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Online Share Trading

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Big breakout on volume

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Not applicable
SAB's trading statement has definitely lit a cracker up ... Analysts were forecasting a drop in volumes, but it posted a 2% increase. SAB has triggered virtually every momentum trade signal I know, channel breakout, bollinger squeeze, all time high, etc. My only problem is that i am not a momentum trader!!!
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16 REPLIES 16
KJR
Frequent Contributor
Question is, do I hold onto my SSf's or do I now bail while I'm still in profit.
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john_1
Super Contributor
well on fundamentals I recon SAB might still be attractive, after all they are the world biggest brewer.
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john_1
Super Contributor
oh and the best performing back dated stratergy I have ever seen was momentum based, back dated over 107 years outperformed every major index more than x2 compounded.
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Not applicable
care to share it?
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john_1
Super Contributor
It was the Abn Ambro study done by the London school of business published in the 2007/2008 year book...in three lines... buy the winners.. avoid the losers... and find a way to sit out legative periods in the market...
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Not applicable
Thanks John. The premise, it seems, is that a) stocks with above average returns this year are statistically more likely to give better returns in future years and b) investors are more likely to pay a greater premium for that. So I support the momentum investment theory - but will still advocate buying the dips personally. My comment on SAB however, is that a trade yesterday would be a momentum trading strategy, which is a wholly different thing, IMO.
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john_1
Super Contributor
We talked about this in the past, Basically any investing stratergy has only one purpose.. to capture "Time" to explain...return = rate of growth x time.. Since we have no controll over the growth of any company--- the only thing you are able to influence is (what shares to buy, and how long you hold them) ..The point of stock picking is in effect an attempt to outperform the index.. anything that fails to achieve this is simply a waist of time. So unless you can prove you can outperform the index dont bother...
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john_1
Super Contributor
Well the answer is simple.. dont pick the worst performer... So in a top 40 if you fail to own..the current worst performing 10 shares you will outperform the index..
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john_1
Super Contributor
Now waiting of share plays a role in the index but not in the dirrect performance of a share.. but this does cause issues.. if wollies only has a weighting of 0.1 % and jumps 20% it has no bearing on the index.. but if anglos moves 2% it makes a massive diffrence.. so one has to decide how to deal with this.
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john_1
Super Contributor
One then has to ask how does one find the winners.. well you can use two methods.. one.. buy the historic best performers..on any chosen time frame and dont buy the losers.. or you but all the shares in the index...then sell the lagards over time.. your choice..
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john_1
Super Contributor
Now how do you avoid negative returning years.. well simple really if the worst performing shares has a "higher" negative return then the winners sell the winners and short the losers.. and reverse when things change.. also moniter the index if all the shares have a losing month get the F$$ck out of the market.. Simone And Brazen have emails to prove this value.. based on this alone you would have sold in June 2008 long before the real crash... this way you protect your gains as market shock have the most devistaing effect on long term portfolios.
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john_1
Super Contributor
hope this help and sorry for the spelling mistakes>
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john_1
Super Contributor
The information in that report is more valuble than anything chop Buffet has ever said and not one forum comment.. geez!
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Werner_1
Super Contributor
I guess for momentum traders its more valuable, but not for value investors?
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