Good morning! It's Paul here.
I'm starting to feel a bit Christmasy, whatever that means. This has mainly manifested itself by my humming "Jingle Bells" under my breath, and asking when the Christmas tree will be going up.
Also, I'm thinking about starting a petition to raise 100k signatures, to get Parliament to ban the playing of Sir Cliff Richard's Mistletoe & Wine, not just over the festive period, but at all times.
MySale (LON: MYSL)
(in which I have a long position)
Several readers have asked if I met management as planned recently. Unfortunately not, I couldn't make the meeting in the end, and I've not spoken to them.
It remains a mystery why the share price is so weak - just more sellers than buyers. My broker tells me that, last week, a retail investor dumped his or her shares, trashing the price. Slamming the price down does seem to unearth some buyers, but then it goes to sleep again. Until the next time someone smashes the price down again.
The shares are tightly held, by management, and big investors Philip Green (through a company called Shelton), and Sports Direct. Therefore, there's a risk that they might decide to take it private. I don't mind if they pay a decent premium, but being notoriously tight, I don't think those characters would be minded to pay a generous price.
The key issue for MYSL will be whether the large receivables on the balance sheet do indeed start turning into cash, as promised in the last set of figures. Time will tell.
Macro musings
It's very quiet for company updates today, so I'll allocate some time to thinking out loud about current issues.
Balance sheets & debt - a friend sent me a very interesting email over the weekend. In it, he pointed out that banks seem to be tightening credit in difficult sectors (e.g. construction, outsourced services, traditional retailers, and others). This is forcing some companies to seek alternative funding, which of course usually means tapping shareholders for funds. We've seen several deeply discounted rights issues recently, and I think there could be many more to come.
My strategy of avoiding companies with weak balance sheets has arguably been too cautious over the last 10 years. I missed some good opportunities because of my strict rules on avoiding weak balance sheets. Although I've…
