Forum Archive Index - February 2000

[Glen Whiteman <quality.res.ltd@xtra.co.nz>]

Hi Phil
Did you notice that EBT was up 22% on volume of 2.19m shares in Oz
today. Perhaps this explains the weird sale in NZ?

Regards.
Glen.

Phil Eriksen wrote:
> 
> > The trade of the day from my point of view as a trader trying to eeek out a
> > living
> > was the person who traded EBT 45 to 60 today. Whilst it was only 5000 shares
> > value $2250. My congratulations.
> 
> I tried to hold my tongue but cannot.  Lets assume one bought EBT at
> .45, and sold them today at .60 cents.  A 6 month chart tells me that if
> you bought them in the last 6 months, you probably paid around .45 for
> them.  Unless my maths is wrong (school and I didn't enjoy a long term
> relationship ; don't trust my maths) the profit on this trade is $750,
> before brokerage costs, and tax, which anyone acting as a share trader
> should be paying.  Again, the shares have been around .45 for at least 6
> months, with very little buying the selling as far as I can see.  Taking
> the "middle ground", lets say the shares were bought 3 months ago.  A
> $750 profit, less costs, strikes me as a pretty bad return given the
> risks involved.  With such an infrequently traded, speculative share, if
> flying pigs stop flying and stocks take a hammering, who would rush in
> to pick up these shares?..
> 
> I don't know, I think holding EBT for any period of time in order to
> take a $750 profit is a very risky way to go.  I'd be washing car
> windows for the money first.
> 
> Admittedly, I know very little about day trading but I do watch the
> short term price movements of stock.  Anyone watching, say, Steel and
> Tube, will notice a decent spread of prices and no firm direction.  I
> have held these shares over a year, managed to buy at a rock bottom
> price, and am just waiting to see what happens.  No one knows what is
> going to happen.  I know, however, that (a) given a bargain basement
> purchase price, my downside is limited (b) i'm sitting back collecting
> dividends (c) while nothing is guaranteed, I have enjoyed an acceptable
> level of capital appreciation and, given the state of the business,
> would expect this to continue and (d) the big question marks that hang
> over all stocks (takeovers, market re-rating, some "good news") still
> apply to boring old stocks like STU.
> 
> While the stock has something to offer to an investor, If I was a trader
> I'd probably be buying them still.  Over recent months, the price has
> tracked between $1.45-$1.85.  While it's always hard to pick when to
> buy, thats the game a trader chooses to play, and that range certainly
> offers some room for a profit.  Much more importantly, a stock with some
> substance, a stock which is definately not speculative nor overvalued
> allows you to invest a larger amount of money, and still sleep.  Rather
> than put, say, $2000 in EBT, i'd much rather load up on a share like STU
> (0.15 cent gains are much bigger when the multiplier is a decent sum of
> money) which I can feel much more comfortable doing, because, if my
> "prediction" for short term appreciation doesnt work out, i'd happily
> hold them too.
> 
> Finally, with the possible sale of the majority shareholding (which
> hasn't happened yet, as far as I know) and whatever may happen after
> that, there is the chance of a "news-inspired" jump.
> 
> How can you go too far wrong?
> 
> Cheers,
> Phil
> 
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