Meeting:

Monthly Meeting - February 2005

 

Held at:

The Brocklebank, Crewe

Date:

22nd February 2005

 

 

Time:

17:15 – 19:00

Prepared by

Dave G

 

Chairperson:

Dave G

 

Present:

Simon B

 

 

Dave G

 

 

Kit P

 

 

Richard W

 

 

 

 

 

Apologies:

Chris B

 

 

Adrian T

 

 

 

Chairman’s Acceptance of Minutes

 


_____________________________________________


____ / _____ / ____

Signature

Date

 

 

 

1           NEXT MEETING

It was recognised that Chris could only make March 11th or 18th but general preference was to have meetings in the middle of the weeks so decision taken to leave March meeting as 23rd.

Proposed dates of next meetings therefore remain as:-

Wednesday 23rd March

Wednesday 20th April

Wednesday 18th May

Wednesday 15th June

Wednesday 13th July (AGM)

Wednesday 10th August (to include strategy review)

Wednesday 7th September

Wednesday 5th October

Wednesday 2nd November

December date to be arranged.

2           Minutes of previous meeting

Minor typo in section 5.1 but otherwise accepted.

3           ACTIONS FROM PREVIOUS MEETING

3.1          Actions Closed Since Last Meeting

Ref.

Description & Progress

Status

ALL/1102/07

Consider how best to allow a more relaxed approach to speculative purchases (e.g. setting up a second Club?)

1207: Richard’s new speculative buy proposal form may well be enough of a relaxation.  Do we need to do anything else?

0106: No progress

0222: The revised buy proposal is enough to address this issue

COMPLETE

RW/0106/01

Purchase appropriate amount of Hunting

COMPLETE

RW/0106/02

Spend remaining Abbey money on UBC Media

COMPLETE

DG/0106/05

Ensure that the club website is nominated for website of the year.

0222: We entered for best website, best performing club and investment club of the year.

COMPLETE

DG/0106/06

Send out details of the Proshare Awards event

0222: Will take place in London on 22nd March. 

COMPLETE

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  Another even more excellent month with an overall rise of £3692 on holdings.  Unit value up from 536.159 to 601.064.  We have £4347.40 of non-mechanical cash.

4.2          Matters Arising From Report

Richard noted that dividend for WAGN could have been included in the valuation but that it will be picked up next month.  Also, Richard noted that Chris had made a cautious valuation of Bellway quoting 834p per share where he could have used 859.5p so our monthly rise was actually even a bit better than that quoted.

As the unit value had broken through 600p, a brief discussion took place on how the unit value is often misunderstood in that a high unit value is interpreted as meaning that individual units are ‘expensive’ and, somehow, less attractive than if the unit value was low.   Indeed, Dave said how he had received one or two emails from other clubs in the recent past wondering whether our high unit value had put anyone off buying more units!   Richard and Simon jokingly suggested that we should have a ‘share split’ of our unit value now that they cost more than 600p !!

5           PORTFOlio Management

5.1          Monthly Money Management Checks

Fundamental portfolio is still “Too low” (20% against strategic minimum of 25%).

5.2          Mechanical Portfolio

This month is a month for the ‘Value’ side of the portfolio.  WAGN is the one to be sold but it is also the top candidate for purchase.   As WAGN was quite significantly ‘underweight’ compared to the other holdings, the strategy suggests that we could purchase additional shares to bring it closer to 1/12 of the total value of the mechanical portfolio.  This principle was agreed as the shortfall was such that making the additional purchase would still be a trade that was sufficiently large to keep trading costs below 3%.  However, at the weekend, the spread on WAGN was 5.6% which is a little higher than the 5% level that we aim to keep within (though this is only an ‘ideal’ maximum rather than a rigid rule).  The meeting agreed that 5.6% was not too inappropriate so agreement made to purchase additional shares to “top up” our WAGN holding.  Richard to make purchase of appropriate amount.

Discussion then covered whether we should avoid future debates about whether a particular spread was or wasn’t too high by adopting a new rule about maximum spread to formally filter out any shares that exceed a certain spread.  On balance, the club agreed to leave the existing mechanical rules unchanged and to keep the existing flexibility regarding deciding appropriateness of a particular spread.  

The table below now reflects the sell situation for each mechanical holding.  The appropriate sell condition is shown in bold.

Company

Portfolio

“Anniversary”

Purchase Price

Target Price

Trailing Stop Loss

High Since Purchase

Target Met?

Sell If Below

Horizon

Growth

Mar 2005

66.50

99.75

9.98

84.50

No

99.75

4Imprint

Growth

May 2005

141.50

212.25

21.23

222.50

Yes

201.28

Fyffes

Value

Jun 2005

117.34

176.00

17.60

152.00

No

176.00

Sportingbet

Growth

Jul 2005

99.05

148.58

14.86

288.50

Yes

273.64

McAlpine

Value

Aug 2005

254.70

382.05

38.21

337.00

No

382.05

Hyder

Growth

Sep 2005

150.00

225.00

22.50

206.50

No

225.00

Lambert Howarth

Value

Oct 2005

272.00

408.00

40.80

340.00

No

408.00

Oystertec

Growth

Nov 2005

24.65

36.98

3.70

30.75

No

36.98

Taylor Woodrow