FEB 29 – 2016 TRADES UPDATE

Hard to believe it is March 2016 tomorrow. I keep saying this but every year it feels like the months are getting shorter! Some new developments since my last blog – we are in the middle of buying a house so unfortunately I will have to liquidate the funds. I need them to pay for the associated charges and fees linked with the sale of flat as well as the buy of house.

Given it has been quite volatile of late, this has worked well in terms of forcing myself to review the portfolio. As a result, I have sold some shares in the past couple of weeks. I have however let my winners run for the time being. I will list each trade below along with the rationale behind them:

INL – This has been a long favourite of mine. I firmly believe the fundamentals are still solid and this has quite a way to go yet. However, given I needed to raise funds for the house buying, I opted to sell at 80p thus banking a profit of £280.

EHG – Although raising funds was the main reason behind the selling, the panic linked with Zika virus played a part in selling this. Also I was not quite comfortable at the level of debt this company carries. Banked a profit of £68 on this one.

CMCX – A mere speculation in buying this share in the first place. This was an IPO – I wanted to understand how it worked and what the associated charges were. Turned out there were none. Although this is a share which thrives on volatility (e.g. the more volatile the stock market is, the more people will bet on shares movements, thus making the company money), I opted to sell it shortly afterwards.

ETO – Biggest disappointment of all! I will forever remind myself of this – I believed in the stock so much that I was willing to let it drop as low as -60%. In hindsight, I should have been firm with my 10%/20% stop loss and cut if off. Since Paysafe (Optimal Payments) dropped low around -30% before it went up, I thought this would be the case with ETO. How wrong I was. I still believe that ETO will be success in the future given it now owns pretty much the licensing of Peppa Pig products and has a large content of films/TV series. The debt is far too high and it takes time for the company to actually reap in the benefits of their products. Given the volatility of the market these days and the need to raise funds, I took the plunge and sold it at a -55%. May this serve as a stark reminder to cut ties ASAP if a similar occasion occurs.

RGS – Interesting piece of company – its acquisition in Blancco has such a promising future. Also its recent RNS in disposing one of their services will help the company focus on its prize winning service – Blancco. Similar to above transactions, I had opted to sell this alongside FRP to realise some cash within my account, ready to cover fees and charges linked to house buying. I will be keeping a close eye on this as we go on.

FRP – The negativity surrounding the change in legislation related to whiplash claims etc has impacted on this share badly over the last couple of months. I felt it was best to cut this loose and move on, hence taking a loss of £40.

Current portfolio is nicely balanced in my opinion. As of 29 Feb, the profit in paper is £679 – adding this to the cumulative profit of £159 amounts to £838. This is equivalent to about 8% of the total funds (£10,000). This is not too bad considering it is my first full year of trading.

Although I will end up using the funds for the house buying, I fully intend to return to trading as soon as I save £10,000 – possibly drip feeding as I go on.

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