When we buy and sell

[garindan]

I'm sure underdog didn't mean to sound the way you read that

Just to clarify - the only reason we held a vote on the Sainsbury stop/loss was to decide whether to remove the stop/loss because of all the compounding factors that had conspired to really hit the value. Some of these seemed to creating a big volatility to trading value. The range of volatility was effectively meaning a share sold one day for 20% loss could be only 15% down a day or so later - similar to what we have seen on the miners of late. I saw this as special circumstances and recommended suspending the stop/loss until we were confident matters were back to a normal situation. I think we are getting back towards that now, with volatility of China, US Central Bank and the debarkle of Tesco accounting looking more stabilised.

Had it not have been the case of this combination of factors we would not have had a vote and it would have been right on the line whether the auto sell would have kicked in and sold the shares at the 20% loss. I just did not want to see us trip over a hurdle thrown in our way by out of the ordinary turbulence. So far it seems the choice we made was right but it doesn't mean we will always be

[BeautifulSunshine]

So what would happen if we had a "flash crash" like in the US and we had set a loss and the share auto-sold only to recover within minutes?

http://www.theguardian.com/business/201 ... on-hearing

[garindan]

So what would happen if we had a "flash crash" like in the US and we had set a loss and the share auto-sold only to recover within minutes?

http://www.theguardian.com/business/201 ... on-hearing

Well it depends how we use the settings for the stop/loss. We'd need to agree what sustained period of time the value would need to be breaking our acceptable threshold.

It was set to sell as soon as the threshold was broken (i.e. as soon as 20% loss reached it would be sold for the next available price - so could be 18% down, could be 22% down if you see what I mean).

We could set it to sell if the share was down 20% for more than a period of x days. However, what this does not protect against is the more rapid decline during that period. It does protect from a sudden loss and then recovery during the period set. It only kicks in when the threshold is breached and would reset if the value went back above our threshold. So the possible scenarios could be:

- price goes to 22% down but recovers within the x days to 18% down. Not sold.
- price goes to 22% down and then fails to recover within the x days and actually deteriorates further to 26% down. Immediately sold at the next available sale price, potentially around 26% loss.

This does not exclude manual intervention of course.

[kevinchess1]

No I do not understand. No point in having a profit and loss position if you then vote to ignore it. A poll takes a minimum of one week to conclude. The whole idea of deciding in advance is to speed things up and avoid the need for a vote.

Agree entirely
I felt a 20% loss was too generous
But then we(the royal we) decided to ignore it
it's ALL right posters saying 'yeah but it's made it all back.'
But I see nothing to convince me it will carry on gaining and it might easily drop again and never recover
Also if we had sold we might well have put our money into a far more profitable share and actually be a lot better of

[garindan]

I completely respect your views Kevin but you are painting a rather distorted picture of this

But then we(the royal we) decided to ignore it

The "royal we" in this case were the majority of members because of the factors set out

it's ALL right posters saying 'yeah but it's made it all back.' But I see nothing to convince me it will carry on gaining and it might easily drop again and never recover

This is the gamble with shares though and you could be absolutely correct. Whilst you may not see anything others have expressed they do see possibilities. It may drop again and it may not. It may sit on a level for a while. We don't know though and will not know who is "right" until the scenario plays out.

Also if we had sold we might well have put our money into a far more profitable share and actually be a lot better of

Indeed this is could be true but we could say that about most of our shares but picking these other shares is not easy. There have been no solid recommendations made as to an alternative. The point it that Sainsbury is currently our second best share, according to statistics, and we keep picking on it rather than looking at the bigger picture. Both GSK and UU have been 12% down at points but there were no such calls to sell these and we are actually down overall, after dividends with both. Sainsbury was only down around the 20% mark for a few days maximum, the rest of the time it has been around the 12% down mark fluctuating up and down some percentage points either side but overall is actually UP at the moment.

As chairman I do need to make decisions and they are not always going to be to the liking of all members. I understand this. What you should also consider, if you think I am being bias with things here, are the following facts:

- a number of members supported putting to a poll the temporary removal of the stop/sell so that's what we did
- no members supported putting in place my suggested -2% selling of Sainsbury shares more recently so no poll
- no members supported putting in place your suggested immediate selling of Sainsbury shares, again more recently, so no poll

As a club we need to be constantly re-assessing our plans for each share as the environment changes. What we decide now might need re-assessing in a week, few months or a year down the line. The thing is we need to be flexible and proactive to react.

[Beachboy]

I completely respect your views Kevin but you are painting a rather distorted picture of this

But then we(the royal we) decided to ignore it

The "royal we" in this case were the majority of members because of the factors set out

it's ALL right posters saying 'yeah but it's made it all back.' But I see nothing to convince me it will carry on gaining and it might easily drop again and never recover

This is the gamble with shares though and you could be absolutely correct. Whilst you may not see anything others have expressed they do see possibilities. It may drop again and it may not. It may sit on a level for a while. We don't know though and will not know who is "right" until the scenario plays out.

Also if we had sold we might well have put our money into a far more profitable share and actually be a lot better of

Indeed this is could be true but we could say that about most of our shares but picking these other shares is not easy. There have been no solid recommendations made as to an alternative. The point it that Sainsbury is currently our second best share, according to statistics, and we keep picking on it rather than looking at the bigger picture. Both GSK and UU have been 12% down at points but there were no such calls to sell these and we are actually down overall, after dividends with both. Sainsbury was only down around the 20% mark for a few days maximum, the rest of the time it has been around the 12% down mark fluctuating up and down some percentage points either side but overall is actually UP at the moment.

As chairman I do need to make decisions and they are not always going to be to the liking of all members. I understand this. What you should also consider, if you think I am being bias with things here, are the following facts:

- a number of members supported putting to a poll the temporary removal of the stop/sell so that's what we did
- no members supported putting in place my suggested -2% selling of Sainsbury shares more recently so no poll
- no members supported putting in place your suggested immediate selling of Sainsbury shares, again more recently, so no poll

As a club we need to be constantly re-assessing our plans for each share as the environment changes. What we decide now might need re-assessing in a week, few months or a year down the line. The thing is we need to be flexible and proactive to react.

I largely agree with this and was planning on posting similar myself. A few comments/observations that are related to this include:

* I think it is quite correct that we put in place in pre-agreed stop/sell (for efficiency/speed). However I do feel it is essential that we should retain the option to manually intervene before these kick-in (as was the case with Sainsburys) where there is a majority agreement by members that these should be suspended. In the case of Sainsbury's, one of the members (garindan) outlined a case for suspension with reasoned argument which was put to the vote and the majority of members voted in agreement.

* An observation I make (which is linked to other discussions we have had lately) is the need to decide about the make-up of our portflio e.g. whether we designate investments as 'short', 'medium' and 'long term' (or any other useful way of categorising them). The reason I suggest this as a priority area is we could end of holding a share that we initially hoped would be for short term gain (e.g. not an especially good dividend generator) 'bumbles along' for some time neither reaching our upper or lower sell position. Therefore the need to have some manual intervention (e.g. a vote to decide whether to sell or stick with it).

* For me Sainsbury is in a position where I would be pleased to see us sell at a break-even/small profit and try our luck with another share because I cannot see any obvious sign at the moment is significantly going to rise above what we paid for it and would not put it in the ‘medium’ or ‘long’ term portfolio category.

* garindan one thing you highlighted that particularly stuck out for me was the comment regarding members not supporting certain recommendations, which raised a really important issue for me. I think there might be a need to somehow distinguish between what are general comments/discussion and firm recommendations (or other areas that require action or decisons etc), because despite reading the all CIC forum posts with interest I did not realise that there was a firm recommendation that required me to take any action. If I had understood that to be the case I would have definitely supported at least putting the selling of Sainsbury’s to a vote.

[garindan]

* garindan one thing you highlighted that particularly stuck out for me was the comment regarding members not supporting certain recommendations, which raised a really important issue for me. I think there might be a need to somehow distinguish between what are general comments/discussion and firm recommendations (or other areas that require action or decisons etc), because despite reading the all CIC forum posts with interest I did not realise that there was a firm recommendation that required me to take any action. If I had understood that to be the case I would have definitely supported at least putting the selling of Sainsbury’s to a vote.

I chopped the rest of the above - but a well formulated reply - thanks

With regard to the above - before I have looked for a rule of thumb whereby if at least two other members support a suggestion/proposal then it is sound enough a thing to take further to a vote. If not then I haven't seen it as being sufficiently supported to warrant further action.

We could indeed tighten this and if we were to do so I would suggest we do two things:

- a proposer of an action needs to set out the scope of what he/she is proposing
- the action should have at least two seconders
- when setting out the proposal in the poll two sides of the argument should be represented and if nobody else wants to represent the counter view then the chairman will try and do this as best he can

Would this be helpful or counterproductive? What i don't want to see out of this is discussion moving out of the open forum and into PM - we have the forum to use and we are all in this together, hopefully to come out ontop, so let's keep it viewable to all

[kevinchess1]

Why 2 seconders? Underdog nomination for secretary only got 1.

[Richard Frost]

Why 2 seconders? Underdog nomination for secretary only got 1.

He did not even need that. He was the only candidate. A surplus job in my opinion at this stage of our existence.

[garindan]

Why 2 seconders? Underdog nomination for secretary only got 1.

I think it is always a good idea to have at least two other supporters, otherwise it is a case of "me and him" think this is a good idea so let's have a vote. That could meant we'll have more votes proposed than needed.

The secretary role will become more important as we grow even if there is not a great call for that third position right now. As far as I can see it certainly does no harm.