Capitulation
Capitulation is the point at which a bear market has a massive sell-off - at that point, with no more sellers left, the buyers take over and an upward trend resumes. However, this is only after heavy losses as been sustained.
Sadly, after 3 years of fantastic returns, the curse has struck my trading portfolio this year - with a nice dose of hubris too. I heavily invested in Xcite energy after the de-risking of a successful drill, only to see the market hugely mark down its potential - from 360 down to 167 - over 50%. A big reaction, too much, but AIM has it problems at the moment with liquidity. EMED too has fallen over 50% from year highs as news flow has been too slow for the market to accept there is real progress. CAZA's failure with a big exploratory drill has seen it 66% off its year highs. Even GKP, which has put out strings of good news, is some 25% lower that its high.
Overall 33% down of the year thus far, at the depths of last year, when my portfolio ended 115% up again, the loss was only 20% - this year I will be glad to get into profit at all. it is quite possible, with EMED likely to double or more and a recovery of some sort in XEL likely to see me near break-even. In reality, I am 50% down from year highs, which is considerably more in cash terms than I earn in my day job - a little sobering to say the least. (Lesson [painfully] Learnt - take profits and de-risk ahead of key news statements on event driven stocks)
Coming up later in the year, a possible GKP takeover after their oil contract row is settled and a make of break drill for XTR in the North Sea.
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It's the 'considerably more in cash terms than is earned by the day job' that leaves a melencholy edge to this post.
Chin up. I have the greatest admiration that you're a player at all.
"Capitulation is the point at which a bear market has a massive sell-off - at that point, with no more sellers left, the buyers take over and an upward trend resumes."
Isn't it also the point in a bull market where a cash-heavy structural or perma-bear sees that he's been missing the boat for the last two years, and reluctantly gets into equities (usually at the top)?
O/T, but....
http://www.eutimes.net/2011/05/russia-says-imf-chief-jailed-for-discovering-all-us-gold-is-gone/
Considering the plight of the eurozone, I am not surprised by EMED's halving. But I am puzzled as to why XEL is less than half of its top price?
thanks all - I think there are many bargains at the moment, there really are. it is not quite 2009 again, but some of the sell-offs are silly.
MNR finally did a deal this week too, 1000% up from where I bought them - sold out at different levels so not quite a ten bagger. My average of 10p to start was tested by a fall to 5p at one point and ages at 10-13p.
It just shows that investing is tricky but also its best to stick with the factsas the market is interested in them only eventually!!
Xcite is looking like a 'table mountain' pattern to me, like Sainsbury's on their 2007 takeover hype.
I'm regretting buying at 235p now but planning on holding at least until the end of 2011.
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