It’s been an interesting week.
I sold out of GAH (Gable Holdings) on Thu 20 June because it reached its sell target on my momo strategy, being overbought, and “subject to pullbacks”. More on that later! Results seemed suspiciously on the late’ish side, and I began to have a sense of foreboding. Insurance is also complicated and iffy area, and I had some worries about potential underprovisioning. More on that later!
The price of GAH had declined somewhat by Mon 24 June, and I said that put it in the “hold” zone. I also said that I thought my comments on underprovisioning were too paranoid. “Everything now depends on the finals”.
It was also Mon 24 June when the market tanked, and DXNS (Dixons) dropped by about 12.5%. This put DXNS in my “buy” zone, and after much humming-and-harring, I decided to top up. So far, this has proved a profitable move, as the shares rapidly advanced, and now stand at about 9% higher.
As an aside, it’s interesting to note that momentum strategies /can/ be good in volatile markets like we have experienced recently, as it signalled a sell at prices which were over-extended, and signalled buys when prices were near support levels. This might be a counter-intuitive conclusion to those that expect momentum strategies to basically “do the wrong thing” in volatile markets.
On Tue 25 June, GAH announced that it would announce its final results on Friday. The whiff of rat went up a notch, as GAH seemed to be waiting until the very last minute – and on a Friday – to present its results.
Come Fri 28 Jun, the company had still not released its results at 7 am. That whiffy smell went up even more. Companies usually give their results at 7 am; although in the past GAH had given them at 7.30 am, and in the afternoon. Still, 7.30 am rolled around, and still no results. At the start of trading, the shares seemed to trade up initially, but at around 9 am the shares traded down 5%. The market was clearly getting cold feet.
At 9.32am, John Rosier noted in his blog that he sold half his holdings. At 1.36 pm he noted (http://is.gd/NOdLNe) that he sold the remainder of his holdings. Great instincts! People were increasingly expecting that GAH would publish near the market close – at 4 or…
