What a turnaround. From Q2 being a write-off at the start to making it all back, and then some by the end. Those that panic sold are probably rueing it by now.

In general news, I attended a day (out of two) of the Mello Conference in London. I didn’t get to hear many speakers, but it’s always good to hear Lord Lee espousing his views. Last year, Mello shared space with the London Investor Show and I found that much better value for money as there was lots more going on. Doesn’t sound like it will be repeated in the near future, which is a shame.

As of the start of Q3 I’m a bit ambivalent about the Market. it’s had a good run, despite the TACO tariffs and the ‘Big, beautiful, budget’ which is another step change in US Borrowing. This side of the pond, we have KACO whereby Kier Starmer has had more u-turns than a game of Snakes and Ladders. Again, Balanced budgets are going out of the window and it will be interesting (as in the apocryphal Chinese Curse) to see how the Autumn pans out. I’ve been deliberately on the sidelines, banking Dividends but being quite selective with purchases.

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9th July

DOM – Dominos Pizza – Buy

Dominos should do a Hokey Cokey pizza just for me. This is quite a cyclical share, going up and down with International Sports events and general sentiment. Definitely one for trading as far as I am concerned. I’ve been in and out twice, so this is the third time, each around the 250p mark. Last time I sold I netted a 50% return over 2 years when it briefly reached the giddy heights of 400p. Fingers crossed for a solid 350p this time.

Buy @ 250p with a d/y of 4.7% and PER of 11.6. Net debt is quite high, giving a negative Book value but I do like the Franchise model with each Branch a standalone profit unit with its own incentives to be profitable, leaving a light Corporate model.
Portfolio %: 2.7%
Total Portfolio Holdings: 2.7%

This does take me down to 3% cash now, so I need to build up some reserves before buying anything else. HSS has been a bit of a duffer for me, but it’s taking off like a rocket currently and I’m back in profit. Considering selling up whilst I’m in the money. Not convinced it’s a prospective takeover target, but why has it jumped the best part of 50% in 3 months? Hmmm.

KGH is another that has had a decent run. It’s been on a spending spree so I’m wondering if there will be any indigestion absorbing all the disparate businesses.

WPP issued a Profit Warning today. We all beat ourselves up metaphorically with those shares we sold that subsequently went up but also spare a thought where we did make the right call. I was nervous about WPP, so sold at 845p in November. Since then, it’s been a consistent black run, almost halving. A plunge after today’s profit warning puts them at 430p. Not in any rush to buy back. The advertising landscape is changing with AI having so much of an impact. WPP is a behemoth and in all likelihood will get left behind. Whilst the absolute amount is coming down, it is also sitting on a massive debt pile. Not for me anymore, Lucky to get out when I did.

GRG issued soft results recently. Don’t think they are there yet, but could be worth a look. They are a staple on the High Street and if they can sort out the shoplifting epidemic, they will be in a good place.

Overall though, no bargains and the Macro outlook looks a bit iffy.

Well, that’s Q2 off to a flying start with Trump trashing the whole world economy. How can it be that one person can have so much of an effect on the World? He’s put Liz Truss to shame. All my gains from 2024 wiped out in a week.

Still, if you can’t stand a 10% (or more) swing / drop in valuations you shouldn’t really be in this game. Apart from the trade, below, I’m not rushing to sell. Au contraire. I’d made a few sales to crystallise some losses that I can offset against realised gains and to free up cash to transfer to my ISA in the new Tax Year. That has now been done (7 April) and I’m sitting on about 10% cash.

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16th June

PZC – PZ Cussons – top up

I know you should make your own decisions, but I can see where Lord Lee is coming from when he says that once they have exited from Nigeria, the rest of the Business can be more realistically valued.

Buy @ 82p with a d/y of 4.8% and a PER of 10.
Portfolio %: 1.2%
Total Portfolio Holdings: 2.5%

4th June

GLE -MJ Gleeson – top up

Longstanding holding, but a small holding that had dropped quite a bit, despite decent asset backing. This purchase brings the amount up to a reasonable amount again. Hope springs eternal that this will get taken over.

Buy @ 390p with a d/y of 3% covered 2.5 times and a PER of 12. Book value of 500p
Portfolio %: 2.3%
Total Portfolio Holdings: 2.7%

29th May

Sorry it’s been radio Silence for a while, but the truth is that with all the volatility from the man-child, across the pond, the easiest approach was to sit on my hands and get a life, rather than time the Market. No spare cash to invest without selling anything was also a factor. I’ve got a bit of cash building up, but not enough in the pot until today.

I’ve spent the day to review my Portfolio. Whilst I do try to not trade too much, I’m not necessarily a ‘buy and hold forever’ person either. There are a couple of duffers in there that I’m ignoring for now (looking at you CLI, FDM, IOM, SFOR, RWS where I’m happy to wait for a decision). On the other hand, I have traded Easyjet very successfully over the years. I’ve averaged a 15% Annualised return overall. Today I sold my current holdings. Never say Never Again, though as if it trends back down to £5 or so I’ll look at buying back in again. Telecom Plus is also looking a bit toppy for its income and margins, so time for that to go, too.

What to buy? I revisited both my Stockopedia Stock Screens (one is low PER, the other are share prices within 20% of their yearly low) as well as my watchlist. A lot of stocks have rallied over the last month or two, which is good, but means they haven’t hit my triggers. Some have though.

EZJ – easyjet – Sell

See notes, above. I find it really difficult to work out a fair value for this and it doesn’t take much – an oil price surge, Putin to ramp up attacks for it to all go horribly wrong. Better value out there, where i can comfortably sleep at night. For now…

Sell price: 571p
Buy price: 363p (average)
Dividend income: 5% (non-weighted average)

Gain: 64% total (33% pa).

TEP – Telecom Plus– Sell

This is an interesting Business. It trades as Utility Warehouse and is Marketed by(presumably) hundreds of self-employed people. I see many of these at the Networking meetings I go to. Good Business model as they all live or die by the sales they bring in, but I don’t see it as particularly profitable looking at the Accounts. Like EZJ I’ve traded in and out a couple of times.

Sell price: 2012p
Buy price: 1545p
Dividend income: 11% (non-weighted average)

Gain: 40% total (20% pa).

SQZ – Serica Energy – Buy

Drilling for oil in the North sea. The incumbent Government seem to think it better to import oil from abroad and stop us drilling for our own as part of its Green obsession. we need oil still, so whilst that is the case, surely it’s better for UK Businesses to employ UK staff and pay UK taxes to drill for UK oil, than pay a foreign Country to import it (therefore adversely affecting our Balance of Payments and incurring non-green transport costs at the same time). What am I missing. Anyway, Serica is profitable with a decent Dividend. It has an issue with a particular field, not of its doing and once that is fixed, oil should gush, and hopefully the valuation with it. I’m in.

Buy @ 152p with a d/y of 13% and PER of 4.8. Book value about 30% over current price.
Portfolio %: 2.7%
Total Portfolio Holdings: 2.7%

EMG – MAN Group – Buy

“Man Group plc is a United Kingdom-based technology-empowered active investment management company. The Company is focused on delivering performance and client portfolio solutions by deploying the latest technology across its business.” (from its website via Stockopedia). Decent performer, just fell on hard times after the recent Trump fire of the vanities.

Buy @ 176p with a d/y of 7.7% and PER of 9.5. Book value about 10% under current price.
Portfolio %: 2.6%
Total Portfolio Holdings: 2.6%

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9th April

I looked at BYG for a top up yesterday. In the end decided on the ones mentioned, below but after today’s drop I’ve put another half a unit into BYG. I still think this and SAFE are fundamentally undervalued, both on Net Tangible Asset valuations and also share price performance. If Businesses close down temporarily a la COVID we may see an in crease in storage requirements.

BYG – Big Yellow – top up

Buy @ 850p with a d/y of 5.4% covered 4(!) times and a PER of 14.8. Book value of nearly 1300p
Portfolio %: 1.4%
Total Portfolio Holdings: 6.5%

8th April

Time to dip my toe back in again

SAFE – Safestore – top up

I still think this is valued at about 50% of its actual property holdings. Deduct debt and still a massive margin for safety and at a 6 year low despite profit tripling and asset values more than doubling.

Buy @ 547p with a d/y of 6% and PER of 12. Book value of over 1,000p
Portfolio %: 2.6%
Total Portfolio Holdings: 7.3%

CRST – Crest Nicholson – top up

This is a 10% drop top-up. No rhyme nor reason for the purchase, except that one day another Housebuilder is going to take a pop at it.

Buy @ 149p with a d/y of 3% and PER of 13. Book value of over 280p
Portfolio %: 1.3%
Total Portfolio Holdings: 3.2%

BP. – BP. – top up

Dropped on lower oil price scares. Good solid yielder. Happy to hold for the income. It’s also dropped its green ambitions, which were probably lip service. Given the size of its non-green operations & what it actually does for a living, it was a bit futile really.

Buy @ 355p with a d/y of 7.4% and PER of 7.8. Book value a shade over current price.
Portfolio %: 1.4%
Total Portfolio Holdings: 2.6%

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7th April

RWA- Robert Walters – Sell

Trump has trashed the World Economic Market with his Tarriffs. Whilst I’m not unduly panicking and selling, to quote Warren Buffett, when the tide goes out, you can see who are swimming without trunks. Recruitment has had a torrid time and before the Trump shenanigans RWA was downbeat. Recruitment will be in te doldrums for a looong while, so I have decided to cut my losses.

Sell price: 225p
Buy price: 360p (average)
Dividend income: 2% (non-weighted average)

Loss: 37% total ((39%) + 2% divs) (58%) pa.

General commentary

11th February

22nd January. easyjet posted another improved set of results and Mr Market did his usual irrational thing and marked them down. I sold a small tranche last Quarter to shuffle things around. It went into freefall after, so have just bought back in again.

16th January. What a difference a day makes. Yesterday was my best day this year with the announcement of lower than expected UK inflation figures & soft US CPI figures driving a strong Dow & a Gaza ceasefire announcement. Wind forwards 24 hours and a lot of the good work was undone. Whilst there is no point trying to time the market too closely, if you are looking to buy (or sell) it’s good to catch Mr Market in a depressed (or ecstatic) mood. I still want to drive more funds to Safestore (SAFE), but yesterday wasn’t the day. In addition, Housebuilders have been in the doldrums, I’ve been running some rough calculations. TW. came up trumps as best value (IMO). Again, yesterday wasn’t the day though.

Today was the day. I’ve doubled my Safestore holdings and also Taylor Wimpey (TW.) (which was a half New unit before, making it up to a full unit now). Now sitting on 8% cash.

10th January. It’s still looking quite dodgy. Bond yields are rising here, which means the Government’s interest costs are rising. Less headroom to play with tax cuts and higher expenditure to come. Who knows which way an emboldened Trump will jump once he is elected. The aftermath from the tragic fires in Los Angeles are also going to create a large, possibly inflationary, Budget hole, directly with the Government well as higher insurance costs.

I’ve sold down a couple of my elephants today – IMB and BATS. I’m not negative on them at all, but IMB in particular has had a great run and may retrench, allowing me to buy back in at a lower level. If not, then I’m sure that I can recycle the funds into unloved shares. Really want to buy more BYG and SAFE, but – for the moment – I’m sticking to my “buy in after a 10% drop” rule. Rules are made to be broken, however.

I’ve also sold a smaller one, Brickability (BRCK) for a modest profit. If there is a Housing Downturn, then this will get hit. Recent update talked about a ‘soft Market’ back last Autumn. Really don’t think it has improved since.

8th January. Bit of a tense start to the New Year with Trump threatening takeovers of Greenland, Canada and the Panama Canal. In the UK, Labour’s Honeymoon is definitely over, Borrowing costs are rising and interest rates don’t look like they are coming down as rapidly as previously thought.

Whilst 2024 was good to me I do think I’ve spread my net a bit too wide. I have bought a few dubious shares as I don’t want to invest too much per share. My Portfolio has benefited from a large cash injection and I need to develop a higher base level to invest. Mentally this is proving challenging.

In addition, to mix my metaphors, Elephants don’t gallop. In other words I have some large caps that have come back from recent lows, but are unlikely to make as many gains as previous, nor to they have a compelling Dividend return case that would outweigh any Capital falls.

Here’s my Plan for 2025.

• Sell down my tail end stocks – my least favourable ones. I will time the sales with Mr Market’s cheery bouts, however. Not rushing to sell.
• Double my entry point for purchases, so I can hold fewer
• Q1 be a bit more cautious & be happy to hold a bit more cash. Opportunities will come along, they always do.
• Still stick to my 10% drop top-up schedule assuming it’s not for a tangible reason.
• Stick to my sector rotations. I went into Housebuilders a couple of years back. Have done well, although the last month or so has not been impressive. I also bet on Tobacco and Banks. My current out of favour sector is self-store. This has served me well in the past with Lok and Store, and now Safestore and Big Yellow seem very underpriced compared to their Tangible value.

Transactions (on the basis that I’ve doubled my ‘base unit’).

26th March

EVOK – EVOKE – Sell

Trading update today and it wasn’t pretty. This may well be a turnaround share, but it’s weighed down by a lot of debt. I’ve also got quite a few gains in my p/f so this sell crystallises a loss to offset those gains ready to Bed and ISA 6th April. Mitigates my Tax bill a tad. Oh well, take it on the chin. I’ll probably seek something else out once the money is in the ISA.

Sell price: 59p
Buy price: 77p (average)
Dividend income: 0% (non-weighted average)

Loss: 25% total ((25%) + 0% divs) (25%) pa (as I held for pretty much 1 year).

19th February

CRE – Conduit Holdings

Insurer, about 3 years old and growing fast. Been impacted by a couple of storms and the LA wildfires, which isn’t good but (whilst extreme) this comes with the territory. Premiums should harden and I would presume that that area of LA will be rebuilt in a way that it is more impervious to a similar catastrophe. in the meantime, one to tuck away for a solid 7% yield, PE of 4.3 and PEG of 0.1 – what’s not to like?

Buy @ 403p with a d/y of 7.5% and PER of 4.3. Book value of over 600p with half the Market cap in cash.
Portfolio %: 2.6%
Total Portfolio Holdings: 2.6%

Leaves me with about 5% cash, so not much purchasing power for now. In addition, some of that is being held back to plonk into my ISA April 6th (currently in a regular Trading Account, so taxable).

17th February

TATE – Top Up

Normally I wouldn’t top up until it’s dropped at least 10%, however the recent drop after a subdued Trading Update brings it back to my Buy Price, but with a half-unit since I have doubled my Unit purchase size. On that basis and I still have confidence in it, with a pinch of takeover rumours I’ve doubled up to get to my current ‘Unit’ size.

See above reasoning in commentary for today.

Buy @ 572p with a d/y of 3.6% (meh)and PER of 10 (So so).
Portfolio %: 1.3%
Total Portfolio Holdings: 2.6%

11th February

OSB – OSB – Sell

A big part of its Portfolio is Buy to Let and the private landlords are taking a bath right now. Many are selling up. Not sure if that is reflected in the share price (even though they may make up a small part of it) so am selling out anyway.

Sell price: 424p
Buy price: 376p
Dividend income: 0% (non-weighted average)

Gain: 13% total (13% + 0% divs) 24% pa (not compounded) equivalent

22nd January

EZJ – easyJet – Top Up

See above reasoning in commentary for today.

Buy @ 493p with a d/y of3% and PER of 7.
Portfolio %: 1.4%
Total Portfolio Holdings: 8.3%

16th January

TW. – Taylor Wimpey – Top Up

See above reasoning in commentary for today.

Buy @ 109p with a d/y of 8.4% and PER of 11.4. Net Assets of 125p per share, so a bit of a margin of safety there
Portfolio %: 1.4%
Total Portfolio Holdings: 2.6%

SAFE – Safestore – Top Up

See above reasoning in commentary for today.

Buy @ 615p with a d/y of 4.7% and PER of 15.4. Net Assets of 934p per share, so a decent margin of safety there
Portfolio %: 2.9%
Total Portfolio Holdings: 5.8%

13th January

BYG – Big Yellow Group – Top Up

I knew I wouldn’t be able to resist. Bought another Unit. Still can’t see why it’s rated so lowly. Still well over 10% cash, so more firepower available.

Buy @ 883p with a d/y of 5.3% and PER of 15.1. Net Assets of 1300p per share, so a decent margin of safety there
Portfolio %: 2.7%
Total Portfolio Holdings: 5.3%

10th January

BATS – Brit. American Tobacco – Sell

Elephant sale. No real negative, just want to increase my fire power if there is a downturn.

Sell price: 2965p
Buy price: 2630p (ave)
Dividend income: 12% (non-weighted average)

Gain: 24% total (14% + 12%) 32% pa (not compounded) equivalent

IMB – Imperial Tobacco – Sell

Who says elephants can’t gallop (Rudyard Kipling, then adapted by Jim Slater as it happens). IMB has had a stonking run and must be due a retrenchment if there is a downturn and/or Trump comes down on Tobacco Companies as a fundraiser. After a 50% climb I’ve been mulling a sale for a while and pushed the button today. Gutted as it has a low PER and high (and sustainable) D/Y. I just think that I can buy it back cheaper and/or use the funds to buy into something else not in a (no pun intended) dying industry.

Sell price: 2598p (ave)
Buy price: 1785p (ave)
Dividend income: 9% (non-weighted average)

Gain: 54% total (46% + 9%) 53% pa (not compounded) equivalent

BRCK – Brickability – Sell

Wary of a Housing downturn, so this is another sale of a slightly dubious purchase. We need bricks, but if Housing drops, this will drop – and it was already warning of a ‘soft’ Market at its last Report. It was optimistic of a Housing Boost from the incoming Labour Government, but this is turning into smoke and mirrors with Housebuilders very unlikely to hit targets.

Sell price: 59p (ave)
Buy price: 54.5p (ave)
Dividend income: 10% (non-weighted average)

Gain: 17% total (8% + 10%) 12% pa (not compounded) equivalent

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8th January

HEAD – Headlam – Sell

One of my riskier purchases. On the face of it, undervalued as it has lot of unlocked property value. On the other hand, will be vulnerable to a housing downturn. Price ticked up after a recent property sale, then stabilised so a good opportunity to get out.

Sell price: 141.5p
Buy price: 130.6p
Dividend income: 0% (non-weighted average)

Gain: 7% total (7% + 0%) 31% pa (not compounded) equivalent

RWS – RWS Holdings – part Sell

Seems a decent Business, but it fell in price after I bought it. This is a sale of the subsequent top-up to crystallise the gains. Nothing negative against it and if it drops again I’ll rinse and repeat. Selling ahead of x/d next week.

Sell price: 178.7p
Buy price: 131.4p
Dividend income: 0% (non-weighted average)

Gain: 35% total (35% + 0%) 178% pa (not compounded) equivalent

NWG – NatWest Group – Sell

Elephants don’t gallop. I had a bit of angst about this. It is still a good Business, and I bought in when Mr Market had a bad reaction to some quite reasonable results. Since then both tranches have hit a 100%+ Gain and I just feel that I can’t see it making any decent returns from this valuation & can deploy the cash more effectively. I’ve set a buy-in price in case it all goes horribly wrong again.

Sell price: 403p
Buy price: 192p (average or two tranches)
Dividend income: 9% (non-weighted average)

Gain: 117% total (111% + 9%) 97% pa (not compounded) equivalent

BYG – Big Yellow Group – BUY

As mentioned, above, the self-storage Market overall seems to be undervalued. Valuations rose 2021/2022 post Covid as Business and individuals reined in spending and had to mothball stuff (although self-storage is not a cheap option, often costing more than what is stored). Anyway, since 2020 it’s all been on a downward slope and as far as I can see, at the moment, once you subtract net debt, the Businesses are undervalued by about 30-40% on NTAV alone, never mind income. I can’t see any reason for this and feel it will revert to the Mean, or be snapped up. Self-storage is a bigger thing in the US for instance and Businesses there might be looking to expand into the UK, especially if the £ keeps falling. Back to reality and I’ve already invested in Safestore, so bough a Unit (new double size unit) of Big Yellow today. Will be happy to top up either if they drop by another 10%.

Buy @ 899p with a d/y of 5.1% and PER of 15.6. Net Assets of 1300p per share, so a decent margin of safety there
Portfolio %: 2.7%
Total Portfolio Holdings: 2.7%

As you can see, the doubling of the Base Unit means new Purchases are approaching a 3% holding each time.

Currently that still leaves me 6% in cash, which is as high as it’s been for a while.

Watchlist snippets after today’s tidy up: PETS, ABDN, VSVS, WPP – and NWG if it drops back a decent amount. None are screaming ‘buy’, so am watching & waiting….

Dithering: IMB has climbed so much, but is still at a stonkingly good price.

Not sure: DOM has done me well in the past, despite never being particularly cheap on metrics. Getting relatively cheap again, so could buy for the cycle….

Fantasy: PIER – Brighton Pier Group. Heart, not head here. Wouldn’t it be fun to own a bit of Brighton Pier? At the rate it’s valuation is going, I could own a decent size.

The Good

Another year of great returns. 16% compared to 5.2% for the FTSE. This takes the Portfolio to an 80% return since 2020 (the earliest date recorded on this Blog). Over the same time period the FTSE has returned 26.7% so very pleased with the performance. Might finally be getting the hang of this investing for growth lark.

I have been trying to pick deep value shares, shares that are undervalued for a variety of reasons, then hanging on to them until they are revalued and/or taken over when someone else sees the value.

Overall there have been 23 specific Sells (i.e. a Stock, that had one or more tranches bought, but all tranches sold together). Not bad, but still some churn there. Reasons for sale are

• Gift Horse sales – jump in price from a (rumoured) bid. Not always at a profit. I sold DLG at a loss because Aviva has made a bid for it, but less than the paper loss before the Bid and I was glad for the ‘out’. It had been deeply underwater for years and this was a way of getting out with less egg on my face.
• Bad choice in the first place. ABRD because, well, it’s ABRD and PZC as I was worried about the impact Nigeria was having (but see later).
• Price had got ahead of itself. I’m rushing less to sell after a climb, but it still happens. STJ is a case in point, after climbing about 65%.
• In retrospect, the share was a bit of a duff purchase in the first place. SSP was an example of this.

So, yes, still trading but overall I’m still managing to thrash the FTSE so a bit of horse trading is fine.

One purchase I did make was to buy into St James’ Place (STJ). This was personal. I mention an inheritance, below. The source of the inheritance was from some people that were not looked after properly by STJ representatives and who were ignored for a long time, despite paying commissions each year. STJ hit the Press when it was found out (this issue was endemic) and the levels of commission paid were made public. The share price plummeted and I plunged. By the time I sold, I had made a 67% return in about 6 months, whereas the investments recommended by the reps had made the recipients about 4% a year – not far off the commission, I expect for doing sod all. I feel vindicated by this and it has helped put the feeling of being let down, at least mostly, to bed.

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In November I attended Mello in Chiswick. Mello had combined with the London Investor Show, so there was plenty to see and do. Lord John Lee was one of the speakers. A one-time MP he rose to fame as the first PEP, then ISA Millionaire, turning Circa £300,000 into 7 figures. He diarised his investment journey in the FT Money pages. I felt that a lot of his strategies resonated with me and have since read his book about his investing as well as listened to a couple of Podcasts where he was interviewed. Highly recommended and I’m glad that there is a level of validation to my approach from such an August person. One Business he did mention is PZ Cussons that I sold out of earlier in the year due to devaluation of the Nigerian Naira that was severely hitting profits. He did mention that PZC was working on exiting Nigeria and that parts of the Business (e.g. Carex) were worth more than the current Market Cap. After a bit of digging, I’m back in again. Let’s see what happens in 2025!

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Boost to savings. I have come into a decent size family inheritance this year. It has allowed me to put some away for a rainy day and also boost the spread of my investments. There have historically been many investments I’d like to make, but haven’t had the funds to invest a decent amount. That has now changed and my shareholdings have shot up from about 15 – 20 to 48 at the end of 2024. That might seem a lot but, as previously documented, I don’t play this game full-time so am not as skilled as I might be. Spreading the money across many investments mitigates the risk that I have missed a black hole somewhere. Mitigates, not prevents, please note. Unless I have spotted a farm Bet, each holding is less than 5% of my Portfolio.

The Bad

Nothing too bad to report if you ignore the few shares that didn’t do so well – only to be expected in a wide ranging Portfolio.

Politically the Conservatives were falling apart at the seams when they were trounced at the Election, however Labour’s honeymoon period was short-lived. Loading up Unionised Organisations with massive, but no strings attached, pay rises whilst simultaneously pulling the rug from pensioners was a bad juxtaposition. Rachel Reeve’s Budget changes are going to ripple through over the next 6 months and it’s not going to look pretty. NI increases, even greater worker Rights and a lot more ‘me too’ when negotiating pay increases for the various Public Sector groups. Election pledges are broken and they can only blame the preceding Government for so long before they have to hang the mea culpa flag up. I’m still fully invested, but also keeping a wary eye on developments.

The Ugly

Mainly this enquiry into commissions on Bank Loans for car purchases. Two of my holdings, LLOY and STB were hit badly. LLOY has bounced back a bit, STB not yet. It’s about time the government had some balls and realised that adults need to grow up a bit. They were happy to take out a loan to buy a vehicle, they were happy with the repayment schedule. I’m sure that they understood that the Salesperson probably earned a commission for selling them it. So what? Sales staff earn commissions on everything, whether it’s reflected in monthly payments, yearly bonuses or pay rises, or the Business actually surviving / thriving for a year. That’s life. As Vivian said in Pretty Woman to the Rodeo Drive Sales women “Big mistake” when they refused to serve her. She implicitly realised that they were on commission (‘scale’) without ever being told. Had their chance, blew it (bonus point if you know which film that quote is from).

Just because it wasn’t made blindingly clear at the time doesn’t invalidate it, especially when the Organisations were operating within the bounds of the Law at the time. To retrospectively change that smacks of Populism and Rule by Social Media.

Disclaimer: I did buy a car on finance at the time and have put a claim in to see if I’m eligible for a refund. If it’s going to happen, then I might as well claim what is due to me. I’d be stupid not to – and it will still be much less than my losses on LLOY and STB if it goes through.

And finally Cyril

It’s been a good year. Returns have been good, outweighing the odd snafu. The ‘day jobs’ have both gone really well with record figures (I run two, very different Businesses) and have recently invested in a third, a niche directory service. I’ve been able to work less, and delegate more for the Training Business and have started to wind down my operations for the Support Business I run with a view to getting out completely by mid-year, possibly with one final ‘big bang’ project.

I’m slowly, but surely moving away from the exchanging time for money model (working for a living) to having enough money coming in anyway to allocate my time more selfishly.

Happy New Year and let’s hope 2025 is also good, despite the change in the White House and Starmer & his coterie’s attempts to take Britain back to the 1970s Tax and Spend days.

In the past I have created a Post each time that I have traded. This makes for a lot of posts to click through so I have now decided to do one Post per quarter & add to it. Latest transactions first.

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General commentary

28th November – Direct Line (DLG.L) has confirmed that it received a takeover Bid from Aviva (AV.L). I hold both and DLG has been a woeful investment for me. My ‘Gift Horse‘ policy states that I should sell… however….back in February DLG was on the receiving end of an all-share Bid from Aegas SA, which it also rejected. Conceivably they could come back for another bite and their share price is now considerably higher. Decisions, decisions.

Update: Sold this morning after mulling it over. First lossmaking sale for a while. See details, below

w/c 28 October – Big issues with non-declared commission payments for car loans that mean the Banks might also be on the hook. Some are talking of PPI level damages. To me it does see that they were following the Law, then a Court decided they weren’t – even though they were. The knock-on effects could ripple through anywhere where sales teams are paid a commission on loans, so I think they will be fighting hard to overturn this latest issue, in which case affected Businesses should bounce back. In the meantime I’ve taken a hit on Lloyds and Secure Trust Bank who both seem to be well on the hook for this. Not rushing to sell currently.

24th December

OK, wasn’t planning on doing anything for the rest of the year, but hand forced somewhat. Vistry (VTY) issued a shocker of a Trading Update. Profit this year £250M rather than £300 because of delays. A few other excuses thrown in there, too. Shares down approx. 17%. Wow. 3rd warning in a row. Those that say warnings come in threes usually come out at this point to justify the aphorism, and this has been the case today. Personally I don’t pay too much attention to it. That leaves the question as to what to do. Sell, hold or buy more?

• The sell case. Management reputation is now officially trashed. It will be a long climb back from here
• The hold case. Bad news out there, well below asset value now. In addition, the revenue is delayed, not lost 9so they claim…)
• The buy more case. Hit my top-up target of a 10% drop, however it hit it due to bad news, not a general decline. Not so clear cut.

I still think that eventually it will come good, or get snapped up as there is plenty of asset backing. No Sale, then. As it’s a profit Warning rather than decline, topping up is out for now. So, ‘hold’ it is.

What I have decided to do, however, is to Bed and ISA it. I’m sitting on a lot of taxable profit on my Trading Account, so by selling it that will reduce my 2024/5 tax bill as well as shelter future recovery, should it happen.

To be able to do this I’ve had to sell something in my ISA. EZJ has to go. I’ve been dithering about this, this week anyway. I’m really quite overweight and am sitting on a nice gain. I’m still positive, but selling reduces my exposure a bit. Still plenty left in my SIPP.

It has also freed up some cash in my Trading Account by virtue of selling and I have bought into International Personal Finance (IPF). This was a spin-off from the Provident, which had a rough time. IPF seems to be suffering from this association, despite showing a good track history. Bought in.

Allocation blocks

I have a certain size block that I buy in / top up at. 1 Call it 1 unit. I top up 1 unit, even if I have more than 1 Unit sitting there in cash. This ‘unit’ has been the same for a while as the Portfolio has grown. It means that if I have more than 1 unit sitting there, but less than 2 I can only make 1 purchase until some Dividends or a sale comes in, leaving cash sitting idle. Rather than having it sitting there, I’ve now relaxed my criteria. As long as it’s not a bit of a punt I am allowing myself 1-2 unit’s flexibility to initially invest.

VTY Vistry – Sell and ISA

Sell price: @538p (buy back at 548p – price fluctuations in those 10 mins or so)
Buy price: 750p (average)
Dividend income: 0% (non-weighted average)

Gain (loss) -18% total (-18% + 0%) -160% pa (not compounded) equivalent!

EZJ – easyJet – Sell

Sell price: @354p
Buy price: 575p
Dividend income: 1% (non-weighted average)

Gain: 63% total (61% + 1%) 102% pa (not compounded) equivalent

IPF – International personal Finance – Buy

See commentary, above. Bought slightly above my minimum allocation. Again, see above.

Buy @ 128.5p with a Dividend yield of 9.5% (covered about twice) and PER of 5.6.
Portfolio %: 2.1%
Total Portfolio Holdings: 2.1%

23rd December

Carrying on the tidying up & also I’m turning really positive on Safestore. I want to keep adding to this as cash becomes available. Made some available today with the sale of Vesuvius (VSVS)

VSVS Vesuvius – Sell

Bought this in November. Had a decent yield and PER. A week later there was a downbeat trading update, citing ongoing depressed Markets and price pressures. Mr Market made one of his frequent irrational conclusions and since then the price has climbed by 10%. Whilst I’m positive that it will recover as the World Economy climbs out of the current dip, I think it will be more extended. Who knows what tariffs will be put on US imports when Trump gains Power. VSVS doesn’t manufacture steel as such, but obviously any tariffs will indirectly affect sales of peripheral equipment. Sold up for quick 10% Gain, but with an Alert set to buy back in if it gets down to the previous buying price, or lower.

Sell price: @413.5p
Buy price: 364p
Dividend income: 0% (non-weighted average)

Gain: 13% total (13% + 0%) 102% pa (not compounded) equivalent

Safestore top-up

Buy @ 6.45p with a Dividend yield of 4% (covered about twice – does seem to fluctuate) and PER of 15.4. Neither generous, but become so once you subtract fixed assets.
Portfolio %: 1.5%
Total Portfolio Holdings: 2.8%

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19th December

Time for a tidy up. Slightly concerned about US warning about fewer rate reductions next year. On this side of the Atlantic, a Labour Government will be inflationary, too so fewer reductions. In addition, if there ever was a honeymoon it is definitely over and I think consumer confidence will take a dip in Q1 2025.

At the Global level we have Trump coming back, more arrogant than ever, which will bring Ukraine to the fore. Who knows what he will have in mind.

On that basis I’ve decided to build up a war chest and sell of some of my strong performers that are consumer facing.

Update – having reviewed my Portfolio, I’ve only made two sales (see below). Everything else will remain. The one I thought were for the chop were BATS, IMB, RWS (part) and EZJ. BATS and IMB are solid dividend payers and whilst BATS is too big, I still hold on to the hope that IMB will get swallowed up by a predator. If you ignore the great run it’s recently had, I’d still buy at this level if I didn’t have any, so it stays. RWS top-up has done well, but it does still seem to be very much undervalued for a Tech Firm specialising in AI. Finally EZJ. Might be heart rather than head but I think that holidays, especially at the easyJet end of the Market will survive any moderate slowdown.

Update 2 – this afternoon, one of my alerts was triggered, so I have bought into Safestore. See below.

So much for the war chest, but it was nice to review everything anyway.

SAFE – Safestore – Buy

Safestore provides secure and dry storage solutions. It makes it nice and fluffy with welcome areas, parking and well staffed to appeal to domestic clients as well as Businesses. It’s a stable and scalable Business. People that rent tend to keep renting and the Business model is easy. Buy some land, put a shell up then subdivide it. Alternatively, buy up a competitor and rebrand. Rinse and repeat.

I had great success with Lok and Store years ago when I realised what a simple model it was. That has now been taken over. For some reason, Safestore has been declining this year from a dual peak of 900p to today’s price of 650p. I can’t fathom out the valuation. It’s Market Cap is £1.4B but even after subtracting long term debt, the units & land are valued at £2B. It’s profitable, and the profits are growing. Perhaps I’m missing something, but if it was to liquidate today there is a 50% upside on the property. The other thing I can’t understand is that the net profit is often higher than Gross. I’ll need to look into that. Perhaps they are revaluing the units every year and adding in the appreciation.

Anyways, until something jumps out at me I’ve dipped my toe in.

Buy @ 6.46p with a Dividend yield of 4% (covered about twice – does seem to fluctuate) and PER of 15.4. Neither generous, but become so once you subtract fixed assets.
Portfolio %: 1.3%
Total Portfolio Holdings: 1.3%

EPWN – Epwin – Sell

This has had a good run this year. It sells windows and benefited from the promise of new house builds. If this falters, or interest rates stay high there is a good possibility of a profit warning, or at least downwards guidance.

Sell price: @ 95.1p
Buy price: 72.3p
Dividend income: 10% (non-weighted average)

Gain: 41% total (31% + 10%) 30% pa (not compounded)

GLE – MJ Gleeson – Sell of top-up

Mild profit warning earlier in year. It was a top-up and the fundamentals are not inspiring. I wouldn’t buy at this price, so have decided to sell the top-up & see where the remaining balance takes me.

Sell price: @ 510p
Buy price: 445p
Dividend income: 8% (non-weighted average)

Gain: 20% total (8% + 15%) 9% pa (not compounded) – calculation (8+15 = 20) seems iffy, will look into over Christmas…

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9 December

KGH Knights Group – first top-up

Had some spare cash from the DLG sale and KGH has dropped by about 17% since my first purchase. Professional Services, light on Capital and a recent acquisition plus positive trading update. Only big downside is a £2M hit from NI increases, but not until 2026 by the looks of it, so hopefully absorbed by higher turnover and possible increased prices.

Buy @ 106p with a d/y of 4.7% covered at least twice and PER of 4.3.
Portfolio %: 1.4%
Total Portfolio Holdings: 2.3%

28 November

DLG Direct Line Group – Sell

Aviva made a putative offer for DLG, which was rejected. Whilst they might come back with a higher offer, or Ageas SA might come back with a renewed bid, they might just decide to walk away. On balance you could see a 20% upside or a 30-40% downside if it falls through. I’ve sold as I’m sure I can deploy the funds elsewhere whilst we wait for action. Shame as this is my first sale at a loss since 2020 when I removed some weaker shares hen COVID hit.

Sell price: @ 226p
Buy price: 272p (average over 3 tranches)
Dividend income: 10% (non-weighted average)

Loss: 10% total (-20% + 10%) -3% pa (not compounded)

Lessons: Bought too many tranches close together before my Min 10% drop top-up rule. Didn’t sell out (Gift Horse rule) back in Feb.

27 November

TW. Taylor Wimpy – Buy back in

Sold at £1.66 a short while back. They have dropped back to £1.30 and have decent asset backing. I’m still positive on Housebuilders so an initial tranche rebought.

Buy @ 130p with a d/y of 7.4% and PER of 12.9 Assets of 125p per share, so a small margin of safety there
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

Commentary: LIO starting to take off a bit, although just about to go ex-Div. VTY recovering from its hammering. EZY produced great results today but got quite a muted response. Hopefully will get some Broker upgrades soon. Definitely undervalued (IMO, natch).

20 November

VTY Vistry – First top-up

Looks like I got back in a bit too soon for this share. COO left today and the shares have taken another dive. So much for a margin of safety there.

Buy @ 619p with a d/y of 6.6% and PER of 7.8. Assets of 990p per share, so a margin of safety there
Portfolio %: 1.5%
Total Portfolio Holdings: 2.9%

Commentary: I sold half my PSN holdings a while back, since when they have continued to dive. They are now below the level where I topped up last time, but I’m just hanging on a bit longer this time. Housebuilders seem to be friendless currently.

13 November

CARD – Card Factory – BUY

This was one I held, but sold during the first COVID lockdown. It was so exposed to footfall I wasn’t sure whether or not it would survive. 4 years down the line it has emerged unscathed.

Downsides: Disproportionally affected by NI increases as staff are at the Minimum / Living wage end of the pay spectrum.

Upsides. Great PER and DY and as long as it sustains that I’ll be happy. It’s more than just cards nowadays and several of its competitors have fallen by the wayside (Clintons, Card

Zone). Always seemed to me that my local Card Factory constantly bustled but Clintons / Card Zone always seemed to be empty. Sample size of 1, but scuttlebutt is scuttlebutt.

Buy @ 81p with a Dividend yield of 6.8% (covered 3 times normally) and PER of 5.2
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

PRU – Prudential – first top up

Thiss fall from grace over the years has been quite relentless, but it sits on a decently low PER of 8. DY not so great at 3% but it is well covered and rising.

Buy @ 601p with a Dividend yield of 3% (covered 3 times normally) and PER of 8
Portfolio %: 1.5%
Total Portfolio Holdings: 2.8%

11 November

LIO – Liontrust Holdings – second top up

Not my best call, this but this is so lowly valued, with a stunning dividend yield that it will either turn around, or be taken over. Yield is 16% and is just about covered. Even if they were to slash it by 50%, that is still 8%.

The last update showed cash outflows, but reduced outflows from the previous quarter, blaming the uncertainty about the upcoming Budget from the new Government. Now that is out the way, with no particular hits to Fund Managers, I’m hoping for signs of improvement when they report 21 November.

As it is a second top-up, it will be sold should the SP hit the first top-up value (514p)

Buy @ 436p with a Dividend yield of 16% (covered 0.9 times normally) and PER of 6.7
Portfolio %: 1.4%
Total Portfolio Holdings: 3.7%

8 November

A bit of a reshuffle of holdings as a few price triggers were, err, triggered. Given the current uncertainty here & in the States I thought I’d materialise some Gains, even if they are Taxable.

Commentary: STB still being hammered. PSN that I halved my holding in recently also being hammered, moving towards top-up level. EZJ steadily climbing following good updates from competitors – hopefully should be some results soon.

VTY – Vistry – BUY

I sold these recently as they had risen quite nicely and then decided to start a share buy back programme, rather than paying out Dividends. I disagreed as 1) I like dividends so that I get a choice as to where to reinvest and 2) with a frothy share price I thought that buybacks were a bad decision. As it happens, I dodged a bullet as the Company had to report some shenanigans within its reporting of profits within some divisions. As a result of that, and a gloomy update today, the share price tanked twice, bringing it down by about 50% overall.

I think the Business is sound and that these are temporary set backs, so have been tempted back in again.

Buy @ 700p with a d/y of 6.6% and PER of 9. Assets of 750p per share, so a margin of safety there
Portfolio %: 1.5%
Total Portfolio Holdings: 1.5%

VSVS – Vesuvius – BUY

One I have had an eye on for a while, but never pressed the ‘buy’ button until now. From Stocko “Vesuvius plc is a United Kingdom-based company, which is engaged in molten metal flow engineering and technology. The Company’s segments include Steel and Foundry. The Steel Division operates as four business lines, Steel Flow Control, Advanced Refractories, Foundry, and Steel Sensors & Probes”

Doesn’t produce Steel, so shouldn’t be affected by any Trumpian Tariffs, but benefits from any uptick in production. In the Gold Rush, those that made money consistently were those that sold picks and shovels, not the miners.

Buy @ 365p with a d/y of 6.5% and PER of 7.7.
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

BP. – BP – BUY

Another I have had an eye on for a while. Have traded this in the past and am now back in again. Oil isn’t disappearing ay time soon

Buy @ 373p with a d/y of 6.5% and PER of 7.5.
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

PZC – PZ Cussons – BUY

I sold this back in the summer as it has large operations n Nairobi and the devaluation of the Nairu is causing immense problems. Thanks to listening to a recent talk by Lord Lee, he happened to mention that PZC has now put its Nairobi operations up for sale. Even if it sells it for nothing, then whilst it will be a hit to the BS, at least it won’t be haemorrhaging cash and the remaining rump has some good value – e.g. Carex brand. I’ve tentatively bought back in again in anticipation of a sale over the next 12 months.

Buy @ 79p with a d/y of 4.6% and PER of 11
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

To fund all the above, and also give me some future firepower I ‘ve sold two holdings.

WPP – WPP – SELL

Made a small turn on this. Recent update is not promising and I don’t see the short term outlook improving. Couple that with a non-bargain PE & DY rating I’m happy to get out at a decent profit.

Sell price: @ 845p
Buy price: 743p
Dividend income: 2%

Gain: 16% total (2% + 14%) 42% pa (not compounded)

STJ – St James Place – SELL

This is a fund Manager that got hammered when it was told it couldn’t charge as much as it was used to, and also Assets under Management were decreasing. In addition, it was bought using funds from an inheritance that was managed by a SJP Agent that, frankly, did a pretty poor job, yet still took a high commission. This was a personal mission to claw something back! It worked.

Sell price: @ 826p
Buy price: 496p
Dividend income: 1%

Gain: 67%ish total (1% + 67%) 149% pa (not compounded)

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30 October – GSK – Glaxo BUY

GSK plc is a global biopharma company. The Company’s segments include Commercial Operations and Research and Development.

Hopefully needs no introduction. Price has dropped in recent times due to Zantac concerns. I sold these just before they split off Haleon and am now dipping my toe back in.

Buy @ 1402p with a Dividend yield of 4.4% and PER of 8.5
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

29 October – RWS – RWS Holdings – top up

RWS Holdings plc is a provider of technology-enabled language, content, and intellectual property (IP) services. Its segments include Language Services, Regulated Industries, IP Services, and Language and Content Technology (L&CT). 

I already hold some. They are suffering as Clients are spending less. Competition from ChatGPT and OpenAI must be an issue, however they own many Patents and you keep seeing horror stories coming out of ChatGPT getting the wrong end of the stick, so hopefully there is a niche for reliable, specialist AI providers. Alternatively they are sitting ducks.

Buy @ 131p with a Dividend yield of 9% (covered 1.5 times normally) and PER of 7
Portfolio %: 1.5%
Total Portfolio Holdings: 2.6%

14 October PSN – Persimmon Homes – reduced Holding

Had a good run with this one. The sale was a top-up after the price had dropped. House market softening.

Sell price: @ £15.92
Buy price: £12.55
Dividend income: 9%

Gain: 36% total (9% + 27%) 19% pa (not compounded)

14 October – IOM – iomart BUY

iomart group PLC is a United Kingdom-based cloud computing company. The Company operates as a cloud computing and information technology (IT) managed services business that is engaged in providing hybrid cloud infrastructure, network connectivity, security, and digital workplace capability.

Cloud computing is where it is at (along with AI). Whilst the market is dominated by the likes of Amazon Web Services there is clearly room for others.

Buy @ 88p with a Dividend yield of 4% and PER of 12
Portfolio %: 1.3%
Total Portfolio Holdings: 1.3%

10 October – LIO – Liontrust – top-up

Liontrust Asset Management PLC is a United Kingdom-based holding company. The Company is engaged in a specialist fund management business. 

Since its peak in 2021 it has been on a downward trend, as have a lot of Asset management Companies. There was a lot of euphoria post-COVID and this probably got caught up in it as everything opened up. Harsh reality kicked in and interest rates climbed. I believe it’s been oversold. It’s on a storming, but just covered 15% yield, but even if that were to be halved it will still be pretty impressive.

Interim results highlights

“Net outflows of £1.1 billion in the Period (2023: £1.6 billion).” so outflows, but reduced and that is an industry-wide issue. Already held some of these, so have topped up (previous purchase at 581p)

Buy @ 513p with a Dividend yield of 15% and PER of 7ish
Portfolio %: 1.4%
Total Portfolio Holdings: 2.6%

4 October – HEAD – Headlam BUY

Headlam Group plc is a United Kingdom-based floorcoverings distributor. The principal activities of the Company and its subsidiaries are the sales, marketing, supply and distribution of floorcoverings and certain other ancillary products in the United Kingdom and certain Continental European territories

Again, an out of favour Business due to the softness in housebuilding but can easily see this rebounding once interest rates start dropping and Labour’s house building plans kick in.

Buy @ 130p with a Dividend yield of 4% and no PER as earnings negative for last report.
Portfolio %: 1.4%
Total Portfolio Holdings: 1.4%

3 October TW. – Taylor Wimpey SELL

Got a bit ahead of itself and Housing slowing. better value elsewhere.

Sell price: @ £1.66
Buy price: £1.24
Dividend income: 15%

Gain: 55.5% total (2.5% + 33%) 20% pa (not compounded)

3 October BT.A – BT SELL

Had a near 50% rise in a short length of time. Difficult to see it growing from here.

Sell price: @ £1.43
Buy price: £1.05 (ave.)
Dividend income: 5%

Gain: 41% total (5% + 36%) 70% pa (not compounded)

3 October HFD – Halfords SELL

On reviewing I can’t really make a Business case for them, so have sold at a modest profit. eta, they have continued to climb (currently 167p 3/11) but I’m not concerned. Thin margins.

Sell price: @ £1.46.6
Buy price: £1.41 (ave.)
Dividend income: 3%

Gain: 6% total (3% + 3%) 17% pa (not compounded)

Sorted by % of Portfolio. Absolute values are not shown as they don’t serve any purpose other than flaunting, or otherwise my net worth.

Click on an image to get a larger version that you can actually read. Software has been ‘updated’, so displaying as a bar chart isn’t really going to work. Pie it is from now on.

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15 May 2023

28 March 2023

9 March 2023

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17th February 2023

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