Good morning!
There's just one report today, from me. Graham is busy travelling back from Asia to Ireland, so he's got today & tomorrow off, and possibly Weds if he's jet-lagged!
Everything is winding down for Christmas now, so there shouldn't be a great deal of newsflow. Although I enjoy this time of year, as with many market participants off work, or too hungover to function normally, there can be nice little trading opportunities in small caps. Illiquid markets can often cause bizarre price movements - providing good buying & selling opportunities.
There's also a heightened risk of profit warnings occurring at this time of year, as some companies fail to close deals that they need, in order to hit full year forecasts. So I keep a close eye on the list of top fallers for the day - and hoping that none of those will be things in my portfolio!
Just Eat (LON:JE.)
Not a small cap, I know, but an interesting & topical share. I'm very interested in internet disrupters at the moment, as discussed last week. I came very close indeed to buying some JustEat shares last week, because it seems to be dominating its niche. Although I'd be surprised if the regulators let it go ahead with its proposed purchase of major competitor Hungry House.
However, something happened over the weekend which made me realise that JustEat has a fundamental flaw in its business model. In my London household we use JE probably twice a week, and have been trying out different local takeaways. Anyway, we've now found a curry place which is our favourite, by far.
Last night, the delivery man from our favourite curry house looked much older than the usual ones, so the penny dropped that this was probably the proprietor. As he handed me our meal, he thrust a few menus into my hand, saying - please order direct with us in future, and we'll either give you a bit of discount, or some free extras. So that's what we're going to do from now on - cutting out JE altogether from our future transactions.
Bottom line, I think by charging (apparently) 14%, JustEat are being too greedy, and thereby sowing the seeds of their own decline. Some business is likely to leak away, as takeaways connect with their regular customers, and persuade them to order direct, by telephone,…
