Q1 2018: 1 Top-Up And 3 Blog Enhancements

30 March 2018
By Maynard Paton

Happy Easter! I hope you continue to find my Blog useful… and that your portfolio has coped well with the sliding 2018 market!

So far this year, my portfolio has extended its behaviour from 2017. In short, positive contributions from a number of holdings (notably M Winkworth, Mincon and Tristel) have been offset by one substantial loser (Tasty).

It has all meant I have started 2018 down 0.3% versus a 7.2% drop suffered by the FTSE 100. I suppose losing less money than a falling market is not too bad, although I think I would prefer to be thrashed by a rising market — and actually make money.

Anyway, I am glad the RNSs from my shares have been broadly positive. There has been a mix of impressive to acceptable-in-the-circumstances results, with only my smallest holding — System1 — issuing fresh disappointing news.

My portfolio activity has been limited to just one top-up. Let me outline what has occurred.

How my portfolio has performed

I publish quarterly updates to explain what has happened within my portfolio, and this Blog post is a recap of my January/February/March activity. You can click here to read all of my previous round-ups.

The table below lists all of my shares. Alongside each holding is my portfolio’s weighting at the start of 2018 and at the end of the first quarter.

This table also shows the total return (that is, the capital gain/loss plus dividends received) each holding produced for me during the quarter. Each holding’s contribution towards my overall 0.3% loss is disclosed, too:

HoldingWeighting
01 Jan 2018 (%)
Weighting
29 Mar 2018 (%)
Holding
Return (%)
Portfolio
Return (%)
Andrews Sykes3.94.02.80.1
Bioventix8.89.35.20.5
Castings6.46.1(3.3)(0.2)
City of London Inv7.07.59.40.7
Daejan6.36.2(0.9)(0.1)
Getech2.93.621.70.6
Mincon4.35.118.90.8
Mountview Estates8.17.5(5.0)(0.4)
Record6.26.89.10.6
S & U4.44.64.80.2
System11.51.3(18.3)(0.3)
Tasty6.14.9(44.0)(3.8)
FW Thorpe9.18.2(11.0)(1.0)
Tristel9.010.010.20.9
M Winkworth5.96.918.81.1
World Careers Network4.44.50.00.0
Cash5.73.5--
TOTAL100.0100.0(0.3)

I will not need another £200m-plus sale to do reasonably well

My only Q1 activity involved buying more Tasty. I increased my holding in the hapless restaurant group by 85% at 15p including all costs.

These shares have shown textbook ‘falling knife’ characteristics during the last eighteen months — and 2017 saw my portfolio pay the price from my averaging down.

However, I am now hopeful some bad-but-not-as-terrible-as-they-could-have-been figures for 2017 have reassured the market the group is not going to go bust just yet.

I must confess, Tasty is not my typical investment.

Restaurant chains tend not to offer outstanding business qualities, and the gloomy news emerging from the sector has hardly helped. For me, the investing premise has always centred on the Kaye family management — which has built and sold two multi-bagger restaurant chains for £200m-plus within the last 20 years.

I have held Tasty shares since December 2011, and watched the price almost quadruple as the group’s restaurant roll-out gained momentum… only then to see the price plunge 95% as the roll-out was curtailed as earnings evaporated.

To a certain extent, I am now back to square one… and I am essentially betting the Kayes can navigate the sector’s problems, eventually revive Tasty, and then one day sell the chain. With the company’s market cap at £8m, I will not need another £200m-plus sale to do reasonably well.

12 of my 16 shares published a statement during Q1

As usual I have kept tabs on all of my existing holdings — trying to seek out buying opportunities just in case.

Here is a summary of the statements issued during Q1:

* Very respectable figures from Bioventix, Mincon, S & U and Tristel;

* Acceptable progress from Castings, City of London Investment and M Winkworth;

* Subdued updates from FW Thorpe and Record;

* Satisfactory-in-the-circumstances results from Getech;

* Bad-but-not-as-terrible-as-they-could-have-been figures from Tasty;

* Disappointing news from System1, and;

* Nothing from Andrews Sykes, Daejan, Mountview Estates and World Careers Network.

Watch-list activity

You may have noticed I restarted my watch-list reports during the quarter. This aspect of my investing process has been sadly lacking throughout the last year or so.

I have since made amends by recently evaluating James Latham and Town Centre Securities — two small companies that are blessed with long-time family managers and illustrious dividend records.

I am keen to maintain my watch-list efforts throughout the rest of the year. The current market is hardly conducive to finding obvious quality bargains, but I hope by studying different businesses I can improve my returns over time.

At the moment my cash balance is low, and I am reluctant to increase my portfolio from 16 holdings. So any watch-list purchase would require a sale, although right now I am not exactly sure what I would sell.

3 Blog enhancements

Last year I fell ill and had to undergo an operation (I have since recovered). During my hospital stint, a ward clerk recognised my name from my days at Motley Fool (“Oh, so do you know David Kuo?”).

The clerk told me he used to like my Fool articles, and the enjoyable conversation that followed prompted me to enhance this Blog. I thought there may be one or two others out there who might like to read about my full-time investing exploits.

This is what I have done:

1) I have created an occasional newsletter

I have always used Twitter to alert readers to my new website articles. Twitter is easy and free… but most private investors I know hardly use social media. I can’t blame them — there is a lot of dross to wade through.

The best way to send article alerts is through email, although sending emails using the likes of MailChimp can be expensive if you have lots of contacts. Still, your content is more likely to be seen and read — so I found a cheaper long-term solution.

You can click here to sign up to my newsletter. Every so often I send extracts of my latest three articles. I should add that the newsletter contains articles that I do not publicise through Twitter.

2) I have created a Resources section

I discovered this tip from a mainstream blogging site. The blogger in question said one of her most popular pages was a Resources page, which listed everything she used for her job and website.

I thought I would create something similar. So I have outlined the services I use for my investing, and the software I employ to maintain this website. Here is my Resources page . I hope you find it useful.

3) I have revamped my Portfolio page

I installed Google Analytics a few months ago to discover exactly which pages you readers were reading.

I was amazed to find one of the most popular pages was this article on Cambria Automobiles. The post was published during January 2017 and for some reason has attracted a steady flow of visitors twelve months on.

I also found my Portfolio page to be a click magnet. So I have updated the page to contain some extra portfolio-report links, as well as a new table that outlines my long-term stock-picking returns. I plan to add further information to this page in due course. I hope you find all this useful, too.

There is work to do on the returns front

One downside to spending time on Blog enhancements is becoming distracted from the ‘day job’. It is no good having an informative website if my returns are poor.

I have to admit, there is work to do on the returns front. FTSE-lagging performances during 2016 and 2017, and now a flat start to 2018, have not been ideal.

The second quarter will bring results from — among others — Castings, Mountview Estates and World Careers Network — and I would like to think these statements might spark some life into their marooned share prices. I have my fingers crossed that my other portfolio laggards can perk up, too.

Until next time, I wish you happy and profitable investing.

Maynard Paton

PS: You can now receive my Blog posts through an occasional e-mail newsletter. Click here for details.

Disclosure: Maynard owns shares in Andrews Sykes, Bioventix, Castings, City of London Investment, Daejan, Getech, Mincon, Mountview Estates, Record, Tasty, FW Thorpe, S&U, System1, Tristel, M Winkworth and World Careers Network.

4 thoughts on “Q1 2018: 1 Top-Up And 3 Blog Enhancements

  1. Nick

    Wishing you a wonderful Easter Maynard. Thank you for your continued dedication to your website and newsletter. Your views are always appreciated and certainly worthy of my full attention. We only have one holding in common and that is BVXP. I have considered TSTL but never pulled the trigger.

    I hope the 2nd quarter is better for all of us, although I cannot complain about BVXP and more of the same will do nicely!

    Reply
  2. Philip Hutchinson

    Hi Maynard,

    Thanks for the update. I think being flat in a quarter where the FTSE lost 7% is a very good performance indeed. There are quite a few investors whose records of outperformance come from doing better in down periods for the market, not necessarily from outperformance in bullish periods.

    I also hold BVXP but not any other of your shares (although a few – MTVW and DJAN, and possibly TSTEL – are on my watch list.

    Thanks again for the blog, it really is terrific.

    Rgds
    Phil

    Reply
    1. Maynard Paton Post author

      Hello Philip

      Thanks for the Comment. At the risk of tempting fate… I have generally found that my portfolio fares relatively well in tricky markets. Some of that comes from one of my favourite mantras, which is investing is not only about picking winners, but also avoiding losers. I guess the skill with long-haul investing is to be able to get yourself through to the next bull phase in good shape.

      Maynard

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *