Assalamu’alaikum warahmatullahi wabarakatuh @UmarA
Can you shed some light on how you find which penny stocks to go for? In other words how do you screen them? What kind of criteria do you use?
Also how do you decide when to sell?
Jazakum Allahu Khayra
wswrwb
In terms of selling, I sell when either a) my thesis is broken/wrong, or b) when my thesis is proved true and everyone can see it in the financials, and the price reflects it, and the technical analysis suggests it is a good time to sell. Every situation is different - one can’t be too strict with rules of when to sell. It also needs to fit ones psychology.
So at the moment, I’m selling early because I think there is a market downturn coming and don’t want to hold through it. I will probably lose out on some gains, but my capital will be preserved.
In regards to screening…I sometimes understand a macro trend and so look for a stock that will benefit from it. e.g. energy costs are higher, therefore I looked at solar stocks.
But most of the time I just look through lots of companies’ business plans and see if I think I believe it or not and how the market may react. I work in a field where I have written and reviewed many business plans over many years, so use that experience.
On top of my instinct gained from experience, I do have some principles and a checklist I follow but don’t really want to share on a public forum as my strategy is not one that I’ve ever read about, i.e. I don’t do value, growth, GARP, magic formula, compounders etc. etc.
One thing I will say is that the best opportunities I think are in small caps, because the big investors/funds don’t fish there. They are definitely more volatile though so I do think one needs to be very careful about it…it’s easier to lose money than to make it.
Bought a 5% position in LON:TGA Thungela at 1623. Basically a replacement for RE4 that I sold a while ago, and essentially the same thing as ASX:WHC, i.e. coal.
Sold half my position in WHC for 118% profit in 6 months. I did a review of it at the weekend and it’s run up a lot and there are some other things I feel more comfortable about investing into.
Sharing for info:
While I’m waiting for the market to stop going down, I’ve got my cash earning 3% fixed income return in a halal bank in the UK. In general, this I think is the best halal place for capital at the moment.
Still on the lookout for buying stocks…just being extra careful still.
Out of curiosity (and also for the benefit of other UK-based Zoyans), which bank is that?
There are two halal banks…AlRayan Bank and Gatehouse. Both giving 3% fixed income, instant access return.
Gatehouse will give 4% if you lock in for a year.
Bought a 5% position in DAC…shipping company…totally out of favour at the moment as freight costs are falling through the floor.
Note that this isn’t compliant per Zoya…because I’m using debt/assets as opposed to debt/market cap.
Sold WHC for 8.04. 76% return
Sold TGA for 1149. -29% return
Bought ASRT at 2.91, increasing position to 10%
Bought DAC at 60.77, increasing position to 10%
Sold all the SGML for 28.40. +118% return
Bought a 5% position in Serica Energy yesterday for 270.00
AA: Being in US how do I invest in LON:SQZ? Will it be SQZZF for me? My broker is TD Ameritrade. Thanks.
Not sure if I would buy it on the OTC as there is very little trading volume for it. But yeah that’s the ticker!
I’m in the UK so I don’t know anything about North American brokers apart from IBKR which I use.
Increased my position in DAC. Going to hold bigger positions this year, although I do believe the market will be similar to 2022.
Bought STX on the Polish exchange. Motorway toll. Key risk…Poland and illiquid!
Just to reiterate…nothing I ever say is financial advice. Do your own research etc. The most important rule of investing is…“Know What You Own!”
