Forum Archive Index - August 2003

["Pete Stevens" <pete574@hotmail.com>]

 

> >
> > My current strategy is to buy in as soon as the price closes above the
> > previous day's close (That's my feeble attempt at technically timing
> > my purchase).
> >
>
> Thus guaranteeing your final return will be worse than if you had
> bought the previous day!

The explanation of my current strategy was faily brief, so I'll elaborate a bit:

 

You are correct in saying that if I waited until WHS had closed up, my final return would have been worse than if I bought during the previous day.

 

However, no one know's when that "previous day" will be!

 

What I do know - is that one technical analysis theory states that if a share price is falling, then it is likely to continue to fall until it reaches some resistance level.

So if we apply this theory to the inta-day trades of WHS shares (see graph below), we see that WHS opened at $4.80 on Monday morning, and closed lower every day until Friday, when it closed higher at $4.61. 

Therefore, using this theory, you would purchase shares after Friday's close (or just prior to it as I did).

 

If I had bought shares at the point when I fundamentally decided to invest in the Warehouse (which was Sunday) - my shares would have lost 4% of their (paper) value!

 

Does anyone want to share how they time their share purchase after they fundamentally decide to invest in a company?

 

> Hi 
Pete,
> 
> > 
> > One thing that concerns me
> 
> though, is the recent fall in the share price (It's fallen $0.25 
since
> > I've been watching it!).  My question is:
> > 
> > Does anyone know if there is reason behind the recent fall?  
Is there
> > some announcement/article that has escaped my 
research?
> >
> >
> 
> Sluggish consumer 
confidence figures in the USA?    Don't ask me how 
> that 
directly flows through to the WHS shareprice - that' s Mr Market 
> for 
you!
> 
> The share price of WOW, Aussie's number one retailer, 
coming off the 
> top, and an associated flow on effect to other 
retailers?
> 
> > 
> > The cynic in me said that it due 
to insiders selling out prior to a
> > (possibly) disappointing annual 
report.
> >
> 
> We already know this years result will be 
disappointing, so that won't 
> be the reason.  It could be that 
these so called 'insiders'  think that next 
> year will also start 
in a disappointing way.    But you didn't invest in the 
> 
Warehouse banking everything on a recovery in Australia next year did 
> 
you?
> 
> > 
> > My current strategy is to buy in as 
soon as the price closes above the
> > previous day's close (That's my 
feeble attempt at technically timing
> > my purchase). 
> 
>
> 
> Thus guaranteeing your final return will be worse than if 
you had 
> bought the previous day!
> 
> >
> >For 
those who are interested, the fundamental
> > justification for 
purchasing WHS is as follows:
> > 
> > The current ratio (i.e. 
for every $1 of current liability we have $x
> > of current assets) has 
been increasing, from 1.63 in Aug '00 to 2.484
> > in Jan '03.
> 
> 
> > Gearing ratio (a measure of how much long term debt the 
company has)
> > has been decreasing, from 0.41 in Aug '00 to 0.365 in 
'03.
> > 
> > The only area of concern is (apart from the one 
detailed above) is the
> > return on assets percentage (how much 
revenue the company generates
> > from each $1 of asset) - which has 
fallen from 14.5% in '01 to 13.5%
> > in '02.
> > 
> 
>
> 
> We have already been told about the lack of a suitable 
series of 
> 'hooks'  (read having the right item on the front of the 
WHS brochure)  
> to get the Australians into the yellow shed stores 
week after week.   
> We were also told of the lack of anything 
to market in terms of 
> electronic game workstations in NZ last 
Christmas.     This is all 
> historical data that I 
think goes a long way to explaining the 
> deterioration in ROA.
> 
> SNOOPY
> 
> disclosure hold WHS
> 
> 
> 
> --
> Message sent by Snoopy 
> on Pegasus Mail version 
4.02
> ----------------------------------
> "You can tell me I'm 
wrong twice, 
> but that still only makes me wrong once."
> 
> 
> 
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