Club investment strategy discussion thread

Discussion of the proposed Cashback Investment Club

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garindan
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Re: Club investment strategy discussion thread

Post by garindan » Tue Jul 07, 2020 5:06 pm

Now where did I put that pickaxe.... :lol: :thumbup:
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Re: Club investment strategy discussion thread

Post by AAAlphaThunder » Tue Jul 07, 2020 6:15 pm

garindan wrote:
Tue Jul 07, 2020 10:13 am
richard@imutual wrote:
Thu Jul 02, 2020 4:17 pm
I am rather tired of staring at the sea of red represented by older "blue chip" stocks i.e. Aviva, Vodafone and ITV. They are also rather pointless distractions; our investment in PGM is worth 13x what we have in ITV. Even if ITV doubled in price (unlikely), we'd still be showing a significant loss and it would have minimal impact on our overall portfolio. For these reasons, I'd sell these 3 stocks and release the cash to invest in a small cap - possibly topping up Bakkavor or Ramsdens
I would personally only want to sell on the blue chip stocks if we were putting the money into PGM. I see that as the share that could "repair" the losses on those share values the quickest and the most likely to do so. I would be happy to sell them, invest the money in PGM and once we have "got back to the original investment" we put into the blue chips when we purchased them, we decided whether to hold or re-invest that element of the PGM holding.
To take it one step further, I'm happy to sell the blue chips at a loss and invest the proceeds in Pure Gold Mining. Additionally, I'm happy to, at the time of purchase of Pure Gold Mining shares to invest every last penny we have into Pure Gold Mining.

It is everyone's money (perhaps my £1,000 cashback shall come in perfect timing and I'm happy to add those funds into Pure Gold Mining also). What do other members think?
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Re: Club investment strategy discussion thread

Post by Beachboy » Tue Jul 07, 2020 8:05 pm

Gold does seem (at the moment at least) to a vibrant sector. If this is the chosen strategy I just wonder if we should at least be considering other companies in this sector to weigh up wherever the risk can be spread. Having the majority of funds in one company could bring great rewards but if there happens to be a problem specific to PMG (e.g. something blows up, major ecological disaster, worker strike action etc.) it could also be our undoing.
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garindan
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Re: Club investment strategy discussion thread

Post by garindan » Tue Jul 07, 2020 9:23 pm

Beachboy wrote:
Tue Jul 07, 2020 8:05 pm
Gold does seem (at the moment at least) to a vibrant sector. If this is the chosen strategy I just wonder if we should at least be considering other companies in this sector to weigh up wherever the risk can be spread. Having the majority of funds in one company could bring great rewards but if there happens to be a problem specific to PMG (e.g. something blows up, major ecological disaster, worker strike action etc.) it could also be our undoing.
I don't necessarily think or even propose we look only at gold. I do think if we are going to offload the bluechip shares and take quite a big hit on them, I'd much prefer we put that money into a company that has the best chances of turning the original loss around and as quickly as possible. Whilst you could argue Bakkavor or Ramsdens could well do that for us I feel the chances are much better with PGM. There are people pumping in many more £££s than us and we are only talking about £600 the way the current values of those bluechip shares are sitting. Yes, it would be in addition to the current holding but like I said - if we were doing it to try and make good what is currently a pretty stagnant bunch of shares and then exit it would offer us a pretty reasonable opportunity to get out of them or at least reassess where things are in 6 months or so.

That said - I do understand what you are saying about a specific problem. The only issue I have with that is I have no idea which other companies offer a similar potential to PGM :( On that basis I would be more inclined to go with what we have been seeing already.
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Re: Club investment strategy discussion thread

Post by Beachboy » Wed Jul 08, 2020 6:23 am

garindan wrote:
Tue Jul 07, 2020 9:23 pm
Beachboy wrote:
Tue Jul 07, 2020 8:05 pm
Gold does seem (at the moment at least) to a vibrant sector. If this is the chosen strategy I just wonder if we should at least be considering other companies in this sector to weigh up wherever the risk can be spread. Having the majority of funds in one company could bring great rewards but if there happens to be a problem specific to PMG (e.g. something blows up, major ecological disaster, worker strike action etc.) it could also be our undoing.
I don't necessarily think or even propose we look only at gold. I do think if we are going to offload the bluechip shares and take quite a big hit on them, I'd much prefer we put that money into a company that has the best chances of turning the original loss around and as quickly as possible. Whilst you could argue Bakkavor or Ramsdens could well do that for us I feel the chances are much better with PGM. There are people pumping in many more £££s than us and we are only talking about £600 the way the current values of those bluechip shares are sitting. Yes, it would be in addition to the current holding but like I said - if we were doing it to try and make good what is currently a pretty stagnant bunch of shares and then exit it would offer us a pretty reasonable opportunity to get out of them or at least reassess where things are in 6 months or so.

That said - I do understand what you are saying about a specific problem. The only issue I have with that is I have no idea which other companies offer a similar potential to PGM :( On that basis I would be more inclined to go with what we have been seeing already.
I am happy with that, my main concern was AAAThunder's suggestion of 'investing every last penny we have' in PMG'. It was spreading the risk of that idea (should it gain traction) that I was referring to. 👍

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Re: Club investment strategy discussion thread

Post by garindan » Wed Jul 08, 2020 1:15 pm

I think if we want to consider doing this with the bluechip companies and PGM then we need to get on the case ASAP. We are wasting share price rises, as it has gone up another 8% today! I'm concious this was not Richard's idea, with respect to PGM, but I know he would very much like them gone in favour of something else.

Should we put this to a vote or not?
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Re: Club investment strategy discussion thread

Post by parchedpeas » Wed Jul 08, 2020 1:51 pm

yes. It's a gamble, but it's going to be a long time waiting for some of the other stocks to come back.

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Re: Club investment strategy discussion thread

Post by garindan » Wed Jul 08, 2020 2:08 pm

garindan wrote:
Tue Jul 07, 2020 9:23 pm
we are only talking about £600 the way the current values of those bluechip shares are sitting
Apologies - this is slightly inaccurate - I have just checked and it is about £850.

If we look at doing this - I would propose the following as a vote:

- sell Vodafone, ITV and Aviva
- calculate the overall loss % from selling them
- add in some of the funds from what we get from SHRE sale, to make it up to an even £1000 chunk.
- invest it in PGM
- calculate the percentage gain required to recoup what our original investment in those bluechip shares was, after costs of sale, having made the purchase
- review this part of the holding in January to see where we are or before should the share rise to the percentage gain point, with regard to continue holding or selling this portion

If members would like to comment on this and either support a vote on it or not, please do say so.
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Re: Club investment strategy discussion thread

Post by Beachboy » Wed Jul 08, 2020 2:46 pm

Yes let's get a vote going 👍

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Re: Club investment strategy discussion thread

Post by parchedpeas » Wed Jul 08, 2020 3:13 pm

I'd support that strategy.

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