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MY BEAR FORMULA
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Bears are brutal...you wake up everyday and watch that share fall..2007/08 during PEV I was almost cleaned out...in fact I took a 9 month break from the NSE only to return in 2009 when the market was picking up..lesson I learned always guard your capital...money lost...money you might never recover again.
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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the deal wrote:Bears are brutal...you wake up everyday and watch that share fall..2007/08 during PEV I was almost cleaned out...in fact I took a 9 month break from the NSE only to return in 2009 when the market was picking up..lesson I learned always guard your capital...money lost...money you might never recover again. Thanks for your comment. The market can be a living hell but we never get out. Let me post my second formula...I call it splitting down...it is much better than the first one.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@lovely. I understand your formula. Funny enough, after months of though, i realised how im going to go through, this yr and next. Its quite similar to yours. I choose long term companies, that i want to invest in. Blue chips, or strong fundamentals. I buy during the downturns. And whenever the market recovers, i wait and sell at around 10 percent or thereabouts. And hold the cash, until the market drops again and i get another buying opportunity. My formula predicts that the stock market will rise and fall on the way down. Incase i buy and the share doesn't gain by around ten percent, i'll happily lock my self in till the market recover after 2012. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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I will use mumias again as an example.
I will consider you are very desperate when you were rebuying and you were driven by pure emotion...
7000 shares*13=19000*2.1/100=1911
91000-1911=89089/13=6853 shares
omit the odd 3 for any occurance
You sold the shares @Ksh 8
6850*8=54800*2.1/100=1150
54800-1150=53649
Loss 91000-53649=37351
Assume you want to split the money 6 times so that you can buy @ Ksh. 1,2,3,4,5,6, and you will be selling @ Ksh 6 coz you were too desperate
53649/6slits=Ksh 8941 per split
8941*2.1/100=187.7
8941-187.7=8753
8753/6=1458 shares
8753/5=1750 shares
8753/4=2188 shares
8753/3=2917 shares
8753/2=4376 shares
8753/1=8753 shares
1458+1750+2188+2917+4376+8753=21438 shares
Lets say the share hits Ksh 6 and you are desperate. You decide to sell them @ Ksh 6
21438*6=128628*2.1/100=2701
128628-2701=125926
125926 is what you'll get after selling @ 6 bob
remember from 13 to 8 to 6
125926-91000=34926
Loss already recovered and extra 34926 made
End of formula 2
Next we will see how to avoid settlement period
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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About buying and selling everyday. I get it! I did it with bonus shares iam yet to recieve from jubilee. I sold the shares i had, equivalent to what i was going to recieve as bonus shares. So when i get the bonus shares, i'll just keep them. But you've opened my eyes that it can be done in the normal market. Hadn't thought about it. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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Aguytrying wrote:@lovely. I understand your formula. Funny enough, after months of though, i realised how im going to go through, this yr and next. Its quite similar to yours. I choose long term companies, that i want to invest in. Blue chips, or strong fundamentals. I buy during the downturns. And whenever the market recovers, i wait and sell at around 10 percent or thereabouts. And hold the cash, until the market drops again and i get another buying opportunity. My formula predicts that the stock market will rise and fall on the way down. Incase i buy and the share doesn't gain by around ten percent, i'll happily lock my self in till the market recover after 2012. What I have realized about this formula, it also works well if you just decide to be keen on daily demand and supply...or other fundamentals if you dont have the time...
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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Aguytrying wrote:About buying and selling everyday. I get it! I did it with bonus shares iam yet to recieve from jubilee. I sold the shares i had, equivalent to what i was going to recieve as bonus shares. So when i get the bonus shares, i'll just keep them. But you've opened my eyes that it can be done in the normal market. Hadn't thought about it. I use that formula most of the time...but let me work on it and I post it here on normal shares.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Generally, under our tax law is that there are no capital gain taxes on shares. Nevertheless, using this formula appears to have alot of turnover within a year (so does speculative trading). Thus, tax law strictly applied such activities (short term) will be construed as income generation & not capital gain. So as an individual or a corporate, personal income or turnover taxes should attract respectively. This is the law but not the practise in Kenya but the law has a way of catching up...like those buildings demolished on road reserves and public land. A low turnover portfolio (1yr+ to qualify as long-term) is ideal and averaging down with new capital (when available)... Pick good companies & stick around 
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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But nothing to worry about though...what will happen probably later is a component of capital gain tax and or VAT will be included into the commisions then we'll have even more pple to make rich off our activities...
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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lovely2010 wrote:
End of formula 2
Next we will see how to avoid settlement period
Formula 1 and 2 are being used by a number of traders. I would call that 'just trading', and the biggest challenge is figuring out the next share price direction. TA and Fundamental analysis do assist but reading market sentiments is not easy. Irrational market sentiments at times mess a traders position Avoiding settlement period; that will be new. Am waiting
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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Im sure we all use these formulas but some of us dont realise they are doing it. They see their portofolio growing but they dont put so much thought into it. Especially if you never go for those cheques after selling, you will see great improvement...I never use my share money, it stays at the broker, and if I get dividend, I send it all there...
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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My third formula is escaping settlement period. I will use three examples:
1 Bonus shares
2 While averaging down
3 My short selling formula
These formulas make more sense when doing it practically than me putting them down here.
1 Bonus share
With bonus share I use what Aguytrying did but I will use example of icdc coz books are being closed today.
Lets say you have 2900 shares of icdc and you want the bonus. Since the ratio is 1:10 you'll get 290 bonus shares. Why not sell 290 from the existing shares @ a good price before book closure. You could have sold them last week or today coz Im sure come Monday, things wont be rosy for this counter. 200 you'll sell them as normal shares 90 as odd shares. Im very sure by the time they post those bonus to our cds plus 3 days settlement period, we will be below price of 20. Tell me what you think.
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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You are right on the above lovely.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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lovely2010 wrote:My third formula is escaping settlement period. I will use three examples:
1 Bonus shares
2 While averaging down
3 My short selling formula
These formulas make more sense when doing it practically than me putting them down here.
1 Bonus share
With bonus share I use what Aguytrying did but I will use example of icdc coz books are being closed today.
Lets say you have 2900 shares of icdc and you want the bonus. Since the ratio is 1:10 you'll get 290 bonus shares. Why not sell 290 from the existing shares @ a good price before book closure. You could have sold them last week or today coz Im sure come Monday, things wont be rosy for this counter. 200 you'll sell them as normal shares 90 as odd shares. Im very sure by the time they post those bonus to our cds plus 3 days settlement period, we will be below price of 20. Tell me what you think.
very true.shares really come down afer bonus issues, take a look at jubilee. So its wise to sell either before book closure or immediately after. but better price before and decreasing thereafter after book closure. further more, bonus shares take forever to credited and by the time that happens the share will be so so down. look at pan africa. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 11/9/2010 Posts: 132
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@ Lovely, in your bonus formula, you will sell before closing date and therefore these shares will not attract bonus shares. What I was thinking is that you sell the shares and give yourself bonus shares by buying more share with the proceeds when the price drops, you can end up getting more bonus shares than what the company gives. e.g if the company gives 10% bonus, you sell before closure date and after the price drops, it may drop by more than 10 %, then you buy again. In theory you will get extra bonus shares.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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And what happens the stock maintains like @scan.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Cde Monomotapa wrote:And what happens the stock maintains like @scan. scan was at 60-65 before book closure. if one sold immediately after one could have gotten a price of 60-58. by the time the bonus shares are in the market the stock will be at 50. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Aguytrying wrote:Cde Monomotapa wrote:And what happens the stock maintains like @scan. scan was at 60-65 before book closure. if one sold immediately after one could have gotten a price of 60-58. by the time the bonus shares are in the market the stock will be at 50. Aaah ok...the calculations of a 16.5% drop less 4% comish make it worth the effort. Alright
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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vestor wrote:@ Lovely, in your bonus formula, you will sell before closing date and therefore these shares will not attract bonus shares. What I was thinking is that you sell the shares and give yourself bonus shares by buying more share with the proceeds when the price drops, you can end up getting more bonus shares than what the company gives. e.g if the company gives 10% bonus, you sell before closure date and after the price drops, it may drop by more than 10 %, then you buy again. In theory you will get extra bonus shares.
You are right by the way...I had a wrong calculation, you make sense, point taken. But there is a possibility of selling @ a good price lets say on coming monday. If you sell on Monday and not Friday you are guaranteed a bonus and the prices wont be so bad compared if you wait longer. What do you think?
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Rank: Member Joined: 10/25/2010 Posts: 519 Location: nairobi
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lovely2010 wrote:My third formula is escaping settlement period. I will use three examples:
1 Bonus shares
2 While averaging down
3 My short selling formula
These formulas make more sense when doing it practically than me putting them down here.
1 Bonus share
With bonus share I use what Aguytrying did but I will use example of icdc coz books are being closed today.
Lets say you have 2900 shares of icdc and you want the bonus. Since the ratio is 1:10 you'll get 290 bonus shares. Why not sell 290 from the existing shares @ a good price before book closure. You could have sold them last week or today coz Im sure come Monday, things wont be rosy for this counter. 200 you'll sell them as normal shares 90 as odd shares. Im very sure by the time they post those bonus to our cds plus 3 days settlement period, we will be below price of 20. Tell me what you think.
Guys, let me correct myself on this...thanks to @vestor. I think it will make more sense to sell the 290 shares on Monday than Friday, coz if you sell them on Friday you will not get the bonus share. But further waiting past Monday, things might get worse.
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