Stock Pick Basket for Feb 2008

I'm yet to figure out how to load a table on my blog, and dont yet have a server you can access to download tables from. You can download the Jpeg image above (hopefully, the picture quality will be helpful). It presents a basket of stocks you can play with and some of my possible price scenarios. The last column shows the possible percentage price growth for our target period (we could do much better, or a little less!). I hope you find it useful. We will track our performance in another month from now (approximately on the 10th of March). Cheers!

Looking for AIICO...

On friday, I instructed my broker to sell some units of my GTB, Presco, UTC, Livestock Feeds and First Aluminium. The entire proceeds from these sales would be used in purchasing AIICO. I called late friday afternoon, but couldn't get any detail on these transactions.

I have to say, it's quite hard giving the order to reduce my GTB and Presco holdings. When we talk about fundamentals being right, these companies are near the top of the pack. The future of both companies is definitely in the "black" from the short to medium term. But my current "market" behaviour is strictly driven by my goals and objectives! I am keen to play short term trades for this year as I believe the potentials are definitely huge. In another 3-5 years my strategy may be entirely different, and God willing I'll discuss this future plan with you.

So why did I sell UTC and Livestock Feeds? I'm I anticipating a fall in their prices or do I think they have gotten to their peak already? The answer is NO! I believe these stocks are still rising and may continue for some time to come. Selling these stocks for me was a big test. Before I bought these stocks I had a threshold selling target. This is a very important lesson we all have to learn when we choose the short term trading route. You need to set your taget and try and resist the temptation to hold for much longer than expected. I expected a 30-40% gain in these stocks over a month period. Livestock has done 46% while UTC has returned 77% (initially falling by -5% in 2-3 days) over the one month target. I just had to sell these stocks to be true to myself (it doesn't matter to me if tomorrow they do over 500% return).

Also, I have to say, what made the decision to sell now quite easy is the fact that my unit holdings were not so huge. So it was a perfect opportunity to test if I am only driven by money or by the overaching principle of goal setting. The next big test for me is if I can give an order to sell Equity Assurance(as at Friday, it has returned over 99% in a month!). I think I will give the order....i think!

So what about First Aluminium? Why sell some units of a stock you bought a few days before? Well, I bought some units early in January and this has returned 65%. I thought it necessary to sell some of these units. I still anticipate more price appreciation of this stock and thats why I still hold significant units of the stock.

So I have asked for AIICO...yes I did. This stock should easily do 40-50% in another month. Amongst many reasons, there is a huge demand for Insurance stock out there, and it just seems there is not enought to go round! Furthermore, AIICO did a public offer late last year, the price for this offer was an unbelievable steal(@N2.20 or something close...)! Ofcourse, I did not buy the public offer, because I'm losing patience with the certificate or no certificate drama, I'll rather pay premium on the secondary market and know I can take full ownership of my purchase in less than a week.

I'll let you know if my broker gets through with my purchase...otherwise, I have to come up with another stock...

Wishing you a lovely week ahead...enjoy!

NB: Does anyone know how to insert a table here or create a link for people to b eable to download a table I have created listing possible stock picks for the week/month...if you have any ideas, please let me know.

Linkage Assurance and First Aluminium - Would You?

I have been targeting NEM insurance and Premier Paints for over two weeks now. Everytime my broker returns unsuccessful. It has been quite frustrating monitoring these stocks from the very first time I placed the orders and see the price rising and yet couldn't find any to purchase. Its a classic case of losing "phantom" money. Anyway, I gave up chasing on these stocks and made a new order yesterday(Feb 5). I requested for Linkage Assurance and ordered for more units of First Aluminium. Fortunately, my broker came back successful.

The interesting thing about First Aluminium for me is that I have not seen their financials or made any detailed analysis of the company's stock. My decision to buy this stock(at least in the short term) is largely informed by a discussion I had with a colleague of mine in the gas supply business who had an opportunity to relate with the comapny sometime in the not too distant past. In the course of our five mins discussion, I was able to pick up "healthy" comments about the relationships and plans of the company. The final comment I heard that triggered my buy decision was that the business of Aluminium was profitable but the problem is....ofcourse...POWER! well, thats not new, even in my house, I have that problem, does it then mean I have weak fundamentals...LOL!

I am hoping somehow, I will be able to lay my hands on the financial reports of First Aluminium and then take my time to digest and analyse, but in the short term, my reading of market sentiments(which is somettimes more important than financial performance for short-term trading) favours an upward swing in the stock. we might experience some fits within the next week or two, but largely, I think the stock can make a 20-30% appreciation in the next 2-3 weeks...pray and hope I'm right!

For Linkage, well, I have been tracking that stock for a while now, and should say the price is not as low as when i started tracking it in January; though the option I chose over Linkage then was Equity Assurance which I bought. in the next ranking order was NEM, which as I mentioned earlier, I could not get. So Linkage came in thrid place. I anticipate more price appreciation of this stock at least enough to meet my short term growth projections.

If I will recommend another stock I wish to buy, I will say AIICO. I believe the price is very right at the moment(already moved from N3.43 to N4.15 i just 2 days?) and I anticipate it will race to over N6-N7 in another week or two. I'm not just sure how easy it will be to get in the market now.

ok guys...enjoy!

New Investing Strategy and Jan 2008 Stock Performance

One of the things I chose to do this year is to try and stop using just my “head” and begin to use the ‘pen”. This made me write down increased activity on the stock market as one of my objective for this year. I don’t intend to be sentimentally attached to any stock this year (I actually wrote it down…and also I need a wallet too…). Well, not to say I have been docile before now, but I was rather conservative in my approach. I always picked good stock, carefully analysing the value (seen and unseen) of a stock before making my choices. The choices always turn out right. But this year I chose to do something different, and my interim plan is to have it this way for another 3-5 years before revisiting my strategy again.

On many occasions in the past, I was never disturbed by volatility in the market (even though in most cases, it has been upward volatility for me). I buy a stock for medium to long term reasons. Whatever happens to the price of a stock, I just won’t sell a stock because I try to come in when the price is relatively low. However, upon review of last year’s performance, I didn’t do too badly (an average of 50% over my entire portfolio), but also found out missed opportunities. With the same money, I could have gotten far more returns if only I had adjusted my strategy a bit. I needed to make my “blood” flow faster than it does currently. I needed to hound my broker a lot more to buy and sell like a “proper” trader would.

So I commenced active trading in January this year, and the results have been quite impressive. I made a choice between income stocks and growth stocks. Some of the stocks I held were in the long term growth stocks but in the short to medium term were income stocks. Some other stocks I figured out were growth stocks both in the short to long term, but there is a caveat, they could be quite risky. I will be targeting only growth stocks for this year. I acted immediately on this strategy commencing in the 2nd week of January.

First thing I did was to sell my Nigerian Breweries and Union Bank shares. I had the Union Bank for over twelve months, while the Nigerian Breweries, I guess for over a year and a half, maybe even 2 years. Don’t get me wrong, I got decent returns on these stocks, but I considered I could do much more. So what did I buy? I went for Livestock Feeds and UTC. I considered these stocks to be appropriately priced and believed they could appreciate by at least 30-40% in a month’s time. Do you want to know the results? Two weeks after, Livestock had returned 43% while UTC clocked 40% returns by the last day of January (UTC initially returned -5% after 3 days before picking again). Confessions: I am yet to offload these stocks as I planned, but will definitely do so shortly (one thing I have prayed for is to have the discipline to sell when my set objective is met and take the next “big” decision.

A week after I sold the Nigerian Breweries and Union Bank, I took another bold step. I sold some units of UBA, GTB, Unilever, and my beloved Presco shares (and all my Crusader Shares). I instructed my broker to use the entire proceeds to buy…guess? Equity Assurance! It was such a divine choice. I had no access to any fundamental analysis to make this decision, but comparing the price of the stock vis-à-vis other stocks at that time, I told myself, this will definitely be a slam dunk! In less than a week, I was over 35% in value. As at yesterday (3 weeks after), it was over 60% in value. During the same time period, I also made a purchase of First Aluminium in the 3rd week of January, and by 1st week in February, it was 36% up in value. If you think I am excited, you are damn right!

I need to point out the basis of my excitement, its not the returns per se, it is the fact that I took a decision and immediately acted upon it, and the results are showing. I believe this will be the hallmark of my life this year and beyond: to make a decision, act on it and stand by it!

If you noticed from above, the stocks I picked in the last one month were quite peculiar. Well, the common parlance is to call them Penny Stocks, I won’t challenge that nomenclature, but I’m not popular with that usage. I’ll rather say my plan is to go after appropriately priced stocks that I believe have 20-40% growth potential in a 20-30 day period. I have asked God for wisdom to do this with excellent results this year; I believe he will help me.

Do you want to come on this journey with me? Some choices I make this year could scare you but something tells me we will have so much fun while doing this.

Enjoy…

NB: if you are interested in seeing the list of my Buy and Sold activity in January, leave a comment behind and include your email address. I am yet to figure out to load a table on this blog, and the picture quality when converted to Jpeg just didn't cut it.

Such a long time

How time flies! Its been over three months I last made a post. so much has happenend to me in this period. I have read some life changing books, dug deep into myself preparing and writing essays and in-between, had a wonderful holiday period. I know its stale and much belated, but all the same...happy new year!

I truly need to apologise to everyone who visited this site in the past months and met nothing new, it has been quite intense for me. I finally got through most of the stuff I'm involved with last friday and believe I'll be a lot more regular on this site going forward.

Interestingly, while all the activities and enggagement was going on around me, I never kept far from investing. I have a new strategy (and i already got some stunning results during the month of january) and approach to investing which I wil be sharing in my next post.

Its good to be back...

Enjoy!