Nothing I did was rocket science

For my final article, I thought it would be useful to recount some of the best investment choices I’ve made.
 
You see, I’m hoping all this may inspire you to work just that little bit harder with your own portfolios, which in turn may bring your own financial independence just that little bit closer!
 
You’ll be pleased to hear nothing I did was rocket science. In fact, you may have read it all before. Nonetheless, these ‘basics’ worked for me and I am convinced they could work for you as well.
 
Anyway, here are my top 5 decisions for you to consider.

Decision #1 – I decided to start my portfolio early

Pretty obvious this, but the earlier you start investing, the more time you have to compound your gains into a substantial sum.
 
In my case, I caught the share-buying bug in my early 20s in 1994, so it has taken me 20 years to arrive at my current portfolio position.
 
For me at least, the best thing about investing early on in life is that you are committing relatively small amounts. So any major portfolio mistakes can be offset by your future employment earnings.
 
I certainly made loads of novice mistakes in my first few years of investing. But I persevered and found that time and a rising salary were on my side to help sort things out.

Decision #2 – I decided to save hard to invest

I was born and bred in Yorkshire, so I’ve always felt being frugal with money was as natural as breathing.
 
Mind you, I still made a conscious decision to be careful with my expenditure. I mean, you will never make a lot of money from shares if you never have any money to invest in the first place.
 
Just so you know, my tightwad nature now involves running a 14-year-old car and having taken just one foreign holiday in the last ten years. It has also involved bringing in a packed lunch every day for the last 15 years at The Motley Fool.
 
I can’t begin to imagine the amount of motoring, holiday and sandwich money I have saved that went into winning shares instead. I can’t say I have missed spending that cash, either.

Decision #3 – I decided the right way to invest for me

I’ve read countless investment books in the last 20 years.
 
But I was incredibly lucky that the very first one I read was about Warren Buffett, which explained how the billionaire alighted on quality stocks such as Coca-Cola.
 
From that day on, I was sold on the idea of buying great companies and simply holding them for years and then watching their prices (hopefully!) rise 10-fold or more.
 
Sure, my own portfolio over time has shifted from massive global brands to smaller UK companies. But the key Buffett approach – find quality businesses that boast owner-friendly managers, respectable competitive positions, conservative balance sheets, reasonable long-term prospects and lowly valuations – I still abide by to this day.
 
I admit, buying quality companies for the long run is no secret – I mean, I’ve banged that drum for 15 years here at the Fool! Plus it requires patience, discipline and a bit of effort to get it to work.
 
But you must trust me here: the Buffett buy and hold way is, in my experience, far more likely to make you dependable returns than any of the more ‘exciting’ investing approaches you will inevitably encounter.

Decision #4 – I decided big bold bets were best

Sooner or later you will come across an investment opportunity that simply screams BUY ME. I certainly did in 2002 and 2003.
 
In this particular situation, I had to recall the words of Buffett, who said we should always buy a “meaningful amount of stock” when we find true quality bargains. In my view, betting bold on a big winner is the best way to fast-track yourself away from the 9-to-5.
 
For me, my big bold bet was on the shares of London Stock Exchange.
 
A decade ago, the Exchange was a clear monopoly with some impressive accounts to match, but its profits had stagnated because of the dotcom crash. However, I assumed earnings would pick up in a bull run and sure enough, the credit boom emerged and the LSE eventually became a bid target.
 
All in all, I put a third of my portfolio into the LSE and I 5-bagged my money within 5 years. That return certainly ignited my portfolio and definitely cut short my years as a full-time worker.
 
(By the way, the original LSE buying opportunity was documented fully on the Fool site – just search “Qualiport LSE” in Google.)

Decision #5 – I decided to avoid sleepless nights

I’ve always liked a good night’s sleep and believed if I was worrying about my portfolio too much, it was a signal to act.
 
So pretty much the best investment decision I have ever made came from a few restless nights in 2007.
 
You see, back then I was living in rented accommodation and hoping one day to buy a house. Then came the run on Northern Rock, which told me the banking sector was in trouble and the effects on the housing market could be substantial (or at least I hoped they would).
 
So one week during the autumn of 2007, I sold pretty much all my shares to ensure I was all cashed up and ready to purchase a great home at a cheap price.
 
Thinking back, I was a bit fortunate to have sat in cash all through the banking crash of 2008. Nonetheless, you generally make your own luck with shares and I have found the ‘sleep factor’ has served me well.

Your dream of giving up the day job could come round just that bit quicker

Each day on my way into the Fool’s office, I walk past a big poster of Sir Chris Hoy celebrating a victory on his bike. The poster quotes the Olympic superstar by saying:
 
“Anybody can achieve great things in their lives if they are willing to work hard, make sacrifices and dedicate themselves to the dream they have.”
 
I am not saying we can all become great investing champions.
 
But I have found if you can commit to:

• working hard (by researching your shares thoroughly),
• making sacrifices (by living below your means), and
• dedicating yourself (by investing regularly and in sizeable amounts)

…then any dream you may have of giving up the day job could come round just that bit quicker. 

All I can say is that it has done for me. And I hope it can for you, too.

The post How Shares Helped Me Quit The Day Job appeared first on The Motley Fool UK.

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• Decided not to bother with a Stocks and Shares ISA? You might be missing these 3 things!
• Why is everyone buying GSK shares?
• £10,000 invested in easyJet shares at the start of 2026 is now worth…
• 5 years ago, £5,000 bought 2,645 Barclays shares. But how many would it buy now?

Maynard does not own any share mentioned in this article. The Motley Fool owns shares in Google.

• Jonathan Sudaria at Capital Spreads – predicting 7,400
• Brenda Kelly at IG Index – forecasting 7,200
• Tim Drayson at Legal & General – estimating 7,200
• Paul Kavanagh at Killick Capital – projecting 7,400
• Guy Foster at Brewin Dolphin – guessing 7,400
• Maynard Paton at Motley Fool – foretelling 7,182

I must admit, I’m disappointed my FTSE 7,000 party hats and champagne glasses have spent yet another twelve months on my desk gathering dust.
 
Looking back, I really should have known we were not in for the best of years… not least because I excitedly revealed in January that “even a doom-monger over at Moneyweek has seen the light and claimed this year will see the index ‘get above 7,000’!”
 
Nonetheless, miracles can happen in the market – especially around Christmas. The FTSE 100 kicked off 2014 at 6,749 and today opened at 6,742 – so all we need is a little 4% ‘Santa rally’ to get to the magic 7,000.
 
Glimmers of hope come from a recent article in the Telegraph, which claimed the blue-chip index has produced a positive return in 19 of the last 20 years in December.
 
The average return from those 20 Decembers is 2%, with the highest gain more than 9%. I have my fingers crossed.

I don’t remember anybody predicting this 40% crash in January!

Not helping matters of course is the oil price, which has crashed about 40% — from $115 to $70 — in the last six months. 
 
I bet you won’t find a single City expert having forecast that in their January predictions!
 
Which, no doubt, explains why so many oil shares have cratered of late.
 
Here are some of the big-name casualties of the year:

• Afren — down 70%
• Cairn Energy — down 39%
• EnQuest — down 67%
• Ophir Energy — down 57%
• Premier Oil — down 37%
• Soco International — down 29%
• Tullow Oil — down 51%

I daren’t even look at all those oil tiddlers quoted on AIM — I bet it’s a bloodbath. The poor sods holding those shares will be praying for the miracle of all miracles this Christmas…

The oil price plunged and I sold in a panic

I must admit, I’ve suffered my own personal share of the oil-price pain of late.
 
I’ve never known much about the sector, although that ignorance never stopped me from investing in Soco International the other year. I liked the firm’s veteran management, solid cash position, actual production income and generous cash flow.
 
Sure enough, the cash flow turned into some very generous dividends and by this summer I was sitting on a healthy capital gain as well…
 
Trouble was, the oil slump then came and it took me a while to realise that oil stocks really weren’t for me.
 
Indeed, I realised only by mid-October that selling oil at $86 was likely to produce somewhat less in cash flow and dividends for Soco than selling oil at $110 or more.
 
My panic selling at 330p when the price had been 440p two months beforehand felt pretty lousy at the time…
 
…but feels a bit better now with the share price below 300p and oil price at $70. For the time being at least, I am glad I am out.

2 special and super-impressive dividend records for the long run

Still, the oil-price rout should in time throw up bargains somewhere. I’m not prepared to gamble on the actual explorers and producers anymore, but I might one day be tempted by a quality firm that supplies equipment to the industry.
 
For instance Rotork (LSE: ROR), a mid-cap engineer that makes heavy-duty controls for pipelines, boasts a super-impressive dividend record…  

…which has been bolstered nicely by six special dividends in the last ten years. That dependable payout record clearly indicates a tip-top operator and, from what I recall, the last time Rotork’s annual profits fell was way back in 2000 after the oil sector had to cope with prices as low as $10 per barrel.
 
Or there’s Goodwin (LSE: GDWN), a small-cap that manufactures specialist valves for refineries, which also boasts an impressive dividend record blessed with special payouts… 

Sure, Goodwin’s payout was cut in 2000 after oil had hit $10, but the overall trend since then indicates another first-class operator.

This could also involve another one- or two-year wait

Whether this pair are obvious bargains now is difficult to say. Both shares have dived about 25% from their highs and, for me at least, are definitely going on my watch-list as possible future buys.
 
For its part, Goodwin reckons the financial impact of the oil plunge is more likely to be felt in its results for 2015 or 2016.
 
That suggests perhaps waiting a year or two for some profit warnings could be the best way to snap up such a quality dividend winner at a rock-bottom price.
 
In the meantime, we always have FTSE 7,000 to look forward to.
 
Although the way things are going, sadly that may involve waiting until 2015 or 2016 as well.

The post Finding Dividend Winners In A 40% Crash appeared first on The Motley Fool UK.

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Maynard does not own any share mentioned in this article. The Motley Fool has recommended shares in Afren and Tullow Oil.

It took me just 2 minutes to rule out this share

Quindell is a £358m AIM-traded business that provides various services to the insurance industry. I’m sure many of you have already seen the firm hit the headlines this year for all the wrong reasons…
 
From what I recall, there was that botched attempted move from AIM to the main market, a scathing review from US short-sellers Gotham City Research, and most recently misleading director share dealings that caused boss Rob Terry to stand down.
 
So far this year, the shares have slumped about 70%.
 
Anyway, I never was tempted to buy Quindell shares following a two-minute glance at its annual report.
 
You see, the simple check I used to avoid Quindell was by looking at a certain part the group’s accounting.
 
Sure, I recognise reading company accounts is not everyone’s cup of tea.
 
But if you want to be successful in the stock market – by avoiding losers as well as picking winners – then I do feel you have to make an effort to study the numbers.

Here’s my simple check that often spells T-R-O-U-B-L-E

My simple check was to look at cash flow. In my view, businesses should always be able to generate ‘cash profits’ as opposed to just ‘accounting profits’.
 
What I do is to compare operating profits to operating cash flow.
 
You see, a critical aspect of determining whether accounting profits are underpinned by cash flow is by checking the movements in working capital.
 
In my experience, companies heading for trouble often have terrible working-capital characteristics, as their stock goes unsold, customers (debtors) refuse to pay and suppliers (creditors) demand earlier payment.
 
Importantly, I’ve found customers and suppliers can both cause difficulties at a company long before management admits to problems.

These red boxes show the crucial cash-flow numbers

Here’s how I saw things at Quindell.
 
The first sign of major cash-flow trouble occurred within the interim results of 2013. The important numbers are in the red box below.

Essentially, that (54,676) figure in the table above represented cash due from customers increasing by £54.676m.
 
The big worry is that, when you compare that £54m figure to the £44m operating profit figure at the top of the table, it meant relatively little actual cash (£2.3m in fact) was produced from Quindell’s operations during that six-month period.
 
The same story occurred for the full-year results of 2013. Again, the important cash movements are in the red box. 

   

This time, cash due from customers increased by almost £138m.

When you compare that £138m figure to the £109m operating profit number at the top of the table, it meant (once again) that relatively little actual cash (£10.4m) was produced from operations.
 
Moving onto the half-year results of 2014, the same cash-flow worries continued. The red box shows those all-important movements:

This time, cash due from customers increased by an extra £225m – well above the £154m operating profit reported at the top of the table. As such, Quindell’s cash flow during the six months was in fact a negative £51m – quite a concerning development.

No hindsight here – this article from 2002 highlights the potential dangers

Now there could be all sorts of genuine reasons to explain these cash-flow movements. Indeed, Quindell’s customers are large insurance companies, who can be notoriously late payers as anyone who has ever submitted an insurance claim may already know.
 
Still, the whys and wherefores of the adverse cash-flow situation are not important. What is important, though, is that the situation exists and – in my experience – often leads to shareholder trouble.
 
Here’s some evidence of how badly things can become.
 
This article, written 12 years ago, highlights five shares that had very poor working-capital movements.
 
What happened next is quite instructive…
 
Health Clinic: Within six months of the article, this business had owned up to accounting issues and cash-flow forecast errors. The firm went under soon after.

Innovation Group: Within six months, Innovation had announced revised accounting standards that would knock prior profits from £4m to £1m. A major profit warning occurred soon after, with the shares losing more than 90%.
 
Minorplanet Systems: A year after the article, revised accounting policies reduced aggregate profits from previous years by £27m. The shares were suspended in 2010 for a total loss.
 
Sanctuary: Five years after the article, Sanctuary owned up to overstating past profits by £54m. Results for 2006 were qualified by the auditors and a takeover in 2007 locked in an 80% loss.

Warthog: There was no subsequent announcement of revised accounting policies, but the company ran out of money anyway and the shares were suspended for a total loss in 2007.

Cavalier accounting prompted massive shareholder losses

Looking back, the theme that hit four of the five shares in that 2002 article was ‘accounting issues’. Reported profits were eventually found to be calculated in a very cavalier fashion and shareholders suffered massive losses as all the bad news came out.
 
I guess that’s what can happen if reported profits have nothing in the way of cash flow backing them up.
 
Anyway, given that article and subsequent events, it was an easy decision for me not to invest in Quindell earlier this year. I merely thought the cash flow looked very poor and recalled those disaster stories from all those years ago.
 
Let me finish by saying I am not sure what will exactly happen at Quindell in the future – but I am not optimistic.
 
Of course, whether you agree with (or even apply) my simple rule is up to you. But as I say, whenever I’ve lost money on a share, I’ve always found it useful to see where I went wrong.

The post How This Simple Check Helped Me Avoid Quindell plc appeared first on The Motley Fool UK.

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• £10,000 invested in easyJet shares at the start of 2026 is now worth…
• 5 years ago, £5,000 bought 2,645 Barclays shares. But how many would it buy now?

Maynard Paton has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

But could now be the time to buy? Possibly.

For one thing, sales at ASOS have more than quintupled since 2009 and the group still reckons it can expand the top line from the current £975m to £2.5bn. Plus, there is the chance margins may get back to the 8% seen prior to the recent setbacks.

Here’s one scenario

Let’s say sales continue to advance at 27% a year, which will mean the sales milestone of £2.5bn is reached in four years’ time. Let’s also say margins return to 8% as well.

If those assumptions come good, we get operating profits of £200m and earnings of perhaps £156m.

Then assume a P/E of 20 and the current share count stays at 83 million, and the share price in 2018 could be £37.

That would equate to a 15% average annual share-price gain, which seems attractive to me.

Here’s another scenario

Let’s say sales advance at a 20% average a year, which will produce the sales milestone of £2.5bn in five years’ time. Let’s also say margins actually grow to 9%.

If those assumptions come good, we get operating profits of £225m and earnings of perhaps £176m.

Once again assuming a P/E of 20 and the current share count stays at 83 million, then the share price in 2019 could be £42.

That would also equate to a 15% average annual share-price gain. Again, not bad.

All told, while these scenarios may not say ASOS is a screaming buy right now, my rough sums do suggest there is a chance of decent double-digit gains to be had should sales continue to grow and margins recover.

The post Could ASOS plc Double To £42? appeared first on The Motley Fool UK.

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Maynard Paton has no position in any shares mentioned. The Motley Fool UK owns shares of ASOS. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

1) The chief executive of GSK has during the past five years earned anywhere between £4.6m and £7.2m including all benefits. In contrast, the average GSK staff member in 2013 earned almost £63,000. The boss’s base salary was increased by 2.5% last year, while other employees enjoyed an average 2.7% pay rise. You may like to know the chief exec claimed travel expenses of £35,960 last year as well.

2) Boardroom pay policies for 2014 could see the chief exec collect a minimum total remuneration of £2m and a maximum of £11.6m. Plus, his base pay will once again advance by 2.5% to £1.1m.

3) The company’s three executive directors collected an aggregate £14m in 2013, and senior managers at GSK took home a combined £23m between them.

4) Some £2.1m was paid by GSK as fees to no less than 13 non-executive directors last year. The same non-execs also collected a further £583,000 as benefits, which covered travel and subsistence costs relating to board and committee meetings and other GSK-hosted events.

5) GSK distributed about £3.7bn as dividends during 2013 (down 3.5%), compared to £7.6bn paid to staff (up 9.5%). The chief exec owns 734,000 ordinary shares, which last year delivered an annual dividend income of about £572,000 – some 46% less than his basic pay.

During the AGM in May, shareholders approved GSK’s remuneration report with a 98.5% vote and approved the directors’ remuneration policy with a 97.4% vote.

Of course, whether GSK’s senior directors are truly worth their wage slips – or are simply trousering the company’s cash at your expense – is something only you can decide.

The post 5 Things You May Not Know About Pay At GlaxoSmithKline plc appeared first on The Motley Fool UK.

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• Starting with nothing? Here’s why now is the perfect time to start building a passive income
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Maynard Paton has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Woodford said it was “undoubtedly a cheap asset” at 320p, but he still sold anyway

Not surprisingly, the pundits have been laying the boot into Tesco.
 
For instance, Marc Kimsey, a senior trader at Accendo Markets, read the statement, evaluated the situation and sent me a simple e-mail to declare:
 
“Tesco is no longer a viable investment.”
 
Meanwhile, an ordinary Fool quickly visited our discussion boards to reveal his thoughts:
 
“That tops it for me. In 10 minutes I’ll be an ex TSCO shareholder.”
 
It’s not hard to see why the City is bearish and shareholders want out. The news at Tesco has been grim since that infamous profit alert of January 2012, when the supermarket warned of disappointing Christmas sales and saw its shares drop from 400p to 320p.
 
Selling out back then was Neil Woodford.
 
At the time, many thought the income guru had lost it.
 
After all, Tesco had decades of profit and dividend growth behind it, while the warning looked like a blip. Even Woodford admitted a few months later Tesco was “undoubtedly a cheap asset and I am always loath to sell at depressed valuations”…
 
However, he also claimed: “But I am confronted with other investment opportunities which are as cheap but which do not, in my opinion, face the same level of risk.”
 
I bet Buffett wished he sold at 320p. I bet many of you wish you had, too.

There is a massive chance of immense psychological suffering here

Successful selling is the hardest part of investing.
 
You see, get out at the first sign of trouble and you’re always likely to lock in your losses and never make any money.
 
All companies suffer problems from time to time. Yet most turn out to be short-term issues that go on to become distant memories as the business recovers strongly and the share price shoots higher.
 
But when the problems come thick and fast, what then?
 
I mean…
 
You thought about selling Tesco at 320p with Woodford… but held on instead.
 
You then thought about selling Tesco at 250p when Philip Clarke quit amid a profit warning…but held on instead.
 
You then thought about selling Tesco at 225p when new boss Dave Lewis cut the dividend by 75%…but held on instead.
 
And now you’re thinking about selling Tesco at 195p after the accounting irregularities disaster…
 
However, you’re also worried what could happen if you do sell.
 
Because if you ditch the shares now, perhaps you could end up being the complete mug who capitulates right at the bottom after all the bad news.
 
In fact, there’s a massive chance of immense psychological suffering here.
 
Sell today, and not only will you suffer the trauma of locking in a massive paper loss, but you could double up your misery by missing any subsequent recovery.
 
Indeed, make the wrong decision, and the emotional rollercoaster you’re riding with Tesco could put you off shares and the stock market for life.
 
As I mentioned last week, for all the pessimism, Tesco still retains a massive market share and its size and status should make its current predicament quite fixable in time.
 
Plus you have every man and his dog writing the company off, which should make now the exact time to buy for smart contrarian investors.

But will Tesco join Sainsbury’s and Morrisons and trade below book value?

That said, there’s a good chance of even more bad news, not least because Tesco’s next results have been delayed by three weeks. I can visualise the kitchen sink being prepared as I write.
 
Tesco’s warnings have signalled first-half trading profits will be down close to 50% to £850m, while the interim dividend will be reduced 75% to 1.16p. But what the second half will bring is anyone’s guess, leaving projected P/E multiples and dividend yields essentially useless.
 
So you know things are bad when you have to resort to the balance sheet and book value to assess a share.
 
For what it’s worth, Tesco’s last accounts showed tangible assets of almost £11bn, or roughly 134p per share.
 
Now I don’t want to alarm you, but right now J Sainsbury (LSE: SBRY) has a tangible asset value of 299p per share and yet its shares trade below that figure at 265p. And of course, Sainsbury’s does not (at least, not yet) have the same profit, dividend and general accounting distress of Tesco.
 
Morrisons (LSE: MRW), meanwhile, does have its problems and its 175p share price is also below its tangible book value of 179p per share.
 
The simple upshot is that if other quoted supermarkets can trade below their book value, then what is to stop Tesco’s share price dropping from 195p to 134p and below…
 
Let’s hope Buffett knows the answer. Because to be brutally honest, I am not sure. 

The post What Is To Stop Tesco PLC Dropping To 134p? appeared first on The Motley Fool UK.

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The Motley Fool owns shares in Tesco.

1)

The chief executive of HSBC has during the past five years earned anywhere between £7.5m and £8m including all benefits. In contrast, the average HSBC staff member in 2013 earned almost £46,000. At least the boss’s base salary was held last year, while other employees enjoyed an average 2% pay rise.

2)

New boardroom pay proposals for 2014 could see the chief exec collect a minimum of £4.2m and a maximum of £11.2m. However, his base pay will once again be frozen at £1.25m.

3)

The bank’s three executive directors collected an aggregate £14.8m in 2013, and 15 other senior managers at HSBC took home a further £45.3m between them. At least five senior managers were paid £3m or more last year.

4)

Some £2m was paid by HSBC as fees to no less than 13 non-executive directors last year. The same non-execs also collected a further £205,000 as benefits, which included travel-related expenses relating to the attendance of board and other meetings.

5)

HSBC distributed about £5.9bn as dividends during 2013 (up 11%), compared to £12.3bn paid to staff (down 6%). The chief exec owns around 2.7 million ordinary shares, which last year delivered an annual dividend income of about £810,000 – some 35% less than his basic pay.

During the AGM in May, shareholders approved HSBC’s new board pay policies with a 79% vote. The remuneration report was 84% approved and a cap to limit director variable pay was accepted with a 98% vote.

The post 5 Things You May Not Know About Pay At HSBC Holdings plc appeared first on The Motley Fool UK.

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Maynard does not own any share mentioned in this article.

Sirius, which is trying to win permission to turn a site in North Yorkshire into the world’s largest and highest grade polyhalite mine, revealed tests showed its fertiliser had helped grow cabbages some 33% heavier after 48 days from planting.

The comparison was made against cabbages grown using a traditional source of potash. The same tests showed a 13% improvement against cabbages grown in a premium potassium fertiliser.

Sirius noted the study, which was carried out by the University of Florida, showed cabbages grown in POLY4 enjoyed a 77% increase in tissue potassium, which was indicative of “improved nutrient use efficiency”

Chris Fraser, chief executive of Sirius, commented:

“Besides the broad-acre crops it has been encouraging to see the positive results of POLY4 on a more fertilizer-sensitive crop such as cabbages which are known for their precise demands from the nutrient source.  POLY4, which has a range of nutrients, coupled with appropriate nutrient release rates, is an effective and quality fertiliser.”

Today’s statement followed a crop study in August that revealed tomatoes grown using POLY4 were 24% heavier than those planted in alternative fertilisers.

Sirius hopes to receive approval to develop its North Yorkshire site during January next year and then commence construction before April. The mine is expected to become operational during 2018.

Of course, whether Sirius receives that development approval, secures the necessary finances for the project and then goes on to sell vast quantities of POLY4 to vegetable farmers around the world is something only you can decide.

The post Sirius Minerals PLC Claims Cabbage Crop Coup appeared first on The Motley Fool UK.

More reading

• Starting with nothing? Here’s why now is the perfect time to start building a passive income
• Decided not to bother with a Stocks and Shares ISA? You might be missing these 3 things!
• Why is everyone buying GSK shares?
• £10,000 invested in easyJet shares at the start of 2026 is now worth…
• 5 years ago, £5,000 bought 2,645 Barclays shares. But how many would it buy now?

Maynard does not own any share mentioned in this article. 

This is why I’m reporting all the doom and gloom about a YES win

Yes, who’d be a professional investment manager at a time like this?
 
Nervous clients are ringing up asking what’s going to happen in the vote and what exactly you’re going to do about it – and yet nobody has a clue what the outcome will be or what will happen after that.
 
At least for you, me and every other ordinary investing Fool, if panic selling does kick in when the result is declared on Friday…we’ll only have our own portfolios to worry about.
 
And it goes without saying that we should all be up, ready and willing to pick up any long-term bargains if everybody then starts banging on about a euro-style currency crisis or a Great Depression or even Spain without the sun.
 
Indeed, such negative views prompted Iain G. to send an e-mail…
 
“Interesting to see that ‘the fool’ lives up to its name by promoting all the negative views of Scotland – a country that invented most of the modern world”
 
Well, I am not here to bash Scotland or give my political views or give you all some cock-and-bull story about what will really happen post-referendum.
 
Instead, my job is simply to guide you all through the stock market the best I can, help you all invest sensibly and — from time to time — point you all towards some potentially money-making opportunities.
 
It’s just that, when almost every professional investor appears to claim a YES win would be bad news for the UK economy, the markets and many companies…
 
…then I feel I have a duty to report such pessimism… and signal the contrarian buying opportunity it could provide!
 
And talking of contrarian buying opportunities…

I can’t believe it — this top ‘dog’ stock has doubled in price

I was shocked to see a share best known for disappointments among the top performers of the last twelve months. 

• Shire Pharmaceuticals up 107%
• Associated British Foods up 42%
• Whitbread up 33%
• Next up 32%
• Aviva up 25%

 No surprise to see tip-top operators such Whitbread and Next among the leaders.
 
(Further proof, if you ever needed it, that quality firms can deliver handsome rewards to shareholders regardless of economic and political events here and abroad.)
 
But Aviva (LSE: AV) (NYSE: AV.US)?!
 
Yes, the hapless insurer is up a super 25% since this time last year and up 100%-plus since mid-2012. Which just goes to show that sometimes every dog can have its day.
 
I mean, Aviva has cut its annual dividend not once but twice during the last five years, and the current 15p payout is almost 40% less than the 24p paid ten years ago…
 
And yet there it is, having doubled in price.
 
Those brave and smart enough to buy Aviva on the combination of a bombed-out dividend, catastrophic share price and, very importantly — a new boss appointed to turn things around – will be smiling now.
 
Winners are grinners, after all.
 
However, it does make you think about what shares could be out there right now… with their dividends slashed and share prices in the toilet… but could one day turn around to make ace recovery plays…
 
Ahem…did somebody say Tesco (LSE: TSCO)?

Uh oh, the price is down 50% and back to levels seen in 2000

Now, I am not suggesting you all buy Tesco today.
 
But if you like to go against the crowd and back out-of-favour businesses that have the prospect of recovery, then surely the supermarket must be towards the top of your watch list.
 
All the contrarian signs seem to be there…

• Awful share price? At 225p, it is down 50% in four years and back to levels first seen in 2000. Check.
• Bombed-out dividend? Interim payout has just been cut 75%. Check.
• New boss at the helm? Dave Lewis of Unilever is now in charge and talks of “getting back to the core of the business”. Check.

Plus you have a business that despite all the pessimism still retains a 29% market-leading share – more than 3 times the combined power of upstarts Aldi and Lidl.
 
You might feel mad contemplating Tesco now, but I am pretty sure anybody buying Aviva before its 100%-plus run-up felt quite mad, too.
 
All told, it appears to me Tesco’s size and status should make its current predicament quite fixable. But as always, only time will tell.

The post Aviva plc’s Bombed-Out Dividend Signalled An Incredible 100% Gain appeared first on The Motley Fool UK.

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Maynard does not own any share mentioned in this article. The Motley Fool owns shares in Tesco and Unilever.

The paperwork and removal vans may cost £1 billion

Yes, a few banks have already made their minds up and have confirmed they’ll take decisive action if the YES vote wins out.
 
Royal Bank of Scotland, Lloyds Bank, TSB, Clydesdale and Tesco Bank have all declared they’ll be shifting their headquarters to England if Scotland does become independent.
 
RBS blamed “a number of material uncertainties arising from the Scottish referendum vote which could have a bearing on the Bank’s credit ratings, and the fiscal, monetary, legal and regulatory landscape to which it is subject”.
 
And who can blame the banks for moving, when Paul Krugman — a Nobel Prize-winning economist no less — says Scotland is all too likely to end up becoming “Spain without the sunshine”.
 
“Be afraid, be very afraid. The risks of going it alone are huge.” he warns.
 
Indeed, the total cost of the paperwork, the removal vans and everything else simply to take just RBS to England could reach £1 billion, according to Chirantan Barua at brokers Bernstein.
 
Of course, that’s £1 billion less profit that could have helped RBS to pay a dividend one day… 

Still, in a situation like this, there’s always a silver lining somewhere for someone

For instance, British Airways and easyJet could benefit if a YES vote leads to the Scottish National Party forming an independent government. You see, the SNP have pledged to cut airport taxes.
 
Meanwhile, the BBC perhaps hiving off BBC Scotland could work wonders for STV, the ITV licence holder north of the border.
 
And if you hold dollar-denominated shares and receive dollar-denominated dividends, then a beaten Sterling could leave you quids in. (A doomster over at MoneyWeek says the pound could drop to £1:$1.40 if things become “really chaotic”.)
 
But perhaps the biggest winner here might be YouGov, what with all the frenetic polling putting the market research specialist firmly in the spotlight. YouGov’s latest financial results showed underlying profits up 19%, which have helped the shares rally 24% so far this year.
 
And when you think there is a general election next May — which could be another knife-edge decision – then the small-cap’s trading could remain brisk for some time to come…

The seven-baggers you could have easily bought in the last crash

There may be more silver linings to come. As I said the other day, the effect of any YES outcome cannot be worse than the banking crash of 2008 – and we all survived that.
 
And yet…if David Folkerts-Landau is anything to go by and everybody else starts to think we’re in for a Great Depression after a YES vote, then stocks are likely to get a real thumping…
 
I mean, it could be just like the rampant uncertainty of the credit crunch, when nobody knew what was going on and quality stocks were sold at any old price by investors believing Financial Armageddon had arrived.
 
But when you look back and consider the mega-buying opportunities that occurred back in 2008 and 2009…
 
And how top FTSE 350 names such as ARM, Randgold Resources, Domino’s Pizza, Rotork, Aggreko, Shire and Weir have all surged SEVEN-fold or more since those dark days…
 
Then perhaps very soon there could be another round of mega-bargains on offer if the YES vote wins and market uncertainty hits warp speed.

But you have to be in it to win it, as they say

Because believe me, many investors actually failed to buy in the banking crash.
 
You see, they were either too busy selling and locking in immense losses, vowing never to buy a share again.
 
Or they were waiting for prices to fall even further, and totally missed the sudden recovery.
 
Or they simply slumped into a deep freeze, unable to take action due to being entirely overcome by shock…
 
I mean, the one thing none of us wants to happen is to completely miss another mega buying opportunity and the chance to enjoy substantial long-term capital gains and dividends
 
So if the YES vote does win and share prices do crash and everybody else does start warning about a Great Depression… you’ll know this time what to do.

The post Massive Uncertainty May Herald Great Depression And Mega Buying Opportunity appeared first on The Motley Fool UK.

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Maynard does not own any share mentioned in this article. The Motley Fool has recommended shares in ARM, Domino’s Pizza and Weir, and owns shares in Aggreko and Tesco, the parent of Tesco Bank.