My investing history

punting to hunting

THE MID 80’S

I first got introduced to investing as a teenager, in the 70’s delivering the Evening Standard to the posh houses in Chigwell Row in Essex. I’d deliver the daily eveing papers then on a Saturday, collecting the weeks money from customers that evening. At several of the houses the man of the house would come to the door and put his hand in his pocket for change while quickly glancing at the football scores and tables. We’d have a bit of banter now and againg, most were ‘ammers while I was a Gooner (a Gooner hadn’t been invented then so we were Gunners fans). If I got paid on a Friday it was always different. The owner of the house at one or two places always went to the inside of the paper first and looked at the share prices for the day. “ICI’s ruddy down again” I remember one of the comments being. I had read about shares in companies and how people could become rich overnight and a lot of these guys were not short of a few shillings. I lived in a rented semi-detached on ajoining Hainault Estate with my parents and my sister and brother Bob (Bob Crow, the former RMT Union Rail Boss as many of those who know me now know). We were like chalk and cheese. My dad had always instilled an importance of fairness and doing right, caring etc. Bob and I came at it from two different directions. Bob was like my dad, very union driven, left wing socialist. They wanted everything for the people and workers around them, striking and fighting the good fight was what they saw as the way to get it. I was more like my mother, more of the ‘hard work pays’ crowd. My mother worked hard for so many hours it is unbelievable, cleaning the floor of the local newsagent at 6am every morning, back home to get us 2 ready for school then off to another big shopping parade half a mile away where she cleaned floors for several other shops too. She used to go on about hard work paying. While she’d row with my dad about unions I’d do the same later in life with Bob. I always felt that the socialist aims were noble but to make a real difference you need to have money. So in a way making money fascinated me as to all you could have and do for yourself and others if you had plenty of it. One of the guys in the houses in Chigwell started telling me about shares each time he paid me, all these great stories about big sums he had made and had lost too. This guy said to me ‘when you get older lad and you’ve got a few bob, stick it in shares, you can’t go wrong’

Well by the mid 80’s I did have a few bob and with his words echoing in my ears I bought my first share. My stock broker was Mr Morris at Harris Allday Lea and Brooks in Birmingham. I used to phone them and he’d always say in his posh city voice “Ah, young Crow, what do you want to do today?” I remember my first buy was the camping and outdoor life company, Blacks Leisure at 4p. I was thrilled when in a fortnight it was over 6p. I sold my £250 worth and made a cool £130 profit - fantastic. I took the lot and bought engineers Weir Group at near 20p. Well within a month they were over 30p so I sold again and banked another 50%. This is easy, compounding this lot I’ll be a millionaire in no time, I thought. I found my next share which was some oil co, put the lot into it and within a month it was suspended and gone! So there lies enough of a lesson in a few months that others may not learn in years. Make mistakes but don’t make the same mistake twice. I invested a lot more in the 80’s in shares and investment trusts/unit trusts and by 1987 I was near fully invested when the Black Monday Crash happened. I lost a third of my savings that weekend and sold out on the second day, right at the bottom. Another lesson not to be repeated. Come the tech boom in the late 1990’s I made a decent amount but I was also smart enough by then to get out near the top. The easy money was over and it was time for me to start learning how to invest properly and not just punt on press tips. I read Jim Slater’s Zulu Principle and was hooked on the idea and how it found value. The basis of the idea is that if you do enough research on small companies you can end up knowing more than even the big city institutions that pay less interest than maybe they should. In the 20+ years since I have developed my very own method of investing in small to mid caps using several indicators of my own and it has been successful. I look for recovery stocks that can double or more in a year or less. I feel a spread of these stocks should be good enough to get me several big winner that will far outweigh the few smaller losers. When looking for these stocks I have always found it helps to write my research down and have it all in one place. If it is written down then I figured I may as well tidy it up and publish it so others can read it.

Time to go deep

For the last 7 years I have run my own chatroom for shares. It has been very rewarding for most on there if not all. Time moves on though and it felt I was a bit tied to it. Answering questions and feeling I needed to be there felt a bit of a drag. I also noticed I wasn’t getting the time to do deeper co research that I had found worked so well in the past. Now, with more time on my hands I can do that. Deep research to me doesn’t mean raking through a balance sheet. Firstly I have never been good at reading balance sheets but more importantly I think in a recover play balance sheets don’t tell you as much as you would hope. Recovery plays with ‘one-bagabillty in a year or less are likely to have a walloped balance sheet in many cases, that’s why they are cheap in many cases too. I prefer a spread of stocks and so a spread of risk. I accept a small proportion might go boobs up or disappoint but if I do the right research and get the right indicators then far more will do very well and outweigh the losers by a country mile, so I accept there may be losses. What I do like doing is researching the co, the board, the market, the competition, the catalysts, the amount a company is ignored etc. This tells me far more than anything I can find on a balance sheet that may be manipulated that well that even skilled auditors get hoodwinked. Hunting down the great little companies that are undiscovered and have huge growth potential is what I’d rather do and intend to do a lot more of again now.

The Blog

Here I will post my research so others can read what I have found and what I think. A warning, I have never blogged before though I have been on public chatrooms in the past. I do a bit of short term trading now and again when I feel something may be under-valued short term and I tweet on Twitter @rebelHQ for anything I see that may be of interest to investors or traders. I am also dyslexic so expect the odd ‘d’ where a ‘b’ should be or any of the other idiosyncrasies us sort tend to type. I will also post various investment strategies I have, being a contrarian investor and the sectors I think I understand best and explain my investment/market feeling. I will usually be bullish too - no point looking for long positions with a defeatest bear attitude, optimism is a positive attribute in my book.

Finally

If you think this sort of thing is for you please feel free to subscribe. I’ll try to post regularly and frequently but the real deep research will come as and when a company shows itself, you can’t make these great potential finds just turn up on demand sadly.

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