Skip to content

Strategy For The Mature

After January’s meeting of Moleside’s investors we invited their Chairman to reflect on the upturn in the club’s portfolio and he reminds us of the thinking that lies behind its aim to stay ahead of the game.

Kris Nasta writes – “Several of our members who retired in recent years with solid pension arrangements and a small amount of spare cash for investing in the stock market, were pleased to join the Moleside Investment Club. (MIC) Their asset build-up during their earlier careers required very conservative management of their funds over their working lives, providing steady growth and now, a stable retirement income. 

At a mature stage in their lives and having an interest in investing on their own account or as part of a Group, there has not been much enthusiasm for boring, but safe, funds which grow slowly, or in safe, but staid FTSE 100 companies.  Smaller companies and new young companies can offer much faster growth profiles and rapid stock value appreciation.  These are typically found on the AIM market.  The average age of the MIC member is relatively high and there is little interest in hanging around waiting for slow growth investments to mature. The MIC members want quick results and it is what makes their meetings exciting and entertaining. Time is short.

The trick here is to do the research right and then invest in these smaller companies.  Key requirements are that they are well managed, financially sound and in exciting growth sectors.  The benefit of this approach is visible from the charts going back to 2019 when we started to monitor some comparative indices.  The blue MIC  line rapidly outstripped the performance of the comparators. We had been fortunate enough to find some stars which shone brightly in our portfolio.

Even during the recent market corrections which have occurred, for well-known reasons since Sept 2021, our portfolio has remained strong.  Our companies have continued to grow, showing very solid results with BUY and OUTPERFORM recommendations very common from the Brokers, but the markets have been very skittish.  Share prices are low because of this. We are confident that we have a strong portfolio, the good times will return and new stars will shine in our portfolio.

Those who follow the track of the roller coasters on which world markets have been riding recently would be encouraged if they could see the results reported at the January meeting of the Moleside Investors Club.  The direction for the blue line which tracks the club’s portfolio is reassuringly up. What’s apparently coming up even faster is the red line of the FTSE All Share Index.  However, the All Share index is calculated on a total returns basis which includes dividends. This injects a bias of around 2%, meaning that the real slopes are approximately equal.

How different is the position at the start of the new year? The AIM is back where it was in 2019, when the MIC started monitoring against its two chosen benchmarks, but the FTSE is showing a slow but steady climb to a position where it could be on the verge of overtaking the MIC. None of this is a real concern to the MIC members who watch these indices but are confident in their combined experience to continue to make sound share selections.

Smaller companies are where the MIC has always tended to invest. The discussions at the first meeting of the New Year found members making a carefully considered decision to invest in a new mining services company which they believe to be grossly undervalued.  This proposition was presented by one of the three research teams.  These teams were formed in August last year to help consolidate MIC’s approach to investment selection, a strength previously confined to one or two key members.

At the turn of the year national journalists have been commenting positively on portfolios that are able to report even a 1% rise in value in these difficult days. Moleside investors can therefore be proud that they are showing at least a 2% improvement in the month since their December meeting. 

It makes for an engaging time for everyone involved in the Moleside Investment Club”