Traders and Investors

[Josho]

Oh I was thinking about it, Silver did really well yesterday, and if it's doing well today over there in the US, it might do well again today.

I was weighing up though whether to get out of silver and take a little profit on my $100 or wait for another %10 increase.

Even if I took a little profit, the little profits do really add up if multiple successful trades are made

 

[Josho]

@JohnDB I sold the silver shares and I bought some cheap copper shares at an alright price, I noticed some other copper company shares have risen recently, this one is still really to see that growth though, they are based in Queensland, and the rainy season is now over, so there may be a rise.

 

[JohnDB]

Oh I was thinking about it, Silver did really well yesterday, and if it's doing well today over there in the US, it might do well again today.

I was weighing up though whether to get out of silver and take a little profit on my $100 or wait for another %10 increase.

usually a long wick on a candle at the top of a long run up usually means that there is no support at that price and that it is about to fall.

 

[Josho]

usually a long wick on a candle at the top of a long run up usually means that there is no support at that price and that it is about to fall.

I guess if the graph is nearly vertical one day, it's an indication it's going to drop the next.

 

[JohnDB]

@JohnDB I sold the silver shares and I bought some cheap copper shares at an alright price, I noticed some other copper company shares have risen recently, this one is still really to see that growth though, they are based in Queensland, and the rainy season is now over, so there may be a rise.

Copper is at a multi year high...
Just saying...And since the rainy season is over...and Aussie copper is going to help supply the world with copper...the price of copper itself is going to find some much needed relief. But If you think that a local copper miner is going to make bank over mining their claims...OK.
If you have a friend that lives near the area that they are mining...and can give you some sort of insight into what is happening with the company...well...no illegality there. Just saying that this is legal behavior. Talking to an employee who has inside information about what is going to happen with the stock price...very illegal. That's insider trading.

However...coffee is on the rise...so...if you have a way of investing into coffee futures of South America...that would be an ideal candidate. We currently are below multi year highs but similar shortages are in existence for a real shortage of Arabica beans. Robusta beans are going to have to fill in...but there are surpluses of those ones. IOW high end coffee (like Starbucks and most coffee house coffee) is made from Arabica beans.
South Korea grows a lot of Robusta beans...leading supplier. Columbia is in a state of Chaos with all supplies of coffee currently not making it to ports because of roadblocks. The nation is on the verge of a civil war. Taxes and quarantines are the crux. However their Peso also had a huge rise today. So Coffee is up like 5% today...and on pace for more rise in the near term and long term.

 

[JohnDB]

I guess if the graph is nearly vertical one day, it's an indication it's going to drop the next.

Futures Copper Chart Daily
This is the chart for Copper prices...Notice all the candles all have long wicks there on the right hand side...meaning the past couple of days.
That means that the support for copper is about to dissolve and any reason (like rumor of increasing supply) is going to make the copper price fall.

 

[JohnDB]

That doesn't mean though that a mining operation that is normally sidelined during a rainy season and is shoveling out copper rich ores off to the smelter fast and furious isn't going to make money...and have profits which then get reflected in the stock price doesn't happen either.

Mostly trading stocks is about predicting which companies are going to make profits. Right now...most companies are trying to squeeze suppliers for their needed supplies...increasing their inventories of materials so they don't run out while meeting demands of customers. So I expect that this will create an oversupply for a bit of some materials that get hoarded. (processing chips?) But smelted and pure copper would be one of those things. So a wire manufacturer can make wire...which then gets sold off to companies that make motor windings...which then get sold to a company that makes air conditioners...and on and on it goes.

By paying attention to the things going on around you...what most people are wanting to do or purchase (new car, new clothes, vacations and etc) a person can accurately predict which stocks are likely going to see a rise in price. Then a bit of glamor (people talking about a stock or situation) and then presto...a company involved in all of this is now going to make a lot of money and it's stock price is going to skyrocket up.

Here in America...we got a housing shortage. Many of the generation they call Millennials are now of age to begin their careers and want houses instead of apartments to live in...especially since many of them are working from home and there has been this pandemic and everything...they want away from people and to live in their own home. So...single family housing is at an all time low in inventories of available houses for sale. Houses placed on the market are usually having a bidding war for the house...getting way over asking price. Some have instituted lotteries so that the winners can then have the opportunity to engage in a bidding war for the house for sale. Its absolutely ridiculous. My realtor friends have all been commenting on it...stories run in the newspaper several times on the subject.

As a result I have invested into a nationwide contractor who builds neighborhoods (CCS) and a manufacturer of OSB, Siding, and engineered beams used in the construction of homes (LPX). Both of these stocks have done fabulously for me. The OSB manufacturer is down at the moment but I expect that it will continue to rise back when it's next earnings report comes out. I have only made roughly 5% on that one. The contractor is doing fabulously and I have made 17% on my investment there. Again...nothing shady by noticing what is going on around me.

And that...along with knowing a bit about charting...and you can make bank by investing. Sure others make more...don't care. Others have lost tens of thousands to hundreds of thousands...don't care. I'm only after my nickel by paying attention and looking at things.

 

[Josho]

@JohnDB

Of to an alright start already up a little bit with the copper shares, I did see though another copper mining company had about a 30% rise since yesterday, but that company would probably be due for market correction in the next few days though.

The one I got yesterday is only at a 2.27% rise so far, it's still early though, the Silver miners went down a little bit more, with the opening of the market though.

 

[JohnDB]

@JohnDB

Of to an alright start already up a little bit with the copper shares, I did see though another copper mining company had about a 30% rise since yesterday, but that company would probably be due for market correction in the next few days though.

The one I got yesterday is only at a 2.27% rise so far, it's still early though, the Silver miners went down a little bit more, with the opening of the market though.

A lot of that depends upon the claim/site they are working or beginning to work. There are mineral surveys from test cores/drilling that are made public...and when they show favorable signs...well...the stock begins to climb whether they have turned a shovel's worth of dirt or not.
Dunno...mining stock sector isn't exactly one of my strong suits. Now FCX (Freeport Moran) is one of the largest mining concerns...they had a large reserve of copper rich mining ore they had warehoused...then the price of copper went up. They made out like bandits on it...their stock price went through the roof because of the stockpile of ore they had.

 

[Josho]

A lot of that depends upon the claim/site they are working or beginning to work. There are mineral surveys from test cores/drilling that are made public...and when they show favorable signs...well...the stock begins to climb whether they have turned a shovel's worth of dirt or not.
Dunno...mining stock sector isn't exactly one of my strong suits. Now FCX (Freeport Moran) is one of the largest mining concerns...they had a large reserve of copper rich mining ore they had warehoused...then the price of copper went up. They made out like bandits on it...their stock price went through the roof because of the stockpile of ore they had.

Yeah and the reports they released this morning were showing favourable signs. I haven't read much through yet though.

If you want to have a look you can

ASX announcements – Castillo Copper Limited (ASX: CCZ)

Working right now so, I might have more of a look later on, also if I read their cash flow report right, I think they are a few million dollars in profit, which is kind of why I had these guys in mind also, you can double check that if you want haha, numbers can sometimes be confusing to look at, so I could be wrong about their cash flow.


There seems to have been quite a bit of positive news about these lot lately though.

 

[JohnDB]

Yeah and the reports they released this morning were showing favourable signs. I haven't read much through yet though.

If you want to have a look you can

ASX announcements – Castillo Copper Limited (ASX: CCZ)

Working right now so, I might have more of a look later on, also if I read their cash flow report right, I think they are a few million dollars in profit, which is kind of why I had these guys in mind also, you can double check that if you want haha, numbers can sometimes be confusing to look at, so I could be wrong about their cash flow.


There seems to have been quite a bit of positive news about these lot lately though.

Well it looks like they are going to be borrowing some money soon...either they sell some stock or issue some bonds or borrow money from someone somewhere to mine out this copper or they are going to be broke. They only got a little money left in their cash flow. And from the geology report...it appears that they found copper and gold together on this site. Hopefully both. So...
Buy on rumor and sell on fact. (when it is good news) That's the rule of thumb. So...the core/diamond drilling is coming...hold until that comes through and then dump it off when everyone is talking about how high this stock can go...That is when it is time to sell. Until that time everyone will be really optimistic about how much money could be in the ground until they can dig it up.

Because after that...

 

[Josho]

Well it looks like they are going to be borrowing some money soon...either they sell some stock or issue some bonds or borrow money from someone somewhere to mine out this copper or they are going to be broke. They only got a little money left in their cash flow. And from the geology report...it appears that they found copper and gold together on this site. Hopefully both. So...
Buy on rumor and sell on fact. (when it is good news) That's the rule of thumb. So...the core/diamond drilling is coming...hold until that comes through and then dump it off when everyone is talking about how high this stock can go...That is when it is time to sell. Until that time everyone will be really optimistic about how much money could be in the ground until they can dig it up.

Because after that...

Lol I think it is pretty funny though, it nearly always happens when everyone talks about how high something has gone and even how much higher it could go and then the big fall happens.

 

[Josho]

It sounds like it may be a good day for the ASX, after Wall Street finally had a good day, especially with the tech giants.

 

[JohnDB]

It sounds like it may be a good day for the ASX, after Wall Street finally had a good day, especially with the tech giants.

yeah...but I don't trust it...still been a lousy week...I'm still trying to recover what I lost last week. But it is coming.

Big thing...coffee has dipped in price...this is huge...this is an excellent buying in price. There is a whole lot to playing futures of commodities...and I have done the research. Coffee both Arabica and Robusta are both going to go up. Today, because of the forecasted rains, the coffee is falling in price...but it is too little-too late to do any good. So we will continue to have a shortage of coffee...also Columbia (2nd largest producer of arabica beans) is almost to the brink of civil war...coffee is not getting out for export...practically nothing is.
It will be a while before they get the coffee out. Also...Brazil's ports are a disaster at the moment as well too...just saying. Very limited coffee is getting out on ships to go anywhere at anytime...and USA's supplies are LOW. It is still all in Brazil apparently. Just saying...

Get ya some...look for an etn or etf that is strictly in coffee and buy in now...Then wait over the next few months as it rises astronomically high.

There is still tech bubble fear...AMAT had great earnings today and outlook for future sales and revenue...and that gave us insight into chip manufacturing...but that tech bubble fear is still widely present. So...where we know they are all busy as beavers...nobody wants to pick up those stocks. And since we just ride the waves instead of making them...don't bother.

General market needs a few follow on days...we might get them for a short duration. But...Look at the Russell 2000 index...this is 2000 companies small and large that tell us the truth about the health of the market in general...and since the Fall of last year it has been on a tear...it's run up too much too fast. I am super cautious until I see it go down below 2000. It still looks "frothy". Like all the little bubbles are about to burst. The only hope of something other than a correction is a flat market for 6 months...we might get that...dunno...I can't tell you the future. I only know what has been and have an idea about the future.

 

[JohnDB]

And a word about cryptocurrency...still not legal tender.

It's at about half it's value that it once held.

COIN the DPO that was highly touted and recommended... started out at $450/sh....

It's below $240 at the moment. Anyone who bought has lost 45% of their money.

I'm feeling like the Amazing Carnac with my predictions.

 

[JohnDB]

Bitcoin is in even more trouble lately as it keeps falling.

And it keeps falling because it isn't legal tender. It's value is only if someone else considers it valuable. Legal tender is a medium of exchange that is mandated by law to be accepted for all debts public or private.

It's kinda like my membership card at blockbuster video...it's only valuable as long as the franchise is open. (Which it isn't)

So...same thing with Bitcoin...it's a bit of programming that is authentic as being somewhat unique.
But I don't have to accept it for money owed to me. I do accept dollars. And those establishments that do accept it will have to charge 20% more for it's use minimum and conversion to regular money you can pay bills with.

I'm not sure if we are trading tomorrow or not...I'm thinking not. But we will see. Not really looking to make any trades....just track what is happening. I'm pretty well positioned already. Coffee is down because of the rain but it's too little too late to help with the crop. American supplies are gone and Columbia is at a point that they would rather see it burn than make it to port for export at this time.

 

[FHII]

Funny how you mentioned Blockbuster... Both my wife and I worked for them. I was a grunt there as a second job. She was a manager as a primary job. Anywhere she went as a manager her stores did well... The stayed in the black.... She's good at her job! But overall, the company, which was previously a bully, failed to adapt. They tried... But their efforts were for the most part stupid.

"Video piracy" was one factor, but far from the biggest one. Redbox was another, but again... Not the biggest one. It was cable companies releasing video on demand. Why waste your time at a store when you can rent the video through your cable company? Its been a while, but I think Blockbuster struck a deal with ROKU. Stupid! As a loyal employee I didn't even buy it! Why buy the service if you already have comcast or something like that and they already offer the same service?

Funny thing is, blockbuster had an opportunity to buy netflix for $50 million. Naw, I ain't got that kind of money laying around... But they should've!

Now, a question:

I'm really struggling to understand what PE ratio is and if its really that important. I have done the research...it seems like something to keep an eye on, but overall... No... Its not and end-all of a stock's potential.

 

[JohnDB]

P/E ratio is the price of the stock divided by the earnings per share.

Earnings are everything.

Most disclose the EBIDTA (earnings before interest expense, taxes, and amortization depreciation)

So we also look at "Free Cash Flow" (FCF) which is a more clear look at earnings after ALL expenses....

So...if a company has a P/E ratio of 5 then in five years the company will profit enough equal to the price of every share of stock floating in the hands of investors.

A forward P/E ratio is a guess as to revenue and costs coming in the future. Usually this number is smaller than the current P/E ratio...and usually what the stock price is moving one direction or another over.

An exception is LPX. They have a forward P/E larger than their current P/E due to a bad forecasted earnings season. (It isn't going to be true but that's what stock picking is all about)

Now in growing companies the P/E ratio is often quite large.... sometimes 3 digits high like some software or Computer chipmaker.

But I like to play in calmer waters with lower P/E ratio companies. (tech is currently not a safe sector to invest in at the moment)

But other stocks that are in the same sector (consumer cyclicals, consumer basic needs, or consumer discount retail or something else like that) will have the same or similar P/E ratios...if the stock you favor has a high P/E ratio then look at the forward P/E ratio...see if it's really low... meaning that the company is expecting higher earnings in the future.

Because part of the stock market is that it is ALL about earnings and profits. That relates directly to the stock price and whether the company is growing or static.

 

[JohnDB]

Funny how you mentioned Blockbuster... Both my wife and I worked for them. I was a grunt there as a second job. She was a manager as a primary job. Anywhere she went as a manager her stores did well... The stayed in the black.... She's good at her job! But overall, the company, which was previously a bully, failed to adapt. They tried... But their efforts were for the most part stupid.

"Video piracy" was one factor, but far from the biggest one. Redbox was another, but again... Not the biggest one. It was cable companies releasing video on demand. Why waste your time at a store when you can rent the video through your cable company? Its been a while, but I think Blockbuster struck a deal with ROKU. Stupid! As a loyal employee I didn't even buy it! Why buy the service if you already have comcast or something like that and they already offer the same service?

Funny thing is, blockbuster had an opportunity to buy netflix for $50 million. Naw, I ain't got that kind of money laying around... But they should've!

Now, a question:

I'm really struggling to understand what PE ratio is and if its really that important. I have done the research...it seems like something to keep an eye on, but overall... No... Its not and end-all of a stock's potential.

Here is one way to use a P/E ratio with the other public numbers of a publicly traded company. The P/E ratio is low for this company and to be honest and full disclosure I own shares of stock of this company he is discussing. (But I don't think that its a losing trade by any stretch of the imagination...nor do I think that all the money from all the members of this forum combined can affect the share price of this stock)

 

[JohnDB]

Lol I think it is pretty funny though, it nearly always happens when everyone talks about how high something has gone and even how much higher it could go and then the big fall happens.

This is something that burns many investors...
Learning when to take profits.

When a stock begins to look weak after a runup...do you know what that looks like?
Do you have a targeted price for exit?
What do you do if the stock has risen a lot and seems to go down a little but still has another 5% to climb to hit your targeted price?
What does diversifying your portfolio really mean?

I personally do sometimes some dumb things...like hang on for too long and forget to take profits...expecting another rise even when the stock I have owned is going down.
Profits are only realized if you sell the stock. When you are holding that cash...that's when you truly made money. Otherwise you are still gambling/waiting for profits or losses.

And that is something that is hard for people to understand at times...they are happy when the stock is going up and asking "How high this stock can go"...that's when you need to remind yourself of taking profits...you can buy back in again in a few days if you want to. (probably for a cheaper price) Usually if a stock has run up 20% or more (of the normal stocks that I play) it is time to take the money and run...but leaving 5-20% of my initial investment in place just to see if it is going to continue to rise is fine...(Hogs get slaughtered and no one has a ongoing runup in price...all stocks have peaks and valleys) And when it doesn't work out...take the last of the money...Usually if a stock falls by 2-3% its time to take the money off the table. Down 5% and you are working actively against yourself. Come back when the stock finally figures out that it still needs to run up. 8% drop (while invested) and you never touch that stock again...but obviously something is wrong with what you were thinking and you need to cut your losses.

IF it goes flat on you...rising and falling but essentially going nowhere...that is actually fine. Usually that is a platform building for a huge rise...and a pretty good spot to add more money to what you have invested.

Today the ETN "JO" had a pretty good rise...coffee finally started to react to all the price support issues. (Columbian unrest, Drought, Low US inventories, opening coffee shops, Low Vietnam production, and low dollar) And for a while you would think that it was never going to go up...but the truth is that there isn't going to be enough coffee this year to go around. Unlike a temporary shortage or inflation...this one is the genuine article. This isn't caused by unreasonable demand...as is the case with rough lumber. This one isn't caused by someone just not wanting to supply...as is the case with oil. This is a bonafide shortage of a common commodity. So...since coffee is usually cheapest at this time of year...this is when most supply houses make purchases for delivery. But...it isn't down...its up. And not going to go down because of Brazil's poor coffee harvest coming because of the drought...sure they are going to get rain for the next week...but it's too late for the coffee trees. They done flowered and fruited. The drought made all the beans extra small or fall off. The trees were damaged for the season. Sure the warehouses down there stocked up for the slow biannual season for coffee...but the shortfall is too much for the warehouses to cover for. So...they like money too...so they stocked up before it got expensive and are ready to begin to sell their gold...eventually. Come Fall and winter...coffee is going to hit another All Time High. So...When it hits the neighborhood of a high a few years ago...around December or January I will release my hold on coffee. Merry Christmas!