Portfolio management strategy revealed by Stockhouse member bandit69.
Today in Portfolio Spotlight we welcome Stockhouse community member bandit69, who agreed to answer a host of questions regarding his public portfolio for the benefit of Stockhouse readers.
Don’t forget that if you have comments for bandit69 or for the community at large, you can post them in the comment box below. The comment box is also a great place to leave suggestions for future interview questions or other interview topics that might be interesting to the community.
Now on to the interview…
SH: How would you characterize your investing style?
B69: Day trader, short/long term investing, speculating. I could be labeled as a momentum player.
SH: Where do you get your investing ideas from?
B69: I read and have read anything I can get my hands on from reputable writers and also from trial and error. I rarely read and never buy broker recommendations. I almost always pick my own or I sometimes receive tips from reputable Stockhouse friends that I trust. I have developed a set of guidelines over the years and stick to them. I scan the TSX and Venture daily for top gainers (nothing is a better indicator than price and volume movements for buying or selling stocks).
When one meets a certain percent gain on the day, I then look the volume traded. I usually like to be over 100k shares on the day with a higher number if trades (for liquidity reasons). If the stock still meets my requirements, I then look where it is in relation to its 52-week low, historical data, recent house positions, etc. If it is making new highs I rarely buy it, but I sometimes break the rules. I then glance quickly at the chart, if I am still interested I will take a harder look at it and if I am still interested I add it to my watchlist. I do not necessarily buy them all, but I do a lot of them.
SH: Explain what’s in your public portfolio on SH and why those securities are there; why did you choose those stocks?
B69: I currently hold Shelton Canada (TSX: V.STO, Bullboard). I have known it for several years and have bought and sold several times in that timeframe. Little risk to it at its current level. I was told about it by a SH friend and have really liked it ever since. But it has been a slow mover and patience tester. But it is paying off now.
I also hold Pennant Energy (TSX: V.PEN, Bullboard) - I picked it up from a scan that met all of my parameters, then bought it and sold it and bought it again and it is doing very well. I think it has more to go yet. I picked it from the old reliable price and volume movement it had a few weeks ago and have followed it ever since. I still hold it as of this writing.
Southern Pacific Resource Corp. (TSX: V.STP, Bullboard) is another one. I have bought and sold it over the last year and have done very well on it. It was a tip from someone and it met my criteria a few times. It has been under slow steady accumulation and I think it has quite a ways to go.
I did hold Moly Mines (TSX: T.MOL, Bullboard) and sold it May 13. Seems stalled at ~$3.00. Here is one where I really liked the technicals and then looked deeper into the story as it was performing very well. I firmly believe this is a moneymaker in the longer term but I have moved on temporarily. Even if I have to buy in higher later, my money from the sale of MOL went right in to PEN.
Most others on my watchlist are the ones from daily scanning that met my criteria. If they continue to do so I will probably buy some of them. I usually post my trades and new picks at the end of the day on my SH blog. My public watchlist is always changing to reflect my new picks and those dropped off of my list.
SH: Does your portfolio indicate your true holdings, or do you use it more as a watch list?
B69: My public portfolio always includes what I own and what I am currently watching closely.
SH: What kind of performance have you had in your portfolio? Up, down, sideways?
B69: My gains right now average 5-7% per month. My overall gains are slow but steady. I do not win on every single trade but my success is definitely above average. I cut my losses without question when I have to no matter what and I always gain them back and then some eventually. Every once in awhile I hit a homerun and ride it as long as I feel it will continue. Homeruns and huge gains are rare on the markets. Everybody looks for them but I think if they were to sit and analyze their trading they may see they would do better by realizing the market will not make you an instant millionaire overnight. Does it happen? Of course. But the odds are against it.
SH: How do you feel about your portfolio performance?
B69: I am very happy with it. Once I got it out of my head that homeruns are rare, I have done much better. I make slow steady gains (average 50% to ~ 80% return over the course of a year) as I mentioned above and I have a lot of fun doing so!
SH: Do you plan on making any changes to your portfolio in the near future? Addition or subtraction?
B69: Not as of today. But things could change anytime. I am topped up in PEN, STO, and STP right now. STP may be stalled for a few weeks and I may drop it for now and pick up something else I like but for now it will sit as is.
SH: Do you see a value in having a public portfolio on SH? Do you find it helpful when judging a member’s contributions to the site?
B69: Yes. I like it and it does help me determine if this person may be reputable and a good trader. It would be even better if a person could see what date the stock was added to the public portfolio.
SH: Is your portfolio weighted toward a particular sector / commodity / service / trend etc.? Why is that?
B69: Yes and no. I stick to oil and gas as well as mining stocks. I have yet to buy any tech, or pharmaceutical type plays simply because I have never seen value in them and I know oil and gas much better. But, if technicals look good, and it meets my criteria for a buy, I would buy one without hesitation. I would definitely not intend on holding it for too long though unless I had a very solid reason for doing so. I sometimes buy stocks that I do not even know the name and only know the symbol and I base my decision solely on technicals. I do not follow trends intentionally. I follow what the market is telling me to follow. Market trends become apparent on their own simply by daily stock scanning.
SH: What do you think about the performance of the junior mining sector over the past year?
B69: I think it has been awful. Sure there have been what some would call successes but they are few and far between. Hathor Exploration (TSX: V.HAT, Bullboard) is a good one. Noront Resources (TSX: V.NOT, Bullboard) was a good one off the top of my head. I think people are tired of juniors that simply continue to dilute for the same old exploration program that produces nothing more than more dilution in the end, or even more waiting for results. I know I am.
SH: Are there any new trends that you’re following that might influence your portfolio in the future?
B69: Well, I do think energy stocks will finally show some life as some are now. But over the last year or two they have not done well at all. Most of my buys are energy and a smaller portion are mining. I don't see it changing for me.
SH: Are there any Stockhouse members you like to follow to help you with your due diligence?
B69: I like Tinmann. I have been online friends with him for a few years. We discuss several stocks and have traded many tips in past. I have just "met" coffintrader and I can see he knows what he is doing based on performance and his past posts, so I hope to forge a friendship with him over time. Other than that I usually fly on my own.
SH: What has been your best investment to date?
B69: That’s a tough one. I did very well on TG World Energy Corp. (TSX: V.TGE, Bullboard) although I no longer hold it for various reasons. Northern Shield Resources (TSX: V.NRN, Bullboard) is another as well as STP.
SH: What has been your worst investment to date?
B69: Nothing really stands out here but I did get burned on an OTC stock a few years ago. So I have paid my tuition in the early years but I tend to cut my losses very quickly now NO MATTER WHAT if they look bad so I can preserve my capital as much as possible. I stick only to the TSX and Venture now.
SH: Any parting advice for new members joining Stockhouse?
B69: Read read read and read some more. Then try your theories with small capital to start. Find good traders here (and they are around here) and learn from them. The best thing you can do is help select others here and your online friendships will prosper into many good solid tips to each other. I also say beware of the sharks. There are many and with experience they will become clear quickly. As an example, I bought 100k shares of a company last year, then was watching the board after the fact. A poster immediately popped on to the board to say he had just bought my 100k as his own. I knew he had not since I have level I and II (Stockstream); I had a chuckle on that one. I also say you should not always buy every tip you get (if any). Buy only if you are comfortable with it. If not then don't. And one last one, never ever buy or pay attention to the endless online "valuations" of a company. I have never ever seen one pan out. And besides, the valuation means nothing. What does mean something is what the stock is trading at that day and at that time. That's all the stock/company is worth. Go with the market, never go against it.
SH: Would you care to share your outlook for the global economy in the next few years?
B69: I think the "global" economy is the worst thing that could ever have happened. It has created ever increasing costs for almost everything you want/need to buy. I am still in awe at how world economies are so intertwined now that one tremor in one part of the world causes a large ripple effect on the other side of the world. I believe it has caused permanent instability in world markets and I do not see it changing.
SH: Is there anything I didn’t ask that you’d like to add?
B69: I could write a lot here. I am fascinated by people. I do not talk much but I am like a sponge and always watching people and how they live, how they spend, why they spend and do what they do. It amazes me how people are surviving now. I like to predict the future based on what I see. I predicted our local housing market was in for a major correction and it is happening now with record listings and slow sales (i.e., supply and demand just like the stock market), and I think it will get worse yet. People built new houses assuming that the market would continue to rise without any logic to back up this assumption. Now, their houses are ready and the house they thought they could sell in a day like the last few years is not happening. People are forced to sell to get out from paying two mortgages.
I predicted how people would go bankrupt if our energy-based industry took a dive (and it did, still is somewhat) and it did happen fairly quickly to a lot of people though the public never hears it. I think the whole economy is what I call a "false" economy, similar to what the US is going through with the subprime lending scam. All of our consumer spending is based on credit and "payment" buyers prop the entire economy. You can buy anything on payments now, and people do. I think these "payment" buyers are a large part of what has caused the entire retail (and housing) industry to increase their costs. All people want to know are what are the payments and they do not look hard enough at the bottom line. I could go on about higher fuel prices and how it does not seem to slow anybody down driving or even shopping! But again, credit reigns supreme in large part.
Thanks for inviting me to answer these questions. Good luck in your trading!
That’s all for our interview! Again, feel free to leave comments, criticisms and suggestions in the comment box below, and look for another Portfolio Spotlight coming soon.
Special thanks to bandit69 for participating.
