Busy days

Since the last week in January I have been active. I have gone from a portfolio that was half empty to one that has almost no cash. I have a rump of my gold and silver, which is doing very well and represents 9% of my portfolio. I still have that position in cattle which is languishing. I had the opportunity to take a small profit a few days ago but didn't and am now showing a small loss. A big part of the problem here is currency loss. I shall not keep this much longer.

78% of my portfolio is in equities some doing well and some doing badly. In the UK I have three strategies.

• The first looks for shares that have a low prospective pe ratio; a high prospective earnings per share; positive revenue growth; have out-performed the market in price movement and that out-performance is accelerating; they must generate cash flow more quickly than earnings. Picking shares on that basis has generated a profit of over 4% in  a week.
• The second is my surfing strategy which I have been running for about a month, this has generated just over 3% in a month with most of the profit realised
• Finally I seek out high valued stocks in growing sectors and these have generated 1.8% in about three weeks 

I am happy with these returns since the bulk of the profits were made in a period when the market went up by less that half a percent.

I also did well in Hong Kong where I sought out shares with a decent value profile but which had suffered a collapse in price. Here I made almost 3% in a little over a week while the market made 1.5%.

The big disappointment was the US where I looked for  high valued stocks in growing sectors and for small cap stocks that have suffered bad price reversals and they have left me with a loss of 9%. I am holding on because these selection strategies have worked well in the past through thick and thin. If they do not start to perform I will have to do a serious debrief to see what went wrong.

Using my surfing strategy in the US was also a failure. I lost about 1.5% in a month.

Today's graph shows how my surfing strategy works at its best. I look for shares that are trending upwards - shown by the middle blue line. I then pick those which are at or near the bottom of the channel representing a movement of 1.5 standard deviations (the dotted blue lines). I like to see a high percentage movement back up to the trend line. In this case it was 9%. I bought at 125 on 25th January and sold at 133 to realise a 5% profit after costs in ten days. I could have held on to the top of the channel but I had no way of knowing it would get there - it did not before. I think I am happy with this type of trade and will increase my stake to reduce the impact of costs

Bull

My switch in approach from bear to bull is paying dividends. The strategies I have adopted are paying off and I now have evidence that if I had been less lilly livered through the past year I would have made lots of money  instead of losing some. I have back-tested share picking strategies, using Vector Vest, in the US the UK and Hong Kong. With the right strategies in those three territories and picking shares at the beginning of each month and selling them at the end I would have made profits of at least 50% on my capital. I also know that I would have made money in more than half of the months but the profit in the good months would have more than made up for the losses in the bad months.

So I embark on my new approach. I bought shares using the best performing strategy in the UK on 7th of February. They are slow movers (mostly in the mining sector which is notoriously volatile and is currently having a few days of weakness), nevertheless they have covered trading costs. I bought another batch on 13th February and they are already in modest profit (GSK BKG SXS AMEC BRBY). - as ever these are not recommendations but shares you might like to watch to see if my strategies are working. - The batch of shares I bought in the US on 6th Feb are also in profit with SPPR leading the way with a 13% rise. And finally I bought shares in Hong Kong last night and they have delivered a little bonanza straight away (3360 410 1128 1068 2342).

I am still running my wave theory shares. (I guess a better name for the system is surfing - I pick shares that trade in a channel and at or near the bottom.) I cashed in profits in the US on MDP (8.5%since 25 January) and am holding on to the others pro tem until I find myself some better prospects - I said on Sunday that I had screwed up when picking these shares, but until I find something better I might as well stick with them till they recover some of the losses already incurred. I have put limit price orders on all of them to reduce the emotional toll of deciding when to sell.

In the UK I cashed in ROR (2.9% since 25 Jan) and MRW (loss of 5.3% but luckily I only bought a very small stake so the cash loss was minimal). I have now refined the surfing system so I now by shares which have very good potential over a relatively few days and I only buy one which are in an uptrend. My latest buys in the UK are POLY and EVR (which has made 5.7% since Monday. I am hoping for over 8.5% and over 6% from POLY.

There is always a danger that some ghastly news will spook the market and I will have to beat a rapid retreat but I'm making hay while the sun shines. Today's picture is not a chart. Instead I show you Elk. The Aberdeen Angus bull who lives in the field at the end of our garden along with two of his sons and his mother. I think it is appropriate that he is rather muddy. My feeling about the bull market that he represents is rather muddy too.