Interview with Pete @GilgameshGod666

This interview was the result of a phone call between Pete and I in early November 2018.

 

Thanks for your time for this interview Pete – I appreciate it. Why don’t we start by hearing about yourself?

Well, firstly I come from quite an interesting family – my Granddad invented numerous weapons in the Second World War including the silencer.

The first silencer? That’s pretty cool!

Yeah, and lots of others, it was crazy as well. I could’ve been this stinking rich guy now because he helped actually develop the ball point pen because the guy who invented it couldn’t get the mechanism to work, and he had two deals one of which was £100,000, which is probably over a million today, or 10% of the company and if he’d taken 10% of the company..

Oh no!

I’d have been sitting on a gold toilet seat with a Dodge Viper right now!

And you wouldn’t be trading shitty AIM shares either – you would’ve been buying BP!

Absolutely! All of the inventions he made during the war he didn’t get a penny for them; it was just for the war effort you know.

He was a hero – not a lot of people can really say that. You’ve got a book coming out soon as well, haven’t you?

I haven’t got it coming out just yet. It’s written, and I’ve been on to my sister. My sister has Oscars to her name and she’s done brilliantly well in the writing world, she’s doing Liam Neeson’s next film-

Wow!

It is pretty cool, and she’s basically said that I can write up a film synopsis straight away and we can send it off to some film companies and we can go and pitch to them and see if they’re interested. It probably needs a week or two of work of it and we can go to London, spend a bit of time to get it done, and sharpen it up and take her advice. But essentially it’s done.

You might not be trading AIM in the near future!

Well, even if I did have a film that was making millions, in a pipe dream situation, I’m sure I’d still be trading AIM and that would take precedence I’m sure.

There’s just something about it, isn’t there? I can’t even imagine leaving. Even if I was worth £10 million I’d still take positions in companies that are around £5-10 million though obviously they’d be huge positions.

You know we’re all different, and I was speaking to Doc Holiday the other day, and he was saying he has a mark that he sets that is when he’s getting out, and I was listening to him and thinking “Well, we’re all different”. I don’t think I could. I’m a total addict, and if it did get to stupid money like £2 million then I’d want £5 million or £10 million. It wouldn’t be about the money, it’s just a total addiction, and I can’t imagine getting off the spinning wheel.

Me neither. On a Sunday night I start getting really excited.

Me too.

You see people posting on social media saying “I hate Mondays” but I actually love them!

It replicates Christmas a bit, when you’re a kid and you go to bed on Christmas Eve and think “Wow, what’s going to be going on tomorrow, it’s so exciting”.

It’s just the thought that “Tomorrow could actually be one of the biggest days of the year in the market”.

You never know.

You never know, and it’s just what keeps me going. Sometimes you just see an RNS and you think “Wow, this is great, there’s a good chance I can make money on this”, and especially on some of the smaller companies the moves can be massively exaggerated, and it just keeps me coming back. I suppose that’s why we do it.

Yeah, you definitely get an endorphin rush, but the problem is then you need a bigger win, or a bigger swing to get that same rush. That’s where the addiction comes in.

A lot of traders say we should be emotionless, and I agree in the execution phase, but how do you relate to that? Some people can be addicts but they let it take control and they take stupid amounts of risk, and end up blowing their accounts.

I think that would go back really to the start of when I started trading, and you know that there’s been a boom and bust twice for me with Westminster Group [EPIC: WSG] and Andalas Energy [EPIC: ADL] and both times I’d swung traded these huge profits from £12,000 to £140,000 and from £8,000 to £120,000 I think it was, and both times I’d fallen in love with the dream. That was where the emotion came in, and both times I got stung really horrifically.

But that was what needed to happen, because that’s when the reconstruction phase happened, and I realised “You’re an idiot Pete, you turned £8,000 into £120,000 but then you thought ‘I’m going to lump all my money in this share and this is going to be the one that makes you rich’” .

I didn’t need to do that. I just needed to keep doing what I was doing, and there was no problem with that at all. That was my Robert the Bruce moment, sitting in the cave, watching the spider failing to make his web a few times, and that was when it really started to go well after those two huge failures really, and since then I haven’t looked back.

I think quite a few of us do the same thing, I know I did. We think we know it all, it seems so easy, then the carpet gets pulled from under your feet. Before it happens you start thinking of how much you’re going to make next month, and when the target isn’t looking likely you’re tempted to take on more risk to achieve it! That’s the danger really.

That’s where experience and time comes in. On Friday I took a £4,000 loss on Tomco Energy [EPIC: TOM]

Sorry about that – it’s pretty shoddy of the company.

No, it’s just one of these things. You’ve got to have wide shoulders and realise that every now and again one of these black swan events come and to be fair the management haven’t been great, but 15% below placing and when we thought was a catalyst coming along, I thought that was going to be one the boys would really jump on it and get a nice 20-30%.

But the way that the market is at the moment, I’ve seen it like this three or four times since I started properly in 2011, and I’ve mentally noted that when the market is like this I’ve given back gains that have been hard fought over the last few months. I’ve realised that this could be a period where I give back some good gains I’ve made this year and so the risk is in the market at the moment. I’ve got to tread seriously carefully at the moment.

I agree, I have a large portion of cash and I’m trying to nip in and out when I see trades.

There are some seriously good swing traders out there who, in a more fertile market, they’re artists, and some of them are taking some serious losses. It’s just time to sit back and wait for the market to be in the right place where those swings pull off.

Yes, that was the same that happened to me during the election. I was in illiquid shares and just gave back so much. I didn’t have a plan, and I realised if I kept on doing that I’d have to go back to work. You’ve got to park the bus and protect what you have, and when the market does turn and the opportunities are there, you’ve got to hit and get long, really jump on it. That’s the time to make big money, but you can’t make big money if you don’t have it.

If you’re really strict and you can get through these periods, and I’m always looking for a trade all day no matter what the market looks like.

Same here.

If you can sit through these markets and not lose anything and have some cash available , when it gets fertile and everyone else is stuck in those stocks, and you’ve got fresh capital to pump into the market, you can make more in three months than most people can in a years’ worth of work.

Oh yeah, definitely.

You get two or three periods in the year, and that’s all you need to do. But the strict part is not taking lots of risk when the market’s like this at the minute. Everyone is going on about the Dow, and the FTSE is at 7,000 again, in reality the AIM market and the liquidity is absolutely terrible at the moment. It’s chronic. I’ve not seen it like this since probably late 2015, early 2016, and then the liquidity just went crazy, and there was another period where you could just buy any stock and make money on it for about 3-4 months again.

I’ve never experienced it like this before, it’s pretty drab.

It does change.

It always changes.

I think the problem is when liquidity dries up, the MMs [market makers] widen the spread, because of course there’s not as much volume, and it just becomes a negative cycle. I don’t want to buy illiquid stocks at the moment, I want to buy things like Regal Petroleum [EPIC: RPT], JKX [EPIC: JKX], that are generating plenty of free cash.

You can generally sell £40,000-£50,000 at the click of a button, maybe a bit below bid, but if you’ve got a good swing that’s irrelevant. If you’ve got one of these illiquid stocks then you get a quote and you can’t even sell £350 you’re thinking “Oh God, no”.

Yes, I know that feeling! And until people start thinking now things are looking really cheap or the risk to reward is starting to become attractive again it’s only going to get worse. Companies are struggling to get placings away, I’ve been made inside for some for weeks now. It’s hard for a lot of them to get funding. The price gets discounted, falls further, becomes more discounted, and it’s just a race to the bottom.

Unless there is any secondary demand then no one is going to buy and it’ll just trade below the placing price due to selling pressure. I can’t understand why anyone is taking them, unless there is a catalyst.

Well, if you look at Tomco where I took the hit on Friday we were already seeing placees talking about not giving them the money, well if they refuse to give the money I can’t see anything other than the company going pop and gone.

It would be a bit of a shame for those who have lost the money, but then at least nobody else is going to lose money on it, if that makes sense.

Yeah, it makes sense, and there was another big commentator on the market Gary Newman said “I’m glad about this, not so much glad about people losing money, but maybe this will force people into stopping giving money to these companies”.

I absolutely agree.

And instead start investing in these decent boards, with skin in the game, and a real business model, not just some sort of string-along kick the can down the road company.

You’re right. One question that The Masked Stock Trader suggested in an earlier interview which he said I should ask people, and have to give him credit for that: What would you do to clean up the AIM market?

His suggestion was to have lock-ins for placings, which I thought was a good idea, because if you know you’re going to have your money locked away for a few months then you’ll be more careful about who you give it to. What do you reckon?

Firstly, that’s in a Utopian world. People don’t want their money locked away for three to six months. People want the ability to press a button or ring a broker and have that cash straight away. God, it really is the Wild West out there. I would say that the rules that have come in this year have actually really stopped some of the scamming.  I don’t know the ins and outs of the rules.

The ESMA rules?

You look at these guys who have been caught out by the TR1s, that has cut down on a lot of who must’ve been for years buying big blocks of shares, and now they’re forced by Spreadex to TR1. That has cut down on a lot of it; they’ve had to change their angle the bad boys of the market.

God, what would I do to clean it up? I would say that it’s not so much that what we’ve got to do, it’s what the FCA have got to do, and the FCA should get off their arse and do something. It’s not even that hard, people have got all the evidence and screenshots of it, I mean they don’t have to do anything. It’s carte blanche for the FCA. People have screenshotted some of the bad boy stuff and they send it to the FCA. The FCA could have them done tomorrow but the FCA hasn’t got the time or the resources.

At one point they will say “Let’s do something about this”, and they already have a bit this year but everything is mostly the same. Eventually, someone will come into the office and say “Well, I’m not having this”, and then it’ll all change. They just need to get off their arse.

I think they try and focus on the really big ones – if a PI loses a few thousand quid no-one cares, which is sad really.

Well, that’s the thing that they are missing. There are some guys on the AIM market that are making millions. If you look at that EQT scam a while ago, I’m sure a lot of people lost a lot of money that were not in the circle, and I’m sure a few made millions. It might be perceived by the FCA that this is the small cap market, but when you look at some of these risers and some of these scams, it’s serious dough, you know?

You’re absolutely right on that – but it doesn’t really matter if it’s £10,000 or £100,000 – they should be clearing up on frauds. When did you actually buy your first share?

The first share I ever actually bought was probably 2006 and it was two paper certificates, one was for Griffin Mining [EPIC: GFM], and the other was Peacocks. This was because my Mum and Dad, and it was very simple, every time we went down there it was really busy, and it looked like a really successful business. So I put a thousand pounds in each one, then after about three months and I went to the bank, there was none of this instant trading, and I’d made £600.

I got a real rush from it, and I forgot I did have an experience of the dotcom bubble, and this is what killed it for a while. I think I had about £1,500 in an account which was a lot of money to me at the time-

Well, it is a lot of money!

I was messing around, I didn’t know what the hell I was doing, it was more like a guy at the casino. Then suddenly the dotcom bubble came, and I was just sat there and I watched that £1,500 and turn into about four hundred quid, and I just sold. I thought “Oh, wow, I like my money; I’m not interested in that anymore”.

But afterwards, I was doing a bit of bricklaying, which is a trade when I fall back on when I need to, the guys I was working with they said “Oh, you know Kirk in there does trading?” I said to Kirk that I’d always been interested in trading, and he said to come to his. He had a big mansion, and I went into his trading room and I think there was about 12-15 screens, and he was doing all the currencies and a few shares. It just inspired me – I saw these graphs going everywhere, and lights going off, and he sat and explained a few things and few rules, and I was hooked again.

At that point I actually got into a bit of a scramble on a night out with the beer, someone snapped my leg-

Bloody hell!

Yeah, it was broken pretty badly, and I had a really nice BMW at the time, which I don’t think it was connected, but it was kids or teenagers. Anyway, this car got absolutely smashed to bits one night.

That is brutal.

Yeah, so I had a broken leg, my car was smashed to bits, I was at a bit of a low ebb. I lived in a third storey townhouse in a little flat, and the insurance money came through really quick. It was about five or six grand. I’ve always been a working man and suddenly I had someone telling me I had to live on sixty quid a week disability allowance.

How could you live off that?!

I know, that’s gone in a day! So I was thinking “I’ve got to do something here. I’ve got five to six grand, sat in a third storey flat, and I can’t do anything”. So, I set up a share dealing account, and again this was no knowledge, I was a gambler. OK, I’d looked at some screens in a guy’s house, but I didn’t really know what I was doing, but it was a real bull market at the time, within a week-

Was this about 2006?

No, this was a lot later, this would’ve been around 2011. This was when I started properly, and yeah within a week that money was up near to £10,000. It was literally one of those thoughts where I was thinking “God, this is so easy, why isn’t everyone doing this? They’re so stupid, I’m amazing at this!”

I didn’t know what RSI was, what MACD was, I didn’t know anything. I just thought I was incredible that I’d almost doubled my money in a week. And this was when LSE was going, it was crazy. Twitter didn’t really exist then, LSE was like the Wild West. There were guys on there with like 15 IDs on a share, pumping it up, talking to themselves with all these IDs. There was so much money in the market back then and it was just crazy, and so many more characters than there is now, although a lot of them were probably multi IDs.

I got caught on a share called ORE [now Sosandar, EPIC: SOS], and I bought it. You know [name removed] was back around back then, the PR guy, and he put this big piece out on Delhi Shavan, Cities of Gold, King Solomon’s mines, and it was one of these things like a 10 minute video. And if you didn’t know anything about shares and you watched it, you wanted to buy. This was like King Solomon got rich out of this mine, the Romans got rich from this mine – it had all these facts. The Romans had supplied their army, the grades were bonanza; they were hundreds of grams per tonne. I was like “Oh my God!”

So, I put my money in here at 1p after a big punt. There were a lot of characters on the BBs [bulletin boards], one thing I did have on these BBs, and I was one of the top 10 salesmen in the UK so I was really enthusiastic, was that I had these couple of guys that were really experienced and they were both trying to get me under their wings. I’m not going to mention their names but they were both dark characters in their market, and they were trying to almost use me as the sorcerer’s apprentice. I didn’t realise what they were doing at first, but they were trading the stock from .5p to 1p, .5p to .1p, and it’s exactly what you and me would be doing now. But as newbies they were bringing out figures, ramping it up for multibags, like some of the characters do now and disappear after 50%.

10% in this market!

Yeah! I was sat in this stock for six months, and by then I was back to work, and telling everyone about this gold mine in Serbia that was amazing. I rang up the CEO, I’d emailed him a few times, and this was my first real introduction to AIM. This guy, I’m not going to mention his name, a few people know who he is – he sat on the phone to me and he said “Pete, this share has my total backing. I am behind this 100%. This project is going to be amazing”, and short on saying we’re all going to make a lot of money on this stock.

Anyway, these drill results were about eight months late, they were driving everyone crazy. The drill results came out, and they were amazing. They were good to bonanza, and I thought “This is the day, this is the day it’ll go to 3p and 4p”, and it went up to 1.2p and then it went to 1p. Then the next day there was an RNS saying the CEO had sold £150,000 of stock! So that was my introduction to AIM, and the seedy world of CEOs, dark forces, and people who’re trying to take you under your wing when in fact all they’re doing is trying to use you!

That’s some story!

Well, it is funny – we’d waited for six months for these results and then I had the guy telling me it was amazing, giving me a hint: “It’s out of market hours but you’ll have a good day tomorrow”. This schmuck sold a huge amount of stock and killed the rise! And that was when I quit ORE and got out of there, and again that was very early days.

I’d lost a fair bit of money, but this was small peanuts I was playing with back then. I had a few wins, and I was a right ramping little twat, but I didn’t know any better. There wasn’t any malice behind it, but I just thought this is how it worked, and I think it was Riddler who sent me a DM – this must’ve been just as Twitter was very early days.

When was that? What year did Twitter come into it?

I can’t remember really, around this time.

2012?

About 2013, but then it was this switch over where people were using Twitter and using LSE. It was 2014 I reckon when everyone made the whole switch, and I know you’ve still got guys using LSE now but anyone who knows anything about shares knows the business goes down on Twitter.

Anyway, this Riddler guy, I’d seen him and he’d done blogs and everything. I was this little fish, and he seemed like a really nice guy, and he said to give him a call. So, I gave him a call, and I think he realised how fresh and green I was, and he taught me a few little things. And he really took the time. He said you pull this up on II, explained RSI, MACD, explaining a few things about moving averages, and it really really helped.

He really helped me as well. You did actually, both of you had a really positive impact on my development as a trader.

Thanks, you know all I do is treat people the way I want to be treated, and you know when you start trading there’s so many questions and fears, and we don’t want to look vulnerable, but you’ve just got to keep on asking and learning from your peers, and then you’ve got your skillset. But yeah, Riddler was a real help, and he was in this stock WSG [Westminster Group], and a few other ones, and I think I’d made a lot of money on APC [EPIC: APC] a lighting company, that ended up being rubbish.

I think APC is actually quite good now, it’s come full circle!

And there was these guys, who I was working with, these millionaire guys on a building site who ran it. They were real entrepreneurs and had cleaning businesses, and they said “Oi, Pete, you’ve done all right there”. You know, I’d done this on my phone and bricklaying at the same time, and they said, “Tell you what, we’ll set up a couple of accounts, very unofficial, and you try and make us a bit of money”. Anyway, this WSG I’d got a load of money in, I’d missed the bottom I was in at 45-50p, and I’d borrowed money. I’d had a massive run and I’d built it up to £100,000.

Well done!

I borrowed £50,000 from various people and got my family and all my Mum’s pension in this share, and again rule #1: Don’t have all your eggs in one basket. This was all in the first year and a half, and this share went to 90p. Any sane person now would’ve at least taken their stake out, but again this was the stupidity of myself. I’d made all this money on swing trades, and this was the one, the airports, they had a billion pound quote bank, I’d talked to the board, we’d even gone and met the board at one point.

Ah, you were part of the group, weren’t you?

I was part of the group, yeah. I went there with Jamie and Dingdong. Looking back I had reservations after meeting them, but I wanted to believe in what I believed. It went to about 50p and went back to breakeven. This was like ORE again, a classic newbie situation. And then Ebola came.

I can remember that in 2014.

It was one of those situations where they said in the press that it’s going to be cleared up within a week, and I was thinking “That’s cool, it’s a week”. The stock price went down 5%, then it was like looking at month on the news. I was thinking that “A month just is four weeks” and just forget about them for a month, then they dropped another 10%.

Then it was then as the press do, it was zombie world is coming, everybody is going to die, Ebola apocalypse, mega Ebola is coming and it can’t be cured. It was like one of those scenes on the films, and the price just went through the floor. I had that big position and I sold. I was in serious debt, I borrowed money, and from the remnants that were left I paid back these guys, quite serious characters actually.

Probably not the sort of people you’d want to be in debt to, I’d imagine.

Exactly. They were the first people that got paid back. I rang my Mum and told my Mum what had happened. I told my brother that had money invested. Obviously, family were a bit more understanding. All I had left was £12,000. There was this huge sort of emotional feeling like “Jesus, I’d gone from £100,000 plus borrowings, and you look like an idiot because what you said was going to happen didn’t happen, and you’re left with £12,000”.

So again, you know, he’s got his haters in the market but people like Riddler – he was a rock. He said “We’re going to go back to basics, you’ve done it before”. So off again we went, and the market was really fertile, boom trading, 10%, 15%, 20%, and within six months this money was back up to £110,000. Which, in anyone’s money, that is bloody great returns.

That is several hundred percent, so that is pretty fantastic.

Yeah. And people used to take the piss. They used to say “Here comes Mr 5%”. I did sixteen 10%ers in one morning, but the market was crazy then. The money was everywhere. There were people putting money in at the top of spikes, you know ridiculous money, and it was doable back then but you couldn’t do it now. You’d be lucky to get 5-10% in a day at the minute.

I can’t really imagine that, can you describe that a bit more please? Sixteen 10%ers in one day!

So, the way I’d explain it is that if you look at top risers right now you’ve got maybe one spike to 50-60 to 100% if you’re lucky. It’s like a football table – you’ve got a few 30%s and generally at the moment and depending on the day and you’ve got bottom of the top risers it’s 12%, and even on a bad day it is 2-3%.

When I was doing those 10%ers, you had about three shares at the top over 200%, four stocks over 100%, the bottom of the top risers was 35%, so you can imagine that liquidity within that set of risers. People were buying and buying, and I’ve always been good at catching the bottom, not so much the top though I’m better these days. It was really doable.

There were guys there like Chiffa, who has gone quiet, and he used to be a legend in this share world and probably still around under an alias. But it was easily doable, a guy like yourself would’ve done ten 10%s a day, and it was just lovely.

That sounds amazing!

It was amazing, but I started in 2011 and though there’s been some amazing great liquidity points, I’m told that in 2010 people were making crazy money. Apparently 2011 wasn’t that great and this was later on. But people were going nuts – it was like when crypto last year, everyone was making multibags everywhere. It was all fresh and everyone was so excited about everything, but the bubble had to burst. We’re in a very different market now that’s for sure. I think I’ve lost my thread actually, I can’t even remember what we were talking about.

Me neither, but it sounds mental!

Basically, again, I’d made this colossal amount of money from a small amount in six months, and then ADL happened. And this was again, I was an idiot, because I’d made the same mistake twice. I’d put all of my money in ADL, all of it, every penny. I used to tell people it was 95%. Was it bollocks – it was the whole lot. So, the suspension came, and I was thinking “Bloody Hell”. My girlfriend, she told me I was going back to work, and to get back on the building site.

Well, the word on the street was that it was a couple of months’ suspension, and I knew from experience even then that it could be 3-4 months. Back in the rain, back in the cold, but earning a good wage, but thinking when this comes back that that it will be great again. Dave Whitby – he turned a £15 million company into a £400 million company. He knows what he’s doing, and he’s going to come back with some great assets. And then the phone started going. I used to talk a lot with [name removed for protection], and he said he’d had a word with the brokers and it was going to be .7p [the placing]. “That’s fine”, I thought, “they’ll raise a load of money, get some good assets, this is going to do really well”. Then a month later, it’s coming in at .6p, and I’m in at .9p.

The market was fertile, it was really fertile, and the stock was going to get chewed up. The stock was suspended at 1.15p or 1.2p I believe, then again the phone call came – it was .5p. The brokers were being a bit arsey, they weren’t in love with the asset, but I thought: “Don’t worry because they’re going to have the money; they’re going to get some good assets after this, just this first one just to get us back trading”. And then the phone call came again.

I think I was coming back from London with my girlfriend at the time, with her little kid in the car. We’d all had a lovely trip away, the phone call came, he was a bit quiet, and he went, “Mate, I’m really sorry – it’s .2p the placing”. And I’ve got £100,000 in at .9 and I thought “Fucking shit, I’ve done it again, I’ve built my Mum’s savings up, I’ve looked after her again, I’ve built my cash up, and boom”.

I knew it was going to be horrific. I actually asked my girlfriend to pull over, and I threw up for about ten minutes, on the side of the motorway on the hard shoulder. She was asking, “What’s the matter? What’s the matter?” And I lied to her. I said I just felt really ill, she asked who that was on the phone and I just said it was something about shares. So I just got back in the car. She really hated me doing shares, and I knew I’d lost all this money and she was quite adverse to the shares anyway, so I just said I felt ill and car sick or something.

How did that make you feel lying?

It didn’t feel great. I was with her for another year and she never knew what happened for that whole time. I lied to her through the whole year. She’d ask how it was going with the shares and I’d say it was going well, and as long as she got her keep which I paid her, a set amount, she used to say she didn’t like me doing it but she kept it cool. There were some really hard times scraping that keep together but I never missed a payment, you know.

And so the share came back, and Cornhill had got this share by the balls, they had so much stock, and I knew they were going to have to raise again. I had all these people telling me I’d be an absolute idiot if I sold now, but I sold out between .2 and .22, which left me with around £8,000. I can’t tell you the exact number, but it went from around £100,000 to £8,000.

That’s the bare essentials of it, and again I had outgoings, I had loan repayments, I did everything wrong. I had credit cards, I was up to my eyeballs in debt, and I had £8,000. I had this woman that wanted to go on these lovely holidays and needed her keep which was pretty high every week, and I was thinking: shit! This was disaster zone. I actually got it a little bit wrong – this was absolutely my lowest point in shares. I owed over £150,000 in debt from WSG, and I’d got loans out under false pretences, saying it was for home improvements, when really in fact it was just to fill this black hole of void.

I went to every bank, my credit rating was quite good because I’d already done it for WSG, and they knew I was good for paying back. It was very, very tight to illegal to what I did, and I don’t think I could get that credit now the banks have got a little stricter. But I’d got £150,000 of debt at high percentage rates, some at high APRs, 7-12%, and again this was the abyss. This was me going bankrupt, and I’d blown my Mum’s money, blown my own money. I was an absolute idiot and I couldn’t believe what I had done. I was really in a dark place. The closest I’ve ever been to a nervous breakdown in my life, and I’m a really strong person. Again, I rang Ridder, and I told him. I was straight with him. I said, “I’ve got all this debt, it’s out of control, I feel like I’m at the bottom of a pit a thousand miles down and I can see this speck of light”. He said “OK mate, we’re going to walk through every trade”, and I said “No, look I know what I’m doing with the swing trades, I just need a bit of support. I’m just lying to everybody. I’m lying to myself, and now I’ve got all this debt to pay off and I’ve got this £8,000”.

Anyway, through a lot of pain, and this is when actually when, and I don’t mind it written, I needed my Mum bad. She came up, and it was almost like they say when there’s this thing where your Mum knows when you need help. I was sat in this flat, and she shouted up: “Do you want a cup of tea?” And she came up, and your Mum knows you, they know you inside out. I made her a cup of tea, she said, “Are you all right? You seem awful quiet”. I said “Yeah, I’m fine, Mum”. Then she said, “Look, what’s wrong?”, and it just came out. I’ve cried a handful of times in my adult life but the tears just would not stop, I was blubbing like a baby. She held me and I said “Mum, I’ve fucked up, I’ve fucked everything up, I’ve fucked your money up, your pension is worth pennies, I’ve fucked my money up, and I owe all this debt, and I don’t know what to do”. She said, “You’ve got to go bankrupt and you don’t worry about me, I know you were trying to do the right thing”.

I said that I wasn’t going bankrupt – I’m quite old fashioned like that. I know people do it so easily these days but I’m not like that. I still had this £8,000 but I had this £150,000 to pay off, plus I wanted to get my Mum’s money back. I didn’t want to tell her that her pension was gone, and again, I couldn’t do it now, I’d just be stuffed. But again, the market then, the liquidity was crazy and it was brilliant. Then I went into CTAG, put the whole lot in.

I love CTAG.

Doubled it, my £8,000 was £16,000. I went in at 3p and went out at 6p, and I could’ve held to 22p.

It is dangerous when you start thinking like that though.

Yeah, I was thinking I could’ve held, but what I meant is that I doubled my money and it went to 22p and then it turned out to be a scam. One man’s disaster is another man’s winner. People must’ve made millions on ADL when I was losing. The market again was fertile, it still wasn’t quite as good as this period before where you could get ten 10%ers, but you could definitely do two or three 10%ers a day, and those compound gains are pretty impressive and quite quick.

Anyway, that was two and a half years ago now, that debt pile is now down to about £25,000 that I owe, but I pay off quite regular. The £8,000 is now worth over £200,000. I’ve taken some out and I’ve put it in an another account and I’ve set it up for my Mum.

Going onto your other question, how has it changed my life? My life’s been hell. I’ve been watching these other guys posting cars, with fluorescent paint with their names on the number plate, other guys posting holidays left, right, and centre, going to amazing places. I think it was 500% last year and this year I’m 118% YTD.

That is really, really good!

I think now that it is starting to click now, and I’ve just got to stick to those rules and my life will keep change amazingly. If I can keep making these percents without doing these stupid ADLs and these WSGs, life’s going to be amazing. I’ve got big, big dreams and I’ve always been one for setting goals and making them happen, and I want a castle one day – half modern, half old – and my brother is a famous artist and he’s also said that he’s racing me. And I’ll make it happen, I really will.

I believe that you will, I genuinely believe you. I think if you can come back from that it really shows your character, because a lot of people would’ve gone bankrupt. That’s the easy way out, isn’t it?

It is the easy way out.

It is the easy way out, and you could’ve done that. The debts would’ve been wiped, and that is really impressive, scary as well, because that sort of situation terrifies me if I’m honest.

I’ve watched guys like you and you’ve really done everything the right way in my book, you’ve studied everything, you’ve picked people like me and Riddler’s brain, after we’d gone through those sort of horrific stages, and you’ve come on, in my opinion, then there’re other guys as well, Calder Capital and other guys, that have learned so quick.

I did everything the wrong way but it’s almost like, looking at people like BigGib and Bel, and there’s other guys that have had a very similar story to me, where you’ve got to go to the edge of the apocalypse and then really sort of go big. My time’s coming now, almost all the debt is almost paid off, there’s a big pot of capital to play with, and as long as I don’t get crazy again, the world’s my oyster, you know?

Definitely. What percentage position size are you taking on positions now? If you’ve been doing several hundred percent you must’ve been big in the best names on the market, because that is a fantastic gain, well done.

We were all discussing stuff from Twitter the other night, and look at Early Bird, another guy I really respect. He was saying the reason he’s made such big gains in certain stocks and that’s been position size, and now I don’t want to go to 100% for obvious reasons but I do break all the rules still. I will put 40%-50% of my portfolio in something that I think will do well, not something like WSG or ADL with dreams, I’m talking about something with good fundamental backing.

40% would terrify me!

It doesn’t terrify me, and I’ve been watching some of the guys like, the King of the market in my opinion is Baron, there’s not even anyone that comes close. I’ve even heard rumours the trust fund boys follow him.

He is incredibly good.

In my book, the best. I aspire to be like him, but at the minute I’m like a little sucker fish that is borrowing his research and almost replicating what he’s doing with his free cash flow models. You can see that it’s almost like in the market there’re ringleaders and it’s almost like the circus. You’ve got the bad ones, the good ones, the grey area ones, and Baron is the guy in this crappy market that is still getting a lot of traction. I was looking at AIM Chaos, six months ago they’d do a tweet and there’d be a £100,000 of stock bought after it.

All of these characters are very creative and different in big ways, but nobody is really getting traction and the only one is Baron. I’ve realised that, and I saw him getting so excited about RPT [Regal Petroleum], and he’s very animated normally. Him getting excited is going to get the market excited. It’s a liquid stock, it’s 80% held by big boys, and I just saw the way that he was going.

So, I put 40-50% of my PF in RPT at 39.5p, and 41p, and I went freehold which I haven’t tweeted at around 52p and 58p. I did another swing on it from 47p, so it was a swing within a swing, and it left me with a £40,000 freehold position. I’m not interested in touching this because I believe RPT is going to go to £1. That was a big risk again, and although I’ve taken my medicine in the past, but with the researched option even if this stock falls back and I’ve got this call wrong, at some point in the future it’s going to come back because this free cash flow is going to build and build and build.

It’s like an insurance policy.

Yeah, it’s not like ADL, where you’ve got some guy with a funny little earring playing golf and spunking the money up. It’s almost like there’s no such thing as risk free but I feel a lot safer doing it with an SQZ or an RPT at the right point in the swing trade. That’s big money. To some people £40,000 is nothing, but to me £40,000 freehold in a company is big money. RRE [Rockrose Energy], I’ve got the same plan, I’ve pumped lots of money in at 5.65p and 5.7p. OK, I’ve missed the bottom but the fundamentals to me are saying that it’s going to be 800p, 900p, 1000p by the end of the year.

I’ll probably go freehold at 700p because I know I’ll be getting a bit twitchy at that amount of profit. But again it won’t be to take the money out. It’ll be to leave the freehold in. I believe in the future it’ll be worth £20, and if I’m wrong there’s no risk in. The compound gains on that and a guy like Baron who has met the board on numerous occasions – I’ve got total belief that RPT will be worth £1 within six months to eighteen months, and those gains are compounded again. That £40,000 is £80,000 or £120,000.

I think that’s the way to do it. Compound the gains and minimise the losers, and gradually build the portfolio.

Absolutely. The most I will go is 50%, but again people say that’s crazy, and it is crazy, but the difference now is the levels of research I put into a stock and the quality of the stock I buy with that amount of money.

Do you have a contingency plan? For example, do you have a plan where you think “OK, I’m getting out?” If RPT if it went the wrong way or a way you didn’t anticipate, do you have a price where you’re actually going to get out and cut your losses?

No, I wouldn’t. Because if it was a small cap with no revenue ahead, yes. Here’s an example: if you look at SOLO a couple of months ago, there was a placing, I bought heavily into it, and you just get a feel for these things over time. The book didn’t feel right, the fundamentals didn’t stack up, it had a bounce straight away. I took a £2,500 loss. That money there went into RPT, a separate pot, and that pot made £40,000 on that stock. So yeah, there are contingency plans on the shares which haven’t got revenue coming in, always a contingency plan. There’s always a price or a time period, or if it isn’t happening or has beaten that resistance after three attacks I’m out, or if it keeps hitting support. But with an RPT I’d pretty much sit back knowing that within the next three or four months when that next report comes out that free cash flow will start to overlap, the market will get excited. I feel a lot more steady sitting in that stock, even if it had gone back to 32p or 33p because I’d be confident in three to four months it would be higher but in a non-revenue stock I wouldn’t.

I think one of my mistakes last year, even though I had a brilliant year last year, was that I didn’t concentrate enough. I was making money on so many stocks; I must’ve traded a few hundred stocks last year, which is a bit ridiculous because if I’d concentrated in my best ideas I would’ve done so much better. Maybe it wasn’t necessarily a mistake because my actual risk taken was very low, but maybe I just felt I hadn’t earned it, and because I don’t want to go back to work I tended to put risk first. When the market does come around I’ll be ready to concentrate more capital in the best names, maybe not 50%, but I’ll definitely concentrate and I’m sure I’ll be rewarded. It does work, and you could’ve made good money this year if you were just in three or four stocks and did nothing, and you have had a fantastic year.

This is the crazy thing. I traded SQZ [Serica Energy] when Baron was first tweeting out, and this could be wrong but I think he was buying I think Aviva and Fidelity’s stock at 5p. I traded that stock from 5p to 6.5p and I thought 30%, wow! Bloody hell, whizz kid. Then 10p to 12.5p, again I was thinking “Wow, 25%!”, and then again from 21p to 26p. If I’d just left that money in at 5p and now it’s at £1.30, just the compound gains there would’ve been ridiculous. At the time I was like Flash Harry, 30%, 25%, and I’d made three trades all over 20%, which were good money, and trades in £3,000-4,000 profit each time and even now that’s a great profit. But now, that would’ve been my castle. All I had to do was sit on that stock for two years and that would’ve been it!

That’s exactly the same for me now. When BMN [Bushveld Minerals] popped up on my volume filter one night I saw the huge Atlas trades get converted, so I bought a boat load the next day at around 9p and sold around 12p, which I was really happy with. I’d done everything right, I thought well done. But then it kept going up and I watched it go up to 13p, 14p, and it kept going up to 20p, and I’ve actually traded it four or five times now, where it’s traded even higher on breakouts, and made money on it every time. But if I’d just kept my stock from 9p I would have been better off, and now I’ve got loads of it and the price is 40p, because it’s just so cheap. I can see that stock going to £1 in a few years because it’s producing more, and the price of vanadium is going nuts.

In the end, there’s only one way it can go unless the prices of vanadium falls through the floor and it can only go up.

I just didn’t really do the research and thought “30% banked. What’s next?” But yes, that’s where the big money is made. I struggle with this and I think probably a lot of other people can relate to it, is to think long term like five years plus. With being a full time trader and the stock market being 100% of my income, my wife and I, we just travel, and we don’t have regular income apart from the stock market.

It’s hard to think long term when you’re a bag up, when the mortgage needs to be paid, we want to go on holidays and enjoy ourselves. When you’re looking at a nice profit and you think that’s two or three months’ work in my old job, it’s very difficult to not take it. But you do have to cut your losers and run the winners, and running the winners is where the money is made.

I’m always selling too early, which is not necessarily a bad thing because I’m making money, but the real money is in finding a quality stock and then doing nothing. I think AIM Chaos is very good at this and he had BMN I think around 1.6p, it’s 40p now, that’s 20x his money. You only need one stock like that and you’re made for life.

That’s the stock that dreams are made of, you know.

Fevertree [EPIC: FEVR], Boohoo [EPIC: BOO]; these type of stocks make an entire career. I remember when I started I looked at FEVR and because I’d read about Peter Lynch and value I thought FEVR was too expensive and left it. But was it expensive? In hindsight, no. It’s quadrupled since early 2016 when I first started learning. That stock wasn’t expensive at all, because it was growing at such ridiculous rates and generating so much cash, it just wasn’t expensive. It was priced highly for a reason.

There will have been some people who bought in at £2 and thought, “Where can this be in five years?”, and checked the results to see if it is was growing, and then done nothing. Some others will have sold out thinking “Wow, four times my money – that’s a good return”, and it is, but some people sell far too early including myself.

Well, as I said I used to be known as Mr. 5%. I’d go onto these groups and they’d say “Oh, here he is, Mr. 5%”, and I would. I’d do 5%, 5%, 10%, and that was three years ago, and I realised I was missing so much out. Then it became 20%ers, now this year they’re like 30-50%ers. Next year I want to be the guy that buys the RPT when Baron starts flagging it up and then you do your research, and hold it for hundreds of percent. But I’m too impatient, I know that. It’s not my DNA to hold a stock for that amount of time.

I think it is human nature to want to take profits quick so we can be right.

Well, Baron and AIM Chaos are great at it. The trick around that is if you put a big concentrated bet in and it goes up 50% just take your stake out, and then just blank it. Everyone is different but for me it’s take the stake out and have that nice five figure sum plus and just leave it there to grow and grow through the quiet periods. That is the way around it if you haven’t got the propensity like I have to hold for years.

I’ve only been trading for around a few years, my third year, so it’s hard to think of five years! That’s just nuts. Next week is a bloody long time on AIM – never mind five years.

But then you see these stories of the building couple who had £1 million in SQZ and it’s worth £38 million now. We love the hustle and bustle and the swing of things.

We love the fast money.

But the money is made from those long, long holds. If it is the right stock.

But that’s also the problem. The reason why it is so difficult is that there are so many of these stocks that just aren’t the right one, and sometimes you can have one that goes up 100% and you think, “That’s cool – I’m in for the long term”, and then it slowly drips back to breakeven and even worse goes below your entry. As a trader, that’s a cardinal sin to give back so much capital, and it is your capital, if that position doubles it is your capital, but it is only truly yours once you’ve banked it.

We like to think of ‘house money’ but that’s just a gambling fallacy, and then when it drops below breakeven you need to be either adding or getting out. There’s nothing worse than giving back a huge gain, it’s so frustrating.

And I think that’s when, I’ll use RPT as an example, it shot up, and Baron has been buying from 5p all the way to 47p. That stock went to 30p pretty quickly and it sat at 20p that for what guys like us would seem an age. Baron just sat there, he knew the model was right, he knew the cash was building, and probably the same guys who were selling at 30p for a nice profit are now re-buying the stock at 50p for another swing. The money is just sitting there and waiting for that stock. That’s been a big development in my trading for this year. I’ve never seen anyone bandying around free cash flow. I didn’t even see it anywhere until this year, and now the market has changed, people are getting ripped, they’re getting ripped new ones in there in the bottom end of the companies.

 

PART TWO BEGINS HERE:

 

I think that’s because a lot of companies are doing so bad this year that free cash and low PEs, companies that are actually sustainable and they’re generating enough operational cash flow – those are the ones that aren’t going to get done with a discounted placing. Quality in a bad market is King.

There’s a huge shift in the market from guys that were only trading penny stocks now that are regularly trading stocks of like £300-400 million market cap. One thing I’ll say is you’ve got to evolve with the market or you become extinct. This year has been a huge evolving point and everyone has got to realise that the market has changed hugely or they’re going to end up with their portfolios completely crushed. You’ve got guys that play the ramp and you look at PSL, they multibagged, they absolutely multibagged. It was at .6p and then they all went quiet. Now you look at that stock and it looks like it could delist really. It’s got nothing, but they made the big money.

Riddler told me back in the day you could take a placing and the price would never get near the placing.

Yeah, this isn’t even so long ago. This was even in your time. Pretty much every placing about a year and a half to two years ago would sit 20% above that placing, and then it would clear some of the placing and before long it would be 50% up. It was regardless of what it was, it could be complete trash! But it didn’t matter because they knew they could take that placing and just shift it for 20%, and they knew five weeks later they could shift it for 50%, but the secondary market has got a bit more switched on now.

It has. I did trade those placing ramps when I started. I used to buy within 5-10% of the placing price, and then ride the ramp up. That strategy doesn’t work anymore.

My first loss in two months, Friday close, on Tomco, absolutely first money I’ve lost over £1,500 where it’s just a swing that has gone wrong. It’s another company that has got huge promises and potential catalysts, and it’s the first time I’ve gone and messed around like a stock like that in a while and it’s the first loss I’ve taken in a while too, so that’s a big lesson.

I think this sort of penny crap will become the ramp du jour again eventually, and if you’re in at the right time you can make money. I stupidly didn’t buy CAMB [Cambria Africa] the other day – I read the RNS, it was good news, but it’s also a bad market.

But it’s not good news. Not wanting to be liable or anything, but look at CNEL [China New Energy], CMB, both of them spike twice a year, it’s like a Christmas annual. Now, I’m not saying those figures aren’t real, let’s get this straight, but I don’t believe those figures are real. Another one is UVEL [Univision Engineering]. Huge contract. If those contracts were real, then that stock should be trading 3-4x higher. You get a feel for it and if CNEL and CAMB were making figures like that, and I’m sure they have got funds, but if they were making that money, then you’d be seeing your JP Morgans, all these funds, they’d be piling in there! Well, you don’t hear anything from anyone like that.

You’re absolutely right, though I was talking from a purely trading view. What I tend to do is automate things, and is it a surprise to the market? Yes, it is. Is it good news? And yes, it was good news. The only reason I didn’t buy is because it was a bad market, and you never know how these things are going to be taken, and there’s the spread to consider too. Only this time it was taken quite well.

Well, I mean things like Tomco – I actually thought there was a genuine case for the company and a case for the swing. Although I didn’t like the company, a few weeks ago I traded ALGW [Alpha Growth] three times and didn’t do one tweet on it. The whole of the swing trade was based on tweets of Danny Swick’s pants with a hard on-

[laughing]

The stock had gone from .85p to 5.5p on a £2 acquisition and a placing. There’s money to be made there but I’d be really disingenuous to anyone that was following me. Angus Energy [EPIC: ANGS], another one, there’s all these guys putting up gifs of gorgeous women with big tits with Angus written on them, and it’s complete bollocks. Again, I played that one and I saw Early Bird go in, and I played that one for a really nice swing. I didn’t tweet about that one either because these market caps are just silly, like UKOG [UK Oil & Gas], just vastly overrated. So, there is still money in that in what I call the rampability.

I think people have gotten a lot wiser. If I buy something junk and tweet about it I say it’s junk, but there will be people that reply that don’t like it.

You know the boys are going to hit it big time, so you can just go in there, take off the mask, wait for the ramp to get on it, then sell. You’re not doing anything wrong there. You’re not encouraging anyone to buy, sand there is no shortage of idiots who are buying so you can make money.

If that company does come out and do a £500 million life insurance deal with a company, and every year they’ll get £1-2 million in revenue from that, the whole picture changes then. But at the minute the whole thing is based on Danny Swick’s pants.

With a hard on!

So, it’s a funny old world. You can make money on these junk stocks if you’re smart, but not so much now. It’ll come around eventually though.

It sounds crazy when you say all these things were several hundred percent, but I suppose it was different then. The market had been completely hammered in 2008/2009, and some of the stories I’ve heard from the older guys, you could make so much money trading these things and there was so much volatility that the FTSE 100 stocks would behave like penny stocks. They’d have double digit volatility swings in a day, and that’s insane – you can’t imagine it now. Today they go up or down 1% or 2%. Who wants to trade stuff like that?

Personally, I’m quite undeveloped in that, I know what I know and I trade what I trade, but I’ve not got into all the FTSE trading. Everyone will say “doom monger” and all that but I think there’ll be a major correction, and I do think that it’ll be like that again within the next two years.

That’s the opportunity, isn’t it?

It is, and City Owl is another great trader, an old face who was trading when I starting trading. The one thing he said is the one thing you can’t call is when a crash is going to happen.

Everyone loves to say that they can though!

You’ve got a load of megalomaniacs in charge of the main countries of the world, everyone is thinking that America is in the best place ever, but the debt clock is just so phenomenally crazy.

Well, America is bankrupt – we just don’t accept it.

It’s like the world is trading like everything is absolutely amazing, but in my reality, if all being well and everything was done to the way the world, the FTSE would be trading at like 4000. But that’s not the way the world works.

All these developing countries have so much US debt and US debt is everywhere.

Yep.

And is it sustainable? Well, no. It’s rising. It’s probably going to keep rising. It’s never going to go down, and eventually someone will wake up and say “What on Earth is going on here? It’s just rising!” But for now it’s just some imaginary figure at the moment.

Did you watch that China programme on the BBC?

Which one? I don’t have a TV license, so no!

It was saying that the government had so much debt that they were creating these almost false banks that didn’t show up on the debt system. They said they had these huge tower blocks going up which no one can afford to buy and that China is building to a tech bubble, a subprime bubble, and a debt bubble all at the same time.

Wow!

And when that goes boom, and the Chinese really stimulate their stock market, and they did just create rules out of thin air to try and support it, but at that point when that goes pop, that’s going to be when people in cash and those who have cash are going to make millions. People talk about everyone following America, but when China goes, that will be it. And people in the market will do a WSG or an ADL, and really experienced guys will get wiped out, and I don’t know when it’s coming but its coming.

I think that’s why you’ve got to be so strict on your losers.

Yeah.

It might only be a 20% drop, and I don’t really want to give back more than 25%, because its 33% back to breakeven, as soon as you’re 40% down, you need 80/90% just to get back to where you were. I like my life, and I like not working, so running losers isn’t really an option for me. You never know how much a stock is going to fall, it might be a really good stock, it might be a good name, the board have got money in, but you just don’t know where it’s going to fall. Ultimately, the lowest a stock can go is to 0p and everyone loses all of their money.

Who knows? A lot of the AIM names have come off, I remember posting on Twitter a few weeks ago if FEVR comes off and dumps through support, the rest of AIM is going to follow, and it did. I was short quite a few of them, closed far too early, but the markets follow the leaders and when the big names are doing badly the rest of AIM will follow.

Is there going to be a catalyst for a crash? Maybe, maybe not, we might go through a year or two where we range trade and consolidate, with some names grinding lower. There might not be a 2008 crash but I think you need to be careful on your losers, because if you lose all your money then you can’t take advantage when the opportunity comes. That’s the real opportunity, like when Warren Buffet says: “Be greedy when others are fearful”, on quality stocks, that is how you make money.

There are two guys that should absolutely be followed by anybody that is starting out on this market, and they’re hated by many, and one of them is GaryN and the other is WShak. These guys are absolutely the bane of the rampers, because they come in with the real facts of the company, the real cash flow, and the real fundamental problems of the company. And I’ve been in a couple of stocks where WShak has been deramping, and I’ve sold straight away. Not only is he coming up with views but I know they’re heavily attacking that stock with shorts, and he’s very good at it. He knows his stuff. He put a big list up the other day, MYSQ, all these names where he was attacked for it but he was right.

I saw that – he’s great at it.

He said I’ve been being attacked hugely by people when these stocks are multiples of the price, and then he said “But who is right now?”

What’s funny is that I’ve made money on every stock on that list!

And people who come into the market and they see people start attacking their stock, they like to come up with these counterarguments. But nine times out of ten these guys know what they’re talking about, they’ve gone into every nook and cranny of the accounts. They know what’s going on, and VRS [Versarien] is another one. I see Justin and Riddler having a little two and eight on it, but UKOG for me is fundamentally crap. And yeah, VRS might be doing loads of stuff in China and it might be doing really well, but even if it was doing really well it should be doing really well at a fraction of the market cap.

VRS is a good example of being long hot names, you make money. If you traded those breakouts consistently with tight stops that would’ve been a monster of a trading stock. But if you’re dead set resolute in your opinion that is shite, then you will struggle to make money. Something The Mad Stork told me that really resonated is “Don’t ask if it is shite. Ask if it’ll make you money”. We know the reality is that most companies are, but what matters is making money.

There is that, but if I put £50,000 into a low risk stock like RPT, and I put £50,000 into VRS, and yeah they can both make you money or lose you money, but can you sleep well in that stock?

I wouldn’t sleep well with £50,000 in VRS.

Can you go down town for lunch and for a few drinks? Can you go to the gym owning that stock without worrying? On a VRS I’d be sat glued to the screen staring at that stock.

Yes I agree, obviously you’ve got to position size for risk, and the risk on VRS which isn’t actually making any money or profit against RPT. You’ve got to consider the liquidity as well. But the point is could you have made money trading VRS? Yes. Even when I realised CTAG was possibly a fraud I still held because it was going up. If you’re coming into this business and you’re objective and honest with yourself, you can make a lot of money. The problem is when you lie to yourself.

Absolutely.

Or take excessive risk, as you’ve learned.

I’ve been through plenty of pain in the market, and some good times too. But when I go to sleep at night I want to be sitting on a portfolio that if that crash did come, I want to be sitting on stocks that if I went to work for 6 months I’d be happy they’d still be making money. Some stocks can give you so much grief. You go to bed and think “Is this stock going to be all right?”

I get that feeling when I’m all in in the market, and even when it’s bullish and you should still be mostly in, I feel it hard to sleep when I’ve not got much spare capital. I’ve not done it since. I keep a decent cash buffer.

You need to have that pile of cash to take advantage of it. You see the surveys come out and you see so many PIs that are 90%+ in the market, but that leaves no ledge space for manoeuvring.

People learnt the hard way eventually.

In a bull market you can be 100% in and not worried at all but it’s not like that at the moment. There are some stocks getting pole-axed and some of these are good stocks, and when they are getting hammered you want to have a nice arsenal to take advantage.

You’re right, and the good stocks you can have faith in them. To use RPT as an example, it rocketed up, came back to test the resistance, and I know that I could double up as there is an even better risk/ reward ratio from testing the new support. I’m still holding and happy to as long as it’s going up, but with illiquid stocks you can’t.

One of the most interesting ones is PCGE [PCGE Entertainment].

What a steaming pile.

This is interesting because even though I wouldn’t put a penny in until I know what’s going, you’ve got an absolutely bombed out stock, and in my opinion an absolutely bombed out CEO too, who has put many to the poorhouse. Yet there’s some guy who knows guys in the city, he’s a big, big player, and he’s bought 10%. In a company that’s going to run out of money in, well now, actually. So, is this guy after a hostile takeover? Has he got an agenda? And as I say I wouldn’t put a penny in until I know what’s going on, but I’m watching with interest. Even if he’d made £150 million elsewhere, he wouldn’t want to chuck £150,000 away for the fun of it.

I’ll watch from the sidelines and let him be the hero.

If he comes in with a plan and pushes that schmuck out…

I think if he resigned and put in a new CEO then it would probably bag on that news!

I’m watching it with interest. It’s bombed out and got nothing going for it, it’s a piece of trash, but some really intelligent guy has come in and bought 10% of the company. Why? I don’t know.

It’ll be one to watch, definitely. It would be nice to see a big winner for Christmas, one that puts a lot of cash in punters’ pockets and gets a bit of liquidity going.

I just don’t buy this whole winners thing. I’ve never understood why people say it. Let’s say you get a stock that goes up 300% or 400%, there are some people that make some serious dough, and then there’s a whole load of people that get trapped at the top who are losing. It’s like my old saying “Tap on, tap off”.

Well, that’s what happens when there’s a big winner, the tap comes on.

But where does it come from? All the people that’ve made money you’ve also got a whole load of other people who are trapped at the top of the stock. They’ve not made any money, so that’s money that’s come out of the market.

But is it though? Think back to PYC [Physiomics], when it went from having a few trades a week to more trades than some FTSE 100 companies in the space of a day. That story spread like wildfire, there were even rumours that they were going to RTO GSK [GlaxoSmithKline], people came out of the woodwork left, right, and centre to pile in. It was an absolute frenzy. And yes, a lot of people made a lot of money, and a lot of people lost a lot of money, but I’m sure plenty of the losers were new market entrants who then left the market straight away, so the net effect is more cash swirling around.

After that, pretty much any half decent RNS was getting jumped on. Was TYM [Tertiary Minerals] a good RNS? Yes, it was, but was it worth 300%? Probably not. And eventually the cash gets diluted into other stocks and spread about, and profits withdrawn, and it starts to quieten down again once everyone realises that they’re not actually going to make a million within a week. But that December period was crazy; I had three 100% risers in three days.

There was a day about a week and a half ago, and suddenly all my Level 2s were lighting up. I think it was a Wednesday a few weeks ago, and everything was trading freely again. But then the next day it went to crap again. There weren’t any big winners. There was nothing, but that liquidity went great again and something happened on that day. It was the same as in the end of 2015 – really good traders like Awkward Turtle and Riddler buying crap, because everyone was so bored they were looking for a trade.

For six months, there was no liquidity, and it was so stale. There weren’t any big winners, nothing had changed in the market, but February, maybe March early 2016, it was a light bulb. It was like a tap going on coming from nowhere. No big winners, the market just went crazy; there was money to be made everywhere. People were chucking money around – you had people like Bobby Axelpig putting £100,000 in at the top of a spike! Things like this, but nothing fundamentally had changed. The FTSE hadn’t really changed and I still can’t put my finger on it. It just went boom!

It could’ve been that one big winner got people excited and got the believers coming? That forces new money in.

I know for a fact that there hadn’t been anything that went 20%, it was just that the liquidity went crazy everywhere. We all like to try and understand the market and get ahead of the game but the market is crazy. Sometimes, it just changes within the flick of a finger, and it will, and with this market it might be a week, a month, six months. For me, the winners situation doesn’t hold stock with me, it just comes from nowhere.

It could, it’s just a case of waiting for it.

The change we’ve had this year and some try to say that it’s not affecting the market that much, but we’ve had a huge liquidity drain to crypto this year.

Beaufort going under too.

And we had plenty of people that had gone in there at the start of the year, and some people were tweeting to me “You lot are old, crypto is the whole world, we’re a younger dynamic”, and the same guys now, in general, most of them have lost their shirts. You’ve got some smart guys like Smudgedann making £100,000 in crypto but generally that’s money that’s not coming back to AIM.

Beaufort sucked a lot out too. I can’t really see the money coming back though and everyone saying “Let’s buy”.

I think one thing people need to think about – is it tomorrow the money comes back?

I think so.

People should be looking at the companies that were heavily Beaufort weighted because there’ll be the mentality of people getting their stock and just wanting their money back. Some of them might get hammered 20% or 30%, and there might be some opportunity there.

Agree – I don’t necessarily think that everyone is going to be rushing out to buy. People are saying the Beaufort cash is back, but why would the majority of Beaufort clients be heavily in cash in a bull market? If they want to buy something else they’ll have to sell something first! So, the argument that Beaufort cash is coming back and all stocks are going to go up is just stupid. Anyone tweeting that, which people are, is an idiot.

It will make a difference when the market gets in a better place when they’ve got all those big bundles of cash to throw about, but at the moment it’s going to have a detrimental effect.

Most of these stocks that people trade are junk stocks. They’ve been trapped in these junk stocks and they’re going to want to sell them. The people who will hold good quality companies will hold them, and most of this market is short term speculation, and short term moves.

If I would put my head into their situation, put my feet in their shoes-

I’d be selling.

If I was holding a load of illiquid bollocks, I’d be thinking I’m getting that money back into cash. I’d almost have written it off, and I’d start again with my current portfolio.

That’s what I’d be doing! What would you say to someone coming into the market now?

I’d say firstly do everything completely opposite to when I started.

I think that’s really good advice.

I’d say that you should really study, because before you get your fundamental backings, you use a lot of others peoples’ research from Twitter. You have to really look at who you’re following, and refine those people and work out who is who before you start trading. In your eyes, who the good guys? Who the bad guys are, and who are the grey area guys. I’d say you only want to be watching the good guys and a few of the grey area guys. Watch them, learn from them, and see what they do. Don’t go into the market with cash straight away, watch what they’re doing. Watch the books, pay for some Level 2, and watch how their plays play out over a couple of months. See what sort of trades they’re making, and I would say you need to grow a very thick skin. You need to have a resilience that you’ll never give up, because it’s not going to be easy the first two years, then it starts to click a bit, and then when you’ve got five years under your belt you should be pretty good.

But you’ve got to go through the bad times and hard times to get to the good times, and you also have to be like a sponge. The biggest piece of advice would be “Don’t ever be scared to ask a stupid question to the more experienced trader”, because they were there once, and they needed that help. Most people don’t mind passing on their own experience to help someone and better their life and trading.

I think that’s one of the good things about Twitter, a lot of people talk about the negatives, like P&Ds, but I spoke to really experienced guys who helped me a lot when I was starting, definitely a lot quicker than I could’ve done by myself. For example you, Mad Stork, Smudgedann, Riddler, WheelieDealer, just speaking to people and hearing about their experiences and mistakes. It’s really helpful, and most people genuinely do want to help people. And of course you always get people who when someone asks for help they’ll tell you what to buy so they can get out.

And straight away that’s a red flag.

There are criminals everywhere, and there’re scammers and snake oil salesmen in any industry, and this one is no different.

Sorry, this is a massive piece of advice: the minute I started earning good money, and I mean really good money, was the minute that I played what was in front of me. I played what was in the RNSs, and the info that was given. When you start listening to whispers on DM groups, you might make a few quid and think you’re really special, but those boys will take you to the cleaners at some point. So ignore whispers, ignore rumours, because if those rumours were true they’d be remortgaging their houses and they’d be putting every penny into it.

The only reason they tell you those whispers is to create a false spike. So just play the RNSs in front of you. That is your field. So whenever anyone tells you this big contract is coming or this that or the other, ignore it.

I used to trade those things knowing that it was made up knowing that someone else will probably buy too.

You can trade things like that when you’re more experienced and you know that the ride is going to end, but for the inexperienced just avoid them because you don’t know when the cut out point is or what’s going on.

I agree with that, and I think if you try to get an inside line then you are a sucker. It just doesn’t work. The problem is that what a lot of people don’t realise that you get a DM saying a contract is coming and not to tell anyone, there are loads of other people who are getting that same DM too. Usually, I just say “Thanks, I’ll wait for the contract”. I noticed a big change in my P&L when I just waited for the said news to appear and then decided if I want to trade it, rather than buying a false spike and then a slow dwindle down. Expected news always gets sold into anyway, so I like to short these things and make a quick turn. But if you send that direct message out to a few hundred people, you only need a few people to buy to start moving the price. I’d rather just learn how to trade, as it’s probably less work, but pumpers do exist and you can make money off them.

It’s the worst feeling as well, when you’re new to the game, and everyone is talking about the stock, and this is when you’re really green – you buy this stock, and suddenly it goes a little bit quiet and you think “Maybe they’re just out and about”. Then the stock just drops back to where you bought it and it’s like a desert, nobody is talking, it’s silent.

Everyone leaves the DM group but they’re always still holding.

And after a couple of times you DM someone and ask if they’re still holding and they say “Yes mate, I’m still holding it, but it looks like it’s going to be a couple of weeks now though”, and anyone with any sort of intelligence after a couple of times realises they’re being taken to the cleaners.

It’s a shame because it’s always new money coming in, and you either learn or you very quickly lose all your cash. And it’s a steep learning curve.

I don’t know if the statistics are true, and I can only go on what people say, that only 10% of people in the market make money, and the other 90% end up being the feed for that 10% generally. You’ve got to work hard and work long. Ten times smarter and ten times harder than everyone else just to be in that top 10% basically.

I think when you’re trading AIM the statistics are terrible. 72% have lost shareholder value according to a study done by the Financial Times. So, obviously, if 72% are losing shareholder value then most shareholders are losing money, right? It’s not a zero sum game, it’s a negative sum game!

The stock market on the whole isn’t a zero sum game, because value is constantly created. The FTSE over the long period of time has always gone up and created value, but especially in smaller caps, especially in the mining and the junior companies, I think most people do lose money. A lot of people lose and never come back, and we never hear about them, so I do think the 90% statistic is probably right. If you can learn it you can make big money, but it’s hard, and it’s a lot of work.

But it’s so rewarding!

It’s the best job ever.

I’ve never had anything that excites me this much.

It’s pretty good. This has been a really good interview, very honest and open, and I think anyone reading this will have a pretty raw insight as to what the dangers actually are. Thanks a lot for your time Pete – let’s catch up again at some point in the future.

Thank you very much, I’ve really enjoyed it.

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