Aug 192013
 

Earlier in the Spring I blogged about how undervalued commodity stocks were and hinted that it could be one of the best trading opportunities of the year 🙂 So I explained how I invested $2,000 into some stocks and plan to sell when I can make at least $1,000 in profit. Well earlier today I sold all those stocks, and made a $1,175 return, exceeding my goal (゜∀゜)dancing-tweetie-bird

April 19th 2013
Initial Investment: $2,000
Bought: 50 shares of  G.TO at $28.84 = $1442
Bought: 100 shares of  SLW.TO at $24.16 = $2416
Bought: 100 shares of  SU.TO at $28.205 = $2820.50
Total money spent buying stocks: $6,678.50
Had to borrow $4,678.50 on margin

Today, Monday, Aug 19th, 2013
Sold: 50 shares of  G.TO at $32.51$1625.50
Sold: 100 shares of  SLW.TO at $27.80$2780
Sold: 100 shares of  SU.TO at $35.325 = $3532.50
Total money acquired from selling stocks: $7,938
Dividends earned during swing trade period: $42

Gross profit: = $1,301.50

Expenses:
Commission: 6 trades x $9.99 = $59.94
Interest on $4,678.50 margin loan @4.25%/yr = $66.28
Total Expenses: $126.22

Net profit = Gross Profit – Expenses = $1,175.28 (59% return)

Another successful swing trade is in the can 😎 Woohoo! That was a fun one 😀 Let’s analyze… Continue reading »

Sep 132012
 

A few months ago I wrote an article about how oversold stocks have become so I started a swing trade with two of my favorite companies, Suncor and Silver Wheaton. Well if you follow me on the Twitter you may have seen my tweet earlier today when I sold both my holdings and made a 34% gain. Mission complete. This swing trade was a success.

When I first purchased these stocks I received a lot of positive feedback from readers…
“That’s awesome that you’re confident enough in your investing to take out a loan from the bank. ” ~Jeremy
“Awesome !!! Your $1000 is a coming :D” ~Amanda
“Very solid buys!” ~PC

Wow, with that kind of support how can this swing trade possibly go wrong? (^_~) Okay, details below.

Wed, Jun 6th, 2012. (my original post here)
Initial Investment: $3,000, from savings.
Leveraged up to $5,810 by borrowing the extra $2810 from TD bank on a line of credit at 5.25% interest rate.
Bought: 100 shares of  (SU.TO) at $29.02 = $2,902
Bought: 100 shares of  (SLW.TO) at $29.08 = $2,908
Total money spent buying stocks: $5810

Today, Thurs, Sept 13, 2012.
Sold: 100 shares of (SU.TO) at $32.93 = $3293
Sold: 100 shares of (SLW.TO) at $36.23= $3623
Total money earned from selling stocks: $6916

Difference: $1106

Expenses:
Interest on borrowed money: -$39.20
Commission: 4 trades x $9.99 = -$39.96

Net profit after expenses: $1026.84 (before taxes)

So after paying back the loan on my line of credit, and all associated costs I’m left with about $4027. Considering that I started with $3000 of my own money, a 34% return on investment isn’t too shabby. I could’ve made more money if I sold later in the day but when I started this swing trade I stated very clear that my goal was to make $1000. I’ve reached it and I’m happy with my results. I can’t lose money by making a profit after all.  I was too greedy in my previous swing trade (round 3) and held on too long >_< Not making that mistake again this time lol.

This strategy of buying high quality, industry leading, large capitalization stocks when markets are depressed, and then selling them when they go back up has worked for me 3 out of 3 times so far, maybe it’s beginner’s luck? Using leverage has also helped because for every 1 percent increase in the share price, my investment returns almost 2 percent :0)  My other strategy of timing the volatility index on the other hand, is failing miserably haha. But now I’m a better investor because I know what works for me, and what doesn’t.

Disclaimer: I’m not a professional anything. Trading stocks is very risky and I could’ve easily lost all my money had I been unlucky or something.

Jun 062012
 

The market is very over sold right now. Time for another swing trade :0) I know my other one is still ongoing and I’m losing some paper money on it but this time I’m certain I can make an easy $1,000 or more with a >80% certainty. This is the buying opportunity of the year. I don’t want to miss it.  I haven’t bought any stocks in awhile so I had quite a bit of savings. Earlier today I decided to buy 2 great companies and plunked down $3,000. But to make it more interesting, I’ve also borrowed about $2,810 more from the bank to buy even more stocks. Go big or go home I say.

Initial Investment: $3,000.
Leveraged up to $$5,810.

Suncor Energy Inc. (SU.TO)
Bought: $29.02 x 100 shares = $2,902

Silver Wheaton Corp. (SLW.TO)
Bought: $29.08 x 100 shares = $2,908

I didn’t buy them at their lowest point today but we’ll see what happens. My strategy is simple. Sell both stocks once I make $1,000 total. Or BUY MORE if falling oil and silver prices drag down commodity stocks lower by 10% or more. I can lower my average cost of buying and make a profit later on.

May 162012
 

When a bank says you’re over indebted it probably means you have too much debt and either have to change your lifestyle dramatically, or file for bankruptcy. Lately there’s been a lot of news coverage about the European debt crisis. I’m going to try and explain what it is and how it will affect us. In some European countries like Germany people work hard, the economy grows, and the government lives within its means. But then other countries like Greece have tax evasion problems, citizens are opposed to austerity, and the government has to overspend to keep the population happy and the economy running. Chart below is from last year.

image source: money.cnn.com

It shows that anyone could have lent money to Greece in 2011 and get paid over 20% interest every year over the next 10 years. But when something looks too good to be true, it probably is. Because earlier this year, Greek defaulted and couldn’t pay their lenders the promised amount, and investors lost half of their initial investments. Greece basically went through a mild version of a bankruptcy. Today strong European countries are still financially supporting the weaker ones. Tax payer’s dollars, or rather Euros, from Germany are being lent to heavily indebted countries like Greece and Ireland. But voters in Germany are getting tired of doing this. It’s like equalization payments in Canada, except instead of a direct payment, these transfers are just “loans” for now which may, or may not be paid back later.

Unfortunately the solution isn’t as simple as kicking Greece out of the Eurozone altogether. If they completely default and leave, then their old debts will just move around to other countries and not really solve anything. It’s like if I borrow $100 from my friends and spend it all, then file for bankruptcy and don’t pay them back, then my balance will still be zero. But it’s my friends who actually lost $100 in the end. In Greece’s case they’ve already borrowed hundreds of billions of Euros from surrounding countries. Is it fair for German tax payers to foot the bill because leaders in Greece failed to properly run their own country? Leaving the Euro zone won’t be ideal for Greece either because without ongoing loans from Germany how would they continue to pay for government services like education? It would be a massive blow to their economy and standard of living if they leave.

Global financial markets are very interconnected, and investors are worried this European debt will spread around the world. If Greece goes bankrupt entirely then bond rates in Germany will rise, slowing down their growth. Companies in the US and China with exposure to Germany will also slow down. For normal citizens like us though, it probably means we’ll see stagnating wages and lower economic demand for the near term.

But not all is bad news >^_^< This is probably one of the best stock buying opportunities of the year. Look at names like Silver Wheaton, Magna International, and Suncor. They are trading so cheap. These are top quality companies that are growing their profits. The only reason their stock price is down is because of P/E compression, which is a market sentiment, not company specific. I’m going buy some of these names soon because when the economy gets back to normal these stocks will be the winners. I’m just waiting for the TSX to turn around right now, but so far it doesn’t look like we have hit a bottom yet.

Jan 192012
 

Roughly a month ago I wrote about how cheap some companies were trading in North America, like Silver Wheaton and Halliburton Co. And there was a 75% chance that the stock market will move up in the short term based on my unique analysis of how much people were saving. So I started another swing trade and hoped to make a profit in the months to come, just like before.
Reasoning behind my timing
Reasoning behind my stock choices

Well earlier this morning, I sold both my holdings and due to leverage, made 19% return on my investment, or $380. Details below…

Dec 17th 2011
Starting Cash: $2000 ($1000 CAD + $1000 USD)
BUY (SLW.TO)   $29.76 x 66 shares = $1964.16 CAD (Only had $1000 so borrowed the remaining $964.16 on a line of credit)
BUY (HAL.NE)   $31.60 x 63 shares = $1990.80 USD (similarly borrowed $990.80 on a line of credit)
Final Cash: $0
Owes Bank: $1954.96 CAD/USD mixed currency

Jan 19th 2012
Starting Cash: $0
SOLD (SLW.TO)  $31.72 x 66 shares = $2093.52 CAD ( $129.36 gain)
SOLD (HAL.NE)  $36.38 x 63 shares = $2291.94 USD ( $301.14 gain)
Final Cash: $4385.46 combined
Still Owes Bank: $1954.96

After paying back the initial bank loan ($1954.96), plus interest ($9.60), plus trade commissions ($39.96), I’m left with $2380.94.
$2380.94 – $2000.00 = $380.94 profit.

I shouldn’t combine currencies like that, but I’m lazy and since we’re basically at parity it shouldn’t make a huge difference anyway. I sold because I had to follow my initial exit strategy. I wrote last month that I would sell if either stock rose by 10 to 15%, and Halliburton past 15% today. It’s important to have a plan before you buy and stick with it so you don’t let greed and emotions dictate your actions later on. I used Halliburton (HAL.NE) for my first swing trade as well but it under-performed back then. This time however it did exceptionally well. You never know with these things so that’s why I usually buy 2 stocks at a time, to mitigate the risks. Maybe both these stocks will go up another 10% next month, but I’m happy with my results and will wait for another opportunity in the future.
Some people say you can’t time the market, but I think they just haven’t found the right strategy yet. I think history tells us that there are some relationships between the charts that I mention on this site and how they affect the stock market. Certainly not 100% correlated, but even if it’s 60%, 70%, or 80% then that’s still better than randomly guessing. Swing trading can be fun, but also very risky, especially if you borrow to trade.