tactical trader

Long time, no post

I've just made an update to the site to make my life easier. From now on the site will automatically send activation reminders to people who have registered but not activated their accounts. This will happen once a week for one month, after which time the account will be deleted.

This is also a good time to remind you that you must enter a valid email address when registering (no excuses!) and you should make doubly sure you've typed the address correctly. Incorrectly spelt addresses are one of the biggest problems to registration. The other big problem is spam filters stopping the activation email getting through - you can avoid this by white listing the tacticaltrader.com domain.

The Trader Locator has also been tweaked - it occurs to me that the removal of the forums makes the locator a little less useful as there is no way to communicate with other members! I'll have to add a comments section to the locator at some point to fix this.

Well, that's it for now...no doubt another six months will roll by before I get around to the next update

I am about to invest in China (better late than never!) and found it fascinating to read some of the current material on the likely growth of this market in 2007, none more so than an article I came across in a magazine called ‘Prospect’. This is a gripping exchange between the very well known Will Hutton and Meghnad Desai of the LSE. Whether you are already in China, want to be in China or are simply interested in the China story I urge you to spend some time reading it by following the link.

Link

Are the current market jitters justified or is it more doom and gloom from the bears who have been consistently proved wrong over the last year? Personally I am a bit more nervous than I was at the end of the year, the trouble is I cannot really put my finger on the reason. I had expected the rate rise today (thanks to all those idiots borrowing far beyond their means over Christmas) but even taking this into account I had expected more stability by now.

After the major correction last May I thought it would be at least October before we saw a return and in particular a buying opportunity, true enough there were some of these but not as many as I had hoped.

India is a case in point, after the huge collapse last year it was recovering nicely and in an orderly fashion then all of a sudden it dropped for no apparent reason, so much for technical analysis!

As usual, everyone was very knowledgeable after the event and they all saw it coming. What a pity none of these experts were able to point out the likely fall when I had my finger on the buy trigger. The amount of the fall is not my concern because I have bought India for the longer term, what bugs me is that the research I carried out and the examination of the fundamentals all supported a buy and yet here I am almost immediately out of pocket. This is not the first time this has happened over the last year and it really has to call into question the value of trying to time entry and exit points where longer term trading is concerned.

This raises an even more interesting point, should I even be looking? I bought India as a longer term hold and there is no doubt that barring a major world event or global correction, the growth of the market in India is set to continue. I should just leave it alone and keep a monthly check on progress against my own objectives rather than listening to so called experts who always seem to let me down when I need them most .

The trouble is that in this information age there is so much attacking us from all sides that you cannot help but listen to it and make judgements accordingly and as much as we are told to make our own decisions we are only human. So my challenge for the next few weeks is not to listen, only to watch the price action, measure against my own growth objectives and interpret accordingly. We shall see how well I can stick to it and how I feel about my Indian holding then.

While having a much-needed clear out of old emails today I came across one advertising a newsletter called The Natural Contrarian. Normally I would dismiss this kind of email as spam and it would be deleted within seconds, but for some forgotten reason I decided to keep this one when it arrived almost a year ago so that I could see just how well or badly the ‘hot tip’ it contained would perform. Here’s how author of the newsletter, Scott S. Fraser, introduces himself:

I am clearly among the very best of America’s oil and gas stock gurus. As you may recall, six of my previous oil and gas stock-picks rose 280%, 130%, 900%, 660%, 230%, and 450%.

• Just a few short months ago, I announced a Top Priority Buy on Eden Energy at the mid-$2 range – its shares went on a tear to the $10 level for a rapid fire increase of 280%.

• Earlier this year, I recommended Fellows Energy – its value rose 130% in weeks.

• I selected Ultra Petroleum below $1 – and within 12 months it shot up 900%…today Ultra Petroleum is a $7 BILLION market-cap producer with a share-price above $45.

• I recommended Pennaco Energy at $2.50 – and early shareholders witnessed a 660% increase as Marathon bought the entire company at $19 per share.

• I selected Atlas Pipelines – RIGHT BEFORE it skyrocketed 230%.

• I announced a “BUY” on American Oil & Gas – and in 26 months it jumped 450%

Now if you’ve been in the markets for a while you’ll no doubt already be groaning and rolling your eyes (or perhaps even crying), but for the less cynical this newsletter sounds amazing! In the email the stock being tipped to “double in value” was Ignis Petroleum (IGPG). According to the newsletter:

In the immediate-term, I expect the IGPG share price to DOUBLE within the next 12 weeks as the market begins taking inventory of Ignis’s incredible oil and gas potential in Texas, Louisiana, and Alabama . Then, sit back and watch the fireworks as this intrepid oil and gas explorer begins attracting expansive market attention.

And if doubling in value was not enough:

IGPG Could Skyrocket by More than 1000% in 24 Months

How has IGPG performed over the last year? The outcome is so predictable that perhaps the idea of The Natural Contrarian is that you should do the opposite of what is suggested in the newsletter! Closing at $1.49 on February 9th 2006 (when I received the email), IGPG opened trading today at $0.12 – an impressive fall of 91.95% and at no time after the tip was issued did IGPG go higher.

I did think that maybe I was being unfair to the newsletter, but a quick search turned up this article on Market Watch from 2003 where Scott S. Fraser’s long term trading record from the beginning of 1997 through to the end of November 2002 showed a 34% annualized loss.

So the next time you receive an email promoting the next hot stock: trust your instincts (or your spam filter) and just delete it

The latest round of updates are now online. Behind the scenes there are hundreds of changes to improve performance and simplify administration (making my life easier )

The changes you’re most likely to notice are the tweaks to the layout, the more dynamic home page, the removal of the forums and the addition of new RSS Feeds.

The Trader Locator has been enhanced to reduce the amount of time it takes to plot trader locations and the articles and reviews sections should load faster too.

You should also note that you now have to login in order to get access to the full text of an article or review - so if you’ve not registered before then now is the time

I’ll be monitoring the site over the next few days to make sure there aren’t any problems and I’m also planning to get a couple of new articles on the site too.

Hope you’ve all had a good Christmas and are looking forward to 2007!

It is often said that Internet chat rooms and forums bring out the worst in people but as this BBC news story shows, some will take it a bit too far

I don't think any of the disagreements on TT, or any other trading sites, have ever gotten this out of hand - have they? Although I almost expected a mention of Bulldozer in the story

Back in March I posted about my research into Uranium and stocks that would allow us to take advantage of the anticipated bull market - a tricky business due to the lack of a futures market for Uranium and the lack of Uranium related products like ETFs or traditional funds.

I was interested to read a recent report by Richard Karn (who I assume is not the same Richard Karn who played Al Borland on Home Improvement ) that suggested that investing in Uranium related mining stocks would not allow an investor to mimic the performance of Uranium itself. While this may be true over the longer term, my recent review of the stocks I identified in March shows this has not been the case so far.

For my review I first looked at the change in price of Uranium (Uranium Oxide, U₃O₈ to be precise) between February 13th (the date of my initial research) and October 31st. The good news is that the bull move did occur taking Uranium up from $37.50/lb to $60/lb - a gain of 60%.

I then looked at my portfolio of 15 stocks over the same time period and was very pleased to discover that their average gain was 65.17% - slightly better than the underlying commodity.

Out of the 15 stocks only 2 have declined over the period: Agricola Resources plc (down 44.44%) and Northern Continental Resources Inc (down 34.44%). I wasn't surprised by the fall in Agricola as this stock was being hyped up on a number of UK based bulletin boards and magazines earlier this year.

Chart of Northern Continental Resources

The real stars of the portfolio have more than trebled in value over the time period - these include top performer Summit Resources Limited, one of only two Australian companies in the portfolio, posting a gain of 226.47%.

Chart of Summit Resources

With the expected increases in demand for Uranium over the coming years, and the difficulty in obtaining exposure to the market that should hopefully prevent Joe Public from getting involved and making it a hype-fuelled market (like oil), this portfolio should give us some good returns over the long term.

As you may have noticed, there haven't been any new forum posts for about a month now and if you try to post you'll get the following message:

You do not have permission to post a new topic in any forum.

The reason for this is that the forums are scheduled for termination at the end of the year. Following the last round of forum stupidity earlier in the year things went very quiet for a couple of weeks - so it seemed like the perfect time to finally get rid. Since mid-October the forums have been locked down, with no new posts allowed.

I'll be giving the site a refresh ready for 2007 and at this time all trace of the forums will go - so if there's something you want to save from them I suggest you do it before the new year. In addition, the private message functionality will also be going - again save any messages you want before it's too late

I know some of our regular visitors to the site have been worried at the lack of updates over the last month – the good news is they don’t need to worry any more. We’ve just had the fun of moving house and with all the packing of boxes, loading vans, unloading vans, unpacking boxes and (most time consuming of all) telling people about our change of address. It is only in the last couple of days I’ve been able to get on with any work!

Today I’ve published Steve’s review of Mark Shipman’s book The Next Big Investment Boom and an article by John Carter describing two simple strategies for Trading the Euro. I was also going to publish an article by Larry Pesavento about the 3 peaks and a domed house pattern applied to the Dow. Unfortunately the prediction in the article (which was written earlier this year) changed my mind:

In conclusion, there is a strong probability that the top of the stock market in the Dow Jones Industrial Average occurred in late March 2006 possibly beginning a vicious bear market at a time when the overall bullish enthusiasm for stocks was peaking.

This opinion is predicated on the conclusion that the Dow Jones will not exceed 11,350 before starting a very vicious bear leg to the downside taking the Dow below 10,600 by the fall of 2006.

With the Dow nearing 12,000 it seems like the pattern didn’t work this time I should have known when I saw references to Fibonacci ratios, W.D. Gann and Elliott Wave all in the same article that it wouldn’t turn out well!

Here’s some advice for you: be careful when talking about your investments, especially when they’re doing well.

And what has prompted me to give this advice? The coup in Thailand.

While we don’t have any direct exposure to the Thai markets, we do have a number of Asian holdings in Japan, South Korea and Taiwan. Yesterday morning we were discussing how, over the last few months, they’ve all been doing very nicely, how they’d recovered following the dip in May, and how we were happy to continue holding them in the portfolio.

Then the Thai military decides to stage a coup while their President is out of the country – great! We all know how the financial markets love a bit of shock news. Although I’m certain they didn’t do this just to spite us (I’d have to be really paranoid to think that), their timing was perfect

Fortunately our holdings haven’t been badly affected with Japan down 0.98%, Korea up 0.78% and Taiwan up 1.16% at the time of writing. I just hope that things don’t destabilise in the country, that some crazed military leader doesn’t install himself as a dictator and that the markets don’t get too spooked by any future developments.

As for us, I think we’ll just keep quiet about the things that are going well, just in case…