Another Way

by | July 30, 2013 10:29 pm

Hi All
A smashing reader called Randy Katz recently asked ’ So, do we buy or sell xyz stock ??’ I answered that there is no WE…..ultimately its your money and your decision. ALL newbies have heard that there’s money to be made/preserved in the market. But one of their biggest problems is that they need to know how to begin to invest and what to invest in with some safety (me too!!). Paid for teasers are aimed at profiting by filling this knowledge gap. Dinner party/CNBC chatter, accounts for other means of choosing (losing). The problem is there are just sooooooo many stocks to choose fom, and too much emotion/hype abounds. At the outset you have as much chance of winning by sticking a pin in the runners and riders list. I once reco’ed someone not to follow more than 5 or 6 stocks coz, unless youre doing this stuff 24/7, you simply cannot keep a close eye on more than that. At a detailed analytical level, I still believe that to be true.
I dont have the temperament, analytical skills or brian cells (deliberate syntax….I’ll explain another day) to take a stock apart like GS and many others here. Ive been hoping someone would define DD ie Due Diligence, for me and provide a template. After 2 years, Im still waiting. I do have a stock screener though, so I can get close to some teases (though why I bother is still a mystery when Ive got GS (any suggestions for a DD template or better screener welcomed))
I love Gumshoe. The tease bustin’ tickles my toes and by having someone to do the final reveal AND further analysis that I’m incapable of doing, has helped me make some better informed and often profitable investments. But what I have learned is that there are a zillion ways to ’play’ the market. Not one of the teasers is always right. If you’ve found someone who knows how to win every time, congrats, you’ve teased out a liar. I just wanted to open up a discussion on other ways to ’play’ the market for the less techie among us. I hope its not too ’off topic’.
Ive been trying a method to find some profit in a 5% pa world that doesn’t require Spock’s analysis skills. Its called bottom fishing ie buying depressed stock and waiting for a bounce. There’s an old saying that you should never try to catch a falling knife (true). However, that doesn’t mean you shouldn’t pick up a knife thats fallen onto the floor. A great example is RIM which was recently teased as a dying company.
A few months ago, just for fun, I used the screener to randomly find stock that had recently suffered a (relatively) major price collapse. I know nothing about any of the following stox other than they fell badly and began to recover around the time of my fantasy purchase. I thought you might be interested to see my list (note: I own none of these stocks, nor will I in the forseeable future other than by a mixture of pure coincidence or lack of memory cells). The results have been ’interesting’ and might have made some good profit without too much need for lengthy research. Of course, if you created a similar list (of your own) and used your analysis skills, you might have avoided some duffers.
My method is to screen stocks that have hit their year low price……..add ticker to your watch list……monitor the 20/50day moving average and when the price crosses up thru the MA (indicating that the herds sell off panic is reversing), notionally buy. Here’s this fools results. Of course some will say, ’It all depends on which ones you pick’. But as these are totally random to my judgment, you can work out the avg. Remember you are buying at the year low and so, as long as you set a sensible stop loss (10%?) I doubt you will lose too much on avg. But I offer no guarantees, so do your own DD…(whatever that is) My thinking is that every company’s directors know they are in the sh1t long before their bad results are published. So, in the background, they are already kickin’ ass to achieve a turn round (to protect their pension/job/holding). The improvements come relatively shortly after the bad news is released:

UK date format ie 1/12 = 1st december 13 = 2013 and over a relatively short period of time. Multiply by months to give a pa %.
Ticker Price today Bought @ % dif Date bought
KOLD 91.95 65.00 Up 41.46% 1/6/13
DGAZ 15.65 11.34 Up 38.01% 18/6/13
AMGN 111.20 87.00 Up 27.82% 1/3/13
FIZZ 17.62 14.00 Up 25.86% 2/3/13
BU.TO 3.00 2.61 Up 14.94% 18/6/13
CPE 4.03 3.64 Up 10.71% 6/7/13
BV 10.51 9.53 Up 10.28% 18/6/13
ACE.L 24.00 22.00 up 9.09% 14/6/13
NEM 30.15 27.78 Up 8.53% 16/6/13
PPL 31.73 2.35 Up 8.11% 6/7/13
PDCO 40.74 37.97 Up 7.30% 6/7/13
WYN 61.77 58.94 Up 4.80% 6/7/13
RIO.L 2,958.00 2,866.00 up 3.21% 16/7/13
SMFG 9.10 8.86 Up 2.71% 25/6/13
FGP.L 99.15 96.6 up 2.64% 6/7/13
A 44.85 44.23 Up 1.40% 6/7/13
BITA 12.10 12.02 Up 0.67% 16/6/13
NC 59.55 59.3 Up 0.42% 16/6/13
AAP 82.19 82.48 Down 0.35% 16/6/13
DEMG.L 14.25 14.5 down 1.72% 1/6/13
LULU 69.56 75.00 Down 7.25% 16/6/13
VCRA 14.70 16.00 Down 8.13% 16/6/13
AIRM 33.97 37.17 Down 8.61% 21/6/13
ISRG 385.82 504.01 Down 23.45% 6/7/13
IPI 13.89 18.9 Down 26.51% 18/6/13

You will also note that a lot of readers ask ’Who are the best tipsters’. I would draw your attention to GS’s own Teaser Tracking (top right….ignore the incomplete/confusing initial front sheet and go to the excell charts for the real McCoy). For v understandable reasons, Travis et al are forced to plant their boney bums so squarely on the fence for each tease reveal, that they must resemble hot crossed buns…..lest they get sued for acting as unregulated investment advisors). However, you will see a lot of AMAZING factual data for past tease reveals. A quick scan shows the names of the repeatedly successful tip meisters. If you are wanting to buy advice (rather than get it here for FREE or for a silly $49ish as an Irregular (value beyond value…..but dont tell GS I said that or you may have to add a naught)) the worthwhile names quickly become apparent.
Enjoy
Alan

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