Australian (ASX) Stock Market Forum

Turning 5,000 dollars into 50,000 dollars

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Freeballinginawetsuit said:
Well done Insider, great effort.

If I may add........ a return such as MTN's should be grasped with both hands, forget about the CGT factor (its irrelevant in the scheme of youre profit).

Move on to some value and diversify youre portfolio from the one share......you have the capital now :) .
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"Wide diversification is only required when investors do not understand what they are doing."


Warren Buffet

Insider, your exceptional return on your initial investment of $5,000 is due in part to the fact that you aren't diversified. If you have done your homework on this stock, believe it is sound and you cannot find a better alternative, why sell it?
 
dhukka said:
"Wide diversification is only required when investors do not understand what they are doing.."Warren Buffet
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Great quote dhukka :)
 
Bronte said:
Great quote dhukka :)
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Interesting quote.

Depends on the context you take it.
If one sees opportunity in another investment field diversification may well be very profitable.

On the other hand its rare to find more than 1 asset classification booming at once.
So could/would you read Buffets quote as
"When the times right place all your eggs in THAT basket"!

I see it more as investors spread themselves thin hoping to "hit" something.
 
dhukka said:
"Wide diversification is only required when investors do not understand what they are doing."


Warren Buffet

Insider, your exceptional return on your initial investment of $5,000 is due in part to the fact that you aren't diversified. If you have done your homework on this stock, believe it is sound and you cannot find a better alternative, why sell it?
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Buffet would certainly not have had all his eggs in one basket. I think he suggested being spread over 5 stocks at any time.
 
Kimosabi said:
As far as I'm concerned, if your paying tax, your making money...
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I was speaking with my uncle who owns a accountancy firm, he stated that there has been a ruling past a number of months back: You are able to earn $20,000 pa 100% tax free if this money is made as part of a interest or hobby other than your primary means of income, share trading is my hobby but I haven't reached 20 000 as yet!!
 
nioka said:
Buffet would certainly not have had all his eggs in one basket. I think he suggested being spread over 5 stocks at any time.
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Buffet never specificied how many stocks he would hold at any one time nor am I advocating a single stock portfolio approach. The point here is that diversifying for the sake of it is nonsense. His message is to invest in sound businesses that you know well rather than investing in things you know nothing about in the hope that you will get lucky. 'Invest' being the operative word which shouldn't be confused with trading.
 
What this guy wants to do with his $5,000 is possible, or at least was when he posted the thread. For example take IBG - a 20c share in mid august 2006 and a few days ago hit $2.95. And there are other more well known stocks that have behaved in the same fashion. I have had a 400% increase in value when taken against my initial outlay in only 5 months investing in stocks like AZZ, MMX, IBG, WLF, CDU, ARM, BCN AND TFE. Its possible
 
dhukka said:
"Wide diversification is only required when investors do not understand what they are doing."


Warren Buffet

Insider, your exceptional return on your initial investment of $5,000 is due in part to the fact that you aren't diversified. If you have done your homework on this stock, believe it is sound and you cannot find a better alternative, why sell it?
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Great I log in now and MTN has plummeted 43 cents... :mad: . What makes this so confusing is that MTN was on it's way to $5 before the correction. If it had simply plateaued before the correction, the decision to sell would have been made in a heart beat... It's just so hard to sell. It has nothing to do with being attached to the company but everything to do with it's fundamentals.
 
insider said:
Great I log in now and MTN has plummeted 43 cents... :mad: . What makes this so confusing is that MTN was on it's way to $5 before the correction. If it had simply plateaued before the correction, the decision to sell would have been made in a heart beat... It's just so hard to sell. It has nothing to do with being attached to the company but everything to do with it's fundamentals.
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You are holding a speculative explorer who's value is all relative in the marketplace at any given time. The value or fundamentals are debatable.

Wedsnesday was a volitile day on the market, the rest have been only a downtrend reflecting sentiment. Opportunities have and will present that are of a real nature,any real value can only be found in particular producers ATM and all relative to their CURRENT business activities/outlook regardless of the 'market apprehension'. Unless we have some wider ranges, even the full circle in value might be a slow one!

All the best with MTN insider, Wednesday was the day to sell specks into bounce strength, MTN's SP is now dependant on the market sentiment, certainly not the commodity they produce>they don't and may never produce zip!.
 
Insider,

Right now, you are probably experiencing some extraordinarily powerful emotions, ones which you were totally unprepared for.

What the stock market giveth the stock market can taketh away, usually much faster than it gave it in the first place. It is not a one way elevator to speculative wealth. Many people are finding this out right now to their great surprise and it's hurting them. You can see the pain and fear throughout ASF.

How you learn from what is happening at the moment will define whether you will remain in the 90% of traders that lose money or the few that succeed.

Hints:

1. Have a Trading Plan.
2. Learn about Risk Management.
 
MichaelD said:
Insider,

Right now, you are probably experiencing some extraordinarily powerful emotions, ones which you were totally unprepared for.

What the stock market giveth the stock market can take away, usually much faster than it gave it in the first place. It is not a one way elevator to speculative wealth. Many people are finding this out right now to their great surprise and its hurting them. You can see the pain and fear throughout ASF.

How you learn from what is happening at the moment will define whether you will remain in the 90% of traders that lose money or the few that succeed.

Hints:

1. Have a Trading Plan.
2. Learn about Risk Management.
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3. Learn about Money Management.

And Michael bro you shouldve really said "taketh", it just sounds way better. LOL.

All the best Insider and well done so far.
 
Some eye opening experiences coming my way... So a valuable note for next correction period would be "sell speckies first no matter how good they may seem, just dump them"... I didn't get to pay much attention to the last correction period so that's why I'm essentially making the same mistakes as last May. Boy am I embarrassed :eek: . I'm just gonna have to wait for a short bounce and if it falls anymore well I guess i'm just going to have to hold very tight.

The emotional swing is really distracting and I'm already falling behind at Uni. I guess I just don't cut it as a trader and neither do I have the time :(

There is just so much to learn! Thanks Fellas :)

How long did it take for all the experienced guys to nail the stock market or until you made consistent profits?
 
insider said:
The emotional swing is really distracting and I'm already falling behind at Uni.

How long did it take for all the experienced guys to nail the stock market or until you made consistent profits?
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Risk Management Rule #1: If you can't sleep at night, you are exposed to too much risk.

It is said to take up to 3 years for traders to become consistently profitable.
 
MichaelD said:
Risk Management Rule #1: If you can't sleep at night, you are exposed to too much risk.

It is said to take up to 3 years for traders to become consistently profitable.
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Sold... Is there a book on risk management?
 
insider said:
Great I log in now and MTN has plummeted 43 cents... :mad: . What makes this so confusing is that MTN was on it's way to $5 before the correction. If it had simply plateaued before the correction, the decision to sell would have been made in a heart beat... It's just so hard to sell. It has nothing to do with being attached to the company but everything to do with it's fundamentals.
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I think you had better learn just what fundamentals are. Start with PE ratio.
 
nioka said:
I think you had better learn just what fundamentals are. Start with PE ratio.
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Sorry let me rephrase myself... Impressive results... They're not earning anything at the moment... So there is no PE... And that's what classes them as speculative and that's why I should've sold them right away... :banghead: ... This is the single worst day drop in the history of the world to me... Lesson learned... I got ahead of myself just like the market so I guess that's why they call it a correction period... But at least I'm still very much in the profit...
 
MichaelD said:
Doesn't it feel better now that the pain has stopped?

A book I suggest for you which should hit the bullseye right about now is Van Tharp - Trading Your Way To Financial Freedom.
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No I haven't sold the stocks... I'm talking about you sold the idea of risk management... I'm still in pain.

Surely it'll bounce after falling so much in one day! That's what I'm waiting for... then I'll sell.
 
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