Robbie Burns
Robbie Burns's columns :
30/01/2007Make Money from Sparkling New Shares
09/01/2007Don't have a Lazy New Year
21/12/20062006 - A GREAT YEAR FOR SHARES
01/12/2006Stocking up for Christmas
01/11/2006Be an Investor with a Plan
26/09/2006Buy Shares Before They Hit the Market?
05/09/2006Unexpected market statements: Interserve and Homebuy >>
26/07/2006A Sunny August Ahead?
10/07/2006Beware of the Penny Share
27/06/2006AIM Shares & ISAs
07/06/2006Beware of Stop Losses
19/05/2006Investors Feeling Flat
03/05/2006Go Away in May?
20/04/2006Spread Betting

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Robbie Burns – The Naked Trader

Robbie has been trading full-time since 2001. His book "The Naked Trader" (which also has useful information on how to use advfn) has become one of the biggest-selling finance books, reaching the top 150 books on Amazon - order it here. Trades made for Robbie's website have amassed profits of more than £300,000. You can read about his buys and sells daily at www.nakedtrader.co.uk.


Unexpected market statements: Interserve and Homebuy

05/09/2006

Two companies have shocked investors recently with sudden unexpected market statements.

Interserve reported that six managers were suspended following some "financial irregularities".

And Homebuy shares were suspended after the company reported trouble raising money.

Interserve shares instantly dived 20% while Homebuy shares remain suspended with investors left in the dark.

The problem with both statements is they came out of the blue with no previous warnings to investors that the companies were experiencing any problems at all.

Both companies looked like pretty decent and safe investments.

I found myself £3,000 poorer after the Interserve statement and I, along with other investors, am hopping mad about it.

A group of Interserve shareholders have hired a law firm to consider whether to sue the company.

Interserve announced it had discovered a "mis-statement of accounting balances" that stretched back at least five years. It added that the problem in the accounts would mean a reduction in its net assets by at least £25m.

I feel like I have been mugged and cash taken directly from my pocket as do many other Interserve investors who have contacted me. We are all interested in some kind of legal action.

Meanwhile Homebuy where I held no shares was suspended because the company said it needed more money and had to discuss how to raise it with banks and shareholders.

Right now it's impossible to say whether the shares will end up going down a lot or if indeed they will come back from suspension. Not a great position for shareholders.

What lessons are there to learn?

First - make sure your portfolio is diversified so that if a company goes bust out of the blue your capital won't be affected too badly.

And secondly don't place money into the markets you can't afford to lose. Consider any company you invest in could let you down.

If I find myself involved with a company that announces any kind of difficulties I immediately get out - there nearly always is something else around the corner.

Elsewhere it's been a great summer for my portfolio with, in particular, Vislink and Celsis flying high.

I'm off on my holidays for a couple of weeks but will be back with a new column mid-September.


You can read Robbie’s daily market comments together with his latest buys and sells at his website www.nakedtrader.co.uk

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