Momentum Investing Opportunities.

[BlackPeter]

We're in a bear market so it pays to take some of your profits off the table along the way, or otherwise you may end up giving them all back.  Bull markets are so much easier, boy I miss it LOL

BIG and ISX were the ones that exploded into oblivion.  As they say, the market teaches expensive lessons.  I lost it all on BIG but didnt make the same mistake twice with ISX (although I only sold half at the first whiff of trouble then still got stuck with the other half as the ASX suspended them, although I was still well in the money just from the sale of half).  You do have to sleep with one eye open with the small caps. 

Cheers - yep, BIG was the company on my mind. I really need to keep better records, even from companies I don't own but just find interesting ... otherwise they just disappear in the big Nirwana of oblivion.

Anyway ... I admire your trading style (even if it would not be for me) ... but are you sure that sleeping with one eye open would have helped you for BIG? Apart from pointing to the importance of a good nights sleep to maintain ones mental well being - I guess its always easy to point with the benefit of hindsight to some flimsy indicator ... but reacting to them every time (without knowing the outcome) might cause your brokerage fees to eat your lunch.

[KW]

Cheers - yep, BIG was the company on my mind. I really need to keep better records, even from companies I don't own but just find interesting ... otherwise they just disappear in the big Nirwana of oblivion.

Anyway ... I admire your trading style (even if it would not be for me) ... but are you sure that sleeping with one eye open would have helped you for BIG? Apart from pointing to the importance of a good nights sleep to maintain ones mental well being - I guess its always easy to point with the benefit of hindsight to some flimsy indicator ... but reacting to them every time (without knowing the outcome) might cause your brokerage fees to eat your lunch.

Yes, there was a period of time when the reporting on BIG made it clear that things were not right, even though the ultimate disclosure that brought the company down was made after it had already been suspended.  I disregarded the known news in the belief that it wasn't material and would blow over.  However that saying "there are always more cockroaches in the kitchen" has proven itself to be true time over.  So now I prefer to take the brokerage hit and lock in big profits, and I will reinvest that money into something else where the management are a lot more trustworthy.

I've implemented several rules like that, the other one is that I won't touch a Chinese owned/operated/market business.  This after seeing the documentary The China Hustle, and noticing that the ones on the ASX often turn out to be fraudulent.  Phoslock being the latest one.  Although that rule has a funny kick to it - I thought I had gotten out of all of my China related stocks but had not realised AB1 (games software developer) was one, which then got delisted for failing to provide its financial reports to the ASX.  However in the era of free money from VC funding rounds, the thing has turned into a multi-billion dollar Unicorn, except that I'm still trapped in it lol. Now that the era of free money is over, its highly likely that it will implode for the second time.  C'est la vie as they say

Here's the latest "exit signal"  https://www.afr.com/rear-window/we-re-not-as-bad-as-isignthis-says-creso-pharma-20230316-p5csqw

[KW]

Yet again, technical analysis trumps fundamental analysis. The market knows, even if you don't.

https://www.newsroom.co.nz/fisher-funds-loses-80m-in-bank-collapse
"There was no indication," he says. "We review the banks and this bank's result was very strong; it actually came out a couple of days ago, late last week, reconfirming the balance sheet and the deposit position. So there wasn't anything in the fundamentals that suggested that this would happen.

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[Hectorplains]

Yes, there was a period of time when the reporting on BIG made it clear that things were not right, even though the ultimate disclosure that brought the company down was made after it had already been suspended.  I disregarded the known news in the belief that it wasn't material and would blow over.  However that saying "there are always more cockroaches in the kitchen" has proven itself to be true time over.  So now I prefer to take the brokerage hit
 and lock in big profits, and I will reinvest that money into something else where the management are a lot more trustworthy.

I see Richard Evans/ Evertz (ex Big Un chief ex) has finally been dragged into Court a couple of weeks ago on insider trading charges...looking at ten years potentially.  He can add that to his previous lag for blackmailing men in public toilets by impersonating a police officer. ASIC's glacial paced investigation concerning Big Un executives is still in play too. 

[BlackPeter]

Yet again, technical analysis trumps fundamental analysis. The market knows, even if you don't.

...

I think above statement is misleading. Both tools have their place. Both are useful, none is infallible.

Sometimes some people in the market know more than you do ... and if the flock of sheep happens to follow them, than it appears markets know more.

Other times markets follow some people making the wrong decisions (like any flock of sheep or horses if there is an unexpected bang) and just stampede into a pretty senseless (and sometimes fatal) direction - sometimes down the cliff.

FA gives you an idea of the value of a company, but obviously this does not help (in the short term) if the markets disagrees. And of course, given that nobody knows the future, FA (analysing the past) might be useless to determine future value.

TA gives you an understanding in which direction the flock of investors stampedes. If the flock is right ... great. If the flock is wrong ... better mind the cliff edge. And of course, given that nobody knows the future, TA (analysing the past) might be useless determining future value.

I guess its picking horses for courses ... which is great if you know the future course. However - nobody knows for sure how the course will continue, i.e. you always run the risk to pick the wrong horse.

Anyway - it is great to learn from you more about some TA aspects. It is a useful tool, but, as any other tools, it does have its limitations.

[KW]

I see Richard Evans/ Evertz (ex Big Un chief ex) has finally been dragged into Court a couple of weeks ago on insider trading charges...looking at ten years potentially.  He can add that to his previous lag for blackmailing men in public toilets by impersonating a police officer. ASIC's glacial paced investigation concerning Big Un executives is still in play too. 

That's a little like getting Al Capone on tax evasion charges.  Still not being held accountable for what was a straight out fraud.  Most people were taught at Uni that the only reliable company statement was the cashflow one, the P&L and BS can be manipulated, but BIG blew that trust out of the water.  Turns out cashflows can be manipulated too.

[KW]

Anyway - it is great to learn from you more about some FA aspects. It is a useful tool, but, as any other tools, it does have its limitations.

If there was one magic tool we'd all be billionaires 
All one can do is utilise all the tools we have to make the best decision we can in light of the limited information we have access to.  But it is my experience that a stock that is trending down while others in their industry are going up (or remaining stable) usually indicates someone somewhere has access to information and is acting on it. Plus there is that theory that the wisdom of crowds is greater than even the smartest individuals. 

But TA is the best tool we have to protect and preserve capital.  By the time the FA comes out publicly it is usually too late and retail shareholders have already lost a lot of money.  Another favourite market quote of mine is "Do you want to be right? Or do you want to make money?".  Attaching one's ego to a stock purchase and then defending it all the way down to zero is a fool's errand.

[BlackPeter]

If there was one magic tool we'd all be billionaires 
All one can do is utilise all the tools we have to make the best decision we can in light of the limited information we have access to.  But it is my experience that a stock that is trending down while others in their industry are going up (or remaining stable) usually indicates someone somewhere has access to information and is acting on it. Plus there is that theory that the wisdom of crowds is greater than even the smartest individuals.

But TA is the best tool we have to protect and preserve capital.  By the time the FA comes out publicly it is usually too late and retail shareholders have already lost a lot of money.  Another favourite market quote of mine is "Do you want to be right? Or do you want to make money?".  Attaching one's ego to a stock purchase and then defending it all the way down to zero is a fool's errand.

I think we essentially agree. It was just your original "TA beats FA" I disagreed with.

And yes, unrelated to the tools one uses - falling in love with a stock (or attaching ones ego to it)  always clouds the view (which is rarely useful), which brings us to a quite different tool box: behavioural science.

Ownership bias (and many other biases) are part of human nature. Good to be aware of them.

Anyway - we probably should go back to momentum investing opportunities ...

[KW]

Anyway - we probably should go back to momentum investing opportunities ...

Its going to be a fairly quiet thread until the next bear market rally kicks off, which might be a while if the financial system crashes.  I might have to start doing TA on bitcoin and gold LOL (nice breakouts on GBTC and BITO if you want exposure to this space)

[KW]

(cross posted from DUR thread)
Lovely example of finding a share that is breaking out into a new uptrend, even in the depths of a crappy bear market.  DUR IPO'd at 50c a share in late 2020 mid Covid pandemic, and like most of those companies that did so it promptly went on to lose 42% drifting to a low of 29c.

But then it found a bottom, and continued to trade within a fairly tight range, giving the stock time for the 50 and 200 day moving averages to realign and setting up the foundation for a move higher.  You can then see a very clear break out from this range in both price and volume (best to have both in sync) portending a strong new uptrend.

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[KW]

Lovely classic Price and Volume breakout on DSE signalling an entry back in April.  First attempt in Oct wasn't successful (first ones often aren't) but it was followed by a successful retest of support at 17c.  Second attempt in Feb looked good, with another successful test of support at the 200 day MA.  Then BAM!

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[KW]

In progress .....

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[KW]

Quite a strong positive move in the Hi/Lo last night.  Looks like a market wide rally is on!  I opened a few positions on Friday in anticipation. 

[McGinty]

Just to mix it up in this thread and to motivate myself to get back into the swing of Momentum investing (as we can't have KW do all the heavy lifting with content) 

I've added a screen shot of a Momentum screener tool I've built with a mate, to help easily identify interesting stocks on the ASX and US markets.

If you want to see the full list or create your own you can visit Technical Stock Screener  at Share Impulse

[Rees Dart]

Very useful McGinty,thanks.Going a little more off topic,can anyone post a " free cash flow based value screen"?