Gambling22 Jul 2013 15:07
Sterling work from Oxo but I think if you invest in AIM companies then this is going to happen more often than not. That's why I think the removal of Inheritance Tax and other incentives to invest in AIM provided by the govt is grossly irresponsible. It's little better than gambling on the horses in my view, and a lot less fun. I first invested in VPhase when the shares were about 8p, maybe 6 or 7 years ago. I stuck a few grand more into them when they were 0.8p and on a slightly positive upturn a couple of years back. I gambled that the govt would support them through its ludicrous "green energy" policies and that they'd win contracts to fit their product in social housing developments. However, for all the positive bluster in the annual report, I remember around the time I bought there was one sentence buried in the small print, which said something along the lines of "all of the above is based on the assumption that we can seal deals and our sales projections remain on track". This was more revealing than the rest of the report put together, and when I bought, I asked myself the question "Can I afford to lose this money, because I probably will". As things have turned out, the govt support has been woeful and the business has been poorly run, for reasons summarised beautifully by Ticomix a week or so ago - the product is far too expensive and the company hasn't controlled costs sufficiently e.g. s****y offices etc. Incidentally I've now invested in 3 AIM companies and lost the lot on all of them - NViro CleanTech, Irvine Energy (this one actually doubled in value at one point but I failed to take profits) and now VPhase - about 15 grand in total, while simultaneously reaping great capital and dividend returns from investment in blue chips. It's not like I didn't do my research either, so it seems like a mug's game to me that I'll be avoiding in future. Ultimately though, I can't help but think of Warren Buffett's great quote here - "Only invest in a business that could be run by an idiot, because one day it will be".