My Approach to Investing

31st December 2013

Agenda

• My approach• Use of stop-losses• Questions sent in advance• Open forum

My approach

• Mid and small cap preferred hunting ground• FTSE 100 10.1%, FTSE 250 18.8% , FTSE Small 22.2%, FTSE Fledgling 12.7%,

AIM 29.2%, Hedge Fund 6.7% and cash 0.1%

• Market Caps: 11.8% <£50m and 11.9% between £50m and £100m• 26.8% currently in pooled vehicles; Investment Trusts favoured -

thematic and overseas diversification• No more than 30 holdings; currently 28

FTSE 100 v FTSE 250

What do I look for?

• Companies where the projected PE ratio is below 15x and the PEG Ratio is below 1.5x• Companies where earnings are being upgraded• I like growing dividends• I tend to steer clear of companies with high levels of debt• Companies that are hitting new price highs

JIC Portfolio as at 31st December 2013

Earnings Upgrades!

Adept Telecom Sainsbury Berkeley Group Dixons

easyJet Synectics Thorntons Lamprell

Where do I get ideas from?

• Screens• Valuation; PE’s, PEGS, Yields• New Highs• “Guru” screens on Stockopedia

• Director buying/Selling• Financial press• Other websites

I dismiss most ideas in about a minute!

Checklist!

• Quick look on ShareScope; PE, PEG, Yield, Chart• Closer look on ShareScope; earnings history and forecasts• Stockopedia; balance sheet, cash flow, earnings

upgrades/downgrades • Read the company website • Read recent announcements at www.investegate.co.uk • I love words like “materially ahead”

• Write up my investment case!

Director Buying/Selling• Buying more important than selling! (Green B’s along top axis represent Directors’ buying)

Basic rules

• Write up the investment case before buying• Don’t catch falling knives• Sell and move on!• Don’t waste energy worrying about what you don’t hold; it is only

what you do hold that matters• Don’t be frightened to take a position

Setting Stop losses

• At what price would it look like the trend/momentum had changed?• Moving Averages; 50 and 200, often act as support• Tend to use closing price rather than intraday• I don’t use automatic stop losses• Won’t help on a profit warning• Can be stopped out on an intraday move

Stop losses; Lamprell

Stop losses; easyJet

Stop losses; St.Ives

2013 Mistakes

• Selling too early!• Fenner• Findel• Staffline• Quindell

• Not being disciplined with stop losses,(far earlier)• Agriterra• Polo

RISK!• Risky in that it is all equities but since Inception, 1st January 2012,

Statpro stats look favourable in comparison to FTSE All Share (right hand table) and looking forward is forecast to be less volatile (left hand chart)!

RISK!

DISCLAIMER

Please accept the following:The content of this presentation is not intended as investment advice. I am posting my portfolio and showing examples, purely as a record of what I have done and does not constitute advice on whether a share should be bought or sold. You should always do your own research (DYOR) and be comfortable with the risks before making an investment. Furthermore, you should obtain independent financial advice from an FCA regulated intermediary before investing money. Investing in shares involves an element of risk: shares go up and down, (often in a manner that seems irrational), and in the worst case, a company going into receivership, you can lose all of your investment in that stock.