Good evening/morning, it's Paul here with the usual placeholder.

I'm hoping that there won't be much news, as I have to go into the City for a lunch.


The way things are panning out with the Brexit shambles/deception, I think it's becoming pretty clear that it's likely to be deferred, perhaps indefinitely. Therefore, I'm starting to think we might see some confidence begin to return to small caps. For that reason, I'm building up a shopping list of irrationally over-sold small caps, with a view to pouncing, once buyers begin to return.

I think we might begin to see some nice uplifts, on positive newsflow from now on, as buyers return.

Offset against that, I'm worried that open-ended small caps funds might be suffering redemptions, and hence need to sell stuff even if they don't want to. Having been through several bear markets before, I've seen how funds tend to sell whatever they can, rather than what they want to sell.

Another quandary, is whether to hold on to highly-rated small caps which have avoided the sell-off so far? Or whether to ditch them, on the basis that in line results probably won't deliver any further upside, but even a slight disappointment could trigger a plunge?

Whatever you do, don't fall into the trap of thinking that your brilliant stock picks are impervious to a bear market - pride comes before a fall - as I've learned the hard way!




Interserve

It's game over here. It looks as if shareholders over-played their hand, and the debt providers just wiped them out, with a pre-pack administration. Note this announcement after the market close, which starts of by saying;

Administrators have been appointed to Interserve Plc (in administration) ("Plc") and the completion of the sale of Plc's business and assets (i.e. the entire group) (the "Group") to a newly incorporated company to be controlled by the Group's lenders has occurred...


The new company is being refinanced through new equity (replacing the old debt), plus additional funding.

This looks by far the best route to take, as it avoids disruption to customers & employees. As for existing equity holders? Well, they're irrelevant. Once any company/group is overwhelmed with debt, then the equity holders rank behind debt holders. Hence shareholders lose control of the situation if they are not prepared to stump up…

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