A Companies House search is essential and it may be necessary to commission an independent accountant’s report which puts up the

A Companies House search is essential, and it may be necessary to commission an independent accountant’s report, which puts up the cost. “My experience is that the guys running junior mining companies have much the same approach as double-glazing salesmen. Having lost my money in the nickel boom of the late 1960s I won’t touch them.” FACT FILE: WHERE THE SMALLCAPS LIVE* There are three main markets which trade in small-cap shares: Ofex, and the London Stock Exchange’s Aim and main market.You can also buy shares in private, unlisted companies through a solicitor or accountant, or direct from existing shareholders, but you must take great care to make sure you know what you are buying. They are now £14.”There is one no-go area for him: mining stocks.

“I was invited to the Society of Investment Analysts dinner back in 1992 and found myself sitting beside David Jones who had just been brought in to revitalize Next. I had him to myself for half an hour and he explained how it was possible to get margin back up and make the business hum again I bought some shares at 7p, and sold them when they hit 11p. I stuck with it.”Then there is the one that got away: fashion retailer Next. “Like most people I might be a good buyer but I’m not a good seller.” He confesses to having fallen in love with Turbo Genset, which he first bought at 3p “They have since been over £2 but are back to 23p It’s only too easy to fall in love with a concept stock.

“I went into NSB because a chum who had indirect contact with the board was buying it That was 18 months ago when they were 6p. Today they are 25p, having touched 38p.”Other stocks that have done well for him in the last couple of years are the travel promotions business, Landround (“I bought purely on the fundamentals: they have since trebled”); Pursuit Dynamics, which has a novel heating technology; and Mears – though he is thinking of switching from the last of those into a fellow provider of outsourcing services, Wigmore.Has he made any mistakes? “Oh, plenty”, he says. Alternatively, there may be someone interesting who has gone on the board – someone in the twilight of his or her career who wants one last chance to make some capital.”He is not afraid to ring up companies directly and ask questions “This is something any investor can do. “Sometimes you come across a company that is successfully copying another, but starting from a lower base – with, therefore, more scope for growth. They don’t often get someone ringing up out of the blue: sometimes, they’ll be only too pleased to chat to you.”He also rings analysts in some of the broking firms that specialise in smaller companies – “the likes of Peel Hunt or Seymour Pierce”.Two holdings dominate Brander’s portfolio: Wolfson Microelectronics, where, through a contact, he had the chance to buy in before it even went public, and NSB Retail. If you ring a small company and ask for the investor relations person, you’ll often find there isn’t one, and you’ll be put through to one of the directors instead.

But the key question is whether there is anything that makes it unique,” he stresses.Brander concedes that not all companies will fit this bill. He subscribes to two investment magazines, scours the Financial Times each morning, takes the ADVFN and Market Eye services and visits a host of websites (“though most are not very good”). He looks keenly at companies showing early signs of rising revenues, where rising earnings may follow.”I also find it is extremely important with a smaller company to understand exactly what it does By all means look at the figures. The time to buy is before the sun comes out.”Brander’s secret is the three “‘Rs”: “read, read, read”. “But companies valued at £200m or less are not well covered by brokers – until one day they are discovered and there is some excitement. I sold them a year later at 70p-plus.”Today, Brander, 60, has a portfolio “running into seven figures” with an emphasis on smallcap stocks. “If you are a fund manager you have to buy bigger stocks, and there is very little you are going to find out that is not already known,” he says.