I have just sold half of my IBA holding yesterday. It was not at the price I would like to have, but definitely the best price possible this week. IBA is 'consolidating' at around $1.32-1.33.
I am also considering to sell some part of my IDL holding. It's been hovering around $0.40 for some time, getting ready to take off, but failed to do so.
And Iran war? My husband advised me to sell everything I've got and just wait. Too much geopolitical uncertainties.
War, Oil Prices and Stock Market
THIS morning, news reported that world oil prices overnight hit new highs for 2007 as the market fretted over rising tensions between the West and major crude producer Iran. Iran, OPEC's second largest producer and the world's fourth-biggest producer of oil, certainly plays a considerable part on the world oil supply.
How far will it go? Will it head to oil crisis again?
Looking back at the history, there were several events that trigger the oil crisis:
How far will it go? Will it head to oil crisis again?
Looking back at the history, there were several events that trigger the oil crisis:
- First Oil Crisis, 1973-4
Arab countries’ retaliation for US support of Israel in Yom-Kippur war 1973.
Triggered sharp recession around world.
1973-4 is second sharpest stock market crash in US history. S&P Composite lost 53% of its real value between Dec. 1972 and Dec. 1974. (Only worse two-year experience was June 1930 to June 1932.) - Second Oil Crisis, 1979-80 1979: Iranian revolution, expulsion of the Shah of Iran, Ayatollah, capture of US Embassy hostages in Teheran Nov. 1979. Iran-Iraq war erupts 1980, disrupts oil supplies. US CPI inflation reaches 18%/year in March, 1980. The “great recession”of 1981-82 is the worst recession since Depression of the 1930s.
- Collapse of OPEC Cartel, 1986
After suffering bombing by Iraq, Iran demands that Iraq be given the same oil export quota as everyone else.
Other arguments about the disproportionate share of some OPEC states. - Persian Gulf War, 1990-1991
August 2, 1990, Surprise invasion of Kuwait by Iraq
UN Security Council deadline for Iraq to withdraw by January 15 1991.
January 16, 1991 Air bombardment of Iraq and its Kuwaiti positions begins.
February 24, 1991 Allied ground invasion begins. War is over February 26, 1991.
Brief interruption of oil supplies mark recession: NBER dates July 1990-March 1991. - Oil Price Collapse 1997
Nov. 1997 OPEC Meeting, the “disaster in Jakarta” involved bitter disputes among OPEC nations about market share. Fuming about widespread cheating in limiting exports to quotas. Asian financial crisis dropped demand for oil - Oil Price Spike 1999
OPEC resolve to stop cheating left supplies shorter than they expected
Erroneous data led them to underestimate how fast inventories were dropping.
Backwardation in oil futures market (futures price below spot price) began in January 1999. OPEC Increased quotas - Second Gulf War Oil Spike
In anticipation of war, oil rises to nearly $36 per barrel February, 2003
US invaded Iraq, March 19, 2003. Symbolic end of war: after capture of Baghdad, crowd topples Hussein stature April 8, 2003.
Oil falls to $28 per barrel by April, 2003 - Next: US- Iran War???
War! is good for nothing, especially if it caused by some nations arogancy!
CBH Resources Limited (CBH.ASX)
I bought a few of CBH Resources Limited (CBH) shares today. This mean I spent all my budget, left me with a mere $15.78 in my account. CBH share price experienced a freefall recently, but hopefully it starts to go back up again, now the have raised some fresh capital. I used to own these shares a while back, but bailed out when the share price went out of control.
Acording to Aspect valuation, this share is undervalued.
CBH Resources Limited (CBH) is a minerals exploration, development and production company, primarily interested in base metals projects in western New South Wales. The company is focused on operation of the Endeavor mine and the development of its Panorama and Broken Hill projects.
Acording to Aspect valuation, this share is undervalued.
CBH Resources Limited (CBH) is a minerals exploration, development and production company, primarily interested in base metals projects in western New South Wales. The company is focused on operation of the Endeavor mine and the development of its Panorama and Broken Hill projects.
Oxiana's Martabe
I found this article today at the Australian. Oxiana is still linger at $2.80 this week. It went up 3 cents since I bought this share few days ago.
Here's the article:
Oxiana experts size-up Martabe
Andrew Trounson
March 23, 2007
SENIOR Oxiana mining engineers and geologists will soon be flying to Indonesia as the company takes control of $415 million target Agincourt Resources and its key asset, the Martabe gold project in North Sumatra.
But while Agincourt was set to complete a bankable feasibility study on the 270,000 ounce a year Martabe development by the end of the month, Oxiana is going to delay that as it works to get up to speed on the project. Agincourt had previously estimated the cost of Martabe at $US165 million ($206 million) with first production in 2009.
Another priority will be to access the value of Agincourt's less strategic 110,000 ounce a year Wiluna mine in Western Australia. While Wiluna may offer exploration upside for Oxiana, there is speculation it could decide to take advantage of a buoyant gold market to sell the operation.
However, Wiluna does have additional value to Oxiana as an infrastructure provider to Agincourt's 57 per cent owned Nova uranium deposit nearby.
Yesterday Oxiana, under managing director Owen Hegarty, declared its scrip bid unconditional after securing over 50 per cent acceptances. Oxiana last month cut its minimum acceptance level from 90 per cent, and sought to hurry along acceptances by reminding Agincourt shareholders that they stand to share in Oxiana's final year divided if they accept before the April 17 record date.
The 5c a share Oxiana dividend is worth 3.25c a share in Agincourt shares, or a total of $7 million. Oxiana yesterday said it had 55.8 per cent acceptances, including US gold giant Newmont's 19.9 per cent stake and the 10 per cent held by the board that has backed the takeover. And late yesterday hedge fund Monterrey Investment Management tipped its 5.8 per cent stake into the bid.
The acquisition of Agincourt adds some 6.7 million ounces of gold to Oxiana's resource base, almost doubling its gold resources to 13.8 million. At Martabe, Oxiana is hoping to replicate the success of its Sepon gold and copper development in Laos.
The Martabe deposits are in the forested hills above the town of Batang Toru, which is on a so-called highway and some 30km from the Sibolga deepwater port. However, the decentralised, sometimes chaotic nature of Indonesian politics is completely different from communist-controlled Laos.
From: http://www.theaustralian.news.com.au/story/0,20867,21431037-643,00.html
Here's the article:
Oxiana experts size-up Martabe
Andrew Trounson
March 23, 2007
SENIOR Oxiana mining engineers and geologists will soon be flying to Indonesia as the company takes control of $415 million target Agincourt Resources and its key asset, the Martabe gold project in North Sumatra.
But while Agincourt was set to complete a bankable feasibility study on the 270,000 ounce a year Martabe development by the end of the month, Oxiana is going to delay that as it works to get up to speed on the project. Agincourt had previously estimated the cost of Martabe at $US165 million ($206 million) with first production in 2009.
Another priority will be to access the value of Agincourt's less strategic 110,000 ounce a year Wiluna mine in Western Australia. While Wiluna may offer exploration upside for Oxiana, there is speculation it could decide to take advantage of a buoyant gold market to sell the operation.
However, Wiluna does have additional value to Oxiana as an infrastructure provider to Agincourt's 57 per cent owned Nova uranium deposit nearby.
Yesterday Oxiana, under managing director Owen Hegarty, declared its scrip bid unconditional after securing over 50 per cent acceptances. Oxiana last month cut its minimum acceptance level from 90 per cent, and sought to hurry along acceptances by reminding Agincourt shareholders that they stand to share in Oxiana's final year divided if they accept before the April 17 record date.
The 5c a share Oxiana dividend is worth 3.25c a share in Agincourt shares, or a total of $7 million. Oxiana yesterday said it had 55.8 per cent acceptances, including US gold giant Newmont's 19.9 per cent stake and the 10 per cent held by the board that has backed the takeover. And late yesterday hedge fund Monterrey Investment Management tipped its 5.8 per cent stake into the bid.
The acquisition of Agincourt adds some 6.7 million ounces of gold to Oxiana's resource base, almost doubling its gold resources to 13.8 million. At Martabe, Oxiana is hoping to replicate the success of its Sepon gold and copper development in Laos.
The Martabe deposits are in the forested hills above the town of Batang Toru, which is on a so-called highway and some 30km from the Sibolga deepwater port. However, the decentralised, sometimes chaotic nature of Indonesian politics is completely different from communist-controlled Laos.
From: http://www.theaustralian.news.com.au/story/0,20867,21431037-643,00.html
One Kind of Day!
I just came back from taking my kids for lunch, when I saw the ASX all ordinary index was down (it was in the green side in the morning). With that, I suspected my shares portfolio to be on fire. It surprised me that actually three stocks made it in the green side, GIR, DYL, and TGR.
DYL went up 15.o7% today!! No news, no story.. (except that Dr Pretorius is speaking tomorrow morning at the paydirt conference in Adelaide). GIR was the same, it went up 9.02%, without any announcement. It puzzled me, how this things happening? A lot of rumours, such as the institution investors start buying DYL, and such.. and that a substantial holders at GIR loaded off their shares or Zinc co. spin off is due very soon..
It's interested to see what will happen to OXR, Agincourt takeover make them involve in the glitter of Indonesian Gold and Silver, my old home. OXR share price went down $ 0.04 today.
DYL went up 15.o7% today!! No news, no story.. (except that Dr Pretorius is speaking tomorrow morning at the paydirt conference in Adelaide). GIR was the same, it went up 9.02%, without any announcement. It puzzled me, how this things happening? A lot of rumours, such as the institution investors start buying DYL, and such.. and that a substantial holders at GIR loaded off their shares or Zinc co. spin off is due very soon..
It's interested to see what will happen to OXR, Agincourt takeover make them involve in the glitter of Indonesian Gold and Silver, my old home. OXR share price went down $ 0.04 today.
Oxiana Limited (OXR.ASX)
I bought Oxiana Ltd (OXR.ASX) this morning, for (what I thought) a decent price, $2.81. I hope I make a right move here. This investment has left me a small amount of money, hardly enough to make another investment.
So this is my ASX portfolio, as of 21 March 2007: DYL, GIR, IBA, IDL, OXR, TGR
I am a little bit heavy on Miners: DYL (Uranium - yes I'm still holding it!!!), GIR (minerals - Iron, Zinc, and Uranium), and OXR (Gold and Copper)
IBA is a health-tech company, TGR is a salmon producer, and IDL is an industrial (also connected to miners)
We'll see how it goes...
So this is my ASX portfolio, as of 21 March 2007: DYL, GIR, IBA, IDL, OXR, TGR
I am a little bit heavy on Miners: DYL (Uranium - yes I'm still holding it!!!), GIR (minerals - Iron, Zinc, and Uranium), and OXR (Gold and Copper)
IBA is a health-tech company, TGR is a salmon producer, and IDL is an industrial (also connected to miners)
We'll see how it goes...
IPO
Waiting with held breathe for our company's IPO. Seems to get closer and closer, as they have just appointed a new board member who's an expert on preparing company's IPO. This going to be exciting if all is well. We are a little bit overweight on this one.
Industrea Ltd (IDL)
I read a quite interesting article about IDL this morning. As a result of the report, there are so many IDL shares traded this morning, with the share price going through the $0.40 cents barrier. It even went to $0.41, before profit taking pushed it back down.
Here's the article:
It floated in June 1999, into the hype of the dot-com boom with major backing from Siegfried Konig, one of the more colourful promoters on the Queensland small company scene at the time.
GPS Online, as it was then known – chaired by former federal communications minister David Beddall and with founder Robert Angel at the helm – went well enough for a while. Shares in the group, which was developing global positioning system technology for logistical monitoring and other applications, were issued at 40¢, debuted at 58¢, traded to a high of 62¢ and closed their first day at 50¢. GPS's free options, issued on a one-for-two basis, closed at 17¢. But it was a roller-coaster ride thereafter and after the tech boom went bust it was all downhill, at one point close to oblivion. The shares bottomed at 1.4¢ each.
Recently, however, GPS – renamed Industrea Ltd after a recapitalisation in 2004 – has been acting like Lazarus with a triple bypass. Its shares, which spent most of the four years between 2003 and 2007 below 10¢, closed on Friday at 38¢, after touching 39.5¢ earlier in the week. Industrea's turnaround began in 2004, when Robin Levison, a Kiwi former accountant turned investment banker and broker, was called in by investors contemplating injecting funds into the struggling group as a consultant. Mr Levison had some experience in global positioning systems, including involvement in their application to America's Cup yacht racing.After eight weeks inside the company, Levison advised his investor group he thought it could be saved and sat back awaiting his fee – only to see the investors tell GPS Online they would put in their funds only on a couple of conditions. One was that Levison, who hadn't been sounded out before hand, become managing director. Having just done a presentation on how he believed the group could be resurrected, Levison says he didn't think he could refuse the job.
In August 2004, he put his feet under the chief executive's desk. It was tough for a long time. He had the unhappy task of reducing staff from 48 to 12 and dumping most of the group's research and development projects. And for many months Levison demanded a formal insolvency statement every four weeks and declined a board seat, to avoid any possibility that he may become liable for trading while insolvent. He joined the board only in November 2005.
Levison says he had a clear strategy to Industrea's resurrection, to concentrate on equipment and services for the mining industry and to make sure the company delivered what it promised. Since he took the reins, Industrea has added to the technologies that have survived from the original GPS line-up by making four acquisitions, QVEN (February 2005), Advanced Mining Technologies (December 2005), WADAM (September 2006) and PJ Berriman (November 2006).Industrea's revenue in 2004-05 was $3.5 million. Its pre-tax loss was $1.4 million for the year. In 2005-06, sales were $10.5 million and pre-tax profit $1.9 million. But in the six months to December, the group's sales soared to $30.8 million and it reported pre-tax income of $7.4 million.
When he took on the CEO role, Levison took a base salary of only $120,000, but received 2 million fully paid shares and a large swag of options. And he has accumulated plenty more since, at way below today's prices. Last month, a notice to the ASX showed he held 15.75 million fully paid shares, having just exercised 3 million options at 5.5¢ each. And he retains another 10 million options, exercisable at 20¢.
Shareholders who bought into GPS Online in its float, like this author, are not doing nearly so well.Still, when Mr Levison took the IDL helm, it's market capitalisation was about $2 million. It is now about $220 million.
You can find this article in today's Australian Courier Mail
Here's the article:
It floated in June 1999, into the hype of the dot-com boom with major backing from Siegfried Konig, one of the more colourful promoters on the Queensland small company scene at the time.
GPS Online, as it was then known – chaired by former federal communications minister David Beddall and with founder Robert Angel at the helm – went well enough for a while. Shares in the group, which was developing global positioning system technology for logistical monitoring and other applications, were issued at 40¢, debuted at 58¢, traded to a high of 62¢ and closed their first day at 50¢. GPS's free options, issued on a one-for-two basis, closed at 17¢. But it was a roller-coaster ride thereafter and after the tech boom went bust it was all downhill, at one point close to oblivion. The shares bottomed at 1.4¢ each.
Recently, however, GPS – renamed Industrea Ltd after a recapitalisation in 2004 – has been acting like Lazarus with a triple bypass. Its shares, which spent most of the four years between 2003 and 2007 below 10¢, closed on Friday at 38¢, after touching 39.5¢ earlier in the week. Industrea's turnaround began in 2004, when Robin Levison, a Kiwi former accountant turned investment banker and broker, was called in by investors contemplating injecting funds into the struggling group as a consultant. Mr Levison had some experience in global positioning systems, including involvement in their application to America's Cup yacht racing.After eight weeks inside the company, Levison advised his investor group he thought it could be saved and sat back awaiting his fee – only to see the investors tell GPS Online they would put in their funds only on a couple of conditions. One was that Levison, who hadn't been sounded out before hand, become managing director. Having just done a presentation on how he believed the group could be resurrected, Levison says he didn't think he could refuse the job.
In August 2004, he put his feet under the chief executive's desk. It was tough for a long time. He had the unhappy task of reducing staff from 48 to 12 and dumping most of the group's research and development projects. And for many months Levison demanded a formal insolvency statement every four weeks and declined a board seat, to avoid any possibility that he may become liable for trading while insolvent. He joined the board only in November 2005.
Levison says he had a clear strategy to Industrea's resurrection, to concentrate on equipment and services for the mining industry and to make sure the company delivered what it promised. Since he took the reins, Industrea has added to the technologies that have survived from the original GPS line-up by making four acquisitions, QVEN (February 2005), Advanced Mining Technologies (December 2005), WADAM (September 2006) and PJ Berriman (November 2006).Industrea's revenue in 2004-05 was $3.5 million. Its pre-tax loss was $1.4 million for the year. In 2005-06, sales were $10.5 million and pre-tax profit $1.9 million. But in the six months to December, the group's sales soared to $30.8 million and it reported pre-tax income of $7.4 million.
When he took on the CEO role, Levison took a base salary of only $120,000, but received 2 million fully paid shares and a large swag of options. And he has accumulated plenty more since, at way below today's prices. Last month, a notice to the ASX showed he held 15.75 million fully paid shares, having just exercised 3 million options at 5.5¢ each. And he retains another 10 million options, exercisable at 20¢.
Shareholders who bought into GPS Online in its float, like this author, are not doing nearly so well.Still, when Mr Levison took the IDL helm, it's market capitalisation was about $2 million. It is now about $220 million.
You can find this article in today's Australian Courier Mail
Sell on the Sound of the Victory Trumpets
I read this article a while ago. I think it's quite good tip for a beginner like me.
Here it is, it's extracted from:
Lord Rothschild's Investment Advice by D.R. Barton, Advisory Panelist, Investment U:
Sell on the Sound of the Victory Trumpets
It's useful to understand the market this way: It acts as a round-the-clock valuation mechanism. It constantly asks the question, "What is the value of Event X in the future?" And it immediately answers that question in the form of a price.
The event in question may be a company's earning report. The market would ask:
* What is the likelihood that the company will exceed its earnings projections?
* What is the likelihood that it will underperform?
* What would either of those events mean in terms of the stock price?
As you see so often, with every little hint of better performance, stock prices jump. And with any suggestion of a letdown, prices drop. All of this happens on rumors and inference.
The end result? By the time earnings are actually announced, the stock market has already digested almost all the possible information about the earnings announcement and valued the stock accordingly. So the only way the stock's price will move significantly is if there is a surprise.
Then there is the "myth of good news" - another factor that often shocks people. For example, the stock's earnings report is released, showing that the company met expectations, earning five cents a share. The public thinks this is good news and expects the stock to rise. But in a pattern we see over and over again, the stock may move up for a short while, only to start dropping, despite the good news. Why?
Because the news was already calculated into the price by the markets valuation mechanism.
The good earnings were expected. The price had already been adjusted to take those earnings into account. And when the company announced that expectations were met, there was no new good news. So any chance for even better news is lost and the price trickles lower.
The Key to Understanding The Stock Market's Reaction to Good News
So next time good news hits the stock market and the share price still goes down (usually after a very short spike up), you'll know why.
Here's the key: If the stock market has already anticipated good news, the actual news will have little effect on prices, or will even have a negative effect.
To clarify this, let's look at a couple of examples:
End of War: The classic example comes following the cease-fire in the Vietnam conflict. After prices spiked briefly, they headed down. While the ceasefire was good news, it was expected. Lord Rothschild's advice was spot-on again...
End of Federal Reserve Tightening: Jason Goepfert, the excellent sentiment analyst, has conducted some compelling historical research on what happens after the Fed stops raising interest rates. In the six months after the end of a tightening cycle, there is strong support that shows stock prices dropping. So be aware that one of this year's most anticipated events (the end of the Fed's interest rate hikes) may bring more disappointment than expected.
Here's what you need to remember: While you might expect that the stock market's reaction to good news would be to soar skyward, if that news was expected, the euphoria is usually short lived and brings only a temporary spike to the market and prices. So don't get caught up in the emotions of the moment when the good news - which everyone was expecting - finally comes.
To read the full article, please click here
Here it is, it's extracted from:
Lord Rothschild's Investment Advice by D.R. Barton, Advisory Panelist, Investment U:
Sell on the Sound of the Victory Trumpets
It's useful to understand the market this way: It acts as a round-the-clock valuation mechanism. It constantly asks the question, "What is the value of Event X in the future?" And it immediately answers that question in the form of a price.
The event in question may be a company's earning report. The market would ask:
* What is the likelihood that the company will exceed its earnings projections?
* What is the likelihood that it will underperform?
* What would either of those events mean in terms of the stock price?
As you see so often, with every little hint of better performance, stock prices jump. And with any suggestion of a letdown, prices drop. All of this happens on rumors and inference.
The end result? By the time earnings are actually announced, the stock market has already digested almost all the possible information about the earnings announcement and valued the stock accordingly. So the only way the stock's price will move significantly is if there is a surprise.
Then there is the "myth of good news" - another factor that often shocks people. For example, the stock's earnings report is released, showing that the company met expectations, earning five cents a share. The public thinks this is good news and expects the stock to rise. But in a pattern we see over and over again, the stock may move up for a short while, only to start dropping, despite the good news. Why?
Because the news was already calculated into the price by the markets valuation mechanism.
The good earnings were expected. The price had already been adjusted to take those earnings into account. And when the company announced that expectations were met, there was no new good news. So any chance for even better news is lost and the price trickles lower.
The Key to Understanding The Stock Market's Reaction to Good News
So next time good news hits the stock market and the share price still goes down (usually after a very short spike up), you'll know why.
Here's the key: If the stock market has already anticipated good news, the actual news will have little effect on prices, or will even have a negative effect.
To clarify this, let's look at a couple of examples:
End of War: The classic example comes following the cease-fire in the Vietnam conflict. After prices spiked briefly, they headed down. While the ceasefire was good news, it was expected. Lord Rothschild's advice was spot-on again...
End of Federal Reserve Tightening: Jason Goepfert, the excellent sentiment analyst, has conducted some compelling historical research on what happens after the Fed stops raising interest rates. In the six months after the end of a tightening cycle, there is strong support that shows stock prices dropping. So be aware that one of this year's most anticipated events (the end of the Fed's interest rate hikes) may bring more disappointment than expected.
Here's what you need to remember: While you might expect that the stock market's reaction to good news would be to soar skyward, if that news was expected, the euphoria is usually short lived and brings only a temporary spike to the market and prices. So don't get caught up in the emotions of the moment when the good news - which everyone was expecting - finally comes.
To read the full article, please click here
Position Sizing (2)
Few days ago, I posted a very simple method for position sizing. It was incorporated brokerage fees to determine the size of our trade.
In this post, we will determine our trading size using a technical stop loss method.
Let's have a look at this example:
Initial Conditions
Trading capital: $20,000
Maximum limit per position: 20 per cent or $4,000
Risk amount: 2 per cent or $400
Let’s say you consider purchasing XYZ, which is currently trading at $1.25. You have decided to place your initial stop just below its previous support level, 12¢ away.
Position Size (number of shares)= Risk amount / Distance to stop= $400 / $0.12= 3,333 shares
Now include the current share price= 3,333 shares x $1.25 = $ 4,166.25
Note, this amount is more than your maximum limit of $4,000. Therefore, you would only commit $4,000 to this position (i.e. 3,200 shares). This simple position sizing model has concluded that the level of risk in this position is tolerable and you can commit your maximum limit of $4,000.
The theory and key behind the above model is that, if the share price moves down to your exit level, you will only lose your risk amount and nothing more, because you have managed the number of shares purchased.
In this post, we will determine our trading size using a technical stop loss method.
Let's have a look at this example:
Initial Conditions
Trading capital: $20,000
Maximum limit per position: 20 per cent or $4,000
Risk amount: 2 per cent or $400
Let’s say you consider purchasing XYZ, which is currently trading at $1.25. You have decided to place your initial stop just below its previous support level, 12¢ away.
Position Size (number of shares)= Risk amount / Distance to stop= $400 / $0.12= 3,333 shares
Now include the current share price= 3,333 shares x $1.25 = $ 4,166.25
Note, this amount is more than your maximum limit of $4,000. Therefore, you would only commit $4,000 to this position (i.e. 3,200 shares). This simple position sizing model has concluded that the level of risk in this position is tolerable and you can commit your maximum limit of $4,000.
The theory and key behind the above model is that, if the share price moves down to your exit level, you will only lose your risk amount and nothing more, because you have managed the number of shares purchased.
Why Uranium?
Exactly!! Why Uranium?
I just read an article from Fat Prophet's free Newsletter, "Why Uranium is the Next Big Thing".
And yet again, I repeated the same question, why uranium?
I bought some uranium (DYL) shares way back in September 2006. DYL's share price was only $0.16 then. It went up a bit, and our family was due for an overseas holiday. I was happy to take some profit, and quit from the market. Came back about three months later, to find that DYL's price was in the high $0.30s, and then up and up and reached a peak at $0.60.
Wow..! But it went back down and I enter the market again at $0.48. It went down more to low $0.40s, and surprise surprise I bought some more at $0.41. How I really loved this Uranium stock!
Anyway, I should have listened to my dearest husband (my principal banker for this hobby) at the first place to not get into Uranium hype. I'm considering to quit the market. I don't think Uranium is for me.
Click here to read Why Uranium is the Next Big Thing
I just read an article from Fat Prophet's free Newsletter, "Why Uranium is the Next Big Thing".
And yet again, I repeated the same question, why uranium?
I bought some uranium (DYL) shares way back in September 2006. DYL's share price was only $0.16 then. It went up a bit, and our family was due for an overseas holiday. I was happy to take some profit, and quit from the market. Came back about three months later, to find that DYL's price was in the high $0.30s, and then up and up and reached a peak at $0.60.
Wow..! But it went back down and I enter the market again at $0.48. It went down more to low $0.40s, and surprise surprise I bought some more at $0.41. How I really loved this Uranium stock!
Anyway, I should have listened to my dearest husband (my principal banker for this hobby) at the first place to not get into Uranium hype. I'm considering to quit the market. I don't think Uranium is for me.
Click here to read Why Uranium is the Next Big Thing
Trading plan
If there is one thing that I really have to learn in my new hobby, is to stick to my plan. Yes, I do make my trading plan, but a lot of times I got emotional and attached to a particular shares that I like. Bad enough? No, I also bought them when the trend is downward.. Ouchhh (yes, I just kick myself for this stupidity!!!)
I read this article again, to remind myself, of the importance of a trading plan, and (most importantly) the need to stick to it.
This article is extracted from Developing a Trading Plan by Louise Bedford, published at the ASX resources page.
What to Include in Your Trading Plan
Your plan must cover some basic issues such as your trading goals and objectives, which accounting structure from which to trade, and how you will handle your positions when you go on holidays. A trading plan must also cover 3 essential areas:
* Entry
* Exit
* Position Sizing
Decide whether to use fundamental or technical analysis methods to trigger your entry into a position. There is no room for gut-feel in the markets when you are starting out. Over time, you may develop an inkling that a trade will work out well, but this will take many years of successful trading. When experienced traders talk about a ‘gut-feel’, it often means that they have internalised many of the indicators that imply an enduring trend, after years of honing their skills. Trading is about making money. It is not about feeling right. Stop trusting your gut feelings. Traders can only afford to trust their trading plans.
Develop a scientific process for analysing signals, and do not let your emotions dictate your trading habits. You need to define your signal in words so that another trader unfamiliar with your technique can duplicate your strategy. If it’s not duplicatable, it’s not a system.
Exit
Before you place your order, you must decide on where you will exit. I advocate that you use a stop loss to capture your profits and avoid large losses. There are four main ways to set a stop loss:
* Pattern based stop loss traders will exit trades if the share breaks downwards through a trend-line or a significant line of support.
* Technical indicators can be used as a stop. A dead cross of two moving averages may trigger an exit.
* Percent drawdown or retracement methods suggest that if the instrument drops in value by a set percentage eg. 7%, then an exit should be made.
* Volatility based stops rely on significant changes in volatility past a pre-defined level in order to trigger an exit.
* To exit a position in the sharemarket, you can choose to implement one of these types of stops or even a hybrid of any of these methods. Derivatives can use all of these types of stops and more. If you are unfamiliar with any of these techniques, it is essential that you research them to find out the most appropriate stop for your own requirements.
Position Sizing
The key to managing risk is to position size correctly. Buy fewer shares and allow the price action room to move if conditions have become lumpy. Seek risk by buying more shares when in profit, or if conditions are more stable. There are many ways to correctly gauge your position size according to sound risk and money management principles. Whichever method you follow, make it explicit by writing it in your trading plan.
Oxiana Limited (OXR.ASX)
Oxiana is one of many shares that came up to my amateur attention a while ago. It came as a value company, with low P/E ratio (just under 8), high EPS growth, and 13.8% ROE.
However, I was not really looking into it, as some analysts (not sure who they are, I saw this detail on Yahoo finance) said that the share price trend is bearish (it was $3.01).
I came back after a few days, and found that the share price was actually down to $2.68. It seems quite cheap.. (or will it go down further?)
There was a quite interesting article two days ago about oxiana in The Australian. Well, it was not just about oxiana, it was also about another miners.
The article was: Mine exports set for huge surge
March 10, 2007
OXIANA managing director Owen Hegarty is a man in a hurry. He sees the construction of his $775 million Prominent Hill gold mine 650km from Adelaide as a race.
The rush is on, he says, to make hay while the sun is shining.
"In our view it is very clear that this is a long period of economic expansion and that is just fantastic for this country," Hegarty says.
"All the hard work is starting to bear fruit now. Prominent Hill is a standout in respect of timing.
"Nothing in this industry is ever simple or easy, but as long as you have the will. But it is a race that never finishes. Those who think the boom is over should get out more."
Hegarty plans for Prominent Hill to start up in the third quarter of 2008, producing 115,000 ounces of gold and 104,000 tonnes of copper. It was only discovered in 2001.
Hegarty's eagerness is shared throughout the mining industry. There is a sense that after three years of waiting, the pay-off from $45 billion of investment is about to roll in, bringing super profits to shareholders and spreading growth through the economy.
For the full story, please click here
Oxiana produces gold and copper from two mines in Laos and studies are also underway to expand both these operations. The Golden Grove zinc/copper mine in West Australia was purchased in mid 2005 while the Prominent Hill copper/gold project in South Australia is targeting a 2008 start-up. An aggressive exploration program is underway at all the above as well as in China and Thailand.
However, I was not really looking into it, as some analysts (not sure who they are, I saw this detail on Yahoo finance) said that the share price trend is bearish (it was $3.01).
I came back after a few days, and found that the share price was actually down to $2.68. It seems quite cheap.. (or will it go down further?)
There was a quite interesting article two days ago about oxiana in The Australian. Well, it was not just about oxiana, it was also about another miners.
The article was: Mine exports set for huge surge
March 10, 2007
OXIANA managing director Owen Hegarty is a man in a hurry. He sees the construction of his $775 million Prominent Hill gold mine 650km from Adelaide as a race.
The rush is on, he says, to make hay while the sun is shining.
"In our view it is very clear that this is a long period of economic expansion and that is just fantastic for this country," Hegarty says.
"All the hard work is starting to bear fruit now. Prominent Hill is a standout in respect of timing.
"Nothing in this industry is ever simple or easy, but as long as you have the will. But it is a race that never finishes. Those who think the boom is over should get out more."
Hegarty plans for Prominent Hill to start up in the third quarter of 2008, producing 115,000 ounces of gold and 104,000 tonnes of copper. It was only discovered in 2001.
Hegarty's eagerness is shared throughout the mining industry. There is a sense that after three years of waiting, the pay-off from $45 billion of investment is about to roll in, bringing super profits to shareholders and spreading growth through the economy.
For the full story, please click here
Oxiana produces gold and copper from two mines in Laos and studies are also underway to expand both these operations. The Golden Grove zinc/copper mine in West Australia was purchased in mid 2005 while the Prominent Hill copper/gold project in South Australia is targeting a 2008 start-up. An aggressive exploration program is underway at all the above as well as in China and Thailand.
Giralia Resources NL (GIR.ASX)
Finally I bought some GIR shares last thursday. Entered the market at what I believe was a decent price, a little under $0.70. GIR share price has not moved much, either way, since I bought it. It went up of Friday, and down back again today.
I wrote about GIR few weeks ago, when at that time, $0.80 was a bargain. I believe it still is a good company, hopefully I'm not the only one in that believe.
I wrote about GIR few weeks ago, when at that time, $0.80 was a bargain. I believe it still is a good company, hopefully I'm not the only one in that believe.
Position sizing
As a learner and a small time investor, I have so much to learn on the share trading subject. Even my masters of Commerce studied seems to be easier, or is it maybe my mind getting weaker over time?
Ok, market is a bit better today, most shares are on the green zone, and I think it's a good time to start looking around for bargain stock again. My first thought is on AMP, but I am not sure if I can afford to buy a decent amount of it with my leftover cash. It was down quite a bit from before the sell off, but then it started to bounce back up again.
My question is: Is there a method to determine the size of trading? I could buy a few of AMP, I suppose, but will it worth it?
Searching on the net, found so many post about position sizing. From a very simple to the sophisticated ones.
I will start from the simplest one: (I extracted this method from an article on this link)
Position sizing is the calculation methodology that you use to determine how many shares you will buy or sell to open each new trade. This alone is the single greatest contributor to your profitability in the market place.
When you close a trade, you will have made a certain dollar profit on every share you bought or sold when entering the trade.
Therefore your gross profit on the trade in absolute terms is:
$profit per share * Number of shares in the trade = Gross $ profit for the trade
Minimum Trade Size – When is a trade too small?
Your net profit per trade, the amount that enters your bank account, can only be calculated after you subtract the effect of brokerage from your gross profit.
Net Profit per trade = Gross Profit – Brokerage (Both in and out)
In order to avoid the scenario of losing money after brokerage, you should consider having a minimum trade size. Your minimum trade size is the smallest $ value for a trade that you will take.
How do I calculate it?
Avg brokerage per trade / Avg % profit per trade = Break-Even $ Trade size
Your minimum trade size is a $ amount that is greater than your Break-Even $ Trade size
Example Average brokerage rate = $27.45 per side or $54.90 for a completed trade
Average % profit per trade (from your backtesting results) = 10%
Break-Even $ Trade Size = $54.90 / 10% = $549.00
Therefore if you were to enter a trade with $549.00 and you made your average profit of 10%, you will have a gross profit of $54.90 ($549.00 x 10%). Subtracting your brokerage of $54.90 leaves you with a net profit of $0. A break even trade.
Hence your minimum trade size is a $ amount that is greater than $549.00 (your break even trade size). As long as you enter positions equal to or greater then your minimum $ trade size you will be able to close trades and have a profit both before and after brokerage.
A bit too simple, isn't it?
Ok, market is a bit better today, most shares are on the green zone, and I think it's a good time to start looking around for bargain stock again. My first thought is on AMP, but I am not sure if I can afford to buy a decent amount of it with my leftover cash. It was down quite a bit from before the sell off, but then it started to bounce back up again.
My question is: Is there a method to determine the size of trading? I could buy a few of AMP, I suppose, but will it worth it?
Searching on the net, found so many post about position sizing. From a very simple to the sophisticated ones.
I will start from the simplest one: (I extracted this method from an article on this link)
Position sizing is the calculation methodology that you use to determine how many shares you will buy or sell to open each new trade. This alone is the single greatest contributor to your profitability in the market place.
When you close a trade, you will have made a certain dollar profit on every share you bought or sold when entering the trade.
Therefore your gross profit on the trade in absolute terms is:
$profit per share * Number of shares in the trade = Gross $ profit for the trade
Minimum Trade Size – When is a trade too small?
Your net profit per trade, the amount that enters your bank account, can only be calculated after you subtract the effect of brokerage from your gross profit.
Net Profit per trade = Gross Profit – Brokerage (Both in and out)
In order to avoid the scenario of losing money after brokerage, you should consider having a minimum trade size. Your minimum trade size is the smallest $ value for a trade that you will take.
How do I calculate it?
Avg brokerage per trade / Avg % profit per trade = Break-Even $ Trade size
Your minimum trade size is a $ amount that is greater than your Break-Even $ Trade size
Example Average brokerage rate = $27.45 per side or $54.90 for a completed trade
Average % profit per trade (from your backtesting results) = 10%
Break-Even $ Trade Size = $54.90 / 10% = $549.00
Therefore if you were to enter a trade with $549.00 and you made your average profit of 10%, you will have a gross profit of $54.90 ($549.00 x 10%). Subtracting your brokerage of $54.90 leaves you with a net profit of $0. A break even trade.
Hence your minimum trade size is a $ amount that is greater than $549.00 (your break even trade size). As long as you enter positions equal to or greater then your minimum $ trade size you will be able to close trades and have a profit both before and after brokerage.
A bit too simple, isn't it?
IBA: set to go back north?
iSoft shareholders not interested in share deal from IBA Health, cash bid unlikely - market reports
IBA Health's takeover discussions with iSoft Group are rumoured to have hit a snag, according to a market report in The Independent. The report noted talks that iSoft shareholders are not interested in a share-based deal. However, IBA, the Australian software group, is unlikely to make a cash offer for its UK-listed rival, the report said.One trader cited by the report noted concerns that iSoft would be left with little option but to launch a heavily-discounted rights issue if it fails to secure a deal with IBA.
A market report in The Guardian noted that ABN Amro, the listed Dutch bank advising iSoft, acquired 2730 shares in the company at 43.5p yesterday (1 March).iSoft shares fell 3.25p to close at 41.25p. The company's market capitalisation stands at GBP 95.9m (EUR 142.4m).
Source : Independent, The Guardian
News from Namibia
DYL finally anounced some news from Namibia this morning. Just about time, even though some people said it was just a PR announcement, at least I saw a green number in my portfolio. That is what matter to me at this moment, after seeing so many days of reds.
Anyway, it might not just an old story afterall. DYL through it's wholly owned Namibian company, Reptile Uranium Namibia has been issued with Environmental Clearances from the Namibian Ministry of Environment and Tourism to commence exploration activities on its three EPLs. Basically DYL have the approval to commence physical exploration on the areas.
It this a good news? I think a lot of people think so... Share price was up a little bit today. It is a closer step to exploration.. Well, maybe it's worth to buy and hold..
Anyway, it might not just an old story afterall. DYL through it's wholly owned Namibian company, Reptile Uranium Namibia has been issued with Environmental Clearances from the Namibian Ministry of Environment and Tourism to commence exploration activities on its three EPLs. Basically DYL have the approval to commence physical exploration on the areas.
It this a good news? I think a lot of people think so... Share price was up a little bit today. It is a closer step to exploration.. Well, maybe it's worth to buy and hold..
Starting clean again.. From the ground zero!
This morning, the damage is continuing, with the ASX opened some 60 points lower. So that put me back in the ground zero, as if I started my investment in clean slate again. All the gains from my hard works are all gone. A bit depressing really, but at least I haven't lose any money...
IDL is holding extremely well, while IBA and DYL are in freefall. Few investores said on our mailing list that IBA could go down as low as $1.10, and my entry at $1.48 was fine, as it is a solid company.. Not so sure about that, but I appreciated them for trying to comfort me..(at least)! IBA announced that it has got itself a new contract in India today, but still didn't help anything. Gee I really dislike this iSoft deal talk!!
IDL is holding extremely well, while IBA and DYL are in freefall. Few investores said on our mailing list that IBA could go down as low as $1.10, and my entry at $1.48 was fine, as it is a solid company.. Not so sure about that, but I appreciated them for trying to comfort me..(at least)! IBA announced that it has got itself a new contract in India today, but still didn't help anything. Gee I really dislike this iSoft deal talk!!
What's with IBA?
Oh my dear... IBA is down again today to $1.34..
A bit scary really, as I'm overweight on this one..
Is the company really that bad? All this profit increases, contracts and everything?
At least there are three factors weighing down IBA's share price - this is just what a new investor like me can see at this moment:
First is the iSoft talk. Yes, it's the talk again. When the talk is announced, it pulled down 6% of IBA's share price to $1.52. Investors are a bit concern about the takeover talk, as UK's iSoft is a loss maker. Medias are still giving it a comforting report, but in the market, share price is going down.
Second, Tuesday sell off or minicrash whatever you call it. On that day, IBA went down of more than 6%. China connection is the trigger?
Last, iSoft Talk again? Decreasing nearly 5% today...
Now I'm trading at a loss. Is there still a future in this share?
A bit scary really, as I'm overweight on this one..
Is the company really that bad? All this profit increases, contracts and everything?
At least there are three factors weighing down IBA's share price - this is just what a new investor like me can see at this moment:
First is the iSoft talk. Yes, it's the talk again. When the talk is announced, it pulled down 6% of IBA's share price to $1.52. Investors are a bit concern about the takeover talk, as UK's iSoft is a loss maker. Medias are still giving it a comforting report, but in the market, share price is going down.
Second, Tuesday sell off or minicrash whatever you call it. On that day, IBA went down of more than 6%. China connection is the trigger?
Last, iSoft Talk again? Decreasing nearly 5% today...
Now I'm trading at a loss. Is there still a future in this share?
Going Back Up?
My ASX shares are all in green section this morning...(Praise to God!)
Still has not come back yet to my original position before yesterday's fall, but at least it is giving me a little peace of mind.
This morning Tassal Group (TGR.ASX - was the only one on the green side yesterday) keep its course to go north. Share price reached highest at $2.68, but then retreated back to around $2.50 this afternoon. It still is an increase of around 4% of yesterday's closing price.
DYL, IBA, and IDL was also going up, although not as high as TGR.
I decided to transfer some money from my bank again this morning. Hopefully it will pay off.
Still has not come back yet to my original position before yesterday's fall, but at least it is giving me a little peace of mind.
This morning Tassal Group (TGR.ASX - was the only one on the green side yesterday) keep its course to go north. Share price reached highest at $2.68, but then retreated back to around $2.50 this afternoon. It still is an increase of around 4% of yesterday's closing price.
DYL, IBA, and IDL was also going up, although not as high as TGR.
I decided to transfer some money from my bank again this morning. Hopefully it will pay off.
Giralia Resources NL (GIR.ASX)
I am really tempted to buy this company's share, and surely will keep an eye (or two) on it from now on. Yesterday's market minicrash have even made it cheaper.
According to the data from Aspect Financial, I think this company is really worth a consideration.
Fundamentally GIR has a:
P/E Ratio : 6.53
Risk Rank : 3
Return on Equity: 71.70%
EPS 1 yr. Growth: 3202.60%
Market cap (million):116
currently the share price is over its moving average
Giralia Resources NL (GIR.ASX) is a mineral exploration and mining company.
Its primary objective is the discovery of significant precious and/or base metals mineralisation. GIR shareholders have exposure to a multi-commodity portfolio of mineral exploration properties in Australia and overseas.
The company's website can be found here
According to the data from Aspect Financial, I think this company is really worth a consideration.
Fundamentally GIR has a:
P/E Ratio : 6.53
Risk Rank : 3
Return on Equity: 71.70%
EPS 1 yr. Growth: 3202.60%
Market cap (million):116
currently the share price is over its moving average
Giralia Resources NL (GIR.ASX) is a mineral exploration and mining company.
Its primary objective is the discovery of significant precious and/or base metals mineralisation. GIR shareholders have exposure to a multi-commodity portfolio of mineral exploration properties in Australia and overseas.
The company's website can be found here
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