Are you 30 years old and you wanna be fully retired in 45 ?

If you will invest only 200 € each month, with Interest rate 10% per year you will be retired (minimum requirements as is food, home, …) after 15 years when you will earn only on interest rate 5845 € each year!!! This is ok for my cheap country , If you will need to live 29225 € per year you will must save each month 1000 € for period of the 15 years…

Goal is to save how much as is possible, use all tax advantages (run own biz, pay low on taxes, return some taxes from the government) and invest only to high interest rates investmentents as is stocks with good dividends (now my primary stock giving me dividends 11,8%). You must invest, not save! Interest rate 1-3% will kill your money! With interest rate 1-3% and inflation 1-3% you are on ZERO . So I’m personally using stocks, good, traditional, big firms, with dividends 6+ percents per year. Now my primary stock giving me 11,8% of dividends, this is investing which will take me "out"!

Year	Your deposit / year [€]	Investment total / year [€]	Interest / year [€]
1	2 400	2 400	0
2	2 400	4 800	240
3	2 400	7 440	480
4	2 400	10 320	744
5	2 400	13 464	1 032
6	2 400	16 896	1 346
7	2 400	20 642	1 690
8	2 400	24 732	2 064
9	2 400	29 196	2 473
10	2 400	34 069	2 920
11	2 400	39 389	3 407
12	2 400	45 196	3 939
13	2 400	51 535	4 520
14	2 400	58 455	5 153
15	2 400	66 008	5 845
16	2 400	74 253	6 601
17	2 400	83 254	7 425
18	2 400	93 080	8 325
19	2 400	103 805	9 308
20	2 400	115 513	10 381
21	2 400	128 293	11 551
22	2 400	142 245	12 829
23	2 400	157 474	14 224
24	2 400	174 099	15 747
25	2 400	192 246	17 410

I never liked the deep fundamental analysis, I liked the graphs. Numbers are boring, and you must know all this economics theories and understand accounting (who like it …).

But my last fundamental analysis was a BIG SUCCESS LOL. My BAAPEGAS (hi-tech textiles for industry) stock is a rocket, which going to the stars (+8,9% in one day), yes, his extra low P/E, good turnover, … forced me to buy this stock, and my decision was right . Woohoo! BAAPEGAS published the results for 2008 and for 2009 Q1, and this company simply rocks!

My "buy and never sell" strategy looking good.

Now I’m waiting for the results of the my other stocks BAATELEC (telecommunication) and BAACEZ (electricity). It will be not so good, they are big companies, but they charging his customers hard, so profit is guaranteed .

Now I’m 31 years old, and I need to do my "exit" in 45.

What about to buy the best stocks according to the low P/E, stable dividends, rising turnover , good technical long-term analysis.

No drugs (cigarettes, alcohol, I’m hating them, and this business will fall later or sooner, destroying of the body is bad business), no risky business with huge leverage (banks), no companies without property (developers), no business which going up and down easily (software).

What about to buy super stocks regularly, AND NEVER SELL. They will finance my exit!

I thought about it and start realized it. Warren Buffet had right.

Situation: you have money, you know which stock you wanna buy, and you wanna buy IT RIGHT NOW ! So you waiting for first second of the opened market and you buying, you don’t wanna miss single second of the opened market . THIS IS WRONG!!!

Why? In first few minutes market fluctuating hard, it’s very VERY volatile!!! When is market opened, all news from the time period, when was market closes must right now adjust the price, so the price going up and down hard.

If you investing, like me right now, your long-term money, you wanna some good day price, you don’t wanna buy at the "crazy" high peak of the day .

My solution? I ignored first 10 minutes, when is the market almost unpredictable and VERY volatile, and I ignored next 20 minutes after it too… For example, If market opened at 9:00, i bought at the 9:30.

But look at this graph (FIO broker, BAACEZ stock, two days 13. and 14. 5. 2009):

Red arrows pointing to the 10:00 hour, when market stop fluctuating hard.

The market ISN’T very volatile only in first 10 minutes, it’s volatile in WHOLE FIRST HOUR!

Next time, I will not ignore only first 30 minutes, but whole first hour! This is my conclusion for the good timing to enter the volatile market.

What about invest each month half of my month income to the best czech dividend , plus some "wild horse" with excellent P/E, stocks ?

BAACEZ 845 CZK, 6% dividends 50 CZK (not stable dividends, but czech government, the majority investor, pushing dividends up in this crisis)

BAATELEC price 443 CZK, 11% dividends 50 CZK (very stable dividends)

BAAPEGAS superb P/E around 2 – 3

Will I be rich after a year ? sure not, but I will be happy, good motivated (that I not ate whole my income, or buy some garbage from it) and I will have a decent year income from the dividends at least, so stocks price fluctuating will be less interesting for me, if the dividends politics of companies will stay same… The dividends will buy at least some ham, milk and bread for me .

Facts:

In the Czech republic are three stock markets. The big one SPAD (minimal buy in M€, market makers), small KOBOS (called also BCPP, I will use name KOBOS) (tenth of SPAD, real auctions) and the little one RMS (hundredth of SPAD , real auctions too ).

The SPAD have Round-Trip commission around 0,2% , KOBOS 0,8% and RMS 1,2% (really huge commissions for KOBOS and RMS isn’t it , nothing for intra-day trading…).

Opening time:

SPAD 9:15 – 16:0

KOBOS 9:10 – 15:55

RMS   9:00 – 17:00

Price depending mainly on the biggest one SPAD market. I’m waiting for the opening of SPAD at 9:15, next +-15 minutes price fluctuating VERY HARD! and at the 9:30 I’m starting buying. But If you are really smart and you know, where will price go, you may trade in RMS or KOBOS before opening of SPAD or after it’s SPAD closed, but I’m not recommended it.

The FIO broker buy/sell screen look like (It’s real screen from the today):

Biggest market SPAD set price of the BAATELEC (O2, telecommunication) stock on the 442 CZK. I’m not investing in M€, I may buy only in the KOBOS (second column) or in the RMS (third column) market. RMS have the biggest commission, but he offering lower price 437,1 than the KOBOSs 441 this is +- 4 CZK difference, which is 1% of the price. RMS commission cost 0,4% more than the KOBOS, but with this nice 1% bonus, its 0,6% cheaper, than the KOBOS with price 441 CZK. Every this calculation I’m making only in my mind, because It’s no time to use calculator or made mistake, price fluctuating hard and fast… Done I’m buying in the RMS for the 437,1 CZK .

Today I will start invest again. I choosed to invest half of the my last month income.

But I like do it the fun way, to have good feel from it. I need to feel good, because if I feel good, I’m making more money in my business… And more money is good .

What I did?

I analyzed Czech Republic stock market and choosed stocks according to this criterions:

1) Company must be from the Czech Republic (pure SPAD stock, no UNIVIC)

Pure SPAD stocks:

ČEZ a.s.

Unipetrol a.s.

Telefonica O2 CR

Komerční Banka a.s.

Philip Morris ČR a.s.

+ one my "wild horse" PEGAS NONWOVENS SA

2) Put out company, which I don’t like as the human:

Philip Morris ČR a.s. – cigarettes

Komerční Banka a.s. – bank. I don’t trust any bank, every bank leverage is +- 50:1, this is crazy…

3) I putted out stocks from the market, which I don’t understand

Unipetrol a.s. – coal company. I don’t understand precisely price relationships between oil and coal. Oil price are determined each day on the commodity stock exchange mainly in USA. I don’t monitoring it, don’t understand it right now, so I will don’t invest to this company…

4) I did technical analysis (Moving Average) and fundamental analysis (P/E, annual turnover)

ČEZ a.s. – good P/E, good dividends, strong uptrend

Telefonica O2 CR – good P/E, excellent dividends, strong uptrend

PEGAS NONWOVENS SA – excellent P/E, very strong uptrend (probably small downtrend correction)

5) And what is the funny part? Dice choosed the right stock .

This Is random part, which will choose randomly (today and in my next regular investments) to which excellent stocks I will invest. Chance is fun. I may choosed, that I will invest to the first company first month, second second… but this isn’t fun and isn’t good, because I will do steps 1-4 each month again, and next month i may have 2 companies, and other month, I may have 5 companies… So I choosed, that random choice will be the best one…

I sorted stock according to the annual turnover.

1- ČEZ a.s.

2 – Telefonica O2 CR

3 – PEGAS NONWOVENS SA

4 – 6 I will repeat throw

How it end ?

Dice choosed 2. I will invest today after 75 minutes to O2 .

CZK currency going up from the 14,5 CZK / 1 USD to +-18 CZK / 1 USD, so my adult business revenue generate me more money . It’s very, very nice !

And stocks price going down , super !!! So the P/E ratio (price per earnings) going down too. Before few months was P/E (It’s how quickly, in years, each stock return it’s value to the buyer) was for example 12 (return money in 12 years to you), today It’s BINGOoo!!! for example 7 years.

Wohhooo , I’m loving this "crash". Can’t be better (without irony) !

Yes, go baby, go!

My experiences from the Czech Republic RMS market Is, that price depend only on the SPAD market. Price is usually 0.5% up or down SPAD (if SPAD go up, it’s up the SPAD price…). It’s good for selling, when the market going up, because you may sell it with higher profit, but if you will miss the turn-over point you will claim high punch .

Liquidity is good, but problem is, that you don’t know If you will sell or not, it’s the auction. I’m someone trying sell for 100, not sell cancel it and go down to 99.8, 99.5…, and still not sell. In the SPAD market the brokers which creating market must buy from you!

Problem is too, that if you not trading with BAACEZ (ČEZ), which is the top one stock on the Czech market, and you trading with BAATELEC (O2) or BAAUNIPE (UNIPETROL) the market is slow and someone selling only, for example, once per 30 minutes . So you looking on graph, which not changing, and you don’t know where the price is right now…

I asked my FIO broker , if they may lower his own stock commission (I’m trading daily now) on Czech Republic RMS market from the 0,29% (RoundTrip 2*0,29%) to something lower as is 0.1% (RT 2*0.1%). Commission of the 0.1%, Is for example on the EU XETRA market via InterractiveBroker .

FIO is owner of this RMS market! So sure they may do it and lower my commission, but they rejected this my request and wrote me, that this commission is one of the lowest on the Czech market. It’s right, but try trade daily with the RoundTrip commission of 0.58% . If you will trade only once per day it’s something like 200 day * 0.58% commission = 116 % of the your whole property per year payed to your broker . So If you trading with 2k € you will pay each year 2.32k € to your broker LOL. Try be in profit in this situation…

For example I bought 26. 9. 2008 250* BAAUNIPE at 189,4 and sell it same day for 189,9 and I was in LOSS, yes loss! of 150 CZK .

Problem of the high broker commission is too , that if you are in the situation, that you must sell right now, you don’t sell only because your broker commission will kill you, and yourself, that the price must go little up …

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