Wednesday, June 13, 2018

Order of the Day - Continuing



13 June 2018

Stock  buy num Cost      sell Low sellHigh %down

WHC 5.640 1,449.28 8,173.91 4.95 7.02 12.234
IJR 113.870 96.43 10,980.71 103.5 134.61 9.107
IRU 221.500 52.63 11,657.89 202.5 259.5 8.578
BAP 6.85 188.68 1,292.45 6.32 7.91 7.74
MFF 2.57 588.24 1,511.76 2.4 2.91 6.61
QUS 34.38 42.02 1,444.54 32 39.14 6.92


ASIC List of Shorted Stocks - Free

Stock shorting or going short is a high risk, high reward strategy of playing the Stock Market. To short a stock means to sell the stock first, in the hope that the stock price will fall, so we can buy the stock back (closing the short position) at a lower price. So sell first buy later - this would be profitable if the price go down. On the other hand if the price go up, there is no limit of how high it can go so the loss level in this strategy is unlimited.

If there are big amount of shorts on a particular stock, it may actually influence the price to go down. Then when the price is down, the short-sellers (people who short the stocks) will come back to buy the shares at a lower price - they win. The stock itself has gone down, not for business performance reason, but for reasons of such influence.

So it may be good to know which stocks are heavily shorted, for those of us ordinary investors who simply want to do the simple thing by buying shares. It so happens that the Australian Securities and Investment Commision (ASIC) collects and publishes this data and is available freely at:
https://asic.gov.au/regulatory-resources/markets/short-selling/short-position-reports-table/

The site also keep the historical shorted stocks records for a number of years. Available in PDF or CSV formats.

Wednesday, June 6, 2018

Order of the Day - 6 June 2018

Disclaimer: The following is more of a personal note to self. But if you are interested, there is nothing stopping you from doing your own analysis.

SSM.AX Service Stream

QIP.AX Qantm Intellectual

Both of these have recevied minor boost in their share prices, but more notably is the significant volume that accompanied their rise. These two were identified from filtering based on 'big change in volume'

Monday, April 9, 2018

Review - Sun Tzu's Art of War

What is Sun Tzu's "Art of War" doing in a blog about Equities Analysis and other financial matters? Well, it seems the philosophy of the Art of War can be applied to different fields and Finance would be no different. This is only a quick review - read the whole book on a plane trip to Sing@pore. Here it is:

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On the whole, the war strategies enunciated by Sun Tzu can be seen as risk averse. From another perspective, it can also be said equally, that it is about total victory with maximum profitability.
It teaches how to do battle only when there is a high certainty of winning. And that can generally be assured when there are advantages on many fronts.
The treatise start with enumerating five principles: (1) The Moral Law; (2) Heaven; (3) Earth; (4) The Commander; (5) Method and discipline. The side with superiority over these five, will be victorious. It is worthwhile noting that the most important of these principles is the Moral Law. This also leads to the command to treat the defeated enemies properly.
One of the more practical strategies, deals with resources for the armies. It recognizes that there is a cost to maintain armies out in the field. One of the consequential strategy of this is to avoid seige whenever possible, and in favor of quick victory. The second strategy from this principle is of course to use the resources of the defeated enemy.
There are also five faults that can lead to downfall of the generals, which are: (1) Recklessness, which leads to destruction; (2) cowardice, which leads to capture; (3) a hasty temper, which can be provoked by insults; (4) a delicacy of honor which is sensitive to shame; (5) over-solicitude for his men, which exposes him to worry and trouble.
There are strategies which are clearly practical and identifiable as purely military strategies, and they involve the condition of the terrain. It discusses the best terrain to occupy, the advantages of various terrain, and the appropriate strategies for different terrains. It goes to such details as when the enemy company is crossing a river.
The next group of strategies involves command of the solders and the relationship between the general and the emperor. The emperor being the highest authority, yet should not interfere with the generals' plans. This can easily be adopted in the modern corporate environment, such as with the CEO and their managers, or between other levels. It goes so far as to advocate defying orders such as when a general knows it will be defeat, he should disregard the emperor's orders to attack. On the other hand, if the general knows victory is certain, then he should attack even if the general says no. One commanding strategy that can equally apply to the modern workers is: "Regard your soldiers as your children, and they will follow you into the deepest valleys; look upon them as your own beloved sons, and they will stand by you even unto death." Another one is "Carefully study the well-being of your men, and do not overtax them."
Cunningness, coyness, intelligence are also traits of the commander that must be employed. The enemy should not be fully trusted but be prepared for deception. One quote is "At first, then, exhibit the coyness of a maiden, until the enemy gives you an opening; afterwards emulate the rapidity of a running hare, and it will be too late for the enemy to oppose you."
The last two chapters are interesting in that it shows that during those ancient times, using fire in battle seems common and there are strategies built around it. Using spies is also an established strategy in those times. Five different classes of spies were identified. The importance of spies cannot be underestimated, "Hence it is that which none in the whole army are more intimate relations to be maintained than with spies. None should be more liberally rewarded. In no other business should greater secrecy be preserved."

Sunday, January 28, 2018

Options - Rationale

1. Need to be a Seller, not Buyer
Buyer gain when stock UP = 1/3
Seller gain when stock NEUTRAL, DOWN = 2/3

Options
Expiration - Work against Buyer, For Seller
Strike - Buyer need overcome, Easy to Avoid
Premium - Buyer Pay, Seller Receive

2. Sell Options that Expire Soon

3. Choose Low Probability Strike

4.  Have a built-in Protection Plan. 
Avoid naked option
If Bullish, Sell PUT, then Buy PUT at lower price to protect stock dropping

5. Don't be Greedy

Monday, June 19, 2017

Order for the Day - 19 Jun 2017


ACQ - Sell at 0.93 - breached sell point
ETPMPT - Sell 118.37 - breached sell point

GWA - Buy 3.15 : 5882 units - sell point 2.98
AIZ - Buy 3.04 : 5263 units - sell point 2.85