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educational blogs |
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THIS IS NOT A TIP OR RECOMMENDATION. I AM NOT A TIPSTER. PLEASE DO YOUR OWN RESEARCH. PLEASE READ THE DISCLAIMER ON THE HOME PAGE OF MY WEBSITE. IF YOU COPY MY TRADES, YOU WILL PROBABLY LOSE MONEY. NPT IS A SMALL HIGH RISK COMPANY AND NOT ONE TO PUT YOUR LIFE SAVINGS IN !!
You may have spotted that I bought more Netplay TV (Epic code NPT) back on Monday 21st March 2016 at 9.75p. The Company is best known for the ‘SuperCasino’ show it runs on ITV and Channel Five late at night but it also has other Online Gambling websites, including a Sports Betting bit. I have held this Stock for a couple of years but never put much money into it as it is a low Market Cap and had some trouble over the introduction of the Gambling ‘Point of Consumption’ Tax (POC) and the new regulatory environment for Online Gambling Companies.
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It’s been a lovely break from the Markets although bit of a shame about the typical UK Easter weather !! We have another short week ahead of us and I doubt much will happen - but as usual I wanted to check out the Indexes and get a view of where things are most likely to go.
After a very good run following the awful start to 2016, Market in general look a lot weaker now although maybe the US looks stronger - in a way this is not a surprise as historically last week has been one of the worst for the Year for the FTSE100 and this may simply be an effect of the April 5th End to the Tax Year.
I‘ve been out in the PUB all afternoon and when I got home I was just in time for the first MotoGP of the new season - sadly the race was a tad dull but it always cheers me up to know that Bike Racing is back on the telly and Summer is on the way !!
We have a couple of interesting weeks ahead - god knows what will happen. Because of Easter we have 2 ‘Short’ weeks with Good Friday at the end of this week (I am off to see Ellie Goulding at the O2 in London) and Easter Monday chopping short next week. This tends to mean lower Trading Volumes and with how Markets have been of late, it might all be very tedious !!
The following text carries on from the bit in Part 1 about Perfect Information - apologies, I don’t think I chopped the Document up very well !!
From the text that I have just typed, the conclusion I draw is that a lot of people lack confidence in what they are doing when deciding what Stocks to buy. For many people, I guess a huge part of this is down to inexperience and obviously the only remedy for this is time and sticking at it and learning. You need to accept that you will make errors and that these are a good thing as they mean you have opportunities to learn. You learn very little from the Trades that go well - it is the screwed up Trades which really teach us about how to make Money (and beat us with a hot cattle prod just to make sure we really remember the Lesson).
Funny old business last week with a huge drop on Thursday with SuperMario’s mega QE (Quantitative Easing) and NIRP (Negative Interest Rate Policy) spooking the Markets into thinking the Eurozone was in dire Economic straits, followed by a huge Up Day on Friday when the Markets decided that the ‘Stimulus’ effect outweighed the Economic concerns - all very silly really.
My own view is that QE and NIRP are idiotic beyond belief and ultimately we are in for a serious Economic Shock - I will go into this more in coming Blogs no doubt as I have already written a draft one about NIRP and its likely consequences.
I regularly hear or read comments about how the FTSE100 is ‘cheap’ in Dividend Yield terms compared to other Assets and Stock Indexes etc., and I am sure I have generally accepted this as pretty sensible. However, I was reading the excellent Chris Dillow in this Week’s Investors Chronicle (4 March - 10 March 2016, Page 16) under his column headed ‘Yields’ weak signal’ and it made me realise that perhaps this advice is rather more nuanced in practice (as with so many Financial concepts, the Theories we read everywhere are barely workable in practice and often downright false.)
As usual I like to see how the Indexes are shaping up to set the background to my Stocks for the coming week. I am still hugely hedged with FTSE100 Short Positions and this is quite uncomfortable with the Indexes going so well - but with Summer not far off now and the Brexit Vote in late June, I see no need to take the Shorts off yet - I will get loads of chances to unwind them in coming months and they give me protection against a still pretty nervous Market.
According to the UK Stockmarket Almanac 2016, the coming week is historically pretty flat - on average it is down for 48% of Years and gives on average a positive return of 0.1%. I noted in my ‘Weekly Performance Update’ last week that the historical averages for March show that the last week is one of the worst weeks of the Year - which makes sense really as people muck about with their Portfolios just before the end of the Tax Year - so expect some weakness soon.
Once a Blog is finished and I upload it into the Wheelie Website, one of the tasks is to assign a ‘Category’ or two for it. On this particular Blog I am not sure what to classify it as - I guess it is really about Investor Psychology and to a smaller extent about Investment Analysis………(ok, if you were expecting culinary advice you will now be very disappointed). Whatever the Category, I think it is largely about the importance of identifying and cutting out Noise.
This one came about as a flash of thought whilst I was watching ‘Question Time’ recently and getting more and more irritated as per usual - and trying not to throw anything hefty at my Flatscreen TV. It struck me that perhaps as many as 75% of the points made by both the Panel and the Audience were probably pretty much irrelevant to whatever subject was being debated - in other words there was an oversupply of ‘Red Herrings‘………(to be honest, they are stinky, boney, things, I would steer clear). |
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