• Welcome to DOSBODS

    Please consider creating a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

Durabo

Investing for the next cycle - for beginners!

Recommended Posts

Posted (edited)

I'm sure I'm not the only person here who has very little experience in investing and wants to use the info contained within the fantastic threads to position ourselves as well as possible for the next cycle.

As I understand it, we should be looking at Private Mining companies, especially those who mine Silver, but also potentially Gold, Platinum and at the riskier end of an already risky investment area Uranium/Thorium.

When looking for good companies to invest in, the key things to look for are how much they have in the ground, how much debt they have and ensuring you have a good spread geographically - e.g. not buying ONLY South African miners as a change in political circumstances within South Africa could result in total losses if you have no other miners.

Other areas to look at are companies again with very little debt, who control or build large pieces of infrastructure - telecoms, public transport, gas pipelines, solar wind farms etc.

What I'm interested in is what your advice would be to a new investor like me who wants to invest a few thousand and understands that this IS a risky portfolio - while it may halve in value, it could also double or in some cases improve by a factor of 10.

Which companies EXACTLY would you invest in if you had to pick only 2 or 3 from the following industries

Telco, Infrastructure, Transport, PMS?

From my own research it seems like Vodafone and Centrica are great options right now, but I've also seen First Direct and SSE Bandied about. Royal Mail has also been mentioned if it falls under 300. When it comes to PMS I'm a lot more confused. To those "in the know", which names would you suggest for Silver, Gold, Uranium, Platinum?

It also seems clear that buying physical gold/silver is an option - what are the best sites for this, and how do we avoid VAT/Store them?

My aim with this post is to distill the wisdom of Durhamborn's larger thread into one solely focused on to what are the best/interesting stocks to take advantage of the crash that we know is coming. Obviously, that means that once a name is mentioned its up to you to do your own further research into the stock!

Thank you to everyone who takes the time to help out those less knowledgeable. This really is a fantastic corner of the internet!

If this post takes off, I will edit in a table with all the info about the stocks/companies mentioned.

Edited by Durabo

Share this post


Link to post
Share on other sites

Not a bad idea for a thread for less knowledgeable to discuss. However, I would probably be a little careful in doing a summary. Not saying to do it but might be worth putting some cautionary notes on there. With what's discussed being a bit buried in the main thread people will have to do their own research by its very nature. If it's all in a single post they may take it as advice and/or absolute as the thing to do. For example, I've seen a number of posts of people recommending a place to buy something that isn't the cheapest. Look at VOD's performance of late. People need to know and understand what they're buying and why.

Just alone on the PM's, it opens up a can of worms. What to buy, where to buy, fees, storage, selling etc etc. Really recommended spending some time doing research.

Brokerages and what you intend to buy and when/how often can have a big impact, especially in the long term. It really is an individual sport, case by case and as such, they will have to pick their poisons and go with what suits them.

Just to touch on what you've mentioned ref First Direct, it is a subsidiary of HSBC, as far as I'm aware they don't trade separately.  

Share this post


Link to post
Share on other sites

I probably qualify for this thread. For the first time in my life, I have surplus funds - personally, within my business and within a SIPP. I am earning good money through the business (husband and wife only, no employees, low risk, low expenses, fee earning pretty much locked in for 12 to 18 months at a time, 95% repeat business, turning work away on a regular basis). We have a mortgage but it's a low % lifetime tracker and less than 10 years to go. We could pay some or all of it off within the next 5 years if we wished. No other debt. Will be working for another 5 to 10 years. We will then either liquidate the company or use the funds as an alternative investment vehicle.

I'm actually finding the surplus money is giving me a headache! However I do accept that this is a classic first world problem (and should give myself a good slap)

For me, it's looking like a mix of share buying, physical PM (more silver than gold), possibly PM held in a vault somewhere (a good one!) and maybe some property in the fullness of time.

Currently moving my SIPP to a proper DIY SIPP administrator and maybe one that allows gold bullion investment. Currently with AJ Bell (but having to go through my IFA). I took my IFA out for lunch last week and talked financial doom with him. Probably gave him indigestion! I'm looking at James Hay at the moment but no decision made.

Will be following this thread with interest as well as DB"s epic ongoing thread.

Looking forward to sharing ideas and also actual outcomes of investment choices with you all.

Share this post


Link to post
Share on other sites
Posted (edited)

First Direct Group (transports)?  Not a recommendation, just a possible clarification.

Edited by Harley

Share this post


Link to post
Share on other sites
Posted (edited)
1 hour ago, Admiral Pepe said:

Not a bad idea for a thread for less knowledgeable to discuss. However, I would probably be a little careful in doing a summary. Not saying to do it but might be worth putting some cautionary notes on there. With what's discussed being a bit buried in the main thread people will have to do their own research by its very nature. If it's all in a single post they may take it as advice and/or absolute as the thing to do. For example, I've seen a number of posts of people recommending a place to buy something that isn't the cheapest. Look at VOD's performance of late. People need to know and understand what they're buying and why.

Just alone on the PM's, it opens up a can of worms. What to buy, where to buy, fees, storage, selling etc etc. Really recommended spending some time doing research.

Brokerages and what you intend to buy and when/how often can have a big impact, especially in the long term. It really is an individual sport, case by case and as such, they will have to pick their poisons and go with what suits them.

Just to touch on what you've mentioned ref First Direct, it is a subsidiary of HSBC, as far as I'm aware they don't trade separately.  

Agree with VOD: I am 20% down on that!   And it was probably meant to be FirstGroup rather than First Direct?

The important thing for me (as someone who also has only a few thousand to play with) was to find the lowest fees. 

As an example, spend £300 on UK shares with 0.5% stamp duty and £10 fee and there is an immediate 4% loss. Sell with another £10 fee; total roundtrip cost of 7%.   

Add more if transaction is in foreign currency.

I have therefore been mainly using regular investment option (£1.50 fee) for my ISA with AJ Bell.

However, there can't be all that much CGT and dividend tax on the small amounts I am planning to invest, so may as well pick the cheapest overseas broker (Degiro for example: £1.75 per trade + stamp duty in UK; 0.5 EUR per trade + 0.1% FX charge for US!) and go through them.  Of course, my money could be safer in a mainstream provider.

Edited by Bear Hug
corrected Degiro fees

Share this post


Link to post
Share on other sites
45 minutes ago, Harley said:

First Direct Group (transports)?  Not a recommendation, just a possible clarification.

Sorry, thats the one I meant!

Share this post


Link to post
Share on other sites
3 hours ago, Durabo said:

I'm sure I'm not the only person here who has very little experience in investing and wants to use the info contained within the fantastic threads to position ourselves as well as possible for the next cycle.

As I understand it, we should be looking at Private Mining companies, especially those who mine Silver, but also potentially Gold, Platinum and at the riskier end of an already risky investment area Uranium/Thorium.

When looking for good companies to invest in, the key things to look for are how much they have in the ground, how much debt they have and ensuring you have a good spread geographically - e.g. not buying ONLY South African miners as a change in political circumstances within South Africa could result in total losses if you have no other miners.

Other areas to look at are companies again with very little debt, who control or build large pieces of infrastructure - telecoms, public transport, gas pipelines, solar wind farms etc.

What I'm interested in is what your advice would be to a new investor like me who wants to invest a few thousand and understands that this IS a risky portfolio - while it may halve in value, it could also double or in some cases improve by a factor of 10.

Which companies EXACTLY would you invest in if you had to pick only 2 or 3 from the following industries

Telco, Infrastructure, Transport, PMS?

From my own research it seems like Vodafone and Centrica are great options right now, but I've also seen First Direct and SSE Bandied about. Royal Mail has also been mentioned if it falls under 300. When it comes to PMS I'm a lot more confused. To those "in the know", which names would you suggest for Silver, Gold, Uranium, Platinum?

It also seems clear that buying physical gold/silver is an option - what are the best sites for this, and how do we avoid VAT/Store them?

My aim with this post is to distill the wisdom of Durhamborn's larger thread into one solely focused on to what are the best/interesting stocks to take advantage of the crash that we know is coming. Obviously, that means that once a name is mentioned its up to you to do your own further research into the stock!

Thank you to everyone who takes the time to help out those less knowledgeable. This really is a fantastic corner of the internet!

If this post takes off, I will edit in a table with all the info about the stocks/companies mentioned.

With all due respect to you, and the very knowledgeable/experienced posters we have on here I don't think listing the specifics is a good idea and/or a good way to learning how to invest properly...

what would be useful (and help beginners such as ourselves) is to condense the general points/themes that are covered...

we can then use this knowledge with that gained from reading articles/books to formulate our own approach/choices....and then learn from our own expensive mistakes rather than others :-) :-) :-)

Share this post


Link to post
Share on other sites
Posted (edited)

I'm not suggesting this thread should be anything other than a push in the right direction. I've tried to list the general themes (as I understand them) and I'm trying to encourage further discussion around these themes, as well as tips or signposting on specific stocks to act as a starting point for further research.

As you say, the idea is to learn. Hopefully we both get what we want from this!

Edited by Durabo

Share this post


Link to post
Share on other sites

@Admiral Pepe posted a link to this series of YouTube videos. A good start point https://www.youtube.com/watch?list=PL24qYBiXaDDsSGgzBFxEe8SsECXiqVFpI&v=_chiIIxMGl0

The message is you can't beat the markets. Reinforces what I've found through experience; there are two types of stock picker. Those who know they cant beat the market and those who haven't found out yet.

Share this post


Link to post
Share on other sites

whatever you do, avoid leverage and spread betting not to mention Foriegn exchange trading.

why?

shares/bond buying and even P2P or even bitcoin/cryptos means you stand to lose up to 100% of what you put in, trading on margin and it could potentially be much more than that.

Usual disclaimers and schtick apply.

Share this post


Link to post
Share on other sites

A good start for a beginner is a monthly portfolio builder or such like, a £50 a month drip into say 3 different shares would cost around £6 (3x£50 with £2 fee per trade).

You can also buy funds and many us stocks too like VOD.

Remember though. Stock market investing is boring as hell 99% of the time and scary the other 1%.

Share this post


Link to post
Share on other sites
8 minutes ago, Bobthebuilder said:

You can also buy funds and many us stocks too like VOD.

VODs listed on the LSE, it wouldn't be wise to buy it on a US exchange, unless you had some USD to burn I guess.

Share this post


Link to post
Share on other sites
1 hour ago, sleepwello'nights said:

@Admiral Pepe posted a link to this series of YouTube videos. A good start point https://www.youtube.com/watch?list=PL24qYBiXaDDsSGgzBFxEe8SsECXiqVFpI&v=_chiIIxMGl0

The message is you can't beat the markets. Reinforces what I've found through experience; there are two types of stock picker. Those who know they cant beat the market and those who haven't found out yet.

Or alternatively can't beat the house (the institutions).  Apart from economic growth, it's a zero sum game.  They win so the retail investor must be losing or at least having their winnings scalped.  They are not geniuses but have access to the data (your trade orders, stops, flows, etc) and the means to extract value from it.  For example, they can see or easily guess where the trading stops are so drive price down to below the stops, force the stops to be triggered, and then let the price recover.  Or know when most retail investors are buying (ISA season, etc) so front run any purchases.  They only become a cropper if they accidently go against another institution with big pockets.   

Share this post


Link to post
Share on other sites
10 hours ago, Bobthebuilder said:

A good start for a beginner is a monthly portfolio builder or such like, a £50 a month drip into say 3 different shares would cost around £6 (3x£50 with £2 fee per trade).

You can also buy funds and many us stocks too like VOD.

Remember though. Stock market investing is boring as hell 99% of the time and scary the other 1%.

I would agree with this but would just say that £50 is about the lowest I would spend in each stock per month. Depends on the stock price of course, but any lower and investment capital is eaten away even by the low fees.

I’ve been doing this in an ISA with H&L for the past year or so. There is a more restricted number of shares and funds to choose from, but the big bluechips are all there alongside the commodities.

This way you average down your investment, so by me increasing my contribution allocation say in Vodafone as it drops and say reducing in Drax (which has done quite well this year) I make the most of stabbing the bottom of wherever Vodafone finds it.

PM miners are more restricted on the monthly investment list, but Hochschild mining is my choice there, (long running company, geopolitically stable sites, reduced debt, expanding mines sites etc) Randgold (too expensive) Polymetal/Kaz minerals (too much political risk/debt etc).

Share this post


Link to post
Share on other sites
11 hours ago, Harley said:

Or alternatively can't beat the house (the institutions).  Apart from economic growth, it's a zero sum game.  They win so the retail investor must be losing or at least having their winnings scalped.  They are not geniuses but have access to the data (your trade orders, stops, flows, etc) and the means to extract value from it.  For example, they can see or easily guess where the trading stops are so drive price down to below the stops, force the stops to be triggered, and then let the price recover.  Or know when most retail investors are buying (ISA season, etc) so front run any purchases.  They only become a cropper if they accidently go against another institution with big pockets.   

I don't think anyone is expecting a free lunch.

Share this post


Link to post
Share on other sites
23 minutes ago, Admiral Pepe said:

I don't think anyone is expecting a free lunch.

Hope not but I see enough young wannabe traders to worry.  My relative is a private FX dealer and his journey was a long one of dummy trading, proper institutional training, and mentoring by some pro traders.  And I was talking to a pro trader only a few days ago about the various stop loss hit and run plays.  Investing though - fair game, especially as you can choose when to be in the market.

Share this post


Link to post
Share on other sites
13 hours ago, leonardratso said:

whatever you do, avoid leverage and spread betting not to mention Foriegn exchange trading.

why?

shares/bond buying and even P2P or even bitcoin/cryptos means you stand to lose up to 100% of what you put in, trading on margin and it could potentially be much more than that.

Usual disclaimers and schtick apply.

Although generally I'd agree with you re: margin / leverage, there is a psychological downside to buying a stock in full - it's been shown that traders who use margin are more likely to exit unprofitable positions earlier (as often the margin forces them to!) than retail investors who can and often will turn a short-term trade into an 'investment' because they '...can't afford to sell, because I've lost too much'. Retail investors are more likely to hold a position all the way to zero - just something to be aware of.

Share this post


Link to post
Share on other sites

Another tip, it's easy to over trade and get involved in too many positions without fully understanding what it is you're buying.

In my limited experience, although I have large watch lists of stocks I like and dislike (for shorts), I think it's important to only hold something like 6-8 positions open at any one time.

There's no way I could understand a stock well enough if I was holding 20+ positions - especially if you're still learning the ropes.

Share this post


Link to post
Share on other sites
23 minutes ago, Harley said:

Hope not but I see enough young wannabe traders to worry.  My relative is a private FX dealer and his journey was a long one of dummy trading, proper institutional training, and mentoring by some pro traders.  And I was talking to a pro trader only a few days ago about the various stop loss hit and run plays.  Investing though - fair game, especially as you can choose when to be in the market.

I don't think it's worth worrying about. Let the wannabes learn for themselves. I think it takes a certain mentality to trade/ gamble and for the most part, they wouldn't listen to any sound advice. Take a look at wallstreetbets on Reddit to get an understanding of what you're dealing with xD

Share this post


Link to post
Share on other sites
49 minutes ago, Harley said:

Hope not but I see enough young wannabe traders to worry.  My relative is a private FX dealer and his journey was a long one of dummy trading, proper institutional training, and mentoring by some pro traders.  And I was talking to a pro trader only a few days ago about the various stop loss hit and run plays.  Investing though - fair game, especially as you can choose when to be in the market.

Obviously training such as this helps, but there's nothing quite like using your own personal funds to sharpen the mind.

I think it's probably key to start small and make the inevitable mistakes with funds you can genuinely afford to lose.

 

Share this post


Link to post
Share on other sites
15 hours ago, Durabo said:

I'm not suggesting this thread should be anything other than a push in the right direction. I've tried to list the general themes (as I understand them) and I'm trying to encourage further discussion around these themes, as well as tips or signposting on specific stocks to act as a starting point for further research.

As you say, the idea is to learn. Hopefully we both get what we want from this!

I think it's a great idea.A lot of different themes and discussions getting merged in the deflation thread.For reference purposes this is much easier to have a scan through than 150 sides of the big One.

Share this post


Link to post
Share on other sites
29 minutes ago, azzuri82 said:

Obviously training such as this helps, but there's nothing quite like using your own personal funds to sharpen the mind.

I think it's probably key to start small and make the inevitable mistakes with funds you can genuinely afford to lose.

 

 

55 minutes ago, Admiral Pepe said:

I don't think it's worth worrying about. Let the wannabes learn for themselves. I think it takes a certain mentality to trade/ gamble and for the most part, they wouldn't listen to any sound advice. Take a look at wallstreetbets on Reddit to get an understanding of what you're dealing with xD

Just trying to cool any hot heads but fair points.  Takes all sorts to make a market so each to their own.

I hear it over and over (indeed just a few days ago) from chastened beginners about easy come and easy go.  I was one once.  Made my salary in one year on warrants and lost a chunk of it in 2009 when the instruments themselves technically failed the stress test of that market fall (a kind of Taleb swan moment).  It hurt but I knew I was learning something valuable and changed totally, including taking time out.  I look back now at some pubescent fool (although enviously remember the other bits!).

Just to be clear on my FX trader relative - the point was the degree you ought to go to be a successful trader, preferably without losing too much money first so you can stay in the game and use all that accumulated knowledge.  He paid £thousands to attend courses the institutions send their staff on and understands how they operate (e.g. running stop losses) to avoid being taken.  He can narrate candle charts like they're talking to him.   

Deffo agree about over trading.  I know a few pro traders (usually of a certain age) who actually have very few trades on the go.  Maybe only 3 or 4 a month but held for days to weeks.  OK they may have other things on the go but they have discipline and know the big money for them is more easily made over the intermediate term.  

Again, I'm referring to trading, not investing.

But then isn't an investment just a long term trade (i.e. you're going to sell at some point)?

Share this post


Link to post
Share on other sites
1 hour ago, azzuri82 said:

Another tip, it's easy to over trade and get involved in too many positions without fully understanding what it is you're buying.

In my limited experience, although I have large watch lists of stocks I like and dislike (for shorts), I think it's important to only hold something like 6-8 positions open at any one time.

There's no way I could understand a stock well enough if I was holding 20+ positions - especially if you're still learning the ropes.

If you're going to run 20+ positions on a 'spray and pray' basis-ie spread yourself wide enough that one adverse event doesn't sink your annual profit loss by take over or share price crash,then you need to be running really wide stop losses and be in apoisiton where it doesn't need daily monitoring.

1 hour ago, Harley said:

Hope not but I see enough young wannabe traders to worry.  My relative is a private FX dealer and his journey was a long one of dummy trading, proper institutional training, and mentoring by some pro traders.  And I was talking to a pro trader only a few days ago about the various stop loss hit and run plays.  Investing though - fair game, especially as you can choose when to be in the market.

Dummy trading is a waste of time in my expereince,it's only when you're trading in cash that you really appreciate the emotions involved.Accroding to IG Index,something like 80% of tradesr lose money.

Edited by sancho panza

Share this post


Link to post
Share on other sites
3 minutes ago, Harley said:

 

Just trying to cool any hot heads but fair points.  Takes all sorts to make a market so each to their own.

I hear it over and over (indeed just a few days ago) from chastened beginners about easy come and easy go.  I was one once.  Made my salary in one year on warrants and lost a chunk of it in 2009 when the instruments themselves technically failed the stress test of that market fall (a kind of Taleb swan moment).  It hurt but I knew I was learning something valuable and changed totally, including taking time out.  I look back now at some pubescent fool (although enviously remember the other bits!).

Just to be clear on my FX trader relative - the point was the degree you ought to go to be a successful trader, preferably without losing too much money first so you can stay in the game and use all that accumulated knowledge.  He paid £thousands to attend courses the institutions send their staff on and understands how they operate (e.g. running stop losses) to avoid being taken.  He can narrate candle charts like they're talking to him.   

Deffo agree about over trading.  I know a few pro traders (usually of a certain age) who actually have very few trades on the go.  Maybe only 3 or 4 a month but held for days to weeks.  OK they may have other things on the go but they have discipline and know the big money for them is more easily made over the intermediate term.  

Again, I'm referring to trading, not investing.

But then isn't an investment just a long term trade (i.e. you're going to sell at some point)?

Staying in the game long enough to learn the hard way is a good beginnign I reckon.

I couldn't agree more on longer term positions.Short term trading is death by bid offer spread.

Share this post


Link to post
Share on other sites
1 hour ago, azzuri82 said:

Another tip, it's easy to over trade and get involved in too many positions without fully understanding what it is you're buying.

In my limited experience, although I have large watch lists of stocks I like and dislike (for shorts), I think it's important to only hold something like 6-8 positions open at any one time.

There's no way I could understand a stock well enough if I was holding 20+ positions - especially if you're still learning the ropes.

In a similar vein to the above. Only invest in companies that you understand. How do they make money? What are the risks? Who are their competitors etc. In addition take a look at the financial statements. If you don’t understand them, it’s not something you should invest in.

1 hour ago, azzuri82 said:

Obviously training such as this helps, but there's nothing quite like using your own personal funds to sharpen the mind.

I think it's probably key to start small and make the inevitable mistakes with funds you can genuinely afford to lose.

 

Yeah. The best way to learn is from your own mistakes.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.