Daily Stock Market Report (Fri 28 Feb 2025) - Portfolio, MEGP, MGAM, RMV, FKE, OBD, SAG/RCDO

Serabi Gold (LON:SRB) big drop today - no news might be linked to yesterday’s drop in gold price. Not sure I’ve got the stomach for small cap mining shares……

If you browse the statistics for Aim shares on here, you will see that a very large number are not profitable and are consistently losing money. Many have to finance these losses to continue in business and that generally means going back to their shareholders to stump up. The banks are unlikely to lend as there is no certaintly that any loans would be repaid let alone the interest on the loans paid. There are quite a lot of casualties on the Aim market where even the shareholders have given up support. The quality of many AIM companies is very low. Many companies on Aim have no turnover and are living on a prayer that eventually their idea or development will eventually bear fruit and bring in profits. In many cases it does not. It is not surprising that the Aim market has been a disaster. If you want to avoid disasters, steer clear of Aim shares that are not paying a dividend. There are some good quality gems that are paying dividends that go from strength to strength. Choosing FTSE 100 or 250 stocks is far safer but once again, avoid those incurring losses, not paying a dividend or those that are heavily geared. That way you are likely to have far less disasters and you have a chance of making steady growth. Looking at the chart performance of the main market and comparing it to Aim bears this out. 

Anybody elese out there feeling utterly dispondant with 250/AIM?

Yes! Over the past few weeks I have exited most of my AIM positions. The only two that reman are Gamma Communications (LON:GAMA) which will soon be moving to the main market and AdvancedAdvT (LON:ADVT) which I view as something of a special situation.

My thinking is that AIM is close to being a broken market or at least, a market for mainly just retail investors. The death knell was delayed in last autumn’s budget as only half of the IHT benefit was removed but how long before the other half is removed? Are wealth managers going to be directing funds towards AIM or encouraging their clients to quietly exit stage left? The liquidity is so poor I can’t imagine it is a fun place for fund managers these days.

As for the FTSE 250, I’m sticking with it for now as I don’t believe there are any particular structural issues, merely a lack of confidence in UK PLC which as timarr has already concluded, might represent an excellent buying opportunity. That said, the FTSE 100 is having a good year which might be more to do with dollar strength than confidence in the UK.

Enjoy your weekend everyone!

Logged first thing, and tech team have replicated so on their to-do list.

Work around:

Click on the buy transactions and then amend the transaction mode to change to required transaction type

Yep, another crappy end to a crappy week.

it’s been  bearish for about 3 and a half years now on aim, not sure what the catalyst will be for a bull market,  if it can even turn around - maybe peace in Ukraine and cheap gas will help 

Take me back to mid 2021 and I’d sell the lot rather than losing at least 60% of my PF 

I have found my investment performance improved since I started using the following rules three years ago, don't invest in aim or loss makers, avoid anything sub 200 mil market cap as generally to illiquid, use naked trader 3 x profit to debt rule, generally max pe of 20 min 6 , divi to be covered min 1.5 times avoid anything yielding more than 7%, spread max 2%.

That's the basics but as I mentioned earlier I'm moving 90% to ETF;s and Investment Trusts I work in the investment industry but I'm averaging the same as Rathbone Global Opps for about 20 hours of my time per week so intending to do some back testing on four way asset split as per Ed Shing's latest article with intention to moving to that if it merits.

After 25 years of average returns the odd big win anyone remember Cove Energy and plenty of disasters such as Torotrak and the like its finally got through to my thick skull I don't have the right temperament to make it into the top 5-10% of investors.

Here are the performance figures for FTSE100, FTSE 250 and AIM index over 1 and 5 years, and also since October 1996 when the AIM index started at 1000 level. 

FTSE100 1 year up 16% and helped by so many FTSE100 constituents being International shares. 

FTSE 100 5 years. Up 34%. 

FTSE100 since October 1996. A miserable (compared with a lot of major markets) UP 120%. 

FTSE250. 1 year up 6% and 5 years up just 5%. BUT! Since October 1996 the FTSE250 has QUADRUPLED! 

AIM INDEX. DIABOLICAL!!!! 

AIM INDEX. 1 year DOWN 5%. 5 years DOWN 18%……and since it started in October 1996, DOWN 30%! 

For comparison the DOW JONES index is up 7 times since October 1996 and the NASDAQ is up 10 times. 

DAX index  is up 7 times. INDIA is up 20 times since Oct 1996! 

Can’t get the figure for Vietnam, sometimes described as the new India, but  VinaCapital Vietnam Opportunity Fund (LON:VOF) which I’ve held along with VietNam Holding (LON:VNH) for most of this century is up 8 times since October 2003 starting level. 

Enough evidence that a portfolio dominated by AIM shares is not a good way to invest? 

I’d suggest there are many definitions of risk…& on some of the better definitions of risk Volvere (LON:VLE) would score really highly…most of its market cap is cash derived from previous successes..the remainder is a highly successful pie factory that occupies a valuable freehold site and serves the supermarket sector with a range of products that could fairly be described as  recession proof. I hold a small position here & saw first hand the lengths mgt went to try and get a live video link working so Graham could participate in the AGM a few years back. I’ve also held it for many years so my bias might be considerable…I too v much miss Jonathan Lander he was a pleasure to interact with & genuinely warm & funny whilst being an extremely talented capital allocator…his brother will doubtless look after his legacy & other shareholders in the process.

I've written up this week's The Week Ahead, a slimmed-down version but hopefully it does the job:

The Week Ahead (3-7 March) - AI Sentiment, NFP, UK earnings season

Beautiful comment, Rhomboid!

Hi ken

I don't think those index figures are total returns. As the UK is so dividend heavy you can't really compare internationally without considering reinvesting dividends.

I don't have figures for the period you're quoting but between 2003 and 2023 the TSR on the FTSE100 was 241%, I wouldn't be surprised if the 1996-2025 TSR was of the order of 400%. Not as good as the US, but not bad.

AIM is awful, of course, but it was designed as a high risk, high return market. It was always going to generate a lot of terrible companies. What is slightly unfair in your comparison is that as companies have become successful they've moved away from AIM - so AIM is left with rubbish and the big winners don't get included.

Melrose Industries (LON:MRO), Unite (LON:UTG) , Genus (LON:GNS), Domino's Pizza (LON:DOM) , Hiscox (LON:HSX), Entain (LON:ENT), Big Yellow (LON:BYG), Breedon (LON:BREE), Alpha International (LON:ALPH) and Plus500 (LON:PLUS) all started out on AIM. I'm sure there are more. Its performance would look a lot better if they'd stayed!

AIM has clearly lost its way, though, there needs to be a serious rethink of what it's for.

timarr

It's on the Stock Peport, Dwit, in the Screens Passed box.

Hi Mike, I don't know whether or not to feel consoled by your note and the similar sentiment in other investors replies, at least we know we're not alone so thanks for that. At least you've missed most of it by being away all week!

I started the year well, boosted by a takeover for my largest holding. At that point I was a genius but six weeks later I'm reflecting that this week, and today especially, has been one of the most depressing.

I'd be slightly better off if I acted quicker on my very tight stop rules but I'm also finding individual stocks crashing right through them in a single day with no news. I've been stopped out of a lot of stocks lately and as of today am 50% cash - self preservation to fight another day, and sleep slightly better between now and then.

Hope isn't a great investment strategy but I do hope we'll all feel better this time next week.  

ME International (LON:MEGP)

I sold my holding in the last week or so at prices between 210p and 216p, not because I don't like the company, but because the share price appeared up with events and a profit of around 60% seemed a decent outcome.  The proceeds were used to add to Zotefoams (LON:ZTF) Card Factory (LON:CARD) and Eurocell (LON:ECEL) the sale may have been auspicious but my purchases in terms of the price paid and today's closing prices were not.

Anyway the reason for the post is that until recently my local Sainsburys had  ME photobooth at the entrance, today I noticed that while it still has a photobooth the name on the booth was Max Spielman.  My inclination, as I speak a little German was to think that this is a German competitor.  Apparently not!

Max Spielman it turns out is part of the Timpson Group  that acquired it in 2008.  Also Max Spielman is a fictitious name according to its website and doesn't exist, corporately anyway.  

About Us | Max Spielmann

How good the Max Spielman photobooths are relative to those of the ME Group I don't know, but there appear to be  providing some competition in the UK

Hi timaar

You can add me to your cohort, although I admit that it is disheartening to see perfectly good shares with decent prospects and valued very modestly on most investment metrics continue to fall in price.  In the main I tend to remain fully invested and like you use dividend income to add to existing holdings.

Most of my portfolio that consists of 24 small cap shares is AIM listed, not by design but because I like and understand the companies. To date I have been fortunate to avoid any profit warnings and shares such Zotefoams (LON:ZTF)  that I bought recently around 305p after the positive trading statement post termination of its investment in 'Rezorce' and Kitwave (LON:KITW) results due next week, but trading in line as at last November's update  continue to be marked down.  Hopefully the outlook statement for the latter will confirm a continuation of that trend.

It is difficult to know what to make of the market in small caps at the moment, so for me its back to sitting on my hands!

Anyway that's my tuppence worth. I suspect that I have got off somewhat lightly so far, with the portfolio down around 3% since the start of the year. 

All the best

There will be some stiff competition between ME International (LON:MEGP) and Timpsons with MEGP bringing out Kee.me and Timpsons muscling in on the photo booths. 

Ever curious and never to be happy until I come across the holy grail in investing I've lost count of the projects I have created.  This time I'm Looking for a common thread to help me to decide on when to add to and when to sell companies held within my portfolios.  It's the 50dMA to be the tool to monitor the changes from one week to the next, entered up each Friday on an Excel spreadsheet reproduced below.  Green cells for a postive figure, pink for negative.  Blue cells for when negativ changes to poitive and yellow for when the reverse occurs.   Comparisons are easlly made and I expect the picture to become clearer as more entries are made.  Right click on the image and select New Tab for better visibility.  Comments will be welcomed excepting those taking the mick re my selections.

Silver Moon

Have you thought about thinking as a fractional owner ?

I find that mindset much easier than anything price related 

I do have fractional ownership in a way with Amedio Air Four but price-related numbers keep the grey matter working at my age of 80 years.

"It's on the Stock Peport, Dwit, in the Screens Passed box."

I see what you mean now.  I thought your were referring to actual short selling, which as far as I can tell doesn't appear in stocko.