Damm I checked my e.mail inbox for the invite from Chris Luxon and all I found was yet another contract note for another 10,000 AIR shares...how disappointing :D
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I first started investing in the share market in 1995 when I bought Infratil for 91 cents. I was then told the best way to invest was managed funds, so I invested in Money Managers First Step. By approx. 2008 this investment had lost me $10,000. I went back to the share market & done well for a while. I bought lots of shares in SLG & SEA with no stop loss set & sold these earlier this year at another loss of $10,000.
Just over 2 years ago I took early retirement & dedicated 4 hours each morning to studying the share market. I have developed spreadsheets to track investments & have a Stop-Loss in place to show where things are not going right.
At this point I would like to thank Roger for sharing his advice and knowledge which has helped me very much.
I am very excited how AIR is performing & wanted to get in on the action.
With not much funds I contacted my bank & they gave me an interest only mortgage of $30,000 at 5.59 percent until 2020.
This is weekly payments of $32.25.
Yesterday I purchased 11260 shares at $2.66. My stop loss (Max I am prepared to lose is $3000 (10 percent). Time is period 5 years (Length of loan).
My calculations are that if the dividends stay the same as last year (16.4c/s) I will receive $1846.64 and my mortgage repayments will be $1677.00 – so a gain of $169.64 or 0.54 percent.
I expect the dividends to be much better & with a possible share price of over $4.00 by 2020
At a share price of $4.00 in 2020 I should have a minimum profit of $15,088 of 50.3 percent (10 percent annualised)
I wish everyone the best with their AIR investment.
Air has dropped 10% three times since March. If you sell after a 10% drop you will lose your $3000 plus the opportunity to make several times that.
Thanks Fred, My Stop Loss works on closing price. If below I sell first thing at the next days opening (Gives a slight chance of recovery). Looking back I see close prices at $2.35 9th Oct & $2.37 8th December 2014 so have adjusted my Stop Loss price to $2.33 10.92% so max loss will be $3540.48. Last time it was below $2.33 was 26 Nov 2014. I hope it won't get that low with the latest performance. If it does then I'll be out with a loss. NOTE I previously had 1130 shares in AIR before this purchase so the above sell figures include my total holdings of 12390 shares.
Best of luck thestg ,but gotta say ,it sounds scary when it involves borrowed money.
My guess is that the main posters have assets enough to ride out fluctuations.
2.33 is more than a 11% drop from todays price to Im assuming you have bought in cheaper-
Dont forget to keep tabs on outside markets as well
Just a caution Thestg......I'm relieved to see you have a stop loss discipline in place...very important to adhere to your discipline especially so with any stopped out cyclicals as they are dangerous stocks to own..but cyclicals are volatile..so expect to be in and out often with your 10% limit...Your can't afford to rise that 10% neither...That's why many longer term investors don't ever touch cyclicals...
Using long term investing,, cyclicals are your best friend one minute your worst enemy (nightmare) the next...
AIR is a cyclical stock
Disc: Have AIR stocks
I am old enough to remember the mid 1980's and the tales of many people borrowing money to invest on the share market. FOMO played its part. 1987 came and the tales of woe started. Perhaps many of those investors did not apply stop losses as rigorously as you intend to. It makes me think that now is the time to sell my equities if the share market is being propped up by similar leveraging as well as QE. A $30,000 mortgage may well be small change compared with the value of your net realisable assets. Good luck. Definitely DYOR and seek independent advice.
Disc: I too got IFT early on and still hold some today. I consider that IFT itself is a type of listed managed investment fund.