Having been out of the market since October 2017, as mentioned here at the time, it is obvious that I am a cautious investor, which perhaps comes from my many years building a financial services company. I am not ready to buy back in yet, but I have been preparing the way and looking at companies that I believe may make good investments. Plus 500 stands out like a beacon of light. As I completed my analysis, I wanted to buy there and then but it was Saturday--an almost perfect company, the thought flickered through my mind “if it is too good to be true” but I dismissed it immediately. When I awoke this morning, Plus was on my mind and I was directed to the Stockopedia blog. I tend to take notice of such happenings as they have both saved and made me money in the past—and there it was an observation from Ed Croft dated 30th May 2018 directing me here https://ftalphaville.ft.com/2018/05/29/1527566400000/Plus500--past-performance-is-no-guide-to-the-future/ with an associated further article. I returned to my desk and wrote across the analysis sheet “they would say that wouldn’t they”!! and binned it.
'And always diversify so that no one stock is more than about 5% of your portfolio.'
This is excellent advice Nick. Last year I lost money on Conviviality - in fact I lost everything as it went bust before I could react. Last week I lost 36% on Titon Holdings (LON:TON) as well as 32% on Plus500 (LON:PLUS) the week before. Although these losses were painful, they were not disastrous as I was reasonably well diversified. One of the great advantages of being diversified is that it gives one the courage to cut losses quickly rather than hang on in the hope things will get better. If there are any positives to take away from the Plus500 (LON:PLUS) fiasco it is that it has been a useful, if uncomfortable, learning experience.
