It used to be allowed during lunchtime and before and after office hours, but then it got banned a few months ago for information security reasons.
What to do, what to do? Pansy, in search of another distraction during her breaks started to watch the stockmarket.
Many moons ago, the Petal decided to try a bit of "dartboard" investing. She attended a free share trading course. She had no savings, but went anyway and she learnt what this means:
Date Closing (c) High (c) Low (c) Volume # Deals Value (R) DY EY PE
A couple of years later, with R10 000 saved, she went on the same course again. She picked a few shares, no method apart from the fact that they were companies she knew (good criterion) and liked (bad criterion), she set her stop loss, and just left them to "brew."
The stop loss kicked her out of the losers very quickly (in retrospect, it was madness to buy a shipping company in a recession, and contrarianism was also a losing strategy). Overall in the year she made 10% including costs. Same as her pension fund.
Truworths, Naspers and Capitec disappointed (bad timing, the uptrend was almost over when Pansy bought), Vodacom did nicely, Satrix40 was a complete waste of time, and Woolworths was the star.
Then facebook and gmail were banned. Petal saw, before her own eyes, how some shares literally went up 10% in a month. And the trend on some of them continued to go up, and up, and up.
"So," thought the Petal, "If I can make 10% based on a random selection of "buy and hold", then I can probably make more if I know what I am doing and check what's going on every few months."
Then she went on another free course, this time to learn when to time trades, i.e. buy low and sell high. It seems obvious, but it's not so easy, especially because psychology comes into play. And you only know with hindsight what was a definite low and what was a definite high. So she learnt what the squiggles mean, and learnt how to choose 2 squiggles which help to make a more scientific and objective decision about what to buy and more importantly, when to buy.
So, based on her new knowledge, she has made share picks for 2011, assuming a "buy, hold, stoploss" (i.e. no active trading) strategy for 12 months, assuming equal rand value of each share in the portfolio, and comparing to the general stock market in South Africa and the US. Will the more informed choices fare better than the "dartboard" approach? Let's wait and see.
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| 29 January 2012, tracking share price growth only, not dividends |
Disclaimer: This is not financial advice nor a share recommendation for second and third parties.
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