Tom is the editor of ShareProphets and known as the Sheriff of AIM. He is also the founder of The Global Group UK Investor Show, although last year he sold his stake to the Wray family. Here are 20 Questions for the Sheriff, with answers!
1. Unlike most internet share commentators, you did actually work as a journalist before getting into the world of shares, what was your exact career path?
I started in the city working as an oil analyst with the No. 1 rated team, albeit as its graduate trainee. I then worked for the Investors Chronicle, the Evening Standard, AFX and finally a dot.com disaster UK-iNVest. Along the way I presented a Channel 4 programme, Show Me the Money, and freelanced quite promiscuously before setting up my first internet site and going into business on my own in 2001.
2. When did you first gain an interest in shares, how and why?
I suppose at school, studying economics. I like numbers, doing sums, but also the very human element of investing. The numbers can look great but if a company is run by a clown or a crook or both you will not do well from shares.
3. How did you start writing about shares and what prompted you to do that?
Well it was my job from when I left university. It paid the rent.
4.Would you say that you were a trader or an investor and why?
I am an investor. Trading is gambling, you simply bet that a bigger fool will buy your shares from you for more than you paid. Investing is about finding something cheap, buying, holding and waiting. So it involves analysis. So I am an investor. Besides which, I have an addictive personality so getting into any sort of gambling would be my road to ruin.
5. What percent of your portfolio is in blue chips and other yield stocks and what percent is in smaller company shares?
0% and 100%. You may say that this is rash given that I am 50 and you are right. But six years ago, I was worth minus £200,000. The only way back was to work my bollocks off starting new businesses and to invest in stocks that could multi-bag. BP might offer a great yield but it won’t multi-bag. Now my situation is different, so I am slowly selling those small caps and moving into cash. When I am a bit less bearish on the markets, that cash will go into safer yield plays.
6. Isn’t your portfolio thus high risk?
It is spread between a good number of stocks (c20) most of which are, I deem, high quality. There are a few “mistakes” in there as well. So it will be fairly resilient. Besides which, the Mrs and I have other assets, few liabilities and both can still earn a reasonable amount. And 50 is not that old – there is no reason why I could not work for another 25 years if I wanted to or had to. Unless of course I die, in which case the Mrs trousers it on the life insurance so I can live with the risks inherent in my portfolio pro tem.
7. What was your biggest ever winner in percentage terms and what made you invest in it in the first place?
I suppose it must be OptiBiotix (OPTI). We bought at 8p, with warrants at 8p at the time of the RTO. We still have all my warrants and about half my shares. The shares are now just under 100p and I could see them hitting 200p within a year. Why did I first invest? Because a bloke I trusted told me to. I owe him a drink or two.
8. And what was your most costly stock market mistake?
Easy, the company I founded and ran, Rivington Street. I did not sell shares, I bought more, eventually selling a house to help refinance it. But by then, others were running it and I was soon ousted and they ran it into the ground and asset stripped it. As a result of that I was, in 2012, jobless, worth minus £200,000 and had the bastard asset strippers threatening me, with no foundation, with lawyers’ letters if I tried to work in the only profession I knew anything about. I guess that counts as a big mistake does it not?
9. In terms of how you look at shares, which other investment writers do you rate most highly?
The team at Zero Hedge are very good. Sam Antar is the king when it comes to fraud. On ShareProphets, Nigel Somerville, the Deputy Sheriff of AIM, has the most amazing eye for detail and persistence as he tracks down and exposes crooks.
10. Your colleague Malcolm Stacey is open about his Christian faith and you often reference God in your work. Are all ShareProphets writers God botherers?
No! Far from it. I think we have a number of devout atheists on board. I admire those with faith. I struggle with it myself. I am happy to accept many of the ideas of Jesus, notably that I am a sinner and will have to face the consequences but struggle with that final acceptance of faith. While not claiming to be anything like a saint in thought, word or deed, I do take a very dark, old testament, view of right and wrong when it comes to the world of shares.
11. Do you sometimes despair at the dishonesty of many involved in small cap shares? How do you establish which CEOs and PR people tell you the truth?
Yes. More or less every day. Nigel Wray says that those who expose wrongdoing come to see it everywhere. The trouble with AIM is that wrongdoing is, if not everywhere, all too common. I take the view that once a liar always a liar. So if I see someone has lied in the past or they lie to me at any stage, they will always be a liar. When I first meet someone, I have to assume they are not a liar. I suppose in the world of AIM I am being rather too charitable in this regard.
12. You were congratulated by regulators for your work on the Quindell scandal. Why has no-one gone to prison for that?
Give it time. They will. Even the UK’s useless regulators cannot afford to overlook the biggest stock market fraud for 30 years.
13. You are often attacked for your work, how does that make you feel?
Lawyers letters, death threats, online harassment of me, my colleagues and my family, downright smears, I have had it all. Folks who either run frauds or who are invested in them tend to react badly to my work. And it snowballs. But when you have convicted bank robbers and other felons and well-known fraudsters attacking you, smearing and harassing you, I guess that suggests you might be on the side of the angels. Having a convicted felon write that I am about to be arrested for a list of crimes within days (that was 18 months ago!) hurts at the time, it all hurts but it comes with the turf. One day it will be too much and I shall call it a day.
14. If someone has misled you once over a particular share do you ever trust them again?
15. If you could introduce any one law to make the stock market a cleaner place what would it be?
That if a director was shown to have lied in any interview or in an RNS with his name on it he should automatically get a ten-year stock market ban. If an adviser was shown to be negligent on that RNS, i.e. not verified it, they too should get a ten-year ban from financial services. That would clean up the market in a shot.
16. Do you feel that as you get older you become a better investor?
Yes. I have learned from my biggest mistakes. Sadly, I find new ones to make. Only folks on Bulletin Boards get it right 100% of the time but my portfolio suggests I am getting better. Or luckier. Or both.
17. Do you understand bitcoin and/or blockchain and have you invested in any plays in this sector?
No. And I think this is just another late stage bull market high risk bubble. I tried to stag a blockchain IPO because a man told me to. I was scaled back to a pittance thanks to over-demand and was rubbing my hands with glee. I think I am 50% down in a couple of months.
18. Which is the biggest threat to the stock market: Brexit or Jeremy Corbyn? And why?
Brexit should be a great event. Ignore Project Fear, if it allows the UK to become a low tax free trading nation that would be great. I saw the chancellor tell the EU that if there was no deal he’d cut corporation tax to 10%. Hell’s teeth let’s have no deal and do it. Look at how Trump’s tax cuts have boosted the US. We could do the same if we told the EU where to stick it. Corbyn, in my view, would end up ruining the UK. The Tories are useless but Corbyn would be a disaster.
19. Are you always bearish about shares. Do you not fear a big stock market correction and what is your 12-month target for the FTSE 100?
I am, by nature a pessimist. But in terms of PE ratios for this stage of the economic cycle the stock market is far too high. Like housing, bonds, art or sports clubs it is another asset bubble. So yes, I expect a correction but targets are for dummies. Okay… how about 6300?
20. Your co-founder of UK Investor, Nigel Wray, says he will never retire, do you plan to quit at any time?
Nigel says he enjoys what he does so why would he opt not to do it? That seems a very fair approach to me and I take the same view. I’d be lying if I said that I was as engrossed in writing about shares as I once was. I do enjoy writing about other things and have an increasing desire to return to the world of self-sufficiency which my family enjoyed when I was a boy. So I might be blogging about goat milking more and more one day.
21. Do you have any exposure to gold in any way?
Not enough. We hold a few Ariana (AAU) and rather more Wishbone (WSBN), neither of which have covered us in glory. But I stand by both management teams.
22. If you had to give one piece of advice to anyone starting in the stock market what would it be?
Never buy any shares in those companies that are most beloved by the Bulletin Board Community.
23. Who are your heroes stock market and otherwise?
Outside the market, my father, for being a superb single parent and a role model for not following the way of the bien pensants and my Uncle Chris Booker, for being the ultimate journalist, fighting for good causes and often lost causes in the face of very real threats, even if it damages your own career. Also, Ayn Rand who was a genius. In the world of finance, Sam Antar the fraudster turned fraud buster for being a great book cooker and also very funny and generous with his praise and time.
24. If you were not speaking at UK Investor on March 30th 2019 would you go to the show and why?
Of course. One day I might not be invited back to the show as my rudeness will be no longer tolerated and I shall be told to spend more time with the goats (see question 17). Pro tem, I think I am speaking on March 30th – I hope with a post-independence day hangover if the wretched Mrs May does not screw Brexit up altogether. Why would I go? Firstly, to meet a few CEOs where I hold shares. That is a great once a year opportunity to do that. And second, to hear what folks like Vin Murria, Nigel Wray, Mark Slater and Luke Johnson have to say on the main stage. They are true master investors. And you will always learn something from stars such as them.