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The Speculator

Discussion in 'General Investing Discussion' started by johnnyb, 12th Jun, 2007.

  1. johnnyb

    johnnyb Well-Known Member

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    Hi All,

    My wife subscribes to The Bulletin magazine, and while I usually don't read much, if any, of it (I trust my wife to distill anything that is interesting and let me know in 20 words or less :D) I often take a quick look at the column by David Haselhurst, AKA THe Speculator.

    For those who don't know his job is basically to take some capital at the start of each year ($40K I think) and he uses this to speculate on junior companies. He is up about 80% so far this year I think. A while ago he published a table showing annual returns over the last 20 years of so. I think in that entire time he only had 2 -ve years, but they weren't very big -ves, but the rest have been positive years, with most showing large gains.

    I find this style of "investing" very interesting. As far as I can tell (in the short time I've been looking at his results) he seems to hold positions in 10 or 15 companies, most bought at prices less than 10c, and often with free options. Many of these companies have modest gains, but occasionally one or two will gain several thousand % (eg, it's price may go up to several $), and it is these gains where he gets his overall good returns. Of course he does some fundamental research to pick his bets in the first place.

    What are other people's view on this type of investing? In one column recently David noted that one of the stocks had a huge increase in volume the day after he talked it up in The Bulletin, so there must be some (or a lot of??) people out there follow who his trades.

    John.
     
  2. Glebe

    Glebe Well-Known Member

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    Looks like something fun to do with play money. Beats the pokies or the horses.
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Unless there are sound reasons for buying into any of these stocks, I don't call it "investing", I call it speculating ... which is a nicer term than "gambling".

    If there is any kind of reasonable analysis going into the decision making, then I think it's okay as a strategy ... provided you understand the market you are playing in.

    It's not just about randomly choosing 10-15 stocks that are priced less than 10c ... that's a good way to lose money in my opinion.
     
  4. Tropo

    Tropo Well-Known Member

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    Johnnyb,

    This kind of game is very profitable for traders (not for all of them) but may not be for investors.
    Penny stocks are quite risky so do not play with fire, unless you can easy afford to blow certain amount of money.
    Do not always believe what you read...Spectacular gains are very rare breed, but few thousand % gain in the one year is possible (happened to some traders during the dot.com boom) :p
     
  5. Rod_WA

    Rod_WA Well-Known Member

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    Read for yourself (don't need to be a subscriber!):
    Business
     
  6. Glebe

    Glebe Well-Known Member

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    I wonder if Kitt picks the stocks? :p
     
  7. johnnyb

    johnnyb Well-Known Member

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    Yes, you can read the column online, but as far as I can see it doesn't show you the current portfolio or the lastest transactions.


    I was going to make a comment like that, but didn't want to show my age :D
     
  8. Rick

    Rick Well-Known Member

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    And also are willing to accept a reasonable loss on your investment if your trading style doesn't work.

    I've been doing a bit of speculating on the market in a similar vain to the Bulletin article mentioned.
    It's only with a total of less than 10% of my total direct share portfolio. I started it 3 months ago and am currently up 20% with 12% of that in realised profits.

    So an average Joe Blow can have success with speculative share investing. This of course is in a bull market which may turn at any time, and that's when the real test on performance will come.

    The reason I'm doing it is I want to make it an integral part of my overall investment strategy when I reach the full time profession of "investor" which shoudn't be any longer away then 12 months, fingers crossed. So I'm really just trialing it at this stage.

    One shouldn't underestimate the physcology of trading shares. eg. I come from a long term investing perspective so I've found it really hard to take profits in very short periods of time. There has been a couple of cases where this has adversely affected my trading prformance.

    Sorry, enough rambling :)