Newbie looking for advice!

2nd Oct '20 by AnonymousUser1165728

9 comments 700 reads

Hi All,

I've been following along in the background stalking the forums / blogs for a little while and I am wondering if you would kindly offer some advice.

Maybe a little background first: my intestment backgound is very much high risk CFD's I have over 10 years (on and off) of trading forex favoring technical analysis over fundamental. However, age is starting to catch up with me and life is different to how it was when I was younger. Surfice to say, I want a little less risk and something a little slower.

I decided to make my mark with stocks - so here I am!

However, it seems stocks trade a little differently to CFD's in as much as fundamentals play a bigger part in the price movement in comparison to Forex, I am guessing this is because i am looking at time as the variable here, for my CFD's I'd be holding for about a day, with stocks, maybe years. I might be wrong in this assumption, i've only been looking a week!

Anyhoo.. to my question; I have picked some stocks below that I think are good picks. I do intend to add to them as I go, but these to start with. For the most part, i've tried to pick stuff that isnt too conservative that I can still see some short term (3 years) growth, but reducing the risk as best I can. The exception here is clearly AML (Aston Martin) which is clearly on its knees, but at the price per share, I don't mind taking that risk.

Do you see any issues with the choices below? How would you go about confirming the decision?

I've tried to look at things I think are under valued based on previous price, but I dont know any of these filters, or EPFRG stuff tat stockopedia uses. I get green is good and red is bad, but I am really looking for something I can understand. What i want to avoid is mixing bits of information from one strategy with another and basically making a mess of it!

Any guidence would be greatly appreciated!

Regards,

Martin

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Rusty2

2nd Oct '20

Why have you picked those shares?

You could look at the QM top ranked shares: https://www.stockopedia.com/stockranks/?field=ratios._QMScore_zz

These tend to be better performing.

MiserableJacktPotato

Several of those, such as Boo, Win, and Cnct are covered by Paul Scott. Suggest you read his excellent analysis on those.

I’ve not looked at them in depth, but not sure I’d want to be holding AML, looks like it’s still a falling knife.

mojomogoz

Read the notes to the accounts first...and if you don't understand what's in them then read a basic accounting book (or do a lot of googling).

What happens with cash is what is really happening whatever the story that people weave. Stocko data is good and following the QM (?) system is pretty sensible if you don't want to do much work

Gromley

Hi Martin,

I think it is worth fully clarifying the transition you are trying to make.

You mention transitioning from CFDs to Stocks - but I don't believe that is correct. CFDs are essentially just a vehicle to achieve leverage - you can trade CFDs on stocks as well as Forex. (In theory you could trade Forex by holding the actual currency via a travel agent - you would never win because of the spreads and fees, but it would be the same basis trade.)

In fact what I think you are talking is transitioning from exchange rates to stocks?

But also I think you are talking about transitioning between trading on TA as opposed to FA.

Without knowing what you are trying to achieve its hard to give too many suggestions, but I would just say that if TA is the thing that you understand, you can trade Stocks using exclusively or predominantly TA. It would be worth reading people like Mark Minervini, or closer to home it would be worth considering the views of Michael Taylor (for eg this thread) or Jack Corsellis . Technical Analysis is not really my thing, so please don't consider this a recommendation - these are just people who I find interesting on the subject. Following up on this might keep you closer to your comfort zone , your holding time is likely to be measured in days rather than hours, but you might already be attuned to the concepts.

However if you are really looking at a holding time that could extend to years, then you probably are looking at Fundamental Analysis - this is a very different ball game as I think you see. It is hard to know where to start in introducing FA, but perhaps as herbie asks - if you tell us why you have picked the stocks you have ; then the ensuing discussion on your rationale will probably be very educational. (FWIW I hold 2 of your picks and have reasonable knowledge of 3 others amongst them!)

Edward Croft

Put them all in a Folio and look at the distribution across StockRanks/sectors in tables and bubble charts. If you have good exposures and reasonable diversity then history suggests you may do ok. Life is difficult. Nothing is guaranteed.

Silver Moon

3rd Oct '20

It's not so much as what to buy but when, and again, when to sell. Do you like dividends? Don't buy into those those companies which don't then. Excellent advice from Gromley and Ed. Gromley has been proved right time and again in my own investing. I like virtual portfolios too, roll on when Ed gives me more that ten to play with. An example: last October I set up a twenty-gold-mining companies portfolio and it is now around the fifty-percent up, has been quite consistent in that usually there are three to five constituents underwater, but just think where it would be if I had bought the whole of the portfolio on the 21st of March!

troytea

I’m a factor based investor. It helps me not to get carried away by sentiment so I have rules for
- stocks that can enter a portfolio
- rules for when they leave
- rebalancing points , I do this quarterly (Up to individual style) and this is when most of my buys and sells happen with exceptions of profit warnings, big price falls

I run 4 types of portfolios each with different rules. I try stick to my rules, most of my big losses happen when I don’t.

Hey! And read this ...

https://www.oaktreecapital.com...

From 2000. Today is like 1999 in that we are cramming a load of future into a select group of stocks all at once today.

Of course, it’s never the same. So can look back and say why it’s different today etc...but what is the same is that we intoxicated with narratives of death and glory. Some stocks are for sure dead and some are glory. Many PIs today are intoxicated with the glory...believing their foresight allowed them to navigate 2020

Reality will hurt

Logical David

Hi Martin, I bought my first share back in the1980s and over the decades I have tried many different investment styles. The best advice I can give you in just a few sentences, if you wish to reduce your risk with regards to losing money, is only buy companies which make a profit and have a good balance sheet. I never buy shares because they have a good story, I only buy shares based on fundamental data and good metrics. My opinion is avoid buying 'Blue Sky' companies and 'Jam Tomorrow' companies which promise profits sometime in the future because more often than not they fail to deliver and thus either go bust, have to keeping borrowing money either via a bank or via a fund raising issue which dilutes shareholder returns. Avoid buying loss making companies. Have a look at the shares which the Stockopedia Club have invested in, it just so happens I already hold quite a few of those companies. As Ed has quite rightly said, there are no guarantees in the stock market. All you can do is your own thorough research in order to minimise your exposure to risk and increase the odds in your favour. I only buy high quality companies with a good balance sheet, which are undervalued (not cheap shares) and a tale wind behind them (aka momentum). This process has served me well over the years including 2020.

I have looked at your list of shares above and I only own one of them, SLP.

Happy investing.

Newbie looking for advice!

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AnonymousUser1165728

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