The Brains Trust, page-40

Howdy BT’ers
New years rambling: I meant to post this over the quiet NY period but didn’t get to it until now.
I mentioned several times during the past year that I am “new” to the small end of the market and that I would give a report card at years end of how I went investing /trading it and any lessons learned.

I have previously told my investment/trading “story”/history on these pages so I won’t bore peops with a rerun. I have also mentioned how I happened upon the XSO Brains Trust (BT) about 12 months ago. To say I was then and remain amazed at the quality and range of posters in the BT is an understatement. I should clarify that I don’t regard myself as a certified member of the BT; I hang around on these pages a bit and show a few charts to try and pay back a bit to the true quality that others offer.
So, in no order this is what I learnt from the BT in 2016 and how I went investing in smallies:

1. - I was not going to single out any particular posters because the list becomes too long and I would inevitably and inadvertently leave a few out. But for any newbies reading the thread I thought I would mention just a few in the manner of saying thank you to them and to alert others to what they can expect:

1. - @paddington bear; a “simple little chartist” who provides simply the best morning market summaries that I know of on the net. My image of PB is of a very wise, incredibly energised, “sort of female Einstein” character surrounded by paper (yes, does her charts on paper I believe!!) churning out page after page and muttering things like “flat top breakout”, “mmmm must check what my geniouses are up to”, “ahhh POG broken an upslating wedge on the 15 minute ….” “soooo much to do and soooo little time” …. All accomplished with a glass of wine in her hand; I suspect an aged Hunter semillion? Or potentially French bubbles?

Truly, her breadth of analysis and knowledge astounds me. The spiritual leader of the BT.
Bt CMP at 38c after TA chat with PB …. Moved to free carry and still hold. Like the story and planning a LT hold for me; currently 87c

1. - @Pisces, have read Pisces posts for years I guess but only after following the BT did I come to appreciate how truly different he is. A true believer (it seems to me) in the “find a goodun’ back up the truck and hold until your research is proven correct.” I have bought several shares on the back of his reco and my follow up TA thughts. Sometimes solely on his tip and even though I somehow don’t like to admit is FOMO. These include:

1. - HRL; like the story here and I expect to be a LT holder here. Entry 12.3c currently 13c

1. -MBK; liked the story at 3.3c and broke what I used to have as a rule and averaged down at 2.4c; hit 4c at break

• NOX; entry at 19c and moved to free carry at low 40’s; I would have laughed at you 2 years ago if you said I would invest in a rather far fetched (IMO) cancer cure … go figure

1. - @Anton Chigurh; Great to see him back on XSO after taking a sabbatical, even if only for “guest appearances”; analysis skills second to none IMO. Not just pure TA but understanding of “how markets work” (re. floats, start ups, relationship of free float to market action, shells discussion of EV etc) and willingness to share is breathtaking.

1. - @Jako64, what a poster; I reckon over the last 12 months I have asked at least a question /month that Jako has given incredibly detailed and time consuming answers too. Amazing the work he does here and on the XSO (and elsewhere)

Learnt a lot from each of them (proves, you can teach an old dog new tricks”) and even “stalk” AC and Pisces onto share forums …. where I rarely tread.

1. So many choices in the ‘small” end of the market; mind boggling and can be a bit overwhelming. I use my charts of which I probably have in excess of 200 saved on Pro Real Time under various template categories; eg 1. alphabetically 2 Various “lists that have been posted on HC eg. Uranium, goldies and tech which I posted at the time PB asked for the lists, Anton specials! etc. These days I can look at a full template of shares (20 I think) in less than a minute to scan for any of interest or worries …. Just checked that 1 minute time by scanning my “GJ holdings” template and noted that CBA HAS fallen from its upslanting wedge (not an xso hare but undeniably a bellweather; be keeping one eye on that this week!) and SMN starting to look ugly!

1. So, you buy a tiddler when do you exit? I started the year truly believing in stop losses and the like BUT with penny dreadfuls you can certainly go broke by the rule of “death of a 100 stops” (I think I just made that up. You certainly NOT trade this end of the market with TIGHT stops IMO, depends on the share etc but I now believe anything less than 20 – 30% is not feasible.

Some simple maths on tiddlers; EXAMPLE: buy 10 shares with $X, ½ of them ½ in price and ½ double (not an unusual outcome I expect):

Holding = 5 x 0.5 X + 5 x 2X = 12.5 X eg. 25% profit NOT BAD?

What if one of the 5 winners goes up 5x

Holding = 5 x 0.5 X + 4 x 2X +1 x 5X = 15.5X eg 55% profit = the attraction of this end of the market for me.

1. Shells; I used to think they were things that the kids gathered at the beach. I never dreamt I would want to trade 'em. Someone recently defined shells on HC as: (Sorry to author I forgot to record your name! PS: my edits to a few typos and the like!)

shell stock simplistic version is a company that no longer really has viable project or has sold it for cash or has no projects at all. Their market cap should be pretty low under 4 million market cap, this will depend on how much cash they have so must be taken under consideration. a shell stock will be looking for something that will add value to shareholders. it might be something they are already doing but just a new aquistion project like a gold miner might move to lithium instead. but is still under the same category
RLC and RMX are good recent examples. or they might change completely like SRT did now IAM. there's more to add but that's the watered down version

So why do they get a mention; I have instinctively been attracted to a few shells such as EYM (is it a true shell? Not even sure) again based on Pisces and AC analysis. Entry at 0.9c after a 1c CR (I think?) where in my simple analysis LOTS OF SM was put into the company and now trading at 1.1c after a spike to 1.8c (where I failed to “free carry). So how risky is a share like this? AC has argued in several posts that the action of such shares is somewhat predictable (do an advanced search on “Anton” and “shell” if interested?) that has really convinced me. My very poor summary would be:
“Whats more risky a cash box that is funded by Smart Money and being cotrolled by an experienced management team OR many of the so called blue chips that most invest in?” Of course this statement relies on the SM being smart and the management team quality.

Just one other thought; when I bought EYM, CBA was about $70 and the reality was that I felt more confident in EYM getting its subsequent 20% than CBA which has got about the same return! As I type this I realise I still feel that EYM is more likely to get the next co% than CBA ….. just food for thought there and proves to me how much I have changed in last 12 months.

1. Because I don’t want to be a poster that pretends everything goes up here is a copy of my holdings and %age move since purchase:

	Column 1	Column 2
0	Code	Profit / Loss(%)
1	ANG	2.15
2	BXN	-37.93
3	CAJ	-31.94
4	CFO	-13.24
5	CL8	-37.5
6	CMP	127.75
7	EYM	22.22
8	GOR	14.54
9	HRL	5.69
10	K2F	-3.19
11	LYC	-19.78
12	MBK	35.14
13	MRQ	-5.56
14	NHC	-21.49
15	NOX	103.88
16	NTI	34.66
17	NXM	42.86
18	PLH	7.33
19	SEN	-44.75
20	SMN	-8.49

I was going to give a quick commentary on each but post is too big and you are MUCH better searching the BT posts for any commentary on each share if interested. Any commentary or critique welcome.

1. Gold trading (and CFD’s more generally): many will have seen my posts re POG and the trading I was doing on the hourly chart TA set ups. FWIW about March 2016 I began restricting myself to a demo account and took it very seriously for several months. Learnings for me were;

1. that I made consistently good profits until gold peaked eg in a rising market
2. just could not get the same pattern trading to work on the down trend move; I have NOT analysed it to death (because of c below) but I believe that too many of the tradable TA set up breaks in the downtrend happened between 1230 and 3 am (AEST) when I was asleep
3. like my history with trading other cfd’s over the years (I have traded nearly every market in there!) its just so damn time consuming; when trading to an hourly chart and often using a 10 minute chart for the EXACT entry and exit you have to be watching ‘puter way to carefully for my liking. More time AWAY from screen in 2017 for this bunny (Said that before)

1. Bottom line is I have really enjoyed my year of discovery and sharing with the BT; its sort of returned me to an enjoyment of the markets again. I'll be around for a while.

Sorry about the book; conscious of PB’s story re case of wine for reading to page 52!!! Like other “too long” posts I have done I won’t reread or I might delete so apologies for typos and also C&Ped this from word and formatting all over the place.
Cheers g