When we buy and sell

Discussion of the proposed Cashback Investment Club

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kevinchess1
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Re: When we buy and sell

Post by kevinchess1 » Sat Mar 12 2016 11:11am

I agree that we should not be afraid of selling at a loss and, as stated, I want us to sell Sainsburys ASAP
You won't make money on every share but you can/should cut your losses
Personally I don't see a problem with having cash in the bank doing nothing
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BeautifulSunshine
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 12:16pm

As a rule I would be wary of selling at a loss.

At the minute, SBRY has a respectable dividend and has potential. The dividend will not be paid once converted into cash. My personal opinion is that it would be premature to write-off SBRY.

Shares by their very nature fluctuate in value. There will be times when you hold your breath and gasp.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 12:39pm

garindan wrote:I just wanted to add something into the mix on this topic. We also need to consider:

...our current holdings and if it actually makes sense to INCREASE this rather than anything else.
I don't see a good reason to sell any of our shares today, in fact the oppostie I would like us to increase and diversify of our investments.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 12:43pm

garindan wrote:I have to say I am not keen with this idea at all. The trouble I see with this approach is that we will either no longer continue holding shares that might pay a good dividend or we'll end up selling shares repeatedly at a loss, or both at the same time... I don't see where we'd make money unless one of those is compromised.

If this was the strategy in place and we had to vote right now - I'd vote for Shell as it would lock in a profit, rather than Sainsbury, which would lock in a loss. I don't want to sell Shell. Any of the others would also lock in a loss. So we'd take a quick buck on a long-term share and lose the opportunity of income from it, which would (currently) be more in a year than the profit of a quick sell. But why would we sell for the sake of having a poll when we don't actually have to? Trading is about predicting what shares will do and when the right time is to pull the plug and take your leave - whether in profit or not. I don't think it is about arbitrarily deciding it is time to buy and sell. In an AIM market maybe it might work better but we are in a FTSE market.

I can only really see the value of my investment going down over time, even if we sold Shell for a profit to begin with. I would suspect Sainsbury would run Shell close or win in a poll, meaning my fear of continued loss would begin to be realised from the off!

For me personally, the idea of forcing buying and selling of our shares for seemingly no real reason makes it considerably less attractive to be part of the club.
Spot on.

Especially,
For me personally, the idea of forcing buying and selling of our shares for seemingly no real reason makes it considerably less attractive to be part of the club.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 12:45pm

My very simple, subtle and basic question would be "What harm is the investment doing to our club that we need to sell?"

There is no harm and it is paying a dividend. If we sell at a loss today then our next investment would need to do TWICE as well to cover the loss we made.

Alternatvely, if we sell at a profit we risk losing oyt on the big payday.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 12:47pm

SBRY isn't poor invetsment, it just a little ecentric.

Makes it great fun to watch though.
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garindan
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Re: When we buy and sell

Post by garindan » Sat Mar 12 2016 2:44pm

kevinchess1 wrote:I agree that we should not be afraid of selling at a loss and, as stated, I want us to sell Sainsburys ASAP
You won't make money on every share but you can/should cut your losses
Personally I don't see a problem with having cash in the bank doing nothing
There are three things you mention here.

- selling for a loss

This is a reality that we need to accept as a club. We are not always going to have made the right decision. We will be lucky to sell all our purchases for a profit.

- I don't see a problem with having cash in the bank doing nothing

I agree to the effect we should not rush into buying. Perhaps we have been a bit guilty of that before. I'd really like us to have a handful of shares we are watching and are ready to buy at the right price when we have cash in had available to do so. This way we'll be in a better buying position.

- I want us to sell Sainsburys ASAP

I respect your opinion here and can see where you are coming from. We have not seen anyone supporting this motion recently and I think we need to have that. I'm inclined to agree with the other two members that suggest holding out on this one a bit longer to see where the wind really is blowing. If the recent improvement in fortunes of the big supermarket players had not become apparent I'd have been inclined for us to sell now. However, there has been some notable improvement with increased potential of seeing us turn a modest profit. The dividend should also not be sniffed at - it is pretty good to be fair.
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richard@imutual
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Re: When we buy and sell

Post by richard@imutual » Sat Mar 12 2016 3:04pm

richard@imutual wrote:It doesn't have to be 5, but I think as a club we have to have some view as to what the optimal number should be.
So what does everyone think the right number is?

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Re: When we buy and sell

Post by magnificent7 » Sat Mar 12 2016 4:11pm

Me as a new potential member of the club asks:
Me: "I'm interested in joining the Cashback Investment Club. So what have you sold?"
CIC: "Sainsbury's."
Me: "That great, how much profit did you make?"
CIC: "We didn't, in fact we made a loss."
Me: "OK, you guys carry on, don't mind me, I just had too much time on my hands and thought I would pop the question."
CIC: "That's fine. If you change your mind please contact me."
Me: "Yeah, no problem. Bye (F-O-R-E-V-E-R)."
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Re: When we buy and sell

Post by Richard Frost » Sat Mar 12 2016 5:21pm

richard@imutual wrote:
richard@imutual wrote:It doesn't have to be 5, but I think as a club we have to have some view as to what the optimal number should be.
So what does everyone think the right number is?
I hate to be at odds here, but I am not sure there is a right number. I am convinced 5 is too low. As has been mentioned we could be selling a good share because we have such a small maximum amount we can hold at any one time. We could set a maximum amount of shares we want to hold eg:10 or even 15 or 20 but do not have to hold that amount. I would have thought that within that limit there was plenty of scope to play and hold on to good performing shares. Also helping with the excitement.

However to get back to topic I do think we should set a limit for when we sell shares

a) to avoid the need for a poll
b) to avoid the call from a small amount of members to sell a share when it is seen to be making a small loss, when it could be that it is paying a good dividend or has a reasonable potential.

We need to decide this for each share when it is bought giving some leeway. ie: Share xyz has lost 8% which is our selling point but the dividend is due next week. Perhaps it may be sensible to hold on for the dividend. A fine line as it might lose more than the dividend due in the meantime.

As for buying, I think we seem to have got this about right at the moment. eg: suggestions. then poll followed by buying the share. Perhaps the poll could take into account a potential sell percentage as well.
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