AIM Investments Share Discussion Threads

[doctor robert hope] 30/3/2007 22:32

Goatherd,

Best performing mining stock I am aware of and I think it narrowly beats First Quantum Minerals Limited TSE:FM is Norilsk Nickel MSE:GMKN US$0.50 October 1998 hit US$190 recently that is a 380 bagger over an eight year ish period.



Stupidly closed position far too early back in 2000 or 2001.

That'll learn me!

all imho, nag, dyor etc

Dr Bob

[goatherd] 30/3/2007 14:57

Ash - just plain boring. :-)

Did you get that 70 bagger?

Richard

[doctor robert hope] 30/3/2007 03:21

Yikyak, poor old Ants, don't fancy the Ant Eaters chances much either!

[doctor robert hope] 29/3/2007 12:36

Johnno,

Another thing I take issue about is AIM being marketted as a medium to long term investment market, IHT Friendly, Taper Relief at 1 and 2 years holding etc., when it clearly is not a trending investment market tracking underlying bull sentiment in wider markets, it is a range trading market over the past three years, ie a traders market long/shortt domoniated by Hedgefunds, Speculators, Spread betting Companies and heavily margined CFD Traders.

If that is not your cup of tea, seems sensible to move to find trending markets dominated by local knowledhge and real money as opposed to margined debt.

Let's look at the alternative where most people are locked in going nowhere now:-



The clear fact is that even after recent rally from September 2006 from below 1000 to recent 1150 area, say if you timed it perfectly a 15% rise approx, had you been holding shares for a two year period on average you March 2005 to March 2007, or Tax Year 2005/6 to tax year 2007/8 you would not have a profit to take, let alone be concerned about the tax implications of doing so.

In reality AIM has traded in a range of 850 approx to 1250 approx over a three year period, the first move yes you possibly could have captured a 35% move, again if you traded it perfectly, but overall in three years the move has been just roughly 300 points 850 to 1150 say 35%, which does not even keep pace with the probable increase in Money Supply M3 over the period which I think was 13% 2006/7, and certainly does not exceed LIBOR Currently 5.25% plus Commercial Bank Rates typically 1.50% to 1.75%, say totalling 7.00%, plus normal liquid instrument Equity Risk Return of 7.00% pa minimum, say a combined 14% compound per annum I come if you bought the three year low and were still sitting in now a compound 10.75% roughly per annum.

So in reality unless you are a supreme stock picker, and have you market timing perfect, the chances are on balance even long term you are probably losing net of true inflation.

In a good year you might see a rise of 25%, which will normally get rapidly eroded, these numbers are in themselves gross of spreads and Stamp Duty,let us assume that the average AIM Stock is probably valued at 100p, which is probably far too high, in fact most seem to trade in the 1.00p to 50p bracket typically trading ranges of 0.50p to 500p, typical spreads of 3.00p to 5.00p each leg and 0.50% Stamp Duty

If you are lucky enough to catch a 25% move, which looks on average to be a big average market move, a Gross move of 25p, would only net you 18.50p net of two spreads of 3.00p in/out plus SD or 14.50p net for two legs on a 5.00p spread plus SD.

True Net adjusted Returns are on average far, far lower than 25%, reducing in reality by 26% to 42% of that return typically, even the lucky player that traded a 35% three year move would probably be netting only 24.50% to 28.50% over the period.

Every time a trader trades the Spreads and Stamp Duty become a tax on capital eroding the base at an alarming rate, I have regularly seen spreads of 33.33% on penny stocks for example.

To play a venture capital market like AIM you realistically need at least an annual 50% pa to make the risk commensurate, knowing full well that in certain cases you will lose.

Let assume you had ten positions, 6 averaged plus 50% which appears unlikely on average and 4 got stopped out for 20% losses, which seems perfectly logical if even George Soros only claims to get it right 60% of the time, your overall annual return will only be 22% pa.

In the end the facts are that AIM has traded in a 400 point range for three years 850 to 1250, it is current bang on its median 1150, which means the great majority have not made a profit over this period.

My gut feeling is AIM is likely to fill the gap up to just over 1200 and hit a wall of sales pressure and people simply get out of the market, fed up with Hedge Funds and MMs trading indescriminantly against them in 135.29%/66.66% trading range deliberate orchestrated to take out stop losses of 20%, both sides of the market.

It certainly is not an investment market for people with, one, two year views, no surge has lasted more than 6 or 9 months that I can see in three years.

Which pretty much sumarises it as a waste of time, you can not short term trade due spreads, you can't invest, so why bother playing it?

all imho, nag, dyor etc

Dr Bob

PS One thing is for certain ASX All Ordinaries Index has been a far better place to be over last 9 months!:-

[jonno1] 29/3/2007 07:21

Ash
Have to agree, have switched 50% of my portfolio to the TSX, probably just as dangerous but at least the prices are good, usually no more than 1 cent spreads

[doctor robert hope] 29/3/2007 03:27

Yikyak,

Interesting ADVFN have edited your thread from appearing on AIM Group LSE:AIM list threads under ticker code AIM, it appears your campaign noting Seymour Pearce Commentry and how dreadful AIM is afterall is having an effect.

Censorship by ADVFN in case you had not realised what a bunch of W*nkers they are, noting afterall them allowing themselves to become one of the most efficient City Garbage Disposal shoots to retail private investors/traders known to man, and for such a microscopic financial reward to themselves, no wonder their shareprice is going nowhere!

all imho, nag, dyor etc

Keep it going

Dr Bob

[yikyak] 28/3/2007 23:42

Thanks for that Steg. Anyone noticed in the last couple of weeks their has been a real AIM pump job going on in the tabloids, keep on seeing articles everywhere! Seymour Pierce (IPO flippers) seem to be providing comforting words in many of the articles I have read so one could reasonably come to the assumption that they are behind it.

[yikyak] 25/3/2007 20:36

AIM is a 'casino', says SEC official

Matt Henkes - 09-Mar-2007

Roel Campos, the US Securities and Exchange commissioner, has described London's Alternative Investment Market (AIM) as a "casino".

He said that 30% of AIM listings were gone within a year. "That feels like a casino to me and I believe that investors will treat it as such," he added.
Speaking at a regulation conference in New York this week, Campos said that allowing lighter regulatory standards in order to attract flotations was a risky strategy. "It's a losing proposition to tout lower standards as a way to promote your markets," he said.

However, the London Stock Exchange (LSE) responded to the remarks, implying that they were motivated by jealousy following a steady flow of US companies transferring to AIM.

Speaking to Finance Week, an LSE spokesman said that the number of US companies listed on AIM had increased by 60% since the beginning of last year.

"It is therefore surprising that Mr Campos should make comments that are so entirely wrong," he said.

"They do a disservice to the quality small companies choosing to join AIM, the institutions choosing to invest in those companies and the high regulatory standards that the LSE promotes."

Some analysts have cited the UK's "lighter touch" regulations as a reason for the increased number of US flotations on AIM, pointing to extra costs associated with the strict American Sarbanes-Oxley regulatory regime, introduced following the Enron scandal.



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"I see so many dead stocks on AIM post IPO flip"

[goatherd] 25/3/2007 15:23

Andy,

Sure, we may have a new ball game.

However I expect many people will still trade the same shares, but via spread-bets; which will lead to an even more volatile market.

Richard

[andy] 25/3/2007 15:14

Richard,

Sadly I fear he's right this time!

If the IR redefine AIM Stocks to lose the BATR, then AIM looks doomed, IMO.

I have read for some time that he (prudence Brown) wants to tax AIM profits, but he has failed to take into account the many investors that lose on AIM IMO, and with that kind of risk, that will kill it if he does what some people think he's going to do!

[goatherd] 25/3/2007 15:07

Hello Ashley,

Still the same old hobby horse I see! I hope you are keeping well.

Regards Richard

[doctor robert hope] 24/3/2007 20:11

Yikyak,

I must say the 2007 New Year Resolution was made to pull out of all London Markets and purely concentrate on ASX:40% TSE/TSX:40% and JSE:20%

I can not see the point in moaning about AIM, LSE, UK Brokers, Market Makers, Banks and Hedgefunds, seems far more sensible to avoid them as far as possible or use them as aftermarket.

I fully expect the AIM Market to implode within 24 months anyway, virtually no decent IPO's are coming here, getting financed domestically, and I see an increase in Dual Secondary ASX Lists on TSX/TSE and Vice a Versa.

Quality Mining Plays now appear to be increasingly boycotting AIM, as are many of the Resource sector specialists I know.

So as you say might and well just watch glibbly as UK Hedgefunds destroy each other, and volumes dry up murdering UK Market maker base and margins.

UK Market Makers having a Normal Market Size, never mind the preposterous spreads means, and I think this is important, that when it goes horribly wrong, you can not get out anyway, so best to redeploy before this happens I feel.

Could you explain UK Stamp Duty in the current age?

A reason by itself to depart these Shores not mentioned sufficiently as a killing tax on Capital, as indeed are Market Maker spreads typically of 3p to 5p each leg versus ASX/TSE/TSX Spreads that seldom exceed 0.50 to 1 cent bid to offer.

I think the next 24 months will be critical to AIM personally, and I will not be shedding any tears when the whole rotten edifice collapses.

Afterall I think it is taken as read the next BRE-X will undoubtedly be AIM Listed.

I certainly don't believe that if a Mining, Oil and Gas or other Resource Stock was any good, or the Directors respected in Key Mining, Oil or Gas Countries and Communities that it would need to list on AIM anyway.

All imho, nag, dyor etc

Dr Bob

[meadow50] 24/3/2007 16:56

The second biggest stealth tax ever??
I have substantial holdings in Aim shares,both for taper relief and inheritance tax reasons.For those benefits I have not taken up my Isa allowances over the last few years because AIM shares aren't eligible.If HMRC do this it will be one hell of a stealth tax and will make a complete mockery of my financial planning.Many others will be in the samre boat because financial seminars have been all over the country with the recommendation that elderly people put some of their savings in Aim funds.

[yikyak] 01/3/2007 22:53

Interesting read Knowing, Seymour Pierce obviously leading the charge in bringing promotional garbage to the market to flip.

[knowing] 05/2/2007 11:42

roosterhead56 - 5 Feb'07 - 11:39 - 502 of 502


Article from Times online broker to watch out for
Seymour Pierce has brought more underperforming companies to AIM over the past three years than any other City stockbroker, an analysis by The Times has shown.

The study, the first of its kind, reveals that £1,000 invested in every fundraising conducted by the firm between January 2004 and December 2006 - the boom period during which more than 1,300 companies joined London's junior stock market - would on average now be worth just £799.

Over the same period, a £1,000 investment in the FTSE AIM all-share index would be worth, £1,260, up 26 per cent, The finding comes ahead of this month's clampdown by the London Stock Exchange on nominated advisers (nomads), the firms that raise money on AIM, when the LSE will formally codify the standards that it expects from them. It also comes after a growing scandal surrounding Torex Retail, the AIM-listed software company at the centre of a Serious Fraud Office investigation.

Two weeks ago, John Thain, chief executive of the New York Stock Exchange, criticised AIM for a lack of stringent corporate governance requirements and said it needed to continue raising standards to avoid harming the City's reputation.

Seymour Pierce is one of four stockbrokers whose AIM fundraisings have on average lost money for investors. The others are Bridgewell Securities, which last month ousted its chief executive after issuing two profit warnings following its own AIM flotation, Manchester-based WH Ireland, many of whose clients are in the natural resources sector, Corporate Synergy and Nomura Code Securities, a life sciences specialist.

Seymour Pierce owes much of its poor performance to Seymour Pierce Ellis (SPE), its Crawley-based private client broking business, which it sold in September to City Financial Associates for £4.65 million. However, even stripping out the effect of SPE, the firm's average return would have been £1,038, which would put it in the bottom six of the 24 stockbrokers covered in the study.

Seymour Pierce has raised money for some of last year's worst performers on AIM, including Smart Telecom, which fell 99 per cent, AeroBox, down 92 per cent, and Screen FX, down 91 per cent. A spokesman for the firm said: "Seymour Pierce Ellis was run as an entirely separate company and is no longer part of the group."

The Times's analysis shows that, contrary to popular belief in the City, Evolution Securities is not among the worst performers, having ranked 12th after producing a return of £1,143. Its showing is helped by Premier Research, up nearly sixfold since its December 2004 float. The fact that the study uses closing share prices from December 29, 2006 means that Torex, to which Evolution is joint broker, makes a positive contribution. Torex shares, which were suspended alongside its January 26 profit warning, were trading at a 23 per cent premium to their issue price at the time.

The best-performing broker is Vancouver's Canaccord Capital, which has generated an average return of £1,954, aided by Imperial Energy, a Russian oil explorer whose shares are up 2,448 per cent since floating. The other top five stockbrokers are Investec Securities, Libertas Capital, Teather & Greenwood and Numis Securities. The 24 brokers covered by the survey - which is based on transactions defined by AIM as admission or readmission of shares - together raised about £12 billion for clients in the three years to December 2006.

[yikyak] 29/10/2006 11:58

LSE Should Keep A Light Touch On The Tiller Of The AIM Market And Reject Foreign Overtures

Interesting to see that Ed Balls, the right hand man of Chancellor Brown, has come out in favour of the AIM market in face of rival foreign exchanges interested in acquiring control of the London Stock Exchange and ending the 'light touch' regulatory nature of AIM which attracts so many smaller companies. Balls, whose nickname for some unknown reason is 'little', maintained that more rigid regulation would be a mistake , and that AIM is a core part of London's offering to international investors.

Just as background, Balls used to be a journalist with the Financial Times in the 90s so should know something about how the City works. It is said that it was he who persuaded Brown to sell a substantial part of the UK's gold assets which he did at an average price of US$275/ oz between 1999 and 2002. The price is now around US$600/ounce so even if Balls knows something about the City he understands little about investment, but he should be forgiven in part as the FT displayed a contempt for gold as a 'barbarous relic' at the time.