Here is my old linear regression channel chart for HNZ updated to today
Strategy is to trade the strong uptrends but when that uptrend breaks down take profits when the price falls below the bottom channel line. Real success using this strategy is discipline and selling when the chart says so.
All worked fine as the price rose to 141 - all honky dory. Wasn't really a worry as the price drifted down to 130. But it broke below 130 which gave a sell signal. I occasionally let these things run a bit (the old fake break out trick) and didn't sell.
The price recovered but at 133 it didn't break back into the channel. A real bad sign and a definite get out message at that time (131/132)
It couldn't be true. I believed my own bull**** - HNZ was going to 160 plus based on decent profits this year, reratings and flag poles and all sorts of things. I had fallen in love with this baby.
Things weren't too bad for a while as it drifted along around the 130 mark.
But the fall to 125 was real confirmation that this was going into a down trend. I sold a decent chunk of what I had. Lack of discipline and getting carried away with my own bull**** cost me - I had not taken all the profits I should have.
I still had hope. Stupid really holding any but I did. A large chunk of those remaining have been sold sub 120 - again not taking as much profit as I should have.
I still have a few which is real dumb - strategy was to ride a strong uptrend and make most of what was available, But not following that strategy and the lack of discipline has made a 40% gain since last August into only a 30% gain (if the ones left don't fall further). (dividends not count, they are a bonus)
I hate it when this happens. Sometimes you learn lessons the hard way winner. People may laugh at your charts and squiggly lines but heck they more often work than not. Yes winner, charts also beat that fabulous fundamental analysis you did.
I will keep the ones I have. They will become the platform for riding another uptrend if that ever happens again.
Originally Posted by winner69
Geez that Roger was clever selling ALL of his at 132.
And he doesn't even use charts
Probably just plain common sense and a belief in how he sees how things going (for the worse)
Don't be too hard on yourself mate. Its a well known phenomenon that people get emotionally attached to shares. My AIR shares and me are best mates lol
If the Heartland share price had followed the red line in the chart below we wouldn't be thinking as we do now would we.
There is also a line showing Heartland's book value. The current share price is just over 10% more than its book value.a Price/Book Value of 1.1. This is probably a pretty fair valuation, many would say about right.
The chart shows the share price has moved from being relatively undervalued (P/B less than 1) to being reasonably (fairly) priced.
Heartland was never worth $1.41. Those were times of real exuberance.
Something happened to cause all the excitement that took the share price to $1.41
On reflection I think Heartland themselves caused a fair bit of this excitment.
After all they (or at least the CEO did) started showing us all those charts with HNZ valuations relative to Australian peers. The message was strong - Heartland share price is too low, Heartland is way undervalued. Talk about a good round of ramping (or more politely self promotion). Even the analysts agreed - did they fall for it as well? It seemed to work - it got the share price up.
But I think the market has got over that and now Quadrant have gone normality has resumed and the share price is about where it should be. No panic, steady as she goes from here. The red line looks pretty good eh.
Last edited by winner69; 16-08-2015 at 03:38 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
The Global Dairy Price Index was 954 on Feb 17th (it had been on the rise since the previous October). On that date the Heartland share price was $1.38
Over the last 6 months as the GDT index has fallen so has the Heartland share price. (GDT down46% and HNZ down 21%
Just an observation and surely a coincidence
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
The Global Dairy Price Index was 954 on Feb 17th (it had been on the rise since the previous October). On that date the Heartland share price was $1.38
Over the last 6 months as the GDT index has fallen so has the Heartland share price. (GDT down46% and HNZ down 21%
Just an observation and surely a coincidence
Or perhaps not. At the time of the ASM on 31 October 2014 the GDT auction price was about $2,700 and the SP was $1.00. Between then and about late January / early February 2015 the GDT auction price rose to circa $3,500 and with it HNZ's SP to $1.32 whereupon on 1 February 2015 I made the bold call the stock was fairly and fully valued and that gains going forward from there would be far harder to achieve. Since then, apart from a brief spurt up to $1.41, the GDT auction price and HNZ's SP have been pretty much steadily downhill, apart from a period just preceding Quadrant's sale when the SP was quite remarkably firm for a short time despite a weaker GDT auction price, which surprised me. Is that a coincidence ?, that's the real "coincidence" question people should be asking !
Or perhaps not. At the time of the ASM on 31 October 2014 the GDT auction price was about $2,700 and the SP was $1.00. Between then and about late January / early February 2015 the GDT auction price rose to circa $3,500 and with it HNZ's SP to $1.32 whereupon on 1 February 2015 I made the bold call the stock was fairly and fully valued and that gains going forward from there would be far harder to achieve. Since then, apart from a brief spurt up to $1.41, the GDT auction price and HNZ's SP have been pretty much steadily downhill, apart from a period just preceding Quadrant's sale when the SP was quite remarkably firm for a short time despite a weaker GDT auction price, which surprised me. Is that a coincidence ?, that's the real "coincidence" question people should be asking !
Next we will bw getting into a discussion on correlation does not imply causation
Whatever things did cause a lot of exuberance
Might be dairy prices .... might be Heartland ramping the undervalued stock story up .... and then there is the coincidence that all this happened around the time that Quadrant were planning their exit.
Just pure speculation
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Haven't had a chance to read full report yet, although found this interesting note:
"Heartland Bank intends to issue a Tier 2 capital instrument this financial year as part of its capital management strategy, subject to market conditions remaining favourable... An issue of Tier 2 capital could (in the absence of any other use) allow Heartland to return capital by way of a share buy back which would have a positive impact on ROE and EPS. A share buy back would also be attractive if Heartland shares continue to trade below the Board’s view of their intrinsic value."
Originally Posted by winner69
Don't be too hard on yourself mate. Its a well known phenomenon that people get emotionally attached to shares. My AIR shares and me are best mates lol
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