C H A M P I O N S H A R E S P R O M e m o
Welcome To New PRO Members
Email sent: 19 January 2010
By: The Champion Shares PRO Team
In This Week's Memo:
Welcome To New PRO Members
This week we've re-opened Champion Shares PRO to new members -- and if you've just joined, welcome! We're thrilled you've chosen our service to help you succeed with the stock market. This PRO Memo brings you right up to speed with our portfolio since we started to invest three months ago.
Why use real money?
We're convinced PRO's real-money portfolio is the most authentic, most beneficial and most educational service for patient, long-term investors. As far as we are aware, there is no other service like it in the country. With £50,000 of the Fool's own money riding on PRO's performance, our financial interests are completely aligned with yours. If you make money, so will we... if you lose money, so will we.
So if you've just joined PRO, let's get you started with our website. These links explain how everything works and where to find what:
You don't need £50,000!
Let's now move to the most common question asked by new PRO members -- do I need £50,000 to follow the portfolio? Well, don't worry. We believe everyone can benefit from our service, even if you have just a few hundred pounds to invest. Here's a full review of the possibilities if you don't have £50,000 to hand.
Buys
If you've joined PRO this week, you may not know about the shares we've already bought. Following our October launch, we have invested in three separate companies:
- Company A (LSE: ---), £1,500 invested, buy limit 650p
- Company B (LSE: ---), £1,500 invested, buy limit 316p
- Company C, £2,500 invested, buy limit 2,800p
Each purchase came with a stated buy limit, which is our guide to ensure you don't overpay and damage your returns. At yesterday's close, we rated Company A and Company C as 'Buys', and Company B as a 'Hold'. Our portfolio page shows the current value of our holdings.
When we announced our first purchase, Company A, its shares jumped up to 21% the next day and our portfolio ended up buying above our own buy limit. At the time this price spike caused much debate on the Company A discussion board and this PRO Memo recounts the issues. Last week we dropped three shares from our watch list that seemed likely to experience disruptive price spikes if we issued a Buy Alert.
11% invested
If this is your first visit to PRO, you may now be wondering why we have invested just 11% of our £50,000. Well, shares in general do not look that cheap to us right now and we are happy to bide our time. You see, we'd far rather quietly pick up good-value shares during 2010 and beyond, than invest in haste and repent at leisure. The price-spike issue has effectively curtailed any forays into some cheap-but-illiquid shares, too.
Our caution has therefore left the PRO portfolio trailing a rising market. At yesterday's close, we were showing a 0.2% loss and were lagging the FTSE All-Share index by 5.1%.
But we're only three months in to a journey that is set to last for decades and we think any comparison to the market will only become meaningful after a few years, when there's more evidence to show how our share-picking philosophy has fared. If we continue to back respectable companies at undervalued prices -- and resist thinking about what the index is doing -- then we expect our relative performance to look after itself.
AIM and ISAs
Sharp-eyed PRO newcomers may have noticed two of our three purchases to date are traded on AIM. As shares on this particular market cannot be held within an ISA, anyone wishing to follow us at home will therefore have to buy our AIM selections through a standard dealing account or via a SIPP. While we recognise AIM shares generally carry greater risks, we do believe the junior market is home to several good businesses that ought to serve armchair shareholders well over time.
Finally…
Again, we'd like to welcome all of our new members to PRO and we hope you enjoy the service. Of course, we wouldn't be here if it wasn't for our existing members -- so thank you, too, for your continued support and involvement in our community. We're looking forward to the years ahead -- here's to growing our portfolios together.
PRO Update
Today's Update continues our recap of shares on PRO's watch list. This time we're revisiting Company D and Company E, two family-run companies that never made it to the old Champion Shares service. Company D, a home-furnishings chain, possesses a cash-strong balance sheet and has just reported sales up 26%. Meanwhile, engineer Company E boasts an illustrious dividend record and single-digit P/E. Read the latest PRO Update.
Coming Up…
Our next PRO Memo will reveal our favourite three books for novice investors. Check your inbox on Tuesday, January 26th. Until then…
Happy Investing!
Maynard Paton -- Chief Investment Analyst
David Kuo -- Investment Commentator
