Good morning! More fundraisings feature today, showing the remarkable appetite the market currently has for financing growth companies. I shall be watching for signs of this appetite being sated this year, but there's absolutely no sign of that yet. This is the hottest bull market in small caps I can recall since 2003, and reminds me most of the tech boom in 1998-99 - the similarities are uncanny. This is both exciting (as there's money to be made), and worrying, as the more frothy it gets, the more you know it's likely to end with some sort of crash - for over-priced stocks anyway, not necessarily for the market as a whole.

So in terms of strategy, I'm happy to get a little more speculative in terms of growth companies, but am keeping that to a limited part of my portfolio, and am keeping a close eye on valuations, and the exit. If the price gets too high, then I'll sell, and happily move on, even if (as usual) it turns out to be too soon to sell.

The key mistake to avoid repeating is falling in love with the stories such that we refuse to sell once the bubble has burst. Better to recognise this bull market for what it is - i.e. the start of the euphoria phase of a bull market, which presents big opportunities, and increasing risks the longer if goes on.

 

 

 

Porta Communications (LON:PTCM)

Regulars will already know that I recently turned bullish on this fast growing PR group. The reasons are firstly (and mainly) that its most recent trading update indicated considerable progress has been made on profitability, and that they reached annualised EBITDA of £4m in Q4 of 2013. By quoting annualised figures, and EBITDA, they are massaging the maximum positivity out of their performance, but that's what PR people are meant to do!!

Secondly, PR is a people business, so as an investor it's vital that we back the right people. I've not met them, but both Chairman and CEO at Porta have formidable reputations, having been there & done it before, in this sector. So I feel sure that their contact lists contain the right names for potential clients & staff.

Thirdly, the IPO and Placing area is booming right now, and hence that is a favourable…

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