Buy Notes to Self Dec 2013

Overall best stocks based on MTI, price < value, growth between 30-50
SHV - Select Harvest
PMC - Platinum Capital
GBT - GBST Holdings

For Bottom Fishing, stocks with good fundamental value, price < value, growth > 20
RRL - Regis Resources
LEI - Leighton Holdings


Update: 21 Dec 2013
SHV - although the highest on the list of good stocks, is facing a bearish divergence when compared to it relative timing. In other words, price action and fundamentals seem positive. But the trend of the price action is suggesting negative sentiment - hence avoid this.

A few stocks to watch for are:
- MNF - MyNetFone
- MFF - Magellan Flagship Fund
- CLX - CTI Logistics

Update: 2 Jan 2014
VRT - IVF provider in Australia floated in mid 2013. Significant rise from $6 to $9 in 4 months but has since stabilised. Interesting fundamentals because of increasing demand for IVF technologies.


Update: 10 Feb 2014
SHV - Select Harvest
GXL - Greencross
IIN  - iiNet

Update: 17 Feb 2014
SHV Select Harvests
MFF Magellan Flagship Financial
OGC Oceana Gold

Update 23 Feb 2014
SHV - Select Harvest
CTX - Caltex
DLS - Drillsearch

Update 24th May 2014
SWL - Seymoure Whyte
AIZ - Air NewZealand
AHG - Amalgamated Holdings
RHL - Ruralco holdings

Ligthning Analysis - Stocks mentioned in Money Mag Nov 2013

A few stocks receiving mentioned in the write up include:
TWE - Treasury Wines
CWP Cedar Woods Properties
CLO  Clough

TWE was notable because although its local Australian business is performing moderately, it seems to show some promise in the overseas markets of the U.S and China. The stock may be out of favour due to recent restructure, and analysts seem not to have included the upside of its overseas operations.


A few technology stocks, some of which have recently floated or are floating are:
XRO - Xero
FLN - Freelancer
OFX - OzForex
ESV - Eserv Global - good pattern
HUB - Hub24
OneVue

Risk Management - Buying Selling Shares - Knowing How Much to Buy

Most of the time the excitement is in choosing stocks to buy, even choosing specific price ranges to make the buy. However, buying is only half of share trading. The other half is of course Selling.

Selling is where most people get it wrong. What is called Risk Management in formal finance literature is tied to both buying and selling. However even those people with a willing sell strategy often get it wrong.

This article outlines one of many techniques of Risk Management all the way through from buying to selling. It is true that a good trade should know when to sell even before it is bought.


1. Starting from a fixed capital, say $10,000; decide that each trade should not lose more than 1%. This lets you lose  100 times before you are totally bankrupt.
So amount of each loss is 1% of $10,000 = $100


2. Determine an entry price $x. There are many ways to determine this buy price and will not be covered here. Suffice to say that let buy price = x


3. Determine the exit price $y. This is done before even buying the stock. Various ways of determining this is by
i) %Loss of Entry, say tolerate about 5% loss of buying price.
ii) Using price patterns in technical analysis, such as ABC pattern, or looking at previous support / resistance levels.


4. THIS IS THE KEY. Calculate number of shares to purchase N.
So N = Loss / (x-y) = 100 / (x-y)

Most people including myself buy a fix number of shares, based on what size of investment we can afford. Eg. Want to spend $1000, and the share price is $50, there choose to buy N = 20 shares. This is the wrong way to do it.


5. Finally after calculating N, the initial investment can be determined. So the initial investment is the units times entry price = N * x

There is nothing to worry about the investment being too big. True, $x can be any value. However, the calculated N has already taken into account the tolerable loss (x - y), so the N would ensure the size of investment is reasonable.


These steps contain the decisions for good risk management. The size of the investment must NOT be a decision - that needs to be calculated.

Ligthning Analysis - Stocks mentioned in Money Mag Oct 2013

From a selection of stocks mentioned in the Money Magazine Oct 2013, a quick table of PE, growth rate and Dividend yield is presented below.

*** Disclaimer: These numbers in the table below are NOT taken from Money Magazine. The author has taken the numbers from his own research. 

Although there is quite a selection of stocks, consider those with growth rate above 10%.

Then look at the price chart for the remaining stocks, with an eye in technical analysis. From all this, it appears that the only worthwhile stocks are: PEA (Pacific Energy) and MFG (Magellan)

CompanyName	Symbol	Price	%Chng	P/E	Grow%	DY	Industry Name
Energy Action Ltd	EAX.AX	3.83	0.00	19.15	18	2.35	Utilities(Utilities)
Pacific Energy LTD	PEA.AX	0.43	1.18	10.75	23	2.33	Utilities(Utilities)
Bigair Grp LTD	BGL.AX	0.86	0.00	21.5	18	1.16	TelecomSvcs(TelecomSvcs)
Image Rsrcs NL	IMA.AX	0.12	4.35	-2	-6	0	Materials (Dvrsfd Metals/Mng)
Medusa Mining	MML.AX	2.17	3.33	5.56	10	0.92	Materials (Gold)
Northern Star Rsrcs	NST.AX	0.91	0.55	13	9	4.4	Materials (Gold)
TFS Corp LTD	TFC.AX	0.78	-1.27	9.75	11	0	Materials (Ppr/Forest Prdcts)
Quickstep Holdings Ltd	QHL.AX	0.255	4.08	-5.1	16	0	Industrials (CapitalGoods)
RCR Tomlinson LTD	RCR.AX	3.8	-0.78	11.52	19	1.32	Industrials (CapitalGoods)
Swick Mining	SWK.AX	0.345	1.47	8.63	5	2.9	Industrials (CapitalGoods)
Seymour Whyte Ltd	SWL.AX	1.355	-2.87	12.32	-6	5.9	Industrials (CapitalGoods)
Watpac LTD	WTP.AX	0.975	0.52	12.19	0	2.05	Industrials (CapitalGoods)
Viralytics	VLA.AX	0.35	0.00	-5.83	9	0	HealthCare(Pharma,Biot&LfeSci)
Magellan Financial	MFG.AX	11.37	-0.35	26.44	46	1.93	Financials(Diversified)
ARB Corp	ARP.AX	11.4	-0.09	18.39	9	2.46	Consumer Discr(Retailing)
Breville Group Ltd	BRG.AX	8.17	0.25	21.5	7	3.18	Consumer Discr(Retailing)
Twenty-First Century Fox Inc	FOX.AX	36.33	1.48	9.51	24	0.5	Consumer Discr(Media)
Maxitrans Inds LTD	MXI.AX	1.195	2.14	9.96	29	7.53	Consumer Discr(Autos&Compnnts)
Reject Shop	TRS.AX	17.91	0.39	20.12	3	2.07	Consumer Discr(Retailing)

Buy Sell Notes to Self 26 Oct 2013

These notes are for private consumption and interests only. This is not financial advice.

Using a combination of fundamental and technical analysis and proprietary software, below is a list of stocks and recommendation. These are for the current market at 26 Oct 2013 in the Australian Stock Exchange. As with current financial environment, this view is for short term only, since many factors can influence the stocks.

Wait till it retrace then head back up and buy

GBT, MRN, 

Buy, but ready to sell if drops soon

RCR, TBR, EBT, CFG, BCI, BOQ, LCM, MNF, BYI, AIZ

All stocks are selected because of very good predicted growth, good value, relatively safe.

A few simple statistics are:

CompanyName	Symbol	Price	Change	DY	%Change	P/E	Growth%	SectorName
Air New Zealand	AIZ.AX	1.49	0.065	3.36	4.56	7.84	22.00	Industrials
BankOfQueensland LTD	BOQ.AX	11.93	0.12	4.86	1.02	14.20	17.00	Financials
BC Iron Limited	BCI.AX	4.95	0.08	7.07	1.64	5.50	25.00	Materials
Beyond Int'l Grp	BYI.AX	2.02	-0.05	3.47	-2.42	10.63	22.00	Consumer Discretionary
Challenger Limited	CGF.AX	5.87	0.04	3.41	0.69	9.17	20.00	Financials
Ebet LTD	EBT.AX	3.21	-0.09	0	-2.73	13.96	32.00	Consumer Discretionary
Logicamms Ltd	LCM.AX	1.96	-0.02	4.59	-1.01	9.33	29.00	Industrials
MacQuarie Radio Ntwk	MRN.AX	1.45	-0.05	6.9	-3.33	12.08	33.00	Consumer Discretionary
RCR Tomlinson LTD	RCR.AX	3.8	-0.03	1.32	-0.78	11.52	19.00	Industrials
Tribune Resources Ltd	TBR.AX	2.71	0.01	0	0.37	5.53	41.00	Materials

CompanyName	Symbol	Price	Change	DY	%Change	P/E	Growth%	SectorName
GBST Hldgs LTD	GBT.AX	3.42	-0.07	2.05	-2.01	18.00	37.00	Information Technology
My Net Fone Ltd	MNF.AX	1.5	0.03	2.67	2.04	16.67	29.00	Telecommunication Svcs

Free W.D.Gann Book on Amazon Kindle

Just found this book today on the Amazon Kindle store that it is $0.00

The Trading Methodologies of W.D. Gann: A Guide to Building Your Technical Analysis Toolbox 
by Hima Reddy

Publication Date: September 21, 2012
Book Description
"W.D. Gann’s works helped to pioneer the discipline of technical analysis, and they still offer immense potential value to investors and traders. However, Gann’s original publications are esoteric and can be challenging to read and use. In this book, long-time trader and expert technical analyst Hima Reddy brings these works to life for modern traders and investors. She distills Gann’s tenets into crystal-clear, bite-size explanations, and illuminates them with exceptionally intuitive charts and illustrations. Drawing on extensive personal experience, Reddy explains how Gann’s insights into price, pattern and time can be applied in all types of markets and market conditions. Using this book, any experienced trader can discover the value of Gann’s approach, and start utilizing it in his or her own trades. Then, with Reddy’s discussion as a foundation, traders and investors can delve even more deeply into all of Gann’s works, identifying even greater opportunities for profit."

The link is:
http://www.amazon.com/exec/obidos/ASIN/B009EC01KO/ozba0e-20

Alternatively just go to Amazon and search the title.

Notes on Vector Vest Strategies

***Disclaimer: These notes are for personal use only

Signs for Selling Shares
1. Increase volume, lower highs, lower lows 
2. P < 40 day Moving average 
3. RT < 1.0
4. Sell rating 

Good stocks for Retirement
RS >= 1.25     - safe stocks, more predictable, less risk, based on fundamental ratios, eg debt to equity.
YSG >= 1.00   - stability of dividends, assurance that dividends will be as good in the future. Shows that company is confident in increasing its future earnings.
CI >= 1.25   - from looking at price history, where the price is increasing consistently.
Sort by VST desc,

Combination for buying stocks in a bear market
RT Kicker Combo / SP500 Ascending
Bear Market Beaters  / Marathon
Gain Loss of 50/10
The key is the Marathon search which is used during a bear market, by people who still want to buy stocks in bear market period.

High VST newcomers
This search aims to catch stocks which have recently reached significant levels in their VST ratings. The original search looks for trends with the last two periods having VST <1.40 and VST > 1.40 respectively. This indicates the VST value has increased the 1.40 levels.

Stocks based on Top Industry
Overall Market -> Sector -> Industry -> Stock
- Use RT as a measure of top Industry
- Within the Industry, we still choose Stocks using VST as the measure.
- In Top Industry, most stocks should be performing well, ie more Buy Recommended.

How to use Industry Ranking
This is about finding stocks in Industry, where the Industry RT ranking is improving, ie Rank becomes better.
'Stocks Industry Group' = 'Top Delta Industries' -> 'Highest 10 by 10 Day RT Delta'

Note - list of Telcos

Amcom 
bigair 
iinet 
m2tel 
singtel 
telecomCorp NZ
Telstra 
tpg 


The above is a list of telco companies in Australia. The telcos enjoy steady revenue, cash flow, profit locked in.
The management can focus on other business aspects. Can prepare more accurate business goals, forecast, budgets.

The two standout ones with good future growtth, good dividend and still be intrinsic value are:
BigAir, M2 tel, IInet

Notes - Masonson's ETF Buy - Don't Hold

These are some summarised notes on the fantastic book on how to trade ETFs by Masonson "Buy - Don't Hold"
It presents a technical strategy based on momentum using relative strength.

Chap 2
- investment questionnarire may determine the risk profile but then most managers use it to allocate asset based on conservative, balanced, aggresive, into asset classes with fixed percentage. It does not account for which asset classes may perform better or worse at
that time.
- better questionnaire at www.finametrica.com  and www.riskprofiling.com 
- risk management in stocks include knowing when to sellout. Some like to hold on whle the stock keeps crashing. The question when you want to keep holding is would you buy that same stock today?
- types of risks - market risk, individual stock risk, diversification risk, inflation risk.
-  Mechanical non emotiona trading has the highest probability of making money
- Buy and hold investing is very risky and can lead to huge losses
P52 use average true range ATR, when go above 0.75, then major bear
may be coming, so exit all holdings, there should still be some time.

Chap 3 - Personal Investment Plan - 6 steps Road to Success
- SIX step investment plan
i determine your risk level
Ii review existing investment portfolio, use sites from Web, WallStreet Journal, Barron's http://online.barrons.com/home-page
Iii assess the stock market condition - use Stock Market Dashboard in Chap 5 to determine market condition, buy when above +3 and sell when below -3
Iv Invest in ETFs instead of stocks - 5 classes of ETFs are;
Morningstar style box, S&P Indices, Individual countries, Fixed Income, Commodities.
v. find top ETFs of specific class using Relative Strength Analysis.
Web: ETF FamilyWeb sites, www.morningstar.com
vi. Protect using stop loss
- a section on retirement investing with details for US residents, but the principles can be applied elsewhere.

Chap 4 - Using ETFs
- contrary to their own thinking, investors are not more intelligent than their peers.
-  most investors lose money, including managed funds
- over 75% of active managers do not beat their benchmarks over a 10 year period. So not point paying over 1% in management fees.
- index funds (ETF is a type of this) has a beta of 1.0 (a measure of volatility)
- ETFs are usually a basket of stocks that mirror the index. So most reflect the indices and they do not beat the indices. Hence the majority are passively managed and so has lower fees. It lets investors follow the indices since most actively managed fund perform
poorer than the indices over the long term.
- list of low cost brokers:
www.digeratilife.com/blog/index.php/2009/05/22/onlinediscount-brokers-smart-money-broker-survey 
- A table 4.1 has a list of the main ETF families (providers?) and they types of ETFs they offer.
- there are many types of ETFs such as those that mirror the main indices like S&P500, commodities, various sector ETFs, currencies, bonds and also inverse ETFs that make money when the market falls (ProShares, Direxion, Rydex).
- benefits of ETFs are: transparency, liquidity, low fees, better performance, simpler tax implications, allow shorting by buying inverse ETFs without actual margin based shorting, can implement trading/investment strategies, earn dividends/income.
- risks: different price in ETFs to their underlying (eg when market is suspended), general market risk, spread in buy/sell, inverse ETFs may be suspended in extreme market conditions.
- leveraged ETFs can magnify gains and losses. The author warns against leveraged ETFs because of higher risks and suggest their use as hedging or intraday trading.
- leveraged ETFs are rated using beta. If beta =1.25, then the ETF move 25% more than its underlying in the same direction.
- 4 types of asset allocation is given according to the profiles:
conservative, moderate, aggressive, very aggressive. Morningstar and SPDR ETFs are recommended for all profiles. Fixed income range from half to zero from conservative to very aggressive classes. IShares countries ETFs range from low to high percentage from conservative to very aggressive.
- a long list of various  ETFs and their ticker symbols are presented in Chap 4

Chap5 - the Stockmarket Dashboard - key market indicators to Gauge
Market Directions
- websites : www.stockcharts.com
- Dashboard consist of 8 indicators. Since each indicator is not always reliable, investment decisions are based on an aggregate of the 8 indicators.
- When the indicator is +3, start buying stocks up to indicator of +7.
When an indicator is - 3, sell ALL stocks.
- Returns on Stock is determined by 70% market trend, 20% industry trend and 10% individual stock fundamentals.
- 8 components of the StockMarket Dashboard
i) Percentge of NYSE stock above their 50d MA. If above 75% then move downwards then market top has been reached. Similarly for the 25% to indicate market  bottom.
ii) NASDAQ crosses 100 DMA. Crossing upward from below means trend has changed upwards and vice versa. The NASDAQ is chosen because it usually leads the other indices.
iii) New daily highs minus New daily lows on NYSE. When this  is -750 and the next day the number reverse to more than + 750 then a market bottom is reached. For market top, find number of new weekly highs divided by number shares traded. If this is 25% and goes lower in the next week, then it is time to sell.
iv) Percentage of NYSE stocks whose Point and Figure Charts has a buy signal. When this number is 70% and turns down it may be a market top.  If the number is 25% and turns up, it may be a market bottom.
v) American Association of Individual Investors (AAII)  survey of weekly bullish sentiment. When 50% is bullish and turn lower next week, then market top. If 25% and turn up, then market bottom.
vi) MACD on NASDAQ where the difference 26dayExpMA-12dayExpMA line crosses the 9dayExpMA, then market has changed direction.
vii) Invest 6months - be in the market from 1 Nov to 30April and out of the market for the other 6 months. Use MACD of S&P500 to fine-tune when to enter and exit markets.
viii) NASDAQ Summation Index (NASI) - When this crosses the 5day EMA
from below, it is a buy signal and vice versa. This is used together with MACD for confirmation.

Chap 6 RELATIVE STRENGTH ANALYSIS (RSA)
- RSA is based on picking the selected stocks which are outperforming their peers in terms of their stock price.
- calculate the % change in stock price over a given period then rank them with other stocks.
- The suggested time frame is 6 months
- Sell the stock if it falls below a certain ranking. And replace with other stocks that increased in ranking.
- RSA have been shown to outperform buy and hold strategies.
- perform analysis every week, based on 6 month price performance.
- sell off those that drop out of top ten and buy those that get into top 10.
- can be used with stocks, also ETFs if there are hundreds of them.
- before buying, check the ETF 2 year chart 50dma and MACD are in an uptrend.
- Strategy #1 - after ranking the ETFs according to their categories, the choose the top  few from each category.  The number of stocks from each category depends on the risk profile. For aggressive investors, choose more stocks from risky category, such as International ETFs.
- Strategy #2, rank all ETFs together ignoring their categories. Pick the top 10 ranking ETFs in this universal ranking.
- when coming out of market bottom, avoid top ranking ETFs which are bonds or inverse ETFs.
- www.robertwcolby.com  - list the top 10 rank ETFs
- www.etfscreen.com - provides relative strength analysis  on ETFs.
- www.morningstar.com - has ETFs info
- www.marketwatch.com - has more details on ETFs
- www.etftable.com  - ETFs stats and ranking
- www.etftrends.com - performance data but no RSA
- www.etfinvestmentoutlook.com  - also performance data but no RSA

CHAP 7 Subscription Software
High Growth Stock Investor software
- screening tools, filter, indicators, charts, groupings, Relative Strength based on price performance or other criteria.
VectorVest software
- powerful back testing, portfolio management, filters, searches.

CHAP 8 Putting it all together
1. Determine your investor profile: conservative, moderate, aggressive, very aggressive. www.kiplinger.com/reports/investor-psychology
2. Review current asset allocation, against your risk tolerance and investor profile determined from previous step. Rebalance portfolio if necessary, ie sell some stocks and replace with ETFs where possible.
3. Use the Stockmarket Dashboard to decide when to buy (+3 or above) and sell (-3 or below) shares. The Dashboard provides general market timing, it does not select which shares to buy or sell. When buying from+3, some strategies include buy everything at once or buy some, then buy a bit more when it increases to +4, +5, +6, +7. When selling, once the market falls down to -3, then sell the complete
portfolio.
4. Stock selection and therefore fundamental analysis of individual companies are not necessary, because this approach is to buy ETFs. The ETFs can also be categorised according to riskiness. Based on the investor risk profile, each profile can have a certain ETF allocation strategy. For example the Conservative allocation can consist of 53% Fixed Income ETFs (safe), 13% iShares Countries ETFs (risky), etc while the Very Aggressive allocation may have no Fixed Income ETFs, 40% iShares Countries ETFs and so on.
5. Selection of which ETFs to buy is based on the Relative Strength Method, using websites which rank them (see Chap6 for web links). Review your portfolio of ETFs at least weekly and if they ranking fall below 50%-tile within their group, then replace that ETF.
6. Always continue to use stop loss for protection. Do not change the plan once started or stray away from it. www.buydonthold.com  - more details on the book.

The Stockmarket Dashboard was used for backtesting with  two examples related to the GFC. The first case was for the market at Mar 2009, the recovery after the GFC, with a score of +7 - a strong buy signal. The second case looks back to Oct 2007, just before the GFC, with a score of -6 - a strong sell all signal.

Listed Investment Companies

What’s a Diversified Investment, but not an ETF or Managed Fund? – Listed Investment Companies.

Some which are listed on the ASX are:
Australian Foundation Investment Corporation,
Argo Investments,
Milton Corporation,
Djerriwarrh,
Australian United Investments
Carlton.

Wilson Asset Management,
Contango
Clime.

A few points about LIC are:
they perform better than managed funds and certainly better than ETFs.
They have experts there hunting out bargains and looking for growth opportunities.
They are generally run on a cheaper cost base.
Invest by buying shares in the company.
They are not forced to buy high and sell low, since they don’t have to hand back investments to customers like Managed Funds do.

Buy Sell Notes to Self 2013

This post will be updated with tips as I read them from various sources and when I want to record it down to look back on later. It is not any kind of advice or suggestion to any other people. 

2 May 2013A-REITS have been doing quite well over the recent years, shooting up from its lows in the GFC. A few REITs with their dividend yield are given

Symbol	CompanyName		DY	Price
APA.AX MGR.AX	APA Group Mirvac Grp		5.40 4.56	6.48 Yes 1.755
ABP.AX	Abacus Prpty Grp		7.26	2.34	Yes
CQR.AX	Charter Hall Retail REIT		6.12	4.25	Yes
BWP.AX	BWP Trust		6.2	2.42
WRT.AX	Westfield Retail Trust		5.74	3.31
SGP.AX	Stockland Trust Grp		6.25	3.84
LEP.AX	ALE Ppty Grp		6.13	2.61

21 Sep 2013
Using the Growth to PE as the main criteria, consider the following stocks
AOD - Aurora Sandringham
LCM - Logicamms
WAX - WAM Research
ALF  - Australian Leaders Fund

15 Apr 2013

Market is on the verge of rebounding. Here are a few stock to consider

mfg
ccp
cwp
LLC  1
jhx  2
iag
ske
brg
pmv  
iof
trs
wrt
gem
vrl 3
mtu  



2 Apr 2013

bsl - Bluescope Steel
gem - G8 Education
ccv y   - cash converters
pmv y  - Premier Investments
alu  good - Altium
aiz good  - Air New Zealand
ctd        - Corporate Travel Management

1 Jan 2013

A new list of stocks for the new year. 

This list is based on having a Buy recommendation, high dividend yield and high dividend growth.

DLX - Dulux Group - Materials

MRM - Mermaid Marine Aus - Industrial Transportation

CAM - Clime Capital Limited - Financials Diversified

ARI - Arium Limited - Materials

GPT - GPT Group - Financial Real Estate