is this a bouncing cat?

lizzie

lizzie

i asked this question somewhere else on the forum as part of a different thread - but now can't find it.

i'm looking at buying some more shares in the near future, but got stung by the last bounce - my share value has now halved since then!!

the experts ;) on ss had been screaming "sell sell" at that time, but i didn't listen. now i am ready to do so. is this recent upswing a cause of the chinese government bailout/investment internally, or is the belief that the market drop has finished and now is the time to buy.

would appreciate some advice that will be listened to this time!!
 
Lizzie, it IS a bear-market rally. But that doesn't mean that there is nothing to buy. If you are thinking banks and REITS, I still have not changed my mind. DON"T DO IT!

Miners and oilers are oversold and should improve though. (IMHO, not advice)

Edit: It is instructional to read up on the '30s depression. There were many rallies and many "experts" saying that the good were back each time, but the markets reversed again and hit lower lows.

The most dangerous thing in investing is to believe that the old paradigm will return and will do so soon, just because you think it has gone down far enough.
 
if the yield was good at the time and you thought it was good buying for a long term hold - then either DCA or hold for the yield (which should have made up part of your stock screening process IMO). your PE might have halved, but so has your capital!

i don't like financials. when (not if) macquarie fail it'll be Feb 08 all over again.

i guess if you own financials like CBA, ANZ etc then you have 2 options. take what you got and run, or hold on for dear life and pray pray pray.

i know what i'd do and i'm not religious.
 
last night obama defied jiabao. now things really get interesting....

resistance levels for precious metals and less so commodities, will rise.
support levels for everything else will be more fragile.

lizzie, what reading have you done to make you want to buy shares in the near future?
 
I think it depends on the sector. I don't think we've seen the bottom of the All Ords/market as a whole, but I definitely think some areas have bottomed.

Personally I have started scooping up some shares in the (junior) gold mining area. Looking for producers that have cash, are producing (or close to) & were knocked down heavily in the market late last year. Have already seen some decent gains on stocks I've purchased. I'm relying on the gold price to drive them further though. So steer clear if you don't believe in the gold story :)

So far I've bought:
TRY
SLR
RED (more of a spec purchase, but did well for me today)

Will continue to bargain hunt.
 
I have absolutely no idea whether:
1) we have hit the low a couple of weeks ago.
2) whether this is a bull market rally or not (and actually to be a bull market rally we still need to see 20% upside off the lows, we are not there yet)
3) whether the market will go up or down from here in the short term.

And further more, i couldnt really care less, i am first and foremost a fundamental based investor. I look at companies and from the company's fundamentals i calculate a buy in point. If the market gives me the opportunity to buy i buy, if it doesnt i wait. Pure and simple.
 
it's to late to sell, might as well just forget about your share portfolio for couple of years, and then come back to it and see the outcome
 
This:
Strannik said:
it's to late to sell, might as well just forget about your share portfolio for couple of years, and then come back to it and see the outcome
Click to expand...
is the second worst mistake an investor can make after:

The most dangerous thing in investing is to believe that the old paradigm will return and will do so soon, just because you think it has gone down far enough.
Click to expand...

I just call it as I see it! Sorry. :D
 
if the shares are bought without use of credit, and they are quality shares, there is no point to sell them just because they are low atm. sooner or later they will bounce back :)
 
Bond Corp, Quinterx, OneTel, HIH.
Weren't they considered to be safe at the time and would bounce back?
Whilst you're not a controlling shareholder, you're at the mercy of the Directors, the Board, and major shareholders.
Ride the trend, stick by your trading rules (no exceptions) and bail when the trend goes against you. Follow these 3 simple rules and you'll do well.

Project 1080

The project: 10 IPs in 80 mths.
 
Strannik said:
if the shares are bought without use of credit, and they are quality shares, there is no point to sell them just because they are low atm. sooner or later they will bounce back :)
Click to expand...

I'm a simple soul who just cannot justify holding losing assets. In the absolute worst case and you sell for a penny, you can at lest buy an ice-cream and immediately offset the capital loss against other cap gains. If you ride your horse to it's ultimate death, you don't get the ice-cream and you can't claim your tax loss until the liquidator officially declares that you have lost everything, which will take years.

DUMP LOSERS!!!
 
Strannik said:
if the shares are bought without use of credit, and they are quality shares, there is no point to sell them just because they are low atm. sooner or later they will bounce back :)
Click to expand...


Quite agree with you, on the condition they really are quality shares and were not originally purchased with a speculative mind in play.

You dont see all the superannuation companies dumping stocks because market prices are below purchase price. If you took the time to logically reason why you purchased the stocks in the first place and that reasoning still holds then inaction can be better than action if you are prepared to take a long term view.
 
Project1080 said:
Bond Corp, Quinterx, OneTel, HIH.
Weren't they considered to be safe at the time and would bounce back?
Whilst you're not a controlling shareholder, you're at the mercy of the Directors, the Board, and major shareholders.
Ride the trend, stick by your trading rules (no exceptions) and bail when the trend goes against you. Follow these 3 simple rules and you'll do well.

Project 1080

The project: 10 IPs in 80 mths.
Click to expand...

Yes you highlighted my main point: stick to your trading rules.

The rules for being an investor and being a trader are different. People get themselves into trouble when they try to blend the two.
 
hobo-jo said:
I think it depends on the sector. I don't think we've seen the bottom of the All Ords/market as a whole, but I definitely think some areas have bottomed.

Personally I have started scooping up some shares in the (junior) gold mining area. Looking for producers that have cash, are producing (or close to) & were knocked down heavily in the market late last year. Have already seen some decent gains on stocks I've purchased. I'm relying on the gold price to drive them further though. So steer clear if you don't believe in the gold story :)

So far I've bought:
TRY
SLR
RED (more of a spec purchase, but did well for me today)

Will continue to bargain hunt.
Click to expand...


I am not commenting on the correctness or otherwise of your comment. But what i will say is this is a trading position, its a position that needs to be watched. Its not an investing decision.
 
chilliaa said:
I am not commenting on the correctness or otherwise of your comment. But what i will say is this is a trading position, its a position that needs to be watched. Its not an investing decision.
Click to expand...
They aren't the sort of stocks I intend on holding forever for dividends like you might with blue chip shares. Not sure if that's what you were getting at. I don't see how it's not an investing decision. Care to expand?

Troy Resources has been in the mining game for 25 years, have been listed on the ASX for over 20 years, pay a dividend, have good cash reserves, I would say this stock in particular of those I've bought could be considered for long term investment and I would like to hear your thoughts if you think otherwise!
 
hobo-jo said:
They aren't the sort of stocks I intend on holding forever for dividends like you might with blue chip shares. Not sure if that's what you were getting at. I don't see how it's not an investing decision. Care to expand?

Troy Resources has been in the mining game for 25 years, have been listed on the ASX for over 20 years, pay a dividend, have good cash reserves, I would say this stock in particular of those I've bought could be considered for long term investment and I would like to hear your thoughts if you think otherwise!
Click to expand...

Again i emphasise i am not commenting on the correctness or otherwise of the decision. I have no opinion on the decision.

What i am trying to emphasise here, is the difference between deciding to make an investment in shares, and taking a trading position in a share. The rules governing such decisions are not the same.

Too many retail investors believe they are investing in shares when in fact they are taking a trading position. Because their minds are not focused on this issue they run the risk of incurring capital losses because they then try to justify decisions based on investment criteria rather than a trading criteria.

For those of you that are looking for a basic frame work to establish trading positions, i will post Gartman's 10 Rules of Trading.
 
Strannik said:
if the shares are bought without use of credit, and they are quality shares, there is no point to sell them just because they are low atm. sooner or later they will bounce back :)
Click to expand...

There is every point to sell them.

Opportunity cost.

Why hold and ride a poor position that is eroding into your capital, when you can put those funds to better use elsewhere?



chilliaa said:
If you took the time to logically reason why you purchased the stocks in the first place and that reasoning still holds then inaction can be better than action if you are prepared to take a long term view.
Click to expand...

Logic is a dangerous thing in the market. Circumstances and market forces change. Using logic to justify a position is easy. Admitting that the exact same logic has actually reduced one's available capital in recent times is another thing entirely. Confirmation bias is easy to find but I don't believe it helps to build wealth.
 
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