Category Archives: Articles

Regis Resources – out of a downtrend

Regis Resources Limited (ASX: RRL) is one of the few fundamentally sound material/mining stocks on our market. And it certainly doesn’t have much company at the moment in the gold mining space.

Regis Fundamentals:
1. Profitable gold producer (at current gold prices)
2. Three separate mines
3. Australian domiciled producer (ie no sovereign risk)
4. Net cash on the balance sheet
5. Well managed
6. Proposing to restart paying dividends for the 2015 financial year
7. Announced share buy back which may start shortly

And, if having gold exposure is good enough for Stanley Druckenmiller and Ray Dalio, than it is good enough for me.


Regis Technicals:

1. Price has come out of a two and a half year downtrend
2. The chart is as good as it gets from a risk/reward probability perspective
3. Gold loves trouble in equites although price will guide from here

click to enlarge

click to enlarge

Regis was a buy for me this week.

The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.

Oil Companies way Smarter than the Public

Remember when petrol prices dipped under $1 a litre at the start of the year?

As this Crude Oil chart shows, Oil is currently trading below prices set at the start of the year yet I filled up at around $1.40 a litre today.

Crude Oil Full0915 Future

So why isnt petrol sub $1 now?

Could it be that the collective public is getting ripped off and outsmarted by some massive corporations / cartels at the moment?

Medibank Private – is it about to go jogging?

Medibank Private Limited (ASX:MPL) is Australia’s largest health insurer.

The fundamental reasons for buying:
1. It enjoys a demographic tailwind
2. It is the market leader in a concentrated industry
3. It has an opportunity to reduce its claims payout ratio (ie increase profits)

The technical reasons for buying:
The $2.00 area seemed a logical place for some price support given the IPO to retail was $2.00 and institutional investors at $2.15.

Plus, it has formed a pretty good set up on the chart:
1. Breaking the downtrend
2. Retest the break
3. Bounce this week

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click to enlarge

Above about $2.14 should see Medibank start jogging.
Maybe Medibank is trying to get fitter and healthier for summer!!!

Jogging off the start line

I made a start this week on what is likely to be a multi-year process of accumulating some Medibank shares once out of a downtrend and selling a few once it falls out of an uptrend. Multi-year rinse and repeat with the aim to build a long term dividend stream with little capital cost in the long run.

22 August 2015 Update
Medibank delivered its annual report yesterday which showed some great financial metrics and the share price reacted accordingly. In my opinion, there is nothing better than technical analysis on fundamentally sound stocks.

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click to enlarge

Investing is a marathon not a sprint however it helps to be off to a good start.

The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.

DWS bounce from oversold?

DWS Limited (ASX:DWS) or “Ddubs” as I like to call it stopped going down in the past week. By my reckoning, this is about the 50th most fundamentally sound stock (out of 2,000) listed. I previously wrote about DWS in 2014.

Bounce towards a $1 is possible after it broke a five month downtrend this week.

Click to enlarge

Click to enlarge

Update 7 August
DWS tagged $1 price target today ahead of time.
That’s plus 36 cents or +56% in a touch over three weeks.

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click to enlarge

The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.

Sydney House Prices chart

The Australian Bureau of Statistics (ABS) this week released their quarterly Residential Property Prices Index for Eight Capital Cities for the March 2015 quarter.

Sydney Property Prices showing the collective price movements till March 2015. (click to enlarge)
Sydney Property Prices with EMA's
No opinions needed
Upon putting charts together for the capital cities about a year ago (courtesy of ABS data), it has been joyous to no longer need to listen to any noise, opinions or commentary on house prices, bubbles, interest rates, supply/demand, chinese investors, SMSF buyers etc.

Despite being a basic excel chart updated on a quarterly basis, the index price change and the data captures it all.

The price index and the moving averages will roll when they roll.

The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.

That’s my Woolies

Three reasons to buy Woolworths (ASX:WOW) for atleast a bounce to the $30-$31 level?

1. Buy the news – On Wednesday, Woolies annouced CEO retirement and reduced earnings guidance
2. Today (Friday) it closed above the intermediate down trend which begun in February as shown on the daily chart
3. Completed five waves up to the $38’s which I nailed here, possibly completed five waves down this week as shown on the weekly chart

Daily chart (zoom)
WOOLWORTHS LIMITED daily 19 June

 

Weekly chart
WOOLWORTHS LIMITED weekly 19 June

Risk is a weekly close below new green up arrow. Risk less than a $1, Reward about $4 per share.

I suspect this call will be unpopular with the majority.

Update 25 June

Seems the call was unpopular. Price closed today back in the downtrend and below my line in the sand $26.50 as per the daily chart below. This means that the probability of a lower share price for Woolworths is now greater than it was just a few days ago. I closed my trade for a 72cent loss. Atleast groceries are getting cheaper!!!
WOOLWORTHS LIMITED daily 25 June
The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.

Aussie Banks stopped going down?

The Aussie Banks may have stopped going down today by breaking their respective intermediate downtrends that started in April. A buy for me on ANZ, CBA and WBC today.

Westpac (ASX:WBC) down over 22% from the top in April to the low of 5 June. Is price wrong at this level?
WESTPAC BANKING CORPORATION 16 June
 

Commonwealth Bank (ASX:CBA) if this can get to the gap fill at $90.57 by mid August, it is going straight to The Pool Room. Notes to self from April looking about right so far…A weekly close however below my uptrend (Green arrow on CBA) will render this wrong.
COMMONWEALTH BANK OF AUSTRALIA 16 June.
 

And, ANZ chart although not shown here is looking about the same with a small break of downtrend today.

Update 25 June
Took profit on 20% of my CBA at $87.40 (+$5.00 per share) to lock in some gains and also in case Greece talks aren’t resolved/concluded. Took a bit of profit off the table for ANZ and WBC too. Risk management is key. Still believe that $90.57 if not higher is achievable on CBA.

The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.

Share Market Investing Protocol

Simple Investing RulesFive minutes a day in practice
Having spent more than three years investing and trading in the markets on a full-time basis to the end of 2014, I have used that experience to come up with some guidelines for myself that will give me the greatest chance of still generating excellent returns while only looking at the markets for about five minutes a day.

While, I have nominated an hour a day as an average time spent across a year, the practical side of my involvement will only see me check the market for about five minutes a day.

The majority of my accrual of my self imposed 365 hours per year will come from undertaking my fundamental analysis by valuing about 100 of the better quality stocks twice a year at the half yearly (February) and annual reporting seasons (August) over the weekends of these months.

For technical analysis, I will spend about an hour typically on a Saturday morning looking at charts on a weekly timeframe to determine possible buy or sell signals for the week ahead.

I will then do a quick review on a Thursday evening of these charts to confirm any of these potential buy or sell signals and act accordingly for five minutes typically on the Friday.
*As of mid June 2015, I have averaged one buy or sell transaction a week during calendar year 2015 to date using this protocol*

What stocks will I be buying?
The same high quality businesses I have been buying for years. Quality being based on:

1. Balance sheet strength
2. A history of consistently good cash flow
3. A history of earnings generating an above average return on equity
4. Stocks with a consistent history of paying dividends
5. The likelihood that these economic traits will continue into the future

**If these companies are good value and/or growth stocks even better**

What timeframe will I use?
Weekly charts

When will I buy?
When these good quality stocks stop going down.

When will I sell?
I will partially sell when these same stocks stop going up. That is, I will sell to a free carry position and leave the capital gain in the market to accrue dividends for free and take my initial capital back to put into the next opportunity.

In summary
Timing my entry and partial exit of good quality stocks on a weekly timeframe should do the trick.

A Time for the Inner Scorecard

The Edge7 and Edge Fund projects have been very much focused on presenting the Outer Scorecard. This Outer Scorecard has shared stock analysis, updated investment performance graphs, stock valuations and my general thoughts on many matters investing and the market over the last three years.

A Time has come where it feels right for me to focus on the Inner Scorecard.

So, I leave you with this passage from Ecclesiastes chapter 3 verses 1 to 8:

ecclesiastes3-1-8-11

This article is published by Dean Mico.

The ASX All Ordinaries Rocking Horse

rocking_horseThe ASX All Ordinaries closed:

October 28 2013 at 5437
October 28 2014 at 5434

Just like a rocking horse, in the past 12 months, the Aussie share market has seen plenty of movement but made no progress!!!

 

Daily Chart
ALL ORDINARIES INDEXdailyOct


Weekly Chart

ALL ORDINARIES INDEXweeklyOct

This article is published by Dean Mico.

The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.