Thursday 29 June 2017

Loss on Aquatic Food vindicated

Ever since I sold my holding in AFG:Aquatic Food I've been wondering if I did the right thing. Taking a £1,100 loss to "rescue" £900 would only be justified if AFG:Aquatic Food went belly up.

I didn't want it to, as that would pretty much write off any trust in a Chinese company on AIM, as this one seemed like the real deal.

Today they announced the suspension of shares on AIM due to difficulties getting money out of China to pay for the annual accounts to be completed before the regulatory cutoff date on 30th June.

Well, that's them screwed then!

This has been a painful lesson, but one which I hope will help me in the future

1) Avoid any Chinese stocks on AIM - in fact, given the RapidCloud debacle when I fortunately got out in time, could extend to most Asian stocks as they were based in Malaysia.

2) If it looks too good to be true then it probably is

3) AIM is rife with fraud. The regulation is pitiful and private investors are seriously exposed to being ripped off

It's not just Asia though - Africa has come up with similar stocks. I'm likely to lose my £700 in AFPO:African Potash, as that's just extending the agony with very little hope of survival.

At least my disasterous UK companies BLUR:Blur Group and TRK:Torotrak are only going to go under because of crappy business models or unsellable products - there's no question of fraud, just incompetence. Fortunately the losses when these go under will be minuscule, as they were from the first few weeks of investing when I wasn't aware of the impacts of spread and commission on small purchases.

So it's been a salutary lesson, and one I hope will improve my future decisions...


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