Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Earnings

Reply
sponono
Super Contributor
Did not get the reaction I expected and have now closed my short: 130% return is not bad
0 Kudos
26 REPLIES 26
Preston
Super Contributor
That is excellent, but you did have a flaw in your strategy. My problem is that I do not short excellent companies. If I were to short, then I would have exit the short close to the R59.60 level, which you failed to do. Traders are thieves and they will manipulate the price of the share to their benefit but over a long period of time the share will always trade close or even above the intrinsic value Anyway, money is money and your strategy did work. Well played.
0 Kudos
Blik
Super Contributor
Preston - a question about your strategy: surely even exceptional companies will / might drop from time to time and hence you can short them? Or is your strategy not to short exceptional companies just a general rule?
0 Kudos
Preston
Super Contributor
Blik, Just a general rule.
0 Kudos
Preston
Super Contributor
Blik, Just a general rule.
0 Kudos
Rams
Super Contributor
Sponono is trading and Preston is investing...i shorted WHL from 78 to 68...therafter went on to short MSM and still short. I would have kept my short on WHL, kept my stop and kept to my target. Anyway....market has gone up about 300 points from the low and WHL still dowm..ROE and all
0 Kudos
Preston
Super Contributor
Don't confuse trading with instrinic value of the share. Price appreciation will happens, just the timing is unknown.Maybe today, tommorrow or even Monday
0 Kudos
Preston
Super Contributor
@Rams, what is important to note that yesterday 5.1m shares was traded in 8 hour of trading whilst today, and in the first 1,5h of trading , 2.3m shares was traded.
0 Kudos
Rams
Super Contributor
did you ever consider that yesterday traders were short covering before results, and today traders and investors are selling?
0 Kudos
Preston
Super Contributor
did you ever consider that yesterday traders were short covering before results (yes, valid point,and i agree) and today traders and investors are selling? (maybe, that this is rather foolish when the company has announced that they are making 55% return for every R1 invested in Capital Contribution) Return on equity remained strong at 55.9%
0 Kudos
Preston
Super Contributor
did you ever consider that yesterday traders were short covering before results (yes, valid point,and i agree) and today traders and investors are selling? (maybe, that this is rather foolish when the company has announced that they are making 55% return for every R1 invested in Capital Contribution) Return on equity remained strong at 55.9%
0 Kudos
sponono
Super Contributor
There's no flaw in my strategy: I buy or sell when a trading update or earnings report (the event) is released. I normally do not look at charts at this point because to me the event will start a new trend. I then hold for a minimum of 20% return (this can translate to between 30 and 200% return based on gearing) I use the price before the event as my stop loss. Once I'm in the money I move my stop loss to my entry price and then keep moving the stop loss to protect my profit. I will exit if the stock starts trading in a range (WHL is now range bound between 58 and 64 that is why I exited). I took a long on ASR on this basis today at R410 with a stop loss at R389, my target is 20% higher at R492;
0 Kudos
Rams
Super Contributor
mmmm ROE, did not see that ratio posted here in a long time...read the bit about foreign exchange losses(almost 3.5 times 2012) and it going to get worse...and the bit about economic pressure in the middle income bracket...well somebody should tell them high income earners dont buy clothes at Woolies.
0 Kudos
Preston
Super Contributor
Value of ROE is significant but over and above that it tell me about the quality of the management team, the integrity and decisiveness of management decision making process and well a their current model. @RAM, if someone tell you that they will make 55c for every R1 you contribute in capital, will you not invest in them?
0 Kudos
Preston
Super Contributor
Value of ROE is significant but over and above that it tell me about the quality of the management team, the integrity and decisiveness of management decision making process and well a their current model. @RAM, if someone tell you that they will make 55c for every R1 you contribute in capital, will you not invest in them?
0 Kudos
Rams
Super Contributor
No,if the high ROE number is because of the reduction in equity and because of aquisitions that is targeting the wrong market and definately not if the share is tanking by more than 3% on the day...
0 Kudos
Preston
Super Contributor
and tommorrow it will be 3% up , so what? Traders hard at work , earning commissions using their snake oil tactics.
0 Kudos
sponono
Super Contributor
not if it breaks support today
0 Kudos
Preston
Super Contributor
that would be really interesting.
0 Kudos
Preston
Super Contributor
@Ram, there was an increase not a decrease in issued share capital. Issued was 846 261 566 shares compared to 846 992 666 (as of today).
0 Kudos