FYI - please find in the below link (scroll down homepage) a few slides that I presented at Monday’s Mello investors Event. Entitled - “Where the markets are wrong & how to profit”.
Here I try to detail my latest thoughts on the macro economy and outlook for equities (especially UK smallcaps) - alongside explaining how I’m positioning my overall portfolio for 2024.
Happy investing everyone & of course very best of luck.
ATB
Paul
Stocks owned : EQLS, AGFX, Pfizer, Bristol Myers, Roche, WATR, VCT, MBH, ASTO, IOM, TR25, ESYS, ELCO, IHC, Paypal & AOM Elsewhere, I'm also paid by Vox Markets (as a contractor) to interview interview fund managers, capital market experts & companies (re EQLS, VRCI, BELL, FIN, AVG, AVCT, LLAI, VLG, FADL, SUP, ELCO, LORD , MPAC & ONC). I believe all these stocks are clients of Vox.Lastly my 24 year HIT RATE is only 62%. Meaning 38% of the time I lose money (ie often wrong) - albeit my winners are (on average) 1.5x larger than my losers. Please Do Your Own Research. more »
My pleasure Kevin. I suspect we all just need a little patience, & the smallcap market should (hopefully) prove rewarding in the medium/longer term.
Thank you Paul for posting the link to these slides. Just what the community here is for :-)
My attention was drawn by your pick of Eleco (LON:ELCO) as a case study. I held for many years whilst it transitioned to a software business and the share price rose from 7p to 130p. Sadly for me it wasn't a life-changing event due to my tiny initial position, but a fascinating experience all the same. I sold in 2021 mainly because of the bust-up in the boardroom (quality of management is amongst my top criteria) but also because I had a sneaking concern that the software, particularly Asta Powerproject, never quite seems to sell at a pace necessary to continue the growth trajectory at the same pace?
I'm never quite sure how much of the growth is by acquisition and how much is organic? Or what kind of churn that have in their SaaS customers. So its hard to interpret the ARR numbers? There is no regular financial review section to the reports which doesn't help? Yes, the transition to ARR does depress sales revenue as they state. But the ARR revenue is generally much higher margin. They don't seem to give a target for this? Hopefully this will change with the appointment of a new CFO? The US expansion has been a topic for longer than Asta has been winning awards? All of which leaves me with a feeling that it's a good company, with a good product - but I'm not quite sure about the vision or the strategy to get there?
I'm generally looking for the potential to grow profits by at least 2 or 3 times in the medium to longer term. And while I have concerns about that - I think there is plenty of scope for them to achieve your 130p target. It's not enough to tempt me back in yet, largely bcause I'm fully invested and would have to sell something to buy Eleco.
I should thank you for your 'wheel of fortune' presentaton of your portfolio. So I hope you won't mind that I've copied it myself and it lives alongside my spreadsheet. An excellent visual cue when I can't see the wood for the trees. Here's my version:
Your portfolio performance is quite remarkable. Amazingly well done and I wish you luck with continued outperformance!
cheers
Mark (Allery)
aka illiswilgig
Paul, you're welcome.
Ha! I very nearly said something to explain. But decided less is more, unusually for me.
No it's not SYS its the other end of the column. The spreadsheet has managed to assign very nearly the same colour to both SysGroup (LON:SYS) and MS International (LON:MSI). I probably don't need to go into the details on MSI? Held for a decade but learn't from ELCO and started increasing my position at the 2020 lows on very good news not recognised by the market. So far so good. I am very conscious that its 40% of my portfolio, but doesn't stop me sleeping at night, quite the reverse.
Whereas SysGroup (LON:SYS) is a small investment that I have nearly exited. Management change and strategy change. I don't know the new management, and don't like the new strategy. It may well work, I wish them luck, but am not a fan of 'stick an AI badge on it' and will likely go backwards before it goes forwards again.
Have decided to solve the spreadsheet problem by exiting the remainder of my SYS holding. Easier than fixing the spreadsheet I reckon - and shows how low my conviction in SYS has become. Both SysGroup (LON:SYS) and Eleco (LON:ELCO) have largely been reinvested in Celebrus Technologies (LON:CLBS) and Pebble Beach Systems (LON:PEB. Out of the frying pan and into the fire?
cheers
Mark
