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Online Share Trading

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BIL / AMS / AGL

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Hali
Super Contributor
I would like the forums views on these 3 commodity shares(dogs).. The pricing looks attractive but I think we can go further down..At what levels would it be wise to start going in?
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22 REPLIES 22
Blik
Super Contributor
You're probably going to get a spread of views on this. My ten cents, as regards AGL is soured; so I would probably suggest you look to get in when either the commodity cycle turns, or when AGL PE ratio becomes reasonable (irrespective of write downs blah blah). The psychology of trading or investing, unless you are a machine or exceptionally good, is such that we feel the pain of our losses more that the reward of our gains. So in taking a fat AGL smack, I am pretty negative towards the share and sector, irrespective of rational non-emotive decision making. Although like a recovering alcoholic, I am trying every day to be more rational....ye gawds, but school fees can be pricey.
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SimonPB
Valued Contributor
nobody knows, but there is no rush .. when these tings turn they'll be monster baggers, we don't need to call the bottom ..
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Hali
Super Contributor
Simon you say theres no rush.. but what I have noticed is once these things bottom.. the bounce is aggressive in going up.. so how do u play this.. buy it 5-10% from the bottom and hold it? Or what? No1 is ever gna call the bottom to the cents..unless u lucky..
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SimonPB
Valued Contributor
wait for the first 100% up then buy, serious .. they're moving up 100's of percents when they go .. we need solid evidence the party has changed, that'll be increasing commodity prices, profits, etc. But first a few must go bust, it a long process ..
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SimonPB
Valued Contributor
take KIO for example .. way too much supply, low demand and supply still increasing from BIL and RIO .. Somebody major goes bust, removes supply, iron ore corrects higher KIO moves up 100%, but it still not R100 and can easy go to R300/R400 or even the highs of R600 .. highs not so easy as that was days of iron ore at $150 an I don't think we'll see that again in a hurry ..

same spin on plat etc.
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Hali
Super Contributor
So what in your opinion will be a bottom price on these three shares.. I wont hold you to it.. If you were to take a punt?
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SimonPB
Valued Contributor
no idea at all .. not dodging the Q just honestly can't even hazard a guess .. could be close, could be another 80% away .. I do say we not there yet and I expect to stay away for most of 2016 of not all of 2016 and into 2017, but that seems unlikely .. thinks next year will be crunch ..
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Hali
Super Contributor
Just trying to follow you in a practical sense.. Lets take AGL currently at R85.. If it were to drop another 80%.. We sitting at around R17.. Lets say it increases 100% from there to R34.. Will you have conviction to go long on it knowing where its come from?? I wouldn't..
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partridge
Super Contributor
What's cheap ? What's "Good" ? It has to be all based on what the business model is and what it is dependent on. Add to this some kind of a track record - not a statement of belief - as to the quality of management- as in they are actually evidently making understandable decisions as opposed to the poor decision making we have seen in the past - for Anglo - for example. So as someone said to me in London after the 1987 crash as I stared with horror at the tumbling prices - what has changed? If nothing has changed then there will be more southward movement. I don't think a lot has changed - but at least the diversified miners' management appear to be in better control of things. So I will wait for evidence of change - and then also a bit more to see how the companies handle change - cos I want a margin of safety... I suspect 2016 will see a change - and maybe 2017 will show evidence of that change bedding down... (In the meanwhile - Read Shackleton's tale of " Endurance"- the impossible is possible.)
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Hali
Super Contributor
If I told you a month back... BIL @ R160 you all would've laughed...
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Russ
Super Contributor
Catch a falling knife and put it in your pocket, save it for a rainy day. (apologies to Francoise Hardy).
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Hali
Super Contributor
U know whats strange.. the falling knife doesn't cut.. It burns..Im burning atm :(
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SimonPB
Valued Contributor
sure, that is the point .. this is a way hard decision so rather err on being late, very late .. coz if you buy now and it losses another 80% you gotta wait for it to again 500% to be at break even
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Hali
Super Contributor
Good point.. Now heres my dilemma.. I bought Bil at 184, its now 170.. in a matter of a few trading sessions.. do I cut or hold.. AMS I am long at 200? Cut or hold AGL long at 97, cut or hold?
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SimonPB
Valued Contributor
two questions, how much pain can you take before you give in ?? sounds like not much .. sleeping stress free more important than money .. secondly, what was the exit strategy if things went against you .. third are you geared, if yes get out
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Hali
Super Contributor
Is this morning a signal that we have bottomed and we should go up or is it a bear trap?
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Vince888
Regular Contributor
Don't you mean a bull trap
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SimonPB
Valued Contributor
clutching at straws .. 4% pretty much daily range for BIL these days
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Preston
Super Contributor
err Simon, my understanding is a bull trap occurs at the top of the price range and not at the bottom. He clearly indicated it was a morning star.
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