I am pretty bored with this Hedging Disaster which befell me for most of 2016 and I am sure Readers will be equally deflated at the tedious prospect of yet more words from me on the subject; but I feel a pressing need to punch the keys and just give the whole sorry business some ‘closure’.
Regular Readers / Twitter Followers / Podcast Sufferers etc. will be fully aware that I have made some poorly executed Hedging Trades against the FTSE100 and Nasdaq 100 Indexes which have dogged my Portfolio Performance throughout 2016 and how I finally Closed Out most of them just before Trump got elected - taking advantage of a slight dip in the Markets. For a bit of clarity on this, if you look at the ‘Trades’ page on this Website and find the entries for early November 2016 regarding the FTSE100, Nasdaq 100 and XUKS (ETF), there is a reasonable explanation of the pain which caused me to bite hard on a chunk of wood to mollify. There are also copious Blogs I have written about Hedging and if you click on the appropriate ‘Category’ in the column on the Right Hand Side of the Blog Page, you should find plenty on the subject. You can also use the Search Box on the Homepage to track them down.
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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.
If you’re keeping up with the tinkering I have been doing to the WD Portfolio, you may remember I bought a small stake in Devro DVO some weeks back after they had a Profit Warning and the Shares had dropped a lot. This was quite unusual for me as I tend not to buy into ‘Trouble’ if I can avoid it - however, in this case, DVO is a Stock I have dabbled with in the past and I know the Company reasonably well. My logic here was that this could be a decent chance to buy into them at a good price and I was particularly interested in the increased Capacity that the new factories have brought along and how this could give them space to grow in the future.
The Psychology behind the ‘No Maximum Size’ approach
Right, now we are finally onto the nitty gritty of the Blog Series - sorry it has taken so long but I felt a strong need to set the scene in Part 1 and make sure Readers had a decent understanding of what the Techniques practically meant before we plough on with the Psychology and Thought Processes lying behind them. If you have not read Part 1 yet, I suggest you read that first as this one may not make a whole load of sense otherwise. You can find it here:
I had intended to issue Part 2 of the TopChop Psychology Blogs tonight but a couple of weeks ago I read an article from Chris Dillow (@CJFDillow on Twitter) from the Investors Chronicle dated 7 October - 13 October 2016 (the one with the front page title of ‘Supersize Returns: EUROPE’ and the stereotypical German funny hat and lederhosen……) and tonight I reread it and decided it was actually saying something quite important and worth us all thinking about. With the time critical nature of the Markets I felt it was more important to put this out at this juncture.
Is it possible to be too cautious? I think I am learning the hard way this year that being too cautious is very possible and can be expensive. I have had a really tough year with Returns (or rather, lack of) and although a big chunk of this has been down to a sucession of Profit Warnings from big Positions, another aspect has been down to me taking a very cautious stance this year. It has hurt in 2 ways - the most obvious is the drag I have suffered from large Short Positions and the other impact comes from me failing to “Buy the Dips” when Markets were low (although at the Brexit Vote Lows back in June I did close half my Shorts which was in effect the same as Buying the Market in a big way).
This is a bit of a cathartic blog for me, cleansing the WheelieSoul (no, not the WheelieAr**hole, that’s a different part of the WheelieAnatomy and best avoided…..)
It is often the case with my blogs that they sit around in my head for perhaps several weeks before they actually make their way to even an early Draft form. This one is certainly of that ilk and I am quite pleased to be actually getting on with writing it and unloading my WheelieBrain from having to think about it anymore !!
Sadly parts or all of this blog might seem repetitive when considered next to other things I have written in blogs or on the Website over the many months that WheelieDealer has been going. However, my thinking is that this is such an important subject that it won’t hurt one bit to reiterate the themes and by giving the subject its own dedicated blog, perhaps it will really get the focus and attention that I would say is appropriate and justified.
A few weeks back I wrote a ‘Week Ahead’ update on a Sunday night and I included a fair chunk of text on how Negative Interest Rate Policy (NIRP) was perhaps not one of the brightest ideas from the Central Banks. I am not sure why but I omitted a pretty key piece of information about the implications of NIRP for Cash and so I thought I would just knock this text up to address this serious deficiency !!
The previous Blog including my bit on NIRP can be found here - it might be worth reading this first, or refreshing if you have not read it for a while (it was written as one of the usual Weekly Charts Blogs but contains the NIRP stuff near the beginning):
This came round on Twitter yesterday and I thought it was utterly brilliant and something worth thinking about and understanding if we want to survive the current Nasty Markets. I say this is a “2 minute Blog“, but take your time and think about the messages here - they are bang on the money. It uses the word ‘Trader’ but equally applies to Long Term Investors and it is worth taking heed.
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.
Here’s something a bit different that I thought Readers might like to look at. A good friend has been investing for maybe 5 years and lately he has found things a bit hard going and wanted me to have a look over his Portfolio and give my views on what I thought of it. For obvious reasons he must stay anonymous but I am sure he is reading this - so ‘Thank You’ hugely from me and on behalf of Readers for letting me share this.
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 WEBSITES. IF YOU COPY MY TRADES, YOU WILL PROBABLY LOSE MONEY.
Earlier today I was talking to someone on Twitter about Quantum Pharma QP. which they were thinking of Buying. Anyway, as with all these things, the first action by me was to quickly go to my ADVFN Fone App (which is simply brilliant by the way, and FREE) and to have a look at the Chart - that is always a very simple way of screening things in or out for me. In simple terms, I want to buy Stocks in Uptrends. |
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