RE: RNS's due early Nov & late Nov?1 Nov 2025 08:58
You correct in suggesting there is no logic to the strategy but if we were dealing in simple logic then maybe you'd never sell any shares if their prices never reached your view of fair value. But add in non-logical parameters like probabilities and things become more fuzzy - a share that at a 50% discount to fair value has more upside to one that has a 10% discount so if you bought at the 50% discount level, you would be less confident in holding all those shares at a 10% level.
If we're doing investing 101 then perhaps we should mention diversification. Regardless of the potential value you believe a stock may hold, you don't want to have too much riding on the SP movement. Say you hold 10% in a single stock - for an AIM listed stock I would consider that heavily overweight - and the SP doubles, you now own 18% in that stock. If it were to triple, you would have 25% invested there. Not only has your % exposure increased, but it is likely that the SP is now a lot closer to what you consider fair value - ie there is less upside. So it makes sense to adopt a strategy that collects profits on the way up which will reduce the gains but not materially while managing the overall exposure. In quite simple terms, you buy and hold more stocks when they are cheaper but as your view of the upside reduces, you pare back your holding.
So while every share is fundamentally the same, the JLP shares that I own are not all worth the same to me.
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