Risks and diversity #investments
There are many different kinds of investment. Even buying tools so you can grow vegetables in the garden or do your own DIY can be an investment. Investments can save you money, make you money or simply provide a little insurance and peace of mind. Something you can sell when times are hard.
It is a good idea to be diverse and have different kinds of investments. I even regard my camera as an investment; I take my photography seriously. I try not to put all my eggs in one basket as the old adage advises. Diversity reduces risks.
Technology is the application of science and when science gives us something new, it can take years before technologists work out how to use the new discovery. Graphene was seen as a new wonder material with lots of possible uses in electronics, medicine and as a lubricant. I was interested when I read about Graphene Nanochem’s unique was of producing cheap graphene and the uses they were exploring. They have products that they are marketing to the oil industry and on-going research into a novel use of graphene to make vehicle batteries. They are making a loss as a company, but investors look to the future. It’s better to invest in the exploration stage than in the production stage when things are more certain and risks are lower, but potential growth is much lower too. Graphene Nanochem dropped in price earlier this year, but more investors are seeing the potential and so the share price has been inching up slowly. It’s up 12% this morning, which is quite a jump, but there is some news due next week. We expect it to be good news, which could explain the rise, but a big jump before an announcement always makes us suspect ‘insider dealing’. We shall see…
RSA insurance is still above 500p which is high enough for me to sell, but Zurich are reported to be offering 550p. I think the deal will go through, even though Zurich hasn’t raised the cash for the takeover yet. I would have expected the price to be closer to 550, so it’s not a done deal yet. The risks are still there; the deal could fall through, but it’s looking promising.
Solo Oil is another one we are waiting for with an announcement due soon regarding a GSA in Tanzania. I think Solo is a excellent investment and the risks are limited because they are diverse with investments in Tanzania and the Weald basin in the UK.
Monitise is also a tech company that is trying to develop new products. The share price halved when they announced their results this week and their CEO left. The risks are high, but the share price is now rock bottom at 2.76. As part of a very diverse portfolio, it could be worth buying a small holding. They have been developing financial apps for smart phones. If they can develop a cross border app in conjunction with a major bank, that could fill a need if it was a cheap way of sending money overseas.
Verona Pharma we went over 6p, then profit taking sent if back down, but their drug looks very promising and the risks are worth taking at today’s price. It’s a company not only at the cutting edge of science and medicine, but they are also aware of the need for investment and good financial management.
Remember that my thoughts on investments are just that; if you need financial advice see a independent financial advisor. In the final analysis, you take the risks and so it’s up to you to make the decisions.
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