Tim Hale - Smarter Investing

learning_every_day

Thank you all for your replies

I'm struggling to get multi-quote to work so I will provide a general response.

Based on the opinions of contributers to this post I think I will read the book Smarter Investing but keep your comments in mind whilst reading. It will give me a good overview by the sounds of it - to be followed by continuous learning...

After buying Red Emporer Resources (RMP) on a 'tip' from a work colleague almost at its peak (I wish I hadn't) I soon realised that its very easy to loose money. It was a stupid thing to do but I've learned from it.

I have set up virtual portfolios before on bullbearings but because it wasn't real money I didn't take it seriously.

Talking of real money - me and my girlfriend are living overseas at the moment and saving hard.

We are hoping to return to UK with our savings pot, ready to 'put it to work'.

I've been thinking of investing in property or shares for a while now.

After reading The Naked Trader (this next bit may sound silly and make you chuckle!) I really fancy myself as a trader/medium term investor - giving up work and giving it a go for a year or two.

The book makes it sound a lot easier than it is I'm sure - and picking the winners and being sure to cut losses at the right time has got to be hard. But, something is drawing me to the idea. Maybe it's the thought of being able to leave my profession which I don't enjoy and concentrating fully on a new venture.

Having said that, we won't have anywhere near 6 figures saved, and I don't know how tolerant I will be to risk when it comes down to it.

The thought of 'wasting' or loosing our hard saved money doesn't sit comfortably.

I guess (sorry about my ramblings) I want to have my cake and eat it?

Long term investment makes sense but doesn't really excite me (I know compounding should - and it's all about time IN the market') but trading medium term appeals to me much more.

Perhaps I need to stop typing and start reading! Followed by some target setting with the other half

gadgetmind

Glen_Clark wrote: »

Cash may have been the best place to be?

Over what period and when compared to which other assets? Then try again over a much larger set of periods, model for rebalancing and drip-feeding of funds, and allow for inflation.

Only by choosing your test period with great care will you find cash doing better than a balanced portfolio of different asset classes.

brasso

learning_every_day wrote: »

Thank you all for your replies
Long term investment makes sense but doesn't really excite me (I know compounding should - and it's all about time IN the market') but trading medium term appeals to me much more.

There's your choice right there.

That Naked Trader book has a lot to answer for. I admire the entrepreneurial skills of the bloke who wrote it, but I dislike his modus operandum. He is selling the dream, and many people are eager to buy it. The same people are suckered by "Rich Dad, Poor Dad" and The 4 Hour Week" and all that stuff.

If you have enough money you can follow different trading strategies which might entertain you enough. I do that to some extent myself. But my experience is that the passive approach is very likely to win out in the end. Trading will give you plenty of 'excitement' just like living in a crime-ridden neighbourhood might be considered exciting compared with somewhere quiet and safe.

Glen_Clark

gadgetmind wrote: »

Over what period and when compared to which other assets? Then try again over a much larger set of periods, model for rebalancing and drip-feeding of funds, and allow for inflation.

Only by choosing your test period with great care will you find cash doing better than a balanced portfolio of different asset classes.

True.
What I meant was that, without money printing, cash would have been better than shares or property over the last 4 years.
Money printing on this scale has changed everything, we are in uncharted waters, and Tim Hale wouldn't have seen it when he wrote the book.

bowlhead99

learning_every_day wrote: »

After reading The Naked Trader (this next bit may sound silly and make you chuckle!) I really fancy myself as a trader/medium term investor - giving up work and giving it a go for a year or two.

The book makes it sound a lot easier than it is I'm sure - and picking the winners and being sure to cut losses at the right time has got to be hard. But, something is drawing me to the idea. Maybe it's the thought of being able to leave my profession which I don't enjoy and concentrating fully on a new venture.

Having said that, we won't have anywhere near 6 figures saved, and I don't know how tolerant I will be to risk when it comes down to it.

The thought of 'wasting' or loosing our hard saved money doesn't sit comfortably.

I guess (sorry about my ramblings) I want to have my cake and eat it?

Long term investment makes sense but doesn't really excite me (I know compounding should - and it's all about time IN the market') but trading medium term appeals to me much more.

To be honest, it sounds like a nice fantasy. I'd certainly like to have enough liquid capital to generate meaningful amounts from working for myself as a trader. Or even working for someone else where all I can lose is my career prospects and not my own cash. Of course, when I was a small child and didn't know that share trading existed, I might have liked to be a spaceman or a footballer...

There are certainly people on these forums who live off their investments (or have a meaningful side income from them), whether they are retirement age or not and whether the investments are actively managed or not.

But if you consider people who work in the City as traders or investment managers for a living - they might have professional investment qualifications, they might have 10+ years of 50 hours a week practical experience. If they quit and work on their own sizeable portfolio, they might make enough in a year to make an annual salary out of it, or better. Or, they might have a bad year and lose several annual salaries out of it.

Say they get half way through the year and they've lost 80% of an annual average salary. They could keep going and make back a full annual salary from that point, still ending up with only 20% of an annual salary to live on for the year. Or they could keep going and lose another 200% of their annual salary, severely limiting their capital and therefore the trading prospects going forward, and writing off years of conventional earnings from their earlier professional career. Or they could realise the enormity of the risks and give up and get a proper job!

Clearly the people writing books about it, saying it can be done, are going to be the majority of books you can buy, and they are going to be the more inspirational ones and appear higher in the bestsellers lists. If Robbie Burns had lost his life savings he would likely not have been able to generate the same interest in a 'how not to do it'' series of internet articles, seminars, and books. So there is bias to what you can read.

You might not be planning on trying to earn an annual salary from sharetrading. Perhaps just a 10% supplement on the side. But the logic is the same - you could easily lose 50-100%+ while trying to make 10%.

Remember your competition is trading computers financed by large institutions which can buy a share and sell it again in the same second. Good luck pondering over a trading purchase which you took the day off your real job to be able to monitor a screen and execute, and which ends up losing you money rather than compensating you for the day off a real job in the real world.

Yorkie1

According to Amazon, a new version of the Tim Hale book is to be released later this year.

Money-Saving-King

gadgetmind wrote: »

It says nothing of the sort. Either you haven't read it, or you read it and completely failed to understand it.

Been a while since I read it but I remember it recommending passive management over active basically meaning go for trackers. OK it didn't say go for FTSE but he really banged on about passive investing.

sabretoothtigger

After buying Red Emporer Resources (RMP) on a 'tip' from a work colleague almost at its peak (I wish I hadn't) I soon realised that its very easy to loose money. It was a stupid thing to do but I've learned from it.

I havent read the rest but I know that stock, it is super extreme but the basic company isnt broke.
Its not profitable either, we are talking Somalia tribal oil license exploration.



Super dam risky, we hear of pirates holding hostages all the time and this is not much different. It is tribal society so you cant blame them all but its the same locale.
Its near the same class as a lottery ticket, so my main point is frame of reference.
Its not that RMP is bad, these guys are not dishonest but risk vs reward was gigantic on this and still is. The oil still could be found, pure drillers are always risky wherever they are

They also 'operate' in Georgia, who was in conflict with Russia a couple years back and so on


My fav one of this type is Heritage oil and this is discussed by Questor who I assume does good research. Very good risk/reward but still operating in Nigeria and subject to possible terrorism, etc

Books to read would be asset allocation ? dont mix invest with gamble if possible, hoil isnt working a profit either but very likely the assets exceed share value disregarding future revenue profit


One forumite suggested we ban all discussion of this heinous risk. As if you can avoid exposure by hiding it.
Thats rubbish also, you fill your car with oil derivatives every day so sorry you are involved in this process and petrol is likely gong to 200p a litre far too soon to not be concerned.
Some people love nanny state but this is best done by private capitalism with eyes wide open

But I wonder how relevant a four year old book can be to the current situation where convential economics has been turned upside down by astronomical money printing. Without that, share prices would have fallen and we would have had deflation. Cash may have been the best place to be?

Nope, I disagree see my sig
Benjamin Graham book is over 60 years old and is probably better still then this one. Some things really dont change that much.
Money has always been debased by those with the power over the people who have to use it
If you dont like sterling, measure your stocks in australian dollars or whatever you prefer. Its the same difference, many companies quote a price in multiple currencies anyway so sterling doesnt preclude ideas really.
The tail can wag the dog is the hope of many in power but I think most dogs will bite me if Im not very careful :laugh:

gadgetmind

sabretoothtigger wrote: »

Nope, I disagree see my sig
Benjamin Graham book is over 60 years old and is probably better still then this one. Some things really dont change that much.

Bernstein's "The Intelligent Asset Allocator" is also rather long in the tooth but no less relevant because of this. In fact, it's always interesting to read very old investment books to understand exactly why you need to hold different asset classes and why cash needs to be treated with caution.

learning_every_day

brasso wrote: »

There's your choice right there.

That Naked Trader book has a lot to answer for. I admire the entrepreneurial skills of the bloke who wrote it, but I dislike his modus operandum. He is selling the dream, and many people are eager to buy it. The same people are suckered by "Rich Dad, Poor Dad" and The 4 Hour Week" and all that stuff.

If you have enough money you can follow different trading strategies which might entertain you enough. I do that to some extent myself. But my experience is that the passive approach is very likely to win out in the end. Trading will give you plenty of 'excitement' just like living in a crime-ridden neighbourhood might be considered exciting compared with somewhere quiet and safe.

You're spot on there. The dream sounds great but in my gut I know that I should be investing over trading.

Would you be happy to give me some examples of different trading strategies you use?