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Fundamental - with a little Technical

Discussion in 'Medium/Long Term Investing' started by Zero Sum Game, Dec 7, 2017.

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  1. Zero Sum Game

    Zero Sum Game

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    Hi ASF'ers...

    My first post, but I'm more a reader than a poster - I've been lurking around as a non member for a bit.

    Been working on a discretionary simulator - thought I would throw it up here to see if I can improve on it.
    I've been studying fundamentals and technicals for a while, and I have to admit - I'm more inline with the former. For example, I've got a library full of well read books, from Radge and Guppy, to Roth and Montgomery. Charts bore the crap out of me, cash flow statements and balance sheets get me excited.
    So here it is:

    I start with a list of "strong buy" consensus stocks, covered over a minimum of 3 brokers. This is simply to narrow the search.
    I then narrow the list using a variety of filters, such as debt/equity, ROE, bright prospects for product or service, growing revenues, etc. Also must have a daily liquidity of over 100% of my total capital (I'll be starting with $500k on paper).

    Throw in a couple of technicals:
    I don't open new positions if the golden cross is negative on the ASX (9ema below 21ema).
    I only buy in an uptrending chart.

    With some risk management:
    Max 6% capital at risk, and 10% portfolio risk.
    1% risk for position sizing (to a max of 10% of capital), using fixed fractional with a 4atr stop point (adjusting to avoid obvious flushing points. However I don't put stops in the market, based on EOD closing prices).
    Trail up at a distance of 4atr on closing prices until b/e locked in, then expanding to 8atr...
    However I will use discretion, with ongoing analysis of company fundamentals, and general market conditions determining possible exits or gap reductions.

    So this is only a simulator for me for the moment. I have a reasonable amount of equity, however I have taken buffet's punch card line to the extreme, and I've got my eggs in one basket, in a business I've been involved with for a while to the extent I'm in the top 20.

    ...but I thought I better post something, since I've been reading asf for a few years...

    Regards,
    ZSG
     
    minwa and peter2 like this.
  2. minwa

    minwa

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    Can you expand on this please ? Don't you only get a new fundamental number change every quarter or so ? A 4ATR stop indicates rather short term trading, would you have held long enough for a fundamental stop ? Or it's more for profit taking in stocks that moved well in your favor but will unfavorable looking new fundamentals ?

    Also does the ASX golden cross negative trigger apply to existing positions or only a filter to stop buying new positions but keeping existing ones ?

    Good luck keep us updated.
     
  3. Zero Sum Game

    Zero Sum Game

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    The ongoing analysis of the fundamentals is only really just to keep an eye out for major catalysts that could seriously disrupt earnings, in which i will probably just exit immediately. I've still got to trial the atr stop a bit more, but ultimately if i can achieve b/e the 8atr would hopefully prevent less churn.
    The golden cross is only for new positions.
     
  4. Zero Sum Game

    Zero Sum Game

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    So I've filtered some quality businesses, and I'm gonna start losing my sim money by buying LNK, MQA and ORA...
     
  5. Zero Sum Game

    Zero Sum Game

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    Still holding LNK, MQA, ORA.
    Just added BHP, BSL, SBM, SGR.
    Currently 4.53% of capital at risk with current stops.

    Have also added a new filter: avoid companies in top 100 shorted stocks (added this due to RFG's run lately. I dont hold rfg, but this filter would have prevented me from holding).
     
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