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Hi IPunter & Rayphua,
Thanks for your comments:). As you probably already know my style, it is a simple one. Accumulate, leverage and hold.
To me the most important thing in investment is manage your risk profile well. I just epxlained to a colleague today. If you make $10, maybe you can afford to lose $3. If you make $20, you can afford to lose $7 etc. Notice as your profit grows, you can adjust your risk profile upwards. It is a slow and steady process but once you have built a firm capital base, you can make money quite fast. To make more money you need to be a bit aggressive but not reckless. There is a difference. I am only aggressive when my earlier lots are in paper profit as I average up. I have plan B if plan A fails.
Yes, warrants seem a bit risky. But as long as you don't put too many "bullets" at one go, it is quite ok. Look at FerroChina MBLECW070905 (time it just nice for the result announcement) now at 30c. If you buy 10 lots at 30c, 5 lots at 20c and 5 lots at 5c, surely you cannot lose money. The warrants is unlikely to go to 5c and it cannot be 0c.
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SUSIE GHARIB: The Dow transports rose today and the index has surged more than 20 percent in the past six months. Wall Street technicians keep close tabs on the transport average. It's a key bellwether of stock market activity. Now that it's in record territory, Suzanne Pratt takes a look at what it means for the bulls and the bears.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Those on Wall Street who believe in the Dow theory have been some of this year's biggest bears. That position is likely to be re-evaluated now that the Dow Jones transportation average closed at a new all-time high last week. Under Dow theory, which was started more than a century ago by Charles Dow, a fresh closing high for the transports confirms the series of new highs recently set by the industrial average. Most importantly, it suggests the current bull market has longer legs. Because transportation companies carried the goods industrial firms make, Dow said investors can gauge long-term bullish or bearish stock market trends if the two indexes rise or fall together. To Dow, a bull market in industrials could not occur unless the transports rallied as well. Miller Tabak technical analyst Philip Roth says the transport's confirmation is one of many technical factors he uses to evaluate the stock market, but it doesn't give specifics about the rally.
PHILIP ROTH, CHIEF TECHNICAL MARKET ANALYST, MILLER TABAK: The indicator just tells you that the bull market is in force because they're both confirming. It doesn't tell you anything about how high the market's going or how long it will be before the top is made.
PRATT: The Dow Jones Industrial Average has been on an upward tear since last July, moving above its May high and setting many new all-time highs. Yet, in the same time frame, the transports were unable to confirm the move, that is, not until Friday, when it finally closed above 5,000. To many Dow theorists, when the averages diverge, it's a warning that change is coming, in this case, an end to the bull market. But technical analyst Louise Yamada believes there has been no divergence. It simply took the two averages longer to confirm the new highs than people expected.
LOUISE YAMADA, MANAGING DIRECTOR, TECHNICAL RESEARCH ADVISORS: Dow theory is not necessarily a short-term, day-to-day or week-to week confirmation that you look for. It's something that can happen with a number of months between one average and the other average moving to new highs.
PRATT: A new high in the transports is also considered a positive sign for the U.S. economy. Experts say it suggests the promise of further economic expansion, as well as a continuation of the bull market. Suzanne Pratt NIGHTLY BUSINESS REPORT, New York.
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PAUL KANGAS: My guest "market monitor" this week is Elaine Garzarelli, president of Garzarelli Capital and welcome back to NIGHTLY BUSINESS REPORT, Elaine.
ELAINE GARZARELLI, PRESIDENT, GARZARELLI CAPITAL: Nice to be here Paul.
KANGAS: During our last several visits, you've been decidedly bullish on the U.S. stock market and given these recent new highs, including today, correctly so. You told us the U.S. economy had rarely been in such good shape as in recent times. Any change in your position? Is the stock market getting ahead of reality?
GARZARELLI: No, no. Actually, the stock market is catching up to where it should have been last year and we think it has a lot further to go.
KANGAS: Where do your widely followed 14 marker indicators standard now?
GARZARELLI: Well, a bullish reading at 65 and they're at 67 percent; 30 percent would be a major sell signal and 42 percent would be a correction greater than 4 to 7 percent.
KANGAS: You're still quite bullish?
GARZARELLI: Definitely, best economy I've ever seen.
KANGAS: When you were here last in October, you said the housing slump was basically over, but it has gotten a bit worse hasn't it and has it bottomed finally?
GARZARELLI: Well, the mortgage rates are down, 30-year mortgage rates down 100 basis points and I think housing now is flattening out and it should start to turn up later this year in 2008, modestly.
Livermore... :)
Although I use the nick "iPunter", I am in reality not the punting type like horse-punters or share-punters in the usual sense of the word.
To me, the moment anyone 'dabbles' in shares (ie.whether as an investor, trader or gambler), he/she is 'punting', ie. betting on the hope that the shares bought will rise and bring them money.
And that no matter how long it takes to realise that hope, sticking to one's guns till the end is the style of the 'investor'.
By the way, I don't dabble in warrants as these are high-leverag instruments as I have pointed out in another thread. To me, I think that if one does not first learn to lose in normal shares, one should really not dabble in warrants. This is because losses in warrants are much more devastating than losses playing shares.
I also never buy with the intention to do a contra. I do contras only on those occasions when the shares I bought have immediately risen much in a day or two.
Hi ed88ks, by the way where u get that comment from ? pay service? or web site?
Just a gentle reminder, STI is post for rebound to see another 200 pts or a new high..
STI has recovered from day low og -52pt to -15pt with DOW, Nasdaq and S&P500 taking some lost ground initiated by China increases in it stamp duty from 0.1% to 0.3%.China punters will be more alert this after round of profit taking..
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Woww..today Straits Times published a car fall from 6th fl and d driver walk out alive lehh. it mean good omen, i see falling from 4th fl, not a problem at all B4 climbing back to d 13th fl. B4 falling again when Greenspan speak, maybe d fall will reachd 10th and not ground fl,expecting for STI to touch anew high B4 going on profit taking on another round, but 1st let this round absorb d profit taking 1st.
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It has been dropping, it should have drop more since the beginning of d last few day. Is not, so renkon drop will be sustainable, which is drop regional bourse will rechange again and make it way to a new high for Dow and also for S'hai but not Nikkei, with those story below....hummm....
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STI will test new high B4 profit taking again n has been happening a few round this year, certainly will be following S'ghai n Dow, needlessly w/o much effort.
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Posted: 25-May-2007
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Even after Olympic 08 is over, the Chinese long, long have plan what can happen, so they do something up..to softer tha ground for a soft landing, maybe this time lower their interest rate, let go abit more to liquidate their yuan, float more Yuan $$$, give HK bourse a boost, ppl's to buy share, alot and alot more then can do or even come out with a big confident word like another world biggest IPO to boost the market.
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This appears in Straits Times Forum.
AS A stock-market participant, I have always thought that the covered warrants issued by financial institutions should track the movements of the underlying instruments closely.
Warrant issuers are supposed to have market-markers to ensure that when the underlying instrument appreciates, the call warrants will appreciate in price, and when the underlying instrument depreciates, the put warrants will appreciate in price. This is far from the case in reality.
Having watched the movements of some STI put warrants for the last few weeks, I must say that their movements are hardly in tandem with the performance of the STI. When the Straits Times Index is down, the put warrants are also down or hardly appreciate. But when the STI is up, these put warrants come down with a vengeance. Their movements are inexplicable and highly suspicious.
I list below the respective prices of the STI and a put warrant issued by Societe General, STI3000SGAePW 70628, for the last few days:
May 10: Closing 3,469; warrant price $0.065
May 11: Closing 3,446; change -23; warrant price $0.065
May 14: Closing 3,501; change +55; warrant price $0.045
May 15: Closing 3,475; change -26; warrant price $0.04
On May 11, when the STI was down 23 points, the put warrant remained unchanged (when it should have appreciated). On May14, when the STI went up by 55 points, the put warrant promptly depreciated by more than 30 per cent to $0.045. On May 15, when the STI was down 26 points, the put warrant, instead of appreciating, actually fell!
This is not a lone example but representative of many others I have observed.
It seems to me that the warrant issuers have no fiduciary duty to play the market-maker's role. After all, these derivatives have an expiry date and they become worthless upon expiry. Monies collected from the sale of these warrants are pure profit upon warrant expiry. The cheaper they are towards expiry, the better it is for the warrant issuers.
When the authorities concerned allow financial institutions to issue derivative instruments, they should ensure that these institutions perform their role in a proper manner. Otherwise, the unwary are in for a raw deal.
Tjioe Tjiong Lip
After yesterday's Dow close, Russell wrote:
"I believe the early part of the third phase of the bull market is now underway. This is what I call the 'worldwide globalization bull market.' This bull market is floating on massive liquidity, low interest rates, easy credit and the ability of the central banks of the world to create all the money they want out of thin air. I consider today's confirmation and record high by the S&P 500 to be an important event."
Volume upward trending, Cashiertan. Healthy.
Will update any squeeze breakouts when it happens on Friday. Cheers.
i think the key is what stocks to buy? btw, is volume for DOW good yesterday?
Livermore, you're discounting too much from yourself. I've seen your posts, makes a lot of sense.
Btw, I am thrilled by the dow performance last night. It was important. For about 11 days, it was trading without any clear directions. Strength was weak, it was moving north or south without committment. But yesterday's was decisive, and a rebirth for the dow. The worldwide indices show the same enthusiasm.
Too bad we're not trading today.
The good trader should be RayPhua whose "tips" gives a ray of hope and optimism which shines through.....:)
Hi IPunter,
Actually I am just ok as a trader. I still wish to hold 1 or 2 stock for long term and I try to make more money puntting like you:). I like warrants. The gains are good if you play it right. For mother shares that are at high price, you won't make much buying the mother share if you don't have much cash. I try to choose those warrants with 3 - 4 months time frame and whose exercise price is below the mother price.
I intend to a full time investor when I retire.*ha*
[error]
Extracted from today's online: The Bangkok Post...
"
Thai stocks rose 1.32% yesterday to a five-month high on growing
optimism that the political deadlock that has paralysed the country's
policymaking and economy was nearing an end.
"
That should give some indication of STI's performance on Friday and thereafter.
Extracted from today's: The Bangkok Post...
Thai stocks rose 1.32% yesterday to a five-month high on growing
optimism that the political deadlock that has paralysed the country's
policymaking and economy was nearing an end.
That should give some indication of STI's performance on Friday and thereafter.
The position of the Dow shows that the world market is still sound and healthy.
Regarding China, I would bet the the desire to make money is the dominant force at play. See what happened when the authorities there tried so hard to dampen the market? The market became even stronger (rose more!).
Livermore... :)
Yes... I fully understand your sentiments in that rather common experience...
I would call that part and parcel of the rough and tumble stock market world of hard knocks.
Well... actually, that's what the stock market is about...
Anyway, I see you are a good trader too... :)
wow..Dow surged 111 pts lst nite!
So much for the China pullback..They dun even bother bout it!
If onli the markets here have more guts and dun follow the china market..after all the reasons for the pullback is clear!
Hi IPunter,
I had the plan but hesitated.*Sigh*. I don't try to time the market. I wait for the first sign. Never good to time the market. For instance, you sell at $2 for share A but the stock goes to $2.40. You lose out a lot. At $2.40, it went down to $2.32, that was the sign for me to sell off half my positions.
Well I went to second plan and sold off another share to have capital to accumulate on A bit by bit.
