Member Info for alex1621

I don't follow the guy, he seems decent enough but a bit all over the place at times. I don't think he's a crook though, so I don't mind him.

No, frankly it doesn't. It makes more sense to consider that they raised their stake in BooHoo because they thought they would do well long term at that price level.

Paul Scott has a fan club, but I'm not a member. He seems a decent enough guy and I think he is more honest than most of those that have a profile amongst private investors. He specialises in the small company sector and he uses spread bets and margin ... so he takes a great deal more risk than me.

PP1 - If Norges Bank buy shares in every listed company, why have they only got round to buying BooHoo? They could have done so in the last few years. No sense in that statement, you're beginning to sound a bit desperate.

The higher the short % the more violent the rebound should the next update be ahead of guidance, or in line with a positive forward statement. But like many on here I've invested an amount that I don't need so I can afford to be patient. I've been here before, so not affected by anybody's predictions. I've no idea when this turns, but when it does I'd expect the rebound to be rapid.

Apologies, I've just listened again. Scott saying he lost over 100,000 at the start of the conversation, 15:14 ... then Hill stating he's lost a 6 figure sum so far at 22:31. So they both have, but Hill hasn't sold any. I knew Scott had lost but I didn't hear any numbers out of him. Correction, my error.

Strikes me that Scott had too much weight in BooHoo, and he's lightened up.

It was Paul Hill who said he had a six figure loss, not Paul Scott. Both own shares. And Hill isn't selling, despite a significant draw down. Paul Scott said he uses spread bets and margin, if you are in that business you have no choice but to lighten up your holding. when it tanks. He's taking on more risk than most investors. So it seems a reasonable strategy.

There are two main bulletin boards for private investors. This one and another, who I’m sure we all know. I noticed when I looked on their Boo threads that they were being bombarded by trolls, like an army of them. Constant and never ending. Any positive comment on BooHoo gets immediately drowned out by them. It looked organised, as if they were employed to do it. I had a look last week and one had commented about “rampers on LSE” never coming on here. No wonder, the threads have been completely trashed, to the point that they are unusable as a source of information.

We don’t see that on here, because these threads are monitored, otherwise they’d be flooding this thread. The objective is to deter anyone thinking of investing and scare anyone already holding.

But we have to be careful about reporting. There is a bull and bear case for Boo, so I’m not adverse to debating points with someone, if they are raising sensible issues. You don’t want LSE to be for positive views only, it would serve no use. Both parties can be right, but on different time horizons. I’m not a short term bull on BooHoo, but I am longer term. Peter Lynch of Fidelity, with possibly the best record for a fund manager, stated that most of his best investments only started to perform after he held them three years. The problem with boards is that people only seem to care about next week, or next month.

I don’t recall them saying that, good question. I think if the start stop pattern of lockdown is behind us their buying and merchandising teams will be better able to forecast efficiently. I’m looking for some positive noises on the Summer and better news on supply chains at the back end of 2022. If they kitchen sinked the last forward statement I’d expect them to have hit their targets. But further bad news is possible. The market is punishing anything other than a pristine update with positive forward statements. Bear in mind there is a large % stock out there with professional shorters, so anything could happen.

It’s possible. That’s why I suggested you wait until it’s published before investing a penny. Even if it’s positive you won’t lose much by investing after a reassuring update, given how far this has fallen.

I don’t follow any of them, and I’ve never invested in anything based on their discussions, except by coincidence. I think they all talk their own book … why would they talk about stocks they don’t have an interest in?

I don’t mind either of them though, I don’t believe they are simply ramping their own book. Paul Scott was very honest about losing millions during the financial crisis … he was using margin and focused on small company stocks. There are plenty of liars and charlatans operating in the financial investment space, but I wouldn’t say that of either of these guys. Unless you think that anyone talking about something they own is only ramping? In which case we are all guilty.

If your time horizon is a few months, you might well be in for a rocky ride. Even if the next update is in line and the forward statements show an improving outlook the organised professional short will still be with us. It will take three decent updates to dissuade them, or a monumental surge in the SP.

As for Debenhams, my understanding is that they are using it as a platform for selling perfume and cosmetics. From my own experience this is a very lucrative market. I’m not sure anyone can objectively assess this until the business is up and running, and we leave the fog of the pandemic behind. These were investments for the future, that require investment up front. We might have a better view of it all in 2024/25.

I listened to that. Paul Scott was being interviewed by Paul Hill. Facts are important. Paul Hill is sitting on a 6 figure loss, Paul Scott said that he had lightened up on his stake, as he felt he was holding too much. Paul Hill’s investment has fallen by two thirds, an eye watering 67%. But he’s not selling? In fact, he did say he’s resisted the temptation to invest more.

I think Paul Hill has been around for a lot longer than Paul Scott in the investing game, having worked in financial circles. Paul Scott is a former retail finance guy. Both have been through the wars, having been investing through the dot com bubble, the financial crash of 2008, and the pandemic. I didn’t notice any sense of panic in either of them. And Paul Hill expects to recover his investment as we move out of this period. Scott said one thing that I agree with and have observed - when these stocks turn they do so very rapidly. I noticed that when I was underwater on 888. Loss turned to profit very quickly, and then multi bagged. With AIM stocks under siege by shorters that’s quite common.

We’ve not seen much institutional activity. Fidelity selling down because they breached their own rules on portfolio weighting, and the Norwegian Sovereign Wealth fund taking a 3% stake. The latter, Norges Bank, conduct more extensive due diligence than anyone on here, and hold with a long term perspective. They are underwater on their investment today, but I very much doubt that when they sell some years in the future it will be at a loss. The patient investor, who can ignore the noise and volatility, will be rewarded.

If I have a few £100m, and I hire brokers to borrow shares in a company, and then dump the shares in the market the price will fall, as it falls it will trigger automatic sells from stop loss levels and others will sell blindly because "there must be something wrong". If I keep on doing that the SP will keep on falling, and others might join me. The same can happen in the opposite direction, GameStop being a good example. At times the SP disconnects from an objective view of a company's intrinsic value (value based on an objective analysis of the numbers). People who constantly predict SP's are attempting to anchor you to their wishful thinking and affect your behaviour. Benjamin Graham explained this to a Senate committee in the 1930's. His view was that stocks tend to reflect their intrinsic value over time. I don't think anything has changed over the last 90 years.

Mr Market is there to serve you, not to guide you. You take advantage of him when he's overly optimistic, but you never come under his spell.

*** Apologies. Meant for Sterowlands, not CHRI55. But agree, read widely, do research.

CHRI55 … the last guidance (and a profit warning) was:

Net sales growth of 12-14% (as opposed to previous guidance 20-25%)
Adj EBITDA of 117m - 139m
Adj EBITDA margin of 6-7% (as opposed to previous guidance 9-9.5%)

So you can see a deterioration in performance, due mainly to pandemic disruption, lockdowns, supply chain issues, etc. Not pretty, but besides that still guiding to growth and profit. Their target is for £5bn in sales, and the DC in the US is part of that plan.

The prior year to Feb 2021 they made a pre tax profit of £125m.
Total liabilities were £303m, and cash was £276m, so not a high debt company.

2022 numbers will be disappointing in comparison. The balance sheet will be weaker, but not dangerously so. The key is if the hit the targets set in the last update and provide guidance of an improving picture. I personally don’t believe the issues they are currently facing are permanent. But that’s a judgement call that each investor has to make.

The company is subject to a sustained shorting attack, so calling the bottom is virtually impossible. Perhaps the best move is to wait until they next update the market.

The business model doesn’t work well in a world of lockdown, open up, lockdown, etc as it causes turmoil with merchandising and buying, added to that port closures, delivery delays, etc and you have the worst conditions for their business model. If you think that is the new normal they will struggle. But if you think that lockdowns will disappear, supply chain issues will ease, then it’s likely they will get back on a growth trajectory. The cruise ship business model doesn’t work in a pandemic. Nor does the airline, restaurant, nightclub and package holiday model. You might think they will never recover … I would beg to differ.

That’s always a criticism by investors, but I’m not sure statements are the best response. Matthew Moulding of the Hut Group made the situation worse, he played into their hands. Best response is improving actual results. When AIM stocks turn they do so rapidly. Holders of RR have seen it move from 50p to 120p in short order, on the back of more opening up with flights. And flights are still nowhere near historical levels. This one requires patience and a strong constitution. The fact that the % short is high may benefit holders when it turns, as the dash to the exit will be fun to watch. And for anyone who think Marshall Wace are infallible, they loaded up on Facebook before it crashed. So despite all their advantages over small investors, it doesn’t always go there way.

Barclays have changed their mind, apparently. I wonder if they do business with any of the hedge funds shorting BooHoo? Asking for a friend.