Meeting:

Monthly Meeting - October 2003

 

Held at:

The Brocklebank, Crewe

Date:

22nd October 2003

 

 

Time:

17:15 – 18:45

Prepared by

Dave G

 

Chairperson:

Adrian T

 

Present:

Adrian T

 

 

Richard W

 

 

Simon B

 

 

Dave G

 

 

Chris B (from item 5.5)

 

 

 

 

 

 

 

Apologies:

Kit P

 

 

 

Chairman’s Acceptance of Minutes

 


_____________________________________________


____ / _____ / ____

Signature

Date

 

 

 

1          NEXT MEETING

Wednesday 19th November 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/0919/02

Purchase £1200 of AHT shares

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 387.356 to 409.354.  We have £3311.87 of non-mechanical cash. 

4.2      Matters Arising From Report

Discussion took place on whether to take up the Parity rights offer of 252 shares (in addtion to the 289 we hold) at a price of 7.5p, i.e. a cost of £18.90.  This is approximately 25% below the current market price and would incur no commission costs.    Decision taken to take up the offer as it had very little downside risk (only £18.90).

5          PORTFOlio Management

5.1      Monthly Money Management Checks

All checks OK.

Mothercare pushing close to being 20% of the club’s asset value.  Discussion took place on whether to take some profit given this and the fact that the 50% rise in the last month makes Mothercare now appear at least fully valued…..possibly overvalued.  It’s almost trebled since purchase.  Decision taken to sell approximately half of current holding in Mothercare.

5.2      Mechanical Portfolio

Mowlem to be sold this month but only TDG has passed the filters so, as we already hold that, there is nothing to purchase.

This situation isn’t explicitly covered in the current strategy so discussion took place on whether to just hold cash for a year in this circumstance or relax the filters to see whether it brought other companies into play.

Decision taken to relax the Market Cap filter from being 0.04 of Allshare down to 0.02 of Allshare.   If this brings in additional shares then we’d pick the highest market cap share that passes (i.e. the one closest to meeting the original criteria) but would only select it for purchase if it is ranked in the top 50 of unfiltered shares.  If this relaxation of the Market Cap filter still does not bring up another share then email discussion to decide upon most appropriate approach (i.e. whether to relax other filters or whether to retain cash).

Current holdings (anticipating the sale of Mowlem tomorrow) …

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

---nothing yet selected-----

For the October 2003 selection

 

5.3      Monthly Reports For Each Company in Fundamental Portfolio

CodaSciSys

HOLD – Review scheduled for next month.

Mothercare

SELL HALF (see discussion in section 5.1 above) but continue to run existing 15% trailing stop loss on the remainder

ISG

HOLD – Risen 11% in the month since purchase.  Not yet met sell criteria (see table in 5.5 below)

 

5.4      Speculative Portfolio

Parity

HOLD – not worth selling but take up the rights offer.

Atlantic Caspian

HOLD (especially as it’s delisted !!)

Templeton Emerging

HOLD – not worth selling but look to sell if opportunity arises as the warrants expire next year

London Clubs International

HOLD – not breached trailing stop loss (see table in 5.5)

Cape

HOLD – not breached trailing stop loss (see table in 5.5)

Ashtead

HOLD – not breached trailing stop loss (see table in 5.5)

5.5      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 5.2 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

320

160p

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

310

263.5p

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

ISG

Richard

170

85p

Hold for 6 months (March 2004) then review.  Before then, run trailing stop loss of 50% to start from purchase price

CAPE

N/A (speculative)

66

52.8p

20% trailing stop loss

PTY

N/A (speculative)

88

22p

Revise on taking up the rights offer.  Existing criteria are “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

Look for opportunities to sell (though currently not worth selling) as the warrants expire within a year.

LCI

N/A (speculative)

74.2

Vote at 45p

Start price 37.1p. Invoke 15% trailing stop loss once price has doubled otherwise vote if falls below 45p.

AHT

N/A (speculative)

29

7.25

Start price 14.5p. Invoke 15% trailing stop loss once price has doubled, or sell if price falls 50% from purchase (unless not worth selling)

 

5.6      New Buy Proposals

No new proposals

6          Lucky Llama competition

Simon wins the first month of the new competition.

Simon   

£109,325.27

Richard 

£109,292.79

Dave    

£108,019.16

Adrian  

£100,562.77

Chris   

£100,000.00

Kit     

£100,000.00

 

New selections put forward by Simon, Chris and Adrian. 

7.                         Competitions

Our entry for October’s FTSE Flyer is Amvescap just because it was one of the best risers on the first day of the competition.

8.                         ANY OTHER BUSINESS

Dave reminded everyone that Proshare’s Dividend magazine no longer exists and is, in effect, available on-line  at the Proshare website (www.proshareclubs.org.uk)

Richard explained that he had changed the data source for the stock screening process from Hemscott to Sharescope and that the stock screener has been enhanced to include new filters (like volatility, relative strength, PEG, etc.).  Richard to send out details of which filters were available to assist everyone’s thinking of new criteria for a second mechanical portfolio.

The Club agreed to pay 50% of Richard’s subscription costs to Sharescope.

The lack of a club website meant that there was no repository for our documentation.  Dave said that he had started putting stuff up again using webspace provided by his ISP.   Dave was asked to send out the URL of this webspace so that everyone could access the documentation up there if necessary.

Actions carried forward to next meeting

Ref.

Description & Progress

Target Date

SB/0716/01

Issue chairman’s annual statement via email

0820: No progress

0919: No progress

1022: No progress

19/11/03

ALL/0716/04

Consider different mechanical selection criteria for a new mechanical portfolio

0820: Deferred to September meeting

0919: All still to consider

1022: No progress

19/11/03

DG/0716/06

Contact Adrian B about the tape of the Radio Stoke appearance

0820: No progress

0919: DG has just sent mail to Adrian

1022: Adrian B has the tape – he has said that he will pass it on to Chris or Kit (though Dave has given him his home address so he could post it there)

19/11/03

CB/0919/01

Provide an explanation of how the subs are represented in the monthly treasurer’s report (forward payments, etc.)

1022: No progress

19/11/03

DG/0919/03

Amend Club Strategy to clarify % composition calculation in section 5 and to add statement about a bid forcing a sell of a mechanical selection (in 12.5)

1022: No progress

19/11/03

CB/1022/01

Take up the Parity rights issue

24/10/03

RW/1022/02

Sell half of our Mothercare holding

23/10/03

RW/1022/03

Sell Mowlem from mechanical portfolio

23/10/03

RW/1022/04

Relax mechanical filters slightly to see whether it brings forward another selection for October

23/10/03

RW/1022/05

Send out details of which attributes can be used as filters in the new stock screener.  This may help others in their consideration of ALL/0716/04 above.

19/11/03

CB/1022/06

Arrange for Club to pay 50% of Richard’s ShareScope subscriptions

19/11/03

DG/1022/07

Send out details of URL which is being used as replacement of the now expired www.rsic.co.uk

19/11/03

 
 
Proposed agenda for NEXT meeting.
 
RSIC Monthly Meeting – 19 November 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.     AOB