Update:
I chose to change over some of my AUT and EKA for TXN in my own investment account so Ithought I may as well do the same with this exercise. So;
15/11/2010 WB5487**** Buy TXN 1,715 1,715 0.585
15/11/2010 WB5487**** Sell EKA 3,170 3,170 0.335 .
So now we have:
4000 EKA @ 0.335 $1340 plus 1715 TXN @ 0.585 $1003 = $2343.
It may have been a proposition to change all the EKA for TXN because the brokerage on these small trades is high in proportion with the size of the trade. However this spreads the risk now over two businesses.
I compared the charts of similar companies over the last 2 years. EKA, AUT and TXN were moving at the same pace for most of the time until recently when AUT and EKA shot ahead. I noticed that the drilling progran at TXN is behind that of the other two but now well under way. TXN also has a higher percentage interest in each of its wells. In my opinion it has room for more of an upward movement that the others. Just my opinion.Hello Nioka
this is an interesting thread
Why did you choose TXN is it because
They are also a player in Eagle Ford Shale
Just expanded its holdings acreage
Already have wells producing and bringing in funds to drill more wells
Did you look at other companies in the same area
Have a nice day
James
I think if you are planning to trade frequently then $5000 to $10,000 is a good amount to begin with. Minimum brokers commisions for trading stocks will eat up a lot of the profits on a small account if you trade a lot.
You could also say that $50,000 to $100,000 is a better too. or $1,000,000 better still. This exercise was to answer the question " Is it worth starting with only $1,500". It is no good saying that it is better to start with $10,000 to someone that only has $1,500.
The answer I am attempting to show is that "yes it is". The object with the investment into TXN is also to show that it is worthwhile starting with only $1,000 as well as spreading the risk a little. Brokers charges do eat away at the profits. (So do the extreme payments to directors etc.) A cost we have to bear I'm afraid.
It's hard starting with little because of the comms. I'd recommend to anyone who can to save enough and shift to someone like IB (which I did). You get two effects - 1) you have a bigger bankroll so you can spread the trades and make each position slightly larger and 2) the % comm is lower.
If I take 1K positions then having only one means I need nearly 100% win rate. Personally I don't like that sort of pressure.
If my capital was only 1500$, and i wanted to spread it over a few companies. Does that mean i pay separate brokerage for each trade?
If my capital was only 1500$, and i wanted to spread it over a few companies. Does that mean i pay separate brokerage for each trade?
Update.
Value today.$2509. Indications are that there will still be improvement in this stock. I am now looking for an opportunity to sell down half the holding to spread the risk over two stocks and take some profit from this one. Brokerage on this size holding is a problem that has to be taken into account.
You also multiply the risk. If things go pear shaped you could end up in debt.
UXC back on down trend as the exuberance buyers bail out and the faith players cling on in hope ...
So I'd go for a bigger capital base than 1500, especially if I was young (time is on my side), use a lower fee broker and and determine my portfolio heat ( both number of positions and $ amount) and risk/trade. Which is what I have done. My stepped plan had been Y1 - break even (didn't quite get there) , Y2 - do better than the bank (done that quite well after paying some subscription service fees), Y3 - better of Y2 goals or XJO performance - don't want to match the XJO if it is a negative year!
The original question was " IS IT WORTH INVESTING AS LITTLE AS $1500"
My example answered THAT question.
My answer is "YES"
My example proved that, yes it is.
Surely it is better to have more capital. Sure you can save more to add to it.
BUT... What do you do with the $1,500 while you save up more?
Answer, Invest wisely and accumulate.
My first share buy cost me 10 Pounds. I doubled it in a month. I could see a fundamentally sound way of doing it with very little risk. That was all the spare cash I could find at the time that I could afford to lose.
There has to be some risk to get better than bank interest but you can reduce the risk by doing sound fundamental research.
Stocks to research in my view are;
EKA. Should become cash flow positive. Takeover potential.
AUT. Emerging shale oil producer.
SDL. Develloping iron ore miner.
CFE. Has assets for sale far in excess of its MC
CER. Has an NTA twice its SP.
NTU. Uranium and rare earth prospects
LYC. Develloping producer of rare earths. Leading the field towards production.
TXN. Great oil shale prospects in Texas.
BUL. Coal seam gas potential.
EDE. Holds patent for Hythane (currently being trialled) and a few interesting irons in the fire.
Then with more risk specs. BLG, TEY, TAS, VPG. All possible for excellent returns.
I hold all of these in reasonable numbers. The fact that I hold is definitely no guarantee on success as I'm often wrong. My recommendation is that they are all worth researching. The above is only information related to "Is it worth investing a small amount of money like $1,500. The best of these stocks attract negative criticism so DYOR.
I'm pretty sure Nioka just offered a list of shares that someone could feasibly make a decent return with little risk, with the intention that you'd only choose one, obviously the brokerage would be too large a percentage to feasibly invest into 10 shares.
Well there are 10 stocks there you recommended.
Now on commissions alone if someone were to trade that and own it, that would cost about $100. Double that if you trade with Comsec.
Now on the return leg that would be another $100.
So before you've even done anything, and before you've even made your gains (or losses!) you're already down about 6-12%. This excludes any setup costs or bank fees as well.
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