My new trading strategy

Its been a good long time since I’ve updated here… I’ve learnt a lot over the past 2 years and I won’t be swing (day) trading no more (well maybe a little).  I’m not stopping because I lost money (up until now I have not lost any), its that I believe there is a better way to go about it.

Very simply my new trading strategy is to hoard cash  till the next crash (something you can count on) and then spend it on good solid Top 40 stocks!  These stocks I will hold.  With hindsight I really wish I had kept the shares that I bought whilst day trading.  I would have made a lot more money and the rate of tax would have been half!
The recession hype has died down, but I still firmly believe there is another big dip coming – Europe is still royally f*cked as is America (who’s knows they might still loan their way out of  this one!)

If there is one constant in the history of markets, its that they go up and down. When they go down a lot they generally go up a lot.  Same as with day trading “sell on the high, buy on the low” only now you’re doing it over a longer period of time.  What is also better about longer term trading is that you don’t have to constantly watch the markets throughout the day… which is far more relaxing.

Oil is on the up and up which is a good thing for the environment and green tech companies.  The US are clearing out the missile closet by dropping bombs in Libya (Each missile cost just under R10 million)

1,400,000.00 USD = 9,178,539.85 ZAR
RATE – May 2011 1 USD = 6.55610 ZAR

- Don’t worry I’m sure NATO will pick up the bill for freeing Libya, just don’t stop the ‘struggle’ too quickly.
Not forgetting: the best way to end a recession is to go to war.

I am also aware that one cannot trade without losing, so I’m probably being a bit over careful since I know this to be true (and that I have not lost anything yet!)
So bring on the next recession.

Upward on and Onward

PS:  Should you switch from Day to Long Term trading be sure to open a new account as SARS (the tax people) will tax your long term investments at a Day Trading rate (yes, it’s a technicality – but you really don’t want to go arguing this with them :)

Margin of Safety

Risk Averse Strategies For The Thoughtful Investor by Seth Klarman

Seth Klarman is a well known value investor and the founder and president of The Baupost Group, a Boston-based private investment partnership.  His book Margin of Safety is now out of print

Follow the link to download the book my10000dollars.com/MS.pdf

Actuaries in demand, Budget Speech and Year of the TIIGR

timeslive.co.za reports:
“The global credit crisis has resulted in high demand for professionals qualified in risk assessment and management.

“Increasingly actuaries are required to lead the risk strategies of organisations instead of restricting themselves to the traditional field of product design,” the society’s president Peter Doyle said.
He said the global financial crisis had opened a whole new career path for actuaries.
Read the full article here

I reckon you could also be read as “We don’t know what’s going to happen, so we’re creating a ‘Estimated Guessing Department’” :)

South Africa 2010 budget maintains policies
Did you know we lost 1 Million jobs in SA. The Government needs more tax payers… where the jobs going to come from?
Blue chips have their belts tightened right now, so perhaps the small to medium Enterprises?

Oh, fuel is going up (which means everything is going up)
The general fuel levy has been raised by 17.5 cents a litre with effect from April 7, with 7.5 cents of the levy going towards funding a new multi-product petroleum pipeline between Durban and Gauteng, the Treasury said on Wednesday.

Anyway, I’m still on the sidelines. Very keen to trade again (didn’t buy any gold) but I’m still waiting for the BIG drop

And for those superstitious actuaries out there, see below your year ahead ;)

From: Firepig
Year of the Tiger Financial Forecast

Everybody probably knows the Year of the Tiger begins February 14th, but most people probably do not know the person who rides the lucky Tiger. It is none other than Tsai Shen, Chinese god of wealth and prosperity!

This is good news given the many economic difficulties around the world in recent years. Of course you are most interested in how this affects you personally. The short answer is you are likely to have better luck this year—unless you are a Monkey, the Tiger’s nemesis.

You don’t, however, want to just trust your financial affairs to luck, especially since there are several Chinese customs that offer to give luck a push. It is said on Chinese New Year (Tet for Vietnamese) Tsai Shen comes around to check on the loyalty of his followers. The prudent thing to do is to burn some incense in the morning while calling out his name. And, take a picture of the event. It also doesn’t hurt to have his bronze statue in front of the entrance to your main door or in the Northwest corner of your house. After all, many successful Chinese businessmen have them in their shops and offices. On the second day of the lunar year Tsai Shen returns to heaven. As you make your wish for prosperity in 2010 give him a rousing send off by burning the picture you took commemorating his arrival.

So the Tiger and Tsai Shen bring us all luck, but there is more than that to making money. Timing and approach are also critical. The first is a bit easier to gauge. Just use the Chinese Almanac to determine your lucky months and days. You might not realize it, but your style also depends on astrological factors.

The Tiger is all about making bold moves and taking risks. You might, however, want to think twice about getting too caught up in the excitement of the moment this year. You see 2010 is a Metal year. Great, you say, Metal is the element most closely associated with making money! True. Unfortunately Metal has a destructive relationship with the Tiger’s fixed element, Wood. This year’s abundance of luck, therefore, is likely to include the bad as well as the good kind.
Bad luck can appear in at least two ways. The first could result from too much speculation and eagerness to jump into risky ventures. The second is later setbacks after initial success.

So, even though it is a Tiger year, you want to continue to be more like the Ox. In other words, stay with more conservative investments. Don’t rush into new ventures or change jobs on a whim. Take only calculated risks. Usually your emotions work for you in a Tiger year, but not in a Metal one, so keep them under control.

Actually success itself could provide your biggest threat to being in a better financial position at year end. The Tiger-Metal combination reminds me of the message of the Peacock in Mah Jong card readings, success but…. Like the Metal Tiger, the Peacock promises success at first. It is then often followed by setbacks. You can, however, avoid them. Be cautious about becoming overconfident, avoid extravagance, and don’t let yourself be tempted into overextending yourself.

The Year of the Metal Tiger can thus be a prosperous one for you. It’s up to you to do those things that enhance your luck and avoid those that can reduce it or even bring on the bad kind.

May good fortune and prosperity be yours in 2010.

Gold ??

So my opinion is that the economy is gonna tank again and I’ve been thinking about investing in gold.

Should You Buy Gold Now?
• The dollar is falling
• Central banks in emerging nations are buying
• Dollars are sloshing around the global economy
• Inflation will return someday
• Individuals and institutional investors are chasing the momentum


Abu Dhabi gives Dubai R74.9 billion in surprise bailout
Abu Dhabi stepped in to help fellow United Arab Emirates member Dubai with a $10 billion (R74.9 billion) injection, of which $4.1 billion was allocated to troubled state-owned conglomerate Dubai World to pay immediate obligations, Dubai said on Monday.

Federal Reserve is a Ponzi scheme !??

Dubai World sinks the markets (the ones that are open today)

Local shares are down, Asia is down.
Dubai World really shook things up today (after their world wide spending spree)

On Wednesday I sold my Vodacom shares (they went up on some news about a collaboration of sorts with Tellumat). So I’m completly out of the markets right now.

I’m banking, not shorting (but I am looking into it) on the markets right now. So you’ll find me sitting on the sidelines waiting for the big fall!
And yes, I’m sure they’re going to hit the deck again.

Think, the world has just had a MAJOR depression, mega food lines in New York, Wankers, sorry I mean Bankers are still dishing out Million Dollar bonuses to one another (oh and good job England (hands clapping allround) you’re going to name the people who get the bonus’s – BIG help to the economy).
So the world economy IMO is still in the shitter.
They were lieing to us then and they’re more than likely still lying / sugar coating / hiding the truth right now!

Dont forget to read: On Tuesday it was revealed that the Bank of England had granted close to £62 billion in emergency assistance to the two failing Edinburgh banks between October and 2008 and January 2009. However it chose to keep the loans secret.

Now, TARP’s $700 Billion bailout… it really doesn’t inspire much confidence for me. Think back a little… what caused the subprime lending problem?
Oh wait! “The money is created by the Federal Reserve/Treasury and lent to the institutions needing a rescue. The Fed/Treasury gets back IOUs from the institutions.”

So… Who owns America’s debt?

Americas Debt

Americas Debt

I believe we are going full circle, ‘things’ are being hidden from the people and it’s going to end in a big mess (again).
And when it does, I’m going to buy back into the markets and let it build up again. Note that I won’t be swinging those trades round for a while though!! (note to self: find new website name :)

Yes, China and India are looking up, but I’ve yet to have an good in-depth look into their markets.
Have a profitable day!

CIT fails and the Rand briefly goes into freefall

So CIT has filed for Bankruptcy (the largest firm to go bankrupt after getting a federal bailout). The TARP loan (bailout) was to the tune of $2.3 bn, so the US Government loses all that and CIT sharholders get wiped out.
Charming!!

Needless to say bank stocks are down!
The Rand has since recovered to 7.90.

Being a pessimist, I’m waiting for markets to go over the falls again.

The rand went into freefall briefly on Monday morning.

RMB Currency strategists said that following the worst day for Wall Street in months on Friday, US small business lender CIT filed for bankruptcy over the weekend in what was one of the largest corporate failures in history.

The US dollar/rand spiked immediately to 8.25 as trade opened in Asia on Monday – but this was a massive overreaction and we should come into regular trade at around 7.90 this [Monday] morning.

“Indeed, trade up at the highs was very brief and illiquid and the scope for getting any orders filled was almost non existent,” RMB said.
Still, the spike showed just how nervous markets were – and how the rand was an obvious victim, RMB said.
“Now, it’s all about global risk appetite.

“The fear really is that the global recovery will not have any legs and we will slip back into a W-shaped recession,” RMB said. This, it said, would ultimately be signalled by the data going into next year.
“For now the nervous markets will react strongly to any data signalling confidence and consumer intentions.”

Source: Busrep.co.za

Dow closes above 10000 points for first time in a year

Dow closes above 10000 points for first time in a year

However one has to ask: Has the world grown 50% over the past year. Bear in mind the ‘debilitating financial crisis that plunged the world into its worst recession since World War II‘??

Are we coming up for a double dip recession!??

Personally I still believe this is another bubble!? As soon as everyone jumps on the train there will probably be a big sell, however I believe its going to dive for other reasons as well.
Less jobs = less spending = less tax for governments = Less

Oil is up to $75

As Charles Hodgson from CNN said this morning “Tears before bedtime”

With regards to my trading right now, I’m presently holding 297 Vodacom shares Wish I wasn’t due to the call terminations costings going down

Have a profitable day!

Foreign investors flock to JSE as confidence in dollar wanes

Nearly R70-billion worth of offshore funds have flowed into JSE-listed companies this year, on a net basis, according to George Glynos, the managing director of market analysis firm ETM.

Non-resident inflows already topped the R67.5bn invested in the local stock exchange in the whole of 2007, Glynos said. And they follow a R57bn outflow last year.
Foreign inflows have helped push the JSE’s all share index up 18 percent since the start of the year.

Glynos also said that according to technical analysis, the gold price could reach $1 300 (R9 560) within the next few months. The precious metal, which burst through the March 2008 record of $1 033 a week ago, touched a new record high of $1 068.30 yesterday before retreating to just below $1 060. It is 20 percent higher than at the start of the year.

The JSE and the gold price are beneficiaries of unprecedented levels of liquidity abroad, after the series of monetary and fiscal rescue packages in many economies over the past year.

“Large quantities of funds that have been cautiously sitting on the sidelines in risk averse investments ultimately need to be invested to generate stronger returns,” Glynos said. Global investors are seeking yield in emerging markets with a better growth outlook.

Glynos attributed much of the JSE’s recent gains to foreign investors because local fund managers, he said, “haven’t committed to the equity market in a wholesale manner”. He said they were more cautious about “rotating away from risk-averse asset classes such as cash” as interest rates in the money market were still compensating for inflation and offered security in uncertain times.

However, he warned the run up in stock markets and commodity prices did not necessarily reflect optimism about economic fundamentals.
To some extent, they demonstrated a lack of confidence in the US dollar and were a response to “ultra loose monetary policies” abroad.

The dollar’s role as the global reserve currency is in doubt as central banks round the world increasingly shift into other currencies, particularly the euro. Investors are also following suit.
Nedbank Capital said yesterday that the dollar was near a 14-month low against a basket of major currencies.

RMB commodity analyst Josina Oliphant said gold responded more to dollar weakness than most commodities.

Source: Busrep.co.za

HSBC boss warns of second global economic downturn

The head of Britain’s biggest bank has warned we could soon be heading into a second recession.

Michael Geoghegan of HSBC said he had delayed expansion plans because he fears the upturn could be short lived.

The chief executive said the economy could follow a W-shaped trajectory, with the rebound going into reverse and growth retreating into the red.
Mr Geoghegan’s words carry weight because of the global reach of his bank and its track record on identifying economic turning points.

In February 2007, HSBC was one of the first financial giants to warn of the impact of the sub-prime crisis in the U.S., when it wrote off £6.5billion. The intervention will fuel the debate between Labour and the Conservatives over when to slash public spending and hike taxes.

Click here to read the full article on the dailymail.co.uk

Dr. Doom sees no credit bubble in China

Below are some excerps from an article on MarketWatch.com

HONG KONG (MarketWatch) — Contrarian economist Marc Faber is cautiously optimistic on the outlook for China, saying he sees few signs of a mismatch between supply and supply in the real estate sector, while its fiscal policies don’t appear to be repeating the mistakes made by Western counterparts.

Faber famously went bearish on U.S. stocks shortly before the 1987 stock market crash and also forecast the 1997 Asian financial crisis. In 2002 he authored Tomorrow’s Gold, which spelled out in prescient fashion the rise of Asia in the global economy.

Too slow revaluation

Beijing, he says, made the mistake of allowing its currency to appreciate too slowly against the U.S. dollar.

Being abolished the yuan’s peg to the dollar in 2005 and now allows the currency to fluctuate 0.5% from a central rate, which the People’s Bank of China sets daily. Since the revamp, which included a 2% revaluation, the Chinese currency has appreciated about 21% against the dollar.

Looking ahead he sees the Chinese currency doubling in value against the dollar, following a pattern similar to the Japanese yen’s appreciation against the greenback in the early 1970s.

Faber says investors should acquire Asian equities on pull-backs as global growth momentum shifts to the East. Although he’s skeptical about growth in the global economy, he remains upbeat on natural resources

Declines in the U.S. dollar are symptomatic of the underlying weakness of the U.S. economy.

Households in emerging markets look set for a meaningful rise in wealth while those in most developed economies should see their fortunes stagnate and even decline.

That’s a reversal he said of the last 200 years when more advanced nations saw their real GDP per capital rise 20 times “as the West ripped off poor countries”.

“Your children who live in the developed world, in Western Europe and the U.S., they may not sink to bottom of the ocean economically,” Faber told the crowd, “but in my opinion in real terms, real GDP per capita, it will not increase, if at all I think it will decrease slightly.”

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