Tricky beginnings and the shares learning curve

Monday, 21st September 2009 11:36 - by Riddler

I stumbled into share dealing in late 2007 when I had the good fortune to be selling a house in a very popular part of my region of the UK and made 200% profit. I took the sensible approach of putting down a 25% deposit on a larger house and investing a large sum in a large fund manager, via my Financial Adviser. I also kept a fairly large amount to invest myself. However, I had the misfortune of having money invested in one of the most volatile periods of the last 65 years and opened my monthly statements with dread. Over the course of 2008, I invested in a variety of stocks including house-builders, miners, waste & recycling companies, and brewers - in the belief that no matter what the state of the market at large, these choices would somehow defy the downward trend. I was wrong to the point of naivety. Rather than sit and dwell, I sought to find out why stocks behave the way they do, why ‘good’ stocks don’t perform, how to learn from past data and charts to look forward to better investing. I signed up to various forums and magazines in the hope of learning the ‘Rules of engagement’ in order to be on a level playing field. An inquisitive mind did the rest. By late 2008 I had discovered, understood and begun to apply charts and other technical data to the art of stock-picking, as opposed to relying on fundamentals alone, and discovered that dividends can be cut, P/E ratios could be slashed, EPS could be savaged and low valuations and share prices can get lower…much lower. I learnt important lessons about not becoming attached to a share, selling for a loss when necessary, top-slicing profits rather than being greedy, and using technicals for entry and exit points. As 2009 commenced, I had a system that worked for me and while I had been hanging on the ropes in 2008, I was starting to throw a few punches of my own this time. I cashed in some of my managed funds equities in the belief that I could do a better job myself. I started ‘Riddler’s Portfolio - Part 2’ in January 2009 and drew a line under my mistakes, mistakes which had to be learned in order to move onwards. I now feel confident in my strategy and enjoy conversing with various people on the forums, in order to engage, adapt and learn. I enjoy discussing stock-picking and suitable trading strategies on ‘Riddler's Technicals’ in lse.co.uk’s General Chat section. I look forward to engaging with fellow posters, new and old.