The document outlines a trading blueprint, detailing the differences between investors and traders, and provides essential trading tools and money management secrets. It highlights the use of derivatives for trading strategies and introduces two stock recommendations, Sasol and Aspen Pharmacare, including their key metrics and investment risks. The document emphasizes the significance of having a clear trading approach and awareness of market dynamics to achieve successful outcomes.

1. Stocktoberfest
02/October/2014

2. 3
8
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The Ultimate Trading Blueprint
How do I get started?
The tools of a succesfull trader
The only trading toolbox you need to beat the market
The seven essential money management secrets
Two stock tips to kick start your rock star trading career

3. Step 1:How do I get started

4. Investor or Trader?
• Decide who you are and what your short-term and long-term goals are
• Assess your appetite for risk
• Do you want to invest for long term growth or are you looking for constant short
term gains?

5. Investor
• Typically would open an
equity account
• Buys shares/equities over
time and is hoping for longer
term growth
• Does not participate in the
daily moves of share prices and
does not mind temporary dips
• Has a low tolerance for risk

6. Trader
• Typically would open a
derivatives account to benefit
from gearing
• Tries to profit from short term
price moves in both rising and
falling markets
• Enjoys market volatility
• Has a much higher tolerance
for risk

7. Who should use derivatives?
•Hedgers seeking to reduce risk by protecting an existing share portfolio against adverse
price movements in the physical (spot) market
•Speculators hoping to make a profit on short-term movements in the underlying price
•Asset Managers and Hedge Fund Managers or Arbitrageurs
•Retail investors wanting to diversify or hedge their portfolio

8. Step 2: Tools of a successful trader

9. When to use derivatives: The Risk/Reward Trade Off
Instrument Low risk/gearing High risk/gearing
Index Futures
Single Stock Futures
Warrants & CFDs
Penny stocks
Share Installments
Shares (large caps)
Exchange Traded Funds
Unit Trusts
Protected Share Investment (PSI)
Gov. Bonds
Cash
Income Capital gain

10. What is a CFD ?.
•A CFD is a “Contract for the Difference” . This is an OTC (over-the-counter)
product offered by institutions, as opposed to an exchange traded instrument. The
profit or loss is the difference between the opening price of the trade and the closing
price of the trade.
Exit Price
Entry Price
P
R
OFIT
The difference between your entry and
exit price is the profit on the trade, which
can be generated by either long or by
going short

11. Why trade CFD’s?
•CFD’s provide the opportunity to trade the market on a
short term basis.
• Returns can be generated in both rising (going long) and
declining (going short) markets.
•CFD’s have a much lower capital requirement (margin).
•CFD’s utilise leverage or gearing
•Higher risk

12. What’s the
difference?
Let’s look at the difference between a conventional equity
trade and a CFD trade

13. Mrs Joubert Mr Pretorius

14. Margin Required for SAB_CFD is 10%
Trade price is R610,00
Deposit required: 10% of R610.00 = R61.00 per share.
Gearing or leverage
Share Price/deposit = Gearing
R610.00/R61.00 = 10
That means we are 10 times geared!

15. Mrs Joubert
Entry 610.00
Exit 650.00
Profits 40 X 100 shares = R 4000
Utilized R6100
Gained R4000 / R6100 = 65.57%
Mr Pretorius
Entry 610.00
Exit 650.00
29.7
%
Profits 40 X 100 shares = R 4000
Utilized R61 000
Gained R4000 / R61 000 = 6.57%

16. Gearing simply increases
your exposure in the market
for a fraction of the price of
the underlying instrument

17. The CFD would
have cost you
only 7% in bank
charges to hold it
for a year which
is only around
R3843.

19. Step 3: The only trading toolbox you
need to beat the market

20. How can I trade?
Online Trading
Copy
Trading
Call in Client

21. Trader

23. A Window into the
World of Trading
What we do…

24. Step 4: The seven essential money
management secrets

25. FEAR Vs GREED
025

26. The seven essential money management secrets
•Pitfall 1: Not having an exit plan before buying
•Pitfall 2: Portfolio imbalances . Traders who purchase entirely too large a position in a
single stock. They do it all at once
•Pitfall 3: Failing to cut losses
•Pitfall 4: Selling too soon
•Pitfall 5: Buying shares that continue to fall - The slide will end. A surprising few number
of shares never do until they become worthless. Timing of when and at what price the
share’s slide will end
•Pitfall 6: Adding additional losing shares to your portfolio
•Pitfall 7: Emotional attachment to a share once you’ve sold a stock. Forget it, whether it
was sold for a profit or a loss

27. Step 5: Two stock tips to kick start
your rock star trading career

28. Sasol (SOL)
Sasol is an integrated oil and gas company with substantial
chemical interests, with production facilities located in South
Africa, Europe, North America and Asia. The Company operates
commercial scale facilities to produce fuels and chemicals from
coal in South Africa, and is developing ventures internationally to
convert natural gas into clean diesel fuel.
Fundamental Metric’s
PE: 10.4
Forward PE: 9.89
T12M EPS: R52.56
Estimated EPS: R51.16
12M Total Return: 30.03%
Beta: 1.05
Dividend Yield: 3.8%
Mcap: R392 Billion
CEO: David Constable
Geographic Segmentation
Revenue Split 3Y Forecast
Growth
South Africa R88 Bn 7.05%
Europe R39.3 Bn 7.57%
North Am R20.4 Bn 7.3%
Asia/ME R16.9 Bn 8.30%
Other R15.9 Bn 5.22%

29. Sasol (SOL)
Investment Case
Key Risks
-Lower Oil Prices – Civil war in Iran
-Global economic activity slumps
-Failure of US investments
-Stronger local currency
- Currency hedge: 10c movement to
USD/ZAR you get R940m EBIT
- Huge opportunities in GTL over
CTL – Louisana
- GTL Higher margin + Lower set up
cost + Lower Carbon footprint
+Abundance of cheap natural gas
= SUCCESS
- New Structure “Project Phoenix”
should save the company R3 Bn
(60% over staffed)
-Coal Division has secured coal for the
next 35 years to supply the
Synfuels plans “Project 2050”

30. Aspen (APN)
Aspen Pharmacare Holdings Limited is a global supplier of
branded and generic pharmaceuticals and of consumer and
nutritional products in selected territories.
Fundamental Metric’s
PE: 33.3
Forward PE: 24.54
T12M EPS: 10.16
Estimated EPS: 13.81
12M Total Return: 29.5%
Beta: 1.10
Dividend Yield: 0.46%
Mcap: R154 Billion
CEO: Stephen Saad
Geographic Segmentation
Revenue Split 3Y Forecast
Growth
South Africa R6.2 Bn 13.28%
Asia/Pacific R6.1 Bn 70.23%
East Africa R1.7 Bn 21.05%
Lat Am R1.4 Bn 16.96%
Rest of the
World
R1 Bn -3.64%
- SA is the springboard to Africa
- OZ is the springboard to Asia

31. Aspen (APN)
Investment Case
Key Risks
-High multiple earnings must grow
-Drug regulation – Offset by diverse jurisdiction
-First half performance will be affected by recent
acquisitions. Earnings will come through in second
half.
- Defensive play – Generic Drugs in
EM markets
- It gets most of its products a full
year ahead of its competitors
- Management is exceptionally good
- New Russian sales force (400) –
Lat Am and Australian Sales force
brilliant!
- Big is Beautiful! 100 countries with
60% of revenue coming from
outside our boarders.
- Huge facilities in PE to distribute
the world.
- Highly Acquisitive
- Buying manufacturing capacity from MSD
.
- Extend product range
- Better margins
- Highly specialized brands (Pregnant
mares – Arixtra and Fraxiparine)
- Not available in Lat Am yet!

32. Thank you