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PLAYING THE MARKET-A NEW YEAR RESOLUTION

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stocksmaster		#1 Posted : Friday, January 01, 2010 7:29:40 PM
Rank: Member Joined: 9/26/2006 Posts: 463 Location: CENTRAL PROVINCE		I took time today to assess my investment position in shares for the period January to December 2009. As a passive investor, i usually hold onto my purchases rarely selling to take advantage of price flactuations. This approach did not serve me well in 2009! I have always wondered wether a trader driven purely by margin trading can make money in the NSE (Without wiping all the gains in transaction fees!) So today, January 1st 2010, I have decided to try and test this model of stock trading (margin trading). I have set aside a trading float for purely speculative purposes and embarked on a project. PROJECT OBJECTIVE: To attain a 50% growth in the principal amount within the year (1st January to 31st December 2010) METHODOLOGY: The principal amount will be actively and aggressively traded throughout the year with at least one trade per month. Purchases will be limited to between 1 to 3 companies to ensure large share volumes. The investment design will be highly speculative. BENCHMARKING: The progress of the project will be compared with the NSE index and reported monthly. The target 50% growth will also be a guiding factor. Every purchase and sale together with its rationale will be documented in order to create a point of discussion and future analysis. The year long journey begins on Monday 4th January 2010. x handle: @stocksmaster79
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muganda		#2 Posted : Saturday, January 02, 2010 8:45:38 AM
Rank: Elder Joined: 9/15/2006 Posts: 3,907		@stocksmaster, Interesting and Controversial. You know, I've come to believe that we all know what it takes to make money(perhaps you more than many) but we all lack the character to do it. It's so easy: BUY LOW, SELL HIGH but we just don't do it - emotions/greed/fear just get in the way. Look at 2009 for example, average investor knew prices had collapsed alot in 1st quarter of the year but... What about Safaricom, no one thought it would go bankrupt yet we knew below 3/= was a steal but... This would have been the best year to make the 50%. In conclusion, almost any strategy could work as long as you're not covering up for indecisiveness or lack of character. For me, after looking at my trading weaknesses, I've purposed to: -pick a stock after looking at it as business first, -buy only if the price gives genuine margin of saftey (SCOM below 3/=, KQ at 15/=, MSC at 2.50 etc), -wait patiently then use the market's fluctuations to my advantage when selling.
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Gordon Gekko		#3 Posted : Saturday, January 02, 2010 9:22:28 AM
Rank: Elder Joined: 5/27/2008 Posts: 3,760		@mugs, I like your theory, but your prices seem unrealistic. Do you genuinely see MSC at 2.50 again? I see it at 6.00 at worst, which is what Im targeting. KQ bus seems to have gone, and I doubt if it can hit 25 now. I have put in a bit of change in Total at 29 and hope to get out at 34 just before announcement. I will then go back when ex and repeat the cycle again. Two cycles during the year should fetch at least 8.00, which is 30%, my modest target.
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muganda		#4 Posted : Saturday, January 02, 2010 4:54:44 PM
Rank: Elder Joined: 9/15/2006 Posts: 3,907		@Gordon Gekko according to my theory... If we did not buy MSC or KQ in March when they passed the test in all 3 measures, then why bother now it's only reactive and not an exceptional buy. There must be another MSC or KQ happening right now or about to happen - I've often noted we all glare at it until it's too late then...
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wanyina		#5 Posted : Saturday, January 02, 2010 5:49:22 PM
Rank: Member Joined: 4/1/2008 Posts: 141		Any comment on Cooperative bank?Im in a big campaign to buy the stock trying to accumulate as much as i could...any suggetions?? from u guys??
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sparkly		#6 Posted : Saturday, January 02, 2010 6:49:33 PM
Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi		@muganda, for sfcom below 3 and msc at 2.50 baring a serious change in fundamentals, you will have to wait for the next severe bear in 20 yrs Life is short. Live passionately.
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VituVingiSana		#7 Posted : Monday, January 04, 2010 8:26:22 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi		Please keep us informed... the high fees also scare me... It seems I take all the risk for the benefit of the broker, NSE & CMA... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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mukiha		#8 Posted : Monday, January 04, 2010 9:13:03 AM
Rank: Elder Joined: 6/27/2008 Posts: 4,114		The commissions at 2.1% either way translate to a minimum margin of 4.3% for you to make any money while trading. You could reasonably use 5% change as your minimum. In today's trading so far, only two stocks would meet that criteria; Sameer(up 6%) and Unga (down 6.6%). The month of December saw 12 counters climbing by more than the 5% threshold and only 4 going down. The climbers were: East African Breweries +5.07% National Bank of Kenya +5.41% Kenya Re-Insurance Corporation +6.36% Mumias Sugar Co. +7.03% NIC Bank +7.76% Standard Chartered Bank 8.78% Equity Bank +9.54% TPS Eastern Africa +9.76% KenGen. +9.79% Kenya Airways +10.85% 35 Athi River Mining +13.85% Housing Finance Co +13.92% And the descenders: Williamson Tea Kenya -11.83% Sasini Tea & Coffee -9.43% Car & General (K) -7.28% Safaricom Limited -6.19% Clearly then, you have enough to chose from.... Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana		#9 Posted : Monday, January 04, 2010 9:25:21 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi		@mukiha - Sameer might be liquid but Unga is not... Now... say the 6%... so all I get is 1% while absorbing all the risk... that is why I figure short-term trading is a no-go area for me for now! Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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the sage		#10 Posted : Monday, January 04, 2010 9:25:58 AM
Rank: Member Joined: 11/20/2008 Posts: 367		I'll ageree with Muginda on emotions/greed/fear just get in the way. Looking at the summarised report of the NSE, it was possible to make at leasst 100 per cent return on at least eight counters. Have to be bold even if I get burned, as Chandaria once told me, "failing as an entreprenuers is a must and not once but you learn, forget the sorrows and marshall on." Guys, any predictions?
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