Archive for April, 2009

On the last article Simon Grifin from Share magazine has recommended to sell the FTSE 100 at 3950. He called the latest rally as typical bear rally or in other words false rally. By the time I was reading his article the FTSE 100 was around 4100 and the Dax was 4650. Then came Friday and markets continue to move up around 0.5%

All of these put my Dax 4000 Put for May call value on the lowest you can imagine (6 points when I bought it for 36). This wasn’t good. I was speaking with my friend that holds the same positions and both of us agreed that the market is almost on its peak and the only way is down.

So we checked to buy the Dax 4400 Put for May. The price was 66 around 17:00. I though that if the Dow will finish on high note then the option will be worth 60 or less and I will buy it. But I forgot to check. You know Friday evening is not the best time to deal.

Anyway it touched 62 and the weekend has started. A new week and the markets again see red. The Dax lost 190 points in one day. This means two things:

1) My 4000 Put worth 34 now (300% in one day)

2) 4400 put that I didn’t buy worth around 125 (100% in one day)

All I can do is blame myself. I knew that the market will go down but combination of tiredness and fear of losing more prevented me to take a huge profit. Another painful lesson has been learned.

This is the hardest question ever. Let’s say you have a share that has done 20% in less than a month. You think this is a nice profit I should bank it. But on the other hand you don’t want to be the fool that sells the share moment before it takes off.

On Dec 10 I’ve bought Petrofac at 319. On Jan 05 the share price was 380 and I thought it is a good time to sell. After all almost 20% in a month is not bad. I was wrong. Look at the price now 591! almost double from where I bought it.

So what happened? I didn’t do my research right. To be honest I bought it through a tip (a good one I have to say) but I didn’t check the company and I didn’t know much about it. This is a big mistake. You should always know everything you can about share you want to buy or have. Then you can judge by yourself if the share can gain more or reached the peek.

It is a good lesson to learn. With Dana Petroleum I did my research and although I have 20% profit I am still holding the share because I think it has more into it.

I have to admit that I am most of the time impressed with Simon Grifin the technical analyst of Share Magazine. Most of the time he is spot on and gives really good tips. He is not always win, but no one can always win and it is fine. What important is that he wins more than he lose, and he always provide a stop loss, so for the long term he is on the winning side.

This is all good and he is the first that I read on the magazine but… he writes his articles on Monday. I get it to my mail box on Thursday. In this crazy market it is like life time. Like today he recommended to buy two shares and both of them were up by 50% since Monday!!! so it was a very good tip, but when I read it, it was too late and I missed the train.

Now Share magazine can claim rightly that they need to send the copy to print and then send it by post and this takes time. All of this is true but… hello this is 2009! have you heard about the Internet? where you can publish the magazine on the same day you write it? and if you don’t want to publish it online, just send the tips by email to subscriber, so the tips will be relevant (for good and bad)…

but all in all it is a good magazine!

and not even one word about my Dax put…

Hello all,

I have bought today a put option on the Dax. Why the Dax? The FTSE 100 didn’t jump as high as the German one or the Dow. While the Dow jumped from 6500 to 8000, and the Dax from 3600 to 4500, the FTSE was much more solid and jumped from 3500 to 4000.

So if I am right and the market will change direction, my logic says that the FTSE will slide slower than the other two. So I left with 2 options. The Dow options seem to me expensive so I’ve decided to choose the German index.

Bought it for 36.3. The lowest price today was 30 but I missed the bottom. I guess you can’t catch the bottom. So I have 4.5 weeks and my target is to double the money. I will keep you updated.

Hi all!

I am not that impressed with the last rally. It is nice to see the market changing direction, but I don’t think that this is the end of the bad period. But I do think that the rally will continue for one or two days depends on the Goldman Sachs results tomorrow. If I am right then I will buy a put option on the FTSE 100 and maybe on the Dow Jones as well.

So I am looking to buy the PUT 3750 for May. I think by Tuesday it should be cheap enough. The nice thing about options is that you know how much you can loss. In fact every time that I buy one I consider it as ‘lost money’ and I am always looking to double my investment. Sometimes it works, sometimes not, but I have more than 50% success which is enough