Derek Pain: Portfolio's still in profit after 13 years of ups and downs
No Pain, No Gain
Saturday 24 December 2011
Christmas Eve is often a time when many of us cannot resist the temptation to look back over the past 12 months and, possibly, wonder where we went wrong. I am, however, indulging in a much more time-consuming exercise – the near-13 years the no pain, no gain portfolio has existed and, I hope, enlightened – even enriched – its Saturday-morning followers.
The portfolio was born in February, 1999, a few months before I retired as The Independent's first stock market reporter.
It's been a roller coaster ride with some stunning successes and, unfortunately, a number of unmitigated disasters. A few years ago the portfolio's gain nudged £150,000. Now it is around £100,000, party reflecting the reluctance of investors to pursue small caps in these treacherous times.
Its first share was a now-forgotten company, called Regal Hotel. In those days it was a rapidly expanding group. It probably grew too quickly and fell victim to a not particularly generous takeover bid. Still, in its early days, bids formed a major part of the portfolio's temperature. Although Regal was a disappointment, a succession of deals provided much-appreciated windfalls. The likes of Burtonwood, a pubs group, Merrydown, a cider maker, and supermarket chain Safeway, succumbed to bid action.
During the first half of the last decade, when various forms of corporate activity were all the rage, the portfolio probably enjoyed its fair share of excitement with obscure small caps like IDN and Paramount adding to the cash pile.
But as the decade progressed the flow of bids and deals started to dry up, and once the banking crisis materialised they even became an endangered species.
However, some still occurred. Allied Domecq, once the nation's biggest brewer which had evolved into one of the world's leading wine and spirit groups, bowed to a long-rumoured bid. And Scottish & Newcastle, the last independent remnant of the once all-powerful "big six" of the British beerage, departed after a joint strike by Carlsberg of Denmark and Heineken of Holland.
In the last couple of years, as the banking crisis was followed by the euro débâcle and deep worries about the very future of the entire eurozone, the portfolio had to exist with only the occasional takeover windfall. Capital appreciation, through trying to spot undervalued shares and those with a recession-proof future, became the name of the game. The portfolio has found the occasional winner. Among early hits I cashed in were Mears, the support services group, Interlink Foods and Stagecoach, the transport group. This trio underline the vagaries of the stock market. Mears subsequently soared comfortably past my selling price only to fail to perform when re-recruited; Stagecoach has done quite well and Interlink eventually went belly up.
It would be foolish – and dishonest – to pretend it has all been plain sailing. There have been too many disasters for comfort. In addition to shares sold at a loss, the portfolio has had to soak up the humiliation of alighting on companies that ended up as busted flushes. Profile Media, which seemed to have carved out a publishing niche for itself, and MyHome International, once a promising franchise group, are among my total wipe outs.
The portfolio invests £5,000 in each constituent. Dealing costs and dividends are ignored in my quarterly performance calculations.
I have often wondered whether I should include buying and selling costs and dividend income to give a more accurate indication of how my little collection of shares has performed. I reckon their impact would enhance the overall performance as quite a few former constituents, like Printing.com and Scottish & Newcastle, enjoyed high dividend yields. But, with its 13th birthday approaching, I think it is too late to change and any switch in the quarterly sums would be rather messy and merely muddy the waters.
Clearly there have been some savage swings and roundabouts since the portfolio arrived with, for example, the blue-blood Footsie share index achieving a 6,950.6 points peak in the madcap internet boom and even declining more than once to uncomfortably close to the 3,000 level. I do, therefore, take some satisfaction from the fact that the portfolio is still showing a reasonable profit, although the debilitating impact of inflation cannot be ignored.
Bargain Hunter: Affordable art - suddenly being a collector is just a walk in the park
The FTSE 100 is inching closer to its record high but can it maintain these levels?
Phoenix Life: Chance of a refund for overcharged policyholders has risen
Money Insider: Peer-to-peer lenders come into their own as marketplace lending evolves
Has your Premium Bond won the £1million jackpot?
- 1 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
- 2 PornHub turns masturbation into energy in bid to save the planet
- 3 Dakota Johnson's 'It's only Isis' Saturday Night Live sketch sparks controversy
- 4 Robert Mugabe eats a zoo for 'obscene' 91st birthday party
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads