Not a massive update. Approaching Page 300 now of the FT Guides - Investing Book. Some more detailed posts will follow in the coming months. Involving discussions about Strategys etc. Approaching the Market. But I am going to purchase a further 2 Books. As I am in no hurry and these books are very specific for the areas of the Stock Market I am keen to gain additional knowledge in:
How to Make a Killing in the Alternative Investment Market
Really not sure about this book. But it is the cheaper of these two books by a long distance. It was really hard to find any decent books relating to JUST the AIM (Alternative Investment Market). But as this is the area of the Market I am concentrating on I think it makes perfect sense to spend some time reading into this specific zone. I am sceptical as I think the book is relatively old. But nevertheless it should be a good read and I look forward to seeing the approach taken by the author.
FT Guide to Using and Interpreting Company Accounts (The FT Guides)
I mentioned Accounts previously. And I do feel this is an area I will need to improve my knowledge in. Being good with numbers has helped me want to gain a respectable understanding of a companies accounts. This book alone is a long (500+ Pages) as the current Investment Overview book I am currently three quarters of the way through. Telling me there is definitely a lot more to reading a Companies Accounts than meets the initial eye. As Gecko says 'Read Between The Lines'. I keep seeing this phrase used. Everyone uses this phrase. So hopefully from reading this book I will be able to feel much more at ease.
So these books should take me up to July. Keep me nice and busy. I will come back on the Options Query. Just getting through thr Company Analysis Section at the moment. I keep having to re-read certain chapters. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
Yes. This is what I have been looking for. This is a free Virtual Share Market. Covers the UK Markets and is much better than any of the others I have come across so far. Although no one else will probably give this a go, I have set up my own League to allow us to compete against one another if any fancies a challenge.
League Name: OLBG Share Starters
League Password: OLBG1631
In this League I have set the starting balance at £15,000. Commission to be deducted from transactions is £11.00. And Stamp Duty of 0.5% is applicable. There is no limit to how long the League runs for. So no reset time. I haven’t made any trades yet as the Market is now closed.
You need to sign up to www.lse.co.uk to take part. But that is all, and it is free. There is money Leagues on this site but you need to register to something else before taking part in them, and I am guessing a fee will be required.
So if anyone fancies it, feel free to join me. This is only something on the side for me while I continue to read read read read. Gives me something to check everyday.
My username is ShareEm. No idea why I picked this. I thought Share as its for the Stock Market. And Eminem was on TV at the time and I started writing that. Stopped at ShareEm and thought; I have seen worse usernames! Why not.
Peace. LP. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
Talked my Dad into joining this League. He has basically just copied his Real Money Portfolio over to this Virtual Share Game. Currently beating him. But I can assure you, this is only down to the fact he has purchased 7 Shares, compared to my 2. So he has been set back by inheriting a larger spread. In a couple of weeks I am sure he will overtake me.
I have been brain storming Strategy Plans for around a week now. I am going to try to write these up and post some of my initial thoughts on here within the next week or two. So many different angles can be taking when approaching the market, I would really like to have strong plans ready for How I Will Enter The Market & My Strategy When Buying/Selling Shares on the AIM Market.
Regarding the League, my Boss is also going to join up next week. He is a complete Novice. He made 1 investment a few years back, but has very little knowledge about the Market. Unlike me, he is unable to sit back and investigate the Share Markets, hence why he is opting to use a Virtual Share Portfolio. Like my Dad did, he wants to learn through the experience of trading shares (all be it Virtual and not with real monies) rather than take my approach.
I am hoping a couple from here may join in over the summer. Punters who only bet on Football Markets will have very little to follow for a few months and could be persuaded to try something new I suppose. I found a very helpful site the other day: www.advfn.com - This site holds upto date records on LSE Market Shares. Confirming such formulas as the P/E Ratio, Market Capitalisation, Earnings Per Share, Cash Flows, EPS Growth Rate etc etc. The list just goes on. This information would usually be useless to any invester, BUT, if you click on these sections individually they confirm the formula they carried out when obtaining these figures/percentages. This is important as it helps to ensure consistancy is being used when comparing this information to the companies direct competitors etc. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
Before steaming ahead with new ideas (Entering the Stock Market strategies etc) I thought I should go back and clear up some of the points I have raised previously. This thread was always intended to be a learning curve for myself, and anyone else if they chose to take an interest. Nothing like correcting yourself.
Quote:
I am starting to notice how impatient some investors in the Financial Markets are. A share I mentioned back in my 1st post called Rare Earth Minerals (REM) has slowly declined from 0.098p down to 0.083p. There has been no news whatsoever. The Market Sector REM is situated in is not performing poorly but around 200,000 shares are being sold per day. It is a consistent amount as well. This is a risky company. Announced a complete change in strategy in November 2010. But because of no update since then many people seem to be almost becoming bored and selling up. Madness.
I have quoted a paragraph which was typed by myself on the 22nd February 2011. In my very opening post I highlighted a share called Rare Earth Minerals (REM). This was a share I was interested in following. To see what would unfold. As you can see from my post I was quite shocked to see the price on a constant decline from just under a penny at 0.098p down to 0.083p. Well, last night I finally found some spare time to do some investigating into this share and this is what I found. REM was a quiet little company, called Zest Group PLC back in October 2010 and they were trading around the 0.035p marker. They held an AGM (Annual General Meeting) and with the ‘Name Change’ and their new planned direction the share price shot up to 1.52p. Well over 200%. When I first noticed this share they were trading at a couple of clicks under 1p (having slowly declined from the dizzy heights of 1.52p). And in the last 5 weeks I have watched REM decline all the way down to 0.056p. It is very difficult to get any sense out of anyone on the LSE board as any investor hyping up a share is labelled a ‘ramper’, while anyone from the outside making any negative arguments against the company are all immediately marked as ‘de-rampers’. But in this particular scenario I suppose I will fit in to the category of a de-ramper. REM’s decline from 1.52p all the way down to 0.056p is now of very little surprise to me. Having dug a little deeper I have now found out that this ‘Company’, if it can be referred to as this, are nothing more than a fancy name. And in all fairness ‘Rare Earth Minerals’ sounds pretty fancy. The company have no assets (tangible or intangible), a very small cash flow, and over the past 5 weeks I have seen more shares sold, rather than purchased, every single day, leaving a big question mark over the amount they have available through equity. All REM are is a company seeking a change in direction. They appointed Adrian Fairbourn as a non-executive director back at the beginning of February. They also have David Lenigas on board. He has experience in this area. But the cold factor here is, that this company own nothing. There has been no discussion of any future appointments or contract discussions. Or where incoming profits in the meantime will be provided from. Regarding this share, there is a 10p Party Group. 11 people who will be meeting up to celebrate when this share reaches 10p. I mean, come on, get real. The stock market is full of as many clueless fools as Betfair is. This share is a gamble, not an investment. Any positive news on REM and we would be likely to see the Share rise over 200%. But with absolutely no guarantee of any appointments the share should continue to fall. A lot of investors probably blindly purchased at 1.52p and are now in a sticky situation. Some would have already sold out of REM and taken they loss. And the question is, how long can the ones still in REM at a 60% loss, keep on waiting. They may need to wait years for anything to happen here. Don’t get me wrong, REM might well be worth purchasing in the future (Depending on future director appointments and possible contract wins), but at the moment I wouldn’t even invest a single pound. But if any lesson is to be taken from this paragraph it is aimed at the blind investors getting in at 1.52p. Jumping on a bandwagon, of which they had no clue which direction it was heading in and why.
My second point I wanted to raise is relating to the share graphs I provided a couple weeks back in relation to a conversation with OT. I feel I really didn’t explain this too well. The reason for this is as follows. Those 3 graphs I provided are all relating to shares on at AIM Market. Of the LSE markets it is clear that the AIM Market is the most volatile, and by some considerable distance. So when I said ‘never buy shares on the up’ I was referring to AIM shares. Even if you only buy on a slight downwards spike it is always worth waiting, as every 0.001p counts. What I have noticed with the AIM market is that every time a share has a very good day, the price always seems to settle afterwards. And I heavily believe that the type of investors you get in the AIM market are important as well. Having only had a Virtual Online Share Trading Portfolio for a mere 2 days, I can see why investors get so impatient, when it comes to holding shares in a company. But I will save this little explanation for another day. The point is that the AIM market is extremely volatile. And while ‘big’ money can be made in a mere 24 hours, it can also be lost just as quickly. And the price in which you purchase a share is probably, and I use the word probably very loosely, as I am not 100% certain on this, but it is probably the all round most important decision you have to make. While selling price, amount invested, and so on also hold massive importance, I can’t see part the purchase price as the area in which I see as the most important decision to make.
Anyway, I will be back in a couple of days to continue talking to myself LOL. Only joking. As I said, this is a 'Log' for me to refer back to, if nothing else. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
Shows this can be very profitable if done properly. This is a copy of my LSE Yearly Portfolio. The Starting Balance is £10,000. So far I have only invested in 3 companies, and I am delighted to see I have not only made up the Spread on All 3 Shares, but I am also in the Green on all 3 shares. So far I think I have invested £5,000 of the £10,000 provided. Been a very good learning curve so far. I think it has only been 7 days since I started up my Virtual Portfolio. No-one else fancying joining the above League I posted up for OLBG users? Will be putting up a decent post on Saturday. Regarding Strategies etc. Some good thinking points anyway. Back to the books.
Be back soon. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
I was really hoping to have some preliminary strategic notes available by now. But I still have many months before I will be making any investments, so I am none to phased that the majority of my brain-storming notes have finished screwed up and tossed in to the nearest available bin. But I have been continuing my reading of The Financial Times (Investing) Book. On Chapter 15 now, and I must admit, the last 3 Chapters have been hard work. And no doubt, I will need to refer back to them over the imminent months. This book has all of a sudden gone from a nice, slow read while paddling your feet in the shallow end of a swimming pool, to launching you off a diving board at the deep end. One positive I can take from this is the fact the last 3 Chapters have been challenging. The way I see this, is that the more challenging something is, the more I will learn from that particular task(s). Both of the other books I have ordered arrived on Friday. I changed the book I ordered on the AIM Market. I have ordered a different copy written by a different author. Not sure why, I just had a bad feeling about the other book. It was only 150 pages long. Plus I will always go with my gut instinct. Me and the old man are having a good battle on the Virtual Share Game. He is £800.00 in profit from the £15,000.00 starting balance, while I am £900.00 in profit. But unlike the Father, I have only invested £3,500.00 from the available balance. Just to show how seriously my Dad has taken to this. He has already contacted LSE ‘twice’ via e-mail questioning his daily totals. This has included him ‘quoting’ his real portfolio values and the share movements for that day. One thing I will say about Virtual Shares is that I would recommend that anyone looking to invest in the Stock Market, tries this first! Gaining the experience of holding a Share Portfolio is something I have quickly learnt the importance of. And this is the best way in which to gain that experience without risking any hard earned cash.
From watching the market this week, one thing that grabbed my attention was the Spread Percentage on shares in the AIM market. So for example if Share A had an Ask Price of 1p, with the Mid Price at 0.75p and the Bid Price available at 0.5p, the Share would have a Spread Percentage of 50% (I believe I have worked this out correctly). Now this is exceptionally high. At the moment I am trying to work on a formula to calculate how wide I should allow the Spread Percentage to be before investing in a certain Share. Midweek I was checking through the highest movers for the day and came across a share with a 33% Spread Percentage. There was a recent post on this Share from an investor dying to get in on the action. A news update had been released on this particular share. Nothing to amazing and bear in mind the share price had already shot up earlier in the day. This poster had put something along the lines of ‘Dying to get in and I just have. The spreads a bit big though’. I mean, is the guy mad? He is starting off 33% in the red. This particular share now has to rise around 33% (maybe lower, as the spread may slightly reduce) just to break even! At the moment, as I have previously mentioned, the majority of the shares I have been following have been of very low value as they are all available on the AIM market and I am currently playing around with a Shares Spread Percentage being no bigger than 5-7%. Unfortunately I have a feeling I am going to have to extend this to around 10%. But I would prefer to keep my calculations at 5-7%.
Astonishingly, I received an e-mail earlier this week from a follower of OLBG asking when I was going to start up my football blog again. I was shocked to say the least. Especially if he had seen my tips over the recent 12 or so months. But, I must admit it did get me thinking about how I slightly miss (for some unknown reason) the agonising pain of researching football matches for hours on end only to see my tips go down in a dramatic style. But this gave me an idea for one of my crazy examples. Lets imagine you work in a farm. Your job is to collect eggs that fall in to the baskets every 5 seconds. One well known saying is ‘don’t keep all your eggs in one basket’. And I fully agree with this. Imagine in this example your basket breaks. You would be out of a job. So lets now expand this idea. You are covering multiple sections of the Stock Market, investing in differing market sectors. So now you have 10 Baskets in which to catch eggs every 5 Seconds. Now, if something goes wrong with one of your baskets you now plenty of back up resource. Lastly, in this crazy example, imagine you are now investing in the sectors of the markets previously mentioned, along with investigating Horse Racing, Football and Tennis. Now you have 50 Baskets catching eggs every 5 seconds. Which is too many. While concentrating on certain baskets, others will be dropping eggs. Now, I promise I have only had 2 beers this evening but in a weird way this makes sense (to me at least). While you shouldn’t place all your eggs in one basket, you can easily have too many baskets. In this case, this is why I won’t return to football tipping while continuing my journey in to the Stock Market. Keep focused on my specific baskets.
Moving swiftly on. Another point I have previously raised is the individual Market Sectors. At the moment I have been looking in to Electric, Gas & Oil, Rare Earth Elements and Pharmaceuticals. But one thing I am still failing to understand is the impact (if any) competing companies have on each other in their individual sectors (on the AIM market remember). The AIM market shares need only a few things to plod along. One thing is a solid idea (future plan) and the next big thing is interest. Shares like Saruem see their Share Price move every single day, and the majority of the time it is down to investors speculating. Big news tomorrow etc etc etc. I must question how many investors really pay enough attention to these smaller companies yearly accounts. A common thing seen across forums is ‘DYOR (Do your own research)’. But I would love to actually know what research these people carry out. With investing, I have the feeling the majority of successful traders currently active in the market, keep to themselves. I am getting an unrealistic impression that the majority of traders seem, how can I put this nicely…..thick! But I know this can’t really be the case. They must be a lot of people out there who are very good at Investing and make a decent profit year in, year out. But it just seems impossible to find any decent conversation online. All I can find is battle matches of so called ‘Rampers’ vs also so called ‘De Rampers’. Is it that hard to really have a sensible online discussion about the Stock Market. Especially for newcomers such as myself.
Still hoping a couple on here may get involved at some point. You never know I suppose. Peace out. Next post will probably be in a couple of weeks. Hopefully I will have made some progress on my ‘Approaching the Market Strategies’. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
Joined: 19 Oct 2006
Posts: 12167
Location: Adelaide
Posted: Mon Mar 28, 2011 1:10 am Post subject:
hi mate,
Quote:
At the moment I am trying to work on a formula to calculate how wide I should allow the Spread Percentage to be
depends on the market makers setting it.. overnight you can get some stupid spreads as they ward off any early big trading.. spreads settle as the market opens... also, depends on the volume an dliquidity > massive stocks have very small spreads (eg vodafone 150p - 151p probably) but AIM stocks often have ridiculous spreads as you mentioned
Quote:
While you shouldn’t place all your eggs in one basket, you can easily have too many baskets.
indeed.. and depends on your risk profile > always have a balance dependent on your risk level - regarding AIM, the sectors are less relevant as individual companies rise/fall on news much more than sentiment towards a sector
Quote:
I must question how many investors really pay enough attention to these smaller companies yearly accounts
very few probably.. the sheep factor is huge as always..don't be surprised that a lot of 'investors' are punting - they follow any news or price rise etc.. they're not all shrewdies
Quote:
They must be a lot of people out there who are very good at Investing and make a decent profit year in, year out. But it just seems impossible to find any decent conversation online.
the good uns are researching and keeping it to themselves..simple.. the sheep ramp and waffle
on AIM shares, you can ring the company up and decent ones will chat - an FD may well discuss the share price and news with you (they are that small some of them) - some of it is down to beilef in their idea (do you think it will work? sell? and so on) and then finding out who they have working for them (previous history)? the competition? funding? and so on
A very nice response their Gecko. Thanks for finding the time. I knew there would be someone on OLBG sitting in the dark regarding financials. Do you actively invest in the Stock Markets? Or is this just an area you keep an open eye to? A good example of the Large Spread is TXO. Has a spread of around 33.3% during the Daily Market and a spread of around 66.6% overnight. Crazy stuff. Yea I saw that you can contact the companies direct. I like the idea of this. I wouldn't be doing this right now mind you, as I wouldn't have any idea of what to ask lol. But definitely something to consider for the future. Still I learn so much with each day that goes by. My ROI is the OLBG Share Starters League is sitting around 33.3% at the moment. But I must admit I am tempted to sell half of my stake in one of the shares. Thanks for the comments Gecko. They are all a big help. It's a shame that the decent traders are the ones who want to keep quiet though lol. Although, who can blame them.
Cheers mate _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
Good to see a 3rd player has joined the virtual OLBG Share League. I have asked my boss and its not him, so it must be someone from OLBG. Good Luck whoever it is.
No new stuff from me. I am sure I will have some more points to raise very shortly. _________________ Liverpool 1 vs 3 Aston Villa - The moment we got Thumped by the worst Aston Villa Team in Living Memory is the Moment I waved goodbye to ALL European Football For 2013/2014.
First of all may I just say congratulations to Liverpool1985 in creating an intriguing thread/blog. Amazing mate really good stuff.
OK , I have recently taken out a stocks and shares ISA for my 1 yr old daughter and in doing so got me interested in shares/financial betting.
I am a complete beginner and thought i'd do some research into my daughters future car fund! and so glad I stumbled upon thisd thread.
I have joined your fantasy league mate but I have decided like you to do some research before laying down my fantasy money.
Can I just ask where you get your information from? E.G the Rare Earth Minerals company ?? Do you google the companies or sign up to companies house for UK companies??
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