No Pain, No Gain: Play it shrewd in times of stock-market disorder

I suspect few serial investors are inhibited by the current stock-market turmoil. My guess is that many are quietly taking advantage of what they regard as the cheap pickings now on offer. Only those burdened with worrying debts are running for cover.

Trevor Hemmings, the 70-year-old leisure tycoon, has invested some of his winnings from the expected Scottish & Newcastle takeover in beleaguered pub chain Mitchells & Butlers, where he has emerged as a 3 per cent shareholder. And another veteran stock-market player, Bob Morton, has increased his involvement in Clarity Commerce Solutions, a software group.

I have, during my 50 years writing about the City, witnessed quite a few share horror shows. The slow, numbing 1970s slide and the slam-bang crash of 1987 were regarded as desperately frightening events when they occurred. Now they are almost lost in the mist of time. I must have seen eight or nine severe setbacks that set alarm bells ringing but shares recovered each time.

Shrewd investors have always taken advantage of such upheavals; others had the sense to sit tight. But a few (often small shareholders) panicked and suffered the lamentable consequences. Investors must realise that every so often shares stumble. Invariably, the reasons responsible for the bad times differ – so each slump acquires a menace of its own. In the early 1960s, when the stock market was enduring one of its now-forgotten slides – shares suffered their worst one-day fall for some 25 years – the then chairman of the Stock Exchange, Baron Ritchie of Dundee, said: "Small investors should put their heads down and let the wind blow over them."

It was sound advice then – as it is today.

Quite clearly, old-timers such as Messrs Hemmings, 70, and Morton, 65, are not taking shelter. Perhaps other investors should follow their example. Morton's Clarity involvement is his second deal since the credit crunch started. His first was in the dying months of last year, when he merged his Harrier Group with Conchango, an IT consultancy that produced pre-tax profits of £2.3m in the nine months up to September.

It was a classic reverse deal. And, not for the first time, Morton managed to turn disaster into success. Harrier had not been his finest hour. The company found the going tough and decided to sell its software business and seek pastures new. With £4.7m in the bank it hunted acquisitions. Before it found one it was hit by AIM's reluctance to tolerate cash shells and its shares were suspended.

The Harrier flag was kept flying on Plus. After several false dawns the £31.5m takeover of unquoted Conchango was clinched. So last month Harrier, as Conchango, returned to AIM. However, the shares, perhaps not surprisingly in the present malaise, received a lukewarm reception. They left Plus at 19p, touched 23.5p but now reside once again at 19p.

Michael Altendorf and Richard Thwaite started the computer group in 1991. It has a host of blue-chip clients including Tesco and Vodafone. The founders still control the company, although their dominance will weaken as they issue shares for acquisitions. Former Harrier shareholders, including Morton with 7 per cent held by his Southwind family trust, account for 17 per cent.

Clarity, capitalised at £6m, represents his return to a past stamping-ground. He used to be chairman. Dismayed by the group's declining fortunes, Morton attempted last year to return to the boardroom, leading a shareholder revolt. But the rebellion failed and, stuck with a 10 per cent shareholding, he seemingly retired to the sidelines.

But it would appear the group is in urgent need of a cash injection. And the failed rebel is prepared to oblige. Through Southwind he has pumped in a short-term loan and is largely underwriting a cash call of up to £1.8m, at 25p a share. Clarity plunged into losses last year, with more red ink being splashed around in the current year. The trading slump has taken its toll on the shares; they have fallen from more than 70p to 26p in the past nine months.

Still, many microcaps have fared even more poorly. And they have not been influenced by shareholder shenanigans and mounting losses. So Clarity, once it gets its act together, could prove a rewarding investment – at least Morton must think so.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Premier League Live
footballLIVE Follow all the Premier League action as it happens
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
Life and Style
3D printed bump keys can access almost any lock
gadgets + echSoftware needs photo of lock and not much more
James Argent from Towie is missing, police say
peopleTV star had been reported missing
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
i100(and it's got nothing to do with the Great British Bake Off)
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Mario Balotelli pictured in his Liverpool shirt for the first time
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

    £35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

    DevOps Engineer (Systems Administration, Linux, Shell, Bash)

    £50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

    Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

    £60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

    Financial Technical Consultant (C++, C#, Finance, MSc, PhD)

    £50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone