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Troy’s Blog

Well, it could have been better, it could have been worse. The shares ended up the day at 47.25 then gained again today to 49.50. But where did I purchase… that’s the bit we need to know…

Ok so my first £1.50 trade got me in at 38.50. Like I say, from placing at 30 it not too bad and it could be way worse.

In other news my Quiksilver shares have eclipsed even Barclays, they are motoring away with impressive gains up to 3.80 from the lows of 1.20 when I bought them. Very happy with that, and if I could I would sell out of them now, but it’s not worth it for the £12.50 fee. I’ll have to look into how to sell at a good price soon.

posted at: 13:42 | path: | permanent link to this entry

Troy’s Blog

I have placed my first £1.50 trade and it’s for Jubilee Platinum (JLP) I did all the work and set the computer up to make the trade for me. I placed the trade on Monday, buying in, hopefully at about 30p, which is where the price is now but had to wait until today, Wed, for the trade to go through.

Now the trade can happen at any time in the day as they group them all together and buy at one time, this means I have to get the price at the time they trade, loosing some of the flexibility of trading when I want.

When I placed the trade on Monday the price was 30p, Tuesday saw no movement, still 30p. Up until 11am on the day of the trade – still 32p. Then, all of a sudden in two hours the price of JLP went up 62%!! I almost fell off my chair. I could have potentially bought into the shares at their highest peak, or just made a 62% gain in the first two hours of my purchase… I’ll have to wait until tomorrow when the shares are deposited in my portfolio to find out.

posted at: 13:03 | path: | permanent link to this entry

Troy’s Blog

Hi gents,

I hope you are all well and enjoying the weather.

I'm stuck for this months investment. I am thinking of getting into gold as I think now might be a good time to buy. But I can't really find a good way of getting into it. I have been put off a bit by some info I was reading about how ETF's in Gold are skewed and not really linked to the prices - is this true? They were saying that they don't represent good value.

I would also prefer to get something UK based as the dollar will no doubt continue its slide.

Could you point me in a direction?

Thanks gents and hopefully catch you soon.

Troy.

p.s. Seen my Quiksilver shares!

Stephen’s reply: “I’m not convinced Gold will do much better from here on in and it’s not really the hedge against (potential) inflation that it pretends. ETF/C is the easiest way in if you’re not intending to trade.”

posted at: 13:47 | path: | permanent link to this entry

Troy’s Blog

Update on stocks. Ok so Barclays has been pretty stellar and as of the first of the month is at 315.00 – I bought at 093. Quiksilver is at 3.45, I bought at 1.20. MCSI Brazil is at 3014 I bought at 2897 so all in all I am making moves.

As Paul rightly pointed out though I was lucky in when I bought into the stocks – they were all at the bottom of a crash. But that was the point. I was making inroads because it was an easier time than usual.

Which brings me to my next purchase. I am a bit stuck. I like the looks of some oil, Pertobras in particular and even BP. But I also like the look of gold. Again thought I am weighing up the option of an ETF of a mining company, hopefully in the UK as the dollar is on its way down. A friend of mine bough Jubilee Platinum when it was 09p and now it’s had a great growth spurt, with almost 10% a day for a while and he thinks it will continue.

It’s easy bottom fishing but it’s not as easy when you have to look at companies that have already priced in their gains. Time for an email to the Monkeys.

posted at: 13:45 | path: | permanent link to this entry

Troy’s Blog

Gutted. Whilst reading the papers at the weekend I came across this http://tiny.cc/2YNas It’s a report about Tadashi Yanai and Uniqlo from the Times. If you remember I was hoping to buy some shares in Uniqlo way back in Jan as my first every share purchase. Read my post about why I chose them, then read the Times article… see the parallels?!

I’m not saying I am a financial guru, yet, but I am very happy that I am capable of logical thinking. I chose Uniqlo based on sound reasoning and 4 months later it looks like the company are well placed to rebound out of this recession with some gusto whilst making good strides with growth in the very same recession. Impressive.

It’s still a shame I haven’t found a way of buying into them yet though. Back to the drawing board and back to the thinking cap, but this time with a bit more confidence. Just a shade more. Enough to come before a fall…

posted at: 18:26 | path: | permanent link to this entry

Troy’s Blog

What I have learned so far. Part 4.

Although common wisdom suggests there is never a bad time to buy shares, there is a better and a worse time to buy shares – compounded by my small investment pot of cash. This is a problem of investing my £50 per month at £12.50 per trade, as I have previously written, that’s 25% to trade in and my shares will have to go up at least that before I make anything, that’s a big percentage to swallow. The market is in such a tizzy at the moment that a share can drop by that amount in the morning, then be back in the plus by the afternoon. If I can get shares that are down, then it’s a good chance I can get the fees back quickly. But this is very hard work, as I can’t check at times other than my lunch and after hours. But I think it can still be done so I’ll keep you posted on what can be done to help this out.

If your shares drop, you can buy more, lowering your price per share. This is good if you have just invested and the price immediately drops (see Monday trading post) Again it’s obvious but it has a sting in it’s tail as well, as you can get caught with a stock that’s plummeting for a reason, and you can loose more cash. But having said that, it’s what I intended on doing next time round with Barclays. I am pretty sure they will drop again (as is David!) as they have a big year ahead, as do all shares, but if they manage to get back down towards the £1 level again I am back in for some more.

posted at: 13:01 | path: | permanent link to this entry

Troy’s Blog

What I have learned so far. Part 3.

Good news doesn’t always make the shares go up and conversely bad news doesn’t always make them go down. Weird I know. It still freaks me out. How is this possible and why does it happen? Again there are people out there that will tell you they know, but I think no one really does. Sometimes it can be because the news is already ‘priced into’ the shares, so the market knows the news already through leaks, or the market wasn’t paying attention and missed things. Honestly, how a worldwide market with so many people misses data still makes me smile. It’s a regular occurrence though and one that if you are on the upside of, it’s great, but when you think you have a stock sussed out, buy at a low and expect it to go up on good news, it’s frustrating when it lays there, limp and unaffected.

The whole market can go down, even if your stocks are nothing to do with what’s dragging it down. I know this might sound obvious given that the global economy tanked mostly on banks, but this will also happen on a normal day in the markets. Essentially the markets trade on news (that’s why there is so much info flying about) and certain bits of news are scary to the traders, others they don’t care about so much. This can affect all shares, not just the one sector.

There are always investments doing better than yours are. The front page of Google Finance has a box marked “Trends” and it toggles between Price, Volume, Mrkt Cap, and Popular. One quick glance at Popular or Price on any day will provide shares that are in the upper 50% + and even one the other day I saw that was up 1350%! Yes it depressed me that I hadn’t invested my £50 in them, yes I was imagining if I had in my head but no, I didn’t so get over it. There is always someone doing better than you are, move on and keep investing, one day it will be your turn.

posted at: 13:03 | path: | permanent link to this entry

Troy’s Blog

What I have learned so far. Part 2.

Reading the papers tells you what’s happened, and broadly what is happening but they don’t fortune tell. I still love reading the FT. I can’t help myself. It’s good reading but more and more, as I am seeing that they report what’s happened in the news the week previous, and you have to be able to use that to try to predict what’s happening overall. I can get bits of info like Bovespa is up 75% since October’s crash. Great! I have only just bought into their recovery though through my last trade (DB MSCI Brazil ETF) so I kind of missed the boat on that one. But you can’t read the FT and expect to have a head full of investment ideas at the end of it, at least I can’t. Tell me if you manage to decipher it any better.

There is a difference between a trader and an investor. This is something very useful that I have learned from the 4WM. That’s real wisdom. A trader is the person that takes the cash available, and in more ways than an investor will, gambles it. Calm down… I know I used the gamble word, I now how it gets the hackles up of people that trade, but honestly, look at it. It’s a quick in and out, “trading on rumour, selling on news” making an all in, get rich quick, then move on short. That’s not exactly the same as gambling, but what I am saying is it’s more like gambling than investing over time. Investors are looking for a long-term gain and this can take years to get a cushion portfolio to trade in and out of at the right times, this is ultimately what I am trying to get right. So what I posted back last month about going in and out with credit card money, that was a reaction to trading not investing. I could see the market lunging forward at 10, 70 and even 300% in a week and wanted to ride that train. But that’s exactly where people loose the shirt off their back and ruin their future. Some people are good at it, make lots of money and others fall by the wayside. I would like an element of that in my investment, but not yet as I am still way too inexperienced to work the system. It’s easy to get green eyes though, there are big numbers out there, but this is the thing, there will always be big numbers out there, but at a later stage I (you) will be better educated to take advantage of them, when the odds are reduced.

posted at: 13:10 | path: | permanent link to this entry

Troy’s Blog

What I have learned so far. Part 1.

Being in the markets for the last 5 months have taught me a few things. I thought it was about time I shared this with you. It’s in four parts, as I seem to have learned quite a bit already. Well… let’s see anyway!

When buying shares the fees for the trade are priced in. Originally I wanted to buy £50 of Barclay’s shares, so I deducted the £12.50 fees from the price I inputted to Selftrade (£37.50) so I ended up with £12.50 less shares. If I had inputted £50, not £37.50 as a buy order I would now be another £37.50 in profit as the shares have tripled since I bought them.

Monday Trading. This makes prefect sense and I have only just learned it. Personal investors (me and you) read the papers at the weekend to get investment tips, then buy on Monday before the price goes (rockets!) up. Or so they (we, me) believe. The same people that set the prices of the shares – so called ‘market makers’ – read the same papers, so they up the price they can charge on Monday morning when everyone is clamouring to get the shares before they rocket up… then in the afternoon, the prices drop and they are immediately in a minus situation. Sounds so easy when it’s pointed out to you doesn’t it? I felt stupid. No more Monday AM purchases.

Advice is all subjective. Even mine, and dare I say it, the 4 Wise Monkeys. For every piece of analysts data you read I can find you someone saying the opposite, and vice versa. There is a dearth of financial information from analysts, journo’s, bloggers etc that are all saying they are the ones to make the best calls. They all know what’s happening, can find a Fibonacci sequence, double bottoms, ‘U’ shapes and not ‘V’ shapes and they can – literally – blind you with info. My eyesight is much poorer now, as I have had my eyeballs glued to my Laptop screen analysing the analysts. I am still at a loss as to where to get the best info from. I’ll try to keep you updated though on my search for what’s interesting and what’s not.

posted at: 13:22 | path: | permanent link to this entry

Troy’s Blog

My daily job has been keeping me busy recently and this has affected my blogging and my exposure to the markets. I have to try to juggle investing with a 9-5 and that’s a hard thing to do. Most of my learning is done over the weekend when I have found that the FT, Daily Mail and Telegraph all seem to have the best business news.

The Mail has Broker Buys, Telegraph has Hargreives and Lansdown brokers analysis and the FT s full of gems, particularly the Money section. But they are al reporting on what’s happened in the week. This is a bit frustrating as they report on what’s gone up, or down and don’t predict enough of what they think will be good. I have also signed up for the Seeking Alpha ETF and Global market newsletters just so I can see what’s happening and digest some of the masses of info that’s out there. Will they help? Well they are a bit, just in making me understand the jargon more, but they are also confusing me as I can’t figure out who is right and who’s wrong.

posted at: 13:22 | path: | permanent link to this entry

Troy’s Blog

This month has been a good one for almost everyone in the shares world apart from the likes of the almost bankrupt GM, but as from my last post, all of the shares seem to have already had the good news priced into their shares. This means they are all at about what they should be at the moment. But – I am looking for growth in the long term and a cheap way in and out, so I am looking at ETF’s – why? ETF’s provide a bit more stability as they are Exchange Traded Funds, so I can spread the risk over whatever I choose to invest in.

Say for instance I think Gold is a good option, I can buy a number of ways into the gold market without actually buying into companies that might fail or gold that I store under my mattress. It’s a way of buying into a whole sector. http://en.wikipedia.org/wiki/Exchange-traded_fund

So I am now looking to see what I can do with ETF’s – they even provide a way of shorting the market (thinking shares will go down), which is extremely difficult for a novice if it wasn’t through a ETF.

posted at: 11:24 | path: | permanent link to this entry

Troy’s Blog

Some great news – my shares have earnt me money already. Barclays has almost doubled since I bought them after they passed the FSA Extreme Stress Test. I didn’t even know that they were up for the test but it basically means they might not have to take any government cash and pushing their share price up. Quiksilver has risen but only by 2% so has yet to offset the 25% purchase fee (£12.50 of my £50 investment)

Overall I am only down (inclusive of fees) by £9.01. Not bad, but not great. Still looking at it over the long term I thought I would be up, but to be up so quickly does feel good. Now I have a nagging feeling that I should have been more bullish on Barclays (see glossary on Bearish and Bullish – http://tiny.cc/KuMFz)

Really, I am already trying to find ways of running before I can walk but I know it must be an obvious mistake lots of people make. Having made good percentages, what if I had invested £1000, borrowed on a card and made it £2000. I could invest with £2000 borrowed off a card for a month, there would be no interest if I paid it off in 4 weeks, but my investment might go up by 6% - 8% (the fees would be a paltry 2.5% to trade in and out) Creaming a percentage off the top. This is the worst trap to fall into and I am thinking it must have ruined a lot of people. Am I right in saying that’s in essence what banks do – and look at them now? Thinking cap on.

posted at: 13:54 | path: | permanent link to this entry

Troy’s Blog

I am still having troubles finding things to invest in. Well kind of. I know that certain shares will, in all likelihood increase but I am struggling with the £12.50 flat rate that is eating up 25% of my investment. So it’s time to look at the £1.50 option, I’ll let you know the ins and outs of that asap.

So after the PE ratings shenanigans I have been trying my hand at picking stocks again. The ones I have been looking at are the following: Pearsons, Premier Foods, Perdigao, Halfords and General Motors.

Some of the companies are in good health (Pearsons, Perdigao, Halfords) but everyone else thinks they are pretty healthy too so there isn’t any real value in me choosing them, they aren’t trading at a reduced value. However some are massively reduced (GM, Premier Foods) and one is silly risky (GM)

So that leaves me with Premier Foods. It looks like a good buy at the rice now 0.30p as it had a 52Wk high of 137.00 They have some great brands such as Hovis and 98% of UK households have their products in the larder. From what I can see looking at Google Finance it’s undervalued for a long term pick. Type in LON:PFD to Google Finance and look for yourselves.

posted at: 13:40 | path: | permanent link to this entry

Troy’s Blog

Hi Troy,

I am sorry to say that the reverse is true, moving from a p/e of 2 to a forward p/e of 16 means a massive drop in earnings rather than a massive rise, all other things being equal.

This is not a surprise in the retail sector. The falling rule about 50 percent that you have applied is quite a sensible approach, there is an indicator called 'Relative Strength Indicator' that can be used to achieve a similar approach in a more scientific way.

My biggest concern would be that despite successfully buying a brand you know and understand, and you passed it through the 10 year test, I am not sure I see you performing the final check of confirming whether the share price is fair.

Cheers.

Paul

Ha ha, man I still have a lot to learn… OK so now I see what’s happening a bit clearer I’ll try to see what’s happening with the ‘Relative Strength Indicator’ Though as a Novice Investor it’s good to know that I have something in common with Barack Obama who managed to get it wrong on PE’s – see here for that: http://www.ft.com/cms/s/0/462907b0-1002-11de-a8ae-0000779fd2ac.html

Note to self, must be smarter than the president of the US.

posted at: 09:16 | path: | permanent link to this entry

Troy’s Blog

Hi there,

I hope you are all looking forward to a good weekend.

Ok, so I have gone and bought again. This time its Quiksilver. And I have located the Google money directory for shares - amazing! I feel liberated.

Just checking I have something right.... Quiksilver's P/E rating is low now 2.61 but their F P/E is 16.44 that's good right? That means if I buy now they will be crap for the year but next year thy will rocket in earnings. Anyway that's what I can get from my research about P/E ratings, just seeing if I am right?

I think that the stock might go down again next month when they release their losses, and I see that they have reportedly said they aren't being bought out by Nike (but I am sure that everything is for sale at the right price) But they are still a strong brand and pass the 10 year test. And they will start selling well over the summer as winter is a bad season for them. $1.20 is almost as low as they have ever been.

I am trying to use a principle to whatever I buy and it's this: A stock will have been at the highest it can possibly have been in Dec 2007 - Feb 2008 (ish) as I see that as when the gravy train was rolling at its fastest. If a stock is 1/2 what it was then it's cheap and that's most stock. But if it's more than 1/2 what is was back then, I am scarping the bottom of a barrel of either a failing company that was run by idiots and couldn't help but make money when the going was good, or a company that has been hit hard by the Crunch word. So the latter will come out of it leaner and meaner if they are good and fail if they are bad. I am trying to make that definition. Am I an idiot?

That's my reasoning anyway. Sound? Crazy? Stupid? Dare I say it - genius?

All the best gents.

Troy.

posted at: 13:50 | path: | permanent link to this entry

Troy’s Blog

Researching stocks is quire mind boggling. Facts and figures that make the stock market a beast standing in front of me spitting never ending %’s and so many .’s not to mention the +’s and –‘s… I have a lot to learn.

Remembering the Monkeys scoff when I said that at least when betting on horses I have odds, unlike shares – “P/E ratings!” they said wisely. See what Wiki says about P/E’s and F P/E’s. This is the first of the figures that appear after the stocks that I have started to figure out. I think!

Price-to-Earnings are what the analysts predict the company will be trading at in the future. But as with everything this isn’t as simple as it looks. See what WIKI says about PE’s - http://en.wikipedia.org/wiki/PE_ratio

posted at: 13:22 | path: | permanent link to this entry

Troy’s Blog

After buying my shares I have been obsessing over the rises and falls. In my lunch hour I have the Self Trade window open and keep refreshing, fascinated by the ups and downs. I am happy to report that the shares topped £1.30 (I bought at £0.92) In Self Trade I have a portfolio that’s updated with my balance. It was -£12.50, reflecting my fee to buy the shares, but I got to the stage where I was only -£5.20! Amazing. I am on the way. Lunch is for wimps. Buy, buy, buy. Sell, sell, sell. Get my broker on the line.

But. A realization hits me. The fee is so big in comparison to my stake, that I can’t jump in and out, making a profit, unless I have a massive rises in stock value. Not only that but imagine this – the stock drops to 30p. What then? If I sell I incur another £12.50 charge so will only save a few quid as leftovers. True it’s better than nothing but to be honest I am in a position where I can only sit and wait. I am in this for the long term and watching the numbers makes no odds whatsoever. Weaning myself off the pretty graphs is hard but necessary. Now I only cursory check when I am researching and it’s already liberating not being stuck to the numbers.

posted at: 13:55 | path: | permanent link to this entry

Troy’s Blog

Inhale deeply. I went with Barclays. Wait, wait, wait. Ok so, I think I know a few things. I should have trusted my instinct and bought them at 50p last week. But I wasn't quick enough as I was at work. So I lost out by 1/2 of what I could have got them at.

Here's my logic. Get ready to shoot me down in flames. I am looking long (long term not short term). I am looking to get something that will build as well as something that's a good stock pick. I think that, and I base this on nothing at all, that the stock in Barclays will rise at about a pound a year for the next 4 years. That's not a great rise but it will provide some stability. Ha ha, well am I the first blogger to mention stability and banks in the same sentence in a positive light in 2009?! So what I am saying is this, I believe it will go down again, but I don't think I will be quick enough to get it at a cheap price if I am not watching the numbers 24/7. So I still think 90p - £1.00 is cheap for the stocks and as they haven't taken any of the governments cash, there is an opportunity to increase the holdings at a later stage and get a dividend. Perhaps. Isn't building a castle on strong blocks a good idea, even if they are cheap and strong? Are they strong?

I invested to the tune of £40.00.

posted at: 13:20 | path: | permanent link to this entry

Troy’s Blog

Now I can't get my head out of retail and I try a succession of retail stocks, even if most people are flushing them and using them to make paper planes out of as they are all sinking. Argos - I passed two stores and they were rammed with people, they are on the cheaper end of the spectrum so should cope well in recession Britain. But, I can't buy them without buying shares in the whole retail group that they are a part of, and all the stores in that group aren't doing well so Argos would be tainted. Wilkinson - again cheap and full to the brim - can't find them. Aldi - can't find them, can you see a pattern emerging?

Then I figured out perhaps it was just about the companies being foreign and not based in blighty.

I thought ok, let's make sure it's a UK company. My boss's son had just been in some ads for Silver Cross (makers of baby prams), they have been in the papers saying they are well poised to beat a recession. I know from previous work that kids are always the last to suffer as parents will go without for the sake of their children. Could I find shares in Silver Cross - could I hell. Frustrating. I need to learn more and quickly.

posted at: 13:53 | path: | permanent link to this entry

Troy’s Blog

Transferring £50 from my bank into Selftrade is child’s play and I am ready and primed to deal. With the words of the Monkeys ringing in my ears - "Buy shares that you can kick the tires of". I was a man on a mission eager to place my first trade.

But... there are some problems already. I started to think... the 4WM had told me to stick with what I know first. So I headed to the one stock I thought would be the best I could think of. Check this for some sound reasoning: the 7th largest clothing manufacturer in the world. Always does well in a recession as they are cheap, but ethical, and well made. They are the 7th largest in the world, BUT they only have 1 store in the US, none in South America and a predominance of their 750 stores in Japan. If they make it through the recession than they should be prime for expansion. All this and I like the brand too. The only downside was that the Yen was at the highest it's been for 13 years, and the company is Japanese. In the words of Rolf Harris "Can you tell what it is yet?" Uniqlo.

I typed Uniqlo into Selftrade - computer says no. I google "Uniqlo parent company" and get a result! It's owned by Fast Trading Co. Selftrade - nada still. I yell “Help” to the 4WM and it seems that I can't trade on the Nikkei (Japanese stock exchange - think FTSE for Japan, big market stall for shares!) So I cant' get what I wanted. Damn. Apparently there are ways round it but I am a novice so I am not even bothering for the moment. Back to the drawing board.

posted at: 16:00 | path: | permanent link to this entry

Troy’s Blog

From my last video post I went out and signed up to Selftrade. As everyone knows my knowledge is limited, but my one friend that trades, said he uses the site. If a pro uses the site then it might not be the easiest to use, but at least I know I can learn something from it. I am after all a novice so why not head for something that will keep me going as opposed to having a easier option that I would have to transfer my portfolio to in the future. And, as far as I can see it's cheaper to trade with at £12.50 per trade.

Starting the account up was hard as there seemed to be lots of options for an account. I was pretty sure that the option I chose was right, there is even an "account selector" that helps you on your way. I went for the Dealing account. When signing up it asked questions about Tax and bank details etc (after all they send a letter to your house, ask for security codes and set up pins - this is a money account that will *hopefully* store some good amounts of cash!) I found the site helpful and they have a helpline that's easy to use with people on the other end of the line.

I will get into the site deeper in later posts as when presented with W8-BEN forms and Complex Instruments Dealing not enabled that are certainly some things to learn!

posted at: 13:47 | path: | permanent link to this entry

Troy’s Blog – Biography

Whilst reading the FT every week in 2008 (akin to reading Heat magazine weekly during a year long celebrity serial killing spree!) I became frustrated in my niavete towards trading shares. I admit I didn’t, and still don’t, understand everything that’s written in the pink pages, but I knew one thing – I wanted to get in on the market. But there were some limiters:

1 – I only have about £40 - £50 a month spare to invest. Would that be enough to make any sort of difference?

2 - I have never traded a share in my life. Making trades would be akin to me walking into a bookmakers and placing a bet.

3 – I work a 9 – 6 job and can’t look at stats and figures all day long to get in and out of trades quick. I need to research and build a permanent and balanced portfolio for the future.

Armed with a million questions I contacted David Stephenson through the FT and proposed being a novice investor and to my surprise, he agreed to help through 4WM.

So here I am. A novice looking at ETF’s, Comodities Super Cycles, Derivatives, PE’s and F PE’s , Market Caps, High’s, Lows and all manner of other financial data in what’s widely recognised as THE investment opportunity of a lifetime. I have 4 Monkeys to laugh at me, bounce ideas off and guide me through one of the biggest financial FUBAR’s in history. Will I be tall enough to ride the rollercoaster? Follow me here on 4WM.co.uk

posted at: 13:30 | path: | permanent link to this entry

8th Podcast – Stephen

The biotechnology sector is pretty dynamic and very interesting for investors. Innovative and exciting, it’s also an expensive business to be in so there are plenty of barriers to entry for potential competitors. The sector offers defensiveness and yet volatility; growth and yet value. After all, an aging population together with growth in personal wealth across global emerging economies means increasing demand for years to come, while P/Es are at their lowest point in a decade. David has picked a biotech this week but I think that’s pretty difficult to do. There are some good funds in this area which are worth a look, but I’d be tempted to examine the investment trusts in this sector. Investment Trusts are pretty good at investing in companies such as these and have the benefit of trading at sizeable discounts to NAV at the moment – value on value.

posted at: 16:07 | path: | permanent link to this entry

7th Podcast – Paul

Some of the companies within the Powershares CleanTech investment have price earnings ratios that are astronomical, to pick this investment you have to have a belief that unlike all other bubbles this is the one that will succeed. Whilst it is easy to be sceptical looking at tulips, bowling and poker as a good example, 'green' has a political and economic that has not existed in any previous bubble and whilst the .com bubble had many causalities, the big boys all survived and our powerhouse businesses today. This fund tries to identify the powerhouse companies of 'green' investment.

posted at: 13:23 | path: | permanent link to this entry

7th Podcast – Stephen

So I’m feeling courageous and calling a short-term floor in the FTSE 100. There seems to be one at around 5100 and possibly one at 5300. What leads me to make this bold claim is that the news over the past week has been uniformly bad. Manufacturing is struggling and so is the service sector; the banks have reported huge falls in profits, other company results have been weak; house prices have fallen, economic indicators have disappointed… the list goes on. And yet markets have been relatively robust. This has something to do with the price of oil which has rallied markets in recent weeks but it is also because of the nature of markets: they are discounting mechanisms. This means that all of this bad news is priced in already. So, provided there are no shocks, unanticipated disasters (and I accept David’s ‘black swan’ pessimism) a short term target of 5700 is reasonable.

posted at: 16:49 | path: | permanent link to this entry

6th Podcast – Paul

Apologies for not making the recent filming. David came in with another property play with Hirco, which he also then tipped in the FT Money Supplement. Research on the boards suggests that the discount to NAV is not as great as David would suggest. The NAV excluding any unrealised profits in the investment companies would move the discount down. There is still a very substantial discount but I am not sure I am interested in the company.

Accsys, another growth play in a time people are looking for value. The timber product is already selling very well, it is a shame that the product is appearing at the wrong stage of the economic cycle, this is what would concern me the most combined with the high price. However, the company has not let down on its promises like many tech companies and as a result is being added to my holding again.

posted at: 11:33 | path: | permanent link to this entry

6th Podcast – Stephen

There are two stories that caught my eye this week: the mixed news coming out of the United States and profits (yes profits!) from British companies.

A huge budget deficit of some $500bn was announced at the same time as world trade talks collapsed, the housing market continued to falter and ongoing nervousness about financial services. But on the bright side, after 6 consecutive negative months, consumer confidence improved and Wall Street rallied on the back of oil weakness. The world of course is looking to the US for signs of recovery and the new President will have a very mixed bag of statistics on his desk when he takes over in the new year. Are we seeing America recover? It’s too early to say but investors will be pouring over these stories for some time to come.

Profits in British companies announced this week were again a mixed bag but amongst them there were some impressive numbers. Unsurprisingly, the energy companies did pretty well - Centrica posted a £1bn profit, Shell £4bn - Anglo American mining saw its profits up 27% to over £2bn. The banks have suffered as have the likes of BT and Unilever. But while profits fell substantially, we shouldn’t lose sight of the fact that they still made sizable profits. And here’s the point,I suppose, for investors we talk a lot about sentiment but profits are important and even in these pessimistic times British companies continue to post big profits.

posted at: 18:30 | path: | permanent link to this entry

5th Podcast – Stephen

It’s interesting that not only are there a number of new funds specialising in North Africa and the Middle East but existing emerging market funds have been moving capital into the region. We’re talking about countries such as Kuwait, Saudi, Morocco and Egypt. Egypt alone has returned more than 700% over 5 years; the more developed Saudi almost 200%. And what these economies have in common is relatively low inflation, economic de-regulation, oil and gas rich or commodities rich but with current account surpluses and are spending the cash on their own infrastructure. This means a growing middle class and increased economic growth. Also attractive is the low correlation with the European and US economic cycle. This is a sector that is not without risks – dependency on oil and political uncertainty in particular – but it will be attractive to many investors building globally diversified portfolios.

posted at: 16:27 | path: | permanent link to this entry

5th Podcast – Paul

EDI has just been tipped by Shares magazine as a possible takeover candidate, one candidate might be Kaplan who are private for-profit company growing fast in the United States owned by the Washington Post. Yesterday was VQ Day, and the vocational qualification market is showing good market growth as students consider alternatives to GCSE’s and A-Levels. This offers good growth potential, relatively protected at a low price.

Inland don’t seem to be as cash rich as I would have expected (though clearly it’s a strong balance sheet) and so in the cold sober light of the day I would have some concerns about this purchase. However it is pleasing to see director purchases, and a small investment might be warranted.

posted at: 16:10 | path: | permanent link to this entry

4th Podcast – Paul

British Banks have made a recovery since the show, in the case of Barclays almost 40% higher. This is currently not a sector that I am participating in, having shorted a few stocks on the way down I am now unsure of its future direction. In the case of Barclays the 250p looks attractive but with ‘e’ in p/e collapsing, the shares could go considerably lower. I would like to mass redundancies in the banks before I probably return to the sector. Further to this, I believe government action internationally is actually increasing the issues rather than my preferred approach of letting some of the banks go bust.

Spice, another growth selection. They are not cheap, so you may want to set a target price for purchase, but the company has a good track record to date.

posted at: 13:40 | path: | permanent link to this entry

3rd Podcast – Paul

ST41 is the doomsday scenario warrant, I don’t think it will be in the money at expiry and if it is, then 1% investment won’t really make enough of a difference (even if the return will be spectacular). Aviva is the best FTSE 100 stock, likely to continue to pay an above average dividend. If you buy slowly and regularly into this stock, I reckon the return over ten years will beat the market. The shares may fall as low as 300p, so proceed with care.

posted at: 15:42 | path: | permanent link to this entry

2nd Podcast – Paul

For awhile I have held reverse tracker warrants in my portfolio, SH32 is an excellent purchase, particular when the markets rally for 3-4 days. The market is likely to be under continued pressure and all investors would be wise to take advantage of this type of investment. However as the market falls, you should be reducing your exposure to shorts in my opinion. Whilst I am tipping buys like Park Group, you do need to make sure your portfolio is protected, otherwise wait for lower share prices.

Gold could take years and years to make profit (moving considerably upwards) and I don’t fear inflation or large scale oil prices at this time. The demand/supply balance of oil can be quickly corrected and growth figures will need to increase before we see rampant inflation.

posted at: 16:03 | path: | permanent link to this entry

2nd Podcast – Stephen

Gold! Always believe in your soul, you've got the power to know, you're indestructible.

Gold is also a 'flight to quality' asset class where the August future has just jumped 3.4%. It has promised many times in the past and rarely delivered the returns that many investors expected but given the global economic environment, a bit of exposure to this commodity would suit many portfolios.

Gold is an effective hedge against inflation and oil price rises - in fact it can protect against broad erosion in the value of money since the shiny stuff is an age old store of wealth. When the economy suffered from stagflation in the 70's, it was gold that enjoyed a decade long bull run. While things are not so bad today, the core reasons for inclusion in a portfolio are present. Gold should also benefit from slowing supply as sales from Central banks decline and increased demand as investors in emerging economies accumulate.

Investors are spoilt for choice when it comes to methods of accessing gold with ETFs, ETCs, structured products, covered warrants, funds and mining shares on offer.

posted at: 15:29 | path: | permanent link to this entry

2nd Podcast – David

SH32. Catchy title ? Don't those letters just roll around in your mouth like a juicey New World Red (wine that is). all the aroma of panicking markets, the slow onset of despondency and gloom. Investors bailing out.

Yep this is a covered warrant put that makes you a whole bundle of money if the FTSE 100 keeps on falling between now and December of this year.

If, and it could change any day, but if the FTSE 100 stays at around 5500 and then heads down 10% to just under 5000, this'll make a 90% return. If you'd have bought a few weeks back when the FTSE was closer to 6300, you'd have made double that, but beggars can't be choosers and I'd predict that the market will behave oddly on its way down past this barrier. I think there might be a small rally in the coming weeks and you may get a good chance to buy this covered warrant put at a better price but the overall pattern of trading is clear - the bulls are selling out and the bears are taking over. You could of course make alot more money on shorted dated options or spread betting but that's too short termist for me - markets are too volatile at the moment and I'd be terrified of being stop lossed if the markets move up a few per cent.

Its issuer SocGen have a huge range of covered warrants to suit just about every bear - even a commodity bear like myself - and you can test them all out at its web site at uk.warrants.com - Trading Tools on the left hand menu. I'm closely looking at a warrant - SV97 -that'll make an awful lot of money when the price of oil eventually turns and heads south. I'm not rushing to buy it as I think oil is still on its way up but economic gravity must eventually weight on oil prices as the global economy skids into a recession and I intend to be there to make a profit from OPEC's much deserved misfortune.

posted at: 11:43 | path: | permanent link to this entry

1st Podcast – Paul

Carnival may take years to provide a strong return, but all the long term fundamentals are right. The only issue would be overcapacity of cruise ships undermining margins, presuming this is kept in check then the company should make solid progress regardless of the short term impact of oil prices. Also my tip takes into account increased oil spend and the shares still look a Buy. Cruise oil spend is far below airlines, and no airline has a similar monopoly like Carnival has in the cruise market.

During the filming I suggested Infrastructure was so last year, but it continues to be trendy. It isn’t one of my preferred investments, though opportunities like the 3i warrants can offer decent higher risk returns.

posted at: 08:30 | path: | permanent link to this entry

1st Podcast – David

A few thoughts on the other 4MW picks. I sort of understand Carnival - I run lots of stock screens on the market looking for classic value stocks. With these stocks you;re after blue chips, great brand, solid cash flow and a long term growth story - Carnival ticks all those boxes. The only fly in the ointment is that dead as a parrot share price which has steamed south for as long as I can remember. But, and its a big but, oil will eventually turn and when it does Carnival will fly.

As for infrastructure I sort of agree with both Stephen - its interesting - and Paul - its boring. Some of the most interesting very long term growth stories are the most boring and I have in the past owned infrastructure stocks - HSBC Infrastructure and more recently 3i Infrastructure which I think is a superb global fund. But I have a worry - not that its boring but that its actually too trendy. Too many private equity outfits are chasing the same set of infrastructure assets bidding up prices, especially now all the other usual suspects on the investment scene have vanished.

As for my pick, well it really is boring. The name says it all perpetual preference shares that base their payout on a 1% premium above the london inter bank lending rate. How boring can you get ! But I have to say that I echo Clem Chambers recent comments in the Investors Chronicle that this bear market is only one third of the way in and we won;t see any real hope until the FTSE cruises past 5000 and possibly 4000. In these circumstances playing safe especially in a world supposedly threatened by stagflation seems wise in my book. The ticker is INVR if you can find a dealer who will let you buy it from the Channel Islands International Stock Exchange.

posted at: 16:40 | path: | permanent link to this entry

1st Podcast – Stephen

I know Paul thinks this a bit dull but I bought an Infrastructure fund in my SIPP at IPO 15 months ago and it's delivered a solid 20% return plus a nice little dividend. Infrastructure is an important asset class which is suitable for most portfolios. It's also inflation busting, something we should take into account given the Bank Governor's warnings and recent retail spending figures.

Infrastructure funds finance everything from roads to rail to public services and is a truly globally diversified sector encompassing not only Europe and North America but also the rapidly growing emerging economies of India and China. China alone is spending 10% of its GDP on infrastructure and it is estimated that over the next decade more than $20,000 billion will be spend on these projects worldwide - that sounds like a lot of cash to me.

There are simply far more projects than finance available leading to solid, durable and predictable returns combining capital and income. There are two drawbacks I should mention: firstly the nature of these funds means that there is often early underperformance since they raise funds and gradually spend the cash over a period. Secondly, as my own fund shows, prices have already risen but it has to be said from a relatively low base (sometimes discounted). This is an asset class with huge, global, sustainable demand over the longer-term which can help protect a portfolio against market weakness and the ravages of inflation.

posted at: 14:02 | path: | permanent link to this entry