cvi cvio, page-106

ClarkKent...

In the world of "speculatives" the odd failure is a given...however it is also manageable!

I have to say, I find your views entirely apprpriate, but to be honest, just plain unfortunate that you twist some facts, or plain ignore others to suit your cause.

You mention failures such as GDN and JPR...clearly speculative plays on my part that went bad...yes...but surely in gauging one's market experience, we need to take a wider brush to our capacities?

Failures such as GDN (-40%) and JPR (-90%) would be terminal in some cases, especially if not weighted appropriately in one's portfolio...and this is perhaps the key to the speculative end of the market versus market safety in the ASX20.

But...if we are going to apply a fair measure, what about the winners in the same timeframe?

KSX, TOX, NDO, CQT, ARE, SKR, CVI, GUJ, INR, FXR, MOX, FDL, MPO, AZA, NIA, TRF, BLK, PGM, MLI, PLA, CCI, YGL (KIK), SEA, DYE, BRW, CDU, CAZ, JPR, AED, AGY...

Most of these are still significantly up on their first mention on the boards...and that is in spite of the recent market carnage. Not all however, such is the changing dynamics of a world under the weight of a new credit regime. Of those that have given back some or all of their gains, there was plenty of time for people to exit however.

I have not even included the short-term plays, more recently MEO, ABS, FDL...and many others...100's of percent available in days in some cases.

And of course the sell recommendtions, a rarity for me...specifically UCL when it was 3.3c!

Of course, there are many more I have not even mentioned on HC...but if I listed them, I am sure you would not believe me anyway.

BUT...there have been plenty of failures too, which is why managing such exposure is key to both longevity and indeed survival in the markets...3 steps forward, two steps back.

Cut the losses fast...although I do not always do this if I believe in the story at a fundamental level (a risk I sometimes take that does not always pay off as you know)...but always let the good ones run and try to maintain at least a core holding even when I do finally exit the stock.

We need to apply a level of exposure (risk), relative to the play in question...a pretty simple approach really I think you would agree?

If BHP has a measured success rate of say 100%...and say our carefully selected favourite specs a measure of just a 10% success expectation...then buying 10 such specs more or less will equate to the risk profile of holding 1 BHP.

Apply further skill in the selection process...and a loss limiting strategy for the ones that go bad...and suddenly our 10 specs will comfortably out perform our risk free BHP every time. Interesting perhaps that our "risk free" BHP just happens to be down some 23% in the last 4 months alone and at one stage was down some 53% in just 3 months!

If one were to have "dialed up the risk with leverage" here, such a fall could be an entirely terminal event...worse, you could end up owing more than you actually started with!

In this case...and there are many from the ASX50, the losses from one could potentially take out two or three other positions...this would ruin most long term investors.

"The advantage is that I can limit my universe to those stocks where my considerable skill set gives me an analytical advantage."

I agree with this statement...but it equally applies to specs. The determining factor of course are the specifics of one's "considerable skill set"...lol

We all have our strategies, none more correct than others...I have never been able to sort out why you oppose those views which do not mirror your own.

The very fact you visit these threads, of itself reveals at least an interest in this end of the market...and specifically, your interests in CVI at least shows you have the capacity to recognise a good thing when you see it.

lol

Cheers!