Smc Share Discussion Threads

[masurenguy] 14/6/2007 15:36

3 in 5 months !

[luchan] 14/6/2007 15:16

Chaps,

how many profit warnings have we had here?

luchan.

[masurenguy] 14/6/2007 15:04

siwel100 - you make some valid points in your post #7300. HOWEVER you cannot classify all AIM companies in the same category and therefore while your basic rules provide an excellent guide to 'blue sky' companies they do not necessarily apply to AIM companies that have already established either a profitable, or close to profitable, business. There are many examples of the latter which constitute good investments rather than speculatibe punts.

Therefore one needs to separate 'blue skies' from 'established businesses' when looking at AIM companies. The key factors relating to the latter are then Cash, Cashflow, Management, Operating Margins, Pretax Profits and historic and forward PE ratios.

Also be wary of companies (like SMC) who expand too rapidly via acquisitions as this is a well trodden path to potential problems since it is always difficult to integrate different locations, cultures, habits, aspirations and histories and even more so for small acquisitors who usually do not have enough experienced staff available to manage the integration and to ensure that common standards are implemented. I don't know the FD at SMC but he is young and inexperienced and it was therefore a big ask to expect him to be able to oversee this effectively. I did post some time back that they needed an experienced ex-FTSE level NXD FD on the Board to both supervise and mentor a young FD in such a role.

The biggest drawback to AIM companies is the lighter regulation which makes it easier for either incompetent or dishonest management to continue trading longer than they should on the main market, if there are problems, and therefore exposes shareholders to much greater risk.

So while I would endorse a lot of your rules for 'blue sky' companies I think that you need to apply a different variety for established AIM companies.

[blockbuy] 14/6/2007 14:58

kneath, as your searching for 250/100 stocks keep an eye on AXO.......been in it for years and has been a real winner over the last 3-4 years for many...........so many positve trading statements over the last 2-3 years that I've lost count..............

brokers have it mainly as a strong buy (see i i i), 850-875 short term target if I've worked the numbers correctly, Altium Securties have slapped a £10 target...........a growth stock that pays a divi...........

looking to be included in the 250 come September all being well according to Samantha........



plus on the FTSE's official reserve list as 1st reserve if any other stock falls out between now and the next review...........



The reason I post is that shares mag had SMC, AXO and BNH(?) as their top 3 for 2007 and that's what bought me here.........shame SMC has messed up so bad.........

keep an eye............

pls pls dyor and nai etc...............

nice...............

;-))))))))))))))

[sirhokko] 14/6/2007 14:05

Hey some nice advice in that list Siwel. Of course some of it is easier said than done, but that is the skill of ruling with your head not your heart.

To be fair there are many stocks on AIM that are good. But far too many speculative stocks like BioPharmas and miners. I just filter all those out. Still not perfect, but it gets rid of a lot of the boom and bust companies.

Personally I never, ever average down. Sometimes it's a missed opportunity but more often it been a real saviour. Get it into your head as a trading rule then it's easy to follow. I only ever add as the price goes up. That reduces your potential gains, but also minimises your losses.

I once read of it being analogous to a retailer's. You fill your store with stuff that is selling. And the more of it you sell the more you stock. You don't fill your store with out of fashion merchandise that you can't sell, then get even more of it 'cause you can acquire it cheap.

BTW, Nice to see you back Kneath. You been away?

[dope007] 14/6/2007 13:42

The other rule Entini is don't listen to other posters as they may have an agenda.

[entini] 14/6/2007 13:32

siwel, 7300 good post.I am new to this and the points you mention are so important.Unfortunately i didn't take an early loss on VOG so i am trapped in at this stage.Would you have a look at the trades over the last week and give me your opinion on what you think is happening.Constant selling yet the price holds.Thanks for your time and sorry o/t.

[kneath] 14/6/2007 13:21

swivel100 or anyone - great post! Saved it as a future reminder. No longer in SMC. Caught the falling knife, juggled with it for a while to maximise my injuries and sold for a £2.6k loss. Enjoyed the pain so much that I bought in again and even then averaged-down on a further dip - because of course, I know it all! Sold at 55p for a further sizeable loss of cash. Lessons learnt: - I don't know it all and don't always take directors words as open/honest.

For the record, I am a relatively new investor (16/17 months) and have fallen victim to most of the detail in your post - now, only just in profit. I am currently 90%+ AIM invested, but due to the stress of it I am slowly moving toward FTSE250/350 as opportunities arise.

Currently about to investigate shorting SMC if it is possible!

One Q: How do you differentiate between 'averaging-down' and 'topping-up on a dip'?

[izzywizzy] 14/6/2007 12:18

would there be any truths in it?

[gary102] 14/6/2007 12:14

Anyone read the report yet?

[slowtrain11] 14/6/2007 11:58

Written words can come back to haunt you. Spoken words less so. And the wifes birthday...

[peter119] 14/6/2007 11:57

"s100"
thanks for that,i learned my lesson many years ago,having said that my first a.i.m. trade for 20yrs was CDN.only bought 10000,had a stop loss and got out with little damage,gawd it did bring back horrible memoiries.split portfolio,ftse100-ftse 350.growh,yield,gearing,but more important of all management.

[siwel100] 14/6/2007 11:42

Peter 119....The problem is that people use the term "investment" when they speak of AIM stocks. This is compounded when they have a mindset that equates an AIM company with a FTSE100.
The reality is that AIM companies are fledgling operations which are floated on the market to raise funds, sometimes with no more than an idea. They are always underfinanced and being small the effect of even relatively minor news can have a dramatic effect on the market caps.
Most novice investors start with AIM stocks because they see the potential gains and are greedy, they do not want to settle for capital accumulation 50% over interest rates, they want 100%/500%/1000%.
The novices run from price spike to price spike and if they dont lose all their money in the first 6 months eventually learn the basic rules of trading AIM.
1. If you buy and the price moves against you, immediately sell. Your loss is contained to a few % + dealing costs and you can always re-enter the stock. But it prevents a massive loss accumulating.
2. If you buy an AIM stock and it issues a bad news RNS then sell and take it off your watchlist.
3.100% let alone 500% gains in a period of weeks months are extremely rare in any form of investment. Recognise that such activity is irrational and that price spikes will always collapse. Be extremely cautious buying any stock that has a gain exceeding 50% and be prepared to sell without hesitation.
4. Always focus first on not losing money rather than making it.
5. Only ever buy on news issued by a company not on a "good story" on a bb. You create a watchlist by reading bb's but only trade company issued news.
6. Set a trailing stop loss on every stock you are in profit on. If it breaks that stoploss then sell without hesitation and take it off your watchlist.
7. Never trade an AIM stock for 10%. Either it has the news to double or ignore it.
8. Never buy because you are bored or have loose cash in your trading account.
9. If you sell a stock that has spiked never try to pick up a few extra % trading it long as it falls. If you arent short then take it off your watchlist.
10. Be as happy to short collapsing spikes as you are to invest long on growing ones.
11. Be as happy to be sitting in cash as holding investments.
12. Always look for smaller potential gains in the silly summer and larger ones in the mad winter.
13. There are exceptions to every rule but ignore them or you risk your trading account.
14. Never ever average down, you should already have sold.

AIM is a legitimate market for start up companies, but you have to understand the type of companies you are trading (not investing). If you arent willing or too lazy to apply the rules then buy Tesco on a dip and look forward to capital accumulation above interest rate levels.

Gawd I must be bored this morning. Anyone fancy adding any other AIM "trading rules"...?...:)

[paulcaine2003a] 14/6/2007 11:36

yeah tell me about it!

[bigbobjoylove] 14/6/2007 11:25

OSH talk of 105p bid.

[paulcaine2003a] 14/6/2007 11:19

Dont think theyll go bankrupt and reckon their accounts will be fairly okish although I had to get out in the end. OSH up another 5.5 today. What a bad decision that was. Oh well, live by the sword, die by the sword as someone famous once said!

[ronmikeh] 14/6/2007 11:12

This company reminds me of Health Clinic in 2001. Tipped by share mag Climbed up from 40p to 240p . A small problem with the accounts? Nothing to worry about. Went bankrupt in the end.

[peter119] 14/6/2007 10:23

have posted on here over the last few Day's,i truly feel for you all,as for a.i.m. stocks, as someone posted on this site"its like Russian roulette"that could never be further from the truth,please do not think i am preaching only advise i can give is,DO NOT BUY ON THE DIPS,as you never now when its hit bottom.particuliey when the management are not fit to tie there own boot laces.
one fact is institutions do not like surprises have now had three,they will have lost total confidence,even more so with blatant fibs.as my farther said to me many a year ago,"god rest his soul"invest in the a.i.m. market and a fool and his money are soon parted.

[gary102] 14/6/2007 10:06

Sorry to hear that Paul.

What's your plan with these, I gather you are still holding?

I pulled out because I believe that the money from the remainder of these shares could be better invested elsewhere.

They will probably sort out this mess in the end, might mean holding for a long time though..

[paulcaine2003a] 14/6/2007 09:58

To think, I got out of OSH at 65p 2 weeks ago for these. Since then, SMC have crashed and OSH have been taken over. I HATE LIFE!!!!!!

[njp] 14/6/2007 08:11

Well, good luck to you, izzy. PRM's not exactly a 'widows and orphans' stock either!