When HRI met Sallies

[miningmx.com] — AFTER the share price of Anglo Platinum sizzled I had quite a bit of correspondence around just how effective the HRI (Hasenfuss Reverse Indicator) is an investment tool.

Two weeks ago my blog celebrated a purchase of Anglo Platinum shares at R359.00.

Naturally with the shares running strong at over R425,00 I was feeling mighty pleased with developments.

Of course, it’s now a different story with Angloplat. The smelter issue fizzled the share price, which – at the time of starting this blogging – was well under R400,00 on the JSE.

Technically speaking, the HRI has initially worked well as a warning system because my euphoric outburst about AMS should have scared punters off from buying at last week’s levels. If so, I’m delighted to have helped out.

Thankfully there were some mutual benefits. On Tuesday, at roughly 11.50am I bailed out of Angloplat at R437,60 (yes, I have the brokers’ note to prove it). I can’t remember if I did this to test the HRI, or because I cannot turn away a trading profit in these testy times. Probably the latter.

At first I regretted wimping out so early, even if it was a profitable capitulation. Angloplat is the kind of share you should hold for years – you know: collect the dividends and put the kids through play-school.

The smelter issue, however, does afford me another bite at the Angloplat cherry.

But when do I buy? I doubt I wil see levels of R357.00 again (he says, hoping to bring the reverse Midas touch into play).

Already the time taken to pen this blog has seen a toll in opportunity costs with Angloplat looking determined to scurry back through R400.00. Perhaps it’s best I hang ten before delving enthusiastically back into Angloplat.

In any event, to ensure optimum effectiveness of the HRI, my much maligned resource portfolio will be updated as and when the holdings change.

As of mid-morning 05/11/08 the HRI index comprised:

SHARE AVERAGE BUY-IN PRICE % OF PORTFOLIO
ANDULELA INVESTMENT HOLDINGS: 17c 18%
ANGLO PLATINUM:
SALLIES DEBENTURES: 55c 18%
SALLIES: 39c 10%
VILLAGE MAIN REEF: 160c 54%