its not the capitalisation, but the subset that is readily available for trading. havent found what proportion of the FT100 is RMG. would need the Free float Adjustment factor for RMG. Havent located this, and have run out of time for now!
that is something we will have to infer from the data,
with the interims, there was a big surge on 27th Nov often reaching 569.5,
but it was 3 trading days later that it began an even bigger surge which took 4 days:
2nd, 3rd, 4th, 5th December often reaching 598.5
pre interims it was 533 (these are all sell prices, not mid prices and not buy prices)
so the interims day was a rise of 36.5, but the second surge moved the sustained maximum a further 29.
to extrapolate this, we need to wait a further 3 trading days, the interim second surge would coincide with 2nd January. the extrapolation would also be that the price will descend before the surging.
I would thus wait till at least 2nd January before concluding anything. it takes time to move money, for me it takes 3 working days to move money. the next 3 trading days are 27th, 30th December, 2nd Jan
big money has inertia, and share trades take time to complete the paperwork.
in particular you can consider moving money to possibly invest, as it may well arrive at the same time as any new surge.
you are mystified that I predict high prices but wont buy huge amounts.
I explain this:
with my existing investment income, and my other income, I have enough money. but only just enough, I rely on my investment money to top up my income. My investment income basically pays for all my shopping costs.
I dont mind making more money, but I do mind making less.
with RMG, I dont know for sure that it will make the amounts I predict. I do know their financials are very good, and that the company has plenty of potential. But I also know that share prices are decided by things beyond the stock market, in fact beyond these shores. Every policy change at the Federal Reserve bank of the US affects the entire London Stock Exchange. Because ginormous amounts of money can get pulled from the London Stock Market to the US.
Also, even if RMG does really well, we dont know when that will happen, and we dont know how low the price will get before that.
I cannot jeopardize my finances. I can only put amounts on RMG, where if it goes badly, I can recoup the lost money in some weeks.
there are too many unknowns with RMG, how long will it take, how low will it go, how high will it go.
I have to work with certainties, even if it means less money.
the correct path to wealth is for continual small gains.
I need the dividend plus share price to rise. the total valuation matters, not just the dividend.
Also as my RMG trades are in profit, 658 quid right now, I intend to keep the venture in profit. if the price keeps falling, I have to keep selling off until everything is sold, to guarantee profit. its about 73 days now, so that is about 9 quid a day. the amount of effort is much more than 9 quid a day!
further on that, the maths is quite stressful. what you can do is take a trade proposition, such as buy 1000 quid at 5.90. then see what the price average is before and after. small trades in fact are fine, eg 100 quid.
each time you sell to secure profits, it also eats into the profit margin, but it also secures the investment.
it is extremely difficult to decide what to do, and you need to take into account the way the specific share graph behaves. some shares require less safety.
if you sell everything, and your average price is below the current price, then that completely secures profits!
also once the portfolio cost becomes negative, then the portfolio is safe regardless of what happens!
(because you have cashed in the original money, and the remaining money is entirely profits)
eg if beatrootjuice sold off 10000 quid of his 17558.85, then that 7558 quid is safe regardless what happens.
it is very confusing, but it is also very important to guarantee success.
best to explain with hypothetical example.
say you buy 10 shares for 100 quid, including all charges. total: 10 shares, cost 100. then buy 20 shares for 300 quid. total: 30 shares, cost 400. now sell 5 shares for 100 quid. total: 25 shares, cost 300.
someone else bought 25 shares at the start for 250. total: 25 shares, cost 250.
both of you have same amount of shares, but the costs are quite different.
to simplify the calculations, say stockbroker charge is 5 quid.
now your portfolio of trades has "average" price of (300 + 5)/25 = 12.2 because if you sold at this price, you would get 300 quid, the cost of the portfolio.
but the other guy's average price is (250+5)/25 = 10.2
as regards dividends, we would subtract those from the cost. if the dividends are reinvested must readjust.
now this average price is VERY IMPORTANT, because while the price is above this, you are in profit, and below this you are losing money.
the higher the current sell price is above this, the safer your investment is.
with your first trade, the average price will be ABOVE the current price, and your investment is unsafe.
my argument is that you need to wait till the investment is safe before topping up. Before you top up, you need to calculate the new average price, and ensure this is a healthy distance below the current price.
the bigger the topup, the closer the average price moves to the current price.
to standardise the evaluation, we can look at the average price as a percentage of the current sell price.
right now at 579.5, had I not sold off 2000, my average price would be 93.76% of the current price. but because I sold off the 2000 at above 6.01, my average price right now is 91.25% of the current price. and my RMG evaluation has 658.01 profit instead of 589.76 profit.
basically if topup by too much, its great if price rises, but its bad if the price falls.
if you only top up to keep average price at least 15% below current price, then can basically guarantee profit. 20% below even better. because you will have time to sell off sufficiently to maintain this safety if price falls too much. eg if this percentage fell to 7%, you could sell off an amount to make this percent say 15% again.
eg say you have 1000 quid cost and the average price is 7% below 589.76, ie 589.76 x 0.93 = 548.4768 15% below 589.76 is 501.296. commission 6 quid. you must have 1006/5.484768=183.4 shares, say 183. sell m, cost 5.8976 m - 6. new portfolio cost 1006 - 5.8976 m. average cost (1006 - 5.8976m)/(183-m)=5.01296, so 1006 - 5.8976m = 917.372 - 5.01296m, 88.628 = 0.88464m, so m = 100.2. you need to sell 100 shares.
this is what I mean by an audited decision. maybe 100 is too much. study say 12% instead.
DO NOT BUY/SELL ARBITRARILY. FINANCIAL DISCIPLINE.
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