller coaster market, is there anything you can do to protect your shares or minimize the risk..

EKA today is at 30c and TXN 73c.

This means for the past month, we haven't had any growth but also had lose out our shares price. Instead of buy and hold, for the purpose of the excercise, would or should you be selling out and come in when the market is right?

 

[nioka]

Please dont stop Nokia. With the current roller coaster market, is there anything you can do to protect your shares or minimize the risk..

EKA today is at 30c and TXN 73c.

This means for the past month, we haven't had any growth but also had lose out our shares price. Instead of buy and hold, for the purpose of the excercise, would or should you be selling out and come in when the market is right?

Nothing goes up in a straight line. I'm prepared to sit and wait at this stage. The value today is not the important thing. We have increased our share numbers and both stocks still have the potential for early gains. It is a time to have patience while still being prepared to sell and buy another stock if the fundamentals change. In the past I have often sold too soon and missed out on the gains that came soon after. We are still well ahead. To sell out now would be to sell at what I consider the bottom. This is a time to buy these stocks, not a time to sell them. Dyor. this is opinion not advice.

 

[IB12]

Nothing goes up in a straight line. I'm prepared to sit and wait at this stage. The value today is not the important thing. We have increased our share numbers and both stocks still have the potential for early gains. It is a time to have patience while still being prepared to sell and buy another stock if the fundamentals change. In the past I have often sold too soon and missed out on the gains that came soon after. We are still well ahead. To sell out now would be to sell at what I consider the bottom. This is a time to buy these stocks, not a time to sell them. Dyor. this is opinion not advice.

I would think that you are taking on undue risk by increasing your concentration in the above two stocks to which you already own. I think you would be better off reducing your exposure, either to cash in the bank or something you have a better understanding of, especially as it appears that you don't have any clue what you are actually investing in. One of the stocks which you are recommending doesn't even have any earnings whose stock price is predicated on future developments occurring of which you have no control over nor any idea of its probable outcome. Add to that we are at the upper end of the commodities cycle, with commodity IPOs happening all over the place, and your whole portfolio is concentrated in one sub-sector of a particular industry of an entire market.

Threads like these are illustrative of why forums like these strictly prohibit any financial advice, especially to people starting out.
On the other hand it can also be illustrative of potential risk for the new investor and why beginning investors should first seek out educational material, read and learn as much as they can, as opposed to diving head first with real money, especially large sums.

 

[ParleVouFrancois]

No risk no reward!

I don't rate TXN because I'm not all that familiar with the geology of the area they operate in, but EKA (same as AUT) is in what is pretty much is the prime area of the Eagle Ford Shale. Thus it is a rather reliable producer of gas and condensate.

 

[nioka]

I would think that you are taking on undue risk by increasing your concentration in the above two stocks to which you already own. I think you would be better off reducing your exposure, either to cash in the bank or something you have a better understanding of, especially as it appears that you don't have any clue what you are actually investing in. One of the stocks which you are recommending doesn't even have any earnings whose stock price is predicated on future developments occurring of which you have no control over nor any idea of its probable outcome. Add to that we are at the upper end of the commodities cycle, with commodity IPOs happening all over the place, and your whole portfolio is concentrated in one sub-sector of a particular industry of an entire market.

Threads like these are illustrative of why forums like these strictly prohibit any financial advice, especially to people starting out.
On the other hand it can also be illustrative of potential risk for the new investor and why beginning investors should first seek out educational material, read and learn as much as they can, as opposed to diving head first with real money, especially large sums.

You are right and if you read back posts you will see that there is an intention to spread the funds over five stocks as soon as possible. There is a good reason why this hasn't happened to date. Both the current stocks are undervalued at this stage and have better potential for short term gains. This is proven with a rise in value of both today and late last week. In my "own" account I bought EKA last week and sold some today to get another 10,000 "freebies".

In the near future I will sell some of one or both of EKA and/or TXN and buy the third which will not be an "oiler" but only to spread the risk as I believe that both the current stocks have plenty of upside yet.

This exercise is an example using real trades to point out that, yes, $1500 is sufficient capital to start investing. No one should take it in any way that it is advice to buy those particular stocks. I doubt though that I would attempt an exercise that picked stocks in which I didn't personally have confidence.

I dont claim to always be right and my other exercise to turn $5000 into $50,000 in two years is not doing so hot at this stage. You are right to point out the dangers in following forum chat. I can also point out the danger in following quite a few of the EXPERT advisers. People should do their own research and only make personally informed decisions.

 

[burglar]

... diving head first with real money, especially large sums.

Didn't see were nioka dived in head first??? and it's not a particularly large sum!
In fact, that is the whole point of the thread!!



Keep up the good work!

 

[IB12]

It's fun to revisit these threads after a while.
I would suggest that if you're still holding onto these two stocks, that you should get out whilst you still can.
There will be more fresh losses to come, especially after the US credit rating downgrade.
Fact of the matter is, the real solution is to let these sovereigns and financial institutions that have lent to these sovereigns ... fail. That is the best 'market based' solution.
But that will never happen, because politicians would never allow it.
In the meantime they are propping up the markets with a lot of artificial stimulus, and thus you're seeing huge capital flows into commodities and emerging markets.

I would seek safe havens in the short term (fixed income, cash, gold etc), and maybe equities in the long term.
Nonetheless, more losses to come, if you're leveraged right now in these two stocks you're in the wrong place.

 

[burglar]

Time for an update?

 

[nioka]

Please dont stop Nokia. With the current roller coaster market, is there anything you can do to protect your shares or minimize the risk..

EKA today is at 30c and TXN 73c.

This means for the past month, we haven't had any growth but also had lose out our shares price. Instead of buy and hold, for the purpose of the excercise, would or should you be selling out and come in when the market is right?

I havent forgotten this one. In hindsight it would have been better to sell and reenter at some of the lows over recent months. My decision was to ride this out and hold. I saw no problem with a good long term result. Todays value is still down on the peak but still stands at $3073. I'm expecting progress from here on and continue to hold both these in my portfolio. I have not been trading many stocks lately, been tied up in other pursuits.