T Nation

What a Buy Looks Like

Trading stocks isn’t a hit topic on this site, but for the few of you who have an interest, South Africa is a buy right now. This chart of the EZA index shows why I think so.

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=eza&sid=0&o_symb=eza&freq=2&time=12&x=26&y=18

In this chart you see a clear upward trend over the past 5 years. As investors, we want to be on board for these types of trends, especially since it has been pretty moderate. No bubble has formed yet but since most trends that look like this end in a bubble, we have an opportunity to be in at the start of a bubble.

Further, the index price is currently right at the lower end of the trend line. To me, this is the perfect entry point. If it drops below 105 and holds, it becomes a sale, so we risk only losing a little. If it resumes it’s upward trend it has room to go all the way up to 180 in the next year. So, by my calculations, a purchase today at 111 has a downside risk of 7 percent (sale at 103) and an upside potential of 60 percent (sale at 180). This is the type of opportunity I look for in the markets.

read up on india as it has been expanding much faster then the US and just slightly behind China

[quote]on edge wrote:
In this chart you see a clear upward trend over the past 5 years. [/quote]

Charts are great for predicting the past.” - Peter Lynch

I realized technical analysis didn’t work when I turned the charts upside down and didn’t get a different answer” - Warren Buffett

Having lived in SA for all my life, except the past 2 years, I would say SA is anything but a good investment.

Nice, cheap beachside properties would be nice for a holiday home, and you may turn a profit just like in most countries with property, but that place is slowly on the road to shit.

[quote]on edge wrote:
This is the type of opportunity I look for in the markets.[/quote]

And what sort of opportunity would the one year chart suggest?

It would have been good had you jumped in when it was on its way UP that graph. Buy high and sell slightly higher is retarded.

It’s good that its near the low end of its 52 week range, but if you were to “buy in now”, and then sell “IF” it goes to 105, you’re hardly a robber baron.

I’m a buy and hold guy though. I look at the max chart I can get. I look at “market going down” as bargain bin shopping.

[quote]rsg wrote:
Having lived in SA for all my life, except the past 2 years, I would say SA is anything but a good investment.

Nice, cheap beachside properties would be nice for a holiday home, and you may turn a profit just like in most countries with property, but that place is slowly on the road to shit.[/quote]

Are you sure it’s not improving from really shitty to just shitty? The chart indicates the economy has been improving over the last 5 years. Would you say that picture is clouded by exclusive success in the mineral industry? There would have to be some explanation like that if what you’re saying is true.

[quote]gsxtacy wrote:
read up on india as it has been expanding much faster then the US and just slightly behind China[/quote]

I like India. I use to trade the BRICs but it got away from me and I’m too cautious to buy in at such high prices.

[quote]Loose Tool wrote:
on edge wrote:
This is the type of opportunity I look for in the markets.

And what sort of opportunity would the one year chart suggest?

[/quote]

That 110 is a solid base.

[quote]msd0060 wrote:
It would have been good had you jumped in when it was on its way UP that graph. Buy high and sell slightly higher is retarded.

It’s good that its near the low end of its 52 week range, but if you were to “buy in now”, and then sell “IF” it goes to 105, you’re hardly a robber baron.

I’m a buy and hold guy though. I look at the max chart I can get. I look at “market going down” as bargain bin shopping.[/quote]

I’m not sure if I don’t understand you or you don’t understand me. The 105 is a stop-loss. It’s not a point where money would be made, it’s protection. It works like this; even if LT is correct and the chart over the past 5 years is equivalent to flipping a coin heads six times in a row and the next flip is still a 50:50 chance, my method still insures that my losses can’t be very big but my gains can be.

[quote]Loose Tool wrote:
And what sort of opportunity would the one year chart suggest?

[/quote]

Wow, if you invert the chart, it looks like something totally different!

[quote]on edge wrote:
rsg wrote:
Having lived in SA for all my life, except the past 2 years, I would say SA is anything but a good investment.

Nice, cheap beachside properties would be nice for a holiday home, and you may turn a profit just like in most countries with property, but that place is slowly on the road to shit.

Are you sure it’s not improving from really shitty to just shitty? The chart indicates the economy has been improving over the last 5 years. Would you say that picture is clouded by exclusive success in the mineral industry? There would have to be some explanation like that if what you’re saying is true.[/quote]

This may give you an idea, as I’ll end up repeating myself.

http://www.T-Nation.com/tmagnum/readTopic.do?id=2266815

Though I may just seem to have a negative outlook, I do love the country and it’s a beautiful place, but the only thing I’ve been hearing from friends since I left is bad news and complaining and this and that.

The people should wisen up and stand up to some of the bullshit going on there.