Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello Share Bunnies. There was some interesting share movements after all the good news came out for Feedback (FDBK), the minnow capitalised at a mere £5 million.
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Comments
Phil
Not certain I totally agree with you on this one Malcolm.
I think selling on spike rises is pretty much obligatory in emerging companies, I have never yet seen a share rise in a straight line, and there is nothing worse than having to sell a share at a loss when you walked away from a previous profit.
Because of this problem and the emotions it creates, I usually take 2 positions in companies, one to hold and one to buy and sell,
In the case of BG, I have 2 positions, the long term hold I will take into Shell, if the trading position is in profit I will take it, if not I will take it into Shell and trade it there, it is the only way I have ever found to overcome the problem.
I also use the same premise in margin trading, to margin trade balance sheet values you need to find a way to keep them running, I overcome funding issues by opening hedge positions. In the case of Quindell, I kept a short running for 7 months and ran a series of 7 call hedges against it. in the end I made twice as much from the call hedges as I did the total short.
I worked that trick out when I read the free copy of TW’s book concerning trading resource shares. Despite being in the markets for such a long time now, their is nothing wrong in accepting that other people sometimes have better ideas than you do. Now hedging isn’t actually in that book, but using your mind to work out different ways, that certainly is. I I would recommend that book to anyone.
Malcolm Stacey
Some fine strategies, there Phil. Will give em some thought. Thanks.
Phil
Malcolm
You have had me wracking my brains for a while now, about how you manage to keep finding these successful emerging companies so early, because I can’t do that
Russ O'Callaghan
Malcolm, I also tend to agree with Phil. Where fledgling companies on AIMS are concerned how often to we see an almost meteoric rise after the publicity surrounding the launch? I’ve never quite understood that expression; when has anyone seen a meteor “rise”? Surely they are famous for crashing to Earth?
And that’s the real similarity with so many AIMS companies. The huge (often hundreds of percents) rises are based upon absolutely nothing except hype and wishful thinking. Once actual figures start to come in all the confidence ebbs away. The successful investor in these cases is usually the chap who’s satisfied with a modest gain:_the “cut ‘n runner” in effect. It’s the long-term loyalist who’s in the position of making and losing a fortune within the space of a couple of years.
Tom’s documentations of loads of Chinese companies and of small oil and mineral explorers on this site serve to illustrate this really well.
wildrides
Interesting about the double positions . I like to spread risk out ……. alot . With AIM shares I have two holdings also. I usually go in with £1000 and see where that goes , up or down . If it goes up I stay in until it drops then sell for a quick win . If it goes down more than 10% I wait for a new base to form ( at least a month or two ) and then take my second equal ( share number) stake . One stake I keep and one I trade the yo yo movements . The theory is the yo yo trades make a buffer of cash against any unfortunate losses in the perm stake . The perm stake is the “godda be in it to win it” stake for the unexpected timing of good news events whilst not at the screen . If they go below 50% I sell out completely and wait for a new lower base and some sort of confirmed start to a new rise trend again . Lowers the stress levels and ensures I never have much tied up in AIM in one share . FTSE is a total other game with different rules, for me anyway . I do like to hear others ways of doing stuff tho ………. its very interesting . For me AIM is the beer and having fun fund and my long term port is FTSE and I dont mess with it very much unless its a TESCO moment. Must admit what I find hardest is the middle ground MID cap where Scotty and Toms N50 operates, so I tend to leave it alone . Horses for courses. I am just too lazy to do in depth analysis on every stock like Scotty . Aim is very much more intuitive , which is what I enjoy……….. the gut feeliing you get when there is no past track record to look back at ……… just judgement of the plan , the people , the market etc.