So here are then, it's nearly the end of another year that has flown past in the blink of an eye! It's been a year of the celebrity death, and whilst there are just over 24 hours to go still, are any celebs still safe?!
We've had quite a bit of change this year in the Crap Trader household, in that the household moved to a new town/county. We made the perilous journey from north Staffordshire, across the border to south Cheshire where we've settled in very nicely indeed! However it's been one of those years where we have been crazy busy, but don't appear to have done much? We've just been doing a lot of 'stuff'.
Please note I am not tipping any shares and would seriously encourage anyone reading this to carry out thorough research on any company they are thinking of buying.
I wanted to write this post to carry out a bit of a review of my years dealings, lessons learned etc. So here we go, as I haven't actually traded that much this year, it shouldn't drag on for too long so bare with me!
Best Trades of the Year
I'll start with the positive stuff as that's easier to deal with! There are two particular trades which stick out immediately, the first one would easily be BooHoo (BOO). Whilst this is appearing in my Best Trades section, it could quite easily fall into the worst section also. I'll try to explain a bit more now... I bought this at the end of May at around 52p, it just kept gaining and gaining up to around 85p. However it seemed to drop sharply which caused me to get the jitters a bit, and I sold at just under 79p thus giving me a healthy profit of around 50%. However (a fancy 'but'), it has continued to surge and as it stands today, is around 135p to sell so there's definitely a lesson to learn from that which I'll go over later.
My second 'best' trade of the year is one I'm still holding and that is Berkeley Energia (BKY). As we stand at close today, I am currently sat with a paper profit of 40% having bought this in early July at a fraction under 38p. I've spoken about this quite a bit in my recent posts but the potential upside from here is still very attractive and as things stand I am in no hurry to reach for the sell button.
Worst Trades of the Year
Without question the worst trade of the year, and indeed biggest mistake made was with the Quantum (QP.). Having bought this at 72.5p and seeing it rise to the low 90's, I made the fatal error of going on holiday to a completely different timezone without having any kind of stop loss in place. One lazy afternoon by the pool in Bali while supping the drinks back I absent mindedly just checked the markets to see if anything was going on to be greeted with a 50% drop on this share. I immediately sold having read the half year report and seeing the words which sends shivers down any traders spine, "the Board now expects performance will be materially below market expectations". What a shitter! I mean, what numpty would go on holiday without putting any stop losses on a volatile pharma company?!
This is closely followed by another shitter of a share and that is Management Resource Services (MRS). This is currently suspended thus disabling me from doing anything other than reading the RNS' be released as the board try to get to the bottom of whatever funny business it's former CEO was up to with the companies books. It certainly doesn't look good and as mentioned in an earlier post, I've pretty much written off any funds in this as a costly mistake.
The trades you see on these pages are from two accounts I currently trade with. That's an ISA, and a SIPP. However the only holding in my ISA MRS which, as mentioned above, is currently suspended. Therefore I'm unable to give you any figures here as there's so little in it.
It is however a bit different with my SIPP... I started trading with this account in May of this year (2016), and as we stand as the close of the markets today the valuation of this account is up by 9.2% which I'm actually quite pleased about for just over 7 months work. Especially factoring in the Quantum farce! It may not look like a huge increase, but if you can consistantly make 10% a year, in just over 7 years you will have doubled your original investment which is certainly not a figure to be sniffed at. I always remind myself of the famous Warren Buffet quote when I think I want to be making more money quicker... "The stock market is a device for transferring money from the impatient, to the patient".
As you can see I've made a few mistakes this year, but I am glad I've made them to be honest as they are mostly school boy errors that could have easily been avoided and each time they have refocused me and made me more determined not to do the same again.
Firstly there's the stop loss. Stop loss, stop loss, stop loss. I know some people don't like to use them, and prefer to use any drops as opportunities to top up, or average down as they say. However I like to keep things as simple and emotionless as possible (I'm also not clever enough to know when is good to average down!!). I just think that there will always be other shares which could make you money while your original holding could otherwise continue to drop.
Second lesson I learned is to never, ever buy a share off the recommendation from someone on a forum, or Twitter, or anywhere really, without doing thorough research and investigation. Always, always try to look for the negatives with a company you are thinking of buying into. There are too many people out there who are looking to hook people into shocking shares because it has risen rapidly in a very short space of time. These are usually penny stocks that shift up 70% in the blink of an eye, then drop 90% even quicker. Or companies which are on the verge of created the next big thing. Avoid anything like this like the plague in my experience!!
Lastly, and I feel this is possibly more important than the other two, is knowing when to let profits run. You saw above my comments regarding BooHoo and how since I sold it has continued it's tremendous run northwards. I think it's essential that you have a plan of what you are going to do with a share not only when it drops, but also when it climbs. I'll be looking to review any share which shows good gains and feel I really need to have more confidence in myself to stick with a good climber and let the profits run. Wether that is by simply leaving it alone, or wether I will take some profit (top slice) with my holding. This is something I still need to get better at, and will definitely be reading more on the subject.
So there we go, I've tried to not go into too much detail but hopefully it's given you a bit of an insite into my year (or 7 odd months) in the markets and see what I've done right, and more importantly, what I've done wrong!
Until next year...
Confessions of a Crap Trader is a blog following a regular investor trying to make profit via the London Stock Exchange. Follow his journey as he attempts to hopefully one day pay his mortgage off in full!