Category: Companies

Sepsis and How to Diagnose It

I have probably mentioned before that I nearly died from an attack of sepsis a few years ago. Spent two weeks in intensive care and even when out of that took some time to recover from intensive care neuropathy. Sepsis is an extremely dangerous condition which probably kills more people than common cancers.

To try and improve diagnosis (early diagnosis and treatment is extremely important) NICE has recently published new guidelines to assist healthcare professionals. But it is worth reading for anyone who looks after the young or elderly, or those with reduced immune systems. See https://www.nice.org.uk/guidance/NG51

Edison have now today published a report on a company named VolitionRX who are working on diagnostic tools for sepsis – see https://www.edisongroup.com/research/snaring-sepsis-with-early-nets-detection/33224/ . They say “Globally, it is estimated that c 50 million people develop sepsis each year (42% of which are children under five years of age), the condition is associated with a c 20–25% mortality rate and survivors are typically left with one or more long-term consequences. In the US, it is estimated that approximately 1.7 million adults develop sepsis annually, corresponding to c 350,000 deaths”. The report provides a good overview of the market for sepsis diagnostics and the need for better tools.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Year End Review of 2023

As I have published in previous years, here is a review of my own stock market portfolio performance in the calendar year 2023. I’ll repeat what I said last year to warn readers that I write this is for the education of those new to investing because I have no doubt that some experienced investors will have done a lot better than me, while some may have done worse.

It’s worth bearing in mind that my portfolio is very diversified across FTSE-100, FTSE-250 and smaller company (e.g. AIM) shares listed in the UK. I also hold a number of UK investment trusts which gives me exposure to overseas markets, and some Venture Capital Trusts (VCTs). Although I have some emphasis on AIM shares, they are not the very speculative ones.

One feels wary of publishing such data because when you have a good year you appear to be a clever dick with an inflated ego, while in a bad year you look a fool. Consistency is not applauded on social media. But here’s a summary of my portfolio. Total return including dividends was up 2.9% while the FTSE All-Share was up 3.8% which I use as my benchmark (the latter figure does not include dividends though). So in summary a disappointing year although much better than the previous year.

Some explanations are as follows:

Holdings in small and mid-cap stocks, particularly tech ones, had another bad year. Both my and my wife’s ISAs showed significantly losses mainly because I tend to purchase any new speculations in those portfolios as costs are lower there. Losses were therefore incurred on Paypoint, SDI, EKF, Spirent, Telecom Plus, Keywords, Learning Tech, RWS etc.

Property REITs failed to recovery from the impact of higher debt costs on property companies until late in the year.  

Values of alternative energy investment companies fell towards the end of the year resulting in losses on Greencoat UK Wind, Renewables Infrastructure Group, Gore Street Energy Storage, Gresham House Energy Storage etc and those holdings were sold. Clearly there was excessive enthusiasm by the market and me for environmentally friendly investment funds while it became clear that future profits from these companies were difficult to predict.

My investment trust and fund holdings generally did well often because they have substantial US holdings. I failed to beat Terry Smith’s performance at Fundsmith for yet another year but Scottish Mortgage and Polar Capital Technology recovered substantially, particularly the latter.

Venture Capital Trusts almost all lost value as their holdings in smaller companies were revalued downwards to reflect AIM market valuation falls (the AIM market was down about 8% in the year). But their dividends held up well.

Holdings in big oil and mining companies which I had moved into did reasonably well but not good enough to offset the negative impact of losses on small/mid-cap investments. Overall dividend income was down slightly due to moving more into cash in the previous period and I still have a relatively defensive overall portfolio position with substantial cash holdings in ISAs and SIPPs. But at least brokers are now paying reasonable levels of interest on cash holdings.

Due to my poor health at present, at age 78 I need to have shorter time horizons for investments with less time spent on researching new investments and managing my portfolios.

What does the future hold? I find it impossible to predict what will happen in markets and I therefore tend to just follow the trends. US markets are now highly valued but betting against the vibrancy of US technology markets could be very tricky.

The political environment is still negative with wars in Europe and the Middle East while it seems likely that the Labour Party will have a good chance of winning a general election later in the year. None can be good for stock market investment and taxes are currently too high to stimulate investment in the UK even if inflation is now being brought under control.

I am therefore feeling somewhat negative about future investment prospects but simply continue to focus on investing in good companies that are generating real cash profits or on well managed investment trusts and funds.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Schroder REIT Change of Investment Policy

I am a shareholder in the Schroder REIT (SREI) and have therefore received the notice of a General Meeting to revised the investment policy of the company.

Their proposal is mainly focussed on a new emphasis on “sustainability” for their property investments. The manager will be required to focus on an ESG scorecard in future and the board believes this will make the company more attractive to investors.

At least that seems to be the gist of their argument for change to the investment policy. But it will complicate the investment policy very considerably.

I will be voting against the change as I consider it an unnecessary complication and to focus on one aspect of investment policy alone is wrong. I suggest other shareholders should do the same.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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BT Problems, Hotel Chocolat and Multibaggers Report

BT has managed to disable my business “landline” number of 020-8295-0378. Major network problem apparently which won’t be fixed until at least 24/11/2023. Even though this is the line used for my broadband service that is still working so anyone wanting to contact me should use this contact form to get in touch: https://www.roliscon.com/contact-us

Will I be buying shares in BT? Absolutely not when the service is so poor.

Despite my previous recent blog post on the dangers of the attractions of luxury food products (see https://roliscon.blog/2023/10/16/hotel-chocolat-and-luxury-products/ ) it has not deterred Mars from bidding for Hotel Chocolat (HOTC). They have offered to pay 160% of the previous market price which is a prospective p/e of over 190. This seems a wildly optimistic valuation for a retailer with no consistent record of profits.  

Stockopedia ran a webinar on “multibaggers” which I missed as the timing clashed with my usual dinner time. But they have produced a report on their research of UK stocks which you can obtain from their web site.

I hold two of the top ten winners over the last ten years which have certainly contributed to my portfolio performance and it is well worth reading their report.

We seem to be back in a political mess after Suella Braverman got fired and the Supreme Court rejected the Rwanda plan for migrants. That was always going to be legally and politically difficult without a very firm hand on the tiller which Rishi Sunak seems unable to provide. Moving illegal immigrants to a foreign country was never going to be easy. But Rwanda is surely not the best choice of location. How about St. Helena or Ascension or one of the remote Scottish islands instead?

As regards the bust-up in the Conservative Party as a result, as someone who has some experience of such events in membership organisations my advice to Suella is to act quickly. Removing Sunak would not be easy so best to form a new platform for like-minded right wingers.   

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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Patisserie Valerie and Shell Legal Cases

Shareholders in café company Patisserie Valerie were wiped out in 2018 after the accounts were shown to be fictitious and the company collapsed. It has now been announced that a trial date of four people alleged to be involved in the fraud has been set for March 2026. See https://www.lawgazette.co.uk/news/2026-trial-date-for-patisserie-valerie-criminal-case/5117808.article

Is it not astonishing that it has taken so long to bring the case to court? Compare that with the recent case of FTX/Alameda Research in the USA where Sam Bankman-Fried was prosecuted and found guilty in just a few months. This demonstrates what is wrong with the English legal system for dealing with fraud cases. Justice delayed for years is no justice and is no deterrent to criminal action.  

Another recently reported legal case is that oil company Shell is suing Greenpeace for £1.7 million after “activists” boarded an oil platform that was in transit off the Canary Islands. Shell incurred substantial costs as a result.

Comment: as a Shell shareholder I fully support the company actions. I think more such lawsuits should be pursued against organisations such as Greenpeace and Just Stop Oil who clearly have substantial resources which are financed by the ill-informed and take part in criminal activities in pursuit of their goals.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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Bioventix Results

Full year results from Bioventix (BVXP) were issued this morning. I hold shares in them. They sell diagnostic antibodies including a troponin test which is a marker for past heart attacks.

I spent some time in my local A&E department a few weeks ago with chest pains which was confirmed as a possible heart attack via a troponin test but later turned out to be a mirage and I was quickly discharged. Don’t know whose troponin test they were using.

BVXP results were good, with EPS better than forecast and a second interim dividend being paid to make total dividends the same as last year. Revenue was up 9% and this is a “steady growth” share in essence.  I am happy to continue holding as the yield of 4% is good even if the shares are not likely to excite in the short term.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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Breaches of the Peace and Stockmarket Trends

The demonstrations in London and other cities against Israel are clearly “breaches of the peace” and should have been prevented. They were not simply peaceful demonstrations calling for a ceasefire in Gaza. The police are being way too feeble in enforcing the law and should call in the army if they feel that they do not have sufficient resources to enforce calm.

A ceasefire by Israel is not going to happen unless Hamas releases the hostages they hold and stop firing rockets into Israel – that also requires Iran to stop funding the attacks on Israel by Hamas and Hezbollah.

The demonstrators against Israel are being completely unrealistic in their demands. Palestinians may have some grounds for complaints about their treatment in Gaza but they are not helping to resolve their problems by the recent terrorist attacks on ordinary civilians.

Stockmarket Trends

Have we reached the late stage of bear market capitulation as Paul Scott suggested last week? I certainly get that feeling so far as small cap stocks go. Good news has little impact while bad news causes abrupt share price falls.

Last week the main good news was that I had sold shares in Fireangel (FA.) and Strix (KETL) some time ago thus avoiding big losses, For example Fireangel has received a bid at 7.4p when I sold for a small loss in 2016 (originally bought at less than 300p in 2014). Reason for sale? Total lack of confidence in the management. Strix I held onto for too long resulting in a 36% loss. The company went into “diworsification” with some unwise purchases and the CFO has quit. Moral: it’s never too late to sell.

Safestyle (SFE) has been suspended and is “game over” with a likely nil return which I held briefly in 2016. Incompetent management seemed to be the problem.

CAB Payments (CABP), a payments business that only recently listed lost three quarters of its value after a profit warning last week. Moral: don’t buy new listings – wait until the business model is proven. I did not hold it. Similar problems at Argentex (AGFX) after the CEO left abruptly.

Difficult to justify buying small cap stocks even at current prices when big oil and mining companies are paying such high dividends and interest on cash deposits can be as high as 5%.

Rishi Sunak may have stabilised the UK economy after the Truss debacle but fears of a prospective Labour Government are undermining confidence in the stock market, particularly by foreign investors. With UK taxes too high there are clearly many people sitting on their hands waiting to see which way the economy trends.   

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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IBP Special Administration and Thames Ventures VCT 1

I have a very small holding in Thames Ventures VCT 1 (TV1). This is the remnant of holdings in other VCTs originally invested from 1997 onwards and which have generated a total return of minus 58% to date according to Sharescope although I doubt that is accurate due to multiple consolidations and name changes. I would have sold the holding long ago if it was not for the roll-back of capital gains roll-over relief that would have been incurred.

Now we learn that TV1 held some of its listed shareholdings with IBP Markets Ltd which has been put into Special Administration by the FCA “due to concerns whether there were appropriate systems and controls in place to ensure adequate protection for client monies and client assets at IBP”. About 20% of VCT1’s assets are held by IBP.

More information here: https://www.investegate.co.uk/announcement/gnw/thames-ventures-vct-1–tv1/special-administration-of-the-company-s-custo-/7824992

and here: https://www.fca.org.uk/news/news-stories/restrictions-placed-ibp-markets-limited-and-firm-enters-special-administration

Needless to say this is all bad news. Are the assets still there, and what will the administration of IBP cost and will it be charged against the assets? Those are key questions. Also how long will it take to complete the administration and have the assets released – too long is no doubt the answer.

The whole future of TV1 is also brought into doubt by these announcements. The investment management was transferred recently to Foresight Group who have experience of taking on dead ducks but with net assets of £91.9 million according to the last annual report and the reputational damage from these events some vigorous decisions are clearly required.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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Hotel Chocolat and Luxury Products

I am writing this while awaiting a phone call from the local hospital to see if they have a bed for me – needed to support a non-critical procedure. They have already cancelled two appointments previously due to lack of a bed which rather shows how the NHS is falling apart and simply does not have enough hospital beds.

To fill in the time I listened to Paul Scott’s latest podcast. He put the boot into Hotel Chocolat (HOTC) and I have to agree with him on it. I avoid all luxury food producers – chocolate, ice cream, wine etc. The words cause investors to salivate and to act irrationally. The word “gold” has a similar impact on some investors. These are “trigger” words that cause a pavlovian response – a subconscious desire to get involved and a sure way to lose money.

I have no opinion on the merits of what Hotel Chocolat sells although Paul said he did not like the taste. But any examination of the past record of the company should be enough to put anyone off investing in it.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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Banks and Following Other Traders

The travails of Metro Bank and its need to raise more finance have reinforced my conviction not to invest in bank shares. In theory there is a gap in the market for a bank that can provide a good local service through a branch network when the major UK banks are closing branches as fast as they can (there is not a single bank left in Chislehurst where I live when there used to be several only a few years ago). My sole brief contact with Metro Bank did not convince me they were a good alternative.

Esther Rantzen had an article published in the Daily Telegraph headlined “I’m furious with Barclays – I’m leaving after 70 years” which spells out the common gripes. It included the comment: “Barclays, for example, is paying a rate of just 1.6pc on its “Everyday Saver account”, while charging mortgage customers rates ranging from 5pc to more than 7pc. Certainly Barclays and other major UK retail banks seem not to care less about retaining long-standing customers by offering competitive savings rates. If you have a “no-notice” savings account there are now much better alternatives.

It’s surely a mistake in marketing terms to close bank branches. A customer visiting a branch is a great opportunity to sell them something new and to build a personal relationship. Post offices and pharmacies know the benefit of a steady stream of old and new customers walking through their doors every day so why have banks not developed services to do the same?

Following other traders

There was an interesting article in the FT today headlined “Copy trading: a road to riches or risk?”. Apparently some share trading platforms now enable you to follow other popular traders and replicate their trades. This is a service for those who don’t want to think about their own trades but just want to follow some guru. Or likely just follow the herd.

When I first started investing in the stock market I thought following others was a sure recipe for success. But as the article points out you are just as likely to be following others mistakes and prejudices. To make money you have to be somewhat contrarian.

I suggest such services need regulation because they encourage herd behaviour which can suck the inexperienced into trading manias rather than investing based on fundamentals.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

Telegraph article: https://www.telegraph.co.uk/money/banking/savings-accounts/esther-rantzen-barclays-bank-loyalty-savings-interest-rates/

FT article: https://www.ft.com/content/beac06bd-61d2-4326-89f7-59a1689132a0?

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