Small Cap Value Report (Mon 8 June 2020) - RBG, UPGS, LOOK, TTG, SOLI, ACT, SDY

7th Jun '20 by Paul Scott

115 comments 12479 reads

Good morning, it's Paul here.

Estimated timings - I need to rest my eyes for a bit, but will add a few more sections after lunch. 16:30 finish time.
Update at 17:40 - I added 4 more company sections this afternoon. Today's report is now finished.

I'll be writing Mon-Wed SCVRs this week. Graham has kindly offered to write Thu-Fri, in order to give me a 4-day weekend to celebrate my 52nd birthday! What a kind man! I shall enjoy that! :-D

Probably much like yourselves, I needed to take a good break over this weekend, to recover from such an intense week, trying to work out what the hell is going on with the world, the economy, and the stock market.

Where do we start? Firstly, thank you for all the positive comments, I really appreciate it. I have no idea what is going on, and am just trying my best to interpret it from one day to another. Some will be right, some will be wrong. Anyone who uses words like this "will" happen, is wrong. People should use words like "could", or "might". Otherwise, they are ~~charlatans~~ overly optimistic about their forecasting ability! Nobody knows what will happen for sure.

It's fine to express opinions. But not to express false certainty. Let's measure commentators - let's make a note of what each commentator said on each date, and then challenge them afterwards when they were completely wrong! (I got that idea from "Superforecasting" by Tetlock & Gardner. The best forecasters express their uncertainty, and readily change their mind when the facts change.

I'm the first to admit that, I had no idea the Dow would go from 29,500 in early March, to 18,500 low, then rebound to 27,000 now, all within less than 3 months. This is unprecedented. Anyone who did know this, ~~would be a billionaire~~ could have become very rich by now. Personally I kept my thinking flexible, and survived this turmoil intact. I hope readers survived it all OK.

My latest feeling, for what it's worth, is to stop fighting market recovery, so I've been forced to close my Dow shorts (due to large short-term losses) . Let's enjoy the longs on recovery - much more profitable than the losses on my hedges I should add.. That is clearly the way things are going. Hence I'm about to ~~double up on~~ increase some…

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Steve L

8th Jun '20

Maybe check out Royal Mint Physical Gold ETC Securities (LON:RMAP) too, backed by the Royal Mint, supposedly you can still access your gold even if the ETC provider (HAN) goes broke, and they even provide you with a process for requesting physical delivery.

mojomogoz

...a bit tangental but I think also interesting context...

When tuberculosis first arrived among a tribe of remote Canadian indigenous people it seemed like something else entirely. The infection attacked organs in their body (which didn't happen to whites) Symptoms like meningitis were more dramatic and progress of disease much more rapid than anything European origin populations had seen on TB. Ultimately it normalised into the lungs as we know it and was less deadly. Host and parasite found a balance.

IMO there are hints this may be the case with C19 (not expert and I don't really know...always aware of that but got to look at what's before me and weigh it up). There are hints that in Asia populations dealt with it better (eg Japan) as their bodies had some sort of greater familiarity with the bug. So not immunity but better bodily coping.

This is not an unusual story when a disease common one place jumps somewhere else. There is an aggressive flare phase. In history this was more devastating as simply we tended to live at the edge of existence...our populations would go to the max of what the local biome would support (mainly nutrition) and a disease would come kill productivity and so create malnutrition which then weakened our ability to cope with the disease...until we based out lower and the disease had run enough.

HollandSmith

Sure there is a simple reason, but why does Diaceutics (LON:DXRX) score 0 on all the stockranks?

ben316

Many Happy Returns Paul :)

davidjhill

hit the nail on the head timarr about contradictory reports. Only today I read two reports from eminent virologists who say categorically that the disease is now far less virulent to those catching it with viral loads on hospitalised patient cases being significantly less than in March. Then I read another report from an equally eminent scientist saying there is no evidence of that! So I guess we now also need to be careful of confirmation bias on our Covid analysis.....who'd have thought :)

epo001

This isn't Facebook and all this nonsensical speculation about covid is hugely off-topic.

Paul Scott

Sorry, misunderstanding. I should have expressed myself more clearly. I meant the Stockopedia community here, and us navigating through the financial/market chaos of recent months. So nothing to do with what you got indignant about!

ed_miller

Re Newmark Security (LON:NWT) and hygiene shields: How long is a decent spike in income from extra sales of hygiene shields likely to last? Retailers deploying them will surely want to fit them sooner rather than later, if they haven't already? Granted, a big spike in sales might well still be in full swing since non-essential retail and hospitality have not yet re-opened, but multibagging usually takes time and enduring growth in sales, whilst a rush on hygiene shields seems time-limited to me.

I've no position, but good luck to you if you're on board.

Tommy H

I would concur about the emotional and mental strength to have +/-20% in a day without any news or logic is not something that I can personally cope with.

Add to that the day job, home schooling, elderly parents and the rest of life, taking some opportunities, down on the year, but slowly improving but as you say with baby steps and very small positions and exiting with some amazingly rubbish timing sometimes too!

timarr

Only today I read two reports from eminent virologists who say categorically that the disease is now far less virulent to those catching it with viral loads on hospitalised patient cases being significantly less than in March.

I'm no immunologist but I understood that the viral load is proprotionate to the exposure - so medical staff exposed to multiple cases were at greater risk than the average person which is why the lack of PPE for them in the early stages was so dangerous. If the prevelance of the virus in the community is vastly reduced particularly in situations where it may be re-circulating like company offices then presumably the impact of that would be to lessen the viral load being experienced by sufferers as they will be exposed to it less?

There seems like a large element of magical thinking going on at the moment along the lines of "there are less cases so it's less dangerous". Although given that our PM is on record as having argued that all the money spent on the Y2K bug was wasted because nothing went wrong we should be cautious about assuming people can link an absence of consequences to actions even when those actions are specifically intended to ensure that self-same absence.

MichaelFBS

I agree with everything you say (particularly on using personal experience) except

“At this point all we can say with much certainty is that it's deadly for anyone with pre-existing conditions”

The chances of dying of/with Covid 19 (and especially if you are under 60 with no co-morbidities) is vanishingly small.

https://www.england.nhs.uk/sta...

https://www.ons.gov.uk/peoplep...

I am not saying the impact on health is not possibly significant, I have no idea and cannot find data on this.

Michael

Ooh that's a great point, FREng, I hadn't linked the two issues.

GrahamF

It’s only been public since March last year may have something to do with it. Nevertheless, I would flag it up to Stocko and see what they say.

Hi Michael

Err, yep, but that's (more or less ) what I said - it's deadly for anyone with a pre-existing condition?

To be fair that's a bit of a stretch from the data for under 65's - the death rate is about 1 in a 1000 and 89% of those have some underlying condition. But I don't know what the recovery rate is of under 65's with an underlying condition, so the best we really can say is that's a major risk factor.

https://www.worldometers.info/...

Trev

9th Jun '20

MrContrarian Thanks for the early warning info on LOOK yesterday...... very helpful

heron

My thanks to everyone who has responded. If anyone comes across explanations they are welcome to contact me at ires@dlmi.ie.

Sorry for going off topic but if the virus is dying out in the western world it helps explain the current strength of markets

UK_Investor_8888

Re LON:NWT, anybody can buy a piece of Perspex on a table stand and sell this as a protective screen. I wouldn't touch such a small Market Cap company with no Dividend history. How's an investor going to get their money back?

Gromley

Hi heron,

I missed your question originally.

My first point would be that you will not get any particularly insightful analysis on a question like that here.

That observation applies to my comments too, but I'll offer them anyway.

marigold suggests : "It's burnt itself out."

At face value this makes no sense - the highest credible estimate I have seen for total cumulative infections in London is 15% [ONS] that is miles away from "herd immunity". (Other as yet unpublished research suggest that 15% is on the high side).

BUT, what if (say) 75% of Londoners have achieved totally effective social isolation?

15% of total population compared against 25% of circulating population might suggest that of the population that have exposed themselves to the pool of potential exposure. That IS very close to herd immunity.

As we start to unlock though we could potentially exposing a group (of previously locked down) people with virtually no herd immunity to exposure.

Without access to all of the data that SAGE has we are pissing in the dark to be frank, but personally think it will be c. 3 weeks before anyone can claim (using public data_ that the lockdown was well timed.

There is lots of gung-ho non-sense from the Government about having the enemy in retreat; I do actually hope that they are right, but unless the censored data is telling (and if it is why not share?) I worry that this is all bluster.

11th Jun '20

Off-topic for here of course, so I might also pick it up on the "lockdown" thread over the weekend.

But I was surprised by the figures from Track & Trace today. On average they have found c. SIX contacts per infected person.

That is having spent more than 15 minutes within 2 metres of someone not in your household. WOW1

Personally despite exercising and shopping on a daily basis I don't think I have spent more than 1.5 SECONDS within 2 metres of anyone for at least 3 months.

I would love to get my hands on some data about the circumstances of these contacts - it would be hugely valuable IMHO.

Nick Ray

Are you referring to this document:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/891703/NHS_test_and_trace_bulletin__England__-_28_May_to_3_June_2020.pdf

You have to read what they say very carefully. They contacted 5407 people who provided the "test and trace" service with 4485+551+168+74 = 5278 contacts. That is less than one contact each.

The other 26985-5278 contacts we have no info about at all. But it sounds like the local public health protection teams did the hard work for those.

The contacts which were handed to the local teams were the ones described as "complex" because they involved schools, prisons, hospitals or care homes.

So the new service is not exactly over-stressing itself yet.

Small Cap Value Report (Mon 8 June 2020) - RBG, UPGS, LOOK, TTG, SOLI, ACT, SDY

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Paul Scott

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