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MY BEAR FORMULA
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lovely2010
#31 Posted : Friday, July 22, 2011 9:03:10 AM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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lovely2010
#32 Posted : Friday, July 22, 2011 9:20:53 AM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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FUNKY
#33 Posted : Friday, July 22, 2011 9:29:09 AM
Rank: Veteran

Joined: 4/30/2010
Posts: 1,635
You are right on the above lovely.
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Aguytrying
#34 Posted : Friday, July 22, 2011 9:34:55 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
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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vestor
#35 Posted : Friday, July 22, 2011 9:44:59 AM
Rank: Member

Joined: 11/9/2010
Posts: 132
@ 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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Cde Monomotapa
#36 Posted : Friday, July 22, 2011 9:52:57 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
And what happens the stock maintains like @scan.
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Aguytrying
#37 Posted : Friday, July 22, 2011 10:08:42 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
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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Cde Monomotapa
#38 Posted : Friday, July 22, 2011 10:17:16 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
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 smile
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lovely2010
#39 Posted : Friday, July 22, 2011 10:28:54 AM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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lovely2010
#40 Posted : Friday, July 22, 2011 10:37:00 AM
Rank: Member

Joined: 10/25/2010
Posts: 519
Location: nairobi
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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