investing etc. 0005

Capital city capers, assessing a share portfolio, Judges Scientific, Dewhurst, Tristel, plate spotting, book catching and profit sharing...

Sorry for the radio silence. This is an irregular newsletter, but the three weeks since I wrote investing etc. 0004 seems longer than it should.

Much has happened. 

For a start, I visited two of our capital cities.

In London new offices sprout up between visits like canopies shrouding older buildings. It feels incongruent, when the people I meet say they are still working from home two or three days a week.

Surely some of these skyscrapers are new...

Then we were stranded in the even more photogenic city of Edinburgh during storm Isha. 

Our sleeper train home was cancelled, so we slept on it platform-side, disembarking the next morning no closer to our destination. 

People stop and pose with Adam Smith, for many Scotland’s greatest economist.

Share Sleuth enters its sixteenth year!

I’ve also been writing about investment...

In the first Share Sleuth portfolio update of the year, I resisted the temptation to talk about how the portfolio had performed. Instead, I evaluated Share Sleuth as if it were a single company. 

Seeing that the portfolio as a conglomerate is not at all indebted, very profitable, and probably undervalued, gives me confidence.

I also liquidated one of Share Sleuth’s best performing holdings, Judges Scientific.

Then, because my editor Lee makes me, I chose the six shares I think are most undervalued, and explained why.

Finally, I re-scored two of the portfolio’s longest serving constituents. Dewhurst is a good company with a very low share price. Tristel may be an even better business, but the share price brings tears to my eyes. 

The difference in valuation is sufficient to make Dewhurst one of my top 6 shares, and Tristel another candidate for liquidation. 

We see them here, we see them there...

Perhaps you are familiar with this effect: Once you are interested in something you see it everywhere.

In Edinburgh, we spent more time than usual in cafes, pubs, restaurants, and the wonderful Dominion Cinema, dodging squalls. 

Habitually, we check the cups and plates in these places to see if they use Churchill China, a tableware brand and one of my favourite companies. Incredibly, unless I misremember, they all did.

Books published by Bloomsbury Publishing fall off bookshop shelves and land in my hands. The latest is The Globemakers by Peter Bellerby, which I have been eyeing up in Waterstones for some time.

Luckily for me, though, I didn’t need to buy it. A routine enquiry sent to Bloomsbury’s new head of investor relations resulted in the offer of any book from the publisher’s catalogue. 

It didn’t take long for me to decide! Peter Bellerby’s passion project, to build a globe from scratch, has turned into a flourishing niche business, and another map related book on my desk. 

The Globemakers is a good read

investing etc. 0004 introduced the possibility of investing in B-Corps, and now I am noticing them everywhere too. 

The cafe at AstraZeneca’s stylish Discovery Centre in Cambridge is run by a B-Corp.

Growing the pie

A reader, RP, wrote to question my enthusiasm for B Corps. They emailed:

“I wonder if this is a good thing for shareholders frankly as it requires companies to go above and beyond existing regulations and legal obligations and potentially to become less efficient... and... less financially profitable”

In other words there is only so much profit to go around, and more money spent on other stakeholders means less for shareholders.

While I can see the logic, I do not agree with it. Business need not be a zero-sum game. 

If a company merely fulfils its legal obligations and its rivals do more, customers may gravitate to the business that does more, and so might good employees. More motivated customers and employees generally means more profit to go around.

As investors, we need to find the businesses that are capable of achieving both purpose and more profit.

Thanks to RP’s email, I was inspired to make this argument, and discover more listed B Corps. 

I am also grateful to M, who emailed to tell me they had switched their troublesome internet provider for Zen Internet, a B Corp that earns lots of praise for its customer service.

You see, now we’re aware of them, they’re everywhere!

Thanks for reading. You can encourage me by, subscribing (it’s free), spreading the word or just by replying. My email address is richard@beddard.net 😉