Small Cap Value Report (Fri 3 Nov 2023) - SCE, CURY, WIX

3rd Nov '23 by Paul Scott

67 comments 7419 reads

Good morning, it's just Paul today, as it's Friday.

All done for today, and the week! Podcast tomorrow :-) Have a lovely weekend all!

Brief market comments

The bounce is on! Is it going to be another bear market rally, or the start of a new bull market? Who knows, it depends on whether people buy or sell.

Although it does seem to me that this week might be a turning point, as peak interest rates appear to be in, and markets look forwards. So who knows, but my money remains fully invested, as I think small caps are offering some tremendous value right now, for patient holders.

Yes there are lots of profit warnings happening, and likely. There are also loads of takeover bids too. So I think these seem excellent conditions for investors who can tolerate the odd disappointment, and who think medium/long term (and of course who pick our shares carefully).

Managing my portfolio

Nobody forces us to sell anything, if we're ungeared. So if I don't like the market price of a share I hold, then I ignore the market price as being unsatisfactory. What's wrong with holding? Especially if there's a divi to look forward to every 6 months.

A few years ago, I decided that staring at profit & loss figures every day was clouding my judgement. So I removed the columns in my spreadsheet showing the original cost, and the running profit/loss on each position. I found this greatly helped my decision-making. Instead of worrying about positions in the red, and gratefully selling them if they got back to breakeven, instead I focused on the fundamentals of each company, and the prospects. Is it decent value at the current price, with a reasonable outlook & balance sheet, and hence worth holding? If so, then my decision is to remain a holder, and my original buying price is totally irrelevant. That's something worth thinking about. Equally, if the fundamentals have gone wrong, and I don't like the value/prospects for the company any more, then it should be sold - and again, my buying price is irrelevant. It's easier to sell a duff share if you don't look at your P&L on it.

Explanatory notes -

A quick reminder that we don’t recommend any stocks. We aim to review trading updates & results of the day and offer our opinions on…

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Wolf of Small Street

3rd Nov '23

This weeks Top of the Pops & Top of the Flops (excl. total junk)

Some much better looking potential early trend reversals showing up now. Theres loads but a few here

A very powerful move up on the S&P this week up 6% (weekly bars) Has the look of short covering as was the case in October also. Will see where it finishes.....tend to see a selloff on Friday last couple of weeks

Charles Mitchell

PEEL HUNT agree https://citywire.com/investmen...

portugull

Reference the post by Mark Carter on Diageo (LON:DGE) I listened to a Podcast by Nick Train to Investors Chronicle last night and Mr Train is a big fan of the Company. A hold for ever type of Share.

mikebianchi

I used some of my horrendous losses eg Patisserie Valerie and some Woodford duffers against capital gains on BTL. But losses in an ISAs and SIPPs are a total loss

The Phoenix

Just want to say ladies and gents thanks for some brilliant posts this week compared to the car crash that is advfn bulletin boards there's some real top table posters here who comment every day on Stocko , in my opinion that is worth the subscription alone.

Haven't seen Timarr about recently who is generally mustard on the macro but hopefully he's lurking somewhere around.

Have a relaxing weekend folks maybe the sunlight is starting to chink through after an awful 18 months , i've been trading 25 years plus and don't remember all asset classes getting beat up at once as has happened last year and a half, even in gfc bonds boomed to cushion part of the pain.

Hopefully the good times may be about to start to roll again.

Andy

SaarfLondon

Currys (LON:CURY) "The enterprise value is £175m, so this is material to the group’s £544m market cap"

Made me sit up ! ...looks cheap ,should read £1.75bn LOL !

yiannos1

Last 25 years interest and mortgage rates have not increased by 5%!

Withdrawals and redemptions (from stocks to bonds) have been the driving force in this market.

As for the majority of the small caps in the UK one can easily understand that they are mostly listed poxy companies (NOT ALL).

This week Top of the Pops includes mostly junk companies that have bounced from their lows.

Top of the Flops companies (excluding 5-6 of them) will probably not be listed in 3-4 years!

The advantages of a well diversified portfolio; even a couple of zeros will not destroy your portfolio and your life time savings and hard work.

jamesalastair

Nice post and I agree. Great place to come and take the temperature, learn something new and share the pain.

Boon

Exactly. My portfolio performance today, even with a -30% for SCE, is still better than the FTSE all-share benchmark.

Risk sizing is always the unsung hero, but it helps when more of the risky clangers are in the smaller holdings.

Paul Scott

WRONG!

No, sorry you're completely wrong there, I don't make mistakes like that!

I was talking about the EV of the Greek subsidiary that is being sold. Not the group EV.

Maybe query the numbers, rather than incorrectly trying to correct me, in future? I pride myself on my numbers. How often are they wrong? Hardly ever. And immediately corrected on the (very rare) occasions they are wrong.

Exactly!

Certainly a lot of speculative stuff up this week yiannos.

Big soz , scan read your article after looking at Stocko report stating £1.85bn EV ..been a long day -have a nice weekend

Harry Hindsight

A good day for Gold

Probably on the back of interest rate rises are done.

But don't trust the market. Horse racing must be more predictable than this stuff.

Thanks SaarfLondon!

You're one of my favourites, glad we got this sorted :-)

Best wishes, Paul.

I spotted that too.

Big LOL -You are MY favourite - Pauly Pilot

Silver Moon

4th Nov '23

Paul’s optimistic cry of ‘The bounce is on! Is it going to be another bear market rally, or the start of a new bull market? Who knows, it depends on whether people buy or sell’ has prompted a deeper look into my spreadsheets. With help from Edmund Shing, (hi Edmund!) with his Rule of 72 Predictor by which means I can use the Past to see the Future in so far things remain in the area of normality. So to discover how many years it will take for my efforts in equity investment to double the value of the portfolios I maintain I used the annualised growth of the past 5 years. Covid occupied a central part of this term of course but I guess this should count as being within the area of normality today. Backing up the annualised growth is the inclusion of all dividends and the addition of spare cash which ends with a prediction of 18 years to double the current amount in the portfolios. It is hard to reconcile the resultant pessimism with Paul’s optimism; Friday’s upward skip surely follows the adage that one swallow doesn’t make a summer. Here’s how Word sees the trend in my portfolios for this year to date.

Going back to the calculator the past 3 years predicts a doubling in the portfolios in 17 years’ time, and in both cases the gain is bound to be nullified by inflation? Will compounding come to the rescue? In my own case, at age now of 79 I simply won’t be around. All this means that it’s high time to put all I have learned from members comments, the SCVR, and the Stock Reports to better use than previously.

Silver

Small Cap Value Report (Fri 3 Nov 2023) - SCE, CURY, WIX

Brief market comments

Managing my portfolio

Explanatory notes -

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Paul Scott

67 comments

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