Dead companies and dead cats

Adam talks dead companies and dead cat bounces.

Trevor Callow wants to know, if the worst comes to the worst and Railtrack shares turn out to be worthless, would this mean he'd have a capital loss to set against other capital gains he has made?

The answer is yes. If you make a loss on one share and a profit on the other you can avoid paying tax on the profit by asking the Inland Revenue to offset the two results.

The problem here is that Railtrack shares are suspended so you can't sell them at the moment to register a loss. You just can't do anything with them at all.

You have to wait until the Inland Revenue has actually agreed that the shares are of negligible value. This could take years.

The Prime Minister yesterday said investors will receive compensation but we've no idea what that might be.

Stephen McGowan wants to know how often companies are assessed to decide if they belong in the FTSE 100. He also wants to know where he can find the list.

The index is updated every quarter. It is made up of the most valuable 100 companies, as measured by the total value of all their shares put together.

If a company's share price falls substantially, they might be kicked out of the index. You can find more details at www.Londonstockexchange.com.

Ms Duncalf from Manchester wants to know what I-shares are and where she can find out more information.

They are a type of "exchange traded funds". In simple terms they are tracker funds, but they can be cheaper than buying an ordinary tracker.

They may be cheaper to buy, but in some cases tracker funds can be put in an Isa for nothing, while putting an I-share in an Isa will cost some money. So there are pros and cons.

More information can be found at www.ishares.net

Mr & Mrs Bailey from Wells in Somerset hold shares in Save Group. The company went into administration in July and since then they have heard nothing. They ask as shareholders should they not have been kept up to date with the situation?

Unfortunately shareholders have a rough time in these sorts of cases.

Once a company has gone into the hands of administrators it's usually up to you to find out what's going on. In this case Ernst & Young are administrators. You need to register your interest with them.

Finally James Woodhouse would like me to explain what I meant the other week when I used the phrase "dead cat bounce".

Dead cats bounce but not much and not for long. So when a share price falls a long way then rebounds slightly before settling near the bottom again, it's called a dead cat bounce.

It means that the share hasn't rebounded to anything like its previous highs and that the rebound is not the start of a rally.