Batm Advanced - A New Beginning

On the subject of major loss (in this case, much less profit) The below is a post of mine from last summer on The Motley Fool, entitled "License to Print Money".

Read and weep - I did!

"Making money in the stock market is simple, you only have to answer one question correctly to succeed, which is, "Do you Buy, Sell or Hold?" Okay, so maybe there is a catch and it's not that easy and there's also the matter of timing, which is just as crucial for an investor as it is for a stand-up comic. If you get the timing wrong, nobody laughs - neither the audience nor the investor on the way to the bank!

"SIA & TRT have at different times been my single largest share holding and representing about half of my equity assets. My decision to buy both shares was proven correct and the timing to buy in both cases was perfect, but the exit part of the equation was a mixed bag when viewed with the luxury of hindsight. I bought most of my SIA shares during its record low period in early 1999 at between 32p - 40p and was very pleased with an approx 5-bagger when I sold 3 years later, but in knowing now that my stake would eventually have become a 40-bagger worth several million quid if I'd held on, it has rather tarnished the earlier image!

"I first bought TRT shares in 1996, but I didn't become really serious until this unknown OFEX company floated on AIM in Dec 99 when I coincidently jumped in with both feet at the same average SP I paid for SIA, allowing for a subsequent 4-1 split to make it comparable with today. Within 3 months, the TRT SP peaked at 693p at the height of the Y2K bubble. I sold sufficient shares to cover my full original outlay to leave me with a 5-figure sum of cash and the bulk of remaining unsold shares held at no cost and being worth at the time more than my main residence! Moving forward 18 months, TRT broke loose from its fellow tech stocks that had headed for the cellar and achieved a new high of 712p when Michelin aligned its future plans with TRT, but the gravy train then stalled in the station when it became apparent that for technical and legal reasons it could take a few more years for TRT's patented technology to develop into commercial reality. As a result, TRT's SP became a meal for Bears and sunk to a record low of under 15p by Feb 03, from which point I began rebuilding my position as TRT clawed its way back up to some level of respectability where it should now only be an RNS or two away from again setting out the punchbowl for the party. I did well out of selling TRT on the way down, impossible not to considering I was in at no cost, but still very painful on morale compared to what might have been. However, the stock market, unlike most games, often allows a rematch if you're not satisfied with the score on the previous occasion and so I've taken up the opportunity presented.

"With the past behind us and only the future that matters, my bets are securely placed on TRT as once again it represents about half of my equity assets. It has long been ingrained in me during my 42 years of trading that this is a game of percentages combined with patience, a continuing effort of trying to maintain the odds in your favour and having the will to persevere with the facts if you're not a masochist and do seek success. Long shots are fun when they win and it satisfies the need of gamblers for excitement, but rational traders extract as much of the risk out as possible and go with the percentages. In my view, SIA has only a remote chance over a practical time frame to double in value from its current inflated level, whereas this for TRT should just be the first overdue hurdle with the commercial prospects it has on the verge of release. Furthermore, TRT is not dependent upon geo-political events and speculation to support its SP as with SIA and will soon have US law requiring the use of its type of product on new vehicles sold in America.

"This time I anticipate that the ink on the TRT banknotes will be thoroughly dry and not smudge after coming off the printing press. If I'm wrong, my tears alone might help alleviate the UK's water shortage!"