Thoughts from Dan.

king kong

Cash is King!

A lot of emails asking for advice on stocks and strategy re’ their investments.

Each investor should have a clear strategy in place when investing. Take Encore,Nautical,Premier,Xcite Sound,Sefton,Chariot Rockhopper etc etc ALL THESE COMPANYS HAVE AT SOME POINT OR ANOTHER TREBLED or QUADRUPLED in value. Private investors have been sat on profits some as high as 400%/500% There has been plenty of opportunity for profit taking and de-risking yet investors haven’t. The majority of professional traders are working on very small margins ranging from 3% to 10%. If I was holding a stock that had these gains then I would de-risk the investment immediately. I wrote an article some time ago about moving on from Gulf keystone, Encore,Nautical,Premier,Xcite etc . This is the way of the market no stock can keep surging upwards indefinitely they all retrace somewhere along the time-line.Β  Stocks are news lead and expectation is built into their price.

Get your strategy in-place and be flexible. I sold and derisked in Encore,GKP,Nautical,Xcite,Premier,Chariot. I never got out at the top and I never sold at the bottom but all my sales have been substantially above where each of the above companys sp currently sits. I sold Xcite at over 400p , Encore averaged at 135p, GKP176p Chariot at 302p, Whilst Premier averages at 1997p with Nautical at 315p. I still hold residual free stock in all of the above for the long-term. Every time I sold stock they invariably rose higher however I stuck to my personal strategy even though at the time of the sales I could have held and made much more in profit. The lesson is there for all to see. Get in cheap and get out when you are showing huge gains! And never castigate yourself if they carry on rising.

Viva!

Daniel

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  1. James Allen says:

    So why is Encore still featuring as a “favoured company”??

  2. Senora_c says:

    Too true Dan! Hard lesson we have all probably had to learn at the early stages of our journey! It should make us better investors/traders. Not to learn at all from the experience – that becomes a real issue.

  3. Apur32 says:

    What a post…
    Real investing….
    Thanks Dan for these thoughts …
    Real Talk….
    Welcome to Real World………………

  4. Moneylender says:

    Good advice Dan

  5. Andrew127 says:

    The advise you have given in this post is 100% correct, I am new to investing and started in february 2010. I was over 130% up by the end of the year with a portfolio of 18 oil and gas shares I had tried carefully picking, buying books and watching video’s on Oil exploration so I could understand a bit about the companies and the RNS releases.

    I am now losing as much per month as I had gained, how much lower can Xcite, Encore, Heritage oil e.t.c. fall. It must be near the bottom of the barrel.

    I brought my father some shares and he has sold them all a few weeks back, before the xcite fall. ( he brought some back today though at 1.97 and my advise was to buy a small number of GKP shares incase they suddenly increase on the next news release)

    Is this the end of the bear raid or could it get worse?

  6. Scott says:

    Cheers Dan.

    Whats the next one after Sefton? πŸ˜‰

  7. Rosalimacat says:

    Scott.
    NGL

  8. Angela says:

    Happy that you still in matra petroleum….!!!!!

    Ciao Dan πŸ™‚

  9. Down but not out... says:

    Thanks – wise words, although nothing we probably shouldn’t already know ourselves if we’re being honest, but it’s still painful sometimes learning these lessons. (I must stop being greedy, it’s been a tough month!)

  10. robert says:

    Dan, where do you think xcite will go from here with the present pi.s sentiment, thanks dan.

  11. Peter says:

    Hi Dan,
    Isn’t there some old market theory (wives tale?) that when selling to always leave a bit of profit for the next man. I always find it is harder to pick the right time/price at which to sell, than it is to buy. However that old theory/tale has always worked well for me.
    Regards

  12. stevie says:

    EO πŸ™ lucky limit orders set

    Scott, BMR I’m told but dyor

  13. jone says:

    The trouble with alot of trading advice is it is contradictory. For example buy low sell high is not compatible with cut your losses and add to your winners. All the ones above Dan, indeed many on your site, are still relative winners (so shouldn’t we be adding to them, or does it just depend on your time frame and the current trend and the type of business)? Chances are the upward trend may return for the likes of Encore and Xcite in due course and they will become winners again although obviously they are short term losers for those that invested in the last 3 months or so.

    Any word on perpetual under achievers Aminex, you had a tantalising message about them a few weeks ago?

  14. Tom says:

    Dan, are you still holding CAD and SLE?

  15. Jonathan says:

    This post seems more reactive rather than proactive, which is unfortunate as I’m a big fan of Dan. I’m sure we’ve all read countless posts on here regarding EO and GKP with phrases along the lines of: long term, hold which now seems slightly contradictory.

    He is right though with the de risking point.

  16. Bill says:

    Dan, Of course you are correct about derisking.

    However I do wonder about why Encore is still a ‘favoured company’ when you have derisked your holding. I still have Encore and did not derisk when their sp was high. You have not posted on Encore recently. Do you expect Encore to recover soon?
    Bill

  17. C K says:

    Dan, are you sure you ever had XEL in the first place to be able to sell at 400p cos I’m sure you never had this stock or mentioned this?

    • BarnstonPickle says:

      Hi CK Check out the Confucius post! I dont think he had many shares I rememberhim selling them then or there abouts.

      Pickle.

  1. 17 May, 2011

    […] Thoughts from Dan. A lot of emails asking for advice on stocks and strategy re’ their investments. […]