Tuesday 6 December 2011

Trading Update 2012 - Head in Hands epiphany

Sometimes in life we make big mistakes, this year in trading terms, for the first time in 3, I have managed to get every single call and every single trade wrong. I would have not previously thought it was possible to get every single one of over 50 trades wrong, but I have indeed managed it.

Far too much risk in my portfolio tied in with a very unlucky streak of results has done for me. Now looking at a portfolio at 55% down and having to raid it for funds too, so yuck.

In order of magnitude of bad calls:

CAZA - Bought in far to high on hopes of an big oil hit in the USA. A large drilling programme for 2011 has netted about 1000 barrels of oil per day rather than the 10-20k hoped for. In a harsh market the shar enow trades below its cash levels. 80% loss, little chance of clawing back to 50% in 2012. At least the company still has cash.

XEL (Xcite) - After a stunning 2010, a disastrous 2012. Poor handling of PR and finance requirements has left he company floundering 80% off it annual highs. This after a major North Sea oil discovery. All my losses are profits only so at least that is something, but with little news flow the shareprice keeps falling. perhaps back to the 50p where I bought in in 2009. Big lesson in selling more at the highs here.

EMED - Still awaiting permitting after 3 years. 30% down on the year, but at least with good hopes of major progress next year, albeit with a still high risk of not getting the permits in time.

XTR (Xtract) - Not so bad, still down about 30% on the year, but at least I sold at a large profit when the share went up to 5p and not the 2p it currently is. Actually, with good prospects for drilling in the North Sea 2012 could be a better year.

AST (Ascent) - The weirdest share of the year, found the largest onshore tight gas field in Europe - but it took a while to get results and the share price collapsed in the meantime from 7p to 2p. Even with the company making news it has recovered only to 3p. Bizarre one, again all shares here free as I have sold out at different points.

and one good call (but no trades so does not count as I just hold from last year)...

GKP (GKP) - Flat on the year, billions of barrels of oil in Kurdistan. Needs political resolution in Iraq that has not been forthcoming for 2 years. But the huge amount of oil underlines the price - as soon as the Iraqi politicians get an agreement, of which there appear to be signs of this happening at long last, the company will be taken out - probably at about £3 versus the current £1.80. So one of my major investments at least is in the blue.

I think Nick Drew's precious metals strategy has been somewhat more successful, so I owe him a beer on our annual bet....


Budgie said...

There are two terrible events hitting the markets (apart from the ongoing recession): Iran and the eurozone.

Whist the euro is extremely harmful to the UK (contrary to what that apology for a PM, Cameron, warbles), I fear that it will not disappear. So ongoing troubles in the EU will continue to hit the markets.

If the Iranians disrupt the oil flow, even if it does not come to war, the consequences will be very serious indeed. Oil at $150+ a barrel would be likely.

i am not sure how all this will play because an oil shortage will send oil stocks high but the general situation will take us into another recession.

Cornishgiant said...

A £3 valuation of gKP is a bit miserly, no? Was hoping more for £8

Steven_L said...

I hedged my £2.5k of US stocks with a £5k short on the AUD/USD pair last night.

Difficult to stay bullish for long in these markets. I'm going to go adjust all my stops too once the US markets get going.

Quite fancy shorting bund futures too if they get below 133c.

Budgie said...

AFE has bobbed up to 6.5 today, but XEL down to 84 - how low can they go? Mainstream, my RR, TATE and SDL are not doing too badly considering the woebegone economy.

CityUnslicker said...

Budgie - Libya and the Arab Spring showed the opposite. War in the Middel East is bad for markets and the oil price - demand is predicted to fall and hence less supply is needed. I was amazed to see the oil price move only slightly and then fall with the Arab Spring - Governments also use their national reserves etc at these times.

Cornish - I am hopeful, but £3 is still a $3 billion valuation, if they only get $2 per barrel then this is not far off. I can hope for more, but would be happy with £3 (bought at 20p originally after all).

Stephen - Anoher person making better calls than me all year long.

Anonymous said...

Not exactly a balanced portfolio... you should have had some banks, housing and travel, hmmm.
But seriously... are you in the oil industry ? Do you have a scoobie doo about oil ? (it's an honest question) Oil looks like a punt to me. "The value of your investment may go.....etc etc"

Why no BP or Royal Dutch, they would of at least averaged up your loses.
But maybe you thought you could get something for nothing, like 20p to 300p and oil we all need that. Seems you were not careful on your stop loss, (easy to say but) they gotta keep going up as the price rise. -50% damn, has that undone the previous two years ?

cornishgiant said...

CU - what is your opinion on EMED and the $8M convertible loan that is just about to 'expire'? Apparently this is going to result in a 20% dilution?

I'm only small time, and have sold down from 40K EMED to 15K and I'm around 25% down on them, this further hit will be painful.

I'm thinking about selling the lot and going all in on GKP (I only currently have 2.1K shares) who I believe has a chance to go mental.

I know that is gambling not investing.....

Anonymous said...

Did Xcite really go from £0.04 in Jan 2009, to over £3.50 in Jan 2011? (and then drop most of the way back down again) or is the graph I am looking at faulty?

Any of you buy at 4p? you must be rich now.

Timbo614 said...

Looks in drawer; silver coins still there :) Gold still on the wife, some melted down and re-made for the anniversary - a really cheap way of getting new jewellery - barring adding diamonds (she doesn't like rubies).

-55% :( ITYS

Nick Drew said...

well you won on the BP wager so a merry evening will be had by all

PMs update to follow

Weekend Yachtsman said...

Well I've been buying GSK, Vodafone, and National Grid.

Not for the capital gains, but for the yields.

And I'm not doing too badly. Even the capital is OK.

The banks can stuff their 0.1% interest, frankly.

diogenes said...

re oil stocks...if you buy BP aren't you effectively punting on the Putin-risk turning favourable, otherwsie it all goes belly-up?