The club's future - a proposal

Discussion of the proposed Cashback Investment Club

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Re: The club's future - a proposal

Post by an6ypan6y » Thu Feb 22 2018 12:54pm

Thunderfog wrote:If we categorise the shares into long-term, medium-term and short-term holds then we can set a different stop:loss for each category. A greater margin for long-term and smaller margin for short-term?

Thoughts?
I would like to expand that list to Income / Growth etc so that we can clearly see and don't lose site of the rationale behind buying in the 1st place.
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Re: The club's future - a proposal

Post by richard@imutual » Thu Feb 22 2018 5:54pm

Just to respond to the constructive feedback from beachboy and garindan...

The target number of different investments we hold (I suggested 6) can be debated separately from what process we follow. But if you agree that there IS an ideal number, then we need some mechanism for forcing sell decisions. To date, we have lacked discipline in selling investments that didn't achieve the hoped-for gains, whilst looking to cash in modest gains on the ones that did do well. i.e. WE'VE BEEN SCARED TO CRYSTALLISE A LOSS!

The process I've outlined still allows for different kinds of investment strategies to be adopted. Again, this can be discussed in a separate thread.

And if you feel that buying a selling a share every 2 months involves too many trades, then fine. Let's agree a different period.

I do feel that some of you are being unrealistic in the flexibility with which an online club like this can operate. In a classic share club, all the members would gather in a room once a month and have detailed discussions before arriving at a decision. That's just not practical with an online club, and to boost both the quantity and quality of participation I feel that we need to have a more rigid and predictable process.

On a more general note, I have to consider what the benefit is of continuing to operate this club. imutual members are rightly expecting me to devote what time I have available to developing their company, and without an overhaul, it's not clear what benefit the share club is giving imutual. To do that, it needs to be more than "just another share club" and I disagree with the comments about the Top Tipsters feature. At a minimum, it can provide something of passing interest to new site visitors; at present, I don't think our club does that.

I like to think I was reasonably clear about the importance of this, as per my post here back in 2011 and again here in 2014.
My primary objective is to help attract and retain imutual members....
.. I'd like to see "member reputations" developed as a key part of the decision-making system i.e. over time, each member can establish a statistical "rating" based on their historical votes and recommendations....
..I just want to make sure that if we all put in the effort required to get such a club off the ground, it gives the hoped-for boost to imutual with creating an administrative burden
Please don't interpret this as a "my way or the highway" ultimatum. I'm open to alternative ideas but I haven't really seen any positive suggestions in the previous comments that would help to achieve the original objectives.

So I think the fundamental question is: can this club be run in such a way to generate a significant benefit to imutual e..g more members, and if so how?
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Re: The club's future - a proposal

Post by kevinchess1 » Thu Feb 22 2018 7:20pm

as i posted earlier I think we should give this a go or something along these lines.
We will get moe members in the club when we start making profits
I agree that some members of the club are 'Unrealistic; in their reluctance to sell losing shares.
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Re: The club's future - a proposal

Post by kevinchess1 » Fri Feb 23 2018 8:07am

Seems to me we are going round in circles
I cant believe members are happy thaT we wrote off £400ish when we voted not to sell?
Lots of posters against the proposal but none have come up with a better/different plan
I'have nothing further to add to this debate
Let me know what you decide to just 'Carry on'
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Re: The club's future - a proposal

Post by blythburgh » Fri Feb 23 2018 9:46am

I am hoping that the members are learning from past mistakes and hope that in future the decisions to vote yay or nay are based on experience and common sense prevails
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler

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Re: The club's future - a proposal

Post by richard@imutual » Wed Feb 28 2018 5:05pm

So in order to move on, shall we hold a vote on whether to adopt the following process:
richard@imutual wrote:
  • 1. Set a maximum number of different investments that the club should aim to hold. (to be agreed separately)
    2. At regular, fixed intervals (to be agreed separately), we hold two parallel votes; a new stock to buy and one to sell (unless at that time we hold less than the maximum agreed above, in which case no sell vote is necessary).
    3. Each decision will be a straight choice between 3 stocks. No "If price reaches X" or "None of the above"
    4. Once the voting has closed, we execute the "sell" decision first and then use the proceeds, plus whatever cash is in our account, to invest in the "buy" stock. These actions take place immediately at whatever is the prevailing price
    5. We automatically apply a standard "stop loss" to all purchases e.g. 20% below purchase price.
If there is a vote in favour, we can then start additional topics, including:
- maximum number of different investments
- fixed interval between votes
- what the standard stop loss should be
- how to organise buy/sell nominations

If the vote is against, then we'll need to think again!
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Re: The club's future - a proposal

Post by BeautifulSunshine » Wed Feb 28 2018 5:28pm

I vote in favour.
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Re: The club's future - a proposal

Post by richard@imutual » Wed Feb 28 2018 5:33pm

I'll create a separate topic for the voting. I just want to know if there are any suggested amendments to the wording before we vote
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Re: The club's future - a proposal

Post by Beachboy » Thu Mar 01 2018 2:03pm

I am very happy to try something different even I am not completely sold on the whole idea, however I am still really struggling with 3 and 4 below:
3. Each decision will be a straight choice between 3 stocks. No "If price reaches X" or "None of the above"
4. Once the voting has closed, we execute the "sell" decision first and then use the proceeds, plus whatever cash is in our account, to invest in the "buy" stock. These actions take place immediately at whatever is the prevailing price
Buying and selling at fixed points in time regardless of what the price is and regardless of whether or not it maybe a good or bad time to execute that decision still makes no sense to me and no one who has supported that has yet provided any further support to explain why this is a good idea.

I am not trying to be deliberately obstructive but would just like to understand the rationale because all I can see at the moment to support it is that is 'easier' to process. Whilst we do now want onerous processes avoidance of that in itself does not feel a compelling justification.

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Re: The club's future - a proposal

Post by richard@imutual » Thu Mar 01 2018 2:40pm

Yes, happy to elaborate on my reasoning ...

The idea is that all club members know in advance when our next investment discussion and decision will take place, to maximise participation. There are two simple stages to the process; nominate 3 stocks (based on current market prices): and then each member votes on which of the 3 they favour.

With this simpler and more structured process, I believe we ought to be able to condense the discussion into a shorter period than has been the case historically (perhaps as little as a week). This should minimise the problem of price fluctuations between when a stock is first proposed and the vote on whether to buy/sell it has closed.

I accept that this is a more restrictive process than we have followed to date, but I think introduces a necessary discipline. In the past, I have felt "rushed" into voting when I've suddenly received a PM announcing a vote, and I don't think I've been able to give proper consideration to the choices.

When you say "whether or not it maybe a good or bad time to execute that decision", who decides what is a "good time" and by what criteria? At any one time, the stockmarket will have overvalued and undervalued shares, and the challenge for our club is pick the right ones at the scheduled decision points.

Happy to consider alternatives though, if someone could explain how that might work

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