The TradersTalk enters the next round: This time we talked to Christian Scheid.
As “Scheid”, the business and finance journalist implements his trading approaches in the form of several strategies on wikifolio.com. We will learn how he discovered trading and what experience he has gained in doing so below.
Tell us your name.
Under which username can you be found on wikifolio.com?
Under my real name: „Scheid“
What is your profession?
Independent business and finance journalist.
How did you discover trading?
The IPO of Deutsche Telekom in 1996 drew my attention to the stock market. About half a year later, I bought my first stock – Mühl Product & Service. But I unfortunately also posted my first loss with it. Shortly thereafter, I discovered SAP and made my first profits in short order. That is when the trading fever gripped me.
How does your typical trading day look like?
I start at about 6:30 a.m. with a cup of coffee and one or two newspapers. At 7 a.m., I boot up my computer and check various news websites to see if there were any news from the corporate sector during the night that could affect prices. Off-exchange trading then begins at 7.30 a.m. One or the other bargain can be found that way from time to time – mainly because many market participants are not even active yet at that time
How many wikifolios do you manage now? Are you already a “Real Money” trader?
I run five wikifolios that are based on three different strategies. The wikifolio „Special Situations” which I primarily use to invest in German second-tier stocks in special situations is broadly diversified. Things are more speculative in the wikifolio „Wachstum mit nur einer Aktie“ (engl. “Growth with just one stock”). As the name suggests, I only invest in one security here. Both wikifolios also exist in the „long/short variant“, i.e. with leverage products. Here, I take on additional securing positions and also use targeted short opportunities in individual stocks. The fifth wikifolio relies on “takeover candidates” and was also named that way: “Übernahmekandidaten”. It is invested long-term, correspondingly there are also fewer restructurings. I also have personal investments in the largest three of the five wikifolios.
What are your reasons for publishing your trading strategy as a wikifolio?
The social trading approach being pursued by wikifolio is entirely new and promising. I just wanted to be part of this. On the platform, everyone benefits from each other. This is actually what I like the most.
How would you roughly outline your characteristic trading style (on wikifolio.com)?
I am active daily and trade in a speculative manner, but always keep an eye on the risks while doing so. One of my foremost rules is the limitation of losses. Should a trading idea not work out, I do not hesitate to put an end to it. Even if a loss ensues.
Are you satisfied with the development of your wikifolios?
Well, no one is ever quite satisfied. Longer-lasting sideways trends in particular are something I neither wish for myself nor my followers. But trading is a continuous learning process. I, too, always try to become better at it.
What was your trading highlight of the last 360 days?
I placed my bets on Yahoo with my wikifolio „Wachstum mit 1 Aktie long/short (engl. “Growth with 1 stock long/short”)” in a timely fashion und almost sold at the top. Yahoo is one of the main beneficiaries of the IPO of Alibaba. After all, the Americans hold a large stake in the Chinese Internet company.
How do you assess the stock market year 2014?
More difficult than expected. Of course: After the dream year 2013, we were also spoiled. Depending on how well the markets handle the impending rate reversal in the US in the coming year, a conciliatory close of the year is, however, possible. Much like 1998 and 2010, many funds are lagging behind their benchmark and are under great performance pressure. The latter is expected to increase as the end of the year draws nearer.
Which markets are currently the most fun / make the most sense?
Highly liquid stocks, the way they are listed on the US Nasdaq computerized stock exchange, are real fun.
Which stocks or securities do you currently favor in the medium term?
Stocks of internet companies. The development of Facebook & Co. has only just begun. The many new business models which no one believed in at the start will change the world. I also consider biotech stocks extremely promising in the long term.
What was the hardest lesson you had to learn on the market?
No matter how convinced you are of a stock: When the market has a different opinion, you have no chance. I made this painful experience in late 2013/early 2014 when I committed to Nordex. Unnerved, I sold in the end. Now the stock is valued considerably higher.
What advice would you give to a novice trader?
Bring a lot of time with you. Read a lot. Practice a lot. And don’t forget the setting of stop prices. Because there’s nothing worse than having one’s first trading attempts end with large losses.
Which book can you recommend to other traders?
Jesse Livermore: “Reminiscences of a Stock Operator” – a classic every trader absolutely must have read.