What Sectors?

I can't report on the whole market, so instead try to focus on areas where I can (hopefully) have a competitive advantage. So this is what I try to cover on this site;

  • Small caps above 10m mkt cap (because below that the risk of de-listing, and illiquidity in the shares, are too great)
  • No fixed max mkt cap, but around 300m mkt cap is usually as high as I go
  • Retailing shares particularly interest me, as I used to be an FD in that sector.
  • Value situations interest me most, especially unloved or overlooked companies that are profitable & cash generative.

These are the sectors/types of shares I don't cover ;

  • Resource stocks - highly specialised area, can't be valued on conventional basis, on earnings or assets, and I don't have any expertise in this area. Plus there are lots of them Listed, so not a job you can half-do.
  • Investment Trusts or other investment company.
  • Banks & insurance companies, all financials really - I have no expertise in this sector, and their accounts are not believable or understandable.
  • I don't have a specific ethical policy, but I have never invested in tobacco companies, and these days I avoid all "ambulance chasing" type businesses, or anything I feel is unethical (e.g. pawn shops, payday loan companies, etc.)
  • Foreign companies - have just been stung too many times investing in foreign small caps with UK listings. I'm happy with UK plcs that have overseas operations. I like to be able to go to a UK AGM, meet the management, and have the whole thing operate under UK accounting rules and business culture (not saying they're the best, but I know how they work!).
  • Anything else I just take a disliking to, for whatever reason.
  • Companies that look over-priced, particularly if blue-sky - again too many bad experiences in that area, which tends to be full of rampers & bad management.
  • Companies that make very low operating profit margins.
  • Pharmas/biotechs - like searching for a needle in a haystack, and the vast majority of smaller ones fail after repeated fund-raisings/dilution.

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