The JSE and finance forum for South Africa
General Category => Shares => Topic started by: Patrick on April 30, 2013, 01:44:30 pm
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A bunch of the competition users are clearly new to investing so I'd like to include some advice to the newbies in the email when the monthly deposit email goes out every month.
For the first month I thought of explaining how buying less than R30k worth of shares means you pay an excessive amount in fees.
Any other ideas as to what I could use in future months? Something which seems like common sense to us might be useful to a newby.
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Get in the habit to read websites every day, and also bloomberg and Yahoo!finance after hours to see what the Dow Jones and Asian markets are doing when JSE is closed.
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How tax can eat up a huge part of your gains if you sell within 3 years. CGT or Income. Are you trading or investing?
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One of the cheaper ways of getting into the stock market without take huge risks with CFD or SSF's is through the vehicle of instalment shares. Normally you purchase full quantity of parcel of shares but only commit about 55% of face value cost up front - so in principle you could buy different counters. These are not warrants but instalment shares and they are put into the market by most of the banks. The shares are not traded as the normal share but have less churn. They are put in place for 1 year and you have the option to take them up at the strike price or you sell just before they come to term. One can expect fairly steady growth in their value in a bull market as they move in line with the main share
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How to determine support and resistance?
Good idea by the way.
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The risks of Penny Stocks. Volatility and Liquidity.
Case in point. RSATrader right at the bottom gambling with R400k in 1 Penny Stock.
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http://www.sharenet.co.za/v3/trade/broker_calc.php
A good calculator that shows your costs for selling and buying.
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Well what I've noticed is that some people are spreading their risk across multiple asset classes and sectors, which for your personal portfolio is great if you're looking to minimise downside risk, but for this sort of competition isn't entirely appropriate. You want risk in this sort of competition. I'd suggest splitting your portfolio into 3 risk classes - low - medium - high and start with equal weightings. Each month you will be given an additional R100k, so you then have a choice to play with your weightings or look at getting into other companies. Don't just buy because you can - cash can be king. I'd also suggest holding on to cash to allow you flexibility to manage downside risk. Towards the latter end of the competition you might need to hedge your downside exposure to certain asset classes, sectors, and/or companies, and this is possible, but you need the liquidity to do so, and in this competition that only comes from cash. Or you might want to dump some money into a higher risk stock and go for broke.
I'd suggest that if you want to learn from this experience, then don't look at penny-stocks, as much as I've stated that you want risk. They are simply too volatile and illiquid an asset, and they're almost impossible for a noob investor to make an informed decision about. Stick with the medium-large cap companies, check their recent SENS announcements, check the latest news about the company, find some research by various asset managers and sell-side participants, look for when they announce results, look for when they go ex-div, look at their div yield, look at their past performance but importantly, use this as an indicator, not as a decision-making criteria. Look at the kinds of volumes traded. Try to understand why their price moves.
Let's take a good example - Calgro M3 Holdings. They recently moved from the AltX to the main board and have had considerable success, even though other property developers have struggled. Why? Well check the news and see their affiliation with government. Look at their potential contracts moving forward. Look at the management team. Look at why they are listed - they're simply diversifying their investor-base - they don't actually need the additional capital. So they are heavily liquid; are well supported; showing great growth; can protect themselves in the event of sudden negative economic impacts; and they're in a market that is somewhat protected from macro external property market moves, as they have a niche with government.
But this poses its own risks. Can their growth be supported for a long period of time? Well that depends on the sector but I say no. They are heavily exposed to one part of the market - government. So there is demand risk. They are approaching all-time highs. Will they trade through this price point? Possibly, but other developers in a similar position often struggle to trade through these resistance levels. But then again, the last time they broke through their all-time high, they shot up like a bullet. They've also recently broken through their 570 resistance level and traded above there for the last day or two, so 570 might in fact become the new support level for this stock.
Look into these risk factors and you begin to build your own risk model. Use this to begin to understand price movements, understand the range within which the stock trades, and you begin to understand where a good entry point into the stock is (i.e. price). You can also begin to gauge the potential of the stock moving forward with this data. You can then transpose what you've learnt on to other asset classes and companies and begin to make informed investment/trading decisions. Remember that you're only in this for a few months, so you're not necessarily trading, but you're also not necessarily investing for the long term either.
Oh and to patrick, I wouldn't suggest adding a sell option, as the competition started as a no-sell option and investment choices were made on that basis. Perhaps next round that can be introduced.
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New money is in. How about a few new tips for beginners?
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It is a competition, thus use this to learn mistakes. i.e. take risks that you will not take with real money.
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No no no jaDEB. :frustrated: Must I always shout at you? They must pretend its REAL money. That way they will be more careful with investing.
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ok, ok. sorry ........ O:-). I use competitions to learn to take risks.
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I'm with jaDEB here. Use the competition to see what playing with penny stocks does instead of using real money. Some people want the experience and don't listen to others - they want to do their own thing.
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What can one possibly learn from penny stocks? It is mostly gambling. You might learn that you can loose most of your investors money or make a lot. Most importantly is that you will not learn that in the real world, with R400k, it will take you weeks to get filled and months to sell all.
It took me 3 weeks to sell AET at 3c and I only had R8k in it.
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True, but say if you bought Poynting in Sept 2011 at 10c, say just R10,000, over a couple of weeks. Today it is R1. Say you sell now, you might again have to spread it over a couple of days. But easy to have made R70,000 or so.
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Correct. But still it could have gone down. Hindsite does help.
Ten cents is still okish but the guys are still buying 1c stocks that might get suspended. Did they not read the introduction to the competition?
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Good morning all... :TU:
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Good morning all... :TU:
Took you awhile. 8)
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I see a lot of free American websites that show candle charts for shares on the NYSE. Where can I get such a site that will show SA candle charts?
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http://www.reuters.com/finance/stocks
That's the only one I know. Daily candles only though. You must add J.J after each ZA stock ie BILJ.J
Then click on the correct stock that comes up. A day chart will open then click on the Charts box.
A 3 m chart will come up changeable to 6m, 1y, 2y etc.
Click on chart styles.
Anyone got better charts?
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Here's one of NPN .. complete with those Bollinger Bands, Orca.
You can get these charts by visiting ft.com (http://markets.ft.com/research/Markets/Companies-Research)
I am sure you will find your way around. :)
(http://thumbnails106.imagebam.com/26994/cbf8ca269939375.jpg) (http://www.imagebam.com/image/cbf8ca269939375)
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There is another one, from marketwatch http://bigcharts.marketwatch.com/
Enter symbol eg. ZA:NPN (doesn't have to be upper case.)
Trouble with that site is that when you have javascript enabled and select interactive chart, there is a
certain amount of cross site scripting (XSS). I don't like that from a security pov.
You won't be alerted to that with Opera (unless you have a suitable extension), but Firefox with
the NoScript add-on will warn you.
Best to turn off js and just use 'basic' for the charts.
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That's cool Moon. Beats Reuters as I can now draw trend lines without using Screenshot and Photo Editor. Hope the Android App works as well because I mostly use my tablet at work.
We both posted at the same time. The FT.COM was the one I was talking about.
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There is another one, from marketwatch http://bigcharts.marketwatch.com/
Enter symbol eg. ZA:NPN (doesn't have to be upper case.)
I like that one. They also seem to have data going quite far back: (http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=ZA%3aSAB&uf=0&type=2&size=2&sid=168805&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=20&rand=1430694115&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
The alsi goes back to 95, still looking for something that goes waaaay back.
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=XX%3aJ203&uf=0&type=2&size=2&sid=10098692&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=20&rand=1073297190&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
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Thanks guys. Much appreciated.
Another request to the forum admin - How about a share buying calculator on the buy page? I have R20230 and I want to buy a 4.23 share. How many can I buy and what will my fees be? I looked at the calculator you mentioned on the sharenet website. Doesn't help.
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Thanks guys. Much appreciated.
Another request to the forum admin - How about a share buying calculator on the buy page? I have R20230 and I want to buy a 4.23 share. How many can I buy and what will my fees be? I looked at the calculator you mentioned on the sharenet website. Doesn't help.
I'll see what I can do.
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Imagine you shorted HAR on Thursday
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Imagine you shorted HAR on Thursday
??? ??? ???
:wtf: happened there?
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Gold up + report that clever people think that gold should be higher.
Gold futures advanced the most in three weeks as demand surged in China, the world’s biggest consumer of the precious metal after India. Silver rallied to a seven-week high.
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Bigcharts is great! Thanks it's a nice free resource. Does anyone have another resource available for historical share prices that could be exported to Excel? That is without having to pay for it like all the SA sites. So many foreign sights provide this free of charge, ADVFN.com is one of them, yet SA you gotta pay for everything.
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No no no. The cr@p chuckers will get us everything for free.
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Sorry Orca not with you could you elaborate please?
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Nios you're not alone. many people don't understand orca :D
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Help with a request - Where can I get a ZA sector heatmap?
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Nios you're not alone. many people don't understand orca :D
That's what happens when your thumb is too big for the virtual keyboard. Post stuff on the wrong thread. :LHST:
Disregard everything I post after 7.30 pm as I'm normally investing in SAB at that time.
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That's what happens when your thumb is too big for the virtual keyboard. Post stuff on the wrong thread. :LHST:
Disregard everything I post after 7.30 pm as I'm normally investing in SAB at that time.
Thanks for supporting one of mine. Now let's drill down a bit further - what brand ? (If not Grolsch, you are missing out). :D
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What brand? Dunno. Whatever they is available. 8)