Category Archives: Investment Strategies

Stadio’s Shooting Star

The ancient Japanese charting method known as “candlestick charting” in the West predates Charles Dow (the “father” of technical analysis) by several centuries. It contains some very simple and useful wisdoms which private investors would be well-advised to follow.

The recent listing of Stadio on the JSE gives an excellent example of what the Japanese call a “shooting star”. Read More

Using the OB/OS with Gold

The price of gold is set overseas, specifically by the two London fixings each day and the international spot markets. In South Africa, our gold shares have to contend with a volatile gold price as well as all the problems of mining in this country – strike action, uncertain legislation, faulting, friability of rock, deep level mining etc.. The combination makes them extremely volatile and risky. It is very difficult to know or find out what the important factors are for any particular mining group, especially if you have little or no expertise in mining. Read More

The Shopping Mall Implosion

One of the most intriguing things about living in the modern world is the massive impact that technology is having on our lives. A few short years ago, smart phones did not exist – now almost everyone has one. As a private investor, you need to think about how this, and other technology innovations, could impact the shares which you invest in.

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Price:Earnings Growth

Investors buy shares because they anticipate good profits emanating from the company which will, sooner or later, translate into dividends or a rising share price. So the relationship between a company’s share price and its past and expected earnings is of great interest to investors.

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Your Stop Loss Strategy

The idea is very simple. Once you have decided to buy a certain share, you should mark off a price, say, 10% below your purchase price, which will be your stop-loss level (for example, if you intend to buy a share at 1000 cents, set your stop-loss at 900 cents). If instead of going up as you expected, the share goes down, then, when it reaches the stop-loss price, you must sell it, because clearly your original decision to buy was wrong – at least in its timing, if not in both timing and selection. You must acknowledge your mistake by selling the share. In this way you limit the amount you can lose from any particular investment decision. Consider this well-known share market saying,

“If what you expect to happen does not happen, then you are always better off selling sooner rather than later”.

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