Have a good friend who asked me about TransCanada over the summer. just told him it was a good stable company and not a bad stock to have in a stock portfolio, also listed FTS and enb. these are safe defensive pipeline utility stocks.
advance a few months ahead and guess what he is trading the stock. over 8-10 trades and all have shown a profit not one loss so far.
he is using a small line of credit, and with every profitable trade he is paying off the line of credit. 25,000-40,000
since he is buying a large position he only needs a small move to make a profit...
pros and cons of this trade.
PROS
1. TRP is in a trading range, and often gets in one, so he hopes to buy at the lower end of the range and sell higher.
2. the stock has a yield of 4.64% which would be considered failry safe unless we went into a great deperession...in terms of the economy... I see limited growth but no great disiaster either, a tradign range.
3. the line of credit is 3-3.25%, and the interest can used to write off against the gains. also his cost of borrowing is less than the yield so if he holds it he will still come out ahead over time.
(there is also options on TRP which are very low and for the most part not worth it though that may be an option going forward.)
5. if TRP went to zero and he lost the money it would hurt but would not destroy his family finances... his house is paid off soon.
6. he claims to not go by anything, but is watching one stock closely and knows the high and low daily.
7. he understands (he is a beginner and must learn more).
Cons
hard to pick holes in a person who has done about 10 trades correct on a stock....
1. never confuse luck with skill, doing well and has skill but has been lukcy as well.
2. recently he bought double when the positon went against him briefly of coarse this turned around and he made even more. though he realizes this was mistake, way to much in one stock.
3. have encourage him to maybe cut the positon in half, cuts down on the risk...also he has yet to experience a loss, that will happen, better if it iis smaller....
nothing wrong with a quick trade making 300- instead of 600.
4. also maybe get another stock to trade in a range and also then hold there are many out there....
5. has yet to have a trade go against him in a big way, this happens to everyone, they have proven a loss sticks with you, and is harder to deal with...
hope this works out, he does not invest in penny stocks after having one go to zero, made on another one... that was a $3 stocks that looked like it wanted to go to zero.
so he is only to look at stocks that pay a dividned and have a stable business, I wish him the best going forward....also give him a few words of caution...just in case.
thanks
selkirk
advance a few months ahead and guess what he is trading the stock. over 8-10 trades and all have shown a profit not one loss so far.
he is using a small line of credit, and with every profitable trade he is paying off the line of credit. 25,000-40,000
since he is buying a large position he only needs a small move to make a profit...
pros and cons of this trade.
PROS
1. TRP is in a trading range, and often gets in one, so he hopes to buy at the lower end of the range and sell higher.
2. the stock has a yield of 4.64% which would be considered failry safe unless we went into a great deperession...in terms of the economy... I see limited growth but no great disiaster either, a tradign range.
3. the line of credit is 3-3.25%, and the interest can used to write off against the gains. also his cost of borrowing is less than the yield so if he holds it he will still come out ahead over time.
(there is also options on TRP which are very low and for the most part not worth it though that may be an option going forward.)
5. if TRP went to zero and he lost the money it would hurt but would not destroy his family finances... his house is paid off soon.
6. he claims to not go by anything, but is watching one stock closely and knows the high and low daily.
7. he understands (he is a beginner and must learn more).
Cons
hard to pick holes in a person who has done about 10 trades correct on a stock....
1. never confuse luck with skill, doing well and has skill but has been lukcy as well.
2. recently he bought double when the positon went against him briefly of coarse this turned around and he made even more. though he realizes this was mistake, way to much in one stock.
3. have encourage him to maybe cut the positon in half, cuts down on the risk...also he has yet to experience a loss, that will happen, better if it iis smaller....
nothing wrong with a quick trade making 300- instead of 600.
4. also maybe get another stock to trade in a range and also then hold there are many out there....
5. has yet to have a trade go against him in a big way, this happens to everyone, they have proven a loss sticks with you, and is harder to deal with...
hope this works out, he does not invest in penny stocks after having one go to zero, made on another one... that was a $3 stocks that looked like it wanted to go to zero.
so he is only to look at stocks that pay a dividned and have a stable business, I wish him the best going forward....also give him a few words of caution...just in case.
thanks
selkirk
