The Simple Weekly Income system

[So_Cynical]

Goal. 12% annual return per annum on $100k investment. You could have bought TLS a year ago and you would be getting 12% return with franking credits. But the river moves on...

This is my post in the Telstra thread in Sept 2010 when TLS was trading at under $2.90

(27th-September-2010) no im suggesting that the positive upside of the NBN deal isn't priced in appropriately, without a doubt the uncertainty is priced in, perhaps over priced in....its a sideways bear market and ive found that what happens is that the uncertainty and negativity is always over priced in and tends to dominate.

Interesting to also note that Telstra's total revenue at the time of the T1 float (1997) was 16 billion, in 2001 it was 23 billion, this years total sales revenue is 24 billion...so for a company that's had its core business smashed over the last 13 years and had belligerent management and faced massive technical and logistical hurdles and ridiculous expectations from the bulk of its customer base...big picture its not doing that badly.

Worth serious consideration at these prices IMO.

Now if i had money at the time i would of brought some TLS, but i didn't have any money because i was stuck in 6 or 7 trades...and that experience has lead me to this thread and experiment because with this weekly system i would of had the money to buy TLS at under $2.90.

That's my point...and the guts of this strategy.

 

[tinhat]

Dividends and credits not included in winning and losing % calculations.

Sounds to me like you are aiming for a capital gain through trading approach with dividends a secondary concern? Do you have any rules about dividend yield in picking your stocks?

It also looks to me like you are trying to pick the bottom on the stock you have chosen so far.

My most recent approach has been two-fold. One concentrate mainly on stocks with prospects for a long term dividend yield should they end up in the portfolio for the long term (eg TLS, CBA, ANZ, WBC, GZL, TGA, RCG) although this is not my only criteria - eg, entries and exits into FGE.

Only buy in when there is momentum. I have some buy signals now that I look for on the daily, weekly and I am also using the coppock on the monthly to confirm that the stock sentiment is on the up. I'm still mainly looking at moving average indicators but I'm still reading up on volume spread analysis and starting to grock it a bit. I wouldn't get in as early as you do because for me those two stocks you have chosen are still in downtrend. Set stop losses based on my eyeballs or a simple 15%. This worked for me nicely with BOL and has worked nicely for me with FGE and DCG. One thing that it has taken me a while to get onto is not buying in until the stock is in uptrend to try and avoid getting stopped out early like I did last year when I bought FGE for $4.15 and got stopped out 15% lower to now see it above $5.

As someone who only started actively investing in stocks a couple of years ago and who has been through a fair bit of pain myself I will be reading this thread with interest. Best wishes.

A few stocks on my short list that may be of interest are LCM, SOM, CYG.

 

[So_Cynical]

It also looks to me like you are trying to pick the bottom on the stock you have chosen so far.

Buy em cheap every week is the name of this game.

Trade #1

• PRG - Programmed Maintenance
• 1070 Shares @ $1.86
• Week 1 - 08/01/2013

Trade #2

• AAC - Australian Agricultural Company
• 1750 Shares @ $1.14 (Edited Qty)
• Week 2 - 15/01/2013

Trade #3

• UGL - UGL LIMITED
• 190 Shares @ $11.01
• Week 3 - 23/01/2013

Trade #4

• APK - Australian Power & Gas
• 4700 Shares @ $0.425
• Week 4 - 31/01/2013

 

[So_Cynical]

Trade #1

• PRG - Programmed Maintenance
• 1070 Shares @ $1.86
• Week 1 - 08/01/2013

Trade #2

• AAC - Australian Agricultural Company
• 1750 Shares @ $1.14 (Edited Qty)
• Week 2 - 15/01/2013

Trade #3

• UGL - UGL LIMITED
• 190 Shares @ $11.01
• Week 3 - 23/01/2013

Trade #4

• APK - Australian Power & Gas
• 4700 Shares @ $0.425
• Week 4 - 31/01/2013

Trade #5

• SLX - Silex Systems
• 630 Shares @ $3.20
• Week 5 - 04/02/2013

 

[So_Cynical]

Trade #1

• PRG - Programmed Maintenance
• 1070 Shares @ $1.86
• Week 1 - 08/01/2013

Trade #2

• AAC - Australian Agricultural Company
• 1750 Shares @ $1.14 (Edited Qty)
• Week 2 - 15/01/2013

Trade #3

• UGL - UGL LIMITED
• 190 Shares @ $11.01
• Week 3 - 23/01/2013

Trade #4

• APK - Australian Power & Gas
• 4700 Shares @ $0.425
• Week 4 - 31/01/2013

Trade #5

• SLX - Silex Systems
• 630 Shares @ $3.20
• Week 5 - 04/02/2013

Trade #6

• SAI- SAI Global
• 540 Shares @ $3.75
• Week 6 - 14/02/2013

 

[So_Cynical]

Trade #1

• PRG - Programmed Maintenance
• 1070 Shares @ $1.86
• Week 1 - 08/01/2013

Trade #2

• AAC - Australian Agricultural Company
• 1750 Shares @ $1.14 (Edited Qty)
• Week 2 - 15/01/2013

Trade #3

• UGL - UGL Limited
• 190 Shares @ $11.01
• Week 3 - 23/01/2013

Trade #4

• APK - Australian Power & Gas
• 4700 Shares @ $0.425
• Week 4 - 31/01/2013

Trade #5

• SLX - Silex Systems
• 630 Shares @ $3.20
• Week 5 - 04/02/2013

Trade #6

• SAI- SAI Global
• 540 Shares @ $3.75
• Week 6 - 14/02/2013

Trade #7

• BSA - BSA Limited
• 10530 Shares @ $0.19
• Week 7 - 18/02/2013

While i realise the market is having a run and making my results look ok, i have to say im finding the simple task of selecting the cheapest stock each week a rewarding challenge...2K is a small position size and i reckon the fact that im under thinking my selections is helping.

Not a lot of second guessing myself partly because im thinking, oh ill get a chance to buy that other stock next week...and mostly that's working out, only 2 that have got away from me so far.
~

 

[Skatter]

nice work!

 

[So_Cynical]

Trade #1

• PRG - Programmed Maintenance
• 1070 Shares @ $1.86
• Week 1 - 08/01/2013

Trade #2

• AAC - Australian Agricultural Company
• 1750 Shares @ $1.14 (Edited Qty)
• Week 2 - 15/01/2013

Trade #3

• UGL - UGL Limited
• 190 Shares @ $11.01
• Week 3 - 23/01/2013

Trade #4

• APK - Australian Power & Gas
• 4700 Shares @ $0.425
• Week 4 - 31/01/2013

Trade #5

• SLX - Silex Systems
• 630 Shares @ $3.20
• Week 5 - 04/02/2013

Trade #6

• SAI- SAI Global
• 540 Shares @ $3.75
• Week 6 - 14/02/2013

Trade #7

• BSA - BSA Limited
• 10530 Shares @ $0.19
• Week 7 - 18/02/2013

Trade #8

• RIC - Ridley Corp
• 1840 Shares @ $1.09
• Week 8 - 1/03/2013

 

[chops_a_must]

Good on you for making these trades public.

A couple of thoughts:

I'd like to know more about your selection criteria.

If you aren't going to back test or pick entries based on patterns, do you at least have some basic stats to guide your entries?

Your hold lengths mean your buys could wipe out your capital easily if you're bottom picking.

With these hold lengths, I'd be inclined to trade breakouts, and cut your loss making stocks much earlier.

If you are going to hold these lengths, what is your universe of stocks? I'd bias the high end and dividend payers.

I also don't think you're outperforming the market by that much.

I also don't like the one buy a week strategy.

But, who knows?

 

[So_Cynical]

Good on you for making these trades public.

A couple of thoughts:

I'd like to know more about your selection criteria.

If you aren't going to back test or pick entries based on patterns, do you at least have some basic stats to guide your entries?

Your hold lengths mean your buys could wipe out your capital easily if you're bottom picking.

With these hold lengths, I'd be inclined to trade breakouts, and cut your loss making stocks much earlier.

If you are going to hold these lengths, what is your universe of stocks? I'd bias the high end and dividend payers.

I also don't think you're outperforming the market by that much.

I also don't like the one buy a week strategy.

But, who knows?

I encourage everyone to READ THE FIRST POST in this thread, this is a paper trading test (WIP) of a low capital outlay weekly system...thanks for your input chops but im not trend following or cutting my losses early or looking for break outs...ill leave that to the punters that pursue those strategies.

I'm testing a simple weekly system looking to build on my stock picking and bottom picking skills, doing it now to see if it works over all market conditions....you cant back test discretion.

 

[chops_a_must]

I encourage everyone to READ THE FIRST POST in this thread, this is a paper trading test (WIP) of a low capital outlay weekly system...thanks for your input chops but im not trend following or cutting my losses early or looking for break outs...ill leave that to the punters that pursue those strategies.

I'm testing a simple weekly system looking to build on my stock picking and bottom picking skills, doing it now to see if it works over all market conditions....you cant back test discretion.

I did. And did again. And now confused.

A lot of these things seem confusing. Are you investing or trading?

And if you aren't looking for dividends, and not looking for trends, how are you intending to get a return?

To me, it sounds like it's a system to get entries to invest. Without actually saying that. And for that there is no back test.

Not doubting it will work, if you select well, but you haven't explained the criteria, or the system well enough for you to do justice to this system.

Maybe you could explain the rationale behind your future entries to help bring this out?

 

[tinhat]

So_Cynical, I would be interested to hear more about your bottom picking technical analysis if you are willing to share or give a little primer.

 

[RandR]

I did. And did again. And now confused.

A lot of these things seem confusing. Are you investing or trading?

And if you aren't looking for dividends, and not looking for trends, how are you intending to get a return?

To me, it sounds like it's a system to get entries to invest. Without actually saying that. And for that there is no back test.

Not doubting it will work, if you select well, but you haven't explained the criteria, or the system well enough for you to do justice to this system.

Maybe you could explain the rationale behind your future entries to help bring this out?

The thing I dont understand is how he will outperform the asx 200 by any meaningful amount with so many stocks to be held in his portfolio. Forget how he is entering positions. I just cant imagine how a portfolio of 40 plus positions is going to be concentrated enough to see outperformance.

 

[tech/a]

There are many problems with this method.

Firstly it's an idea which is being forward tested here.

The biggest flaw is virtually no consideration for capital depreciation.
The culling idea is far far too slow.
Any shock move or sustained reversal of this market will crucify the holdings
Not only that but falls in price will see yields also fall.

As has been pointed out in this parabolic uptrend there is no real out performance.

It very much reminds me of Ducati's method which ran for 2 yrs and failed dramatically.
So C is putting his ideas on the chopping block and for the exercise and the comments ---positive and negative--- should continue to validate or negate all " theories" So Cynicals--- mine and everybody else's.

So although I'm not a supporter of So Cynicals method I applaud his presentation,

 

[nulla nulla]

I encourage everyone to READ THE FIRST POST in this thread, this is a paper trading test (WIP) of a low capital outlay weekly system...thanks for your input chops but im not trend following or cutting my losses early or looking for break outs...ill leave that to the punters that pursue those strategies.

I'm testing a simple weekly system looking to build on my stock picking and bottom picking skills, doing it now to see if it works over all market conditions....you cant back test discretion.

Putting up his evidence of his "paper trading" system as it goes forward is probably the most honest display of someone testing their investment ideas we will ever see. At least here we will see what works and what doesn't and there won't be any suggestions of "after the event" successful stock picking.

 

[So_Cynical]

I did. And did again. And now confused.

A lot of these things seem confusing. Are you investing or trading?

Travesting

And if you aren't looking for dividends, and not looking for trends, how are you intending to get a return?

I'm not using dividends as a selection criteria though understand that there will be some dividends and distributions, the system will out perform (get a return) via my stock/bottom picking ability's and the forced closing of trades.

Not doubting it will work, if you select well, but you haven't explained the criteria, or the system well enough for you to do justice to this system.

Maybe you could explain the rationale behind your future entries to help bring this out?

Simply buying stocks that i like when i think they are cheap enough...i have 200 stocks in watch lists and select the 1 that looks to be cheapest, not necessarily the one that has fallen the most that week.

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

So_Cynical, I would be interested to hear more about your bottom picking technical analysis if you are willing to share or give a little primer.

Bottom picking technical analysis BPTA - i look at long term charts and short term charts, 10, 5, 2 and 1 years...looking for factors to explain the significant SP moves, i read over some of the Annual reports, look over the announcements year by year looking for cap raisings and take overs and acquisitions etc, anything that is price sensitive.

I do 'form' based Travesting so use all relevant macro information available to come up with a judgement of the cheapness of a stock, i then tie that into my general macro world view and make a decision to buy or continue watching...some stocks i know well, some stocks i don't.

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The thing I dont understand is how he will outperform the asx 200 by any meaningful amount with so many stocks to be held in his portfolio. Forget how he is entering positions. I just cant imagine how a portfolio of 40 plus positions is going to be concentrated enough to see outperformance.

Good points.

What's a meaningful amount? i would hope to be outperforming the index by at least 20% and lets use the All Ords as a benchmark...40 stocks is a 2 edged sword, diversified enough to get an opportunity advantage and not concentrated enough to be hammered by big changes in sector sentiment...but of course will be hammered by, or advantaged by any larger swings in general sentiment.

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

Starting point 8th Jan 2013 ~ All Ords = 4730.30 / SWIS - Simple Weekly Income Sys = $100000

All Ords now 5100.90 up 7.46% / SWIS = $101300 up 1.3%

 

[So_Cynical]

Trade #1 ~ PRG - Programmed Maintenance, 1070 Shares @ $1.86 ~ Week 1 - 08/01/2013

Trade #2 ~ AAC - Aust Agricultural Co, 1750 Shares @ $1.14 ~ Week 2 - 15/01/2013

Trade #3 ~ UGL - UGL Limited, 190 Shares @ $11.01 ~ Week 3 - 23/01/2013

Trade #4 ~ APK - Australian Power & Gas, 4700 Shares @ $0.425 ~ Week 4 - 31/01/2013

Trade #5 ~ SLX - Silex Systems, 630 Shares @ $3.20 ~ Week 5 - 04/02/2013

Trade #6 ~ SAI- SAI Global, 540 Shares @ $3.75 ~ Week 6 - 14/02/2013

Trade #7 ~ BSA - BSA Limited, 10530 Shares @ $0.19 ~ Week 7 - 18/02/2013

Trade #8 ~ RIC - Ridley Corp, 1840 Shares @ $1.09 ~ Week 8 - 1/03/2013

Trade #9

• IAW - ILH Group
• 21050 Shares @ $0.095
• Week 9 - 7/03/2013

 

[So_Cynical]

Trade #10

• ERJ - Enerji
• 333000 Shares @ $0.006
• Week 10 - 13/03/2013

The portfolio is actually 0.01% in the red!!!

 

[chops_a_must]

Overall?

 

[So_Cynical]

Trade #11

• PGI – Panterra Gold
• 25300 Shares @ 0.079
• Week 11 - 20/03/2013

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