Trading the stockmarket (NO Referrals)

Matt_Hirst said:
I have no clue when it comes to investing money, but have a question, what is meant by a short?

Matt
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further to the above post as you might still be left wondering 'how?'

basically you borrow the shares and then sell them with an obligation to return them in future (long only asset managers, pensions funds etc.. will hold a position in a company for a while so will lend shares via brokers in return for a fee)

so say stock A is trading at $10, you borrow 1000 shares in stock A via your broker and sell them... later it is trading at say $8 you buy back the shares and you return them via your broker... As you received $10,000 for selling them but then only needed to $8000 to buy them back you've made $2000 in profit! (well minus the charges related to borrowing the shares + transaction costs etc..)

Of course this can work the other way too, if the shares go up in value then it is of course going to cost you more to buy them back... upside is limited to the current value of the stock (it can only go to zero) whereas (in theory) your downside has no limit.

on the other hand, if you're using one of the spread betting/CFD bucket shop places then you're not dealing with the market but essentially placing a side bet with your provider using the two way quote they offer and so no need to borrow anything, to go short you just press sell instead of buy...
 
dowie said:
further to the above post as you might still be left wondering 'how?'

basically you borrow the shares and then sell them with an obligation to return them in future (long only asset managers, pensions funds etc.. will hold a position in a company for a while so will lend shares via brokers in return for a fee)

so say stock A is trading at $10, you borrow 1000 shares in stock A via your broker and sell them... later it is trading at say $8 you buy back the shares and you return them via your broker... As you received $10,000 for selling them but then only needed to $8000 to buy them back you've made $2000 in profit! (well minus the charges related to borrowing the shares + transaction costs etc..)

Of course this can work the other way too, if the shares go up in value then it is of course going to cost you more to buy them back... upside is limited to the current value of the stock (it can only go to zero) whereas (in theory) your downside has no limit.

on the other hand, if you're using one of the spread betting/CFD bucket shop places then you're not dealing with the market but essentially placing a side bet with your provider using the two way quote they offer and so no need to borrow anything, to go short you just press sell instead of buy...
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OK, thanks for this, makes more sense now.

Matt
 
Richdog said:
What websites do you guys like to use for stock news and advice?
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I prefer not to take advice from stock sites and periodicals, I tend to find they blow with the wind. Guess there's no problem getting information from lots of sources, but many analysts seem to have projections built on sand.
 
Fusion said:
I prefer not to take advice from stock sites and periodicals, I tend to find they blow with the wind. Guess there's no problem getting information from lots of sources, but many analysts seem to have projections built on sand.
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Not sure what the downsides are of staying informed from multiple sources as long as you take them for what they are. The stock sites I linked have a lot of relevant news and also some well balanced articles.
 
Azza said:
Don't look for 'advice' or 'stock ideas'. Ignore the noise. Keep your emotions in check.

The big men even say it themselves.

http://www.marketwatch.com/story/wh...l-investors-to-ignore-market-noise-2015-06-04

https://seekingalpha.com/article/61736-secret-to-value-investing-ignore-market-noise
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It's a little ironic that the articles you link to are on the sites that people use for news. Each to their own I guess, but at least staying informed of developments is never a bad thing in my eyes.
 
I agree about keeping up to date with developments.

I think the cautionary tale is just not to jump on any buy/sell recommendations (not saying you have). I lost plenty when i first started through following forum posts :rolleyes:
 
Marvt74 said:
I agree about keeping up to date with developments.

I think the cautionary tale is just not to jump on any buy/sell recommendations (not saying you have). I lost plenty when i first started through following forum posts :rolleyes:
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Eek, that must have been an annoying learning experience.
 
Yeah, was inexperienced and figured they must be good with all this buzz!

Guess the main foolish thing was splitting my shares into these companies, whereas the people making the posts probably had 95% in stable shares and then 5% in the likes of Quindell and Blinx. Whereas i had 40% in good stocks like Sainsburies and Rightmove and then 10-20% in each of the crap ones!

Live and learn :)
 
Richdog said:
It's a little ironic that the articles you link to are on the sites that people use for news. Each to their own I guess, but at least staying informed of developments is never a bad thing in my eyes.
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They are fortunatly the sources know what they're on about, as in random analyst #1024 states that the bond market is about to collapase so you panic and sell your holdings and invest in some random equities only for that not to happen and you lose money. Or you see on Bloomberg some bloke saying Livestock ETFs are mega value right now so you go all in on pigs and cows or something. Just make sure you do consice due dillegance and never go all in on anything.



Marvt74 said:
Yeah, was inexperienced and figured they must be good with all this buzz!

Guess the main foolish thing was splitting my shares into these companies, whereas the people making the posts probably had 95% in stable shares and then 5% in the likes of Quindell and Blinx. Whereas i had 40% in good stocks like Sainsburies and Rightmove and then 10-20% in each of the crap ones!

Live and learn :)
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Another good one is GTAT. People saying they pludged their life savings and relatives etc just because there was talk or rumour that might be providing Apple with sapphire glass ... then nothing. Bust in like a week or something.
 
Marvt74 said:
I must've missed that one :p
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https://www.joshuakennon.com/gt-advanced-technologies-bankruptcy/

This is the thread.

If you start from about the 1st October here - http://forum.thecontrarianinvestor....gt-advanced-technologies-inc-gtat.69/page-475 that's when the meltdown starts and people start getting their hopes up with random rumours and completely fabricated opinions and the 6th is when they annouce bankrupcy.

People just posting absolute nonsense, people making decisions on pure rumours. It's hilarious and unbelievable at the same time.
 
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I started reading and then realised there were another 60 pages to go.

Will carry on from the 6th later on, when i'm less busy.
 
Azza said:
They are fortunatly the sources know what they're on about, as in random analyst #1024 states that the bond market is about to collapase so you panic and sell your holdings and invest in some random equities only for that not to happen and you lose money. Or you see on Bloomberg some bloke saying Livestock ETFs are mega value right now so you go all in on pigs and cows or something. Just make sure you do consice due dillegance and never go all in on anything..
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To me that is absolutely self-explanatory, but maybe some people need reminding of it. It doesn't change how useful industry news and views can be though.
 
Azza said:
People just posting absolute nonsense, people making decisions on pure rumours. It's hilarious and unbelievable at the same time.
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Haven't read that particular saga, but have a few mates who did a similar thing with a minerals company a few years back. Both lost a reasonable amount. Their information sources seemed to be investing forums. Essentially they were waiting for validation/acknowledgment of resources in the ground. People were speculating heavily that the firm had to be worth a certain figure, based on estimates. Can't actually remember what the resource report said, but the share price tanked after.

Just checked, price was £12/share at that time, pretty much halved soon after. It's now 52p :p

Hence why I (and some others) are trying to emphasise understanding what you're investing in. The amount of talk about spread betting, trading and cryptocurrency worries me. Remember that a little like those who frequent casinos, you only tend to hear about the success stories.
 
Richdog said:
Nothing is a "no no", it's my money and I trust my own decisions and I am not following a strict code of "best practise". Proportions will change as I invest more, but Alibaba is looking like as safe a bet as anything right now and I am happy taking that risk.
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Yep of course its upto you, I chose wrongly not to go with emerging markets more from 2000 onwards. I still have the brochure for JII that I declined to go ahead with because it was more fees then ftse. I did trade it a bit since but China and India can surprise with exponential growth for sure, I hope it happens.

Its a forum though, if nobody responds differently it'd not be worth posting or reading. Theres a large gap between perception and action.
By no no I just meant like if there was a big list of official rules on the wall, it'd be there. How that works out varies, not upto me if its right exactly.
I think the wall itself had a big crack down the middle and everyone should be holding at least 1% gold overall longer term. Some people think thats nonsense but its still worth mentioning as an idea/dynamic imo

Sounds like you are at the opposite end of the thread posters linked above in your age and accumulation. Building up a position regularly I do agree with (not that I presume anyone gives a dam if I approve lol)
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related:
silversurfer said:
A big trader I used follow on iii back in 2008:

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Graph for period of investment discussed below:
[IMG]http://i44.tinypic.com/2n6x7pd.jpg[/IMG]

http://www.shareprice.co.uk/LLOY/LLOYDS-BANKING-GROUP

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Okay, here goes, my £200,000 trade 21-Jul-08 08:55 PM

As promised, here is my thread re my big gamble by purchasing lloyds shares....

The funds cleared into my account this morning...£199,957 sent from the re-mortgage.

Am damned annoyed at how much lloyds shares have rallied these past few days, if only I had got this money last Wednesday when they were below 300 pence per share!

I am gambling that there will be a fall back in the next few days, so for today I just purchased 5847 shares at 342 pence per share, total cost £19,998 after stamp duty. I am using ETrade as the broker.
Still sitting on £180,000 cash, so will update this thread as and when I make further trades!
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22-Jul-08 06:21 PM Today I took advantage of the drop in price from yesterday to purchase a further 7991 shares at 312 pence, total cost £24,998.

I am still hoping that there will be a further drop in these shares and am holding back the remaining £155,000 in cash in the hope of purchasing below 300 pence per share.

In any case, I want to purchase all the shares before they go ex-dividend on 6th August as the dividend income is key to my plan to still make a profit on the dividend over my regular mortgage payments.
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23-Jul-08 08:29 PM Today I sold the 7991 shares I purchased yesterday. Sold at 335 pence per share (purchased yesterday at 312p), netting a profit of £1784 after costs.

Will use this profit to effectively cover my mortgage payment for the next month or so (which is around £960/month i/o) which also gives me more time to digest half year results etc etc and hang back on a large purchase if necessary.

I am back to now holding 5847 shares purchased at 342 pence. Still hoping for a drop in the near future back towards 300/320 pence per share, where I will then purchase a large amount (£100k or so).
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24-Jul-08 07:52 PM Yeah....having a bit of fun being a day trader at the moment.....purchased 10,000 at 337 pence today; holdings currently are
5847 @ 342p £19,998
10,000 @ 337p £33,879

Have set some limit orders to purchase tomorrow at 329p (5000) and 324p (5000) and to sell at 349p (10,000
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25-Jul-08 06:32 PM Today I purchased 21,729 shares at 321 pence, total cost £69,999

Holdings to date:
5847 at 342p £19,998
10,000 at 337p £33,879
21,729 at 321p £69,999
Total invested to date £123,876
£1784 made in a one day buy-sell trade

Will invest the rest to bring total investment up to £200k next week.
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29-Jul-08 09:59 PM Purchased a further 12,291 shares at 324 pence recently...

big day tomorrow with interim results so hope everything reported will be ok.
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30-Jul-08 07:33 PM Well am considering the interim results today.....

very pleased with the dividend increase, a show of confidence from the board, and this will come in useful to me as I now hold 60,469 shares!

Once you read past the "SHOCK 70% drop in profits" headline, these results are actually very strong across all three business divisions in the bank.

I personally think that Lloyds results today now show that they have got all the real bad news (re credit write downs) out in the open now and can concentrate on continuing to build longer term profit growth etc.

As I said in earlier posts, this is a minimum 3 year investment for me...not in it to make a quick buck so I am going to sit back and enjoy the dividends for now and forget about the share price.
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30-Jul-08 10:23 PM Hi there Fundamental...thanks for your interest in my great financial adventure
Since I received the chaps sum from the solicitor from my re-mortgage, these are the trades/shares I am currently holding (which have been purchased from the mortgage money) :-

5847@342p (Etrade) £19,998
10,000@337p (Etrade)£33,879
12,291@324p(Etrade) £39,998
21,729@321p(Etrade) £70,000
6102@312p (Etrade) £19,107
4500@305p (Etrade) £13,804
60,469 in total as at 30/7/08

I also bought and sold 7991 shares on the same day making a cash profit of £1784

I am also holding around 20,000 furtherLloyds shares (including the 3000 mentioned on my other thread) but these are a combination of matured sharesaves (when I worked for LTSB) and shares that have been bought with cash (rather than the mortgaged borrowed money). Therefore, this other holding is being kept entirely seperate to my shares bought from my re-mortgage as mentioned above.

Now that I have completed my portfolio of purchasing LTSB shares from the £200k I received from the re-mortgage, I intend to regulary update this thread with my profit and loss account of where I stand....I will continue to do this until this expirement comes to an end (which is hopefully when I sell all the shares again at a price of at least 450 pence, and then repay the capital I borrowed on the mortgage)

Here is my profit/loss statement to date:-

21/7/08 Chaps Fee £45.25 cost £45.25 loss

23/7/08 B/S 7991 Shares £1784.40 gain
£1739.15 profit

Hope that clarifies exactly where I stand financially with this experiment. I intend to disclose every aspect of how things are going on this thead, so people that are interested can follow my fortunes (or mis-fortunes?) with me through the roller-coaster of the coming months!
Richard
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13-Aug-08 09:35 PM Since my last post, have been taking advantage of the rising share price to sell off my lots of shares as they moved into profit

5/8/08 Bou/Sol 4500 Shares +£676.47 £2415.62 profit
7/8/08 Bou/Sol 2000 Shares +£291.30 £2706.92 profit
11/8/08 Bou/Sol 6102 Shares +£950.50 £3657.42 profit
12/8/08 Bou/Sol 21,729 Shares +£1566.64 £5224.06 profit
12/8/08 Bou/Sol 12,291 Shares +£1413.40 £6637.46 profit
£75,528 currently held in cash.

So a healthy £6637 profit at the moment, took advantage of the big falls today and late yesterday to pile back in so am now currently holding:

5847 @ 342p (Etrade) £19,998
10,000 @ 337p (Etrade)£33,879
3000 @ 330p (Etrade) £9959
5000 @ 321p (Etrade) £16,065
5000 @ 321p (Etrade) £16,065
5000@ 318p (Etrade) £15,985
2000@315p (Etrade) £6341
2000 @307p (Etrade) £6180
37,847 shares

Have my first mortgage payment (interest only) on 25/8/08 which will cost me £1428 (larger than normal for the first payment) so this chunk will be taken off my profit figure. But am entitled to a dividend of £6380 for the shares held on ex-dividend date so will receive this 1/10/08.

What I am hoping to show as this post continues is that it is possible to borrow a large sum of money, and actively trade in just one company and make an ongoing profit.

Regards all.
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29-Aug-08 07:49 PM As its the end of the working month, here are my share transactions and profit/loss trades since my last post.


22/8/08 Bou/Sol3000Shares
+£240.10
£6877.56 profit
22/8/08 Bou/Sol 3000 Shares +£239.35 £7116.91 profit
25/8/08 Mort Interest Payment -£1428.67 £5688.24 profit
25/8/08 Mort Application Fee -£599 £5089.24 profit  (
28/8/08 Bou/Sol 2000 Shares +£134.31 £5223.55 profit
28/8/08 Bou/Sol 2000 Shares +£152.70 £5376.25 profit at 31/8/08

Lloyds is going nowhere these last few weeks, seems to be moving steadily between 280p to 320p, not sure which way it will eventually break out of this, but I can't see anthing lower than 240/250 pence as a bottom for this share, time will tell I guess.

Sentiment : Strong Buy

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16-Sep-08 06:04 PM Good comments, I agree.

As I said at the start of my thread, I am looking for this as a three year deal, so I view the madness of the past two weeks as interesting, rather than panicking.

I still predict we are not at the bottom, hence why I am deliberately holding back some of my funds to be able to take advantage of a purchase below 250 pence per share. I bought some today at 260 pence and sold late afternoon at 280 pence, netting a further £700.

I am looking foward to receiving my first juicy dividend on the 1st October and will be updating my positions to date then.

Sentiment : Strong Buy

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13-Oct-08 04:16 PM Well I've been pretty quiet lately, and I am sure that some of you have been wondering what has happened to me so here is my update.

I will have to be brief as I am on suicide watch and am only allowed a few minutes to write this update before I am put back in my padded cell.


I think its fair to say that I didn't expect recent events to happen!!!!!!!!!!

Without going into too much detail I am holding a large bulk of shares at an average purchase price of 320 pence (£100K or so) and the rest of my £200k cash has been in and out like a yo-yo actively day trading in LLoyds TSB.

I wish I could turn the clock back but had I sold my entire holding a week ago on Friday afternoon 3rd October I would have walked away at that point with an overall profit of around £40,000 (including the £10k dividend I received 1/10/08)

However, I didn't sell and what has happened in the last 2 weeks just defies belief, the fall in LTSB share price has been incredible.

Taking the current share price of 150 pence, I am sitting on a paper loss of around £60,000. Of my £200k, around £160k is in Lloyds TSB shares, the most expensive at 340p and moving down from that price in neat little bundles every 5p or so down to 208 pence. I still have £40,000 in cash from the original £200k

My plan which looked relatively failsafe on paper is in tatters; I had always figured that if the shares fell there would be the back-up of the dividend instead, which would at worst cover the mortgage payments. Now we know that there will be no dividend for at least 2 years so that is out the window.

What do I do know? Well, I am certainly not going to sell at a massive loss. I feel that bank shares have been massively over-sold due to total panic and loss of confidence. When it is all completed, I also think the HBOS merger will be fanastic for the future earnings of this company. I, like many shareholders, feel totally misled by the information I had on Lloyds TSB. Both the company and all reports said that Lloyds was relatively immune to the downturn and well capitilised. That certainly looks like it was not the case now.

The biggest winner out of all this will undoubtedly be the government, who receive massive stakes in the main banks at knock down prices together with the high guaranteed yield of their preference shares. I do expect Lloyds shares to remain volitile for the rest of the year then settle down around £2.

I have no doubt that in three or five years this will be a bank back to top form making large profits on business with better-than-today margins, together with the huge cost savings that will certainly be extracted from the merger. I can only hope that the shares recover to the average price I need of 275 pence in order to recover my losses.

I guess that I can take some comfort that in the scale of the history of LTSB share price, an average price of 275 pence is a good one, rather than say the £5 they were a year ago.

Keep faith people, you don't lose anything unless you sell!
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11-Nov-08 07:03 PM Yes I'm still here and still alive, although I did like that comment about the electricity being cut off.

Actually, since my last post a couple of weeks ago I am feeling quite smug with myself, especially today.

Despite being stuck with many Lloyds shares that I had purchased between 330p and 220p (it seemed a good price at the time), I have been doing some daring 'averaging down' recently. By that I mean I have been selling all my Lloyds shares at a given price, and then quickly buying back within a day or two at a cheaper price. For example, I sold my entire holding of around 70,000 shares yesterday for 198.4p and purchased them all back again today for 181pence. This is the fourth time I have managed to do that now in the last 2 weeks and so I have been able to hugely cut my overall losses down by around £35,000. My average purchase price now is between 160 pence and 320 pence.

Apart from that, I don't really have anything else to add to my earlier post, am still looking forward to the HBOS merger and seeing the benefits of this in the longer term, and of course, like most people here, looking forward to the dividend starting again, which looks to be only a year away now, with a shares dividend to be paid for the full year 2008 also.
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11-Nov-08 07:05 PM I also forgot to mention that the mortgage that I took out for £200k to purchase the shares has also reduced hugely in cost, I took a tracker rate of base rate plus 0.75% so from next month my I/O payment is only at 3.75% and has reduced down by around £340 per month, so that has also been some good news for me.

http://uk.messages.finance.yahoo.com/UK_Stocks/threadview?m=tm&bn=UKF-Stocks-LLOY.L&tid=1571&mid=1571&tof=132&frt=2
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