Due diligence on share buying
Discussion
Chaps and ladies, I have a dilemma and I'd love you to lay down some opinion and hopefully show me the ways forwards:
I'm currently in a medium-sized hole with PFG (Provident Group) shares. It's been this way for a while and I've been ignoring it but really I'd like to claw my capital back out if it's at all possible. I don't think they're going to reach the heady heights of my current break-even price any time soon.
Do I:
1) Buy around 1500 PFG shares at current prices. This brings my break-even price down to something not a million miles away from the current share price, and hopefully the price will rise, allowing me to sell everything and happily recover all of my outlay.
2) Stop being a silly boy, continue investing my hard earned with Intelligent Money who clearly know exactly what the flip they're doing, and thereby have no real worries.
3) Find a black market boozer (I'm in a Tier 3 location), buy beer, repeat until horizontal position achieved.
If you can give me some tips on what due diligence I should be doing about buying a single share then I'm all ears. I rushed in to it first time around and learned a lesson, so this time I want to make an educated decision. I might even go ahead with point 1 if I can make a good argument for it.
Currently I'm favouring points 2 and 3 with a roughly 70/30 weighting in IM's direction. I quite fancy a beer back in "an pub" again... hehe
I'm currently in a medium-sized hole with PFG (Provident Group) shares. It's been this way for a while and I've been ignoring it but really I'd like to claw my capital back out if it's at all possible. I don't think they're going to reach the heady heights of my current break-even price any time soon.
Do I:
1) Buy around 1500 PFG shares at current prices. This brings my break-even price down to something not a million miles away from the current share price, and hopefully the price will rise, allowing me to sell everything and happily recover all of my outlay.
2) Stop being a silly boy, continue investing my hard earned with Intelligent Money who clearly know exactly what the flip they're doing, and thereby have no real worries.
3) Find a black market boozer (I'm in a Tier 3 location), buy beer, repeat until horizontal position achieved.
If you can give me some tips on what due diligence I should be doing about buying a single share then I'm all ears. I rushed in to it first time around and learned a lesson, so this time I want to make an educated decision. I might even go ahead with point 1 if I can make a good argument for it.
Currently I'm favouring points 2 and 3 with a roughly 70/30 weighting in IM's direction. I quite fancy a beer back in "an pub" again... hehe
I’m not known for my due diligence so please ignore..... however if you’re looking for gambling advice, step this way...
just looking at current shareprice trajectory (which appears to be on a relatively consistent tick up) I would be minded to buy myself out of trouble and then sell down once I’ve broken even. Then I would pass my hard earned winnings (sorry, investments) over to the nice men and women at IM.
vulture1 said:
I assume you bought between april 2015-april 2017? Tough one looks like a dog tbh
Yep! PFG then had massive internal problems with the way they recruit people to collect the money that is their income, coupled with financial conduct issues... The share price dropped like a stone. However, the news is much more positive now as far as I'm aware.500 Miles said:
just looking at current shareprice trajectory (which appears to be on a relatively consistent tick up) I would be minded to buy myself out of trouble and then sell down once I’ve broken even. Then I would pass my hard earned winnings (sorry, investments) over to the nice men and women at IM.
That is exactly my thinking. My main savings is with IM and it's doing well. This purchase was a punt that backfired! I don't want to throw good money after bad though; that's why I'm asking what sort of due diligence I should be doing to make an informed decision 
Forget how much you own and what you bought it for - that's a sunk cost fallacy.
The question to answer is do you think it's a good investment at the current market price?
If the answer to that is no then don't buy any. If you wouldn't buy at the market price then by the same logic you should be willing to sell at that price.
Another question to answer is what do I know that the market doesn't? If you don't have a good answer to that then you don't have a good basis to think that this particular share will over/under perform
The question to answer is do you think it's a good investment at the current market price?
If the answer to that is no then don't buy any. If you wouldn't buy at the market price then by the same logic you should be willing to sell at that price.
Another question to answer is what do I know that the market doesn't? If you don't have a good answer to that then you don't have a good basis to think that this particular share will over/under perform
Or 4) Rather than buy 1500 PFG to bring you up to break even, buy the same value in a company that will move more easily and hopefully make some profit, turning your whole account into profit.
As for PFG, what's their market cap? What will they need to achieve in increasing their market cap to cover your losses? Can they do it? If they can't you should cut your losses and invest elsewhere with a company that can move their market cap.
Quick butchers at google says £775M, How big is your loss? The MCAP will need to increase by that to gety you back to break even? Can they do it? If your 50% down, they are going to have to double their MCAP to get you back to break even. That's a big move to make......
As for PFG, what's their market cap? What will they need to achieve in increasing their market cap to cover your losses? Can they do it? If they can't you should cut your losses and invest elsewhere with a company that can move their market cap.
Quick butchers at google says £775M, How big is your loss? The MCAP will need to increase by that to gety you back to break even? Can they do it? If your 50% down, they are going to have to double their MCAP to get you back to break even. That's a big move to make......
Edited by super7 on Tuesday 8th December 10:27
NickCQ said:
Forget how much you own and what you bought it for - that's a sunk cost fallacy.
The question to answer is do you think it's a good investment at the current market price?
If the answer to that is no then don't buy any. If you wouldn't buy at the market price then by the same logic you should be willing to sell at that price.
Another question to answer is what do I know that the market doesn't? If you don't have a good answer to that then you don't have a good basis to think that this particular share will over/under perform
Yep, agreed on the first point. I wrote the money off a long time ago but it looks like I may be able to claw it back...The question to answer is do you think it's a good investment at the current market price?
If the answer to that is no then don't buy any. If you wouldn't buy at the market price then by the same logic you should be willing to sell at that price.
Another question to answer is what do I know that the market doesn't? If you don't have a good answer to that then you don't have a good basis to think that this particular share will over/under perform
I do think the share price is a bit too cheap at the moment and I reckon it'll rise after this Brexit nonsense is out of the way. Plus they ought to be reporting that they're making money again. Coupled with the after-affects of these long lockdown periods and people out of work, I think the sub-prime lending sector might get busier too.
I don't know anything more than the rest of the market. This is where I need to do some research to be confident that if I buy some more shares I'm making the right decision. The problem is, what exactly do I need to be looking at?
anonymous said:
[redacted]
I think that's what I did the first time around!super7 said:
Or 4) Rather than buy 1500 PFG to bring you up to break even, buy the same value in a company that will move more easily and hopefully make some profit, turning your whole account into profit.
As for PFG, what's their market cap? What will they need to achieve in increasing their market cap to cover your losses? Can they do it? If they can't you should cut your losses and invest elsewhere with a company that can move their market cap.
Quick butchers at google says £775M, How big is your loss? The MCAP will need to increase by that to gety you back to break even? Can they do it? If your 50% down, they are going to have to double their MCAP to get you back to break even. That's a big move to make......
That's an excellent strategy that I hadn't thought of! I could mirror some of IM's holdings in their recovery fund... I may look in to that as a better bet than just ploughing money in to PFG shares. I was thining of 'averaging down' my break-even price with PFG. Depending on how much I buy I can get the break-even price down to within about 50p of the current share price and I definitely think that growth is do-able. But it's only a hunch. Like I say, I need to do something a bit more scientific than that to convince me to buy some more PFG!As for PFG, what's their market cap? What will they need to achieve in increasing their market cap to cover your losses? Can they do it? If they can't you should cut your losses and invest elsewhere with a company that can move their market cap.
Quick butchers at google says £775M, How big is your loss? The MCAP will need to increase by that to gety you back to break even? Can they do it? If your 50% down, they are going to have to double their MCAP to get you back to break even. That's a big move to make......
I more than made up for some UK equity losses with PH Recovery - but it's done 40% already. The more it's recovered, the less there is left to recover.
It's a tough call. Do you hang on to donkeys in the hope they will do better, or check out with a loss and find something that can run?
'Come on Shell!'
It's a tough call. Do you hang on to donkeys in the hope they will do better, or check out with a loss and find something that can run?
'Come on Shell!'Simpo Two said:
I more than made up for some UK equity losses with PH Recovery - but it's done 40% already. The more it's recovered, the less there is left to recover.
It's a tough call. Do you hang on to donkeys in the hope they will do better, or check out with a loss and find something that can run?
'Come on Shell!'
Yep, my PHR is showing very healthy gains too. I want to claw back the money I've got in PFG and then put it in my IM ISA because it's the best thing for me to do with that money.It's a tough call. Do you hang on to donkeys in the hope they will do better, or check out with a loss and find something that can run?
'Come on Shell!'I have some provident financial bonds but don’t own any of the equity. I’m not sure I’d buy the stock but I did buy more of the bonds when the price dipped earlier in the year. The bonds are in my Isa so coupon is tax free. At the current mid price, say 97, they will yield about 19% between now and redemption in 2023. I’m pretty happy with that.
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