Tuesday, 27 January 2015

Should Fool Promote Quindell?

Time to blast this one out...

Should Fool promote Quindell?

Fool have a writer called Prabhat Sakya. From his LinkedIn, he looks like he should be quite intelligent. This is however what he says about Quindell:

"Let's take the example of Quindell (LSE: QPP). This was a share that just kept on falling, even though the fundamentals said that the value of the company should be rising.

Early last year the share price peaked at 660p. I was thinking about taking profits, when the share price started falling. And falling. And falling. It eventually reached a low of 24p around December 2014.

Yet, and this is the bizarre thing: at no point was I ever considering selling. After all, this was a cheap company which had just got cheaper. Instead, when Quindell's share price reached its low, I sort of knew that this was the time to buy.

Investing is much more difficult than it seems

I suspect many of the company's shareholders were more likely to be panic selling than buying. But then this is why, in essence, investing is much more difficult than it seems.

As it happened, I hesitated about buying Quindell. During that moment's hesitation, the share price rose to 80p. But I knew this was still dirt cheap. Although I still believe in the recovery story of the banks, I figured it might be time to take profits on some of my holding in Barclays (LSE: BARC). With this cash, I bought some Quindell shares."

Now I am not an expert on Quindell... but I’ve read all of Tom Winnifirth’s articles on the company. Let’s just say that... there is a chance it could be a fraud.

Now is that the kind of company you should be promoting to possibly impressionable readers... who might actually follow that advice?

Let’s look at the advice. Sell Barclays and buy Quindell. So already going against the time honoured Fool advice of buy a good company... and hold. But here you’re selling a company which can deliver solid dividends and grow in the future... and buying Quindell.

There is a realistic chance you could lose all your money here.

Now I’ve been a Fool for ten years now. I can JUST TELL this article will probably LESSEN MY CHANCES of actually writing for them and getting paid again. But seriously... this article is not good. I think it’s quite surreal that this article will get published, when other articles by successful long term buy and hold investors don’t.

Interested to hear your thoughts!

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