A tweet by Lord Sugar (which Peter Jones from Dragons' Den agreed with):
Bank shares seem too low,I bought LLoyds RBS and Barclays Friday. Don't follow me I'm no expert.Take professional advise if u fancy a punt
Euler - Do you agree with this?
Jeff
Bank shares
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superfrank
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Peter Jones is probably already holding them and Sugar is an eternal optimist.
He might be right, and maybe they're worth a punt, but the reason Lloyds and RBS shares are so low is that they are both technically insolvent (if they marked their assets to market and not a phoney book price for the balance sheet).
He might be right, and maybe they're worth a punt, but the reason Lloyds and RBS shares are so low is that they are both technically insolvent (if they marked their assets to market and not a phoney book price for the balance sheet).
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andyfuller
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Just using the (very) little knowledge I have I would say bank shares are a big gamble at the moment. There is a lot of stuff up in the air and knowing which way they are going to go I would say is extremely difficult.
As a long term investment of several years (5+) they probably wouldn't be the worse punt, but I would sooner for the sake of missing a small amount of profit wait it out at the moment and see what the next few months bring as I wouldn't be surprised to see them go lower yet.
Barclays are down 2.06% on the day and Lloyds are down 1.73%.
Whats your view Jeff?
As a long term investment of several years (5+) they probably wouldn't be the worse punt, but I would sooner for the sake of missing a small amount of profit wait it out at the moment and see what the next few months bring as I wouldn't be surprised to see them go lower yet.
Barclays are down 2.06% on the day and Lloyds are down 1.73%.
Whats your view Jeff?
I don't have a view - I'm a trend follower, not a fundamental analyst.andyfuller wrote: Whats your view Jeff?
And even if I were confident that panic selling had created a value buying opportunity, I'd still let the trend run its course before entering the market.
Jeff
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andyfuller
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When you do get one of these trends any chance of you posting up a thread for it as I am keen to see an example and the thinking for it.Ferru123 wrote:None - I'm not currently persuing financial market trading.
What sort of time frame do you look for your trend trades to run for (or is it just until the trend ends, i.e. how long is a piece of string)?
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superfrank
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So you're a trend follower who doesn't follow trends?!Ferru123 wrote:I'm a trend follower, not a fundamental analyst.
Sure, although the rules of trend following are very simple. For example, you might decide to buy when the 10 period MA crosses up through the 20 period MA, and have a 100 pip stoploss. Once you've set your rules, you stick 100% to them - no judgment is allowed!
There are an infinite number of variations of rules you could use, although I'd recommend you read the backtested examples in Covel's Trend Following if you're thinking of giving it a go with real money.
You only exit when the trend comes to an end. Trend following doesn't use arbitrary profit targets, and rejects that idea that 'you can't go broke taking a profit' (you can!).
Have a look at the McDonald's chart here - viewtopic.php?f=35&t=2814&p=17553&hilit ... lds#p17553. That's the kind of move trend following is good at getting.
In terms of timeframe, the generally accepted wisdom is that it only works on 1 day + timeframe, but I think it can be adapted to other timeframes.
BTW, when you trade Betfair, do you trade trends yourself (if you're trading a heavily trending market, for example)?
Incidentally, there is a downside to trend following - you get horrendous drawdowns (percentage bank depletions). It's a bit like betting on 10/1 horses - if you have an edge, you'll come out ahead long term, but there will be times when you question your own sanity!
Jeff
There are an infinite number of variations of rules you could use, although I'd recommend you read the backtested examples in Covel's Trend Following if you're thinking of giving it a go with real money.
You only exit when the trend comes to an end. Trend following doesn't use arbitrary profit targets, and rejects that idea that 'you can't go broke taking a profit' (you can!).
Have a look at the McDonald's chart here - viewtopic.php?f=35&t=2814&p=17553&hilit ... lds#p17553. That's the kind of move trend following is good at getting.
In terms of timeframe, the generally accepted wisdom is that it only works on 1 day + timeframe, but I think it can be adapted to other timeframes.
BTW, when you trade Betfair, do you trade trends yourself (if you're trading a heavily trending market, for example)?
Incidentally, there is a downside to trend following - you get horrendous drawdowns (percentage bank depletions). It's a bit like betting on 10/1 horses - if you have an edge, you'll come out ahead long term, but there will be times when you question your own sanity!
Jeff
andyfuller wrote: When you do get one of these trends any chance of you posting up a thread for it as I am keen to see an example and the thinking for it.
What sort of time frame do you look for your trend trades to run for (or is it just until the trend ends, i.e. how long is a piece of string)?
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andyfuller
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It will be one of many things I take into account, if I think the trend will continue I will jump on, or I may look for the reversal. I take as much as I can into account and react, you don't want to tie yourself down with a set of rules imo as you will miss out on a lot of profitable opportunities. You need to be willing and able to take advantage of every opportunity that is thrown up.Ferru123 wrote: BTW, when you trade Betfair, do you trade trends yourself (if you're trading a heavily trending market, for example)?
I used to trade by just a few things but slowly realised that you just miss out on so much profit. Learn to be able to work out what is important and what isn't and when.
I think you tie yourself down to much with your trend stuff when it comes to horse trading form what I have read. You need to learn to be more flexible and look at the overall picture.
Just my opinion of course and others far more successful than me may say differently
Whether you go with the trend or counter-trend, your long-term profit comes from the fact that you exploit market over-reactions, cutting your losses when trades aren't working out, and letting your profits run. So in that sense you're trend following.andyfuller wrote: It will be one of many things I take into account, if I think the trend will continue I will jump on, or I may look for the reversal.
If markets were extremely efficient all the time, the only way you could profit would be by market making. It's hard to swing trade a random walk... Jeff
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andyfuller
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Lord Sugar bought on 12/08/11:Ferru123 wrote:A tweet by Lord Sugar (which Peter Jones from Dragons' Den agreed with):
Bank shares seem too low,I bought LLoyds RBS and Barclays Friday. Don't follow me I'm no expert.Take professional advise if u fancy a punt
LLoyds (LLOY) = 33.82p
Royal Bank of Scotland (RBS) = 26.49p
Barclays (BARC) = 187.20p
Currently:
LLOYS = 31.12p (-7.98%)
RBS = 23.67p (-10.65%)
BARC = 165.5p (-11.59%)
Indeed Lord Sugar you are no expert, note to self: Do the opposite of what Lord Sugar suggests
Last edited by andyfuller on Thu Aug 18, 2011 12:03 pm, edited 1 time in total.