Investment Strategies

Slack IPO, Web Privacy and Sell on Monday

The IPO of Slack in the USA has received a lot of media coverage. This is one of those technology stocks that is on what at first glance is a sky-high valuation. Slack provides workplace collaboration software and last year had revenues of $400 million, and lost $140 million. The market cap is now around $20 billion which means it is valued at about 50 times revenue. Those are the negative numbers. The positive aspect is that it roughly doubled revenue ...

Will Neil Woodford Succeed?

How long do you give a fund manager before giving up on poor performance? This is the key question faced by investors in the funds run by Neil Woodford and his Woodford Investment Management company. Neil Woodford had a very successful record at Invesco – their High Income fund turned £10,000 into £230,000 over 25 years. In 2014 he departed to set up his own investment company and he attracted many followers to the new platform but the record since then has ...

Interserve Administration: I am very angry!

I attended Interserve's General Meeting today and I am... ...angry with major shareholders, who didn't hold the board to account and couldn't be bothered to speak or vote today. ...angry with former board members who, in my opinion, did not properly exercise their corporate governance responsibilities. ...and angry with former executives who drove the Interserve ship onto the rocks... and were still well-rewarded. In short, a massive failure of corporate governance and corporate stewardship. Those responsible should hang their heads in shame. Government should consider ...

More Words of Wisdom from Warren Buffett

Warren Buffett has published his latest annual letter for investors in Berkshire Hathaway (see http://berkshirehathaway.com/letters/2018ltr.pdf). These letters are always worth reading for their insight into how a successful stock market investor thinks. I’ll pick out a few highlights: Berkshire’s per share book value only rose by 0.4% in 2018 but he assigns that to the need to write down $20.6 billion on his investment holdings in unlisted companies due to new GAAP accounting rules using “mark-to-market” principles. He is not happy about ...

Gooch & Housego and Sectors to Avoid

Today Gooch & Housego (GHH), a photonic components manufacturer, held its Annual General Meeting in Ilminster, Somerset. I would have attended as a shareholder except the time of 11.00 am would have meant a very early start. As it was, the trading update issued in the morning prompted me to sell my holding anyway. The key negative in the announcement was this: “Looking forward, we believe timing and mix will result in a FY 2019 group trading performance showing low single digit ...

AssetCo, Patisserie, Stockpiling, Warehouses, Sheds, Brexit and Venezuela

A week ago, an award of damages of £21 million plus interest and costs was made against Grant Thornton for their breach of duty when acting as auditors of AssetCo Plc (ASTO) in 2009/10. See https://www.bailii.org/ew/cases/EWHC/Comm/2019/150.html for the full judgement. I understand Grant Thornton may appeal. These are the key sentences in the judgement: It is common ground that in those years the senior management team at AssetCo behaved in a way that was fundamentally dishonest. During the audit process management made ...

Bogle Death, Patisserie and Diploma AGM

The death of John Bogle has been announced at the age of 89. He wrote several very informative books on investment and was the founder of Vanguard which has grown into one of the largest mutual fund managers by promoting index fund management. He also promoted the idea that the investors should own the fund manager. He suffered from heart attacks from a young age, the first at age 31, and actually had a heart transplant in 1990. So in some ...

Market Bouncing Up or Down – Sophos, Greggs, Apple and Fundsmith

After a dire market performance before Xmas, we seem to be back to the good times in the last 3 days. Is it time to get back into the market for those who moved into cash as the market fell down and down and down in the autumn? Rather early to generalise I suggest although I have been picking up some shares recently. One which I purchased a small holding in was Softcat (SCT). Yesterday it issued a trading update simply saying ...

IC Share Tips, National Grid, Brexit and the Audit Market

This week’s Investors Chronicle edition (dated 28/12/2018) provides lots of food for thought. One of the most educational is their review of the share tips they published as “tips of the week” in 2018. Unlike some investment publications, who simply forget about their past tips that go nowhere, while lauding their hits, the IC is open about their performance. They issued 173 “BUY” tips and 24 “SELL” tips in the year. That is quite some achievement by itself as I rarely have ...

Market Trends, Interest Rates, Glaxo and Yu Group Accounts

Yesterday was another dismal day in the markets. The US fell significantly allegedly caused by the rise in interest rates announced by the Federal Reserve and the UK market followed it down this morning. The US rate rise was widely expected although perhaps slightly lower estimates for US economic growth had an impact. But when the markets are in a bear mood, excuses for selling abound. Meanwhile the Bank of England has announced today that their base rate will remain at ...