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Share Bear | Tracking portfolio performance & other thoughts. | Page 5

At the start of 2015, inspired by stockopedias ‘NAPs’ i put together a portfolio of companies i thought would do well in 2015 based on high stock ranks, recommendations from respected investors and my own research. It’s a fantasy fund but the idea being that i wouldn’t tinker, by or sell, but would measure performance again in one years time. There are no rules – it’s simply what i think might do well, with little risk of blowing up. Part fun, part experiment – would i do better than my real money portfolio where i’m certainly more footloose and fancy free?

The answer is yes it did. I like to bottom fish, buy ‘cheap commodities’ and short as well as buy ‘quality’ or ‘value’ companies for real. It’s looking like my NAPs approach works better. I didn’t post my picks at the start of 2015 so you’ll have to take my word for it, but over the year they showed a gain of 24.2%.

CWK Cranswick
KLR Keller
HWDN Howden Joinery
IRV Interserve
WTM Waterman
BVXP Bioventix
ETQ Energy Technique
LTHM James Latham
SPRP Sprue Aegis
UNG Universe
VLK Vislink
ZYT Zytronic

Quite impressive against FTSE 250’s gain of c. 9% and Aim all share gain of c. 4%. But Ed Crofts mechanical NAPS made 43.4%!! Thats really quite impressive.

With this in mind i select my 2016 NAPS. Can i beat the mechanical Stockopedia NAPS or does my human subjectivity lead me to under perform again….

Ok so like so many i’ve neglected to update my blog given everything else going on. New job, new home etc. I am reading as much as ever and adding to my ever growing watchlist of ‘potential’ companies.

I’ve been putting new funds into minting over the last few months. The whole sector has been an absolute disaster for investors over the past 18 months with concerns about global growth, access to funding/capital and falling prices for metals. Bombed out…. the perfect place to go looking for bargains.

The problem is that there are cheap miners out there….but they just keep getting cheaper. No-one can call the bottom, but at current valuations i’m thinking it cant be too much further (but i really cant back that view up).

What with the recent dive in the price of gold, gold miners have been hammered furthermore. I don’t know much about gold or what the price of it will be, but it seems to make sense to me that it will not stay below its cost to extract for long – currently somewhere in the region of $1150/oz  on average across the world. I also believe that the whole mining sector will pick up, metals prices will recover. Many companies will go bust, but pick the survivors and i believe you’ll have a multi-baggers galore.

Gold miners with the financial capacity to survive a short to medium term drop of gold below these levels are probably the safest bets (but then they arent quite as bombed out (cheap) as some of the less financially strong).

I want to remember the pessimism and valuations that exist now, because if and when things change, it’s easy to forget. It’ll reinforce my confidence as a value/contrarian minded investor.


My end of first calendar year investing review and yes its very late! I had written but not published. I thought it might still be of interest to some so hear it is….with a couple of updates clearly marked.

I will try and keep this to an analysis of my trades in 2012. The good, the bad, the ugly. I only really started 5 months ago but it’s a new year and seems appropriate to look back.

Gulf Keystone Petroleum – GKP – What a share! For many GKP will lead to early retirement in the sun or financial ruin. People seem prepared to bet it all on this one. Poetry and dreams shared on message boards show how some have fallen head over heels in love. GKP illustrates my growing maturity as an investor as I was almost swept along in the hype, tempted to pile in. Since those heady days I have come to view GKP in a more objective way, understanding the risks (and there are risks!) and potential catalysts along the way. Importanly I also understand that this is not a magic amazing investment, a one of a kind, but that in fact there are many oppurtunities that offer perhaps better risk/reward.
I bought in at just over 200p but sold over half my holding at a slight loss when the case did not finish early and now the judge takes his three months to consider the evidence. I will add a little more nearer the end of the court case hoping for a short term re-rating as the case ends and takeover rumours ignite. The court case sounds tenuous, GKP likely to win. From then on it’s a bet on Iraq politics and the chances of a takeover. Yes oil will find a way eventually, but perhaps not for many years and without future better buying opportunities. I will be looking to be out of GKP before mid 2013 as Exxon are due to start drilling in an Iraq/Kurdistan disputed area, the commencement of which Iraq says will lead to armed conflict. Cue share price plunge…. And then rise again when a ceasefire is brokered shortly afterwards. Blimey, there’s the danger I might convince some people I actually know what I’m talking about here!

Update: Ive since sold two thirds of my position as the court case didnt end early. Result is due in two months and i expect a slow drift downwards during the vacuum.

Frontier Mining – FML – Ok I confess I don’t know what prompted me to buy these! I’m no expert on mining and I don’t even know all the facts. Asking for it aren’t I! At a glance though I’m still keen despite this being my biggest loss so far. It’s drifting downward on no news as the newly producing mine is shut down during the harsh Kazakhstan winter. I believe that some spring 2013, this could re rate as the mine starts producing and people realise that its not just a tin pot explorer anymore. The company has low investor sentiment after missing targets and poorly communicating last year. I think this presents a buying opportunity at these levels.
What I’ve learnt is that market sentiment, and trend, really need to be taken into account to get the best possible entry and exit points. I could have thought to myself, hold on, wait, the SP is drifting down, there are no likely catalysts in the next few months, hold your fire.

UPDATE: mining stocks rose along with other shares during the last 3 months, Frontier are back at the level I bought them hoorah. I continue to hold.

Thalassa Holdings and Northbridge Industrial -THAL and NBI – I’ll cover these together as they are at about the same level as that at which I bought. Again I am not 100% clear why I bought these. They both offer somewhat attractive P/E ratios and seem to be trading well. But on the whole I believe there are better bargains to be had, despite them being good companies. I think results in early 2013 will be positive and I’ll likely sell at some point to free up cash. These were really amongst my earlier purchases and I was keen to get involved and own shares. I wanted to make money and didn’t appreciate the number of potential investments I would come across. I have absolutely learnt to invest only when I have high conviction – that opportunities will present themselves and to wait for the right ones.

UPDATE: idid sell NBI for a small profit but held THAL after further analysis…. Great decision they have tripled on new contracts 🙂

Trinity Mirror – TNI – Oh how I’ve admired this share since it was low but never really believed it would re-rate. I put this down to my initial disbelief( from being a beginner) rather than on TNIs merits. I eventually bought in at about 70p only for it to hit my stop loss, then take off again Seversl weeks later. Since then I’ve kept out as I believe the phone hacking claims will lead to a better buying opportunity.
Capital Drilling – CAPD – The biggest success so far. Tipped on twitter by WShak the Motley Fool stalwart. Brief invetigations showed that the days 40% drop corresponded to news of its customer Centamins (CEY) mine being shut again in Egypt. CAPD was already cheap by most measures, was now silly cheap and was not reliant on CEY. This seemed a no brainer and sure enough large gains were mades within a week as the Egypt mine reopened. Its currently at 34.6p and still cheap. I’m glad I took this opportunity, profiting from market over reactions is something I’m looking to do more in 2013. Regular use of Twitter and message boards should help me do this.

Nostra Terra – NTOG – A recent buy on the tip of a well known private investor/blog owner BrokerManDaniel. Recent well results wre good and he obviously believes that well results due soon for nearby wells have positive read across. It all sounds plausible and im happy to take a small punt with near term catalyst. Ill tell you what i’ve learnt from this once well results are out :-p UPDATE: results were good and I sold out on a rise. Decent profit.

ViaNet – VNET – A paulypilot favourite. Software developer for restaurants/bars who want to track drinks sales from the tap. Fairly easy idea to understand. Definately scalable. The company has undergone a transformation away from petrol forecourt systems in previous years so i think this company is somewhat misunderstood but will be re-discovered by investors if it can start producing good results. UPDATE: Underwhelming full yr results have pushed the SP lower. I continue to hold.

CarpetRight – CPR – Short – How can somethign so right be so wrong? Daring feats of levitation by Caprpetright keep its on a P/E of somethign like 50. Ridiculous. I’m even on this at present and wondering how much patience i have left. Recent results were in my view disappointing, they still make bugger all profit and Europe has worsened for them. Perhaps at some point some owners will wake up to the ridiculous magic carpet ride and sell leading to a re-rating.
This has reminded me that the market can defy logic, and of the famous phrase attributed to Keynes i think that the market can stay wrong longer than you can stay solvent.

JPR – Johnston Press – Short – I lost money as this rose and hit my stop following a results announcement that i took as fairly negative considering their significant troubles (debt, newspapers, cash flow etc) Obviously the market disagreed and i lost a small amount of money quite easily. I havnt researched this company further sice but at the time i don’t remember thinking this company has a great chance of survival. Nevertheless am i prepared to disagree with the market in the short to medium turn, risking untold losses if im wrong? No. Another trade that reminded me of the importance of market sentiment. Focusing on company fundamentals alone is not enough (in the short or medium term at least).

Falkland Island Oil and Gas – FOGL – A short term trade. Massive interest in this as results for the potentially massive Loligo well were due imminently. The market took a sudden drop just as results were expected. I speculated that this might be a news leak. Who knows but the drill result was disappointing and the share price dropped.

FGP – FirstGroup – Large company with debt expecting to maintain the dividend which was something silly over 10%. Maybe it was 13%. I bought prior to trading update and expected the price to rise once dividen guidance was maintained. Well the price didnt really react. Normally high yields are a sign that the market believes the dividend will be cut. It was only a short term idea so i sold out for about evens.

SRT – Software Technology – Very small loss. I tried to buy in before a results statement and the results weren’t as great as we all hoped. They still have a great product and the market is potentially huge but orders aren’t coming in . Could be great investment but its been a bit of a let down for past couple of years.
I’ve been reminded that buying in advance of results may or may not work. It helps if you have an insight the market doesnt – i remember years ago seeing SuperDry clothing everywhere and planned to buy in before the following results announcement….i wish i had!

SnoozeBox – ZZZ – Highlighted on Paulypilots blog. very intereting idea about portable temporary accomodation in refurbished shippig containers. It rallied well following positive trading updates. Rebooking rates are high but i sold once the value of the company started to look high for an unproven company still in its first year i believe.

Chariot Oil and Gas – CHAR – Message board rumours persuaded me to take a small position. Nothing happened. Price drifted. Only buy on your own conviction i no tell myself.
Aurelian Oil and Gas – AUL – Looked attractive in that last RNS said management were about to come to a decision about the companies future. Without going into the whole story this was likely to be a good strategic decision for the company. Made a small profit.

IndigoVision – IND – Another Paulypilot highlighted company. Very bullish trading statement about growth rates in its markets and wanting to match or exceed this. Following RNS was less enthusiastic and the share price reflectd this. Without such 20% growth promise i sold at a loss.

PV Crystalox Solar – PVCS – I’ve writen this up previously on my blog and on the Motley Fool message boards. I still hold at a paper gain and expect this to rise further until management disclose the restructuring terms and most importantly the cash return. 90m euros in cash. 50m euro mkt cap even after recent gains.

All in all I have learnt a lot and I am enjoying my new ‘part time job’.

Some recent bulletin board discussion has caught my eye and i’ve bought some Bowleven. They recently made a potentially significant discovery and the market barely reacted. I’m in and waiting for the share price to catch up.

I forgot to post that i added to my CAPD position 2 days ago. Fortunately as the trading update i was pre-empting came out early – today! I read it as good and so did the market – up nearly 10% today.…

The key points are:
There was a slowdown towards end of yr, ‘but fear of decreasing capital expenditure by miners is over done here:

‘We have also received confirmation of drilling activities from clients representing approximately 90% of our forecast revenue for 2013.”

They have planned reduction in capex 2013 which was 30m this yr. So next year if revenue is anything like this years, they will be throwing off cash, enough to fully pay off the modest 22m pounds of debt.

It was on a p/e of under 4, so its still cheap. I’m aiming for this to double and am happy to hold this long term.

Here is a good article explaining CAPE. CAPE is basically a way of telling how reasonably priced the whole market is. At the top of a bubble CAPE will be high, and in a slump, low.

If this was boiled down to one lesson it would mean to take caution when CAPE is high, be greedy when others are fearful ie when CAPE is low. This is because historically CAPE returns to its long run average.

An alternative approach to stock market forecasts

UK Value Investor is a great site for those wishing to beat the market investing in large FTSE companies but with little effort. I think there might be a small subscription charge but Johns Kingham’s methods are pure common sense.