Member Info for Alas_Smith

With the BoE announcing that historic lows for interest rates are to remain in place, I have dipped my toe in today in anticipation of capital appreciation. The underlying assets are performing well, but the SP is more reflective of the pressure on the shares.

As the UK is edging closer to a lifting of restriction, with Europe a month or so behind us, so I expect the opportunity for rapid revival of economies and with that comes the need for financing following a pretty dismal 18 months.

Phyl, I am helping my children build their respective SIPP accounts and have bought a few moments ago 670 shares for elder son. It is correctly showing as a buy.

It is very difficult to know when to buy shares directly in equities when the long haul of building a portfolio starts and sometimes it is better to use an investment trust. There are 2 direct holdings in his portfolio - both blue chips (RDSB and LGEN) - but the remaining 3 holdings are Investment Trusts. I've tried to balance the monetary values of these evenly.

With professional press suggesting that investors are likely to enjoy the greatest growth from UK markets, my reasoning for an investment in MTU is that smaller companies are more sensitive to market changes than large ones so there is a greater chance of growth.

Once the capital value of the SIPP reaches £10,000, it is likely that a third direct holdings will be purchased, again a blue chip but he is at least a couple of years away from such event unless something very spectacular happens.

Holding for elder son in his SIPP has been cashed in today to bank a 12.63% uplift. My holding in my ISA remains unchanged.

Took the opportunity to add a few more to my elder sones portfolio yesterday. NAV now above 304 but SP is unchanged at 283 (mid price).

FWIW, contributions in the professional press have been hinting for some time that the best prospects for investors to growth their wealth is on the UK Stock Exchange(s). Although winter is now drawing in, the UK market has been bumpy and yet to evidence predictions published. I am pretty confident that once the UK is removed from the restrictions that have been in place for the last 17 months or so that it might be the inflection point.....this last year has given many businesses a focus on tecnology in adapting to the challenges for remote working. Whether there is a return to the office or not, upgrades ar always needed.

OWLS, you have a good point…..the argument in owning individual equities rather than a fund (even if it has the same holdings and in the same ratio) should generate greater reward.

Where I use IT’s (and this is not advice, of course) is either to fill the sector gaps in a portfoli or (and this is my preference), to remain fully invested while I try and find the next individual winner.

I am pretty confident for instance that shares in say airport operators, hotels, pawnbroker, retail FX dealers, airlines, cruise operators and restaurants will be the hot sectors this autumn, but there are a myriad from which to choose.

Chucking cash into any “special opportunities”/“recovery” type of fund is the next best thing, surely? It will give exposure to 20 or more companies that a fund manger with a team of researchers have screened that fit the bill. Whittling them down comes down to investor strategy. Some investors are diligent, others are better described as a monkey with a pin.

I have added a few more shares on the back of the news that was published following the decision that Downing Strategic Micro-Cap Investment Trust have bought a chunky stake. A niche company, but as disclosed in previous contributions, my timing was flawed. Don't you just love hindsight?

A passive tracker is, too all intents and purpose, “the market”. I am going to refer to all pooled holdings as funds whether they are open or closed ended . Most are constructed so that the holdings in the fund are in the weighting for that which is being tracked with training adjustments. Where there are direct holdings and a dividend is declared these assist to mitigate the cost to manage the fund and provide liquidity to those wishing to sell units in the fund.

These funds are stable over time but only reflect the collective growth (or fall) for that which is being tracked.

An active fund has defined focus usually sector or theme based. The managers are responsible not only in their choice of holding, but the weighting that such holding has within the fund. A closed ended fund not only has the valuation in the underlying assets to support the market cap for the fund but is quoted on its own account so that it is possible to buy or sell units. The price for these units might be unattractive but it does permit an investor to execute a bargain independent of the ability to deal in the individual assets that comprise the fund.

Investors generally expect better return from an active fund than a passive one. A change of manager for instance, can have a marked effect on the share price of the fund despite there being no change to the underlying assets.

My preference is for a portfolio structured for growth with direct holdings in equities quoted in UK, European, N American and Japanese exchanges. Where I have gaps, these are filled with sector based closed ended funds. It seems to be working (for me).

Where I do use passive funds is to build up capital from regular savings. If I squirrel £400 each month into that type of fund, I know that growth is likely to be that that has happened in past years. Once the value of my regular savings reaches the point where a direct investment can be made in an equity of choice (for me this is in £5,000 sums) the bargains are executed.

In the short term, this skews portfolio weighting. In the long term it allows for badly performing holdings to be sold and the portfolio gradually upgraded. This, of course is not investment advice, works for me and is probably riddled with flawed reasoning. I have the benefit of having made many mistakes in the past. Most mistakes were through poor timing. A few were investments in niche companies that failed through poor decisions (Albert Fisher moved from the dull field of frozen peas to the exciting area of lettuce. A poor initial harvest and plop). Then, at least 3 investments were made in companies that were managed by rogues…. Graphene Nanochem was the most recent.

Both closed and open ended funds feature to an extent in my portfolio and those for my wife and children (I still manage those for them as they need to concentrate on their careers). Might not work for everyone.

Well, the last PR news as far as virolens is concerned was at the end of March. There was comment in directors talk a month ago, but these sort of interviews are subject to embargo and scrutiny.

It is heartening to note that the SP is holding up well. Perhaps things may get a little rough if silence continues

OWLS, your latest remark is absolute tripe. Some IT’s have an atrocious track record and others brilliant. There will ALWAYS be equity star performers which, in turn become the benchmark for an index or a sector.

But to tar all IT’s as having a poor track record is ridiculous. SMT has had a decent run in the past BECAUSE there was one (or more) holdings that did well. I am banking that those will continue to do well and be joined by others

robleo, I am intrigued with your approach to pending retirement. Retirement for me is expected in 3 years time but my wife is 7 years my junior. I would not expect her to continue to work when I am retired. At best, I might receive 50% State pension so we will be reliant on investments. We have INCREASED my appetite to risk from Med High to High. This is because once retired, our portfolio will need to last for 30 years.

The portfolio remains structured for growth so although it does throw off some dividends, this is insufficient for income. The approach that we are using is capital withdrawn at a maximum of 3%. As long term growth (over 40 year period) has been 13% compound (a few really terrible years, of course) with all dividends re-invested I think 3% withdrawal is prudent. With a 36 month lead time, it provides chance for dividends to be set aside so that there is cash balance equivalent to income for 1 year and rising income in the future.

The markets that have performed very strongly include DOW and Nasdaq with companies that seem to have done best of all paying a tiny dividend or none at all. And while it was great when companies such as Shell have dividend returns of 6%, that was at the point for the FTSE when the average dividend was 3.86% and rising. Currently the FTSE has a dividend rate of 2.93% so although it is within a whisker of my 3% target, the yield for this return is determined by a small handful of companies led by fags, oil, miners and pharmaceuticals. Two of those sectors are in terminal decline.

Since my last post, the SP has weakened considerably. Hospitals saw a huge drop in both elective and emergency surgeries over the last 18 months and the managers of individual trusts seem emasculated.

TSTL is a well run company but until there is a Consultant led focus to address the backlog of surgeries missed the SP will continue to wallow. I like to average up. Recent moves have been sharp and down. Today seems no exception. Grrrrr

tealo1 - 20% gain for an individual holding is neither here nor there - Nvidia (actually it is now my largest holding) was bought in 2018 at $216 per share - is doing nicely. For that matter, so are my shares in Adyen, and Varta and a dozen or so others. All have doubled in a couple of years. My portfolio is structured for growth and I will be disappointed if, this year I do not have uplift of 17% - 18%. Sure, there are a few losers this year already - Abcam for instance and plenty of turgid ones such as AFC, SAGA, Utilico, Deutsche Bourse etc.

Ramsdens has plenty going for it - cash rich, the watches and jewellery side are providing not just turnover, but are keeping the company alive. Division for precious scrap metal and pawnbroking will do well in a down turn, (but surprisingly, we are not there yet), FX (does well when conditions allow for travel) but talk of expanding into the South East is bold and at a tangent to core competence. I don't like that from the perspective of Rent, Rates, Staff and competition.

We have news to expect the lowering of restrictions (in England) in late July so it might mean the start of FX again. Once the furlough scheme ends and employers weigh up the prospects to re-open, I would expect to see unemployment begin to rise. That won't really happen until schools return in September. That MIGHT mean the beginnings of the pawnbroking side picking up. But these little things do not mean that shareholders in Ramsdens are going to get rich all of a sudden.

It does take time and rather than adding to my holding in RFX (because I know the risk), the reward is insufficient (at this stage to press the buy button. So, for ME, these are not a buy but there is an insufficient case to sell. I like to average my holding UP. And I will do this when there is sustained evidence that momentum will continue.

And for that, I will use the basic historic information in graphical format (chart) with the 5 year one as a guide.

My decision to buy was flawed by my impatience - I underestimated the amount of money that Governments would chuck at businesses for a far longer duration than I expected. Things that I believe I got right include that RFX is a well managed company, is cash rich and has revenues from different streams.

Dividends are a bonus as far as I am concerned. While the value of my holding is slightly underwater, this is magnified when opportunity cost is taken into account.

The results simply reflect the past. The authority in the narrative to accompany them was muted. And, as a consequence I am not sure what to do.

I don’t care about intraday movement, but the forward guidence was expansion with defined geography, London and the S East as the focus….. and, I’ve got to be honest this does it really fizz me up. South East (as far as I am concerned is Berks/Bucks/ Surrey/Hants/Sussex/Kent etc…., all living in cloud cookoo land in terms of value : worth and it is a long way out from the core roots for Ramsdens.

My hunch is to sell. I’l give it 6 weeks before I hit the sell button, but the managers are not evidencing the subtle signals that warrant support. 3 months is the timescale I have in nind. If there is no PR stream of news weighted to improvement, then pastures new with the residue.

In my 40+ years in building a portfolio, it is rare that I buy fresh shares in a company in which I have held investment unless there is a change of management.

Although tax is never grounds on which to invest, simple things such as opening and sheltering assets in ISA wrapper for husband and wife, transferring assets between parties immediately before transferring into ISA wrapper allow for gains at the maximum amount and the sheltering of £40,000 each tax year.

This year has seen the remainder of our joint accounts sheltered in ISA wrapper. In 2014 we realised that our children had the potential for a substantial IHT bill on our death and we began to settle assets into a discretionary trust that was created in 2015. Neither of us have inherited from our respective parents, though as each year passes so the liklihood increases. A trust allows £325,000 to be settled from our estate every 7 years. There are penalties, of course - tax due from capital gains made each year for instance as well as requirement to complete a tax return if income to the Trust exceeds £100 annually. A periodic charge every 10 years is made on the capital balance of the Trust.

SIPP's are also efficient ways to transfer capital on death as these fall outside IHT. As I have never been employed, my earnings have fluctuated wildly and a SIPP for me is of low concern as it cannot usually be accessed before retirement. The preference being to use the efficiency of ISA.

The assets of the IT (NAV) are bought and sold daily causing NAV changes. If the NAV is substantially lower than the shares of the IT, and thus trading at a discount, it is good commercial practice to buy shares of the IT not only by the ordinary herbert in the street such as myself but also by the managers of the trust. These shares can be held in treasury to be re-listed at a later date or pensioned off. Held in treasury mean that they will receive the same dividend as you or I whereas pensioned off mean that they are cancelled.

A premium might occur if the managers are considered to be of exceptional calibre and able to generate a better return from the assets. Discount, the reverse. Not all IT's are permitted to buy their shares or they might be limited in the qty that they can hold or the free float of shares that is available. CGI is a good example with the shares trading at a 32% discount to the NAV. It has shares in some of the largest Canadian and N American companies. Either the shares in the underlying companies will fall or the share price for CGI will rise. (Not investment advice as CGI usually trades at a substantial discount and this is not that unusual).

Discounts and premium happen for many reasons - where there are changes to the NAV that are unusual, advantage can be taken by the ordinary punter.

stevebt - re dividends, the short answer is that dividend investors may hold opinion, but that does not necessarily apply to all investors. FWIW, my portfolio is structured for capital growth and while some holdings throw off dividends and quite decent ones, I do not rely on dividends for income. Income from dividends in my portfolio contribute around 0.09% each month but capital growth averaged out over the last 40 years has been 1.1%, this has been growing over the last 4 years and is averaging 1.5% monthly.

Total return produces better reward than chasing dividends and this is true for UK and US holdings. Asian markets however have a myriad of companies that reward investors with pretty static share prices but very decent dividend returns.

Royal Dutch Shell (as do all BIG oil companies) has headwind in the transition to renewable energy. It is the cost of restructure to buy companies in that area that has caused the dividend to be cut not from the shortage of oil. All big oil companies are in the same boat and all chasing a fragmented market. There is no benefit whatsoever in Shell (or any other big oiler) trying to start a renewables division from scratch. Far cheaper to hoover a dozen or so companies up, bring them under one roof and plan transition from a position of strength.

I added to my holding last week.

Trello, while I appreciate that you may wish to have countries open up, or, rather lower their guard, the press and the Prime Minister are conditioning us to expect that lifting of restrictions will be delayed. We will now more on the Monday evening update.

I am not too fussed whether there is delay or not - sure, it might mean that my theatre tickets booked for July 3 are cancelled and that a proposed group event planned for 26 June won't go ahead and share prices might react unfavourably to the news - but I am much more concerned that the pressure faced by hospitals is not repeated. That has a huge knock on effect for all those minor procedures that were cancelled.

The bigger picture is that although the UK, USA and EU have got to grips with the pandemic, until there is sufficient vaccine delivered to the world to allow us all to cope with this virus and manage its effect, international travel should have restriction in place even with domestic flights of 2 hour duration or shorter.

For the sake of clarity, I do not hold any shares in EZJ at the moment, have never short sold any share. As news that is likely to affect the share price of companies in this vertical market will be published on Monday, despite my preference to be fully invested at all times, I am content to wait. If the price goes up or down, the risk to my capital will be better understood.

If the assumption that this article refers to iAbra and/or Virolens, then it would be reasonable to expect announcement as a Regulatory News Statement (RNS).

Over the last few days, press reports seem to be more downbeat on the re-opening of the UK economy from 21 June. The decision being taken on 14 June, if my memory serves me correctly. The inference is for a delay of anywhere between 2 weeks and 6 weeks.

I am beginning to feel that a delay is actually going to benefit the share price of TTG as one of the more tangible benefits of the removal of restrictions is air travel. Hopefully, behind the scenes the Foreign Office and their counterparts around the world will be working on having common controls for Internation passenger movement. Once common agreement and infrastructure is in place, then announcement to ease travel restriction can be made.

Pretty sure that iAbra and their partners worldwide for Virolens deployment are in full swing and may be subject to political embargo of any announcement.

In the meanwhile, it is comforting to see the trend remain intact.

Guidence that has been provided is for the NAV to be released in June.

This is a very young IT and although it has quite an impressive record since launch, it is not yet enough to smooth out wild variance in market value. Sure, yesterdays drop was painful, but, I would contend that it is consistent with recently listed equities in a relatively new nd unknown sector.

Happy to hold and await documents showing the fundraise which will be considered with the benefit of the declared results