Wrong, crushed, out.
by, 15th-March-2008 at 04:08 AM (3732 Views)
As you know for the past few months I have been rabbiting on about how BHP was undervalued and people need to hold out and be firm in their convictions.
Well I couldn't:
Maintain conviction - Because as lovely as the fundamentals sound, who knows how much the price will be punished. After all like one other ASF reader said price is a "human idea".
And also, what if BHP acquires Rio, has too much trouble integrating the business and gets raped on its debt?
Hold on - The higher funding costs have gotten to me and I was sick of seeing cash seeping out of my account everyday to maintain it.
Wasn't ready myself - I was saying in my blogs earlier that traders should be ready for a 30% correction. Well that happened, and even I wasn't ready. I had to top up my account with plenty of my reserve savings to avoid a margin call.
And then I made a stupid move of shorting the British BHP at the bottom and then the criss-crossing between Aus/British BHP got too complicated.
Anyway, I'm still very happy . I had a 400% profit increase last year, I'm still up YTD and I've got my cash napping in the savings.
And most importantly - I actually had a good night's sleep last week because I didn't hold any CFDs and worried about metals/Dow each morning.
I bow out of CFDs and margin lending humbly. A margin call is something I do not want to worry about when I go to bed, I've had enough!
After this, and hopefully this is something I stick to: I want a diversified portfolio of mainly blue-chips and I don't want to use margin lending to buy them (so I can sleep at night!).
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