Margaret Laing doesn’t mind admitting that she is pretty chuffed with her sharemarket wins over the past 10 ten years. An investor in both property and shares, Laing would put most professional investors to shame.
Her successes include a parcel of Gloucester Coal shares that she divested for a tidy $50,000 profit – tripling her money.
Setting a high benchmark, she consistently outperforms the All Ordinaries Index by 75-100%. This includes income from dividends and capital growth.
In property she has an uncanny knack of being in the right place at the right time. Laing pocketed a profit of around $1.5 million on a house and land on Noosa Sound and close to $1 million on land in Brisbane.
Her philosophy is simple. Laing follows the Warren Buffet line: “If you don’t understand it, don’t invest in it”.
Possibly one reason for her success is that Laing is never afraid to ask questions, and is always prepared to pick up the phone to speak to mangement before buying shares in a company. Rather than relying on hearsay, she wants it straight from the horse’s mouth. “I believe in picking everyone’s brains,” she chuckles.
Laing’s investment approach combines fundamental and technical analysis, using the latter style for timing her entry or exit into a stock. Interestingly, and good news for the punter, Laing confesses that her greatest wins have mostly come from tips. “I would get the information and put it on my watch list and the technical indicators would show me the time to get in,” she says.
Although Laing is aware that investors should have a spread of investments across many different sectors, she tends to ignore the rule about never having more than three stocks in the same sector. “I know it’s riskier but I like to focus on [certain] sectors and industries. I have my indicators there and if they start going bad I get out,” she says, conceding, however, that lack of discipline regarding stops has resulted in losses of $10,000-plus.
Her most recent blunder was gold miner, Dominion Mining (DOM). “I thought, things are going bad, people will buy gold and this will turn around. But I ended up losing double my stop loss,” she groans admitting that she still chastises herself for ignoring her technical indicators.
It was early 1999 after her daughter fell ill and was admitted to a psychiatric ward in Brisbane that Laing shifted temporarily from the Sunshine Coast to Brisbane to be close to her sick child.
“It was like being hit by a Mack truck,” she says, referring to her reaction to the news. “I walked out of my office, over to a park, lay down under a tree and looked up at the sky and came back and resigned and moved to Brisbane.”
It was whilst she was in Brisbane, with long periods of time alone, that she began reading voraciously about the stockmarket.
She stgoured Warren Buffett’s ‘The Essential Buffet’, the bible of technical analysis Stan Weinstein’s ‘Secrets for Profiting in Bull and Bear Markets’ and Peter Lynch’s ‘One Up on Wall Street’ followed by several handbooks by Alan Hull and Jim Berg.
At the end of the day, she attributes her success in the market to the time and work she put into becoming educated. “I always say to people go and read books and don’t worry about all those courses,” she states. But she fears that most investors are not prepared to put in the work, and this is their biggest downfall.
“Anyone who has the passion, the drive and the enthusiasm can learn how to trade. It’s like learning to play the piano. It’s a skill that you stgelop as you build confidence.”
With a background in accounting she admits that she had a natural aptitude. But still, even for Laing, it was a steep learning curve.
One of the hurdles she faced when learning to trade was finding out which time frame suited her personality. Should she buy and sell on a monthly, weekly or even hourly basis? Laing found out by trial and error.
Initially she traded currencies over the very short term, but quickly realised that this was more suited to an “adrenalin junkie”.
Today, Laing is a long-term trader. It gives her plenty of time to be with family and friends and to maximise her role with the Queensland Investors’ Club.
Initially intimidated by the club’s “sophisticated and experienced members”; today she proudly wears the badge of President.
She grants that she is still struggling with the technical analysis software, AmiBroker and is currently seeking the expertise of some of her fellow club members. “AmiBroker is the buzz word in charting programs because it is very cheap. But it’s not user-friendly,” she exclaims.
Laing uses weekly charts and holds stocks for three to twelve months. When she began trading she applied the 2% risk rule but because of the big downturn in the market found she was losing too much. She has since cut back to 1.5% at the most.
Although there are literally thousands of technical indicators available to traders, Laing prefers price and volume indicators; she particularly likes the MAC-D (Moving Average Convergence Divergence) and the RSI (Relative Strength Index). “One of the most important things I’ve learned as a trader is to keep it simple,” she says. “You start off trying to understand hundreds of indicators and end up discarding most of them.”