Many thanks for your detailed response and in what I call 'plain English,' ie something I can easily understand as I've been away from the stock market for yrs other than making a few thousans in itv within weeks, and monotoring shale gas shares, supermarket shares, Alk and of course RMG
Had a luck escape with Morrisons as I nearly bought at about 220.
I usually buy in batches of a few thousand pounds at a time and ideally would like to deal with the top 200 shares.
Nearly bought RMG a while back at just over a fiver, then it went to 6 and now this.
Based on what you have said, and my research, I may buy around the 365 mark, plus or minus 10% but subject to genral market conditions as I am of the opinion markets will correct. The AIM markets are already down and I am guessing the main markets may fololw.
Again, I found your post and tips really helpful and will look out for that
the last 2 trading days the intraday graph has been unclear, the price has been hovering around 400.
this must mean either someone is buying continually at 400 OR someone is selling continually at 400
its not completely clear which, continual buying at 400 would prevent the price going below 400, continual selling at 400 would prevent the price going above 400 (because you would buy from the continual seller instead of a higher seller)
if the price is being prevented from going downwards, then when the continual buyer runs out of funds, I think 360 would be inevitable.
the preceding days the price was starting to accelerate downwards ever faster which suggests they are preventing the price moving down further. at the start of friday the price did dip momentarily to the 396.1 low, probably they momentarily werent supporting the price. this is a hypothesis to explain the intraday graphs.
@cautious7 Vangogh's suggestion is the most plausible, I would advise caution, if you put a trade, put a smaller trade. I have a limit buy for 300 quid at 363, I chose 363 because its exactly 10% above the IPO and I think 360 is the most likely price if the price descends from 400, so 363 is a small margin above that just to be sure. but it may go to 350 also, just that 360 is tautologically more likely than 350.
if the price longer term reaches 1300, then that 300 at 363 would be 80 shares for about 298 quid, and at 1300 that would be worth 1034 quid, so I would make 736 quid profit.
there is a stock market saying that "a rising tide raises all boats", similarly a descending tide descends all boats. I think high tide was earlier this year, and the tide is starting to move out.
on other matters, I mentioned that DLAR plummetted 25% on Friday, I found now my mistake, that it had negative equity. but otherwise was very good, on Thursday the P/E was 16, profits were up 25%, divs 5.6%. I had bought in because of their probable 10 year contract to print Bank of England money from April 2015 and also generally suppressed price. I saw they had negative equity but forgot about this! the moral is to not buy shares with negative equity.
eg RMG has positive equity of 2.4 billion, which is up 71% since the previous year.
there are warning signs with the plummets of 3 shares I have been tracking SPD, XAR, DLAR. when investments go sour, I try to see if there was any warning sign.
29th July Velo said september was the worst month for FTSE shares! in future I will follow that advice!
some weeks ago someone also said that the end of the month was the best time to buy shares, that comment also so far seems good. I will probably follow that advice in future.
but which day of the month is the best for selling?
Velo said Oct/Nov/Dec share prices move up, how about buy at end of sep and sell in mid december?
I'm just a customer of royal mail and I've come to whinge about them on this thread.
I often send parcels through the royal mail and I often cannot believe how expensive they are. It's a rip off! If you are the biggest firm in your sector then give the cheapest prices and stop ripping the customers off with high parcel costs. They can whinge all they like that the small courier companies are undercutting them but they are the biggest so they should charge the cheapest. In this day and age nobodies willing to pay a premium because of the royal mail name because these days name means nothing because all we want is a cheap price.
So to sum up, if you are the biggest then charge the cheapest. If you don't you won't thrive.
This share price will be extremely hard to predict and I do not believe it can be assessed in the same way as other companies at this stage (post privatisation). There needs to be a real drive on efficiency, and a focus on quality, to differentiate Royal Mail from the competition to maintain profitability and revenue respectively. These factors could go either way.
There is then the very real prospect of significant changes to the regulatory environment, or significant divestment of the property portfolio that could give short term jolts to the share price. These factors pose a significant risk to those shorting the share in my view.
I nearly bought these at/about 5/550 - than god I did not, then at about 4 quid last time and tempted this time. All I usually read is about how severe the competition is, ie a bit like the supermarket wars but I guess not as viscious as the supermarket wars but may get there.
The SP you are guessing, will you buy at that and what in yur opinion will happen to SP after that subject to markets being steady
what I am suggesting, untested of course, but it could be backtested although that is quite timeconsuming, is a methodology for long term investing:
to buy long term trades when across the market major companies are on the up.
and to sell out when across the market major companies are starting to stall or descend.
with this, 2010 would be a time to invest, and 2014 is a time to move to cash.
you would sometimes keep your wealth as cash for eg 1,2,3,4 years. eg sell out in 2007, then 2008, 2009, cash, then 2010,2011,2012,2013 long term trades, 2014 move to cash, maybe 2016 long term purchases. may 2015 is the general election, and could cause major chaos.
in the stalling/descending years, you can still buy shares or stay invested, but you go for smaller amounts on fewer companies. eg I may go for 2 trades of 300 for RMG, currently 300 at 363, and the next 300 not decided. originally I was thinking of 1200, but now I think 600 because of the worsening market.
if the price doesnt descend from 400 I will eventually buy at 400.
the backtesting shows that in most cases holding across crashes does work, but say we look at SPD, which went from 285 to 32 to 920
if we held out, that is a net gain of 228% but if we sold at 285 and rebought at 32 and resold at 920
ignoring stamp duty, spread and brokerage:
1 share initially gives us 285p, we then buy 285/32 shares at 32p ie 8.90625 shares, and sell at 920 for 8193.75p. net gain is 8193.75p/285p = 28.75x
ie a gain of 2775% instead of 228%
of course one wont manage to sell at the exact high nor buy at the exact low. but I think cash is an enormously powerful form of investment. cash is immune to crashes, immune to defaults, immune to credit ratings. everyone accepts cash, since 2011, cash has outperformed gold.
essentially I am saying that its not coincidence that companies gain in the same era, and lose in the same era, but it is engineered.
people in charge of any organisation, have enormous discretion. eg you are in charge of your own bank account. if you wanted to buy a camera you could set aside say 600 quid. you can now choose when to buy the camera.
you could go and buy it today, or next week, or in December, or in 2015 or 2016. this is a form of discretion. discretion ultimately is the power to choose to not act, the power of doing nothing. saving up money is from choosing not to spend. you could wait till your neighbour buys a camera, then wait several months and be able to buy the same camera a lot cheaper or buy a better camera cheaper. this is engineering/manipulation of time. politicians also enact some ideas when the time is right, eg Cameron enacting an EU referendum after the election because UKIP are at his door.
RMG could also be waiting for TNT to enact decisions before then competing. he who acts first will be outdone.
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