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Moleside Investment Club News – August 2022

Most of our members are aware that the MIC started as a light-hearted group of investors who joined together to invest in a small portfolio around the time our Probus Club was originally founded nearly thirty years ago. Over time they were gratified to watch their investment portfolio grow to a substantial size. 

In the early days the organisation was informal, a bit hit and miss, as the MIC worked  to find a good way of managing its investments.  In those days the results were poor and so those involved decided they had to improve the way they managed their affairs.

One or two of the members then were well versed in Financial Markets and established  an Investment Advisory Group.  This IAG was made up of four or five people who had studied the ways one could research the market based on the analytic methods followed by Slater Walker. For a time these two very successful indiviuals had operated a much admired investment company. Today’s Moleside IAG has refined the Slater Walker approach to suit current financial circumstances.

The other main conclusion of our IAG was to focus generally on investments in small companies which offered good prospects for growth.  

This organisation has proved successful for us, recently keeping us ahead of our benchmarks even in current very challenging times. As a result our approach has not changed for some years.  The IAG makes monthly purchase and sale recommendations.  The wider MIC divides up the agreed portfolio and individual members take post purchase responsibility for monitoring a small number of shares on behalf of the MIC and progress is reported at each meeting.

The IAG based system headed up by a few knowledgeable individuals, the latest being Peter Gauld, has been running for many years now.  As Peter approached his 90th birthday we believed the time has come to evolve our proven approach further.  

One very time-consuming part of the work of the IAG is share selection and analysis.  If this task could be shared it would greatly help the Leader of the IAG. 

So we have decided to start a new method of share selection. This will use a team approach so that members can better share our stock selections and benefit from the experience of using directly the tools that are now available to us.  Slater Walker principles will still apply but the data guiding our decisions can now be accessed by modern software products.

The approach we are taking will allow us to retain the IAG and the Members Monitoring System but will, we are confident, allow our club to evolve to the benefit of all of us.  

We are forming three teams of members.  Each team takes responsibility for share selection for a month in each quarter.  Team recommendations are discussed at the IAG, as before and then one or two are shortlisted for detailed presentation to the MIC Main Meeting for a vote on an investment decision.  All members, as they did before, will continue to report to their peers on the shares under their responsibility.

Prior to making this organisational change there has been considerable discussion about this method versus other alternatives.  There has also been a major coaching session covering how we will go about this approach.  We will improve with experience, but we are committed to this evolutionary change.  Peter will continue to head the IAG, but when leadership changes in the future, his replacement will find this a less daunting task to take on.

This change has solid benefits for all.

  1. It retains the strengths of proven methods.  
  2. It shares out the work more evenly.
  3. Each member of the Investment Club can find a way of improving their individual performance in their area of interest. 
  4. Finally, as new members join, they can develop more quickly in one of the teams

The Investment Club is a Group of people who like to enjoy membership without pressure.  Each Team Member is only expected to contribute to the level of their own ability.  The Teams are stronger that way with each of us complementing one another

And as we seek to do ever better look at the blue line on our August chart.  Significantly, we are still outperforming our benchmark indices.  The explanation could possibly be that we have found something valuable or is it that we have simply been a very lucky group of investors. 

More likely perhaps – quite a lot of both.  

Kris Nasta  MIC Chairman, August 2022