Small Cap Value Report (8 Nov) - GBO, TNI, BPI
Good morning! It's Friday already, and my news feed is extremely quiet this morning for small caps. Plenty of news overnight, including a horrendous-sounding storm in the Phillipines with winds up to 195mph apparently. The US markets had their first significant wobble for a while, so as usual this feeds across to the UK, where the futures are indicating that the FTSE 100 will open down around 40 points at 6,654. At some point excitable investors in small caps are going to realise that share prices can go down as well as up! That's certainly true of story stocks on crazy valuations, where I'm expecting some major corrections at some point. However, a correction doesn't worry me with my portfolio of solid value & GARP shares - you just have to take the occasional 10% portfolio correction in your stride, and use it as a buying opportunity, selectively.
I was thinking back to what happened when the Tech, Media & Telecoms (TMT) bubble burst in Mar 2000. Despite the Indices crashing, it was actually a very good time for value investors - many great businesses were bombed out in price during the TMT boom, especially cash cows like retailers & house builders, as so much money was sucked into TMT stocks, that people indiscriminately sold down their holdings in much better companies, in order to raise cash to buy junk.
This time round we're not seeing that - in fact everything apart from resources stocks are going up - both trendy tech stocks, and value/GARP stocks - they're all going up. So it's harder to find bargains, but there are still some to be found - I'm not having any difficulty finding new, good value positions to open, but it's requiring more research, and generally they are at the sub-£25m market cap level.
In my core portfolio, which is £25-250m market caps, I'm not altering my strategy, and if there are no conviction buys available, then I'll sit and wait in cash. Opportunities can arise in the blink of an eye, so it's essential to be ready, with cash in hand in my opinion. Probably the most important aptitude for any investor to learn, is to be comfortable holding cash. Most people are permanently 100% invested, and that means you'll be hit hard by bear markets.
Whereas people who are disciplined enough to move gradually into cash as markets become increasingly expensive, are the people who absolutely clean up when sentiment changes. I've observed that in the smartest & most successful investors I know - their one common trait is that they are very happy to sit things out in cash, partially or fully, if share prices are too high.
This is the third bull market of my investing career, so I'm determined to get it right this time, and be correctly positioned (i.e. only in good value shares, and holding plenty of cash) when the next bear market starts. Also, bear markets are when the best opportunities are to be found. I made my best ever returns in the bear market of 2001-2002, focussing on a specific value niche (shares trading well below the companies' own net cash). So bear markets are not something to be frightened of, on the contrary they are the biggest opportunities, one just has to go into them correctly positioned.
It will be another interesting day to watch Globo (LON:GBO), as it plunged again yesterday. I've been trying to find out why, and somebody said it's because some of the CFD/Spread Bet companies are raising their margin requirement on this stock to 100%. I've made some enquiries, and this is correct, although I understand that IG Index and Spreadex are maintaining normal margin requirement on it. Therefore holders might need to move their positions to those companies that will still allow positions in it on a normal margin. Although I think it is extremely foolhardy to use gearing on positions which are so volatile.
Offsetting that, I note that Investors Chronicle tipped Globo overnight, referring to the shorting attack by Evil Knievil & others. Again, please note this had nothing to do with me - I've been negative on Globo since Jan 2013 in my articles here. Just because EK quoted my articles does not mean I agree with his tactics, which I don't, indeed I've repeatedly distanced myself from that.
So it will be another fascinating bull-bear tug of war today. I'm expecting to see a perhaps 10-15% spike up on the Investors Chronicle effect, lasting a day or two, then another leg down. That's just a guess of course.
People still holding Trinity Mirror (LON:TNI) need to be aware that the phone-hacking issue has become pretty prominent again, and I remain of the view that there is a high risk of this spilling over to Trinity Mirror. It's been widely reported already that TNI journalists "habitually used phone-hacking", therefore victims want compensation. This could get nasty, and I think the shares could tank at some point if/when the issue blows up again. So that needs to be weighed up against a share price that is still cheap on fundamentals. Anyway, it's up to readers what you do, but having been very bullish on the stock at 25p last year, I no longer see it as representing good risk/reward, as the price has quintupled, and the risks have blown up again & could end up triggering some very substantial liabilities for compensation & legal costs, which are not currently provided for on the Balance Sheet.
British Polythene Industries (LON:BPI) issue an IMS for their Q3. Despite some challenging conditions, they say that performance is expected to be in line with market expectations. Looking at valuation, it looks fairly reasonable - on a current year forecast PER of 12.8, dropping to 12.0 next year. The dividend yield is about 2%, so unremarkable, but it is covered about 4 times, so likely to be safe. Net debt has been in a nice downtrend, and looks to be about 1 year's operating profit, which looks fine to me.
Overall though, I'd struggle to buy the shares after such a good run this year, from under 400p to 706p now, it feels too much like catching the tail end of a bull run, and it looks like a mature, low margin business, so not likely to get a premium rating.
Signing off for today, as there's nothing much else to report.
Have a relaxing weekend & see you back here on Monday at 8 a.m.
Regards, Paul.
(of the companies mentioned today, Paul has no long or short positions)
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43 comments
A note to Ed Croft, re. Harryr.
Can you not just ban this chap from Stockopedia permanently. We have all had a bit of fun and now he is becoming at best a pain in the proverbial, and at worst downright insulting. There is no value added in his tirades. Complete waste of time.
Chaps, Harryr, to give him credit, has made a lot of money in microcaps over the last couple of years while the community has down-voted his posts on his selections - we should cut him some slack. If you don't like his writing, please be aware that his stock selection has shown a certain instinct for a bargain. I met him at a show once and he said that was his strategy, always had been and always will - there's a certain discipline there.
We try to be light on moderation at this site but we certainly won't tolerate abuse. Harryr does know that and knows the consequences if he crosses the line - I've warned him about this. He should understand though that there's nothing wrong with shorting stocks - in fact short sellers in general are the best stock pickers of all and act as policemen. We'll be publishing short interest of all the top hedge funds within the next month which will be a very useful resource.
I've been disappointed in the heated nature of discussions in recent weeks that have spilled over onto our boards here. We should all cut each other some slack.
I'm closing this board now.
I personally find it hilarious that it's the posters who post continuously one sided views on their favourite stocks on threads that no one else bothers reading are the ones who are so quick to falsely accuse Paul of unethical behaviour. It reminds me of the psychology study that showed that the skills required to identify competency were the same as the skills required to be competent so that the truly incompetent we're doubly cursed not just with their incompetency but the inability to recognise their own incompetence! Unfortunately for the rest of us it means that arguing with them on the basis of rational logic is totally pointless since they lack the ability to understand the argument.
I myself think if this chap is or has, shorted stocks that he posts on this site, and if he is being paid by Stockopedia then he should be sacked at 8AM in the morning.
Interesting comments Harryr.
This from the person who, on introducing themselves to the Stockopedia crowd,posted such in depth analysis as:
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Thursday, May 12 2011 by harryr 49 comments 11,019 reads
"Westminster group has been a dog of a stock since listing. Todays stock price,11/05/11 reflects that view.[16p at the open]. Last years results[out within the next 3 weeks] will show yet another huge loss. The city puts it at around £2m.
The stockmarket is all about looking out, for growth and profit. A kid of 3 can tell you that if orders go through the roof,while at the same time fixed costs stay the same, investors are on to a winner.
This stock should do very well, priced to go bust today, could turn out to be a real star as the directors and staff are about to be rewarded for all their hard work."
5 reasons why you should sell you house.
Sunday, Jun 09 2013 by harryr 15 comments 3,334 reads
The first reason is that big profits can be booked,as we have far more buyers than sellers.
The second reason is it is cheap money that is lifting house prices [not higher wages.]
The third reason is low rates will not last for more than a few more months or years.
The fourth reason is when you want to sell the market will not want your shares.
The fifth reason is it will be the fear of rate rises that will start the slump in housebuilders shares..This could come out of the blue at any time.
The City thinks that these stocks are cheap as turnover and prices are going one way[up] helped by cheap land bought by the builders in the last 3 years.
I take the view that just as production steps up a gear, with higher wages,and material costs to boot, lending costs will jump."
When the cost of money doubles [from a very, very, low base], the fun stops dead.
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And that's before one even takes into account the mostly one way dialogue (WITH YOURSELF) you have subsequently engaged in. No in depth analysis. No effort. Your posts all read like ramps and you have the cheek to criticise someone who takes time out to proffer in depth analysis that puts your effort into that of a five year old category.
"I find it very sad that Paul Scott seems to be leading a great many investors up the garden path..
Does Stockopedia pay this chap.??
Does he short stocks and then push his views on Stockopedia."
I find it unpleasant that someone like yourself is still allowed to post here given the absolute dross you scribble and the copious amounts of other people's time you waste with mindless discourse. I guess the multitude of red ticks you continually get is finally causing you distress.
Hi harry
Its called skin in the game . for long enough Paul has given Globo the wide berth choosing not to take a position , which leads to the opportunity of being shot or criticised from both sides for lack of commitment. However I suspect Paul's decision to pin his cash to the mast is understandable as he has become a target for those who don't look at company accounts and instead haunt the BB's whose analysis is that of the crowd or herd .
I admire and envy his ability to analyse company accounts which he offers to this site and he always invites his readers to DYOR which allows the reader options i.e. Do you agree or disagree with that analysis?
If you don't you let it go and look for something else of worth in his report.
No offence Harry over time following Paul's analysis and example can be a lucrative journey.
His calls are easily checked over time and in the past he's big enough to eat humble pie if required , you will just have to wait and see if its a good call or not .
I know which opinion I favour.
I find it very sad that Paul Scott seems to be leading a great many investors up the garden path..
Does Stockopedia pay this chap.??
Does he short stocks and then push his views on Stockopedia.
Some people are pathetic - Don't let the b*****ds get you down Paul! You do a fantastic job and offer balanced ,topical and very readable (and funny) daily reports. You always make it clear that we should do our own research. Anyone who has any intelligence reading them should understand that they are your opinions - which are valuable BUT IT DOESN'T MEAN WE HAVE TO AGREE WITH YOU OR FOLLOW YOU BLINDLY! Anyone who doesn't understand this (and I suspect that this is the case with your new best mate, Jam) is foolish and should not be investing their own money. Either that or Jam has a secret crush on you! ha ha - you have to laugh at these people. Just remember that they are a tiny majority and probably have nothing better to do with their time. Keep up the good work.
Thanks chaps!
Also, just as a post-script, I've decided to study for & sit the IMC quallification (Investment Management Certificate), most of which is stuff I already know, but I'm sure there will be some gaps in my knowledge. So it will be a useful thing to have & is relevant to what I do, and will be good to get completely up-to-date.
Cheers, Paul.
Right, I'm going to blow my own trumpet to prove what a ridiculous position Jam7 finds itself in (by the way, why not admit as I'm sure most here have suspected & concluded, that you're heavily geared in a long position in Globo?): I was a trainee actuary once (with Coopers & Lybrand, now PwC!), am currently a CFA Charterholder, a Chartered Financial Planner and a Fellow of the Personal Finance Society (all by examination) and have worked in financial services for nearly 20 years and have been investing for over 20 years - NOT for one second would I pretend to know as much, let alone more, about small cap equity investing than Paul, and whether or not you think that that's down to my exam record vs. Paul's, I'd rather take my baby daughter's opinions on investing than yours, thank you very much.
Sheesh!
Ah yes, qualifications.... Give me someone who is QBE anyday.
So, in the FM business, the new regs came to pass and everyone had to be qualified - fortunately, having had my PCIAM from 20 years ago, I was pre qualified (subject to some gap fills); however, Id much rather hire someone with 20 years business experience than someone who has just passed some whiz bang new exam. There is no substitute for someone who has been handed their lumps over the years IMO.
I think you should donate 50% to a PI to track down Jam personally.
Clearly he's got no balls attacking as he does from behind an anonymous avatar.
Come on jam - Turn up to one of these Investor events that nearly everyone goes to and introduce yourself - we are all dying to hear your "experience" and why you seem to have an unexplainable issue with PP.
P.s Just passing the exams doesn't mean you're a competent accountant fyg. Being grand fathered into the "qualification" through extensive experience is a far more sound claim when determining whether PP is a qualified accountant or not. I passed both my SFA and IMRO IMC fund mangers exams but never used the latter.
Am I a qualified fund manager? Despite passing my IMC in 1995 I never having worked as an FM? I've worked in the City(of sorts if you include Hong Kong/Singapore) for 15 odd years however.
p.s I've never met Paulipilot fyg Jam, but have followed him(over on the Motley Fool pub since the mid 90's I think it was, perhaps a touch earlier - 1992/19933?) He's one of the most honest and able investors around who coincidentally is happy to share his knowledge with all and sundry. Not seeing much sharing coming from you other than pointless ad hominem attacks on his credibility and honesty
As regards my CV, I've always been truthful - that I trained as a chartered accountant, and then went on to be an FD for 8 years. Now you could (justifiably!) argue that this glosses over the fact that I didn't pass me PEII exams, but I never claimed to have done! It's irrelevant in any case because I'm classified as QBE (qualified by experience), and have never given any financial advice to anyone. The whole ethos of this site is DYOR - do your own research.
What amuses me is that I have volunteered this information! So it's hilarious to have some nameless muppet on a bulletin board questioning the qualifications that I've told them about!!!
You know what, I've had enough of this - I'm going to Short Globo (LON:GBO) on Monday morning - and will happily donate 50% of the profits from that short position to my favourite charity, Scope.
Cheers, Paul.
That is not true ,go and read some non paul scott boards.
If he is happy to mislead people on his qualifications,what else is he happy to mislead people about?
Please don't come across as principled when you have failed at the first stop.
No one cares about Paul's CV. His posts speak for themselves. In any case PwC train over 1000 accountants a year, I'm sure many of them go on to become FD's. Being a chartered accountant isn't exactly "elite". That's not what makes Paul's posts valuable and his experience shines through clearly from his posts anyway.
I have not claimed to be an accountant ,nor an analyst ,writing on a stock website.
You however have chosen to pad your CV and claim to be an analyst.
You credibility is falling to pieces fast.
You are taking positions and writing about those which clearly benefit yourself.Hardly objective analysis
You may be rolling around laughing ,but that does not hide the facts.
For clarity's sake Mr Scot,please can you change your profile so as not to give the false impression you are a qualified accountant.In your own words you "flunked " the exam.
It is highly misleading ,like many of your other statements.
Furthemore what qualifications do you possess to call yourself an analyst?
Are you licensed by the regulators?
Paul trained as a chartered accountant with Price Waterhouse. He then spent 8 years as FD for a clothing retail chain. "Retired" in 2002 to become an independent investor & analyst.
Jam7,
It does make me laugh when you try to use the information about me that I have given you, to attack me!!
So before we go any further, please do what I have done, and publish your details. namely;
1) Your full name
2) Your full career history, including all qualifications - especially exams passed & failed.
3) Your full investing career - every success and failure, and what you learned from them.
4) What qualifications you have to comment on shares?
Come back to me with that information, and I will be happy to discuss further.
Or, continue what you're doing, and be a coward who hides behind a pseudonym and a distant internet connection.
Paul.
Hi Chaps,
I'm fine about the comments here, in fact I was rolling around laughing at them late last night with some friends! But the moderators decided that a couple were below the required standards of civil discourse, so zapped them.
Just to clarify, opinions are welcomed here, providing they are based on facts, sensibly constructed, and presented in a reasonably civil way.
I've grown a thicker skin recently & it's like water off a duck's back now - after all, I dish it out - saying negative things about companies that I don't like - so one has to be able to take it when people disagree and chuck a few missiles back in my direction. Also, I'm a great believer that if you give people enough rope, they hang themselves!
Cheers, Paul ;-)
Backing up my hunch for Globo, I have now found from another source that a valuation is now undervalued & should be about 103p. To back this up consider looking at EXI energy@253p & valued @ 323p stop loss @205p.I obtained this from a £400 worth of software package. EXI is showing as a BUY.My opinion looks good momentum stock.
This is obviously much safer than Globo & you might like to take a look.
This is one of 70 stocks on my hit list to replace any failing stocks & EX Iis the best replacement one at this point in time.
Thanks Paul for all your good work.
Lightningtiger
I still think with smartphones millions of people will want to have the latest gismo added with the help of go enterprise. Christmas is coming up & I still think they have excellent prospects, mainly because of a good track record both proffits and sales. A nice "W" formation appearing with the graph is usually a good sign the stock will go back up again. With a broader 5 year picture, it is generally going up each year. Not the sort of company that will go down the tubes in my book.
It was in a sell position without question, but my hunch says it will be up again by Christmas.
Meanwhile I have tried a few THORNTONS to chew on.
Cheers from Lightningtiger
Great write up as always Paul.
A bit unrelated to this report but I've noticed Zanaga Iron Ore have gone down about 8% today to 18.75p ish. Do you still hold your view that this could be a good potential stock? Especially having quoted "That is perfect for the resources sector, so to my mind it's only a matter of time before the speculative money floods back into resources stocks" above. I've been doing quite a bit of research on them and all looks pretty positive from what I can tell. I'm looking for an entry point of around 15p
Cheers
Hi ryanc,
I think ZIOC is just drifting down in between newsflow, as that type of stock often does. The fundamentals are potentially very exciting there. There are 2 big unknowns - (1) although it now looks very likely that Glencore will progress the project, it hasn't actually been given the definite go-ahead yet. (2) the financing of the $2.5bn capex has not yet been finalised, in particular what level of dilution ZIOC will suffer.
Positive outcomes on those 2 points could quite feasibly see this stock worth 10+ times the current price (see range of outcomes in Edison note). I got the impression from meeting the company that they're thinking in terms of a 200p outcome as being the sort of ballpark they're aiming for - whether that happens or not is what it's all about.
It's a question of being patient in my view - I accept volatility in the share price, but want to be in the stock because a highly positive outcome (e.g. a takeover bid) could happen literally overnight, so if you're not in the stock then you miss it. Upside much larger than downside, so risk/reward is very good here, in my opinion. As always, DYOR!
Cheers, Paul.
Thanks a lot for the reply Paul,
As always very interesting to hear your thoughts. I'm going to monitor this over the next week or so with the intention of getting in on any further price drop.
Just read some of the below derogatory comments about your reports. You've got to laugh at these kind of people haven't you. Nothing better to do than try and cause a storm..
Anyway keep up the great work
Cheers
Ryan
QPP price action isn't great on the back of the update
The fact that QPP can't get above a fwd PER of 5 is also pretty clear evidence that the market doesn't believe the story. That's probably also why they've only got 2 Institutions on their >3% list, whereas most companies this size have lots of Institutions over 3%. There's a lot of scepticism around this company for very good reasons.
P.
Paul,
As a contrarian/value investor does it mean you will be looking to buy more in the resource sector? I know you have dabbled a bit in stuff like ZIOC, TRAP, BLVN already. But as you state, just about the only sector to have done badly this year has been oilers and miners.
Hi Cranium,
"As a contrarian/value investor does it mean you will be looking to buy more in the resource sector?"
Yes, definitely. We're in a roaring bull market, with a lot of very speculative money sloshing around, looking for good stories. That is perfect for the resources sector, so to my mind it's only a matter of time before the speculative money floods back into resources stocks. But I don't think it will be indiscriminate, people will have wised up to the fact that follow-on funding is difficult to secure, so it will be all about finding resource companies with adequate cash reserves for the medium term, and good management.
Regards, Paul.
Thanks for a week of reports Paul - do you know where to find charts of the PE of various markets over time - it would be a very useful tool to gauge whether the broad index is over or undervalued historically and how different markets compare.
Nice RNS from QPP today Paul - when are you going to admit you got it wrong on that stock?
"Nice RNS from QPP today Paul - when are you going to admit you got it wrong on that stock?"
I haven't got it wrong on QPP. Just because the share price goes up in the short term, doesn't mean you're right about the long term value of the company.
Remember that in the short term the market is a voting machine. In the long term it's a weighing machine. QPP still hasn't generated any cashflow, and the Balance Sheet is piling up with debtors, and it's far from clear that they have a long term sustainable business model.
A lot of their profit is coming from dodgy whiplash claims, which is a very shaky basis to build a business on. Firm action by the Govt to stop these widespread, dodgy whiplash claims could destroy QPP virtually overnight.
Let's see what happens in the long run - I'm still pretty confident that I'll be proved correct eventually. Same with Globo.
If either (or both) businesses deliver real, sustainable cashflows, then and only then will I admit I'm wrong, but we've not got to that position yet, have we?
It's all about risk/reward for me. Why take the risk buying a stock that MIGHT not be what it seems? I just like to eradicate risk by taking heed of red flags in company accounts. That's the safest & most intelligent way to invest.
Regards, Paul.
Just a thought on Globo.
You mentioned the press release they issued a few days ago that was intended to reassure investors as to the soundness of their accounts. One of the key ways in which companies can artificially inflate profits is by recognising revenue prematurely. E.g (apologies for the gross oversimplification) a company might take the whole of a new contract straight to their p&l even though the contract is going to run for some years.
So a statement that revenue is recognised only when the service has been delivered would have been reassuring. But what did they say in their press release? "Revenue is recognised in accordance with the Company's accounting policies, in compliance with International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS), set out in the 2012 annual report" In other words they gave no information at all. They could hardly say "Revenue is not recognised in accordance with company accounting policies…" Any decent accountant should be able to do better than that to explain how revenue is recognised and so to reassure investors.
My conclusions
1. There is no good information to help me to judge the soundness of the accounts
2. The lead accountants in the company are either not up to scratch or are intentionally hiding something
The difficulty with situations like this is that the company may be a genuine high growth stock. My emotions tell me to hold on. I don't want to miss out on something big. And I don't want to admit having made a mistake - by buying in the first place.
I have sold and taken a small loss. Pity I hadn't seen your blog before buying
As a new reader, thanks for your reports. I can see that they will be very valuable
Regards
Julian
Disclosure: Long Globo
The level of trade debtors, the terms of the disposal of Greek interests, capitalisation/amortisation of software development costs, all have been attacked: now we can add revenue recognition and the assertion the FD is either incompetent or dishonest!!
In the 2012 accounts Globo expend 560 words allegedly giving investors no information at all about revenue recognition. Go see for yourselves!
For a company with something to hide the CEO and FD have certainly been putting themselves about in a most creditable manner of late. Not only have they been presenting but also making themselves available to individual investors afterwards.
Nobody is forced to invest and rational argument for and against is always healthy. In the case of Globo the arguments are obscuring the real picture in my opinion.
DYOR
Hi Julian
Funny you mention about the accountant at GBO not being up to scratch. He's not even a qualified Chartered Accountant. He just has a degree in finance.
Ryan
A very interesting discussion and not one I expected from Paul as a value investor. But it is important to keep an eye on the big picture IMHO.
For those interested I have done a lot of research on long term and short term stock market cycles and believe that we are still in the tail end of the long term secular bear market (so what we are experiencing is a cyclical bull market within the long term bear market).
What this means in practical terms is lots of volatility but ultimately sideways movement until we get a real recovery in the underlying economy, with normal interest rate policy.
http://www.telegraph.co.uk/finance/personalfinance/investing/10421834/Why-a-bull-market-could-come-charging-back-in-2018.html
Regards,
Kerry
Kerry
Thanks for sharing. Great article in telegraph and very interesting discussion. Personally I don't see many comparisons with the tech boom and lean more towards your views. One hiccup in the road will be when QE stops, I think we'll see a hard correction then. The good non farm payroll data showed that today, great figures and yet the futures dived as worried what it will mean for QE. Bad news is good news and good news is bad news..crazy times.
All that said, I generally don't like to second guess the market and just go with the trend.
cheers
J
For interest (though not a small-cap)... there's a ~30% special divi coming at Bumi (LON:BUMI) once the seperation from the Indonesian entities the Bakrie Group and Bumi Resources is complete - defined as 'near-term.' The ownership and management issues may be coming to an end, to draw an end to the embarassing corporate governance issues arising when the company obtained a Premium Listing when floating.
I think the comparison with the tech boom days is a slightly false one to make at this stage. There are crazy valuations about today, but it is all relative. From what I remember of the tech bubble everything was going up crazy in that sector for some considerable time, while yes, "old" economy stocks got left behind. If this were the tech boom days again, Globo would probably be around 300-400p by now. It wouldn't be worth anything like that, but that was the case with 99% of tech stocks back in 1999.
The case can be made for many overpriced growth or momentum stocks today, but there again, value investors are always going to say that once things get ahead of themselves. It's certainly a bull market, but bubble prices? In individual companies yes, but I don't see a mass across the board mania just yet and while indices are heading towards new highs or breaking them, some have a long way to go just to catch up with inflation.
Hi SevenPillars,
I'm seeing plenty of examples of over-exuberance, but not yet mania.
So my view is that we're probably in the final third of this bull market, but it could last for another year or two, in which time spectacular gains can be made - providing people see it for what it is, and bank the gains before the music stops.
So just to clarify, I'm not comparing where we are now with the insanity of early 2000 (the peak of the TMT boom). However I am saying that there are some uncanny similarities with perhaps late 1998, early 1999, in some stocks.
For small caps overall, I definitely wouldn't buy the market generally - valuations are too high. But selectively there are still some good bargains on an individual stock level. So I don't think we'll get any general boost from the market overall rising in small caps (which has soared in the last 18 months - rebase it to the same as the FTSE100, and small caps are knocking on the door of 10,000!)
Cheers, Paul.