Category Archives: Investments

One month on: the good, the bad and the ugly.

I’ve been surprisingly busy so far this summer, hence I haven’t been updating my summer goals as much as I would have liked.

Alas here is my second update:

On www.bullbearings.co.uk (The FTSE/AIM simulation) I’ve made three transactions since I last posted.

The first one was downright ugly, stupid and a gross overreaction. Basically what happened was that in one day Tullow saw a +5% dip in share price following the news that the ugandan government wasn’t sanctioning a license given to Tullow for one reason or another, with Tullow being so involved in the African continent it could have had big consequences, I sold off all my shareholdings in Tullow on the spot for a loss of £1,394.25, a gross overreaction as in the following weeks (while I was away) the share price recovered and surpassed the point at which I had originally purchased the stock.

Once I came back to Ireland (on the 20th) I had a think about it and thought about why I had such a reaction to one piece of bad news. It was an overreaction and I jumped back in and bought about 40k worth of Tullow at 1132p, five days later and it’s up to 1223p given me a paper gain of £2798. All is good again and following more positive news regarding new oil finds. I can’t see Tullow leaving my portfolio for a while in any case.

My second and third transactions (with the third enabling me to purchase some Tullow again) concern the Aegis Group, a london based company involved in in Media and market research. A few days after selling Tullow for the first time, I had imaginary money burning an imaginary hole in my imaginary pocket. I was eager to find something and so did a trawl of some investing forums and found Aegis Group  Plc, one single post (and some follow up research from myself) convinced me to lump on it.

Here’s the post from a very knowledgable poster who I have a lot of time for

Aegis Group is an international media and market research holding company, fifth in size of the advertising agencies, ahead of Havas, and behind the ‘Big Four’ advertising agencies, WPP, Omnicom, Publicis Groupe and Interpublic Group.

The Company consists of two global marketing services segments, Aegis Media and Synovate. Aegis Media is one of the world’s leading independent media communications networks and provides media planning and buying, communications planning and digital advertising services through two principal media networks (Carat and Vizeum) as well as a leading outdoor unit (Posterscope) and a digital and interactive media network (Isobar). Synovate is a market research group, primarily focused on providing custom/ad hoc research services to companies globally.

Just less than 30% of the Aegis Group equity is controlled by Vincent Bollore, one of France’s richest men who is also Chairman of Havas, with a 33% controlling interest in that group. In my opinion, Havas will pitch for Aegis this year – combining the two companies so they can compete better with their much larger competitors.

Even if Havas does not attempt a takeover the company has booked a record amount of new business in the past 12 months, has recovered strongly from the recession and has the second highest exposure to digital media of all the agencies.

And I was in, I sold off 40000 of an original 74420 shares bought three weeks previously to enable me to buy Tullow for the second time. On the 40495 shares, I made a profit of £2,592 and currently my remaining shares are showing good profit of £4,647

So there we have it, my bullbearings portfolio is at a year high and everything is looking good. I’m ahead of the FTSE index and hopefully that is the way it will stay.

I’ll do a post on my investopedia NYSE fortunes in the coming days.

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Day 2 – And we’re off!

So this is the section of my summer goals where I look at getting involved with trading.

As it stands i’ve very little knowledge of trading or any companies other then through college projects and what I pick up through reading blogs and forums.

I’m using two online market simulators. www.bullbearings.co.uk for the FTSE and AIM markets and www.investopedia.com for Wall Street. With both these simulators, you are given $/£100,000 of “play money” to trade with. The goal is simply to make capital gains as  obviously dividends aren’t taking into account (I don’t think they are anyway, I could be wrong)

Due to my lack of knowledge no doubt i’ll make some ridiculous decisions with regards to trading amounts and even stock picks, but none the less to help with the learning process i’ll try to justify everything that I’m doing. And any comments would be hugely appreciated.

With regards to the trades i’m making, at the start i’m just going to do straight trades, no option trading etc. Maybe i’ll do a bit of short selling but I think for the moment that will be the gist of it. Obviously I won’t be updating this portion of the blog everyday, but rest assured I will be keeping an eye on how my stocks are performing.

So here’s a run down of the story to date.

The first pick was Tullow Oil on the FTSE

During the past year, I did a very extensive strategic management project on Tullow Oil. It’s very apparent that the company has seen huge growth since day 1, from it’s routes in Ghana, it had various stages of organic growth, leading it to becoming one of the largest independent oil and gas producers in the world.

In recent years the company, under the stewardship of Aidan Heavey, has looked to focus primarily on the huge Jubilee field off the coast of Ghana. It seems apparant that this is one of the largest fields in the world, and has the potential for even more rapid growth. Everything about Tullow screams success. It has a exploration success rate, far above the industry average, it’s employee productivity is one of the highest in the FTSE top 100 and all of its KPI’s are sound.

It may be contended that some of Tullow’s success has been based on luck, they have always seemed to be in the right place at the right time, and have yet to have anything major go wrong in the companies history.

Luck may change, Tullow’s oil reserves are dwindling in parts, with the companies production levels due to drop next year, but I don’t see the success of the company changing any time soon. I think the main volatility when it comes to Tullow is the price of oil. However at $77 I think it’s a far way off from being at a low level….

For the moment I’ll be holding onto Tullow. I bought 3,575 shares at 1,113p (roughly £40k worth) and these have seen a rise to 1,162p meaning that i’m already showing profit.

This is good as it is offsetting the initial loss I’ve made on BskyB

I purchased £20k worth of the shares at 717p yesterday after an eventful day which saw the share price rise by about 17% (I think) on the basis of News Corp proposing a cash offer for BskyB at a premium of approximately 22%. There is some talk that regulators might not approve the deal, however given that News Corp already own 40% of the company a lot of what i’ve read is that it will ultimately go through.

My shares in BskyB took a hit after the inevitable profit takers (I’m presuming) and the share is currently trading at 705p, I purchases at 717p representing a loss of £332 with the market still open. I think i’ll be holding onto BskyB until the deal goes through, hopefully leaving me with a tidy profit.

Below you can see a screenshot of my bullbearings account

Over the other side of the pond I also have two shares in play.

Coinstar inc (CSTR), based on the recommendation of twitterer, blogger and all round nice guy @fiscalstudent – Coinstar is the crowd behind the change counting machines, they also hold 80% of dvd rentals redbox, who are expanding rapidly. Fiscalstudent got out a few weeks back, showing 80% on his investment as can be seen from his blog post here. I thought it was still worth a look see and early doors suggest I may have been correct. Trading over 2.5% higher then my purchase price, this largely seems to be on the back of extending its revenue sharing license agreement with redbox.

Harris & Harris Group (TINY) are a publicily traded venture capital company that specialises in early stage nanotechnology and biotech companies. Founded way back in 1981 it has concentrated its investments primarily in nanotech since 2002. I came across this crowd while reading an investment thread on forum where a poster gave some very good reasoning behind why this was one of his stock picks.

TINY’s maturing portfolio provides it with many opportunities from which it must produce just a few significant winners to significantly boost its net asset value (NAV). In the future, IPOs or profitable acquisitions will significantly drive up TINY’s NAV and thus their share price. I expect that when the credit markets open up fully again and the US and international economies recover, the number of clean energy, biotech and nanotech IPOs will subtantially increase.

Obviously it’s a high risk share, but none the less i’m happy to have come across it. Another posted also said how it had showed up on gurufocus.com

It has shown a 5% increase since I got on it.

So as can be seen, I’ve started off nicely, beginners luck…..

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