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things every retail investor/trader should know

Thanks elfie.

 Boosting the market before Obama comes in?

 

heya,

thanks for the comments, ticklish8. :)

SupremeA: vol high cos funds have been buying Asia for past two/three weeks. it's good though, to finally see the breach of 2 bil again. my expectation is back to regular mode (consolidation mode) tho, since the breakout is on overbought levels and most of the counters stochs were turning/have turned. so let's just see how it goes.

note to all: capland: rumors of rights issue, hence the earlier ramp and dive.

onesharer: got here dec 15 (or was it earlier...hmm...). didn't rub shoulders with Obama, but saw his cruise boat (and he had a helicopter on deck too! o_0 ). still here and absolutely loving it.

cheers!

btw: one more tip for the newbies: this capricorn effect is what is known as a bear market rally. bear market rallies can be from 3% to as much as 20% (track the history of the NIK, you'll see what i mean), so really, considering the global economic data coming out, it isn't quite 'recovery-->rally'. From the US side, the analysts are expecting feb to retouch the lows.

am quite certain though that spore market has bottomed. but to note that bottoming and recovery are two different things. ie, stocks can play around a range for 6 months or more. and these ranges may be wide. so don't get caught buying at the highs, as per blog warning. 

 

 

Aloha!  When did you get there?  Did you get a chance to rub shoulder w/ Obama and share your thots on short-selling w/ him? 

Enjoy! 

elfinchilde      ( Date: 07-Jan-2009 06:57) Posted: http://elfinchilde.blogspot.com/2009/01/and-new-year-begins.html   greetings, peeps, from the sunny isles of Hawaii. I trust most have had a good Capricorn effect. cheers and back to hols! :D

 

Hey Elfie Welcome back. Agree that the market looks overbought. Rise is too fast! but the volumue has been pretty high too tho. Anyway,some of the graphs look pretty look pretty bullish.


 

 

Tks. Been monitoring your stock tips/ advice for the past 3 month. Have been accurate, without the impulsive, emotional outburst of buy/ sell call usually associated with other stock trader/investor/speculator.

elfinchilde      ( Date: 07-Jan-2009 06:57) Posted: http://elfinchilde.blogspot.com/2009/01/and-new-year-begins.html   greetings, peeps, from the sunny isles of Hawaii. I trust most have had a good Capricorn effect. cheers and back to hols! :D

 

http://elfinchilde.blogspot.com/2009/01/and-new-year-begins.html

 

greetings, peeps, from the sunny isles of Hawaii. I trust most have had a good Capricorn effect.

cheers and back to hols! :D

 

Erm... got qns for fellow experts....

I saw this announcement :

The Directors of Delong Holdings Limited (the "

Is this a good thing or a bad thing to have the bonds cancelled? I'm still quite confused how such information is important or not for the company... how should I be digesting such information?

Many thanks in advance...

Company") have been informed by its majorshareholder Best Decade Holdings Limited ("Best Decade") that a holder of S$175,000,000 zero coupon secured exchangeable bonds due 2012 (the "Bonds") issued by Best Decade had exercised its right to exchange S$300,000.00 in principal amount of Bonds ("Relevant Bonds") for 75,000 ordinary shares of the Company held by Best Decade and following the exercise of such exchange rights, the Relevant Bonds had been cancelled on 18 November 2008.

 

This is sth like 'buy on rumours sell on fact'type of rally. Also year end need some window dressing. Also mkt been too oversold so natural forces act to make it become overbought. STI reaching 1900 soon and if you look at most charts most hitting previous line of resistance and some even pierce it. Certainly it is Santa Bear Riding through the snow in a white horse sleigh...jingle bell jingle bell.......those not careful will be snow under!

 

iPunter,
       No doubt your post is a bit philosophical or cheem to me, but i think i understood what you meant. True indeed to preserve capitals.
20% is  a lot  but if something goes below this, something is really bad, so getting out is wise. Holding has opportunity costs, no doubt it might go up again (esp for blue chips) but there is a cost of getting stuck.

       thanks for the inputs. I've learnt! Will try this way. To average up and cut loss at 20%. To cut loss at 10%, it is a bit noisy, so maybe 20% is better.

Actually, i read it from somewhere that it is risk/reward ratio. If you think it has a upside of 100%, divide by 3, you get 33% which is for you to average up. You divide by 4 (25%) for you to cut loss. So the risk:reward ratio is 1:3
This is how i arrive at 20%, (about 25%).

iPunter      ( Date: 09-Dec-2008 06:47) Posted: To most people, the idea of selling a stock when it has gone down 20% is an impossible thing to do. That would mean losing face and admitting a wrong and defeat, and saying sorry to bad Mr. Market! The 'war chant' is 'rather wait,  it may go back up tomorrow' ... Hehehe...

 

as long as there r no punters, no teeth, no one thousand forty one.......n as long as money talk.

 

Frankly I am not totally sure how far this rally can last. But if it does last for soem time, then what I wrote earlier will have real significance.

Livermore      ( Date: 06-Dec-2008 12:57) Posted: Let's say you sold a stock at 80c and it comes down to 60c but you forgot to buy back and it climbs back up to 90c, some people would say to themsleves,"Ok, let's wait for it to drop back to 60c then I buy." It is a common mistake. But that stock may not even drop back to 80c. There is simply nothing wrong with buying back a stock at a higher price than the price you sold off at Livermore      ( Date: 06-Dec-2008 12:53) Posted: We are like in a trading market. There is nothing wrong trading and locking in some profit but do remember to buy back your stock after you sold off as one thing that could happen to some people is you sell off your stock to lock in some profit. Then after the stock falls and it climbs back up fast, you would have lost it if you don't focus on it. When we eventually enter a bull market, the long term gain will far weigh all your successful short term trades if you forgot to buy back

 

You only average up to a certain point then you stop. You also average down minimally up top certain range then you stop

Livermore      ( Date: 09-Dec-2008 07:25) Posted: Your method is quite ok but this is how I do it. The first buy is the important one. Let's say I might get 10  or 15 lots (sometimes when I am confident downside limited I put in 20 - 25 lots) on first buy at say 40c, the when it goes to 45 or 46c, I buy maybe just 10 lots, and at 50 or 51c buy another 10 lots. I use the 5c averaging up method. It seems strange to buy at higher price but analyse carefully and you realise you are covering your positions in this way. Just like in war, your comrades cover positions when you attack your enermy. If the price comes down on first buy there is no need to panic. I might average up just 5 lots at wide difference of 5- 10c and up to certain point when I proved really wrong and price just won't reverse up, then I get out.     HLJHLJ      ( Date: 09-Dec-2008 01:41) Posted: Yes true! It happened to me last time and i missed out a lot! Price is relative just like speed is relative as Einstein had said before. There is one method which i'm trying now but not sure it is ok. Use some percent  to buy to try the base. If it goes up about 30%, add the same proportion and so on. If the any stock goes down by about 20% of its peak, get out. What do you think of this? In this way, we do not have to track so closely, and let the good ones run up, chop off the lousy ones.

 

Your method is quite ok but this is how I do it. The first buy is the important one. Let's say I might get 10  or 15 lots (sometimes when I am confident downside limited I put in 20 - 25 lots) on first buy at say 40c, the when it goes to 45 or 46c, I buy maybe just 10 lots, and at 50 or 51c buy another 10 lots. I use the 5c averaging up method. It seems strange to buy at higher price but analyse carefully and you realise you are covering your positions in this way. Just like in war, your comrades cover positions when you attack your enermy.

If the price comes down on first buy there is no need to panic. I might average up just 5 lots at wide difference of 5- 10c and up to certain point when I proved really wrong and price just won't reverse up, then I get out.

 

 

HLJHLJ      ( Date: 09-Dec-2008 01:41) Posted: Yes true! It happened to me last time and i missed out a lot! Price is relative just like speed is relative as Einstein had said before. There is one method which i'm trying now but not sure it is ok. Use some percent  to buy to try the base. If it goes up about 30%, add the same proportion and so on. If the any stock goes down by about 20% of its peak, get out. What do you think of this? In this way, we do not have to track so closely, and let the good ones run up, chop off the lousy ones. Livermore      ( Date: 06-Dec-2008 12:57) Posted: Let's say you sold a stock at 80c and it comes down to 60c but you forgot to buy back and it climbs back up to 90c, some people would say to themsleves,"Ok, let's wait for it to drop back to 60c then I buy." It is a common mistake. But that stock may not even drop back to 80c. There is simply nothing wrong with buying back a stock at a higher price than the price you sold off a

 

To most people, the idea of selling a stock when it has gone down 20% is an impossible thing to do.

That would mean losing face and admitting a wrong and defeat, and saying sorry to bad Mr. Market!

The 'war chant' is 'rather wait,  it may go back up tomorrow' ... Hehehe... 

 

Yes true! It happened to me last time and i missed out a lot!
Price is relative just like speed is relative as Einstein had said before.

There is one method which i'm trying now but not sure it is ok.
Use some percent  to buy to try the base. If it goes up about 30%, add the same proportion and so on. If the any stock goes down by about 20% of its peak, get out.

What do you think of this? In this way, we do not have to track so closely, and let the good ones run up, chop off the lousy ones.

Livermore      ( Date: 06-Dec-2008 12:57) Posted: Let's say you sold a stock at 80c and it comes down to 60c but you forgot to buy back and it climbs back up to 90c, some people would say to themsleves,"Ok, let's wait for it to drop back to 60c then I buy." It is a common mistake. But that stock may not even drop back to 80c. There is simply nothing wrong with buying back a stock at a higher price than the price you sold off at Livermore      ( Date: 06-Dec-2008 12:53) Posted: We are like in a trading market. There is nothing wrong trading and locking in some profit but do remember to buy back your stock after you sold off as one thing that could happen to some people is you sell off your stock to lock in some profit. Then after the stock falls and it climbs back up fast, you would have lost it if you don't focus on it. When we eventually enter a bull market, the long term gain will far weigh all your successful short term trades if you forgot to buy back

 

I typed from internet outside. Hm...not sure why font so small.

You are right. Now plane take off and after a while develop engine problem.

Let's say you put $10k into a margin account. You can buy shares up to about 3 times i.e $30k worth of shares.If you have existing shares, just ask your broker to transfer the shares into margin account after you fill up some forms. If you leave money in margin account, your money also earn interest and it seems higher than bank interest

 

stupidfool      ( Date: 08-Dec-2008 18:23) Posted: Hi friend It is true the plane will take off. But wat happen 5 min.into the journey,the cockpit discover some engine faults and have to return to base? Like wat happen in sept.08,the plane has to abort the flight.....habis lah...finitto...died...wan tan(in mandarin). Hi friend,i have great respect for u.May i know how many years have u been trading in the share mkt?And wat sort of margin loan do ur broker firm allow to borrow at any one time?No offence intented. Livermore      ( Date: 08-Dec-2008 11:59) Posted: Although with margin I have  more room to play, I normally just buy a bit when a stock has stablised and not moving. There is no point putting too much as capital is being wasted when the stock does not move. Go with those "in play".  I treat each of my buy like a aeroplane about to take off from a airport. First passengers will board the plane, then the plane gradually makes its wasy to the run-way. Then it starts its run on the runway and increases its speed and finally takes off.

 

Hi livermore

ur print is so small.Looks like u want to exclude old folks from reading ur posts.

luckily i am still young and have good eyesight....hahaha.

 

Hi friend

It is true the plane will take off.

But wat happen 5 min.into the journey,the cockpit discover some engine faults and have to return to base?

Like wat happen in sept.08,the plane has to abort the flight.....habis lah...finitto...died...wan tan(in mandarin).

Hi friend,i have great respect for u.May i know how many years have u been trading in the share mkt?And wat sort of margin loan do ur broker firm allow to borrow at any one time?No offence intented.

Livermore      ( Date: 08-Dec-2008 11:59) Posted: Although with margin I have  more room to play, I normally just buy a bit when a stock has stablised and not moving. There is no point putting too much as capital is being wasted when the stock does not move. Go with those "in play".  I treat each of my buy like a aeroplane about to take off from a airport. First passengers will board the plane, then the plane gradually makes its wasy to the run-way. Then it starts its run on the runway and increases its speed and finally takes off.

 

True.

What about if the the share mkt keeps gg up when key indicators keep showing a poor state of health?

 

 

Stocks always lead ahead of the economy. By the time the economic indicators turn positive, stocks already be somewhere off the bottom.

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