Meeting:

Monthly Meeting  - August 2005

 

Held at:

The Brocklebank, Crewe

Date:

10th August 2005

 

 

Time:

17:00 – 18:30

Prepared by

Dave G

 

Chairperson:

Kit P

 

Present:

Adrian T (part)

 

 

Chris B

 

 

Dave G

 

 

Kit P

 

 

Simon B

 

 

Paul L (for AOB)

From SWIFT Investment Club

 

Apologies:

Richard W

 

 

 

Chairman’s Acceptance of Minutes

 


_____________________________________________


____ / _____ / ____

Signature

Date

 

 

 

1           NEXT MEETING

Proposed dates for future meeting are as below.  Each to be confirmed at the preceding meeting:-

            Wednesday 21st September (note change of date from that previously agreed)

            Monday 17th October

            Monday 21st November

            Monday 19th December 

2           Minutes of previous meeting

Accepted.

3           ACTIONS FROM PREVIOUS MEETING

3.1          Actions Closed Since Last Meeting

Ref.

Description & Progress

Status

CB/0718/02

In the Treasurer’s Report, show Sportingbet as being in Leisure sector rather than being shown as Software

COMPLETE

CB/0718/05

Update the Treasurer’s Report to calculate the % in one stock based on the non-cash assets rather than using total net asset value that is currently used

COMPLETE

SB/0718/07

Complete a fundamental buy proposal for Pace Micro

COMPLETE

ALL/0718/08

Review the Pace Micro buy proposal when it comes out to allow the buy/no-buy decision to be made without having to wait until the next club meeting (see rule 3(f) in the club rules)

COMPLETE

ALL/0718/10

Consider whether we should leave the Abbey account open and accept the fact that we’ll incur transaction charges from September 2005 OR whether we should transfer our holdings to the Barclays account before that date

0810: Agreed that we should close the Abbey account and transfer Egg and UBC Media to the Barclays account before September but that Jarvis should be sold as it would have near zero valuation when the Barclay’s commission is taken into account.  See new actions CB/0810/01 and RW/0810/02 below arising from this discussion.

COMPLETE

DG/0718/13

Invite the other club member from Crewe to our August meeting

0810: Paul from SWIFT Investment Club attended the meeting

COMPLETE

DG/0718/11

Mail out a filtered list of possible Investment Trusts to put our cash pile into

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:  A fairly quiet month with our holdings up £301 on the month.  Unit value up from 594.453 to 597.911.  We have £5721.90 of non-mechanical cash.

4.2          Matters Arising From Report

The rights issue in Hunting was taken up as agreed at the last meeting. 

The Infast cash should come through in the coming month. 

With the commission-free status of the Abbey account ending in September, Richard proposed via email that we sell Jarvis and transfer the holdings of Egg and UBC Media into the Barclays account so that we can close the Abbey account.  This was agreed.

5           PORTFOlio Management

5.1          Monthly Money Management Checks

For the first time in months, possibly years, everything is showing up as “OK”. 

Following the discussion of action ALL/0718/12 (see table at end of these minutes) a discussion took place on how we might manage the ‘cash’ that gets moved into any investment trust(s) that we may purchase.  Regardless of which trust is purchased, points to be considered are:-

·            Where money is invested in investment trusts, should it be treated as being ‘cash’ in Strategy terms?

·            As our cash builds up again over time, at what point do we decide to put more into the investment trust?

·            When we reach the point of wanting to put more money into the trust, do we need a separate buy proposal or does it just go into the investment trust by ‘default’?

·            How much cash do we actually want to have tied up in investment trusts?

The view of the meeting was that we should consider the cash in investment trusts as being somewhere between being “cash” and being a “fundamental holding”.  That is, it could be counted as being in the fundamental portfolio, but should be considered as being available for liquidation should we need to access the cash for any reason.

It was suggested that these sorts of questions should be covered in a revision to the Strategy before we put any money into an investment trust.  Dave to draft a proposed revision to the Strategy and to submit this for review along with the other changes covered by ongoing actions from previous meetings.

5.2          Mechanical Portfolio

This is a month for the ‘Value’ side of the portfolio with McAlpine being the candidate for sale.  However, like Sportingbet in July, McAlpine has risen beyond the target price so is now to be held until it breaches its trailing fall of 38.21p.   The top candidate for purchase would have been Wyndeham Press (WDSW) had McAlpine not been retained.

Contrary to our expectation last month that Sportingbet would breach its tight (4%) stop loss during the month, it actually rose to hit new highs.  However, it had fallen back to be very close to its 14.86p trailing stop loss.  Nobody had checked whether Sportingbet had closed below this value on since the weekend so the meeting didn’t know whether or not we had to sell Sportingbet yet.    Chris undertook to check the closing share price tonight and sell tomorrow if it is below 363.14p.   If it IS to be sold tomorrow, then its replacement is to be Charter (CHTR) which is still the top candidate on the Growth side of the portfolio.  If it is NOT to be sold tomorrow, then it is still possible that Sportingbet will close below 363.14p in the near future, at which point it needs to be sold but not replaced until the next club meeting. 

The table below now reflects the sell situation for each mechanical holding.  The appropriate sell condition (i.e. “Anniversary” or “Sell If Below”) is shown in bold.

 

Company

Portfolio

“Anniversary”

Purchase Price

Target Price

Trailing Stop Loss

High Since Purchase

Target Met?

Sell If Below

Sportingbet

Growth

Jul 2005

99.05

148.58

14.86

378.00

Yes

363.14

McAlpine

Value

Aug 2005

254.70

382.05

38.21

387.75

Yes

349.55

Hyder

Growth

Sep 2005

150.00

225.00

22.50

231.50

Yes

209.00

Lambert Howarth

Value

Oct 2005

272.00

408.00

40.80

363.00

No

408.00

Advanced Fluid Connectors

Growth

Nov 2005

24.65

36.98

3.70

30.75

No

36.98

Taylor Woodrow

Value

Nov 2005

242.39

363.59

36.36

347.25

No

363.59

Bellway

Value

Dec 2005

724.40

1086.60