Good morning from Paul. What a chaotic week it's been, I'm so glad it's nearly over!

Some cracking reader comments this week, I'm delighted to see the reader comments section coming alive with really interesting posts this week, thanks to everyone who is contributing constructively.

McBride (LON:MCB) - a key refinancing announcement with its banks was announced yesterday, that strikes me as remarkably lenient. That then allowed FY 6/2022 results to be announced, which come with a "material uncertainty" over going concern warning. It's loss-making, and very heavily indebted to both the banks, and trade creditors. Cashflow is poor. So this is really a question as to whether the business can survive. It says current trading is improving, after 18% price rises were pushed through in H2, to recoup "rampant" inflation on costs. Shares could have little to no value, so best seen as a high risk call option on a turnaround. Risk:reward strikes me as poor, but I'll keep an eye on it, for a possible future turnaround.

Made.Com (LON:MADE) - as mentioned here before, the facts & figures lead me to believe that MADE is likely to be insolvent soon. I've gone through the interim numbers, just to be sure, and the numbers & commentary back up this view. The company has put itself up for sale, but why would anyone buy something that is now generating massive losses & burning through the little remaining cash? The going concern note is laughable. The shares remain uninvestable, and I would steer well clear. (more detail below).

Tpximpact Holdings (LON:TPX) - it's a profit warning for H1 from this acquisitive group of IT companies focused on the public sector, due to a botched strategy of centralising key functions in the group. However, there seems good visibility for an improved H2. Founder CEO & CFO are stepping down, but staying within the business, in an unusual move where they admit that more experienced leadership is needed, and bringing in a sector expert new CEO. Overall, I think this share is starting to look interesting as a potential turnaround, from a much more sensible (i.e. lower!) valuation.

Xeros Technology (LON:XSG) - a deeply discounted placing/open offer. I work through the numbers, which means ruinous dilution. Can you believe, the share count will have risen from 1m in 2014, to up to 294m (if…

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I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

We had a very good lunchtime pizza from Franco Manca in Exeter last week. The best bit for me was the screensaver on their cash register - a picture of Francos tiny restaurant in Brixton market in the 80s, where we had lots of great pizzas, and when the whole business was Franco and a couple of help. Not much real connection to that business now, but the pizzas remain good.

Yes now is a good time to read to remind you of why we invest in the first place. I've just got the one you recommend here and will enjoy reading it over the weekend...

It is not whole story - we are still below pre pandemic levels the only member of G7 economies.  But it is good to see gilts and gbp/usd recovering and lets hope it continues after  BOE intervention expires in a few days. 

The average mortgage is £130k. When it moves from 2% to 6% it costs £3444 per annum. The increase in energy costs is £1500. That is an extra £5000 per year. For the average family that will have a severe effect.  

Although I'm an old geezer, I'm quite new to investing (2 years+). I am, of course, feeling rather jittery about this economic situation, so a big thank you to the many people who have provided sound, encouraging advice this morning (especially Paul Scott whose balanced and knowledgeable opinions I always value). 

I've no sage advice of my own, I'm afraid. I, like Socrates, am the wisest man in Athens because I know how little I know!

I  am glad you are with me and like the Brtian Unchained policies and are optimistic about the economy. Clearly, anyone pointing out how it is affecting and likely to affect the economy  is balderdash!

Pension disclosure : following story re Serco (LON:SRP) I have quickly read the note in the accounts. Of a 1.5bn scheme - 100m surplus - LDI assets of 400m held on balance sheet at NAV. Different disclose to BT re NAV. Fairly limited info to go on but I’d be more sensitive to mis-selling I think. 

Fulham Shore (LON:FUL) have decades of experience in building chains of restaurants and selling them on. This is happening nicely now. New additions with liw rents. I dxpect them to exit this bad economy in great shape with less competition. 

Fair enough - most of it is leases though - devils in the detail. 

Good point on the debt.  But do consumers go back to Tesco once they’ve switched to the German discounters? The latter’s store opening program is it big threat.

I know within Covid Years several of the friends were Furloughed or made Redundant so were looking at how they could trim the household costs.  We are a smallish town, so finally have a German Discounter, whereas previously you had to drive at least 14km to get to one.  So for me time + petrol costs meant I felt that I would not get my monies worth unless doing a massive shop.

The basic findings, as people with younger families were, yes it is reasonable quality, yes it is a good price, and sometimes absolute bargains, but to get everything you then had to go to Tesco to get what you could not get in the Discounter!

So I guess now we have one you shop there, then walk across the road to Tesco and get what you didn't find.

Obviously now folks are back in work they are on a one shop per week, I do not have time to go to more than one place, and interesting several have switched to Sainsburys as basically they could get a parking space and it is a lot quieter!

That is my sample of a few folks.

I am on the delivery saver for Tesco, so hardly ever face going into the store.  I pretty much get everything I want delivered to the doorstep twice a week (now split shop to get fresher fruit and veg rather than one big shop).  Tesco have been removing stuff from their stocks left right and centre, so product choice down.  They have also been ramping prices rapidly across the board.

ps. I do not hold Tesco (LON:TSCO)

Mine too. I also like to think in times like this of how great entrepreneurs like Dyson behave. Even though his business is unlisted its theoretical selling ‘price’ on any given day presumably also fluctuates with the state of the economy, cost of financing, animal spirits, prevailing tax rate, etc, etc. And yet he isn’t tempted to sell. Because his focus is on building Long Term intrinsic value. Now granted his non-business assets presumably nominally dwarf those of the average punter. And indeed I know, for example, he’s big on farmland. All that said from a portfolio perspective he breaks all the usual rules that advisors love: he is super concentrated from a company perspective, sector perspective, in the main Dyson industrial business. But that is the way great fortunes are made. Through decades of compounding. The caveat of course is that this strategy only works when being invested in the small per cent of truly quality / good companies. And I know we have very diverse opinions on here as to what ‘good’ represents. But if you have good companies, long only, unlevered, you can afford to sleep soundly, even in times like this 

Thanks to Dicktrade for responding to my post early this morning re £BT.A 

I now understand clearly that in 2025 Landlines will switch to Digital from Analogue.

Actually this is a bit more complicated. The move to digital will mean using 'voice over IP', which means the phone will be connected to your router which needs external power (unlike current phones). So if your power goes off, no router & no phone. Now OFFCOM has said vulnerable people must be able contact emergency services on their land line during a power cut but that means battery backup. Power cuts in the country can last for hours so although this is a necessary move to more modern technology I'm not sure the role out will be smooth or cheap for a lot of people.

I happen to have been approached by TPX to sell business in the early days. The original listing was based on 4 or 5 companies with no coherent strategy purchased for no cash but 8 EBITDA in shares. These shares could not be sold for 2 years and you got topped up if you business did well in the group. Interestingly the CEO only owned part of one of the businesses and the CFO had no interest in them at all. 

I did not let them buy my business but did buy stock which I sold with the heady post-covid tech bubble . I did think they had managed to get the strategy on track with the public sector focus but the management team always troubled me. It always seemed a good deal for them but not for the founders. It is quite unbelievable that they have decided to leave like this. 

It  does look cheap now (if they do get someone in that knows how to run it)  BUT you have a lot of founders of small businesses wrapped in a group with a leadership that ran away, these guys are holding some very heavy bags. Will they dig in and get themselves out of this or write it off and start afresh?

They will need an internet connection. So wont work if no internet or in a power cut. Think many will get rid of landline phones. 

Thanks mainlydown. I hope you see this reply. Your comment is really, really useful for me because I spent much of yesterday researching Tpximpact Holdings (LON:TPX) and you have confirmed my conclusion that this is a cobbled-together bundle of good but small businesses run by talented people, and the cobbling-together has been done exceptionally badly. I did my research hoping to convince myself to buy. The price now is either ridiculously low or the business is running a risk of failure when the lock-in agreements expire and the talented people are free to leave, start up on their own again, and probably take their customers with them (depending on how effective the non-compete clauses are). I hoped it would be the former. It might have been except that your comment 'if they do get someone in that knows how to run it' is absolutely key. A simple online dig into the background of the new CEO, Bjorn Conway, leaves me wondering why the board thought he could sort the mess out. Obviously they will know more about him than I can find on the internet but what I have found makes me wonder what made them think he is the right person for the job.

Just thinking forward, based on what I've learnt. Many pension funds started investing in equities, to juice returns, as bond yields were tiny. LDIs were used because of this. 

Now that bond yields are going back to healthy levels. Isn't the incentive now for UK pension funds to sell all their equities, buy gilts? They are now able to lock in a decent interest rate to match their long term liabilities. 

Does this mean further downward pressure on share prices over the next few months? As pension funds all but exit the equities market? 

Rusty2Yesterday 9:37 pmIn reply to Dicktrade

They will need an internet connection. So wont work if no internet or in a power cut. Think many will get rid of landline phones.

Yes, but many still live in places with poor or non existant mobile signal, and I can see that lasting for some time. For them a working landline - conventional or digital only can be essential. And of course, those most likely no have a mobile signal are also often the same people who live on places power lines can be blown down or damaged by snow or storm.

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