Jeez, only about 14 more sleeps and it's Xmas ... so, what have we learnt in 2016?
A time for some reflection and plans for 2017?
I've learned heaps, or at least I think I have. Depends a lot on whether I make the same mistakes again. If so, then I give permission for
@67shelby to give me a short, sharp slap across the forehead (she will, too).
I know that this is the DT thread, but since almost no-one is a true DTer, some of my lessons might be relevant. Maybe not.
1 - Holding and Hoping
(or, having no stops and sitting there like a stunned mullet as the SP goes down and down and down).
Example: CDC - had one good trade shortly after it listed. Bought another smallish parcel at what turned out to be near the highs and have been holding ever since.
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2 - Falling through support and not selling
(or being a True Believer despite the clear evidence to the contrary).
Example: SYAO. Had 2 previous successful trades with entry at 0.008 (June/July). Went for the trifecta. SP fell through 0.008 so I doubled down and doubled down and doubled down and doubled down. Yep, 5 parcels in total at average of 0.005. I felt the FA was so strong that the market - surely - will realize this. Nope. OK, getting a bit exciting now but still a failed trade for me, despite the outcome.
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3 - Ignoring market sentiment when a company in a hot sector just fails to deliver
(or thinking that nearology works even when the company seems to be ignoring the tailwinds).
Example: VMC. Once again I bought in at what turned out to be near the high and have been holding ever since. So many prospective tenements, so many possible positive announcements, yet management seemed to spend the entire Li boom in early 2016 talking about other things. Might still turn out OK. At least I haven't doubled down yet. I'm waiting for a push through 20c (bit like waiting for Godot atm).
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There is some good news here for me though, I think.
I have a choice (as we all do): do I hold and continue to hope, or do I sell and cleanse myself from these failed trades? SYAO will be out of the way in 2 weeks (oppies expire). I'm ready to take a 100% loss on these. VMC is awaiting on some drilling results - I'll reassess then. CDC is a basket case (possible lesson about buying Chinese companies which list in Oz?).
The main game (for me) now is what will happen in 2017. The SMSF which my wife and I set up is now pretty much operational. We just need to fill out some papers to roll over our existing Super etc. We are talking about the usual stuff: portfolio structure, asset allocation, risk/reward, timeframe.
We will probably have about 30% of the total for trading/investing (we are prepared to take a higher risk over the next few years, knowing that our main future assets lies in our Sydney house). We also have a trading plan and we will follow it! This is non-negotiable! If we don't, then we deserve what we get.
Possible macro events:
Trump could do anything. Who knows? The US market has gone up 5% since the results, all-time highs (in the US), will it continue? I consider the risk of a diplomatic incident which will spook the markets as being very high. To that extent, I'm looking closely at a goldie like WCN for a MT hold. Has a lovely trading range, just needs some patience. Getting close now.
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Events in Australia:
Goldman Sachs have given their first bullish assessment of the Australian economy in 10 years. Make of that what you will. From what I can see, the rest of the world regards Australia's economy as being a giant sandbox/quarry with some banks with good moats. That's about it. And that can be enough. We will almost certainly buy one of the Big 4 banks for some growth and dividends. If the international instos like what they see, then the blue chips in those sectors should do well.
The "innovation nation"? Nope, not for me. I'm possibly too cynical and grumpy and tired of hearing decades of BS to believe any of it. That is not to say that there are no clever people here. There are many. I just have little faith in the electorate in general and the people who they elect.
Given that our trading timeframe is MT, most of the stocks mentioned on this thread will be of no interest to us. I have spent a lot of hours looking at charts in the spec space - trading them requires constant attention, which in my case ain't going to happen.
I do love some specs though, and will almost certainly stalk some (eg NSL).
Eventhough I work in Aged Care and know the demographics, so many of the stocks in that health space, and the bio space, rely on government funding. Oz might be heading into a recession, so not sure how firm the funding support from govt will be.
I still love the "export to Asia" story, so will be watching, including some low-key, long-term evolving ones like SFG.
Oz commodity stocks? Certainly the main focus on this thread and the STT. Fair enough too. If I had only made one trade in January 2016, I could have done a lot worse than buy FMG or WHC. Will that run continue? Possibly too risky for me.
Does making 20% profit per year seem too conservative? I had this discussion with some here over a year ago. Some people thought that was ridiculously low. Maybe. Compounding is a wonderful thing though, depending on how long your timeframe is.
If you are averaging about 20% p.a. profit on your total trading portfolio, and doing this over an
extended period of time, then you are doing better than Warren Buffet and George Soros (yep - look it up).
I'll be benchmarking our SMSF performance against our existing Super funds (REST and BT). Our initial timeframe is 2 years. If we are crap at this, we'll close down the show and go back to REST (or something similar). Neither my wife nor I want to, or can, spend 10+ hours per day looking at stocks. So, our expectations are well under control.
For me, possibly the nicest part of this upcoming exercise is that both of us will be fully involved. No ugly surprises ("sorry honey, but I've just lost our entire savings which we have accumulated over the past 40 years.") This does happen.
Sorry about the length of this post. Another long one from DD. This is what happens when I've done the shopping, the wife isn't well and both sons are off doing their things and I have spare time on my hands.
For someone like me who tends to over-think things, writing it down is good therapy, and you lucky people are the beneficiaries
Avagoodweegend!
