I put this presentation together as I was asked to present to an Investment Club, describing my approach to investment. Stop losses were of particular interest to them as I believe they have a number of holdings which have dwindled away without them cutting. I emphasise the importance of valuation, earnings upgrades and director buying and selling. Risk control is also described in detail.

1. 21st October 2013

2. DISCLAIMER
Please accept the following:
The content of this presentation is not intended as investment advice. I am
describing my approach to investing, showing my portfolio and using
examples, purely as a record of what I have done and does not constitute
advice on whether a share should be bought or sold. You should always do
your own research (DYOR), make your own decisions (MYOD) and be
comfortable with the risks before making an investment. Furthermore, you
should obtain independent financial advice from an FCA regulated
intermediary before investing money. Investing in shares involves an element
of risk: shares go up and down, (often in a manner that seems
irrational), and in the worst case, a company going into receivership, you can
lose all of your investment in that stock.

3. Agenda
• My approach
• Use of stop-losses
• Questions sent in advance
• Open forum

4. My approach
• Mid and small cap preferred hunting ground
• FTSE 100 8.0%, FTSE 250 23.4% , FTSE Small 19.8%, FTSE Fledgling
11.2%, AIM 28.5%, Unclassified 9.1% and cash 2.0%
• Market Caps: 5.7% <£50m and 18.5% between £50m and £100m
• 32.4% currently in pooled vehicles; Investment Trusts favoured thematic and overseas diversification
• No more than 30 holdings; currently 27

5. FTSE 100 v FTSE 250
(Source: ShareScope)

6. What do I look for?
• Companies where the projected PE ratio is below 15x and the PEG
Ratio is below 1.5x
• Companies where earnings are being upgraded
• I like growing dividends
• I tend to steer clear of companies with high levels of debt
• Companies that are hitting new price highs

7. JIC Portfolio
as at 21st October (Source: ShareScope)

8. Earnings Upgrades!
Adept Telecom
easyJet
(Source: Stockopedia)
Amino Technologies
Synectics
Berkeley Group
Dixons
Thorntons
Vislink

9. Where do I get ideas from?
• Stock screens
• Valuation; PE’s, PEGS, Yields
• New Highs
• “Guru” screens on Stockopedia
• Director buying/selling
• Financial press
• Other websites
I dismiss most ideas in about a minute!

10. Checklist!
• Quick look on ShareScope; PE, PEG, Yield, Chart
• Closer look on ShareScope; earnings history and forecasts
• Stockopedia; balance sheet, cash flow, earnings
upgrades/downgrades
• Read the company website
• Read recent announcements at www.investegate.co.uk
• I love words like “materially ahead”
• Write up my investment case!

11. Director Buying/Selling
• Buying more important than selling!
(Source: ShareScope)

12. Basic rules
• Write up the investment case before buying
• Don’t catch falling knifes
• Sell and move on!
• Don’t waste energy worrying about what you don’t hold; it is only
what you do hold that matters
• Don’t be frightened to take a position

13. Setting Stop losses
• At what price would it look like the trend/momentum had changed?
• Moving Averages; 50 and 200, often act as support
• Tend to use closing price rather than intraday
• I don’t use automatic stop losses
• Won’t help on a profit warning
• Can be stopped out on an intraday move

14. Stop losses; Lamprell
(Source: ShareScope)

15. Stop losses; Globo
(Source:ShareScope)

16. Stop losses; Worldwide Healthcare
Trust
(Source: ShareScope)

17. Mistakes
• Selling!
• Sports Direct
• Ashtead
• Tribal
• Not being disciplined with stop loss
• Agriterra
• Polo

18. RISK!
• Risky in that it is all equities but so far Statpro statistics favourable in
comparison to FTSE All Share and looking forward is forecast to be
less volatile than the index!

19. RISK!

20. Other Questions
• Access to companies
• Importance of PI’s
• Diversification
• Best current investment themes?
• Is JIC unique?