One of our members had been following Thomas cook after its fall from the heady heights of £2 per share to the low of 5p. In his opinion the market had over reacted and the problems Thomas cook were facing had been somewhat resolved. By the time we took the plunge they had reached 18.5p already not a bad return for those who took the risk at 5p. We held TCG for only 4 days and have just sold them for a massive 50% profit at 29p. This secures the club in the black, the clubs current value compared to the amount invested in it showing a healthy profit for the first time in a good couple of years. We are continuing to keep an eye on the stock to see if we can buy back in if the price retreats some. Though it has retreated from our sale price it has yet to hit our buy back point. Watch this space.
Severfield Rowen hit the thin air of 220p recently though that still leaves us down on our investment it was a good sign. Unfortunately over the past few days it has retreated some to around 200p. Still a bargain and now that a price of 220p has been tested we may consider increasing our holdings.
After the impact of PPI was factored in Lloyds didn’t perform to badly. The headline figures have damaged the share price somewhat but not overly and we see it hitting our target price if 38p within the short term future.
You can’t win them all. Bad headlines around Tesco’s participation in the questionable workfare program have hit the share price driving it back down. We still agree with Warren Buffet on this the share is under valued. Tesco’s profitability is their and headlines like these blow over. The only outcome of this maybe an increase in the wage bill as they start paying people that work there, heaven forbid.
We decided the ISF had hit a ceiling. There seems to be a lot of resistance to the ftse going over 6000. The percentages involved meant we would see little change in profit above 590 but below 600 so we sold at 590. On a plus point and very much by accident we sold once the share had gone exDiv giving us a surprise extra profit of a further 1%.
Well the market seems quite positive today. Decent upwards moves in Tescos and Lloyds. The ftse 100 is green and although we lost a bit on SFR at the end of last week its recovered a little.
Currently we are considering taking the profit on our ISF shares, however their is some optimism that the slow upward march may continue for a while and we may reach our dream target of 600. As currently stands if tescos and lloyds continue heading up we may be taking our 10% profit soon, that said again some dissention about keeping tescos longer term and hoping for a higher return.
We generally try to be regimented with our dealing. It has stung us bad in the past keeping hold of something to long, wither by losing out on a decent profit or by making a heavier loss. We now identify things at purchase as short, mid or long term. Short term shares are sold when we end up 10% up or down pretty much automatically (though we don’t trust profit loss transactions as we’ve been burned by them.) Mid term have decision made when they reach 10% up or down as to sell them or not. Long term are only sold if a significant profit is made, we are unconcerned by short term reductions in share price other than using them as an opportunity to increase our holding. At the moment all our shares are mid term apart from sfr which is a long term.
As i stated in a previous blog we have held Lloyds several times in the last 6 months. We effectively noticed that the price would cycle with the bad news from a low of 30p to i high of around 36p. A very nice 20%. Being small time we struggled to catch the peaks and troughs but managed to buy low and sell high enough to earn 10% each time. We always re-invested only the original stake and placed the profit in our cash reserve, so we ended up earning 30% on our investment in around about 4 months. We stayed in to long though just before Christmas we bought back in at what we believed was a new low. Subsequently the price dropped further and we were about 10% down. We have now recovered this and are well on our way to 10% up again.
Our current thinking is to get out once we get to 10% as even though the bad news does seem to have dried up somewhat, we believe the price will remain suppressed for some time. The market has factored in that the government have a large share holding and we won’t see triple figures until that stack is released to private investors. So its a good long term prospect but its one that we don’t have to buy now. We can use our funds on hopefully more productive stocks and leave Lloyds for a later date.
Very off topic, but I have to blog about Spree4.com.
I Used spree4 a while back and go some very cheap Amazon vouchers. I loved than their customer support and very much the prices you could get. Spree4 is one of those site’s were you pay to take part in an auction. The money from all the participants is added together and someone gets an amazingly cheap product (in my case £50 Amazon voucher for £10!!). Their auctions work so that you pay to see the current price, you than decide if you want to pay that price. If you don’t than the next person to look is shown a lower price as some of the money you paid to see the price of the product comes of the current price. There was one other auction type where the product could not be bought unless the current price was less than £10. I’ve been on several site’s like this and i didn’t like them, most of them have those daft ones were every time you bid it adds a minute to timer. I very much liked spree4’s no catches approach.
This week I received and email from Sarah who is a customer service rep at Spree4. She told me about their new auction type and even said they’d give me some free credits to try it. Their new auction type is the lowest unique bid auction. Most people will now what this is, but i really like Spree4’s implementation. The auction closes when the number of bids reaches a predefined limit, which is not hidden. You even get a nifty little gauge to tell you how close it is to closing. Myself i like to make a few tactical bids so I’m not to worried about waiting til its going to close to make my bids, but i can see that some people would just like to swoop in at the end. Sarah was happy to respond to my questions over mail, and just reiterated the good customer service i have come to expect from them. I’ve also got to say I love the new styling of the sight very nice and very ergonomic.
They’ve got some good products on there to. As ever I’m interested in the Amazon voucher, I’ve also been considering getting a kindle for some time now so fingers crossed for that one to. Sarah informed me that thanks to the Lowest unique bid auctions they hope to be a lot more dynamic with the products they offer and hope to “keep offering the hottest products at the cheap prices.”
I can’t recommend spree4.com enough.
severfield rowen is a stock we’ve held on and off for a few years now. They are a steel manufacturing company. They came to our attention when we noticed that the market had factored in the economic down turn twice on their share price. Our thinking was that once the market realised their mistake the shares would go considerable up. Which they did and we made a healthy profit. We than made the mistake of buying back in at around 15% less than our previous sale. At this point the continued un-ease at the state of the economy added to SFR themselves saying profits would be down for the next few years hit the share price a lot and we ended up 30% down. A while after that the market again factored in the un-ease at the state of the economy and the shares fell to 150p. Yet again we saw what others hadn’t that nothing had changed for sfr and the reason for the drop in share price had already been factored in at 190p. So we bought a 2nd holding in SFR. We sold this 2nd holding when the price returned to 190p.
As SFR pay reasonable dividends and seem in no immediate risk of further reduced profits or market share. We are happy to keep this as a long term holding. Our target price being 300p within the next 3 years.
Our most recent purchase was Tescos which in true Warren Buffet style was bought when everyone else was selling. I was delighted to find today that buffet had also bought at this stage. We held tescos early this year and made around 5% profit on them at a much greater share price than they currently are.
While I appreciate this is not an indication of future price, we believe their was an over reaction to the profit warning from tescos. Though the short term prospects aren’t as good its still a very good long term bet. We hope to see at least 10% in the short term and will make at that point a decision on keeping hold of them or taking the 10%.
Memoirs of a Small Investor 