Bargain shopping

I feel much better about the stock market crash after a spot of bargain hunting over the last two days.

I mentioned in my last blog that I had decided to use some of my spare cash post-mortgage to take out an interest free loan for £4,000 payable in September 2021.

The cash came through today, but I had enough in my account to spend half of it yesterday and the other half today.

My purchase yesterday was in my SIPP, where uploading £2,000 means I get £500 from the tax man in May. I bought 1,253 shares in CAML:Central Asia Metals at 158.6p costing £1,999.21 with commission. The bid price is already up to 162.6p so these are starting to pay their way.

This takes my overall SIPP holding to 4,253 shares and reduces my weighted average cost from 196.6p to 189.7p. They cost £8,090 altogether and are now losing £1,187 (15%), but there's a dividend due soon, and last year it was 8p. Production has been good so I'm hoping it will be maintained, which would give me £340 and is due around the same time as my tax rebate.

An 8p dividend is 4.2%, but this is just the 6-month dividend. Total is likely to be 14.5p which is £616 or 7.6%.

When the share price goes back up to where it's meant to be at 340p, I'll be sitting on £6,357 paper profit, and even a 6% dividend at 340p would be 20.4p, which for me would be a dividend of £867 (10.7%).

I really shouldn't dismiss the beauty of buying a good dividend paying company cheap, as the annual return on the initial investment just gets better and better. Unfortunately I have precious few stocks like this, but aim to increase them as I ditch the more risky shares.

My second purchase was this morning, when I loaded the other £2,000 into my ISA and bought 4,657 shares in OPTI:Optibiotix. I had to at these prices, even though I'm already so heavily exposed. They cost 42.78p each and were registered on the trading stats as a sell, which is ridiculous. Cost including commission was £2,004.21.

So, my holding has increased to 109,989 shares costing a weighted average of 64.66p. This purchase reduced the average price in my ISA from 65.38p to 63.56p. I really, really hope this is the last opportunity I get to buy them cheap!

They only climbed 1p on the bid price today, so I'm still down on the ones I bought, although it's more expensive to buy them now than it was this morning. Now it's just a case of battening down the hatches and waiting for the current madness to blow over.

The portfolio isn't doing great after the first 2 days of this week. It's down £4,109 right now, but that's better than the £6,000 down at the end of play yesterday. It's worrying that the FTSE100 lost all its early gains to finish slightly in the red, particularly when the US markets are on the rise.

I don't usually time these purchases very well, but both these are at multi-year lows, so given both companies are doing so well, it's hard to think it won't be a good long term buy.