Short Term Trading Weekly thread week starting: 20th Mar

Originally posted by forrestfield ↑

I have learned over the years that listening to others is way better... I mean we have two ears and one tongue... It is a very good thing to have strong opinions particularly if one has done homework... It helps to stick to the plan and make the right moves but it does not mean we should stop listening to others or worst being disrespectful...

Re strong opinions: I mean picking up one sector right well before the run starts... and I think it will generate more gains than anything... The focus is "BEFORE THE RUN STARTS" not in between... Picking up a sector early means more returns % wise with less risk... Joining the sector in between need caution IMO... But to pick a sector before the starts is not everyone's cup of tea... I have been trading for years and I still end up chasing most of the trends... and I am not confident that it will change in near future but I still try very hard...

Even with ZINC where I am taking my positions in different stocks has its first run... Although most stocks made smaller gains vs other sectors... Zinc is still hot and trying to make new highs... which means the sector might do well in coming weeks/months... But even though I am extremely bullish on Zinc I am not buying stocks blindly... I am making sure that risk is low and reward is very high... For example 4CE has 770k ounces of gold along with their Zinc-copper-lead-silver project. The gold project is currently valued less than $4 per ounce... I am not aware of any other project at ASX which is in the proven belt with majors like NCM (Cadia-Ridgeway 60m OZ) and Rio (8moz) with JORC and drill ready High grade zones... If zinc actually gets a boom as I am expecting 4CE will make some serious gains for me I think... but still things can go wrong and then its trading with lower EV than some shells? No biggie I think...

The point is... although zinc stock piles are 12 years low, warehouse 5 years low, apparently no new mines coming to life in short term, majors being bullish about the metal, metals is among the top 5 used metals in the world and more of the same crap... It still does not mean that supply issues are as real as they have been published? I mean no one knows? I mean when any metal goes up, its always the supply issues and then suddenly wooffff.... those supply issues are gone in to the bin... So every sector is just another hot sector for me which forces me to research to find something undervalued in peer comparison to make a wage out of it... and while doing so I might end up finding a sector well before it actually re rates... may be SOME DAY!!!

As always invest wisely and keep this thread a happy place... a place where we can treat others the way we want to be treated ourselves.

Cheers

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Interesting discussion about the drive to find the next hot sector and how its done.

Is it a bad thing if someone like SGB champions a new sector he believes will be hot? If he truly was the one who first picked up on the Cobalt wave I wasn't reading the STT thread regularly enough at the time to know) then I would say he's worth paying attention to when he gets excited about something (I'm assuming he's a he). I understand that to be a champion of a cause requires someone to put themselves out there and push ahead with belief when nobody else is paying atention and they can actually appear to be a nuisance at the time but in hindsight we thank them for shaking us all up and making us paying attention. On the other hand, to champion a cause you can get your message across more effectively if you saturate people with your message which can and does turn people off or cause them to tune out.

The drive to find the hot new sector is an interesting question in itself. Of course the driver behind that search is to find stocks that have unrecognised multi-bagger potential. The STT crew collectively have shown you are very good at picking up on the next wave early - and as a result have attracted a growing readership and contributorship, which no doubt creates a snowball effect.

But find the next hot sector has its issues (imo). They include:

1. The time risk associated with getting set early before the wave starts. The risk here is it may take much longer for the wave to start than expected, causing opportunity cost of money sitting in stock not going anywhere while they continue their basing pattern (and in fact the sector may never take off).

2. For the followers, there is capital risk if getting on board once the wave starts - not knowing how high and how quick that wave will be, and how quicky it may fall back.

3. The pressure associated with searching for that next wave, or getting on board once it starts, all while keeping an eye for the next wave even while the current one gets going. The pressure I imagine is particularly high if trading full time for a living.

4. The skillset associated with researching to find the next wave, sorting out which stocks are the best ones, etc. Not all of us have that skillset or dedication/perserverence for that kind of reasearch.

So I applaud from the sidelines as I watch in awe as you guys do your stuff and generate winner after winner. But it looks more and more like a team effort from the STT, different members contributing in different ways.

I say in awe because for reasons 1-4 that I listed, I decided catching hot sectors isn't for me, because it doesn't match my skillset or psyche. Personally for me its about honing my trading skill - whether stocks or forex - and trade markets I know repetitively not making gains primarily from a research skillset, but primarily from a trading execution skillset. Hence why I, and presumably many other readers, are grateful for the great work shared here which highights possible new stocks or sectors to turn our attention to for new ideas.

Cheers, Sharks.