a few years ago when all was well with acl, i bought at 115, then came the minning rights fiasco and i had losses of >R700K. emotionally the hope was that it would go back, but i decided to cut losses, though painfull. good decision, had i notdone that today i would be sitting on losses at least double that...so whats the lesson..
well when i first started making trades/investments (2008....) I lost about 40% in a stock, and decided that it must be bound to go back up, and that I would buy some additional shares for "cheap". It was a relatively small overall investment of around R6,000 that ended up being worth around R250. The lesson there, never to throw good money after bad ;)
So buy lots of good companies, keep the ones with the price going up and dump the ones with the price going down....but the real skill is differentiating, price change due to noise and price change due to poor performance....so as we learnt on this forum....all you ever going to know for sure is your risk amount...the rest is as good as it GUESS....
what is a good company? is it a company that Gwen Lane keeps punting or is it a company whose share price has fallen below PEG ratio or a company with a low PE multiple or what? its all subjective. Clive Roffey would say a good company is a gold company, lol. Simon Brown would say its Shoprite and Capitec Bank. Rams would say its SASOL at R300, BIL at R200 and MTN at R100. Its all a matter of opinon but as we know the market does not give a hoot about opinions, it deals only in facts. Like the rolling of the ball in roulette its outcome is final with no appeal, kwekhu.
Yes if you want to short. No if you want to go long because trend down . But , good, bad matters not becos you have thoughts and you must not think....if the system says buy, then buy, the rest is up to your money management system...if you right only 50% of the time, you can give up your day job....oh and you dont even have to know to count if it's a big number like 2000...if you count to 500, that's all you need.
Simon...i think you put your finger on a very important point and I think one that possibly causes a lot of confusion and maybe even polarises this forum for the wrond reason. we do need to distinguish the two and the objectives, tools used and mindset required by the two distinct activities is very different. Maybe we need trading and investment tabs or topics? Of course there are some amongst us that do neither....maybe a village idiot play area?