Primary Recommendation

H&T - Gold price and weak pound boost profits

March 2009

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

If you have a business that is buying its stock in trade for Â£4.25 and selling it for Â£8.02 and demand seems insatiable, it wonâ€™t be long before you make a pot of money. In the case of this month's second main recommendation, H&T, thatâ€™s exactly the kind of margin it achieves when buying items of gold jewellery from customers, which it melts down and sells as a gold ingot. The numbers above paint a vivid picture of the margin the company makes when it buys 9 karat gold items, the standard for most European jewellery but the company doesn't discriminate and makes similar profit margins from 18 karat West African items or the yellower but more fragile pieces of 24 karat Asian gold jewellery. This all started off as a ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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