Trading Thoughts For The Week Ahead  - Sunday 1st August

This week's guest " Thoughter" is Spaceman who gives us his own thoughts on trading. If anyone else would like to be the guest "Thoughter" please let us know by emailing mike@moneyam.com

Monday 2 AugustFinals Filtronic A shock profit warning and departure of the finance director have severely dented the mobile phone-parts makers share price. Filtronic blamed the weak US dollar for reducing 2004 fiscal sales by 13.4 million and operating profit by 3 million. The chief executive was replaced last week.Interims HSBC HSBC is likely to post $7.4 billion pretax profits for its first half, compared to $6.2 billion for the same period last year. However, the Hong Kong environment remains challenging, and the slow recovery in housing markets and unfavourable interest rates are likely to have exerted pressure on margins.Tuesday 3 AugustInterims Scottish & Newcastle Investors will be focusing on sales in Western Europe, which makes up around 80% of the booze groups profit, mostly falling in Russia and France. A restructuring programme to save 45 million a year is ahead of schedule and Euro 2004 should ensure UK profits beat last years.Economics Mergers & acquisitions involving UK companies. A quarterly report on domestic and overseas corporate activity. The data covers cross-border acquisitions, along with direct and indirect transactions of controlling interests by UK companies. Download the report at www.statistics.gov.uk.Wednesday 4 AugustEx-dividend - BT Although BTs May results were unexceptional, there was some encouraging news. For one, the dividend was increased by 31% to 8.5p, while turnover from broadband more than doubled. Traditional business turnover is declining, however, as the group adapts to a challenging environment.Ex-dividend PHS Shareholders were pleasantly surprised when PHS tripled its dividend payout to 1.7p in its recent results. The washrooms business, which makes up 81% of operating profits, grew by 21%, although margins dropped due to acquisitions and investment. Management says it still has plenty of cash to spend.Thursday 5 AugustInterims Reed Elsevier The publishing and information group is likely to report figures in line with analyst forecasts, consensus pretax profits being 1 billion. Strength will come from Elseviers science and technology academic businesses, while its archiving business has started the year satisfactorily.Interims Rotork The engineering components manufacturers interims are expected to be in line with forecasts of around 31 million pre-tax profits. Analysts anticipate stronger growth in the second half as output responds to the improved order book, and they forecast an acceleration of earnings growth rates over coming years.Friday 6 AugustInterims Bradford & Bingley The mortgage group released a trading statement in June advising it was comfortable with the full-year consensus figures of 273 million pretax profits. The core lending business has continued its 2003 performance and the group should save 40 million per year from the end of 2005.Interims Dignity Death is a multi-million pound industry, and Dignity knows it. Britains largest single provider of funeral services saw turnover increase by 6.6% to 37.3 million in its first quarter, while underlying profits grew by 17.2% to 14.3 million. Management described the period as a very busy time.

Traders Thoughts This week we are lucky enough to have secured an exclusive interview with the new Chair Lamb of Shell, the interview took place on his new yacht where he was relaxing after a busy first few weeks in charge.

Spaceman - "So Lambykins what have you been doing during your first few weeks in charge?" Lambykins - "Well, it's been a bit of a shock, before taking over I spent most of my time at home looking after my new daughter and managing my website and then suddenly, out of the blue, I was appointed Chair Lamb. It's been very enjoyable though; lots of drugs (editor: Wow! But cut this bit, we can't publish it, he will deny it) and social events, I have sacked several people and been to most of the major sporting events."Spaceman - "Most new Chairmen take a bit of time to get to know the company properly before making changes, you seem to have done it a bit differently, why is that?"Lambykins - "I am a lamb!"Spaceman - "Yes, it's interesting that you should bring that up, some people don't believe that you are really in charge at Shell, I have even heard some commentators saying that you are not even a real lamb and that you are, to put it bluntly, a stuffed toy lamb. What do you say to such people?"Lambykins - "I am a real Lamb, I am not a stuffed toy."Spaceman - "Well you say that, but I have to say sitting here with you now, you definitely do look like a stuffed toy; you are only about 3 inches long and your eyes don't move."Lambykins - "I am a Lamb, I am not a stuffed toy."Spaceman - "OK, well for one moment let's assume that you are a lamb; why do you think that you have been selected to run a major multinational company when most other lambs just eat grass and get slaughtered?Lambykins - "Well that's a difficult question. I do like grass but I normally smoke it rather than eat it, I think in the end it just comes down to knowing the right people."Spaceman - "So who are the right people?"Lambykins - "Well that would be telling. Just let me say that the people who organised the takeover of Shell were very helpful, I can't say any more than that."Spaceman - "Turning to the takeover of Shell, how was that organised? It seems to have been very unusual, many people don' t believe that any takeover has taken place"Lambykins - "I don't know all the details, but I have been assured that the new owners are in complete control."Spaceman - "Doesn't it seem strange to claim complete control of a company like Shell while only actually owning 59 shares?"Lambykins - "I am a lamb. Sorry, I have to go now."

At this point Lambykins brought the interview to a sudden close, I thanked him for his time and wished him luck.

Trading Now are you sitting comfortably? Then I will begin... In the beginning, during the time of our much loved Margaret Thatcher, her name be praised and all the land that she walks on be blessed, I first realised that it was possible for ordinary people like me to own and make money from shares. Strangely this was exactly the message that Margaret, her name be praised etc. wanted me to get. I started trading in the early 1980's, by stagging privatisations. This was the process of applying for shares in the companies being sold off by the government, and then selling the shares as soon as they started trading. (Later on, I even started selling them before they were traded). This was very successful, but it was hard not to make money because most of the shares were being almost given away. Although successful, I wasn't making a lot as I had very little to invest and some of the share allocations were very small, but I made enough to start to reduce my overdraft. For several years this process continued until Margaret Thatcher, her name be praised etc etc, had sold everything. "Oh s**t!" I thought, no more easy money; my overdraft started to rise and I thought I'd better start to work a bit harder. So what did I do? I pretty much gave up trading; it was much easier to make a living in IT. Into the 90s and the market has changed and there are more tools and opportunities for small investors. Dealing becomes easier and as the years go by the Internet revolutionises home trading and I start to trade more and more frequently. We are in the tech boom and I begin to think I am good at trading, I am making a fair bit of money and most of my deals are good. But slowly reality takes a grip and I realize that a monkey could make money in that market and that I am actually doing less well than just tracking the FTSE, and then I start to lose money as the tech boom ends. Time for another review of my methods. So how do I trade now? Well it's taken a long while but I have now worked out my perfect trading method.

* Firstly I have a stock watch containing the FTSE, the FTSE250, all the AIM stocks, all the NYSE stocks and most of the stocks in the Nikkei Dow. * For each of these stocks I have selected 7 indicators. * For each of the 7 indicators I have 4 sets of parameters * And for each parameter set I use 9 carefully selected graph styles * This allows me to see at an instant which stocks I need to be trading.

Each evening I go through these shares, this normally takes about 17 months. Do I bollocks................ Here is how I actually trade Well first a confession, I am a fraud; I am not really a trader. I play with trading and at the moment I don't make a living from it. So my real rules...

* Ignore almost everything anyone else says, including all the tipsters and even your fellow Traders thread posters. * Look for shares that are moving up and preferably breaking new highs and buy them. Good over any time scale, but for me a few days to a few weeks works best. * Look for shares that are moving down and preferably making new lows and sell them. As above for time scale. * Manage your money and risk, run winning trades, cut losing trades and don't risk too much on a single trade, don't overtrade, and don't spend too much on trading toys. * Do not trade when it doesn't feel right to do so.

That's it. Simple isn't it ? Well it's simple and it works, but I also know it's very, very difficult to keep to these rules. For me, the key to the whole game is to play a psychological game with myself and to win it; the game is to work out how to follow and stick to the rules and not follow fellow traders and tipsters. I know there are other ways of trading that work for others but being a simple Spaceman I need simple rules and these work for me. So could I make a living as a trader? I am not sure; I think I know enough to do it but there are a few problems: -

* I am far too lazy * I am not always disciplined enough, I tend to bend my rules * I have the Concorde Method to fall back on, it never fails.

And finally a few thoughts for the next weekOil prices continue to be high with uncertainties about Yukos scaring many oil traders, I think this is an exaggerated concern but I have said that for months and have been proven wrong. At home we have the Bank of England rate decision on Thursday and most seem to be betting on another rise, It seems fair to assume that another .5% rise will happen over the next few months but who knows when. In summary I don't have a clue, but I don't think many others do either ;-). As the great Concorde Method guru says, we can expect the market to continue to move with prices moving in line with the moves that they make, most stocks should see some changes over the next few weeks with some changing more than others, those that change the most will have bigger changes than the others but the other may also change although by less. A few may not change at all but even these will change and the overall market direction will be as it is. Don't expect any things that are not expected other than those that are.

That's it. Have fun.SpacemanPS I can't stand Margaret Thatcher.

All the above comments are purely a personal opinion and no investment advice is intended. Please do your own research