Solo Oil PLC (SOLO.L) | Investments
My first investment blog post was nearly 2 years ago now. I wrote that after buying shares in Premier foods for 4p each. The company was heavily in debt, but the shares went to 18p before a 1 for 10 share swap. They are still at 129.59 at the time of writing. That’s a return of over 220% so far!
I had the investment bug and so not long after, I bought Lloyds Banking Group for just under 30p a share. They have done quite well too, they are 73.65 this morning. That is a return of 145% which isn’t bad. I waited for another opportunity and although I didn’t really want another banking investment decided to buy Royal Bank of Scotland at around the same price. They too were subject of a 1 for 10 share swap and are now 336.52 giving me a return of 18%. I bought those in February last year.
Even though many shares seem to be at bargain prices, I haven’t been tempted to buy any for over a year. Many investors have been choosing the big safe companies rather than the riskier companies that are cheap and might offer better returns. I regard the so called ‘safe companies’ as risky too. When the economy starts to recover investors could start selling the safe ones and going for bigger returns by taking more risks. I see many ‘safe’ shares as being over priced.
I’ve kept an eye on a list of shares for some time and decided to buy this week. There was some talk of stimulus and maybe more quantitative easing that could send the stock market up soon. There was talk of a surge in the price of oil and that made an oil exploration company seem more attractive.
Solo Oil is an exploration company that invests in exploring for oil and gas. They don’t actually do the drilling. They have investments in Canada, but the more exciting one is in Tanzania. It has a 25% interest in the Ruvuma PSA in Tanzania. The value of the investment isn’t just dependant on the exploration of oil and gas, but on getting it to market. There is a new pipeline being built and that will carry the gas production.
After researching what is happening in Tanzania, this seemed like a good time to invest, but it’s still a big risk.
Solo Oil shares at in the AIM (Alternative Investment Market) and can now be included in an investment ISA. The spread, the difference between the price you bid for shares and the price you sell them at can be quite large in the AIM market. The prices today are Bid: 0.31p Ask: 0.33p. I paid 0.3175 on Wednesday, so I’m still a little above the bid price. I did get a reduced dealing fee, which helps.
I also bought Taylor Wimpey PLC (TW.L) for 100p a share. A less risky investment and it’s a company that does a lot of house building in the region I live in. I think I’ll make that the subject of a separate post.
The culture of live now; pay later, seems to be going out of fashion. The save and invest for the future culture seems to be in vogue. The economy has to rebuilt and so the rewards should go to those who do save and invest. I suspect that the rewards could be much higher than should be warranted.
What are you doing? Still spending or saving for the future? Please share your thoughts in the comments box. You can also subscribe to my blogs or follow me on twitter.
The information and views in this post aren’t intended to be investment advice. Investments can go down as well as up…