2013 – A Game of Two Halves

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AIM stocks, Alternative Asset Opportunities, Asta Funding, benchmarking, correlation, fear and greed, hedge funds, home bias investing, KWG Kommunale Wohnen, Petroneft Resources, portfolio allocation, portfolio performance, Richland Resources, Saga Furs, Tetragon Financial Group, Titanium Asset Management, US Oil & Gas

Yup, it’s that time of year again… [For reference, here’s my mid-year 2013 performance report, plus my FY-2012 report]. Right off the bat, I have to admit assessing annual performance isn’t my most favourite of activities (as I’ll explain). It also reminds me how easily our (personal) fear & greed equation can magically transform itself as we finish an old year & head into a new one. While most traders tend to start a new year cautiously, investors often set out brimming with over-confidence – which can prove pretty hazardous…

The UK’s AIM market, for example, has enjoyed significantly positive returns in 14 of its last 18 Januaries. This annual love-fest is even more remarkable when you realize the AIM index has declined 17% since its 1995 inception. [Growth and value investors, take note!] My favourite muppets provide a more ludicrous example: Shareholders of US Oil & Gas (USOP:G4) (I’m presuming no new suckers are buying at this point) hailed the new year by immediately buying/running up the price 60% from its yr-end close! Sure, hope springs eternal…but with most USOP investors having lost 95%+ of their investment to date, this kind of new year exuberance is wildly irrational.

Thinking about & tracking your stocks (& portfolio) on some kind of calendar basis is yet another fixated version of tracking individual stock gains/losses. And that’s how fear & greed grabs hold & encourages you to play the ‘if…‘ game. I’ve already recommended you Forget Your Purchase Price – now I recommend forgetting your Year-to-Date Gains. Free yourself of those deadly anchors, and you’ll be forced instead to look afresh at your holdings every single day. For each stock, that’s an exercise in assessing upside potential (i.e. current share price vs. your latest estimate of intrinsic value), and then weighing that reward against the level & range of risk(s) involved. Which boils down to one simple question for each of your portfolio holdings:  Should I buy, sell or hold this stock today? And your cumulative or calendar gains/losses on a stock are irrelevant to that question – no matter how small, large or goddamn painful they might be…

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Chasing Some Dividend Tail (I)..?

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AIM stocks, dividend coverage, dividend yield, Expecting Value, income/dividend bubble, pitch books, REIT/MLP sector, Richard Beddard, Stockopedia, survivorship bias, tax, tax-free compounding, The Reformed Broker, UK Value Investor

There’s been a lot of good dividend commentary & debate in the UK blogosphere recently. Stockopedia seems to have ignited the debate:

http://www.stockopedia.co.uk/content/the-dividend-puzzle-or-why-the-dividend-emperor-may-have-no-clothes-66275/

Expecting Value & UK Value Investor chimed in with these:

http://expectingvalue.com/aroundtheweb/friday-reading-29#more-2326

http://www.ukvalueinvestor.com/2012/06/how-to-find-the-best-high-yield-shares.html

AGI Therapeutics – Anatomy of a Takeover (IV)

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AGI Therapeutics, AIM stocks, compulsory acquisition, delisting risk, EUR/USD, Event Driven, Expected Value, Gross IRR, Irish shares, market-makers, Recommended Cash Offer, Risk Arbitrage, takeover offers, technical analysis

Continued from here.

OK, to recap the latter part of my previous article, I put forward 2 (hopefully strong) arguments why you should embrace (unhedged) FX risk in your event-driven investing (and, of course, elsewhere in your portfolio). With AGI Therapeutics (AGI:ID/LN), however, I essentially faced no FX risk on the deal in the end.

Remember, AGI traded in EUR (or GBP) but the takeover price was $0.1171 per share (and holders could opt for equiv. EUR proceeds). My solution was to round-trip surplus USD I had available. Yes, I’d incur a small FX spread to convert USD for my EUR share purchases, but by opting to receive USD takeover proceeds I’d eliminate subsequent FX risk, and end up back in USD cash.

Would Groucho Marx Join This Club?!

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AIM Soiree, AIM stocks, Gulf Keystone Petroleum, Hot Tuna, Leed Petroleum, logorrhea, natural resource stocks, penny dreadfuls, Petroneft Resources, Philip Fisher, scuttlebutt

You may have noticed I added a new AIM Soiree link – I see Philip O’Sullivan fell for this site also! I found it last year, and (a bit of a surprise to me) have enjoyed visiting it regularly since. Take a look, I recommend it – the design has a ’50/60s cartoon vibe (unusual for a finance website!), and it (rather smartly) ranks the Top 10 (& 100) AIM Stock Discussions from across the web.

Why the interest? Well, I’m fascinated at what pops up! Yeah, you guessed, it’s stuffed to the gills with natural resource penny dreadfuls! Oh Lord, fuck a duck… Not too much of a stretch to assume the most discussed stocks are also the most popular stocks to invest in (occasionally to short, but for the overwhelming majority it’s to go long)? And trawling through a few boards, it seems like there are plenty of people out there who believe they’ve got a well-diversified portfolio simply because they own 5 different resource stocks (not all oil stocks, you know ;-))!?! This idea’s even more insane than the stocks themselves. Got any friends like this? Can you help ’em out, buddy, please?!

Er, Throw That Fish Out – It’s Reached its Sell-By Date

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AIM stocks, garbage stocks, Hot Tuna, surf brands

On Thursday, I shared my bemusement upon rediscovering Hot Tuna (HTT:LN). Great memories, but an appalling valuation and share price history, and even more appalling management. I wondered ‘…is this the worst AIM stock ever?!?’

After a last gasp sales surge since then – yes, I believe they sold almost 50 t-shirts over the weekend – they woke up Monday morning with a God-awful hangover and empty pockets. Jeez, time to sell the rest of the t-shirts, the van, the drunk surfer girl in the corner who won’t wake up, even the damn Hot Tuna brand itself..!

Surfing Wipeout & A Charitable Plea

Tags

AIM stocks, garbage stocks, Hot Tuna, Ocean Pacific, surf brands

Hot Tuna (HTT:LN)

Mkt Price:  GBP 0.07p

Mkt Cap:  GBP 1.6 mio

Randomly came across Hot Tuna the other day, and enjoyed waxing nostalgic about wearing their surfing t-shirts years ago, I literally wore some of them to death! This prompted me to take a closer look, without much hope, at its news/financials. Wow, even more entertaining than fondly remembering their t-shirts: Good God, is this the worst AIM stock ever?!?