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MY BEAR FORMULA
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the deal
#21 Posted : Thursday, July 21, 2011 10:00:53 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
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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lovely2010
#22 Posted : Thursday, July 21, 2011 10:11:38 PM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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Aguytrying
#23 Posted : Thursday, July 21, 2011 10:35:16 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
@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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lovely2010
#24 Posted : Thursday, July 21, 2011 10:39:43 PM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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Aguytrying
#25 Posted : Thursday, July 21, 2011 10:41:15 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
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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lovely2010
#26 Posted : Thursday, July 21, 2011 10:45:11 PM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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lovely2010
#27 Posted : Thursday, July 21, 2011 10:49:34 PM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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Cde Monomotapa
#28 Posted : Friday, July 22, 2011 5:26:19 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
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 smile
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Cde Monomotapa
#29 Posted : Friday, July 22, 2011 6:41:21 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
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 smile then we'll have even more pple to make rich off our activities...
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  | | Edit by user: Friday, July 22, 2011 7:03 AM | Reason: Not specified
mwekez@ji
#30 Posted : Friday, July 22, 2011 8:48:23 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
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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