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
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Bank shares
by superfrank » Mon Aug 15, 2011 5:19 pm
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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by andyfuller » Mon Aug 15, 2011 8:59 pm
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?
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by Ferru123 » Mon Aug 15, 2011 9:22 pm
andyfuller wrote:Whats your view Jeff?
I don't have a view - I'm a trend follower, not a fundamental analyst.
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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by andyfuller » Mon Aug 15, 2011 9:34 pm
Ferru123 wrote:None - I'm not currently persuing financial market trading.
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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by superfrank » Mon Aug 15, 2011 9:35 pm
Ferru123 wrote:I'm a trend follower, not a fundamental analyst.
So you're a trend follower who doesn't follow trends?!
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by Ferru123 » Mon Aug 15, 2011 9:47 pm
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=mcdonalds#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=mcdonalds#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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