30
‘THE MARKET CAN BE IRRATIONAL
FOR LONGER THAN I CAN REMAIN
SOLVENT’
Three months ago, Humbug set
out with £50,000 to invest and the
ambition to grow his capital by 20%
p.a. without taking undue risk.
In a recent trading update he
described his results to date as ‘dire’
as ‘trade after trade has failed’.
However, Humbug is disciplined in his
trading (‘the market can be irrational
for longer than I can remain solvent’)
and is resolved to take any losses the
moment it is obvious he has called
it wrong thereby ensuring that the
damage to his capital so far has been
‘very manageable’
His first three months stats show
losses on closed trades of £2050
with profit on closed trade £596; his
running profit on open trades stands
at £348 showing a net loss on his
portfolio of £1106 (2.2%)
Midway through his latest blog
Humbug hopes that a couple of weeks
R&R on the ocean wave will put some
wind in the sails of his lacklustre
portfolio.
His frequent trading may not appeal
to those looking to build a long-term,
diversified investment portfolio but
Humbug’s diary is rarely dull and
frequently brutally honest.
My trading performance in August was
a little better, although I found myself
trying to predict which way the market
would move – normally a mug’s game
– and a couple of short positions went
against me. The net position on the
trades I’ve closed is a profit of £229
which equates to a return of 5.5% on
my fifty thousand pound portfolio.
WEDNESDAY 3RD SEPTEMBER
Enquest (ENQ) my recent range trade
is just not working out as I planned
and as I’m off on holiday sailing for a
week or two soon I decided to close
it. Sold on the spreads at 118p for
a loss of £110; it had been flapping
around going nowhere and yesterday
suddenly fell away for no reason I
could see, in the circumstances the
kindest thing was to put it and me out
of our misery.
All I have in the portfolio right now are
AVON, the remaining half of TCM and
QFI. Right now I’m happy for these just
to sit there till I get back.
FRIDAY 5TH SEPTEMBER
Advanced Oncotherapy PLC (AVO)
is a tiny company that is developing
and supplying the next generation of
machines to treat cancer. It is right
at the cutting edge of this potentially
huge market. A trading buddy of mine,
Robin, highlighted the stock and I
did some research. It’s a great story
and I buy into it. It’ll either make me
monster money or I’ll lose the lot. For
a tiddler the spread was tight and the
market size was workable so I bought
50,000 shares at 3.9280p with costs
£1975.95. I’m going away on Sunday
armed with my laptop and some good
stock market books but think a break
from getting up at 6 am each day to
look at the market will do me no harm
at all. What I will do is look from time
to time and if anything too good to
miss out on comes up I’ll bag it.
WEDNESDAY 24TH SEPTEMBER
Back from sailing having had a great
time and am now in the mood to make
some money this autumn. I only looked
at the markets once when I was away
which I think has done me good; I did
however do a lot of thinking about
what I have done both good and bad
and how I will improve my trading
performance in the coming months.
Clinigen (CLIN) a small pharma
company with an interesting and
unusual business model reported good
results today. I made a lot of money
with them this time last year and
would like to repeat the performance. I
plan to watch them and pounce on any
price weakness.
Also very interested in another
pharma company, a tiny one called
Angle (AGL) that has developed a
blood test to see if a cancer has spread
and if so, to where. This test can also
help doctors evaluate how effective
any given treatment is proving. The
price shot up yesterday after some
publicity, so once again it’s a case of
wait for a bad hair day and pounce.
DIARY OF A DIY INVESTOR
IN THE SECOND OF SERIES OF BLOGS HUMBUG
TAKES TO THE HIGH SEAS HOPING TO CHANGE TACK BUT DOES HE SEE THE STORM COMING?
