2014 Review And New Year Resolutions

3rd Jan '15 by ShareSoc

56 comments 23292 reads

Now's the time of year to look back on the performance of the stock market in 2014, and look at plans for the future. Last year was undoubtedly a disappointing year for the UK stock market. The FTSE All-Share index was down 2.45%, worse than many other major markets. The cause was undoubtedly that the All-Share index is dominated by large mega-cap FTSE-100 companies such as BP, Shell, Glaxo and Tesco. The first two have been badly hit by the decline in the oil price, Glaxo alone fell 14% and you don't need to be told the travails of Tesco.

Smaller cap stocks had a particularly disappointing year after a barnstorming 2013. The FTSE Small Cap Index was also down and the FTSE AIM index fell by 16.5% on a Total Return basis. Small cap stocks were generally out of favour as investors moved into more defensive holdings or piled into the US market. Stocks such as ASOS and Monitise fell as the froth disappeared. Quindell, Blinkx and Globo suffered from disparaging blogs linked to shorting attacks and the small cap resources companies which were often kept afloat purely on hope, fell into a black hole. There were few major gains in AIM stocks and new listings such as MoPowered and Outsourcery fell very substantially. Avoiding all these disasters was not easy for investors in smaller companies.

New Year Resolutions

Before the end of the year ShareSoc sent out a Tweet asking what ShareSoc should do for investors in the New Year. We got a number of responses, which included:

- Sort out AIM including press hard for reform of AIM, and making Nomads and the boards of AIM companies more accountable.

- There was a also a call to regulate bulletin boards and force people to use real names not pseudonyms (if Facebook can do it why not in the financial sector where it is even more important?). It is clear that on the internet there is rampant distortion of the facts by some commentators, much of which is libellous but where there are no adequate legal remedies for those attacked. Sometimes these commentators are defended on the theory that there is “no smoke without fire", i.e. there may be some underlying truth in the allegations – sometimes there is but often there is not. It is impossible to separate truth from fiction in many of these cases, which can be exploited by those…

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JakNife

7th Jan '15

intuitive6191,

For the record it was (a) death threats and (b) false accusations to my employer as well as (c) the aerial photos.

Roger,

Words escape me. You don't understand my concern about me having aerial photos of my house posted on the internet? When I have a wife and two small children (7 and 5 back then). When I had a track record of highlighting fraudsters, boiler rooms and other financial crime over on TMF?

I note your lack of understanding. That would be another blind spot to add to the one identified at the start of this thread.

JakNife

Fangorn

@Jaknife,

For the record it was (a) death threats and (b) false accusations to my employer as well as (c) the aerial photos.

Have to say I disagree with Roger in regard to this, despite sharing his concerns on the shorting that goes on.

I also suspect I'd be handing our far more severe sentences for such death threats/ false accusations to employers.

Where the perpetrators caught?

Hi Danger,

Thank you for your response.

So correct me if i am wrong but in the three examples given,

1) Selling the Asset short, say Shell shares, without owning them is "Naked" short selling.

But

2) Selling Shell shares via Spreadbet, or via a CFD, despite not owning the underlying shares

is only considered shorting because you arent actually "Selling the Underlying Asset", you're essentially engaging in a synthetic short, namely " A derivative into that underlying asset" that mirrors the economic effect of a naked short without being subject to simialr stringent rules?

From my own PoV all three involve no ownership of the underlying, have the same risk/reward payoff for going short in that you hope to buy back cheaper in all three instances, the only difference being in how "The trade" is packaged.

I dont think your analogy however is , in any way, comparable, as at least in the above scenario the underlying elements of ALL THREE trades is the same. All that is different is how the latter two are packaged. In your example I'm strugglign to see any link whatsoever in how you could logically define a Bulgarian to be those who are born in Bulgaria, or who have the avatar name Fangorn. The second assumption would seem to be non sequiturial to the first.

"Re: short/medium term damage to employees and suppliers I struggle to see how this could really happen when a good company is shorted even when there are false rumours. Again I think the onus is on you to produce an example where this has actually happened otherwise we are hypothesising generalities. "

I'm sure you'd agree that even banks/employees watch the news and are aware,in this global 24/7 news society we live in, are aware of extreme share price movements in various companies. With regard to your specific question of providing examples - as I'm sure you're aware evidencing my hypothesis is difficult as it's hardly likely that a company will announce its cutting back on an investment project as a result of its stock plumetting 20%, due to shorting activity. You request would also entail going back over my extensive notes trawling for companies that suffered 1) Excessive stock price volatility, 2)Comparing it to known "Shorts" in that company at the time, 3) Dissecting the news to glean how much investment /restructuring was put on hold as a direct result. A tad time consuming at the bare miminum.

But I pose you this question - a company with an extremely volatile share price, particularly in a seeming downward spiral (even the mere mention of raising funds for an investment project sees the shorters sharpen their knives and 5-10% fall ensues), would surely see its cost of capital elevated as its "risk" was percevied to be rising? Bankers/Creditors are not daft. If the share price is falling rapidly there must be a reason, ergo the risk must be compenated for via more stringent & costly terms for any loans/refinancing.

Most blue chip companies rely, on an ongoing basis, for significant debt refinancing/ongoing capital raises to finance their investment plans - such activity is not just the preserve of financial weak AIM companies. So, in the face of rising cost of capital these investment projects are quite often delayed, to the detriment of the headcount already in place, but also of potential future hires/training etc etc. There are plenty such short to medium term costs to perfectly viable businesses - proving it however is difficult.

Things are even worse however for smaller companies where these large financial hedge funds, leveraging up their already huge financial advantages, can essentially blow any small company out of the water, rumour or not. Is this healthy for a viable and prosperous economy? My opinion is that it is not.

"The issue I have is that by criticising short seller research (i'm referring to the likes of Gotham, Edelman, Hempton etc. here not the BB muppets) sharesoc seem to be coming down on the side of the bad managements that implement unsavoury business models, destroy shreholder value, overpay themselves, and do related party transactions."

The issue I have is much of Edleman's blog comment was incorrect - hence he had to alter the contents of it on numerous occasions as new information came to light,and his prior remarks were shown to be factually incorrect. The damage had been done however.

What was more galling though was that he didn't disclose he had been paid, to do the research , by the very shorters who had already positioned themselves.

"The more high quality true short seller research attacks poor, promotional or potentially corrupt management the better for investors and the country since the more capital will go to good companies that are innovating and creating jobs. Sharesoc should be behind this not against it."

I don't see the need for short seller research,nor short selling activity that exacerbates price volatility to achieve the aims you highlight. Surely all that is needed is to point out the potentially corrupt management, or the poor product and let market forces sort themselves out - Holders of the stock WILL SELL, and the company, when it seeks new capital, will not be able to do so. Capital will therefore go to good companies, as you say, who are innovating and creating jobs. Doesn't need Short sellers at all who merely speed up the process,and cause significant contagion at the same time.

As an aside perhaps it would be an idea for a tabulation of "bad managements" as no doubt each new generation of investors is not aware of the "dubious charlatans" that the prior ones are.

As I said, having worked in the City it has changed beyond all recognition to how I remember it when I joined, it's far less honourable, its participants of far more questionable probity - one only has to review the various price fixing revelations that we see from Libor, to FX to doubts over Gold. Which commodity/market is not affected? How many more skeletons are there in the cupboard yet to be revealed. These days they'd sell their grandmother, and the shirt off their colleagues back, if it secured them an extra bonus.

Case in point is my own situation where I've had a "financial institution" try to pull the wool over my eyes with respect to a currency translation from USD to GBP.

10 weeks and I'm still waiting for the bastards to tell me what Cable rate they used, despite asking five times at least. But silence - they'll answer most other questions with flannel, but just blatantly avoid the Exchange Rate one.Why - because they're trying to use their "Internal exchange rate" they decided upon at the beginning of the year despite my transaction happening in November! This internal exchange rate results in an immediate 5% capital loss on my part!!!! Which is, shall we say. an utter piss take.

Mark Simpson

Hi Fangorn,

Again you can use your definition of 'Naked Shorting' to include spreadbetting etc. because you don't see the difference but the law clearly does (and for good technical reasons which are nothing to do with seeking to profit from downward price movements.) But sooner or later you will get into hot water yourself if you seem to be accusing people of illegal activities based on your personal definition not the law's.

Following the LIBOR scandal etc. I have sympathy for the view that there are the people in the city who are behaving consistently unethically however it's hard to see standards declining massively when in the past you had people legally front-running orders etc. However none of these issues are directly related to shorting shares they are just general concerns, valid but general.

I don't see the need for short seller research,nor short selling activity that exacerbates price volatility to achieve the aims you highlight. Surely all that is needed is to point out the potentially corrupt management, or the poor product and let market forces sort themselves out...

The problem with that idea is that you are expecting people to do significant amounts of research, spend money to investigate (it's not easy to detect fraud) and then take significant personal risk (corporate fraudsters are notoriously litigious and English libel law is badly structured) all for no reward. It just doesn't happen without incentives. Sophisticated investors don't buy these sort of companies (at least not without the understanding that they are playing a greater fool theory) it's the ill-informed PI's. If you ban short selling nobody is going to publish their concerns they are just going to keep quiet and the PI's will bid the shares up higher and lose more money in the end.

Again no one has managed to produce an example of a good company damaged by short sellers - for the avoidance of doubt I don't consider Blinxx, Quindell, Lehman Brothers and other overleveraged banks full of illiquid assets as good companies.

Cheers,

Danger

"because you don't see the difference but the law clearly does (and for good technical reasons which are nothing to do with seeking to profit from downward price movements.) "

But what is the difference? Other than one involves using a derivative to mimic the economic effects of shorting something one doesnt own, the other involving directly shorting the asset in question(without owning it) You mention technical reasons - what are they other than the point I've highlighted. Surely the Spreadbet/CFD is merely an "instrument" being used to legalise what is in effect, the same action?

I can't see it. To me they're both as bad as each other regardless of whether one is illegal,and the other is not.

"But sooner or later you will get into hot water yourself if you seem to be accusing people of illegal activities based on your personal definition not the law's."

Distasteful activities, of comparable nature. Don't think I actually claimed they were illegal, just that I believed they were no different to outright naked shorting - we really have taken a leap if you think that constitutes me accusing traders of such products as engaging in illegal activities :)

"The problem with that idea is that you are expecting people to do significant amounts of research, spend money to investigate (it's not easy to detect fraud) and then take significant personal risk (corporate fraudsters are notoriously litigious and English libel law is badly structured) all for no reward. It just doesn't happen without incentives."

All for no reward? What of their remuneration arising from their employment - is that not good enough? (eg Research analysts at Goldman, JPm, BOA ML, or Journalists for that matter)
Surely they are merely fulfilling their job description which they get paid for. I'm pretty sure Terry Smith is not alone in focusing on "the truth" rather than what he has been incentivised to say. And what of those bank's analysts who are no longer pitching for the target companies business - they'll scribble as cutting a report as possible surely highlighting all the problems

But instead we have hedge funds taken a short position,then paying a harvard professor to write a negative piece, which he does,publishes, and doesnt disclose that he was paid by two shorting hedge funds to do it . Is this the kind of incentivisation you find acceptable?

In case you werent aware, Mr Edelman has been in the press again, fairly recently.

You can choose your source according to personal preference.

http://www.theguardian.com/us-news/2014/dec/09/a-c...

http://www.dailymail.co.uk/news/article-2871466/Ha...

http://www.telegraph.co.uk/news/worldnews/northame...

So not only is he lacking in probity by not disclosing he was paid for "negative research" by the very people who had already shorted the stock in question, he is also clearly an obnoxious bully.

"Sophisticated investors don't buy these sort of companies (at least not without the understanding that they are playing a greater fool theory) it's the ill-informed PI's. If you ban short selling nobody is going to publish their concerns they are just going to keep quiet and the PI's will bid the shares up higher and lose more money in the end"

When you say "these sorts of companies" which ones do you mean? I tend to buy mainly Ftse100/Ftse250, but occasionally stray into Aim, Oilies mainly,odd miner for my sins. And Blinx.Other than that I avoid small companies like the plague as theyre too easily manipulated by anyone with deep pockets.

Plenty of institutional investors in Blinx, from some reputable houses as well.

http://investors.morningstar.com/ownership/shareho...

"for the avoidance of doubt I don't consider Blinxx, Quindell, Lehman Brothers and other overleveraged banks full of illiquid assets as good companies"

For the avoidance of doubt I don't disagree with your comment immediately above, other than the inclusion of Blinx.

Hi Fangorn,

I have no issue with you viewing both as bad as each other I just disagree with you, as does the law and accepted market practice. Your personal view doesn't change the accepted terminology though and using it otherwise is simply confusing. Using the illegality of naked shorting and your view on it's similarity to spreadbetting to argue that both are wrong completely misunderstands why naked shorting is illegal which is maintaining the integrity of the market in delivering shares on time as per settlement. This is not an issue with spreadbetting so cannot be used as an argument against shorting in general.

If you want to convince people that shorting shares is bad you need to come up with an argument that is not based on the illegality of naked shorting, not based on the illegal actions of a very few individuals who may happen to be short and not based on your personal investment experience.

Regardless of whether you personally consider Edelman 'an obnoxious bully' it comes down to whether he was right or not as to where Blinxx revenue growth was coming from or not, given the subsequent performance of the business I think he probably was, hence my inclusion of Blinxx in that list.

All for no reward? What of their remuneration arising from their employment - is that not good enough? (eg Research analysts at Goldman, JPm, BOA ML, or Journalists for that matter)

This comes across as pretty naive for someone who has worked in the city. Why do you think IB's have a research dept.? It's not to do a civic duty. What happened to the Cannacord analyst that wanted to put a sell rec on Quindell? What happened to all the IB analysts that called the tech bubble?

At the end of the day I don't think we'll ever agree - you think shorting has cost you money, I think it's a valuable tool to balance my mostly long portfolio. Like everyone else we are aligned to our economic interest.

Danger

"If you want to convince people that shorting shares is bad you need to come up with an argument that is not based on the illegality of naked shorting, not based on the illegal actions of a very few individuals who may happen to be short and not based on your personal investment experience".

If a large hedge fund, with access to leverage, is able to short the hell out of a small to medium size company, then the target has little chance of fending off such unwanton interest - the power these funds now wield is out of kilter with what is healthy for a strong productive economy imo.

Shorting merely adds to the volatility and you've not really explained how the three scenarios are different - they all involve selling something you don't have, they all have the same risk/reward profile, they all have the same desired outcome.

Is it essentially because one is physical short, the other two are synthetic - is that why the latter two are not deemed as being naked shorts?

ie Similar to say buying a Put option into 5000 Shell shares. I'm effectively short, and whilst I might not own Shell now, despite going short ,if it plummets I can either sell the Put, or buy underlying in open market and exercise option.

Just saying

"I have no issue with you viewing both as bad as each other I just disagree with you, as does the law and accepted market practice. Your personal view doesn't change the accepted terminology though and using it otherwise is simply confusing. "

isn't really helping me understand the WHY.

"Regardless of whether you personally consider Edelman 'an obnoxious bully' it comes down to whether he was right or not as to where Blinxx revenue growth was coming from or not, given the subsequent performance of the business I think he probably was, hence my inclusion of Blinxx in that list."

Given Blinx is a reputational business, the brand took quite a pasting despite the professors comments being continually correct for factual errors. Small company, reliant on its brand, will always see its business affected - the falling sales were then used as evidenced that the business was dubious, the call supposedly vindicated. Rinse and repeat. Easy to do if you have the firepower.

Lehman was a no brainer. QPP I dont really follow as I wouldn't go near such a stock.

All for no reward? What of their remuneration arising from their employment - is that not good enough? (eg Research analysts at Goldman, JPm, BOA ML, or Journalists for that matter)

"This comes across as pretty naive for someone who has worked in the city. Why do you think IB's have a research dept.? It's not to do a civic duty. What happened to the Cannacord analyst that wanted to put a sell rec on Quindell? What happened to all the IB analysts that called the tech bubble?"

Naive? Have you not heard of Terry Smith then? IB's have research depts for a variety of reasons and I'm sure that they're not all as acquiescent as your Canaccoord example. For starters they were renowned for putting out negative pieces on conpanies where they'd lost out on contracts with. There's also the "In house" use of research, either for trading desks, or Fund/Wealth management so again such research pieces are unlikely to be carte blanche positive - pitfalls and negative outcomes would certainly be pointed out.

For avoidance of doubt I'm not talking about the dross that the likes Edison, Canaccord, FinnCap, Peel come out with - tier 3 operations that they are, but the bulge bracket firms whose analysts have, in the main, far better reputations. At the end of the day as I'm sure you're aware, most FM's for example take the research from 1-3 analysts,two they deem the most consistently capable, the third they like who comes up with decent off piste stuff , the rest gets binned because there is simply too much of it.

Again, you need to read this in the context of my prior comments of the City is not how I remember it, it has morphed into a rather unwholesome beast that leaves alot to be desired.I quit the City in 2007 having done my time. Perhaps this might explain my old fashioned views of the City.

What of journalists? Plenty of them scratching about for dirt on XYZ plc. And they'd not be averse to revealing all was not well

"At the end of the day I don't think we'll ever agree - you think shorting has cost you money, I think it's a valuable tool to balance my mostly long portfolio."

Ah so you use it as it was intended. A hedging tool. No issue with that at all.

And no I dont think it has cost me money , I know some of the dubious shorting antics has, for a fact , cost me money in short term - but seeing as they're long term holdings I am able to ride it as I keep such forays outside the FTse350 to a minimum. Many other investors however are not so fortunate.

Interesting chat however.

Cheers.

emptyend

Regarding Roger's comment about legal remedies, that COMPLETELY misses the point, as JakNife noted.

Legal remedies aren't adequate if some unbalanced moron has caused actual physical or mental harm. There is NO shortage of unbalanced morons on the internet, especially on Twitter.

Words fail me too.

rhomboid1

I'm reading this thread in amazement, how can Sharesoc be opposed to shorting? It is probably the most efficient method of unearthing poor or catastrophic investments! If the shorters are wrong they are a transient flea bite on a healthy beast. However if a beast is flea infested its owners might like to ponder why.

I also cannot understand the antipathy to pseudonyms, I have and have had 'real world' roles that could easily inhibit my ability to post as openly as I'd like on issues on a variety of topics, a pseudonym can be associated with posting rubbish or stuff worth reading , as can people using their own names.

I've also huge sympathy with Jaknife , his crusade against the fraudsters over many years has been extraordinary, it cost some nasty folk cold hard cash and that is not without risk but to an extent a pseudonym can act as a first line of defence.

Roger Lawson

To rhomboid1: There was nothing in the original post that said either I or ShareSoc are opposed to shorting, per se. Please reread it.

As regards pseudonyms, the big problem is that a lot of people use them because they do not wish to be openly associated with the views expressed. That often is for dubious or even illegal reasons. I cannot tell whether it is just people who are shy, may have some good reason to conceal their identity or motives, or whatever. But I do know if someone is using their real name that I can put a lot more trust in what is said.

National newspapers will never print letters from people who do not provide a name and address for the same good reason. But internet blog publishers have not learned that lesson yet it seems (apart from those who think trust is important such as Facebook). I doubt that we would miss much intelligent comment if those who were not willing to disclose their names were put off from posting. But it would certainly discourage the often libellous and unproveable garbage and downright abuse one sees all the time from the ignorant and reckless on bulletin boards.

Thanks for the response Roger

In your original post you stated;

"Quindell, Blinkx and Globo suffered from disparaging blogs linked to shorting attacks - See more at: http://www.stockopedia.com/content/2014-review-and-new-year-resolutions-89612/?comment=46#46

I would argue that shorters simply pointed out some fairly fundamental flaws in some shonky business models, for you to suggest that you/Sharesoc believes the problem was the blogger or shorter rather suggests you have missed the obvious.

Finally you appear to not accept that anyone would feel better operating under a pseudonym for legitimate reasons, that is plain bonkers to me , but I respect your personal view.

intuitive6191

Sorry, I cant agree that abolishing pseudonyms will have any effect whatsoever on market manipulation. A bit like using a pea shooter to stop an elephant in my view.

It might reduce some of the abuse on the likes of advfn, but this wouldn't serve any investment purpose.

Roger, you have expressed some personal views here (which is fine) but does ShareSoc have an offiical line on market manipulation and how to protect the private investor? This might be a more productive starting point for discussion.

rhomboid1: I did not suggest anything! I simply reported on what happened at Quindell, Blinkx and Globo and the cause for the share price declines (as reported by numerous other financial media). If you are saying that there were no "shorting attacks" at those companies then you are obviously not as familiar with events at those companies as me. Whether there were underlying facts that justified the shorting is not something I commented on.

If you feel better operating under a pseudonym then that is fine. But I and many others are less likely to believe you and trust what you say because we do not know who you are and whether you are trying to conceal who you are for reasons not disclosed.

For example, we don't know whether you have an interest in promoting shorting in any of its forms and the associated business practices and are never likely to find out (which we might if your name was disclosed).

It is for this kind of reason that people are not allowed to appear in court under false names unless there are very good justifications. Why people won't give you credit unless you disclose who you are. Why the police won't be very happy if they stop you and you either won't give a name or give a false one. Why you can't get a passport without proving your identity. etc etc. It's a matter of trust, which the internet needs a lot more of, not less.

marben100

For avoidance of doubt, Roger's views on shorting and anonymity on electronic media are his own, and not those of ShareSoc. He has tried to make this clear. Note that the OP is signed under Roger's name. Roger is the author of "the ShareSoc Deputy Chairman's blog", which is republished by Stockopedia. As a member of ShareSoc's board, I am most grateful for the amount of work Roger puts into the blog, as it tackles many issues of interest to investors - whether you agree with Roger's opinions or not!. Opinion pieces on the blog can not be assumed to be ShareSoc policy.

I expect that we will discuss these policy matters at the next ShareSoc Board Meeting (there are 9 well qualified members of ShareSoc's Board - see http://www.sharesoc.org/directors.html ) and, if we agree a formal policy position for the Society on them, we will make that formal position clear.

OK Roger ,you appear to be missing my point.

I accept there were shorting attacks on those three companies, you believe that is a problem, I believe it to be a self interested public service by those involved. I'd far prefer to see Quindell directors doing serious jail time than see shorting attacks curtailed.

As for anonymity on the internet it has advantages and disadvantages, drawing comparisons with "real life" ID requirements seems a pointless exercise though.

In the meantime please clarify whether these views are Sharesoc related or just your own views , if the latter then maybe lose the Sharesoc website link?

8th Jan '15

rhomboid1: "Self interested public service"? What does that mean? And your comment about Quindell directors is defamatory unless you can produce evidence about fraud or other illegality which will stand up in a court of law . A typical example of bulletin board abuse of anonymity.

As regards whether the "views" expressed are mine or ShareSoc's, Mark Bentley has already made clear that any comments by me on ShareSoc's blog are my personal views. It clearly states that on our blog - see http://www.sharesoc.org/blog.html (see the heading).

But will everyone please note that the blog post made no comment on the ethics of shorting or took any general position on it. Will those at the back of the class please pay attention and reread what I said!

intuitive6191: as regards your question on the ShareSoc stance on "market manipulation and how to protect the private investor", we certainly have a number of suggestions. The resources put into the FCA certainly need to be larger if they are ever going to tackle this issue. They simply do not have the resources to tackle all but the largest companies and the biggest issues. Any small company is simply not going to get any attention however many complaints there are or requests for investigation (and companies such as Quindell and Blinkx are nowhere near the smallest of course).

In the AIM market we would like to see existing regulations properly enforced and there needs to be an independent regulator because self regulation by the LSE simply does not work - they have a vested interest in sweeping problems under the carpet. Our stances on these matters are spelled out in our policy manifesto which is present here: http://www.sharesoc.org/ShareSoc%20Manifesto.pdf and we have promoted these to the Government and the LSE a number of times in the past.

Good Morning Roger

If I may say so you appear to be at the at the back of the class if you cannot understand perfectly plain concepts expressed in clear terms!

If someone for purely selfish pecuniary reasons reveals , in public ,information that is important for investors to consider in deciding whether to hold shares in a quoted entity then that is ..a self interested public service.

I also expressed a preference for Quindelll directors to do serious jail time ...as opposed to shorting being curtailed. I fail to see how that constitutes an abuse of anonymity. It is also non defamatory.

Finally if this is your personal blog then remove any Sharesoc references , otherwise your ill thought through prejudices damage Sharesoc IMHO

Roger

The FCA budget for 13-14 was £432 million employing 2848 staff. The link can be found here

The FSA (its predecessor) did have a larger budget of £578 million for 12-13, but the new FCA had their budget reduced because the FSA underspent by £19.5 million. I think that most people will read this as the FCA just not being very organised in using the resources it had at its disposal. No surprise really.

Having said this, 432 million and 2848 staff is still quite a considerable resource. Given that some of the alleged market abuses on AIM are quite visible, I would have thought that this was the obvious place to start investigations.

Thank you for providing the link to the ShareSoc Manifesto. I had not seen this before and took a minute to trawl the ShareSoc website to see why I had missed it. I have to say it's a bit buried. I would suggest that this document should be linked directly from the front page of your website as a clear statement of what ShareSoc is all about.

Might I also suggest that someone starts a thread here in on Stockopedia to discuss this Manifesto and provide valuable feedback? It's dated 2011 and could probably benefit from some revision. Even if people chose not to comment, at least they will have the opportunity to read it.

intuitive5191: Thanks for pointing out a possible issue with our web site. There is a direct link to the Policies page from our home page (top right). We are currently redeveloping our web site so I will pass your comment to those involved.

As regards the FCA resources, I think the problem is partly as you say that the resources might be misapplied but they do cover an enormously wide area, and the problems and legal cases in the financial sector have been rampant in the last few years - the banking sector alone has generated an enormous amount of work.

As regards the last point that may be a suggestion for Stockopedia to consider, but we are always willing to listen to proposed changes. The reason why it has not been revised since 2011 is mainly because there haven't been calls for significant changes. The last time we asked our members about this they were generally happy with it. We are however considering holding debates on some of the issues surrounding shorting which is a very contentious area and where there is no more unanimity among our members that there is on this board. There are also some other areas which could do with more debate, to enable us to refine our policies (there is of course nothing in the Policy document at all on "shorting" at present even though I did write it - we tried to promote policies that every sensible investor could agree with).

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