....of where I have got to.
On the 6th August I totted up the performance of my portfolio to date - and I am happy to report an excellent performance.
My investments - in no small part driven by LinkedIn's astronomical performance over the last 12 months - is up 31% (including dividend payments). Over the same period the FTSE All Share index is up 17.01% - so I am close to doubling the rate of growth.
My habit of grabbing the falling knife hasn't been 100% successful - whilst LinkedIn and Optos are up, Imagination Technologies Group and Cupid are down. However, that's what portfolios are for ..... and the latter two are by no means out of favour with me - both have potential in them yet!
Sunday 11 August 2013
Sunday 19 May 2013
Can you SEE the logic here?
This week the world came crashing down for a Dunfermline-based business called Optos Plc. A 90% drop in profits and cashflow issues meant the share price was down 25% at one point in the morning of Thursday 16th May. Sounds bloody terrible, doesn't it?
Well (as always), perhaps. Who are Optos? The company website says:
The company is going to market leading with its Daytona machine - a low cost product for widescreen imaging. It has already shipped 400 units, with the expectation that it will hit 1000-1200 units for the full year.
There is some interesting commentary on accounting practices at Optos as well. Previously the company had been pushing operating leases (income recognised each year), but over the last couple of years has moved towards finance leases (multi year income recognised in the first year). Sounds great at the start (the last two years), but if the sales momentum is not maintained then suddenly sales fall off a cliff (the kind of thing that would cause a 90% profit drop!).
I like defensive, I like niche markets, I like defensible technology, and I like big drops in share price as an entry point with a stock. Let's see how this one goes, as it seems to be ticking the boxes right now.
Well (as always), perhaps. Who are Optos? The company website says:
"Optos plc has the vision to be The retina company. We aim to be recognised as a leading provider of devices and solutions to eyecare professionals for improved patient care. Optos' core devices produce ultra widefield, high resolution digital images (optomaps) of approximately 82% of the retina, something no other device is capable of doing in any one image."Now, this by my understanding, is a very interesting market. First of all, it's healthcare - a well known defensive; secondly, there is a very limited number of companies operating in the vertical - big Japanese companies like Nikon Corporation and Canon USA. So how come a £100m company can compete in the space? My understanding is that a lot of the competitive advantages of Optos relate to its research base, which as the quote above points out gives it a distinct advantage.
The company is going to market leading with its Daytona machine - a low cost product for widescreen imaging. It has already shipped 400 units, with the expectation that it will hit 1000-1200 units for the full year.
There is some interesting commentary on accounting practices at Optos as well. Previously the company had been pushing operating leases (income recognised each year), but over the last couple of years has moved towards finance leases (multi year income recognised in the first year). Sounds great at the start (the last two years), but if the sales momentum is not maintained then suddenly sales fall off a cliff (the kind of thing that would cause a 90% profit drop!).
I like defensive, I like niche markets, I like defensible technology, and I like big drops in share price as an entry point with a stock. Let's see how this one goes, as it seems to be ticking the boxes right now.
Monday 6 May 2013
A second set of views
I have been blogging since late 2011 about my pension experiment. You can read the blog here, which details my trials and tribulations as I try to turn a decent return from the stock market and set myself up for retirement without shelling out management fees to fund managers.
What I haven't written about is my other 'experiment', which is a bit closer to home. I call it my 'hedge fund', although it is nothing of the sort because it's a simple buy / sell of shares that I personally like. My 'like' is mainly driven by my knowledge of the market / company, and tends to be theme based - that is, I buy into a particular theme. Given my line of work, a lot of the shares I have bought (five so far) have been technology shares - I feel I understand this industry better than most. It will be interesting to see if I can maintain the rate of return I have achieved so far.
I hold as many of the shares as possible in my stocks and shares ISA, which save me any capital gains tax when I sell them.
So, what and when have I been buying (because in this case, timing is key because unlike my pension I do not have a 'hold until the end' policy) - and importantly for what unit price?
Cupid and Imagination Technology Group were both bought on big share price drops - where the fundamental reason for buying hasn't changed, but for some reason the stock market has been offended. Cupid has been accused by a documentary maker of running false profiles, whilst Imagination Technology Group is taking too long to close sales that the market believes should now be closed.
The piece of blue sky so far is the Zipcar stock. I love Zipcar - I am not their busiest user, but I do like the convenience and it really plugs a hole for someone living in central London. Zipcar was bought earlier this year by Avis at a decent premium to the price at which I bought in ($12.25), althought it sucked if you had been there at the market floatation price ($27.16).
Like the pension blog, i'll keep the reader updated of what I am buying into and report the return each quarter. So where are we today? According to my initial calculations I am 22% up - not bad in less than 12 months
What I haven't written about is my other 'experiment', which is a bit closer to home. I call it my 'hedge fund', although it is nothing of the sort because it's a simple buy / sell of shares that I personally like. My 'like' is mainly driven by my knowledge of the market / company, and tends to be theme based - that is, I buy into a particular theme. Given my line of work, a lot of the shares I have bought (five so far) have been technology shares - I feel I understand this industry better than most. It will be interesting to see if I can maintain the rate of return I have achieved so far.
I hold as many of the shares as possible in my stocks and shares ISA, which save me any capital gains tax when I sell them.
So, what and when have I been buying (because in this case, timing is key because unlike my pension I do not have a 'hold until the end' policy) - and importantly for what unit price?
- Zipcar - ZIP - bought 6th August 2012 at a unit price of $7.20
- LinkedIn - LKND - bought 7th November 2012 at a unit price of $108.15
- LinkedIn - LKND - bought again on 26th March 2013 at a unit price of $181.32
- Cupid - CUP - bought on 26th March 2013 at a unit price of 84.21p
- Imagination Technology Group - IMG - bought on 2nd May 2013 at a unit price of 330.38p
Cupid and Imagination Technology Group were both bought on big share price drops - where the fundamental reason for buying hasn't changed, but for some reason the stock market has been offended. Cupid has been accused by a documentary maker of running false profiles, whilst Imagination Technology Group is taking too long to close sales that the market believes should now be closed.
The piece of blue sky so far is the Zipcar stock. I love Zipcar - I am not their busiest user, but I do like the convenience and it really plugs a hole for someone living in central London. Zipcar was bought earlier this year by Avis at a decent premium to the price at which I bought in ($12.25), althought it sucked if you had been there at the market floatation price ($27.16).
Like the pension blog, i'll keep the reader updated of what I am buying into and report the return each quarter. So where are we today? According to my initial calculations I am 22% up - not bad in less than 12 months
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