Meeting:

Monthly Meeting - August 2003

 

Held at:

The Brocklebank, Crewe

Date:

20th August 2003

 

 

Time:

17:30 – 18:45

Prepared by

Dave G

 

Chairperson:

Adrian T

 

Present:

Adrian T

 

 

Richard W

 

 

Simon B

 

 

Dave G

 

 

Kit P

 

 

Brewster the Bear

(for a brief part of item 5.2)

 

 

 

Apologies:

Chris B

 

 

 

Chairman’s Acceptance of Minutes

 


_____________________________________________


____ / _____ / ____

Signature

Date

 

 

 

1          NEXT MEETING

Friday 19th September 2003.

Venue: The Brocklebank 17:15 – 18:45.

2          Minutes of previous meeting

Accepted.

3          ACTIONS FROM PREVIOUS MEETING

3.1      Actions Closed Since Last Meeting

Ref.

Description & Progress

Status

RW/0620/01

RW to investigate CFD service

0716: No progress

0820: Report sent out by RW by email

COMPLETED

CB/0620/02

CB to investigate tax scheme changes

0716: Still needs details from Simon B, Kit P and Dave G

0820: No details from Dave and Kit but posted off anyway

COMPLETED

RW/0716/03

Attempt to register for the club on-line banking

COMPLETED

DG/0716/05

Scan in the articles from our competition wins

COMPLETED

3.2      Actions Carried forward to Next Meeting                  

See end of these minutes.

4          Treasurer’s Report

4.1      Monthly Report Summary

See separate report for detail. 

Highlights/Lowlights  Unit value up from 340.001 to 375.059.  We have £5,288.56 of non-mechanical cash.  Net Asset value rose by 17% on the month against a rise in the FTSE of just less than 3%

4.2      Matters Arising From Report

None.

5          PORTFOlio Management

5.1      Mechanical Portfolio

TDG was the only share that passed the filters but we have already got this in our portfolio.  Prior to the meeting, it had been proposed to change the Market Cap filter from being set at filtering out companies with Market Cap less than £100m, to filtering out companies with Market Cap less than 0.04 of All Share Index (in £m).  This change was agreed unanimously.

With the revised criteria, European Motor Holdings also passes the filters so it to be purchased for this month.  Woolworths is to be sold.

Once actioned, current holdings will then be …

Mowlem (John)

HOLD until October 2003

WH Smith

HOLD until December 2003

British Vita

HOLD until February 2004

Crest Nicholson

HOLD until April 2004

TDG

HOLD until June 2004

European Motor Holdings

HOLD until August 2004

 

5.2      Monthly Reports For Each Company in Fundamental Portfolio

CodaSciSys

HOLD – not met sell conditions

Mothercare

HOLD – not breached trailing stop loss

 

The Fundamental portfolio is still underweight, running at approx 18% of total club net value whereas strategy calls for it to be between 25% and 50%.

 

5.3      Speculative Portfolio

Parity

HOLD – not worth selling

Atlantic Caspian

HOLD (especially as it’s delisted !!)

Templeton Emerging

HOLD – not worth selling

London Clubs International

HOLD – not yet doubled

Cape

HOLD – not breached trailing stop loss

5.4      Stop Loss / Sell Criteria (as of date of treasurer’s report)

The following is the summary of sell criteria for each stock held within the Speculative or Fundamental portfolios (the Mechanical holdings are dealt with as part of section 5.1 above).  The stop loss is invoked against the “end of day” price, but the sell decision may wait for the opening price to avoid rogue trades at the end of day.

Stock

Reportee

“High” Price

Stop Loss (based on the “high”)

Exit Criteria

CSY

Richard

325

162.5

Hold until at least Nov 03 and then review;

In addition, review following any trading or results statement that expects / reports a fall in either revenues or profits over the previous reporting period;

Trailing stop loss of 50% to start from purchase price (based on mid-price due to large spread).

MTC

Dave

200

170p

Invoke vote on a sell proposal immediately following a bid announcement.  Otherwise,  sell on 15% trailing stop loss

CAPE

N/A (speculative)

58

46.4p

20% trailing stop loss

PTY

N/A (speculative)

88

22p

Start price 44p. Invoke 15% trailing stop loss once price has doubled, or sell if price falls 50% from purchase (unless not worth selling)

ACA

N/A (speculative)

20.4

5p

Start price 10.2p. Invoke 15% trailing stop loss once price has doubled, or sell if price falls 50% from purchase (unless not worth selling)

TEMA

N/A (speculative)

57

14.25p

Start price 28.5p. Invoke 15% trailing stop loss once price has doubled, or sell if price falls 50% from purchase (unless not worth selling)

LCI

N/A (speculative)

74.2

18.55p

Start price 37.1p. Invoke 15% trailing stop loss once price has doubled, or sell if price falls 50% from purchase (unless not worth selling)

 

5.5      New Buy Proposals

Richard W submitted a buy proposal for Ashteads (AHT).  Discussion took place over debt position and risk of possible bankruptcy was identified.  It was recognised that existing renegotiated banking terms were tough on the company but these expire in Jan 2005.  If company had traded well for a couple of years up to then and could then renegotiate the terms, expectation would be that they would be much better terms than at present and this would also boost share price.  

Agreed to purchase Ashteads for Speculative Portfolio given high risk but possibility of share price doubling (already risen 7-fold since lows earlier in year).  Maximum purchase amount permitted by strategy for this portfolio is 5% of net asset value so agreed to purchase £750 of shares.

6          Lucky Llama competition

Another month during which we were all in profit. Adrian needed his dividends to get into profit though, up just 0.7%.

Photo-me has jumped 54% in the month that Simon has held it but, as anticipated, Pace has had a major drag on his performance. Still up 1.8% over the month.

Dave is probably regretting selling Mothercare but he was still ahead by 2.1%.

Another good month for Kit, up 10.3%.

Chris managed a 11.4% rise without any of his holdings doing anything really spectacular.

Anite stopped Richard from winning last month but made up for it this time, up by nearly 50%. Overall up 14.8% on the month.

Big changes in the overall race with Dave's seemingly strong lead wiped out and now Richard has got the big lead with just a month to go! Very tight for second spot though and if any of Richard’s holdings should drop badly then it could go any of 5 ways.

Overall positions are as follows with only one month to play:-

Richard W

£144,736.13

Dave G

£135,452.84

Chris B

£134,890.80

Kit P

£134,098.32

Simon B

£130,243.59

Adrian T

£106,072.96

 

Portfolio changes for the coming month are:-

Simon buying Psion as it’s recently been tipped, Dave selling BskyB to buy British Energy as a complete gamble to make up the gap to Richard, and Richard selling Anite to buy TDG as it’s Dave’s biggest holding (a blatant attempt to play for the corner flags and protect his lead).

7.                         Competitions

Our entry for July’s FTSE Flyer was BskyB which made a small loss (less than 1%) over the competition period so that didn’t win.

Dave missed the entry for August.

8.                         Strategy Review

Next month is the Strategy review.  We should consider initiating a second mechanical portfolio to make use of our cash pile using a different set of criteria.  All to think about prior to annual strategy review (August).

It was agreed that for the fundamental portfolio, it should not be required to fully complete a buy proposal form before making a suggestion for purchase to the club.  A buy proposal form would need to be completed before purchase but partially completed forms could be circulated to members between meetings for consideration and further input prior to meetings.

Deferred to next meeting to allow more time for everyone to read Richard’s review reports and for people to consider possible changes to the strategy.  In particular, everyone was reminded to consider possible criteria for a second mechanical portfolio, and to try to consider ways of making Fundamental proposals easier to generate.

Actions carried forward to next meeting

Ref.

Description & Progress

Target Date

SB/0716/01

Issue chairman’s annual statement via email

0820: No progress

19/9/2003

CB/0716/02

Ensure that accounts are submitted for audit

0820: Accounts are ready for audit – RW to collect from CB

19/9/2003

ALL/0716/04

Consider different mechanical selection criteria for a new mechanical portfolio

0820: Deferred to September meeting

19/9/2003

DG/0716/06

Contact Adrian B about the tape of the Radio Stoke appearance

0820: No progress

19/9/2003

RW/0820/01

Purchase £750 of Ashtead (AHT)

21/8/2003

DG/0820/02

Put Strategy Review onto agenda for September meeting

19/9/2003

 
 
Proposed agenda for NEXT meeting.
 
RSIC Monthly Meeting – 19 September 2003 between 17:15 and 18:45

Venue: The Brocklebank

1.     Date of Next Meeting (2 mins)
[Agree a date for the next meeting]

2.     Agenda Changes? (2 mins)
[Any items for AOB or any suggested reordering of agenda?]

3.     Minutes of last meeting (1 min)
[Any comments on minutes from previous meeting

4.     Actions from last meeting (10 mins)
[Progress on actions]

5.     Treasurer's Report (15 mins)

6.     Portfolio Management (30 mins)

6.1. Monthly “Money Management” threshold checks

6.2. Mechanical Portfolio

6.3. Monthly Report for each Company in Fundamental Portfolio

6.4. Speculative Portfolio

6.5. Latest sell conditions for each share held

6.6. New Buy Proposals

7.     Lucky Llama Competition (10 mins)
[Latest positions and any new buy/sell decisions]

8.     Competitions (2 mins)

9.     Strategy Review (15 mins)

10. AOB