Good morning!

Before I get into today's report, I'd just like say how thankful I am for the early comments. Besides alerting me to the stories which you find most interesting, they also help me to spot things I might otherwise have missed. So long may this continue!

Today, the following stories have grabbed my attention so far:




XLMedia (LON:XLM)

  • Share price: 118p (-31%)
  • No. of shares: 220 million
  • Market cap: £260 million

Trading Update

Performance has stalled at this Israeli performance marketing group, registered in Jersey.

General thoughts

Can we trust these Israeli (and Greek, Cypriot, etc.) small-caps, listed on AIM? It's difficult to generalise, but my basic point of view is that I always want to feel like the shares I buy have a sturdy relationship between the shareholders, directors and the company itself.

This is related to something I was taught about property investing. From a legal point of view, you can't buy land. You can only buy title to land, i.e. the right to do certain things with a specific piece of land.

It's the same with companies. We don't buy companies, we buy securities (bonds, shares, etc) which give us rights to do certain things (collect coupon payments, collect dividends, vote for Directors, etc). If there is something wrong with the securities themselves, then there is something fundamentally wrong with our investment.

Usually, we don't have to worry too much about the legal integrity of company shares. But sometimes, it matters a great deal.

I currently own shares in just one company not registered in the UK: DP Eurasia NV (LON:DPEU). This is active in Turkey and Russia, and is registered in the Netherlands. I accept that this is a risky stock, and so my position is very small. However, I do take some comfort in the Netherlands registration, since the Netherlands is on…

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