My investment mistakes of 2012

Tuesday, Dec 25 2012 by
17

Investing mistakes - I've had my share this year. I'm a relatively novice investor (I bought my first individual share in September last year) so I expect to have my fair share of errors as I go along, the key thing as I see it is to learn from my mistakes to prevent their repetition as far as possible. So, without further ado, here's a tally of my investing cock ups:

1) Elektron Technology

Technically this is a mistake of 2011, my only action in 2012 was to sell my remaining shares in January at 23.3p. Given the market price is now 17.3p this was arguably a successful decision! However it's worth a look at because I think the mistake I made here is an easy one to do and one I anticipate I'll inevitably make again - trusting in management who aren't operating in shareholder's best interests.

The Chairman, Keith Daley, currently owns 13% of the company, which is normally a very good sign. Management who are owners overcome the principal-agent problem and tend to act in the better interests of shareholders. Key word - tend to. The incident in question that led me to selling out here was this statement.

Wow - management awarding themselves bundles of shares - giving away almost 10% of the company in one fell stroke! Now I'm all for management being well incentivised, but this was beyond ridiculous. Such an action is effectively a big middle finger to all non-management shareholders. The business may be selling well below the intrinsic value right now but with management having shown they are in this to maximise wealth for themselves at the expense of other shareholders, who'll be the end recipient in the long run of this value? Given there's cheap companies out there which have shareholder-friendly management why take the chance?

There's plenty of ire on the ADVFN company board about the management even before the JSOP announcement. My mistake was not investigating this further before I bought at 32.3p - d'oh! One last piece of irony is that one of the board members has written a book entitled Angels, Dragons and Vultures: How to Tame Your Investors... And Not Lose Your Company. The writing really was on the wall... or rather, in the book.

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way

Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


Do you like this Post?
Yes
No
17 thumbs up
0 thumbs down
Share this post with friends



Elektron Technology plc is a holding company. The Company is engaged in designing, manufacturing and marketing products that connect, monitor and control. It operates in two segments: Connectivity, and Instrumentation, Monitoring and Control (IMC). Connectivity comprises two complementary product families: Bulgin and Arcolectric. The Company's products are helping its customers to quantify real-world environments, process this data and act on the results. Its products include sealed connectors, Switches, indicators, battery, fuseholders, ophthalmic instruments, nanopositioning and sensing equipment, and vehicle power management systems. The Company's Checkit offers a wireless solution providing work management software and automated monitoring. Its subsidiaries include Elektron Technology Corporation, Elektron Technology PTE Ltd, Elektron Technology UK Ltd and Elektron Technology (Shanghai) Trading Limited. more »

LSE Price
7.28p
Change
-4.6%
Mkt Cap (£m)
14.2
P/E (fwd)
n/a
Yield (fwd)
n/a

RSM Tenon Group PLC is an entrepreneurial professional services company. The Company operates in five segments: Audit, tax and advisory; Turnaround and corporate recovery; Risk management; Financial management, and Specialist taxation. The Company’s services include audit and accounts, consulting, corporate finance, corporate recovery, financial management, forensic accounting, fraud solutions, information systems assurance, internal audit, outsourced services, personal insolvency, software solutions, risk management and tax. Through a suite of accountancy, taxation and advisory services, the Company offers solutions to clients that range from individuals and entrepreneurial privately-owned businesses to corporations and public sector organisations. In October 2012, the Company disposed the IVA business of RSM Tenon Recovery to Grant Thornton UK LLP. more »

LSE Price
n/a
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

Playtech plc supplies online gaming software. The Company and its subsidiaries develop software platforms for the online and land-based gambling industry. Its gaming applications include online casino, poker and other pay to play games, bingo, mobile, live gaming, land-based terminal and fixed-odds games. Its segments include Gaming and Financial. Its Gaming segment includes Casino, Services, Sport, Bingo, Poker and Land-based. The Financial segment includes contracts for difference (CFD). Its business gambling software offering includes casino, live casino, bingo, poker and sports betting. The Company supplies software and services through online, retail and mobile operators, land-based casino groups and government sponsored entities. Its product suite enables players to access online, broadcast, mobile and server-based gaming terminals through a single account. Its subsidiaries include Playtech Software Limited, OU Playtech (Estonia) and Techplay Marketing Limited. more »

LSE Price
807p
Change
1.1%
Mkt Cap (£m)
2,575
P/E (fwd)
11.6
Yield (fwd)
4.1



  Is Elektron Technology fundamentally strong or weak? Find out More »


8 Comments on this Article show/hide all

A1ex99 28th Dec '12 1 of 8
1

Great article!

| Link | Share
djpreston 29th Dec '12 2 of 8
1

As Alex said, brilliant article and thanks for posting it.

Fund Management: European Wealth
| Link | Share
loglorry 29th Dec '12 3 of 8
1

Yes great blog entry - I just wish I was as astute in my first few months of investing.

| Link | Share
Richard Goodwin 29th Dec '12 4 of 8
1

Thank you very much, a well thought through reinder of mistakes we all tend to make.

| Link | Share
WhichInvestmentTrust 20th Mar '13 5 of 8
1

I worked for Tenon until recently. I could have told you about them (except of course that you never knew).
The good news looking at the recent figures is you were lucky to get out north of 5p with them in danger of breaching their only recently agreed banking facilities from Lloyd's.

| Link | Share
seasons 13th Apr '13 6 of 8
1

Wow, I never thought I would laugh reading investment articles. Honestly, not because I enjoyed your losses (far from it!) but the way you presented the information. Well done and thanks for saving me from getting into Playtech (LON:PTEC) -- I was considering it but reading about it here I quickly gave up any further investigation!

| Link | Share
CantEatValue 16th Apr '13 7 of 8
2

I'm glad so many people have enjoyed this article - it was quite painful to write! A wonderful exercise to rid one of any investing hubris.

It's interesting that the market has shrugged off any further Teddy Saggi fears and has re-rated Playtech (LON:PTEC) quite a bit - d'oh! I still hold a lot of admiration for it's market position and would love to own it but I still can't get comfortable with Mr Saggi - especially not when PTEC is about to receive a huge cash windfall from William Hill to buy out their share of WHO. Where's that cash going to go? Here's what they say....

"Playtech is undertaking a broad review of the most effective use of the proceeds from the disposal, taking into consideration both feedback from shareholders and the Company's requirements going forward. The Board will, amongst other things, be assessing the potential for further value-enhancing acquisitions, joint ventures and partnerships, with a focus on regulated markets, together with the possibility of a return of capital to shareholders."

They'll need some for the Ladbrokes deal (which, I imagine, they will do what they did to Will Hill and get a fantastic deal and use their know-how & Ladbrokes' brand to kick-start their online growth) but I imagine a lot will be excess. If it's returned to shareholders then that's great, but I fear it's just going to end up in another Saggi dud-company buyout...

| Link | Share | 1 reply
Calalily 18th Apr '13 8 of 8
1

In reply to CantEatValue, post #7

Excellent article, I'm sure it wasn't easy to write, thank you for sharing.

| Link | Share

What's your view on this article? Log In to Comment Now

You can track all @StockoChat comments via Twitter

 Are Elektron Technology's fundamentals sound as an investment? Find out More »



About CantEatValue

CantEatValue

Part-time private investor predominantly in micro-cap UK equities or anywhere I can find inefficiencies.

Follow



Stock Picking Tutorial Centre



Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis
Foliobuilder