imutual.co.uk

Members and others reading,

It would seem that a number of shares have now, or are looking very likely to soon, return to their pre-lockdown share price level.

- Pure Gold has done that and more due to various reasons
- Codemasters is now back to exactly where it was
- Warehouse REIT is almost there and I don't see any reason why it won't get there very soon

However, two of the shares we have bought more recently have not got back to anywhere near such levels yet, although they have both ebbed and flowed.

- Ramsdens has risen a bit and fallen back on a few occasions, but still fallen ~100p short of pre-lockdown levels.
- Bakkavor fell back to around the current level but also jumped to above 100p for a while before falling back to where is it now. either way it is still 50% down on pre-lockdown levels.

So what I am thinking about now things have settled a bit is whether we can take advantage of any of these factors to significantly grow our portfolio value?

- Pure Gold offers a potentially massive opportunity but is more of a longer term view to realise a large profit, at least that's what discussions around the company have suggested online. It has already grown by a big percentage as it stands but when people talk of the value potentially becoming several pounds rather than the sub £1 value it currently has it does put potential growth into a different perspective.

- What has happened at Bakkavor, a food company, to make it now worth half what it was worth pre-lockdown? Some discussion has centered around whether their debt is sustainable, but I'm not sure "how much more debt they have acquired" since lockdown and why this wouldn't have been a concern before. People have to eat and this company offers seemingly good value products against the branded equivalents. So what is stopping a big rise in price back to where it was? Is this a big opportunity for us to put some quick value into our portfolio when reality hits and the price re-adjusts?

- How has Ramsdens been affected? All their shops are closed and they deal in foreign exchange, which is not generally needed right now. If they re-open soon, how much will the foreign exchange element impinge on the business turnover and profitability? Gold is doing very well, so how much stock of it do they have? Is there opportunity for us here or not?

I'd be very interested to hear the views of everyone about the above, as well as whether we just forget the shares we have learnt a bit about in favour of just following a tipster's view as a next investment.

I think we need to gather thoughts here and react before any opportunities we do have available disappear in this recovering market.

Interesting thoughts

Seems a good idea to buy if we had the funds

but if not,

how to choose what to sell?

pieman wrote: ↑

Wed May 20 2020 8:30pm

how to choose what to sell?

For me personally I would look to move on Warehouse REIT and Codemasters, the latter with much regret as I'd like us to keep it. However, there is nothing stopping us buying it back again as a additional part of the plan. Both are currently up, so that's good news anyway. If we had £2k to play with that would be nice.

It will be interesting what Thursday brings for Pure Gold Mining. It fell back a small amount from the high of today but still up by the end. I think if the gold pour goes as planned in the 4th quarter and the yield is a good as they are suggesting the price could be well in excess of the current level.

Both Warehouse REIT and Codemasters are up ~7%.

Does anyone apart from pieman (thanks!) have any thoughts about this? I don't think there will be a better opportunity to review our holdings than this as coming out of lockdown will surely act as a stabiliser and reset any shares undervalued or otherwise.

I think we need to move away from the mindset that some have of selling stocks as soon as they show a decent profit, while clinging stubbornly onto losers. Our past investments list shows a large number of stocks that we've sold at a modest profit, while our current investments list is often a sea of deep red. Also given how few active members we have, I think we should reduce the number of stocks we hold so we can focus on just a few and get a better idea of their future prospects

I would start by offloading our "blue chip" stocks: Vodafone, Aviva, ITV - but only once we've decided where to reinvest; sitting on cash would be unwise at the moment

It's true that these are solid companies that may well rebound in the coming months, but they'd have to increase by a huge amount to make up all the lost ground and be worth bothering about

richard@imutual wrote: ↑

Fri May 22 2020 2:55pm

I think we need to move away from the mindset that some have of selling stocks as soon as they show a decent profit, while clinging stubbornly onto losers. Our past investments list shows a large number of stocks that we've sold at a modest profit, while our current investments list is often a sea of deep red. Also given how few active members we have, I think we should reduce the number of stocks we hold so we can focus on just a few and get a better idea of their future prospects

I would start by offloading our "blue chip" stocks: Vodafone, Aviva, ITV - but only once we've decided where to reinvest; sitting on cash would be unwise at the moment

It's true that these are solid companies that may well rebound in the coming months, but they'd have to increase by a huge amount to make up all the lost ground and be worth bothering about

I'm happy to sell Vodafone, Aviva, ITV - but only once we've achieved a profit.

AAAlphaThunder wrote: ↑

Fri May 22 2020 4:51pm

I'm happy to sell Vodafone, Aviva, ITV - but only once we've achieved a profit.

That's not the right way to think about it, though. You've got to believe that ITV, for example, will race faster than the other alternative. Making profit on each individual share is not the point. Maybe ITV will get back into the black for us, but maybe that'll take longer than jumping off now and riding another horse for a bit. You can always jump back on ITV later in the day, with more cash in your pocket to do it.

I've not given much though to this, but I'll have a look over the weekend. I can see the reason to sell pGM, the rest, less so. But I agree that something like ITV - reliant on ads and with production costs likely to increase - I can't see huge promise in the short term.

richard@imutual wrote: ↑

Fri May 22 2020 2:55pm

I think we need to move away from the mindset that some have of selling stocks as soon as they show a decent profit

In this instance it not what I am suggesting - I'm suggesting we release some cash, from a share and put it to better use in something like Pure Gold Mining. There is significantly decent looking support for this share and it is considerably up at the moment, so we'd be moving on a share or two that are already making us money into this one. Additionally, you have to wonder how the two shares that have bumped up and down (Ramsdens and Bakkavor) are worth such a considerably lower amount as before. I've not seen anything to suggest their current value is warranted. If we don't look at opportunities to invest some of our larger sums of money into shares like these then is it possible we'll miss the boat once again. Since lockdown we have missed many boats and they can't all have sailed yet.

richard@imutual wrote: ↑

Fri May 22 2020 2:55pm

I would start by offloading our "blue chip" stocks: Vodafone, Aviva, ITV - but only once we've decided where to reinvest; sitting on cash would be unwise at the moment

The trouble is these are in an even more depressed state than before and the total sum available from selling them all is still vastly less than selling say Warehouse REIT, which is an income share and isn't ever going to cause much excitement at all. 6-10% a year is clearly nothing to sniff at but it's one you just keep holding and the Club has shown a dislike to sitting on shares and there being no "action".

So we have today sold WarehouseREIT for a fair but not overly exciting profit. That means we do now have funds to invest and invest we should, as Richard has rightly said, having cash is not a good policy at the moment. We have, as far as I see it, two choices.

1) Invest in the same way, as we did for each of the past several purchases by choosing from a list of shares recently tipped.

2) Invest using knowledge of our current shares and taking current circumstances into account, as an exceptional circumstance, to further invest in a share we own - Bakkavor, Codemasters, Ramsdens or Pure Gold Mining.

My overriding concern is we do something positive with our money. It would be excellent to try and take advantage of the share price dip seen in stocks that have not recovered yet (whether it be one we currently own or not) or make a more bold step in choosing Pure Gold Mining, where we could potentially see some serious movement.

I would very much appreciate a quick poll to choose direction in these odd times, which I have added to the thread.