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How much is an affordable loss?
Rank: New-farer Joined: 2/8/2013 Posts: 27
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Just like any other business,one must be prepared to lose,right? At the NSE,when is the loss enough? What criteria do you rely on?
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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berns wrote:Just like any other business,one must be prepared to lose,right? At the NSE,when is the loss enough? What criteria do you rely on? 10%-15% per investment is acceptable if you trade frequently.. Mark 12:29
Deuteronomy 4:16
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Rank: New-farer Joined: 2/8/2013 Posts: 27
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Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out?
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Rank: Member Joined: 4/25/2012 Posts: 110
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berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. There is nothing as dangerous as an Idea, when there is only one Idea
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Rank: Elder Joined: 6/23/2009 Posts: 13,474 Location: nairobi
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MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to.  always slotted a value of 1/ in my assets portfolio. ,Behold, a sower went forth to sow;....
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Rank: Elder Joined: 6/23/2009 Posts: 13,474 Location: nairobi
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muandiwambeu wrote:obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to. always slotted a value of 1/ in my assets portfolio. Honestly this @muandiwambeu chap is on hard drugs. Ama ni mimi tu ndio simuelewi
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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obiero wrote:muandiwambeu wrote:obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to. always slotted a value of 1/ in my assets portfolio. Honestly this @muandiwambeu chap is on hard drugs. Ama ni mimi tu ndio simuelewi Pole sana @obiero. Times themselves are equally confusing. But FYI, I only do tea. Building an empire of your own, may at times take you over to the realms of reality and especially now I am low on chums. Not everyday that we see a cloud with a silvery linning. History is being rewritten and I gona dine with kings. Enjoy your Sunday. ,Behold, a sower went forth to sow;....
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Rank: Member Joined: 10/26/2015 Posts: 151
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obiero wrote:muandiwambeu wrote:obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to. always slotted a value of 1/ in my assets portfolio. Honestly this @muandiwambeu chap is on hard drugs. Ama ni mimi tu ndio simuelewi  He seems to have applied his 10% rule to the queen's language
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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Only invest what you can afford to loose. That effectively means 100% loss. I stopped trading and my picks tend to be those with a solid earnings history and a dividend (given that these are lifetime investments it is worthwhile to get income all along before I bequeth the same to my kids). I would say the only factor that can trigger me to make a sale is if there is a notable change in business thay may never be outdone and conqured with time. A bear loss doesn't count nor is it even worth my worry. Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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MadDoc wrote:obiero wrote:muandiwambeu wrote:obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to. always slotted a value of 1/ in my assets portfolio. Honestly this @muandiwambeu chap is on hard drugs. Ama ni mimi tu ndio simuelewi He seems to have applied his 10% rule to the queen's language He is snorting half dried managu. Life is short. Live passionately.
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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obiero wrote:muandiwambeu wrote:obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to. always slotted a value of 1/ in my assets portfolio. Honestly this @muandiwambeu chap is on hard drugs. Ama ni mimi tu ndio simuelewi @Muandiwambeu thinks that we are in a poetry class....This is business and poetry language is a none issue. ..Hata mimi huwa simpati poa...I struggle to digest his stuff....You should learn to understand guys on cheap weed anyway ... John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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sparkly wrote:MadDoc wrote:obiero wrote:muandiwambeu wrote:obiero wrote:MoneyMonger wrote:berns wrote:Affordable loss to me as a speculator. When the price starts coming down,at what point do I jump out? My policy is to jump out if I make a loss of 10% without any hopes of a reversal soon. So, I also consider the reason for the drop. Sometimes I take in more than 10%. Upto 50% incase you are aware of the reasons behind the dip and subsequent recover.. 10% in the event you have no clue as to why the stock is sliding Sometimes to the bin, its worth the lesson than the savings. I call them, border marks. Free alarm any day any time. You can't touch this, and you live happily thereafter. This is especially purposeful, a bit of the larger portfolio not everything. Its a mark that I need to retain, remember, and own up to. always slotted a value of 1/ in my assets portfolio. Honestly this @muandiwambeu chap is on hard drugs. Ama ni mimi tu ndio simuelewi He seems to have applied his 10% rule to the queen's language He is snorting half dried managu. I thought i have been 'floating' solo kumbe ..... In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 1/3/2014 Posts: 257
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berns wrote:Just like any other business,one must be prepared to lose,right? At the NSE,when is the loss enough? What criteria do you rely on? I think there is no definitive answer that fits for everyone. At the end of the day each investor needs to know this for themselves. For me 25% is what I work with.
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Rank: Veteran Joined: 2/26/2015 Posts: 1,147
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hello wazuans. Allow me to give my 2 cents. My comment might be longer than usual. These are the steps of proper money management: 1. Measure your account value on the first day of the month—the total of cash, cash equivalents, and open positions. 2. Calculate 2% of your equity. This is the maximum you may risk on any given trade. 3. Calculate 6% of your equity. This is the maximum you are permitted to lose in any given month, after which you must close out all trades and stop trading for the rest of that month. (in stocks it might differ) 4. For every trade, decide on your entry point and a stop before engaging the market; express your risk per share in KSH. Mark my words "before" not after. that was not a typo. 5. Divide 2% of your equity by your risk per share to find how many shares you may trade. To get a round number, round it down. 6. Calculate your risk on all open positions by multiplying the distance from the entry point to the current stop by the number of shares. If the total risk is 4% of your account or less, you may add another position, since you’ll be adding 2% with your current trade, bringing the total to 6%. Remember, you do not have to risk 2% per trade; you may risk less if you like. 7. Put on a trade only after meeting all of the above conditions. The beauty of this kind of money management system is that it clips your losses when you are cold and lets you go forward at full throttle when you’re hot. note: Establish the size of your trades on the basis of how much money you can afford to risk, not how much you want to make. hope this helps best wishes. It's not over until I winskype id: karasinga. email: kkarasinga@gmail.com
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Rank: Elder Joined: 6/23/2009 Posts: 13,474 Location: nairobi
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karasinga wrote:hello wazuans. Allow me to give my 2 cents. My comment might be longer than usual.
These are the steps of proper money management:
1. Measure your account value on the first day of the month—the total of cash, cash equivalents, and open positions.
2. Calculate 2% of your equity. This is the maximum you may risk on any given trade.
3. Calculate 6% of your equity. This is the maximum you are permitted to lose in any given month, after which you must close out all trades and stop trading for the rest of that month. (in stocks it might differ)
4. For every trade, decide on your entry point and a stop before engaging the market; express your risk per share in KSH. Mark my words "before" not after. that was not a typo.
5. Divide 2% of your equity by your risk per share to find how many shares you may trade. To get a round number, round it down.
6. Calculate your risk on all open positions by multiplying the distance from the entry point to the current stop by the number of shares. If the total risk is 4% of your account or less, you may add another position, since you’ll be adding 2% with your current trade, bringing the total to 6%. Remember, you do not have to risk 2% per trade; you may risk less if you like.
7. Put on a trade only after meeting all of the above conditions.
The beauty of this kind of money management system is that it clips your losses when you are cold and lets you go forward at full throttle when you’re hot.
note: Establish the size of your trades on the basis of how much money you can afford to risk, not how much you want to make. hope this helps
best wishes. @karasinga wise words for the fearful investor.. for the macho investor, first avoid any dubious shares which happen to form over 75% of the listed stocks at NSE.. Secondly and possibly more importantly, keep information on the remaining 15% viable stock, to avoid being blindsided.. Thirdly, average down once certain that a lull is unrelated to the firm's fundamentals
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 6/23/2009 Posts: 13,474 Location: nairobi
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Information is everything at the NSE
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 1/8/2018 Posts: 2,211 Location: DC (Dustbowl County)
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berns wrote:Just like any other business,one must be prepared to lose,right? At the NSE,when is the loss enough? What criteria do you rely on? My humble two cents: Look at investing in equities the same way one should look at investing in property: Price Vs Value.Let me give you an example. Say plots in an area are going for 3 metre per quarter, yet a plot you really like for some specific reason (eg it is right next to the school where you work, or you can see future potential based on info you have that not many others have, or you just like it's location and what you can do with it) in the area is going for 3.3 m. Some may say you are overpaying but to you value trumps price. Ten years on when the same plot is going for 20 metre, that 0.3 m overpayment will not mean much will it? Another example; say you have that 3.3m sitting in a dead dog like Mumias or Home Afrika and the plot opportunity above presents itself. Even if the dog stock has milked you of three metre, it would make sense to sell the stock and buy the plot, given the same reasoning above.
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Rank: Veteran Joined: 7/8/2008 Posts: 947
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Jesus take the wheel. What are you talking about @MugundaMan? This makes no sense. Were you answering a different question? Okay you get 100% for the imaginary question you answered! @Berns I am not an active trader. I review my stock at best half yearly but often yearly when I review their results. My cutoff for losses then is 15% unless they have a clear plan to change their fortunes. MugundaMan wrote:berns wrote:Just like any other business,one must be prepared to lose,right? At the NSE,when is the loss enough? What criteria do you rely on? My humble two cents: Look at investing in equities the same way one should look at investing in property: Price Vs Value.Let me give you an example. Say plots in an area are going for 3 metre per quarter, yet a plot you really like for some specific reason (eg it is right next to the school where you work, or you can see future potential based on info you have that not many others have, or you just like it's location and what you can do with it) in the area is going for 3.3 m. Some may say you are overpaying but to you value trumps price. Ten years on when the same plot is going for 20 metre, that 0.3 m overpayment will not mean much will it? Another example; say you have that 3.3m sitting in a dead dog like Mumias or Home Afrika and the plot opportunity above presents itself. Even if the dog stock has milked you of three metre, it would make sense to sell the stock and buy the plot, given the same reasoning above.
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Rank: Elder Joined: 1/8/2018 Posts: 2,211 Location: DC (Dustbowl County)
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tony stark wrote:Jesus take the wheel. What are you talking about @MugundaMan?
This makes no sense. Were you answering a different question? Okay you get 100% for the imaginary question you answered!
@Berns I am not an active trader. I review my stock at best half yearly but often yearly when I review their results. My cutoff for losses then is 15% unless they have a clear plan to change their fortunes. hehehehehe I thought you had a "big 7-6-2 brain" full of abstract thinking and critical evaluation? Yet hutu tusimple statements tumekushinda?
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