Moving out before the technology bubble bursts

So what did RICH decide at its latest meeting? Well, members were concerned about the bubble possibly bursting on high-tec stocks.

It was exactly the fear that the snort had gone out of the techno bull market which led them to sell half their holding in Pace Microtechnology at their February meeting. (And it was justified as its shares fell drastically immediately afterwards.)

Ditto Kingston Communications, but here the members decided to put a rigid stop loss point and sell if its shares fall to £10.50.

It also created new selling cut-offs for Net Call at £1.50, Axis Shield at £9 and Arthur Shaw at 15p.

They decided not to cut and run on Royal Sun Alliance shares but to stick with it and await recovery.

So where to actually invest?

Well, they considered Geest, the ready-made meals specialists which was a possible take-over target; Dixon Motors which at the time of the meeting was rumoured to be setting up a link on the Internet with Direct Line Insurance; and Ultrasys, (formerly Villars) whose computer/Internet stress diagnosis product was a speculative bet given growing popularity in the US.

Decision: Invest around £500 in Dixon Motors - a hunch which paid off the next day as, sure enough, the Internet link was announced and shares moved from £1.58 to £1.651/2

As for the rest of the portfolio leave well alone. That includes shares in -

British Telecom, Railtrack (in which RICH recently invested more than £1,000 regarding it as undervalued); training group Birchem International, Chorion Leisure, Axis Shield, French, Granada, Glynwyd, GWR Group, Marks and Spencer, Morrisons, NatWest, Great Universal Stores and Medysys, an AIM company on which they targeted speculative investment based on the fact that it has just developed a new injection method for the medical profession.

Final decision of the meeting: To attend The Last Night of the Proms at Castle Howard in black tie with dinner and candelabra on the lawns.

They can afford it!

see also 'Sharing secrets of success'

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.