Brief intro to Dark Pools

October 3, 2014 1 Comment

The readership of this blog is quite varied both in geographical terms, but also I think in investment experience. Many people that manage their own money don’t actually have any formal qualifications in finance. So I’m sure many readers will respond the same way I did some time ago when I asked a friend what was he doing his Masters dissertation on and he replied ‘Dark pools’ – by pulling a confused grimace. I think it’s worth introducing these dark pools to those of you that know little or nothing about them.

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Mecom Group – $MEC.L

September 30, 2014 Leave a comment

Mecom Group is a newspaper publisher I’ve been looking at over the last couple of days. It is an interesting special situation which looks appealing. A cash offer has been made for the shares at 155p and the shares currently trade at 140p. The takeover has already been approved by shareholders, but the deal has been delayed while a regulator conducts an investigation into whether it will impede competition. Their preliminary findings were that it does which is why the market is pricing in a big discount.

Regardless of whether the takeover happens, the company currently trades at an EV/EBITDA (adjusted) of just 2.5 and will surely be an acquisition target for other companies if this deal falls through. If the takeover fails you will be left holding a cheap company and can probably buy more shares even cheaper after it is announced. Alternatively if it happens you’ll net an 11% gain, probably in around 2-3 months.

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Bouvet Thesis – $BOUVET.OL

September 22, 2014 Leave a comment

One of my most successful investments over the last couple of years was in Kentz, which was a typical Buffett buy and hold forever type stock. Kentz operates in the oil and gas industry, offering engineering and construction services with high returns on capital. I bought it at a time when the oil & gas industry wasn’t doing too well and it was around a P/E of 13, but Kentz went from strength to strength and netted me a 134% gain in just over a year. If they hadn’t been taken over I would still hold them.

But moving onto Bouvet, this is a Norwegian IT consultant and bears some similarities to Kentz.

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indepedence

Independence Options Play

September 15, 2014 Leave a comment

This week is all about independence in the UK. Scotland votes on Thursday over whether it wants to become an independent country or not. Both sides of the campaign have been releasing “information” [read: propaganda] about what independence means for Scotland and also the UK. Leaving aside my personal views on the politics, I believe that independence will be incredibly damaging economically to Scotland in the short term and that will have knock on effects for the UK and hence my portfolio. I believe that the ‘Yes’ campaign is deceiving a lot of people, blinding them to the harsh reality that independence will bring. I have no objection to independence, I just think people should know what they are voting for. Here are my random thoughts on the consequences and how to profit from any market turmoil via options.

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Rise of the Indexers

September 8, 2014 5 Comments

One of Warren Buffett’s favorite bits of advice to the average person is for them to invest a dollar amount each month into a passive index tracker fund. The wisdom behind it is simple – the average mutual fund manager under-performs the index and the average person can’t separate the great managers from the poor. The advice seems to have finally sunk in, the proportion of assets in passive funds has almost doubled in the last 10 years and now stands at 21% in the USA. That is projected to keep rocketing over the next 10 years.

But it is becoming obvious to me, that this liberation of the people from the oppression of greedy fund managers is coming at a cost – to shareholder power and activism.

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Trawling AIM

September 4, 2014 3 Comments

The AIM market is one of the few places bargains exist today, because it is mainly small individual investors that trade on it. The problem is finding stocks, screeners don’t include AIM and there is limited info about the companies. So I put together a spreadsheet that trawls the internet for basic valuation ratios on all AIM companies to allow investors to hopefully find the best bargains.

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Revisiting Craven House $CRV.L

August 29, 2014 9 Comments

I haven’t look at CRV for a while, and it was recently covered by another blogger, Expecting Value, which takes the count now to two bloggers that have been skeptical of CRV. I thought I would write a post setting out my thesis again and particularly addressing the issue raised that CRV could be inflating the valuation of its balance sheet.

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cigar butt

Cigar Butts and Turnarounds

August 19, 2014 4 Comments

Last week I was holidaying in France, and when I go away I like to take a stack of reading that I don’t normally have time for. Among my stack were Buffett’s shareholder letters; I’ve read them before but they are always worth a re-read. Upon reading them I came across his thoughts on ‘cigar butt’ investing and wanted to do an article on them because there seems a lot of mis-information about them floating on the web.

I have never been a fan of ‘cigar butts’, and if I recall my positions that have had the highest gains, these have been in growing and strong companies. The market seems to realise true value far more quickly when a company is performing well – and if it doesn’t the business is growing intrinsic value for every year you are waiting.

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