The Alternative Investment Market - Five Suggestions for Change

Monday, Aug 02 2010 by
18
The Alternative Investment Market  Five Suggestions for Change

This article was written by David O'Hara of Blackthorn Focus and first published in Aimzine.

I love AIM but like most things in life, it is not perfect. The London Stock Exchange's AIM market has come in for some fierce criticism from all corners: investors, advisors and the companies themselves have all voiced disappointment along the way. Any institution with such a high profile will be criticised. In a stock market, investors will often blame someone else for their losses and company executives typically harbour the conviction that their company is worth far more than the share price is telling them. The market itself is the ultimate judge, though, and its invisible hand continues to point companies and investors in AIM’s direction. 

I’ve been investing in AIM shares for over five years. I know that isn’t long but I’m not very old. AIM launched when I was still at school I’d have needed one hell of a paper round before I could afford to invest in stocks. 

AIM continues to change as markets, investors and companies’ expectations of a market evolve. All AIM companies will soon have to declare the full earnings of each individual director, a move which is to be welcomed.

I don’t see why change should stop there, however, and have detailed five things that AIM could do differently:

1. Make market expectations public: If there’s one thing I can’t stand it is a company referring to ‘market expectations’ in trading statements when access to these expectations is restricted. This amounts to a nudge and a wink to everyone who is unaware of simply what numbers the company is vaguely referring to. Some large cap companies deal with this properly (Barclays is one example) by publishing brokers’ consensus estimates on the Investor Relations section of their website. Trading statements should not carry more meaning for the house broker’s clients than they do for everyone else. To be sure, data aggregators exist, publishing consensus forecasts to anyone who takes the time to register on their site but brokers are under no obligation to send their estimates to sites such as Hemscott. AIM Rule 26 requires that major shareholders are detailed on a company’s website. The figures management are referencing in trading statements are surely more important to a fair and orderly market than a declaration of who owns 3% of a company.

2. Make…

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
18 thumbs up
0 thumbs down
Share this post with friends




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

You can track all @StockoChat comments via Twitter


About Blackthorn Focus

Blackthorn Focus

Blackthorn Focus is a publications and events organisation dedicated to Europe's financial markets. Blackthorn Focus was established in 2009 by David O'Hara. After several years experience of financial media with  AQ Research and many more as an active investor, David realised certain areas of the financial markets were not operating to the satisfaction of participants. Blackthorn Focus was established to create the media necessary to help bring about change and improvement. more »

Follow


Stock Picking Tutorial Centre


Related Content

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