Meeting:

Monthly Meeting - November 2007

 

Held at:

The Brocklebank

Date:

16th November 2007

 

 

Time:

17:20 – 18:20

Prepared by

Dave G

 

Chairperson:

Adrian T

 

Present:

Adrian T

Chris B

Dave G

Kit P

Richard W

 

 

Apologies:

Simon B

 

 

Chairman’s Acceptance of Minutes

 


_____________________________________________


____ / _____ / ____

Signature

Date

 

 

 

1           NEXT MEETING

Dave to look in Outlook calendars for a suitably free date during week commencing 17th December. 

[Post Meeting Note: Tuesday 18th Dec seems to be a suitable date]

Dave to also send out meeting invites from Outlook Calendar so that it helps with reminders, etc.

2           Minutes of previous meeting

Kit P was shown as attending the meeting and also as having given his apologies.  He was in fact unable to attend the meeting and shouldn’t have been shown as an attendee.

Otherwise Accepted

3           ACTIONS FROM PREVIOUS MEETING

3.1          Actions Closed Since Last Meeting

None!

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:  £3715 loss in the month and another underperformance against the FTSE (-5.6 v -3.8%).  Now our 6th consecutive monthly underperformance against the FTSE though we’ve had 18 consecutive months of still beating the FTSE over a year.

Worst performer was Taylor Wimpey which was down 21% in the month.  Best performer Star Energy up 12.2% (and up a further 25% in the few days since the valuation was taken).

The Unit Value down from 818.562 to 779.073

Overall club assets stand at £72,287 (profit of £29,792). 

4.2          Matters Arising From Report

4.2.1           Barclays account

The attempt to purchase the listed CFDs after last month meeting had failed because whilst we had provide a warrant risk form to Barclays we had not completed the more recent covered warrant risk form (which also covered listed CFDs).

Chris contacted Barclays to obtain a blank form, however (maybe co-incidentally) Barclays wrote back with a  request for the personal id information for Richard which they hadn’t received previously and is required to conform with current FSA rules.  In addition they require further id for the club and completion of a new club agreement.  These requests were passed to Richard to progress in the first instance since he had no personal id on their approved list and this may take the longest time to resolve (especially judging by Kit's recent experience with Barlcays).

4.2.2          Selftrade account

We hadn’t previously completed the Selftrade risk warning form.  Chris had obtained a blank copy from the Selftrade website and asked the meeting to confirm that we understood the risks involved in dealing with complex investment instruments such as listed CFDs and that we, as a club, were happy to permit Chris as Treasurer and ‘Lead Investor’ (in SelfTrade’s terminology) to deal in these investments on our behalf.  Selftrade requested the form be completed and signed by the ‘Lead Investor’ and accompanied by a copy of the minutes confirming the above understanding. 

The meeting unanimously agreed that the risks were understood and that Chris could deal in these types of investment on our behalf.  A signed copy of these minutes will be sent back to Selftrade along with the completed form.

5           PORTFOlio Management

5.1          Monthly Money Management Checks

The Fundamental portfolio is still “too low” with 17.4% held in this portfolio against strategic minimum of 25%.   The Fundamental also remains too low in UK stocks with 77.5% held in UK stocks against a strategic minimum of 80%.

The recent small rise in Tesco had been enough to push it above the 30% strategic limit on any one Fundamental holding.

What this confirms is…….. Fundamental buy proposals of UK based stocks are still encouraged.

Alliance Trust is still above the strategic limit for any single temporary investment vehicle (12.8% v 10%) though this issue was acknowledged at the time of deciding to buy so is acceptable.

5.2          Mechanical Portfolio

No formal report produced but Lookers has reached its anniversary and will be sold this month from the Growth side of the Mechanical Portfolio.  We already own the top 2 growth candidates (M&C Saatchi and Empresaria) so the top valid candidate is the 3rd in the list, Volex, a "producer of electronic and fibre optic cable assemblies and electrical power cords".

Given the trade will not be made until Monday it was agreed that the filters be re-run this weekend to see if anything had changed. Richard to buy top valid candidate on Monday.

Current value of the Mechanical Portfolio overall is £35,544.54 which is down from £37,622.90 last month (-5.5%) compared to the market which is down 2.7%. This is the 6th consecutive down month for the portfolio during which time it has fallen by £8.5k or nearly 20%. Despite this it is actually still up over the last 12 months but only by a little under £2k (6%).

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

Annivers-ary date

Purchase Price

Target Price

Trailing Stop Loss

High

Target Met?

Sell If Below

Lookers

Nov-07

167.72

251.58

25.16

219.75

No

251.58

Oxford Instruments

Jan-08

273.73

410.60

41.06

309.00

No

410.60

Royal Dutch Shell B

Feb-08

1702.53

2553.80

255.38

2167.00

No

2553.80

ScS Upholstery

Feb-08

422.90

634.35

63.44

437.50

No

634.35

Renold

Feb-08

131.96

197.94

19.79

143.00

No

197.94

Taylor Wimpey

Mar-08

402.44

603.66

60.37

469.30

No

603.66

Character Group

May-08

175.00

262.50

26.25

185.00

No

262.50

M&C Saatchi

May-08

169.00

253.50

25.35

166.50

No

253.50

Alexon

Jun-08

260.16

390.24

39.02

260.00

No

390.24

Persimmon

Jul-08

1178.31

1767.47

176.75

1178.31

No

1767.47

Empresaria

Aug-08

132.00

198.00

19.80

137.00

No

198.00

Ukrproduct

Aug-08

78.20

117.30

11.73

88.00

No

117.30

 

5.3          Monthly Reports For Each Company in Fundamental Portfolio

Qinetiq

HOLD - Not yet met sell criteria (see table in 5.6 below)

Wipro

HOLD - Not yet met sell criteria (see table in 5.6 below)

Tesco

HOLD - Not yet met sell criteria (see table in 5.6 below)

Blue Planet Worldwide Financials

HOLD - Not yet met sell criteria (see table in 5.6 below)

 

5.4          Speculative Portfolio

A bid approach had been received for Star Energy from Petronas.  This had sent the share price up 25% but it came in after the valuation for the month was taken.

5.5          Other Investments

Nothing to discuss.

5.6          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 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 EPIC

Stock Name

Reportee

“High” Price

Stop Loss

Exit Criteria

QQ

Qinetiq

Simon

218.5

163.88

25% trailing stop loss

WIT

Wipro

Chris

1581

1300

Sell if price falls below $13

Run 20% trailing stop loss at $20

TSCO

Tesco

Simon

491.5

368.5