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I think you must be right, Caravan. Trading this share just now looks pretty risky. But buying for the long-term at this price i.e. "when there is blood in the streets" as the Sage of Omaha used to say, seems to me a worthwhile bet. As I have said before, I do not believe the highly successful businesses which have recently joined S4 would have done so if they thought it had no potential. If this share ends up being 4-5 times its current share price in 4-5 years, and paying dividends too, I shall be very happy. I agree that there is value elsewhere too. I'm buying copper miners just now because the Chilean govt is restricting mining of this metal, which, by reason of its high conductivity, will always be required to bring electricity ashore from marine windfarms, and feed the electricity supply of new-builds the world over. Just let us pause and ask ourselves - why are the Chinese buying into Zimbabwe. Copper might be the answer.
I think the answer to these questions is that investors are taking time to assess where things will go from here. Bitter experience from several disappointments has made them sensitive to the recent accounting failures. This company and its SP will only prosper on results from now on, not predictions or hopes. I'm staying in because I believe its long-term prospects are good. I do not believe that those entrepreneurs who have joined SMS's pilgrim band are dopes. Au contraire, I think they are pretty perceptive.
Honestly, guys, I think we have to come to terms with the prospect that the SP will rise only quite slowly over the next few years while the company is expanded to accommodate SMS's vision. Of course, Buffett might take it on, as he has previously shown interest, but other than that, until it starts turning huge profits (as I believe it ultimately will), it will continue to fund acquisitions through share issues, thus diluting the value of existing shares. This, in my view, means a long slow haul towards the construction of a truly great international company. That is why I shall be a regular buyer.
I am not quite clear about the importof the third item in the RNS concernkng TheoremOne. Was the payment in respect of that association, made after Q1, financed by the issue of further shares? Have not been able to determine who the new "whoppers" are? Were they acquired via TheoremOne?
Non-farm payroll figures in the USA increased by 480,000 in April according to Ministry of Labor stats. So, is this American recession really going to be so prolonged or will the recovery come sooner than the doomsayers expect?
I do understand your fears, Buster, but the more likely outcome is, I think, that S4 willbe listed in the USA, although perhaps not yet because of the recession there. The mid-term elections in November will be a set-back for Biden, but I think he will ride out such troubles. Moreover, we should not forget that S4 Cap needs to issue shares periodically to fund acquisitions and that SMS is targetting whoppers too. While I do understand your fears, I suspect they are unfounded.
Thank-you for that reassuring info, Petevid. I was not aware of that research, although its import does not altogether surprise me. I hope many CEO's are aware of it.
Which we all ought to ask ourselves is this: why did the guys who have allowed their previously successful businesses to be absorbed into S4 Cap? The only sensible answer, as I see it, is that they liked what they saw in SMS's model. Forget what the market is saying just now - it is nearly always driven by short-termism - and ask yourselves this question: do you think this share is giving you the chance to buy into a share which will be huge in a few years? I do, but if you do not, then seek your fortune elsewhere with my very best wishes.
I suppose new shares were issued to buy Theorem so I am not surprised by the fall in the SP. But I am certain SMS knows what he is doing, so I'm a buyer.
Load up for the future, everyone! Best wishes, one and all.
Please can someone remind me when these are due? Thanks in advance.
I'll be buying in tomorrow if this price is still on offer at 8.00 a.m. But then I am an LTH. And I think that ultimately this share will fly.
Batterseafish,
I think you have to ponder this point - a long time ago a certain Mr. Saunders went to jail for lying. SMS is certainly not stupid, and has obviously been well tutored as to what he can and cannot say. Those who advise him will certainly be aware of the Saunders case.
Dear Alamo and Mr. Long,
Please read carefully my replies to each of your posts. My original post written with the sole intention of providing a tiny bit of professional insight which I had hoped might be helpful. I spent a large part of my professional life trying to help people in desperate circumstances, often of their own making. I'm not going to enter into the punishment/rehabilitation debate here - all I want to say is that many of the cases with which I dealt prompted me to feel pity at the prospect of at least one other life ruined through greed or violence. It is very, very hard indeed to look into the eyes of an 18-year-old convicted of murder in a silly fight and think that he is going to spend his next 18 years in prison. One such client killed himself in prison a few weeks after being sentenced. Another young man, whom I defended on a murder charge, was rightly acquitted by a sensible jury. A few weeks later, he was shot in the back of his knees by an avenging relative of the deceased, and is now in a wheelchair for the rest of his days. I emerged from my career, because of such cases, with much-increased sympathy for the human condition. I do not want either of you to lose money over this share. Neither do I wish you to miss out should it fly. Honestly, I am no ramper or de-ramper. I was trying to help, that's all, by stating the perception which instructs me to hold onto my shares. Whether you choose to follow my approach is, of course, a matter for you but I do not feel I deserve your contempt. That is all I have to say. My sincere good wishes to you both in whatever decisions you take.
Dear Mr. Alamo55,
I gave an ironic snort when I read your post, but not because I wish to appear sarcastic. Let me assure you that after forty years in the trade, life as senior counsel in mostly legal aid cases is anything but stable. Yes, I had good times, and yes, my life is comparatively comfortable, but I am not filthy rich like some QC's who deal with tax, planning, or other lucrative fields of work. And many of my colleagues at the criminal bar are in the same boat. I can think of some who have gone bankrupt too, through failing to provide for tax. I invest because of the wisdom underlying the Parable of the Talents. In the long term I hope to help one of our daughters who suffers permanent ill-health and our grand-daughters by our younger daughter and her husband. I also enjoy suppprting worthwhile charities. And so, let me repeat my view. SMS would be an utter fool to issue deliberately misleading or deceptive remarks and risk jail. That is why I am inclined to believe him when he says trading is in line with expectations. I sincerely hope you find this view helpful.
Dear Mr. Long
Please re-read my earlier post. My point is that were SMS to have made deliberately misleading or deceptive statements recently he would ultimately expose himself to prosecution. And I do not believe he would ever court that risk by giving out fraudulent information. My "expertise" should you wish to flatter it with that appellation, is very much limited to pointing out that that very substantial risk exists. What flows from that point is this, or so it seems to me, is that if SMS allowed himself to be interviewed (which he did) and took that opportunity to say that trading was in line with expectations (which he also did), then, given the considerations which I set out above, I see no reason to disbelieve him. I don't think I could be clearer about my view. It is for you to decide whether you agree with me or not, but I adhere to my reasoning, which I had hoped might be helpful to others including you. And it is "Counsel", not "Çouncil".
I am a retired QC who specialised in criminal work. I cannot believe for one nano-second that SMS would be foolish enough to incriminate himself by making misleading or deceptive statements at this critical juncture. I suspect the hedgies think along these lines too.
Rich.by.30: I think you are very wise to take such an optimistic long-term view of this share. SMS will, of course, not be around for ever, but it is to be remembered that he has developed SFOR very quickly as a serious player and I do not doubt that his team is imbued with his ethos. Yes, of course, as with all companies, serious mismanagement could cause the SP to tumble, but there is absolutely no warrant for any such concern at present. I intend to keep adding to my holding of this share. I can see why traders were anxious to defenestrate it, but as a LTH I look at it quite differently. This is one for our children and grandchildren IMHO.
Sorry - meant to that I am struck by the realisation that many of you do not post frequently.
A great deal of good common sense and insight from you all. Some very helpful information too. I am struck by the fact that most of you do not particularly frequently and I suspect that some, if not all, of you were struck, like me, by how rapidly this share went into freefall, just as it bloated before the last results were announced. It is, of course, perfectly reasonable to cash in when a substantial profit beckons, provided it suits one's tax position to do so. But I still adhere to my view that, for this share in the long term, the only way is up, so I am locking it away in my ISA, adding to it and to other shares as my circumstances allow. I always bear in mind Terry Smith's mantra: "Buy good companies and then do nothing" and John Lee's enormous success in building up huge tax-free gains through his ISA. I know some here will disavow that approach, preferring to trade as and when opportunities present themselves, but you will not always win by re-investing gains in other companies. Stick with rock-solid, well-managed companies, even nascent ones like S4, and sleep easily at night. It's all too easy to do a Woodford.