Small Cap Value Report (24 Dec 2015) - BOO

Good morning!

If the market's open, then at some point in the morning I'll surface here, and put together a few words. I overslept this morning, and found a half-empty glass of red wine by my bedside, all my things on the floor, and a 20p piece stuck to my side - so am taking all that as a good sign that 2016 will be a lucky year!

I run various portfolios for myself, and others, and generally speaking it's been a good year. My SIPP has done badly - it's roughly flat on the year. I need to come up with a new strategy for that. At the moment, it's a repository for crappy micro caps - potential multibaggers, but not enough serious stocks.

I think the problem is that I can't access the money for at least 8 years, which is too far into the future for me to take it seriously. Reading that back to myself, it sounds absolutely crazy, so a re-think on strategy is needed there.

My long-term, value portfolio is up about 10% this year. There have been some excellent picks in there, e.g. Zytronic (LON:ZYT) and Boohoo.Com (LON:BOO) (bought at the bottom), and nice recoveries on long-term positions like Spaceandpeople (LON:SAL) and Flybe (LON:FLYB) , but overall there have been too many banana skins, which I should have avoided (e.g. Entu (UK) (LON:ENTU) ). So my scorecard there says, not bad, but could (and should) do better.

It's my spread betting accounts which have really done well this year. There's been one disaster (a ridiculously over-sized punt on Home Retail (LON:HOME) ) but I'm pretty confident that I'll get my money back there, due to the amazing balance sheet strength. Other than that, there have been lots of smallish losses (as you would expect), but some terrific profits on e,g, Avesco (LON:AVS) , Boohoo.Com (LON:BOO) , Character (LON:CCT) , accesso Technology (LON:ACSO) , Alkane Energy (takeover bid), Apple (bought on the flash crash as a quick & profitable trade), French Connection (LON:FCCN) (heavily averaged down right at the bottom), the short on Globo of course (should have been much bigger, but never mind).

My other, smaller losses have mainly come from either silly punts (e.g. long on Twitter), oil-related, e.g. Genel Energy (LON:GENL) , and catching falling knives (my worst investing sin), e.g. DX (Group) (LON:DX.)

I'll do a more detailed portfolio review at the year end, but the overall picture is very positive - despite plundering them regularly for living costs, my family's spread betting accounts (which I manage) are substantially up on the year - high double figures in terms of percentages, but I haven't worked out the exact figures yet. As long as you manage the gearing very, very carefully, then there's no reason at all why spread betting accounts cannot be lucrative. It's all about focussing on what you're good at, and not being tempted to punt in areas where you don't have any expertise or competitive advantage.

I've lost a small fortune (well into 7-figures) over the years, punting on Indices, and other things where I have no expertise, it was pretty much an addiction in years gone by. However, am pleased to report that my strategies to stop doing this have been successful, and I have not done any Index punts at all on my main spread betting account this year. I did a few on a small account, which is my fun money account, and bizarrely actually managed to make a good profit during the flash crash time in late Aug 2015 - but that was more luck that judgement, so not to be repeated.

I hope readers have done well, and that my reports have been a useful ingredient in your overall investing hot pot - just looking at the summary page, I've written 247 SCVRs here this year so far, so no wonder I've got a bit of RSI in my knuckles & up my right forearm!

In terms of company results & trading updates, I'm pleased to say that there aren't any today (within the 500-ish stocks that I cover - which incidentally are listed here on a spreadsheet on my website (see the "Filters used" tab).

It only remains for me to wish you all a wonderful Xmas, with lots of fun & feasting, and spending time with loved ones - that's what life's all about really isn't it.

Kind Regards,

Paul.

(Usual disclaimers apply)