Small Cap Value Report (24 Dec 2015) - BOO
Good morning!
If the market's open, then at some point in the morning I'll surface here, and put together a few words. I overslept this morning, and found a half-empty glass of red wine by my bedside, all my things on the floor, and a 20p piece stuck to my side - so am taking all that as a good sign that 2016 will be a lucky year!
I run various portfolios for myself, and others, and generally speaking it's been a good year. My SIPP has done badly - it's roughly flat on the year. I need to come up with a new strategy for that. At the moment, it's a repository for crappy micro caps - potential multibaggers, but not enough serious stocks.
I think the problem is that I can't access the money for at least 8 years, which is too far into the future for me to take it seriously. Reading that back to myself, it sounds absolutely crazy, so a re-think on strategy is needed there.
My long-term, value portfolio is up about 10% this year. There have been some excellent picks in there, e.g. Zytronic (LON:ZYT) and Boohoo.Com (LON:BOO) (bought at the bottom), and nice recoveries on long-term positions like Spaceandpeople (LON:SAL) and Flybe (LON:FLYB) , but overall there have been too many banana skins, which I should have avoided (e.g. Entu (UK) (LON:ENTU) ). So my scorecard there says, not bad, but could (and should) do better.
It's my spread betting accounts which have really done well this year. There's been one disaster (a ridiculously over-sized punt on Home Retail (LON:HOME) ) but I'm pretty confident that I'll get my money back there, due to the amazing balance sheet strength. Other than that, there have been lots of smallish losses (as you would expect), but some terrific profits on e,g, Avesco (LON:AVS) , Boohoo.Com (LON:BOO) , Character (LON:CCT) , accesso Technology (LON:ACSO) , Alkane Energy (takeover bid), Apple (bought on the flash crash as a quick & profitable trade), French Connection (LON:FCCN) (heavily averaged down right at the bottom), the short on Globo of course (should have been much bigger, but never mind).
My other, smaller losses have mainly come from either silly punts (e.g. long on Twitter), oil-related, e.g. Genel Energy (LON:GENL) , and catching falling knives (my worst investing sin), e.g. DX (Group) (LON:DX.)
I'll do a more detailed portfolio review at the year end, but the overall picture is very positive - despite plundering them regularly for living costs, my family's spread betting accounts (which I manage) are substantially up on the year - high double figures in terms of percentages, but I haven't worked out the exact figures yet. As long as you manage the gearing very, very carefully, then there's no reason at all why spread betting accounts cannot be lucrative. It's all about focussing on what you're good at, and not being tempted to punt in areas where you don't have any expertise or competitive advantage.
I've lost a small fortune (well into 7-figures) over the years, punting on Indices, and other things where I have no expertise, it was pretty much an addiction in years gone by. However, am pleased to report that my strategies to stop doing this have been successful, and I have not done any Index punts at all on my main spread betting account this year. I did a few on a small account, which is my fun money account, and bizarrely actually managed to make a good profit during the flash crash time in late Aug 2015 - but that was more luck that judgement, so not to be repeated.
I hope readers have done well, and that my reports have been a useful ingredient in your overall investing hot pot - just looking at the summary page, I've written 247 SCVRs here this year so far, so no wonder I've got a bit of RSI in my knuckles & up my right forearm!
In terms of company results & trading updates, I'm pleased to say that there aren't any today (within the 500-ish stocks that I cover - which incidentally are listed here on a spreadsheet on my website (see the "Filters used" tab).
It only remains for me to wish you all a wonderful Xmas, with lots of fun & feasting, and spending time with loved ones - that's what life's all about really isn't it.
Kind Regards,
Paul.
(Usual disclaimers apply)
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35 comments
Thank you, Paul, for your daily Reports. I have been following them for few months now and have learnt a great deal on what to look for when analyzing potential purchases.
Have a good Christmas and a successful New Year
Sincere thanks to Paul and the entire stockopedia family and contributors for the daily reports, continuous flow of ideas and invaluable information and comments. I have learnt a lot from these. Wishing you a wonderful Christmas and a fulfilling new year in advance.
p.s. I see Fairpoint is not on your list anymore. I would love you to keep analysing this - partly for selfish reasons but this has also come off over 30% since recent highs and I think the reaction has been overdone given it was already trading cheaply with a cash generative business and good growth plans in place.
Thanks for all your analysis this year Paul. I have learnt a lot.
I was interested to see that you thought ENTU was a banana skin you should have avoided. I'd be interested to hear more. I don't think you could have seen it coming (until the 20 July RNS where management attempted to put a gloss on what I thought were questionable figures at which point I halved my position). Plus, I think this is now looking good value.
I was in Entu (UK) (LON:ENTU), as well but got out pretty quick after the annual results, went off the management very fast, it maybe good value now but I'm not tempted, next year I'm looking for more quality, having missed out on many good ones this year. Aim to sell all the less quality shares and will try to build up my portfolio. As I only joined Stockopedia this year I'm in a transitional stage, with hindsight I should have sold most of my shares and started again with a few expections, have not got exact figures but think I'm up around 10%, had some good gains with Ab Dynamics (LON:ABDP), Tristel (LON:TSTL), Castleton Technology (LON:CTP), Inland Homes (LON:INL), but a few duffers from last year and a few new ones like Fairpoint (LON:FRP) have gone a bit pear shaped but I feel that it should bounce back, tempted to buy some more.
Paul many thanks for your opinion on Vislink (LON:VLK), I got out just at the right time, just under 60p.
Wishing you a Merry Christmas and Properous New Year, keep up the good work, Stockopedia needs you, in fact it would be good to have a Paul balance sheet rating on the Stockranks.
Paul,
I've been reading your stuff since the days of the dotcom boom (and subsequent bust!) and figure if I'm not sick of you yet I never will be.
What I want for Christmas 2016 is the opportunity to purchase a "Paulypilot's guide to investing" book!
As Mrs Doyle would say: Ah, go on. :-)
Paul, Stockopedia, All of you,
Don't forget Paul, that glass of red wine is half full not half empty! Thanks too you, Stockopedia and everyone of you who shares your thoughts here on the page. Very Merry Christmas and a Peaceful and Prosperous New Year to you all.
Hi Paul,
Sincere thanks for all your reports - look forward to reading them every day - much appreciated.
Best wishes for a great Christmas - hope your mum is better. All the best for a happy,healthy and prosperous 2016
John
Paul,
as others have said your reports are a great resource and one I look forward to reading every day. Thanks for all your effort and time and Best wishes for a successful 2016 both as an investor and life in general.
Kind regards
Many thanks, and best wishes to you and yours.
B
Hi Paul
A big thank you for all your hard work during the year. I am enormously grateful to you, and I read your blog every day. It has had an excellent effect on my trading - I am getting a useful return on my capital - usually at least 15% a year. This has made an improvement to my standard of living.
Thanks again
Tamarix
Thanks for all your valued reports and all the best for 2016.
Thanks for all your reports and your honesty Paul. You have taught me a lot this year. Hope your mum gets better and you have a good Christmas & New Year.
John
Paul, have a great Christmas break. I read you every day but haven't found your website yet. I learn something from you every day. If you ever consider doing a 'workshop' on your analysis of companies I would be a customer for it.
Keep up the good work, you are highly valued by me and many others.
All the very best and I wish you a happy and successful 2016.
Charles
Paul
Christmas Greetings and all good wishes for a Peaceful and Prosperous New Year for You and Family.
Thanks for your continued commitment to the SCVR Paul. Part of my daily routine! Merry Christmas and wishing you a great 2016. The bit about the 20p made me LOL!
Cheers
Hederz
Thanks a million for your reports this year Paul, just brilliant.
It has quite cheered me up to learn that you have traded in a very similar style as myself and lost money in doing so, also like me!
I decided to give up the jam tomorrow shares except AVCT, RENE and AGL and have decided to invest in shares that are already going up and have a good solid outlook, ie TRAK, GNC and AMS and I am gradually reversing the downward trend.
Have a great Christmas and let's hope for a better 2016,
PS Thank you for the link to the companies you cover. It makes my head spin just thinking about it. How do you do it!!
Hi Paul
Thank you for all the reports and the education they give.
One comment on your SIPP. I have just read Howard Marks - "The Most Important Thing: Uncommon Sense for the Thoughtful Investor" which is a fantastic book. I understand that relatively short term trading may be your area of expertise but for me I like the Buffett quote he gives (either in the book or in a podcast with Brewin Dolphin with him that I listened to this morning): "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes”.
Not being a full time PI I don't have the time to trade or study 100's of stocks but even if/when I am retired I will be much happier to sit on my thumbs in markets like we have now when everything seems so toppy and just wait for the odd fat pitch that might come along from time to time.
That said I still learn a huge amount from you and can not thank you enough for all the pearls of wisdom that you throw out for nothing on a daily basis.
Have a very Merry Christmas and a Happy and Prosperous New Year.
Michael
Paul,
The lunchtime arrival of your column is one of the highlights of my day, very much appreciated. Thanks and Merry Christmas to you
Hi Paul, thanks for all your hard work this year, your report has become an essential part of my day as I'm sure it has for many, many others! Your fantastic analysis has certainly helped to identify some great stocks I wouldn't have known about otherwise and saved me from making some very big mistakes too. I also love your audio interviews - great to hear what other investors or CEOs have to say, really appreciate it.
Here's to a successful and peaceful 2016. Merry Christmas and a happy new year to all.
Cheers, James
Paul
Very interesting list of stocks and comments. One thing I would like to check, I agree that McColls is a declining biz and I am not long or short, but I have seen recently that a lot of village post offices are closing and the businesses are being relocated into McColls stores. I have no idea what profit margins there are on stamps etc but could this change the fortunes of the group, probably not but does give more stability
Happy xmas
Steve
Really appreciate your reports Paul and am looking forward to your full end-of-year round up. I'd like to echo the interest someone expressed in a video on how you run the spread betting side of your investing as I'm learning that at the moment.
Best wishes for a fantastic holiday period and new year!
Excellent, Paul. What I want for xmas is to be as good at stockpicking as you.
Hi Paul,
thank you for all your reports since I came across your site a few months ago. I too was invested in Globo although I got rid of it before the heavens fell in albeit at a loss, which is far more of a learning curve than a gain. Wish I had your advice on Tungsten early on but that's life. I always find your reports objective and interesting. I don't always agree, sometimes rightly but mostly wrongly but it is always great to get an independent view. It is always wonderful to make money but it also important to enjoy it as well if you do make it.
Paul
Hi Paul,
Just to say that I am new to your SCVR's, and have already picked up some pearls of wisdom. Keep up the good work and let's hope 2016 can be a profitable one !!!
Thank you Paul, for your amazing reports, you saved my skin with Globo. I was heavily averaged down with that stock. I managed to get out with a small profit before it all went pear-shaped!
I too cut my hands on the DX falling knife.I will never learn!
Merry Christmas and I look forward to reading your valued reports in the new year. :)
Paul,
Thank you greatly for excellent write ups on Stockopedia, they always make very good reading. I am sure that you put considerable time and effort in bringing then together and sharing you insight into company reports and accounts.
I would advise any fairly new investor to read and learn from your writings/analysis and strive to graft some of that wisdom & knowledge into their own knowledge bank. I have been investing for a good number of years and yet still feel I consistently learn just that little bit more from your shared knowledge and expertise as a top notch accountant.
Have a good Christmas and great plus prosperous New Year.
Bill.
Very Merry Xmas and a Happy New Year.
Hi Paul,
I would like to thank you for steering me away from the frauds that look so good on numbers alone, I would be pretty under water without that advice. Instead I am up 30% this year. I only wish I had also listened to your advice about DX. group too :(
Have a merry Xmas and a Happy New Year.
Merry Christmas Paul.
Thanks for the daily reports as always. Have a wonderful Christmas with your family and I hope your mum is doing well.
Paul,
Thank you so much for all of the fantastic SCVRs in 2015.
Season's greetings and a very happy and successful 2016 to you.
Cheese!
Steve
Hi Paul
I consider myself to be very lucky indeed to have discovered you early in my investing journey! I wonder if you would consider doing a blog or video on spread betting in the future i for one would be very interested.
Best wishes to you and your family for Christmas and the new year.
Is 'Roughly Flat' the same as 'Broadly Inline' :-)
Merry Christmas
Paul
Thanks for excellent reports over the year I have learned a lot.
With reference to your typing RSI, if you visit or are anywhere near Fulham and/or Acton I know a truly excellent osteopath who sorted out my shoulder and arm typing RSI after writing my 100,000+ words thesis (mobile 07778 411610).
Regards
Howard