Small Cap Shares

[idpickering]

I would say - stick the big boys with reliable history... Cough, Cobham, Cough

Quite right. As per pyad's original suggestion. Anything else is not hyping imho and belongs elsewhere.

Ian.

[Raptor]

I would say - stick the big boys with reliable history... Cough, Cobham, Cough

Quite right. As per pyad's original suggestion. Anything else is not hyping imho and belongs elsewhere.

Ian.

But how "big" is "big". Market cap is likely to go down as well as up. What if there is no "big" companies in a sector you are looking at and as mentioned "big" companies do fail. I agree about first looking at those that are up there but when you have the "full collection of cards", where do you go?

Mind you some of the suggestions do make me think..... Have I missed something...........

Raptor.

[idpickering]

I would say - stick the big boys with reliable history... Cough, Cobham, Cough

Quite right. As per pyad's original suggestion. Anything else is not hyping imho and belongs elsewhere.

Ian.

But how "big" is "big". Market cap is likely to go down as well as up. What if there is no "big" companies in a sector you are looking at and as mentioned "big" companies do fail. I agree about first looking at those that are up there but when you have the "full collection of cards", where do you go?

Mind you some of the suggestions do make me think..... Have I missed something...........

Raptor.

I'll give you that Raptor. How low do you go? I only have TATE and CLLN from the lower index (ftse250). The bottom like though, is each to their own. But some hereabouts are taking to higher risk to glean the income IMHO.

Ian

[Raptor]

I'll give you that Raptor. How low do you go? I only have TATE and CLLN from the lower index (ftse250). The bottom like though, is each to their own. But some hereabouts are taking to higher risk to glean the income IMHO.

Ian

Shades of Luni there, be careful

Some of my shares were FTSE 100 but are not anymore. A few would never be HYP today (some would say they never were )

Raptor.

[OZYU]

My post seems to have upset Ian, and Arb. I am really Sorry about that.

I was just trying to demonstrate that a mixed approach can work too. The smaller cap are more risky maybe individually, but not as a selected bunch in my experience because they have low 'intercorellations', and they do indeed produce vast losses at times, 100% max theoretically, although 67% is my worst so far(and purely due to my own stupidity), but multi baggers too are not that infrequent, hence my interest to assist the HY portfolio. The collectives bring in the 'heineken part' that the 350 cannot reach, among other things such as ready comparators. Overall resulting volatility is low, diversification very high.

Now in terms of results, it looks as if I am about a third as successful as Lord Lee, guessing what his ISA pot must be worth by now, good for him. In term of the person who taught me most about investing, which some of you might have briefly known as GrumpyMike on TMF, or I should say the late Grumpy, a master investor highly respected by all who knew him, never could anywhere match him either, not that I tried because his main message was to first find out which investor you are and stick to that style.

We all have our own targets. Mine has been to first better a simple long term model based on modest growth, plus RPI, plus a sensible yield. Then to beat FTAS TR. This has been achieved on a three year rolling basis so far. It does not mean that this could all change tomorrow.


So we all know someone who is doing worse or a lot better. It is a journey, not a race, and like golf it cannot be won, just played best you can, I am told.

Ozyu

[idpickering]

My post seems to have upset Ian, and Arb. I am really Sorry about that.

I was just trying to demonstrate that a mixed approach can work too. The smaller cap are more risky maybe individually, but not as a selected bunch in my experience because they have low 'intercorellations', and they do indeed produce vast losses at times, 100% max theoretically, although 67% is my worst so far(and purely due to my own stupidity), but multi baggers too are not that infrequent, hence my interest to assist the HY portfolio. The collectives bring in the 'heineken part' that the 350 cannot reach, among other things such as ready comparators. Overall resulting volatility is low, diversification very high.

Now in terms of results, it looks as if I am about a third as successful as Lord Lee, guessing what his ISA pot must be worth by now, good for him. In term of the person who taught me most about investing, which some of you might have briefly known as GrumpyMike on TMF, or I should say the late Grumpy, a master investor highly respected by all who knew him, never could anywhere match him either, not that I tried because his main message was to first find out which investor you are and stick to that style.

We all have our own targets. Mine has been to first better a simple long term model based on modest growth, plus RPI, plus a sensible yield. Then to beat FTAS TR. This has been achieved on a three year rolling basis so far. It does not mean that this could all change tomorrow.


So we all know someone who is doing worse or a lot better. It is a journey, not a race, and like golf it cannot be won, just played best you can, I am told.

Ozyu

Don't worry about it. Let's move on.

Ian

[monabri]

And then you had to go and ruin it by mentioning "golf"...

[moorfield]

But how "big" is "big".

Good question. I always felt limiting myself to FTSE100 companies was too restrictive, and on the other hand I could never decide how far down the FTSE350 ladder to look. In the end I settled on using the Sunday Times' Top 200 companies list (back page of the Business section) as my selection pool. (Although I won't be selecting any new holding for the forseeable future as my 20-slot punch card is currently fully filled.)

M

[77ss]

Some of my shares were FTSE 100 but are not anymore.
Raptor.

Works both ways. One of my more solid performers was a humble 250 component at purchase, recently promoted. Provident Financial.

Granted, it was one of the larger FT250 members, with a market capitalisation comfortably above £1bn when I bought.

Like one of the other posters, I have found the Sunday Times list of the top 200 a useful first port of call when feeling in need of another holding.

[Arborbridge]

toofasttolive,

HYP doesn't forbid you to buy ITs, but it is arguable whether they should be discussed as part of your HYP, and probably preferable that they shouldn't be. Go ahead, if you like Mercantile, buy it- I did, but I just don't include it in my HYP share collection. I have a very few other "odd" shares floating about too, but I just don't roll them into the HYP. (e.g. my wife owns Wetherspoons and SSP Group).

I notice a discussion about Cobham: I'm not entirely up with the latest news, but as far as I know it hasn't failed yet.

As regards RBS not failing owing ot its size: well, yes - that was the whole point! Large companies sometimes get away with disasters because they are BIG - that just proves the point. Think BP - a smaller company would have cracked. Although RBS shares dropped 80% or whatever it is, it still exists as a share, whereas other smaller companies would have gone bust and left sharefholders with a total write off. I did say, it was only an anecdotal feeling, but in my experience, I've had several small companies fail totally leaving nothing for shareholders, but since HYP, investing in large companies, I've had none - not one.

Arb.

[minerjoe]

perhaps we can come back to my original question here, I feel we might be more onto the strategy question rather than my OP.

Would anyone have any shares they might recommend me looking further into? Maybe MARS?

Thanks,

[mike]

I notice a discussion about Cobham: I'm not entirely up with the latest news, but as far as I know it hasn't failed yet.

Unfortunately, Cobham has failed on the income front -

In the light of the disappointing trading and higher than expected net debt, the Board will not be recommending a final dividend payment in respect of financial year 2016. The dividend policy for 2017 and beyond will be set out following a full review of the Group's financial situation.

http://www.investegate.co.uk/cobham-plc ... 00098492T/

And the more recent pretty horrific update is being discussed here viewtopic.php?f=15&t=3308

Mike

[daveh]

toofasttolive,

HYP doesn't forbid you to buy ITs, but it is arguable whether they should be discussed as part of your HYP, and probably preferable that they shouldn't be. Go ahead, if you like Mercantile, buy it- I did, but I just don't include it in my HYP share collection. I have a very few other "odd" shares floating about too, but I just don't roll them into the HYP. (e.g. my wife owns Wetherspoons and SSP Group).



Arb.

I disagree upto a point. I have 3 ETFs and I consider them as part of my HYP. They are EMDV, IAPD and IDVY, which pick high yield shares from emerging markets, Asia/Pacific and Europe. They total just under 15% of my HYP and are limited to a maximum of 20%. They allow me to diversify into areas that I would find difficult to invest in on an individual share basis. So I personally would say that including an IT or two or even a fund within your HYP to cover areas of the investment market that you find difficult to invest in with individual shares is a valid option. My only provisos would be that their yield should be a major criteria used to choose them, and individual high yield shares should still make up the majority of the portfolio.

Moderator Message:
General note to posters. Although mentioning IT's is allowed, depending on context, they are not part of the overall HYP practical . Thanks. Raptor.

[jackdaww]

I notice a discussion about Cobham: I'm not entirely up with the latest news, but as far as I know it hasn't failed yet.

Unfortunately, Cobham has failed on the income front -

Mike

=======================

i suppose it depends on one's interpretation of the word "failure"

[Arborbridge]

i suppose it depends on one's interpretation of the word "failure"

Failure in this context is, in my view: total collapse/ change of the company leaving no capital for the shareholders,

and/or total collapse of the dividend with no prospect of its being resumed.

Arb.

[Gersemi]

perhaps we can come back to my original question here, I feel we might be more onto the strategy question rather than my OP.

Would anyone have any shares they might recommend me looking further into? Maybe MARS?

Thanks,

I see you've failed to steer this thread back on topic!

HYP doesn't forbid holding smaller companies, but the original concept was very much about investing in 'blue chip' shares and most people posting here do tend to stick to investing in larger companies, so that is where their knowledge lies.

How about suggesting a few smaller companies and saying what advantage they have over larger companies in the same sector - or maybe they cover a sector where there is no suitable larger HYP candidate?

Gersemi

[JohnnyCyclops]

perhaps we can come back to my original question here, I feel we might be more onto the strategy question rather than my OP.

Would anyone have any shares they might recommend me looking further into? Maybe MARS?

Thanks,

MARS - Marston, yes.

I looked at this over on the old TMF boards last year, compared to Greene King. From memory at the time they were similar, however MARS yield was about 100bps higher (MARS ~5.5% to GNK ~4.5%), although it had a poorer track record on the dividend. In 2009 both had rights issues, but whereas GNK held their dividend for a year, MARS cut their dividend. You might also want to look at levels of debt. GNK gearing is around 100%, MARS around 250%.

So, to build upon Gersemi's comment above, why not compare MARS to GNK, and to others in the Travel/Leisure sector (I say this, because to my mind those companies have similar characteristics around consumer discretionary marginal spend in many ways, although there will be exceptions!). Or just compare to others in the drink/food/property areas. I.e. is MARS the best choice for this sector for your HYP.

MARS
Market Cap £800m
P/E ratio : 9.5
Yield (trailing) 5.5%
Yield (forecast) 5.7%
Dividend Cover 1.9
Dividend growth ~+4.5% p.a.
Net gearing : 247%

All data from DigitalLook.

We plumped for GNK four months ago, to add to our HYP. Although the yield was lower than MARS I do consider the relative larger size, less debt, and that it didn't cut its dividend previously in 2009, all to be in its favour.