Am I making a mistake by delaying investing?

tg99

fairleads wrote: »

September is a quarterly reporting/accounting period for unit trust funds in which case we could have a mini top around month end.

I will be looking to sell all my investments then on 1 October as I'm sure there is extensive and concrete evidence that markets usually have mini tops at quarter-end points. I'm glad that all the institutional / hedge funds etc have not spotted this and arbitraged away the opportunity either.

fairleads

EdGasket wrote: »

Come on fairleads there are plenty of shares out there; surely your 'tools' can give a sell or buy for at least one of them?

I'll stick my neck out and put a Buy on UAI at 181p with at least a 10% gain target and a Sell on ASHM at 355p target 300p.

Ed
They're not my tools, they are on the Yahoo finance web
However, fwiw
UAI is not a buy for me.
ASHM looks promising but i would wait a day or so until the tools confirm a definite buy signal, or not as the case maybe.

fairleads

tg99 wrote: »

I will be looking to sell all my investments then on 1 October as I'm sure there is extensive and concrete evidence that markets usually have mini tops at quarter-end points. I'm glad that all the institutional / hedge funds etc have not spotted this and arbitraged away the opportunity either.

Obviously you do not know the reasoning, or understand, why the market has a tendency for moving up at the end of a reporting/accounting quarter, however, providing the market does start running higher towards month end then you could be onto a winner. Or not as the case may be.

coastline

fairleads wrote: »

Ed
They're not my tools, they are on the Yahoo finance web
However, fwiw
UAI is not a buy for me.
ASHM looks promising but i would wait a day or so until the tools confirm a definite buy signal, or not as the case maybe.

Guessing here so in the case of ASHM the chart is showing a decent rising trend since Jan 2016.If a lower indicator was applied such as the Slow Stochastic you would be waiting until it began to turn back up again ?

https://uk.finance.yahoo.com/q/ta?s=ASHM.L&t=1y&l=on&z=l&q=l&p=&a=ss&c=

In the case of UAI we have a falling trend although since early July its showing signs of some recovery with a flow of higher lows and higher highs.? Stochastics are showing short term overbought so we could be in for some consolidation. ?

https://uk.finance.yahoo.com/q/ta?s=UAI.L&t=1y&l=on&z=l&q=l&p=&a=ss&c=

....:)

tg99

fairleads wrote: »

Obviously you do not know the reasoning, or understand, why the market has a tendency for moving up at the end of a reporting/accounting quarter, however, providing the market does start running higher towards month end then you could be onto a winner. Or not as the case may be.

Yes, I have no idea and no understanding of how unit trusts work and how their managers go about buying and selling stocks. However, from this thread it is clear you are an exceptional investor with an edge over other market participants that allows you to generate alpha from quarter end trading and thus I cannot fail to be excited to be following your lead. Once the likes of Bridgewater, Soros, Lansdowne etc cotton onto this then I'm sure you'll be inundated with offers.

bowlhead99

Well, when it gets close to quarter end the fund managers want to sell and convert their unrealised gains into realised gains because it looks good to have realised gains on the books even though it doesn't make a penny of difference to the NAV. Also they might have been holding some tasty stock that they like which doesn't actually fit the official stated strategy of the fund and they want to get it off the portfolio list. Then with the realised cash they can go and buy the coolest thing in their sector.

But the most common type of 'window dressing' is probably to dump stocks that were big losers during the quarter -get rid of 'mistakes' so you have a portfolio listing packed with stocks that everyone knows have been winners that quarter, instead. At the same time, some managers might like to pick up losers so they can say they hold X stock but it's valued close to cost because they're smart and bought it after a fall.

Of course, selling some shares and buying others won't boost the average price of shares in the market at month end because you're selling as much as you're buying -just switching assets and not actually putting more money into the system. And your sells were met with someone else's buys and vice versa so there is no big demand imbalance and no obvious reason for the market to rise as you approach month end.

The sneaky thing that some funds might do is, if they have a million shares of ABCXYZ Illiquid Nanocap plc worth 10p each, is go and do a cheeky buy of 1000 more shares right before the closing bell at 4.30 on the last day of the quarter, offering 12p a share. If they're lucky, the market makers might tick up the official bid price, and the last traded price will be over 10p, meaning they can publish their accounts showing that the whole million shares are 'worth' more than 10p each. Even though any slight premium would unwind the very next day, the quarter-end position might look nice.

None of the above effects adequately explain why the market at large would go up as we approach the last few days of an accounting quarter but probably fairleads has a good bit of insight which he/she is keeping close to their chest so they maintain their trading edge over us mortals.

EdGasket

fairleads wrote: »

Ed
They're not my tools, they are on the Yahoo finance web
However, fwiw
UAI is not a buy for me.
ASHM looks promising but i would wait a day or so until the tools confirm a definite buy signal, or not as the case maybe.

Interesting; you take the opposite view to me on these shares.

ASHM down heavily today on poor results; might have to wait some time for your buy signal on that one. Anyway what use is a buy signal after they have already risen 75% since their low point?

UAI has well covered dividends, has strong director buying, and currently trades way below it's property NAV. Plus all 4 brokers that comment on it rate it a Buy; I prefer to believe them than you although I do concur with some of what you say about timing.

AnotherJoe

fairleads wrote: »

Ed
They're not my tools, they are on the Yahoo finance web
However, fwiw
UAI is not a buy for me.
ASHM looks promising but i would wait a day or so until the tools confirm a definite buy signal, or not as the case maybe.

LOL. If all this was true, didn't it occur to you that people with fancier algorithms, better data and faster computers would be on this ahead of you and wipe out the "edge" you think you have by using public "tools" to guess from past stock price movements what they will do in the future?

You would get equally good results from using chicken entrails, but i can see you wont be convinced until you've found out the hard way losing your own money that this junk doesn't work.

Please do post buy and sells in advance though, a good laugh is always welcome, dont be like the "genius" on one board I'm on who posts his successful buys and sells the day afterwards

EdGasket

AnotherJoe wrote: »

LOL. If all this was true, didn't it occur to you that people with fancier algorithms, better data and faster computers would be on this ahead of you and wipe out the "edge" you think you have by using public "tools" to guess from past stock price movements what they will do in the future?

Well there are plenty of chartists using technical analysis of the share price to make decisions. That's why once a trend is established, it often carries on far beyond what most people would expect both on the up and downside. Some people follow the chart and the price gets dislocated from fair value based on fundamentals. At this point, a contrarian investor can get good value. Similarly you can jump on the bandwagon and follow the herd when a trend is established - momentum trading. Some of it is hocus pocus but there are enough believers out there to make it happen for real sometimes.

grey_gym_sock

EdGasket wrote: »

Well there are plenty of chartists using technical analysis of the share price to make decisions. That's why once a trend is established, it often carries on far beyond what most people would expect both on the up and downside. Some people follow the chart and the price gets dislocated from fair value based on fundamentals. At this point, a contrarian investor can get good value. Similarly you can jump on the bandwagon and follow the herd when a trend is established - momentum trading. Some of it is hocus pocus but there are enough believers out there to make it happen for real sometimes.

that's 1 theory to explain why momentum trading might work (and it is certainly rather puzzling that it would work at all).

another theory is that prices tend to underreact to (good or bad) news, because of retail investors who are too quick to sell shares that have risen, and to buy shares that have fallen. hence prices tend to keep moving in the same direction, as the market belatedly fully incorporates the news into the price. see http://mutualfunds.com/education/who-trades-on-momentum-and-who-is-on-other-side/

perhaps that might fit rather well with all the posts where people want to sell because the market is at an all-time high, or to sell a share after they've made a quick profit, or to buy a share that has started falling.

i suspect (though i haven't tried to analyse my past trades to confirm this) that i tend to sell rising shares too soon, and buy falling shares too soon. my main answer to this is to trade as rarely as possible - if you don't trade, you can't make trading errors.