Good morning!

Several people have pointed out to me that a Director buy at Restaurant (LON:RTN) (announced today) could indicate that the company may not be in bid talks. I've decided to play it safe, and sell half my shares. That's locked in a smashing 31% gain from when I flagged up this share as good value at the UK Investor Show just 4 weeks ago. Why can't they all work out like that?!

Also, someone else spooked me a little in the comments here, saying that the price could crash again if they put out another profit warning. I worked out how much money I'd lose if the shares tanked by say 30% (as has happened in the past). The resulting figure frightened me, which is a sure sign that the position is too big. Hence another reason to sell half.

It's a great discipline to look at each position in turn, in your portfolio. Then work out how much you would lose if a 30% fall occurred due to a profit warning. If that figure is horrifying, then it's probably best to trim the position size somewhat, to reach a more comfortable figure. It depends on your conviction on the company though. Smaller companies often hit bumps in the road, it's the nature of things. So panic selling on every profit warning wouldn't get you very far.

I had an enjoyable afternoon in the City yesterday, and ended up at a Mayfair watering hole, chatting about shares with some experts (brokers & PE guys). A lot of interesting discussions were had. One chap caused amusement by pointing out that the market cap of Fevertree Drinks (LON:FEVR), the purveyor of premium tonic water, is now greater than Enterprise Inns (ETI)  and Punch Taverns (LON:PUB) combined! At some point FEVR is probably going to make a cracking short.


There are hardly any results or trading updates today in my universe of about 500 stocks. I've had a quick look at results from serial disappointer NATURE (LON:NGR) which is the biggest % faller today. It's down 24% to 5.6p, for a market cap of only £4.6m.

The company has reported a loss for 2015, but says it has restructured, so makes more positive…

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