The UK Investor Show 2014 was awesome and I learned a lot of things from this year’s show as I always do when in attendance.
Globo is the stock that the bears are most bearish on #ukinvestorshow
— David Thomas (@djthomas) April 5, 2014
The fact that so many market savvy people are gathered in one place and are able to network, relax and listen to a great line up of speakers is truely amazing and a gold mine for up-to-the-minute knowledge.
For example, to witness the microscopic detail with which Ben Edelman analysed Blinkx’s (LSE: BLNX) online shennanigans was truely breathtaking and a lesson in how razor sharp focus in due diligence can prevent you from buying into companies that engage in unsavoury practices.
These things usually, one way or another, get found out by the market and share prices tank as a result.
Here are the first of 5 of 10 key takaways from this years UK Investor Show that will help you orientate your thinking about stocks for 2014.
1. Asset Based Value Investing Is The Exception Rather Than The Rule
— Chris Bailey (@Financial_Orbit) April 6, 2014
Its refreshing to be reminded that value can be found in a variety of ways whether it’s a strong management team, a strong brand name that the market does not fully appreciate or a discount to earnings or assets. It’s this last aspect of value – assets – that was mentioned the least.
2. Nobody Mentioned The Current Value Of The Stockmarket
True to the value approach, there was hardly any mention of the current value of the market. Instead experts discussed how to value individual stocks, how to reduce costs when buying and selling shares (low portfolio turnover – a la Terry Smith) sectors (tech) and emerging markets.
None of the “I think the market is due for a correction” type of comments, just a focus on where and how to find value and avoid mistakes. Excellent.
3. Most Investors Place At Least Some Emphasis On Future Earnings
Future earnings or at least the ability of unloved companies to generate them was something that came up as a theme. There wasn’t a strong emphasis on it but sometimes a young/strong management team was often cited a catalyst for such earnings.
You’ll know that this website hardly discusses such future earnings if at all due to the simple fact that Mystic Meg (remember her?) impressions yield less than satisfactory results.
4. AIM Stocks Are Akin To Buying A Lottery Ticket With The Odds Stacked Against You
Contributors to ShareProphets do an excellent job of exposing the frankly casino-like nature of the Alternative Investment Market and the bears session at the show highlighted this aspect of AIM in great detail.
Eminent bastions of the small cap roulette wheel mentioned included Avanti’s (LSE: AVN) missed sales targets, Globo’s (LSE: GBO) negative cashflow and Greek customer base and Gulf Keystone’s (LSE: GKP) bonds at junk status (13% yield). Lucien Miers, Matt Earl and Evil Knievil did an awesome job of explaining how investors can avoid the dross.
5. The Best Opportunities In Tech Stocks Are When They’re Private, Before They Come To Market
Sorry folks but the panel on the tech session which included Marcus Hanke, Steven Streater, Jon Wisby and Vin Murria stated that when tech stocks come to market they do so at inflated prices.
Not always but most of the time.
The trick is for private investors to tread carefully when investing in tech stocks and bring a Ben Edelman type of due diligence to bear on these stocks.
This weekend I’ll post the remaining 5 things I learned from this years UK Investor Show 2014 including what panalists shared on short-term trading best practices, how Terry Smith from Fundsmieht invests and the pitfalls of exposing the dark side of the force on AIM.
EDIT: Access Part 2 of 2 ’10 Things I Learned From The UK Investor Show 2014′ by clicking here