The ‘working title’ for this Blog when it was just a mere whisp of an idea in the WheelieBonce was ‘Only the Inexperienced Panic’ but the more I thought about it the more I felt this was a bit insulting and in reality we all panic but there are ways we can reduce such episodes and I wanted to talk about how to do this.
As usual with my Blogs, a lot of the ideas just come out of thin air and no doubt my Brain is triggered by something which seems unrelated that I then twist (probably much too far) into a topic loosely related to Investing !! My inspiration for this one came from the icon Thomas Weekes on ‘Misfit Garage’ on Discovery Turbo when he came out with the line, “My old daddy used to say, only the inexperienced panic”, and that cemented the thought in my head.
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This Guest Blog has been kindly sent to me in order for Readers to see what Journal.Investments are providing in terms of a Website through which you can record information about particular Stocks in a structured way with various ways to analyse your performance and it is FREE to use. I first became aware of this perhaps a year ago and I have had various chats with the guys who run it with regards to how it can be shared with the wider community. It is now ready so feel free to take advantage. Having proof-read the text they sent me I have to say that it does sound a very useful tool.
I have no commercial relationship with Journal.Investments. Cheers, WD. PS. You can find a copy of ‘The Art of Execution’ in Wheelie’s Bookshop if you are desperate to spend money.
This is a Guest Blog sent to me by Zoe Talent Solutions which discusses various aspects of HR management courses and skills. Also at the bottom they have provided me with an Infographic which has some useful information on it. You can get a Zoe Talent Solutions Human Resource Training Course here.
Please note I have no commercial relationship with Zoe Talent Solutions but I thought some WD Readers might be interested. Cheers, WD.
I am breaking all the well established ‘Rules’ of Blog scribbling with this one as I am going ahead without a plan and half watching the Lionesses in the Semi-Final against the USA which is very distracting (I am sure if I was watching the Men’s game I would be able to focus almost 100% on the Blog because it would be extremely dull as Men’s Footie often is).
I got the idea for this Blog from a fairly new chap to the Markets who strikes me as very much in the early stages of trying to figure out what the hell is going on (don’t worry, you will always feel like that, even after 20+ years with the Markets forever throwing up new tricks and challenges) and getting drowned in the sheer Wall of Noise that just bombards us. It is by no means a Blog subject I have not written about before and I intend to include Links at the bottom to several related Blogs on the subject which should help understanding (oh boll*x, the US have just scored a second goal……).
In a recent Blog I sort of hinted at the contents of this particular Blog because it is something that has been playing on my mind for many months and I have only just got around to creating a Blog that gets it down in document form. It has been excruciating because my head has been really buzzing with the desire to write this one but I had other ones to finish and on top of that the sun has been out and I have been messing around with the paintwork on my Z3 again – in essence I cocked up the rear wing for a second time and I just have to get it sorted.
The title to this Blog has been pinched partly from the book, ‘The Art of Execution’ by Lee Freeman-Shor (you can find a copy of this in Wheelie’s Bookshop) although I have probably stretched the true meaning a bit to fit my own view of how I want to run my Portfolio in the future.
I must have had this Blog in mind for the best part of three years and the simple concepts within it I have explained to various people in the Pub many a time since I first figured out what Jason @Stealthsurf was up to. What had stopped me writing it up until now was an inability to figure out how to ‘draw’ it and it was only after mucking around with Microsoft Paint to do those ‘Mechanics of a Trade’ Blogs that I realised I had found a tool to enable me to create what was needed here.
OK, I have to admit that despite my truly remarkable MS Paint talents, some of these pictures can hardly be called a Rembrandt or Van Gogh (and I have both my ears thank you very much !! …….or I did last time I looked in the mirror…..) but hopefully they are clear enough and simple enough to get the key points across and to provide Readers with either an entirely new way to go about doing things or at least to give a lot more appreciation of ‘Break-outs’ and how this could help boost their Trading/Investing Returns.
If you have not had the dubious pleasure of the first 2 bits of this Blog Series, then you should be able to locate them at the following Links:
http://wheeliedealer.weebly.com/educational-blogs/what-i-look-for-when-reading-a-results-statement-part-1-of-3 http://wheeliedealer.weebly.com/educational-blogs/what-i-look-for-when-reading-a-results-statement-part-2-of-3 This final Part of the Blogs is a bit different as it postulates (is that a word?) a technique for analysing a Stock and then has an example to show it in action. When reading any News item and in particular when looking through Results on Recovery Situations, a great way to understand the true relevance of the information is to separate bits that are Historic from bits that will impact in the Future. To a large extent I do this in my head in the Mornings when working through the RNS Statements and this is easier to do on Stocks which I know extremely well because I have held them a while and the changes in the Business leap out at me. The logic being that bits that are in the past are irrelevant really (ok, they do give some context but 9 times out of 10 they are unlikely to be repeated), and it is things that are likely to impact in the Future that really should be concerning us and getting our attention. I think this is a huge mistake a lot of People make - it is so easy to focus on past problems and totally overlook a significant change that is happening within the Business. I know this because I make this cognitive error all the time myself.
If you have not had the dubious pleasure of reading the first part of this Blog Series, then you should be able to locate it at the following Link:
http://wheeliedealer.weebly.com/educational-blogs/what-i-look-for-when-reading-a-results-statement-part-1-of-3 Financial Strength Debt and Cash are arguably the most important Numbers you can find in the Headlines - and you would be amazed how often the Debt Number is conveniently not included. I have even had Results Statements in recent Days where I have found no mention of the Debt level in the first few bits of the Results Update and I have had to scroll and scroll and scroll right down to the actual ‘Financial Review’ bit to find any mention of Debt - and of course you can be 100% certain that if I have had to do this then the Debt Mountain is chunky and the Debt has probably increased (if the Debt had improved, you can guarantee they would be bragging about it up front !!).
If you follow me on the Tweet Machine you have probably noticed by now that every morning from just after 8am I am looking through the RNS News Feed for the Day (which I usually find on Investegate or if that is playing up I go to the LSE RNS Feed), and first off I am looking for Stocks I hold and any News they have put out.
Before this I usually grab my Mobile Fone where I use the ADVFN App and even bang on 8am there are movements on some of my Stocks and if I know one of them is due to put out a Trading Statement or a Results Statement, then I use the App to have a quick look at the Headlines or perhaps the full Statement if it is just a quick Trading Update. The ADVFN App is superb and an easy way to track your Stocks and you can set up Watchlists and all that for Stocks you don’t hold and of course it works on Tablets and stuff. I also use it to see what the Indexes are doing but unfortunately there is a 15 minute delay on the FREE version but I do find that the Intraday Charts it shows do seem to be pretty near Real-time.
This Blog Series covers some pretty complicated stuff and I recommend that you read Parts 1 and 2 before you attack this one - you can find them here:
http://wheeliedealer.weebly.com/educational-blogs/the-mechanics-of-a-trade-part-1-of-3 http://wheeliedealer.weebly.com/educational-blogs/the-mechanics-of-a-trade-part-2-of-3 Example 3 - You want to buy 3 Shares in Company XYZ - a ‘Tree-Shake’ This next situation only tends to happen on Small Stocks which are illiquid and where the actions of one Market Maker can affect the Price - on a large and liquid Stock, this kind of thing simply cannot happen as in effect it can throw up an arbitrage opportunity where another Market Maker can take advantage of the artificial Price move and in addition such big Stocks are watched by Traders in general for every tiny move and any mis-pricings would be quickly bought or sold away. |
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