Presentation on theme: "Summary of what Jim Slater said: Small companies[<£100m] massively outperform large companies [10x] Use just one intelligent parameter and beat the market."— Presentation transcript:
Summary of what Jim Slater said: Small companies[<£100m] massively outperform large companies [10x] Use just one intelligent parameter and beat the market Combine parameters to very strongly beat the market AIM offers: IHT relief, business taper relief and EIS; VCTs offer big tax relief CCCIC uses Zulu, REFS and charting for buying and selling
? As fans of Clinton Cards, we’ve watched the big price decline and notice how the price suddenly jumps through the MA and then stays above it. Then The MAs cross each other - a ‘golden cross’ - so we buy around 106p.
? It looks like a trading range is being established so we draw two parallel lines; the price hits the lower line and we might have sold on a stop loss but it quickly recovers.
? Oh dear, the price starts bouncing along the bottom of the trading range and then dives out of it, cutting through the MA - we sell around 182p. Or, we’re more cautious and sell at 172p, when the two MAs cross, for a 43 % profit in under two years.
And then price rises and cuts the MA...
‘Winning on the stock market’ ‘It’s my story’ in iii about investor who used Zulu and ‘centred moving averages’ I bought second hand book written in ‘92 that is difficult to understand! Concentrates on probabilities and charting; opposite of our fundamental analysis Offers a complete investment method but I’m focussing on his charting methods to improve the timing of our buys and sales Some key concepts follow; further talk with more charts and explanation?
Advanced charting Probability always wins in long term Being right 50% of the time will result in losses due to dealing costs Strategy is to make money, not ‘hold shares’ 80% of shares will follow main market so only invest when market trend is up 20% chance of beating a falling market Only invest when market is trending up and share’s price is trending up Our Growth filter contains ‘relative strength over 1 year>0’; Slater buys when ‘share is behaving like a winner’ Sell when share dips, don’t worry about market
[Excel’s] moving average lags in time; a centred ma is simply moved back in time by half the span, thus averaging the price and the time.
Stop loss Must always use an automatic, percentage stop loss Loose 50%: have to make 100% gain to recover capital 7.5% recommended Selling crystallises loss Stats say 2/3 of shares recover Only an ‘earthquake’ justifies not selling 20-50% fall in a day Market still trending upwards Share has been trending up in last few months No sinister press comments No other better share to invest in
Market trend changing? A trend continues until it ends CCCIC unit price is flagging! FTSE100&250 look to me to have peaked A proper analysis next month Oil prices still increasing US company results disappointing Dow Jones at 6 month low; 3 days of sharp drops Blair will raise NIC by 3% very soon Directors of AIM companies sell/buy=4.6; market overpriced?
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Next month Determining the market’s dominant trend Determining a share’s dominant trend Short term buying signals Channel analysis Lots of charts!