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Online Share Trading

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Please help with sound advice.

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sk_1
Super Contributor
On the 18th June T-SEC research recommended AGL as a buy which I did at 54750. The share has dropped like a stone and I am down 25%.. What to do? Buy more at this price, cut my losses... I am more of a long term investor than a short term trader.
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33 REPLIES 33
Electrox
Super Contributor
hi SK. at the end of the day it comes down to risk analysis and porfolio size. Does agl constitute more than 10% of your portfolio and where is your stop loss placed? I know that Simon from SBK sets his stop losses at 20% for his long term portfolio but it all still comes down to your portfolio size and what significant loss is agl to your total portfolio .One rule i have learned is to never expose more than 10% of your capital portfolio on any given share, and to set stops at maximum 10% trailing.
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SimonPB
Valued Contributor
the 20% is nly for my derivatove portfolio
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sk_1
Super Contributor
Hi Elec. My Dad hdk gave me and my brother pdk each 100k to invest in the stock market. I was up 25% recently but invested 17k in Anglo and aprox the same in Arcmittal which is also down more than 20%. All in all I am still 14% up in my portfolio.
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Electrox
Super Contributor
I presume you are still young then and lucky u to get such a genorous gift from your dad( i had to work three years to save 100k to start a portfoilio) anyway, The most important aspect at the moment at the moment is capital preservation. since you are still up on your overall portfolio, you should determine on your time frame for the shares your invsted in since i presume you found value in them based on the companies fundametals. Most importantly, i reccomend you analize your risk analysis on the exact maximum loss you are prepared to take on any given share and have that incorporated before buying any share. Rule no 1 : Preserve your capital(stop losses) rule no 2 : refer to rule no 1
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og
Frequent Contributor
Man I wish I had an old man like yours - the only thing I inherited from my dad was his hair loss :)...
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Werner_1
Super Contributor
sounds like Buffetts rules - #1: never loose money, #2 never break #1...
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saash
Super Contributor
Tough one sk. I'd say that as a long term investor its probably not a good idea to be selling now while the price is being knocked around by a change in market sentiment. But then, getting in when you did was a bit of a knee-jerk reaction to jump on the band waggon imo. I'm not expecting the price of these 2 stocks to settle for a few more weeks, but I don't belive they'll go down by more than another 10%-odd. What does Hdk suggest?
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Not applicable
Sound advice:
The human hearing range is from 20 Hz to 20,000 Hz. "O.K...So what does that mean?" Well, 1 Hz is one cycle per second. So, if a speaker could produce a 1 Hz signal you would see the cone move out, back to the rest position, continue to move back (negative direction) and once again move forward to the rest position -all in one second. This motion of moving; first to a maximum position in one direction, then, back through the rest position to a maximum in the opposite direction and once again forward to the rest position, mirrors the action of a sine wave. Musical notes are made up from sine waves which are pure tones. When these pure sine waves are mixed with other sine waves of different frequencies and amplitudes various musical sounds are created. This is how a synthesizer keyboard can closely approximate the sound of a piano or violin. Any complex wave form can be made up from pure sine waves through this combination process. For example, a square wave can be made from a fundamental frequency sine wave and a number of subsequent harmonic sine waves each with a decreasing amplitude and increasing frequency. Note: you would likely never want to listen to a square wave, it's just for demonstration purposes. The higher the number of harmonic sine waves used the closer the final wave form will look like a square wave. This series of waves is called a Fourier series. O.K enough of the technotalk!! You are probably asking yourself ; " What does all this have to do with speakers?" The answer?' A speaker is a transducer. "O.K, so what's a transducer?" Transducers convert one form of energy to another. In this case the transducer (speaker) converts electrical energy to mechanical energy. It's the job of the speaker (transducer) to vibrate the air and recreate the musical signal you are listening to. The musical signal is made up from all those sine waves of different amplitudes and frequencies mentioned earlier. Sounds easy enough right? The problem is not all speakers can do this over the entire range of 20 Hz to 20 KHz very well. Lower frequencies need bigger surface area speakers and higher frequencies need smaller ones. It's for that reason most house speakers are constructed as; two way (tweeter and woofer) and three way (tweeter, mid range and woofer). The same applies to the automotive world. So why can't a SINGLE speaker perform over the entire range??? Speakers do exist that try to perform this task but they fall very short on performance. Known as "full range" speakers they are often found in very inexpensive systems. If you have ever heard the sound from these "things" you would know what I mean! The bass is really more of a mid range and distorted and the treble is very screechy. That's because the speaker is trying to vibrate slowly to reproduce bass and also try to move fast to reproduce treble and it can't do both WELL at the same time. The solution is to divide the entire audible bandwidth up into smaller bands so that speakers of different sizes can perform better i.e bigger speakers produce the lower frequencies and smaller speakers reproduce the higher ones. The traditional cone type speakers are constructed the same, independent of their size. A woofer is big, has a large magnet and a heavy cone so that it can vibrate large amounts of air at relatively low frequencies. A tweeter, on the other hand, needs to move very fast to vibrate at 20K Hz therefore the cone is very light and small and the magnet size required is much smaller.
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barry_1
Super Contributor
very funny Super I....took me a mo. though to see..
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Not applicable
No worries Barry, I try to help out where I can.
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Not applicable
Thanx, if we need more sound advice, we'll ask :)
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louisg
Super Contributor
Rule Number One: Never lose money. Rule Number Two: Never forget Rule Number One. Warren Buffet
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Werner_1
Super Contributor
yes, thats the correct wording... sorry my wording was not 100%, but in effect it means the same...
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louisg
Super Contributor
As a long term investor I would suggest that if your view of the company(prospects of the company) has not changed AND it's only the price that has changed, then hold. I assume that your financial objectives have not changed since buying AGL either. The role that AGL plays in your portfolio as a whole must also be considered.(read super idego's sound advice above).
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Not applicable
the soundest advice I can give is do you own research...if u are unable to put you money into your bond if you have one....if you cannot do your own research buy Satrix is you are prepared to accept that risk....if u are not able to do your own reserach you will never accept the responsibility for the loss....the least you can do is look at someone's track record...if you had the mistake would have been prevented...
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DST
Super Contributor
T-Sec. Is that the independent brokerage with Kebble links all over it?
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Werner_1
Super Contributor
SK - did you make a move, or you holding, i would hold if i was you, long term i think AGL is a good company like BIL (which i have)...
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sk_1
Super Contributor
T-SEC is Tlotlisa Securities (PTY) Ltd Directors PM Saaiman, C Botha, M Carlsson, JD Fisher, CJ Foulkes Thanks for your replies guys, I think I will hold for the long term. I see we are up 3.5% today
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Werner_1
Super Contributor
I bought BIL shares at the beginning of the year, i cannot remember exactly when, but i had over 20% profit, maybe 24% or so, then it dropped and today only 3% about... so it also dropped so much, but i am holding as well... I don't know if you read the FinWeek, Colin Abrahms had a recommendation on AGL and BIL (that it could drop) in the issue from 2 or 3 weeks back. I like to see what he has to say each week, quite interesting.
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