Meeting:

Monthly Meeting - May 2000

 

Held at:

Crewe Arms, Crewe

Date:

25th May 2000

 

 

Time:

17:35 – 19:00

Prepared by

Dave G

 

Chairperson:

Geoff O’F

 

Present:

Chris B

 

 

Adrian B

 

 

Dave G

 

 

Geoff O’F

 

 

Kit P

 

 

Richard W (from item5)

 

 

 

 

Apologies:

Richard W (to item 5)

 

 

 

 

 

Distribution:

As above

 

 

Chairman’s Acceptance of Minutes

 


_____________________________________________


____ / _____ / ____

Signature

Date

 

 

 

 

1.              Minutes of previous meeting

The minutes from the monthly meeting of 19th April were accepted.

2.              Next Meeting

17:00 – 19:00  Tuesday 27th June.  Venue Crewe Arms


3.              Actions from previous meeting

3.1            Actions Closed since last meeting

Ref.

Description & Progress

Target Date

KP/0827/02

Add Annual Reports to list and email to KP

0916: No progress

1019: No progress – DG has also obtained some annual reports since last meeting so needs to inform KP also

1124: KP to chase

1221: KP to chase all for details of new annual reports

0111: No progress

0216: No progress

0322: No progress

0419:  to close?

0525: Dropped this action – DG will put known list of annual reports onto RSIC website – everyone to send details to DG if they obtain new reports (see action DG/0525/01).

DROPPED

KP/1221/09

Compile and maintain a list of useful URLs

0111: Requires some action on ALL/1221/08 first!

0419: passed to DG

0525: Action dropped – see action DG/1221/08 (previously ALL/1221/08)

DROPPED

CB/0216/02

Begin process of transferring current account to Fleming Premier Banking

0322: DG noted that rules state that bankers cannot be changed unless through an extraordinary general meeting.  Agreed to hold an EGM on 19th April to coincide with next club meeting.  Item on agenda to be change of bankers.

0419: Awaiting signatures

0525: Closed as a result of EGM 25th May 2000

CLOSED

3.2            Actions Carried forward to Next Meeting                                  

See end of these minutes

4.                           Treasurer’s Report

4.1            REPORT SUMMARY

CB supplied his report (subsequently corrected to reflect the additional purchase of 53 Science Systems shares as part of the rights issue).

The (corrected) report showed that the llama is sick with net total assets having fallen to £8883.69 and unit value of 299.7p.

The current net value if realised on the Science Systems shares was calculated as £2746.00 (a profit of £1,718.66 (or 105% APR) so far on the deal).

The current net value if realised on the ARM Holdings shares was calculated as £3551.00 (a profit of £3,041.51 (or 446% APR) so far on the deal).

The current net value if realised on the Total Systems shares was calculated as £708.00 (a loss of £102.98 (or -30% APR) so far on the deal).

The current net value if realised on the Parity shares was calculated as £450.29 (a loss of £548.59 (or -137% APR) so far on the deal).

The current net value if realised on the Atlantic Caspian shares was calculated as £289.50 (a loss of -£110.50 (or -69% APR) so far on the deal).

The current net value if realised on the Cable & Wireless shares was calculated as £748.00 (a loss of £28.00 (or -10% APR) so far on the deal).

The current net value if realised on the Tibbett & Britten shares was calculated as £996.00 (a loss of £1.70 (or -2% APR) so far on the deal).

4.2            MATTERS ARISING FROM REPORT

CB to fill in tax form 1A5 similar to last year though it will be more complicated given the Workplace sale and the receipt of some dividends.

5.              Lucky Llama competition

RW had emailed his report.  KP takes the Llama yet again with a gain of 3.91% with only DG having also made a profit (of 1.1%) during the period.

All have until end of Friday 26thst May to send in buy/sell requests to be processed at the weekend. 

6.              Portfolio Management

6.1            Stop Loss Triggers

All holdings (other than the just purchased Tibbett & Britten) had invoked the 20% stop-loss trigger so discussion on each was necessary.  It was again agreed generally that whilst market would continue to be volatile, it was still worth hanging on.  Same principles as discussed as part of the 22nd March meeting were again raised (see those minutes for commentary).   However, taking each stock in turn…..

Parity

Never sold their contracting business and have also issued a profits warning.  Whilst fall has been pretty significant (down over 50% since purchase) current realisable value is less than £500 so isn’t necessarily worth selling – might as well hold on for recovery knowing that most we could further lose would be less than £500.  HOLD

Atlantic Caspian

Is only worth less than £300 to us if we sell now so, again, worth holding to see if the upturn eventually happens.  Not worth selling out just for £300.  HOLD

ARM Holdings

Some competitors to ARM are starting out but ARM has more or less captured the market at the moment and we are all confident that ARM is a winner.  The recent drop in price of ARM shares therefore represents a good buying opportunity rather than a selling opportunity.  HOLD.

Science Systems

Still has potential to be very big.  Held AGM yesterday and things are going as planned.  No change in fundamentals.  HOLD.

Cable & Wireless

Is making money and still reported as being sound.  Has been hit by Telecomms, Media, Technology (TMT) slump but no particular reason to think that C&W shouldn’t be a success and come through any shakedown.  HOLD

Total Systems

They announced a web commerce venture earlier this year and put up a web site in April.  However, the contents of this web site hasn’t changed which could be a sign that it isn’t going anywhere.  If we were to sell anything in particular (if only to break the possible psychological barrier to selling) then this could be the one to go.  Agreed that it may be worth selling this share if price rises to above 90p for no discernible reason.  SELL AT 90p

 

6.2            New Buy Proposals

No formal buy proposals submitted though RW had suggested Templeton warrants as a speculative punt.  This had been arrived at largely via number crunching but it did offer exposure to emerging markets and has good gearing, reasonable liquidity and a relatively long time to run – all good qualities.

Taking the drop in ARM price as a further Buy opportunity was discussed though it was recognised that ARM already makes up more than 40% of our portfolio’s value.  It was also recognised that even though buying more ARM would be an ADD rather than strictly speaking a Buy, there still ought to be a formal buy proposal submitted before any purchase be made. 

6.3            Sell Proposals

All covered as part of 6.1 above.

The discussion of when to sell Total Systems (see above) had identified the benefit in thinking at the Buy stage of what price we’d like to sell at and when – i.e. an investment target level.  DG to add a box to the Buy Proposal form to allow this to be recorded.

DG recalled an article on the Motley Fool site discussing the pros and cons (mainly cons) of a strategy based on selling when the price doubles.  DG to find this article and distribute it.

7.              Competitions

Express competition had been cancelled due to a printing error in some regions of UK.

Our Mail on Sunday tip for May had been Surgical Innovations but it’s lack of spectacular (indeed any) price movement makes it unlikely to be the winner.

We hadn’t entered the Independent competition (B/Bear) for May as DG had missed the copy of the Independent with the entry printed.

Mirror competition was entered earlier in the week.

Next competition dates are all in early June.

8.              AOB

None


Actions carried forward to next meeting

Ref.

Description & Progress

Target Date

RW/0415/05

As part of improving the records we keep on companies, set up and maintain a file on Science Systems

0510: No progress

0628: No progress

0726: No progress

0827: No progress

0916: No progress

1019: No progress

1124: No progress

1221: No progress

0111: No progress

0216: No progress

0322: No progress

0419: No progress

0525: No progress.  It was remarked upon that it wasn’t big or clever to have actions lasting longer than a year!

27/06/2000

CB/0916/02

Increase Market Master direct debit to reflect recent increases in subscriptions

1019: Awaited any late requests for changes to subscriptions before increasing direct debit.

1124: No progress

1221: No progress

0111: No progress

0216: No progress

0322: No progress

0419: No progress

0525: No progress but agreed that this action would be progressed as soon as bankers had been changed.

27/06/00

ALL/1221/07

Consider what we could spend some of the Mirror prize money on to improve our education (e.g. books, subscriptions, data, etc.)

0111: Agreed it would be sensible to spend approx £200 on furthering our education.  All to consider what it could be useful to buy.

0216: RW looked at TechInvest newsletter and it is OK but unlikely that we will act on its tips straight away.  Consideration of purchase of InvestorEase is a possibility though ShareScope is worthy of a look into also.  Agreed to carry  forward action to next meeting

0322: Financial Freebies website has some potential ideas.  DG said that he was considering whether to attend one of the recently advertised Proshare seminars.  The Leeds one is 16th April.  All agreed that the club should cover the cost of this (£19.50) if DG wished to attend, as long as he wrote a report to summarise the seminar.

0419: RW would like to wait for an update to ShareScope in order to re-evaluate packages.

0525: RW email had stated that ShareScope was not worth pursuing but proposed that we purchase InvestorEase.  Proposal was that RW pays half the cost and the club pays the other half.  This was unanimously agreed.  RW to arrange purchase (see action RW/0525/02).   KP had noticed that Motley Fool had advertised an investment information manual which the club may wish to purchase.  KP to investigate further.

27/06/00

DG/1221/08

Send details of useful URLs to club members with brief description of each

0111: No progress

0216: CB and RW have suggested some useful URLs.  RW added that if you register (free) with www.fool.co.uk, the “MyFool” page presents some useful links.

0322: DG supplied a handout from SHARES magazine with some reviewed websites but action is still outstanding

0419: DG to put links on RSIC Website

0525: No progress since last meeting

27/06/00

ALL/0111/06

Consider a suitable speculative investment for the remaining £400 of Mirror competition prize money.

0216: No progress

0322: No progress

0419: No progress

0525: RW email had suggested looking at Warrants and Templeton in particular.  Agreed to discuss as part of item 6.2 in the minutes.  

27/06/00

DG/0525/01

Put annual reports list onto website

27/06/00

RW/0525/02

Arrange purchase of InvestorEase, half of cost being covered by the club.

27/06/00

CB/0525/03

Complete tax form 1A5 for the club

30/09/00

CB&RW/0525/04

Sell Total Systems if price rises to >90p with no discernible reason to account for it.

27/06/00

DG/0525/05

Add a new box to the Buy Proposal form to allow the Target Price level to be recorded.

27/06/00

DG/0525/06

Find and distribute the Motley Fool article about the “selling when the price doubles” strategy

27/06/00