Good morning!

Graham is travelling today, so it's just me reporting.

There's tons to cover. Here is a quick summary of the companies I report on below;

  • BooHoo - another excellent trading update.
  • Somero Enterprises - good trading update & increased divis - all positive.
  • CloudCall - good trading update - has it turned the corner? Possibly.
  • Topps Tiles - Q1 trading update - possibly good value now?
  • Majestic Wine - Xmas trading update. Looks expensive to me.
  • Games Workshop - excellent interims. Worth a closer look.
  • Focurite - encouraging update, nice quality company.
  • Telit Comms - trading update - short squeeze imminent possibly?
  • K3 Bus Tech - profit warning, down 21%.
  • Carr's - in line update. Dull, ex-growth company. Not especially cheap either.
  • H&T - slightly ahead of expectations. This share looks good value & is going up I think.


Market getting toppy?

It's all feeling a bit frenzied at the moment, isn't it? I'm starting to get worried about a correction in the markets. That said, I can justify the valuations of everything in my portfolio quite easily, and I keep away from speculative stuff on daft valuations. So everything should be OK in the long run, even if there is a market correction.

These days, my portfolio is generally newsflow-driven. So I tend to buy after positive trading updates & results. That tends to make my portfolio quite resilient when market corrections occur. This could be because people are loath to sell shares in companies which are performing well, even in a market downturn. You can see this from the chart of Beam Me Up Scotty, my fantasy portfolio, which wasn't affected at all by the sharp market correction in Jan 2016, and didn't suffer too much on the Brexit vote either.

Talking of market corrections, I spotted a fascinating chart, posted by Urban Carmel on Twitter, see below. This chart shows very clearly how intra-year sell-offs are usually very good buying opportunities. The S&P usually finishes the year strongly up from its intra-year low.

So, unless there are serious macro-economic problems (like the credit crunch in 2007-8), then buying market corrections seems to be a very good strategy. Whereas of course our natural, emotional response to a market sell-off, is to panic sell. Usually that urge needs to be suppressed, as it can be very costly. I can't be the only person who has, quite frequently, capitulated and sold a poorly performing share absolutely bang on the 5 year low. Only…

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