The biggest loser was IKA:Ilika which had seen a recent rally, but that was reversed as the price dropped 9% and is back to being 50% down. It's going to be difficult for this company to make money as they are so focused on their science, but not on selling anything.
JLP:Jubilee Metals had seen a really strong rally. In fact I nearly bought some with my pension transfer last week. I'm glad I didn't as the rally has gone into full reversal and they dropped 6% this week to go 15% down altogether.
RDT:Rosslyn Data have been stagnating for months, with the share price rarely moving. This week they gave a trading update, and that resulted in a 5% drop. I'm surprised it wasn't more, as they are showing no signs of making a profit.
TLOU:Tlou Energy is another share that I hoped was moving in the right direction, but this week dropped 5% to go 45% down. I'm hoping this was traders profit taking, as my optimism for this company hasn't been dimmed.
Only one share gained by a decent margin this week, and fortunately it was CAML:Central Asia Metals which is one of my biggest holdings. They gained 5% and so my only profitable share is up by 11% overall. If you include dividend income it's up by 36%, such is the remarkable quality of my best-run company. A worthy winner of Share of the Week.
A horrible, horrible sight. Merry Christmas!
Back below the trend line. Oh joy!
Here's my ISA and share portfolios
| Weekly Change | |||
| Cash | £15.74 | +£0 | |
| Portfolio cost | £57,768.95 | +£0 | |
| Portfolio sell value (bid price-commission) | £35,596.08 | (-38.4%) | -£1,782.89 |
| Potential profits | £0 | +£0 | |
| Yr 5 Dividends | £0.63 | +£0 | |
| Yr 5 Profit from sales | £-167.28 | +£0 | |
| Yr 5 Average monthly cash profit | -£41.43 | (-0.9%) | +£2.30 |
| Total Dividends | £1,342.93 | +£0 | |
| Total Profit from sales | £20,224.13 | +£0 | |
| Average monthly cash profit | £407.76 | (8.5%) | -£1.81 |
| (Sold stocks profit + Dividends - Fees / Months) | |||
| Performance/Injection | 13.1% | -0.1% | |
| Compound performance | 57% | +0% |
Lots of reasons why the value dropped this week, with all my biggest losers coming from this account. OPTI:Optibiotix dropped another 2p and accounts for a big chunk of the fall.
Frustrating that the more excited I get about the prospects for OPTI, the further the share price falls. When the recovery comes, which it will, the rise will be shocking and immense. If I had the slightest doubt it would happen, I wouldn't keep piling in more money.
My paper loss on OPTI is now £20,045 which is terrifying. It's still by far my favourite share. Products are now being actively marketed in India. When the licence fees and royalties start coming in from those, there will be no holding us back. We haven't even started commercialising Sweetbiotix and LPGOS yet.
Maybe I'm being stupid and missing something blindingly obvious. All I can see is a company with a very low and fixed cost base, with scientifically proven products in an emerging market, with a global reach in an area of massive un-met demand, and with an income model that gets revenues from manufacturing raw ingredients, producing products containing the ingredients, and selling those products to consumers. Add to that the fact there are less than 100 million shares in circulation, and the fact we own a big chunk of SBTX:SkinBioTherapeutics means we can get cash whenever we need it without dilution.
Is it me? Am I missing something blindingly obvious?
Bugger - below the dreaded orange line. The worst possible metric.
The only ray of hope is that it's been worse.
The SIPP looks like this after week 211
| Weekly Change | ||||
| Cash | £90.96 | +£0 | ||
| Portfolio cost | £46,995.31 | +£0 | ||
| Portfolio sell value (bid price - commission) |
£33,120.92 | (-29.5%) | -£799.35 | |
| Potential profits | £662.97 | +£330.00 | ||
| Yr 5 Dividends | £0 | +£0 | ||
| Yr 5 Interest | £0 | +£0 | ||
| Yr 5 Profit from sales | £0 | +£0 | ||
| Yr 5 Average monthly cash profit | -£17.86 | (-0.5%) | +£8.92 | |
| Total Dividends | £1,899.24 | +£0 | ||
| Total Interest | £0.17 | +£0 | ||
| Total Profit from sales | £12,549.10 | +£0 | ||
| Average monthly cash profit | £287.37 | (7.3%) | -£1.37 | |
| (Sold stocks profit + Dividends - Fees / Months) | ||||
| Performance/Injection | 11.5% | -0.1% | ||
| Compound performance | 47% | +0% |
The drop in value from the OPTI:Optibiotix slide was mitigated by the £330 increase in potential profit for CAML:Central Asia Metals. Not much change apart from that.
This account absolutely has to stay above the injection line else I'll be devastated.
It may be above the injection line, but it's below the trend line.
The trading portfolio looks like this after 177 weeks
| Weekly Change | |||
| Cash | £48.24 | +£0 | |
| Portfolio cost | £2,321.29 | +£0 | |
| Portfolio sell value (bid price - commission) | £1,242.07 | (-46.5%) | +£2.82 |
| Potential profits | £0 | +£0 | |
| Year 4 Dividends | £13.20 | +£0 | |
| Year 4 Profit | £0 | +£0 | |
| Yr 4 Average monthly cash profit | £2.72 | (1.4%) | -£0.14 |
| Dividends | £47.92 | +£0 | |
| Profit from sales | -£64.29 | +£0 | |
| Average monthly cash profit | -£0.40 | (-0.2%) | +£0 |
| (Sold stocks profit + Dividends - Fees / Months) | |||
| Performance/Injection | -0.2% | +0% | |
| Compound performance | -1% | +0% |
The rise in CAML:Central Asia Metals was almost erased by drops in everything else, so still a general feeling of misery despite it being a blue week.
I was hoping the injection line would be down to zero by now, as this account was meant to be a way of making back the interest free loan I got. So far I would have been better off putting it all in a building society account.
Sneaking back towards the trend line but still below it.
I decided to try an experiment. I have recently re-read "The Little Book That Beats The Market" by Joel Greenblatt. He espouses the use of a "magic formula" to choose good companies that are selling at a cheap value. I really like his theory as it involves ranking companies and then using their relative ranking to show which companies have the best combination of those attributes.
One of the factors he ranks companies by is their earnings yield. For my purposes the P/E ratio gives us an equivalent, and is readily available.
The second factor is the return on capital. That's a harder one to find, but I decided to go for return on capital employed (ROCE), which unfortunately meant going through every company on Advfn and copying them from the financials one at a time.
I decided to use the FTSE350 and the AIM100 combined, as these are the top companies on the two markets. I copied the tickers from a website into an Excel spreadsheet and used the stocks data type to convert them to companies, and that gives me a dynamic link to all the P/E ratios.
I ranked them and then ranked the ROCE and added up the rank scores, and this was the result.
The idea is that you invest £1,000 in each of these and hold for a year and then sell. I'm not so sure about that - some companies in this state could take more than a year to turn around. I think I'd rather ensure I was buying companies that had entered the top 30, which would mean selling companies that were no longer in it but making a profit. I guess that also includes selling those no longer in the top 30 that are making a loss, as they are no longer a "good" company.
I think if this was real money I would have taken more care with the shares I bought. This list is heavily weighted towards house builders, and there are also some oil companies that I would steer clear of on environmental grounds.
However, for the purpose of this academic exercise, I set up a virtual portfolio in Advfn based on no more than £1,000 per share and £11.95 commission and will follow its progress as if it was real, with a view to using my future pension transfers to start buying these companies, but following a bit more due diligence. I may also transfer some of my existing SIPP cash into these when I sell the shares.
I bought my virtual portfolio the day before the election, so it did quite well on Friday.
| Weekly Change | |||
| Cash | £153.61 | -£29,846.39 | |
| Portfolio cost | £29,846.39 | +£29,846.39 | |
| Portfolio sell value (bid price - commission) | £30,724.54 | (+2.9%) | +£878.15 |
| Potential profits | £1,080.87 | +£1,080.87 | |
| Year 1 Dividends | £0 | +£0 | |
| Year 1 Profit | £0 | +£0 | |
| Yr 1 Average monthly cash profit | £0 | (0%) | +£0 |
| Dividends | £0 | +£0 | |
| Profit from sales | £0 | +£0 | |
| Average monthly cash profit | £0 | (0%) | +£0 |
| (Sold stocks profit + Dividends - Fees / Months) |
So it appears I'm a whizz investor when there's no real money involved!
I'll keep monitoring this and get to know the companies. I doubt I will buy my first share for another 4 months when my next transfer arrives, unless MMX:Minds+Machines gets into profit, as that was designed to be a short term holding. No chance of anything else in the SIPP being sold for some time, as they are either long term holdings or doomed.
It's interesting that CAML:Central Asia Metals is number 33 on the list, so is actually still a very good buy at these prices. One of my previous favourite holdings is JLG:John Laing Group, and they are number 41.
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