A presentation outlining my approach to investment. 2013 returns of JIC Portfolio +41.5% and +71.6% since 1st January 2012

1. My Approach to Investing
31st December 2013

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

3. My approach
• Mid and small cap preferred hunting ground
• FTSE 100 10.1%, FTSE 250 18.8% , FTSE Small 22.2%, FTSE Fledgling 12.7%,
AIM 29.2%, Hedge Fund 6.7% and cash 0.1%
• Market Caps: 11.8% <£50m and 11.9% between £50m and £100m
• 26.8% currently in pooled vehicles; Investment Trusts favoured thematic and overseas diversification
• No more than 30 holdings; currently 28

4. FTSE 100 v FTSE 250

5. 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

6. JIC Portfolio
as at 31st December 2013

7. Earnings Upgrades!
Adept Telecom
Sainsbury
Berkeley Group
easyJet
Synectics
Thorntons
Dixons
Lamprell

8. Where do I get ideas from?
• 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!

9. 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!

10. Director Buying/Selling
• Buying more important than selling! (Green B’s along top axis represent Directors’ buying)

11. Basic rules
• Write up the investment case before buying
• Don’t catch falling knives
• 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

12. 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

13. Stop losses; Lamprell

14. Stop losses; easyJet

15. Stop losses; St.Ives

16. 2013 Mistakes
• Selling too early!
•
•
•
•
Fenner
Findel
Staffline
Quindell
• Not being disciplined with stop losses,(far earlier)
• Agriterra
• Polo

17. RISK!
• Risky in that it is all equities but since Inception, 1st January 2012,
Statpro stats look favourable in comparison to FTSE All Share (right
hand table) and looking forward is forecast to be less volatile (left
hand chart)!

18. RISK!

19. DISCLAIMER
Please accept the following:
The content of this presentation is not intended as investment advice. I
am posting my portfolio and showing 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) 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.