No Pain, No Gain: Take time to find new blood in a rising market

For the second New Year in succession the No Pain, No Gain portfolio is in need of new blood. But I am in no hurry to buy. At this time of year, many a Tom, Dick or Harry feels the need to indulge in some hopeful share tipping, and the stock market usually responds by happily squeezing the best possible prices from any gullible punter. It is, therefore, much wiser to wait until the tipping season is over.

I mentioned before the holiday that I was waving farewell to two constituents - IDN Telecom and Georgica. IDN, the subject of a takeover bid, will exit at 2.939p, and Georgica, at around 150p, is being dumped because it will not satisfy the portfolio's £5,000 stake rule once it splits into two quoted companies. Both investments have been profitable and if I were not a forced seller, I would have stuck with them.

Their departure will reduce the portfolio to 13 members. I am a superstitious old fart and will consequently not hang around on what many regard as an unlucky number longer than necessary.

I could, of course, always escape "unlucky 13" by selling an underperformer or, indeed, a highly rated share, thereby locking in a profit. For the time being, I am sticking with the remaining 13, although Lennox seems to have little going for it and Goals Soccer Centres is on an uncomfortably high rating. Wyatt, the little online consultancy that I had lumped with Lennox as a disaster share, posted a pleasant surprise to shareholders in the Christmas run-up.

It revealed that in its half-year it actually made an operating profit - £64,000 against a £319,000 loss. Turnover more than doubled to £1.2m. On month-to-month calculations, the company has been profitable since September. The move into the black did not extend to the pre-tax level where there was an £88,000 loss. But the deficit was down from the £375,000 suffered in the same period last year.

Wyatt has a long way to go before justifying my faith. Although the shares have climbed off the floor, they are only 12.5p against my 27.5p buying price. Still, chairman Bob Holt, the man behind the successful Mears support services group, is confident the improvement will continue. The company's personnel consultancy turned in its best-ever figures and the fire risk assessment operation is benefiting from the Government's new fire regulations.

Myhome International, the franchise group, was another to offer a little festive enthralment, successfully switching its shares from Plus (formerly Ofex) to the Alternative Investment Market (AIM).

The portfolio is in good heart and I must avoid damaging its overall performance in my search for recruits. Picking winners is getting more difficult as the stock market continues to confound the bears and delight the bulls. Last year was a good one for investors. The Footsie, although its festive display did not match some past performances, still managed to end the year with a near 11 per cent gain. Smallcaps also enjoyed a strong run.

What about this year? Many in the City expect another rousing performance. There are even suggestions the Footsie could exceed 7,000 points; topping its record level, the 6,950.6 achieved in the dot.com madness at the turn of the millennium. There is little doubt that, historically, shares are cheap and the joy run should continue. But 7,000? I doubt it. I'm inclined to settle for around the 6,600 mark with smallcaps also prospering.

Trying to predict the stock market performance over 12 months is a fool's exercise. Still the temptation to take part in this yearly ritual is irresistible and I am happy to add my modest contribution. I should, however, point out that my record is not particularly good. I was wrong last year, predicting a 2006 year-end Footsie of 5,900.

There are worries that the strong run, which started in March 2003, cannot have much further to go. Some see 2007 as the last year of the present euphoria, with shares fading in 2008 as the global economy runs out of enthusiasm. I'm not so sure. There is no evidence takeover euphoria will peter out, although private equity's growing debt burden worries me. Even so, progress could continue and, barring disasters, that 7,000 level could be topped - but not before next year.

cash@independent.co.uk

Compare with the Independent: See how much you could save by switching credit cards. Compare now

VIDEO
Arts & Entertainment
Ricky Gervais at a screening of 'Muppets Most Wanted' in London last month
tvRicky Gervais on the return of 'Derek' – and why he still ignores his critics
Sport
Luis Suarez of Liverpool celebrates his goal
sport
Arts & Entertainment
Homer meets Lego Marge in the 25th anniversary episode of The Simpsons, set to air on 4 May
tv
Arts & Entertainment
James Franco and Chris O'Dowd in Of Mice and Men on Broadway
theatreReview: Of Mice and Men, Longacre Theatre
Life & Style
Infant child breast-feeding with eyes closed
healthTo stop mummy having any more babies, according to scientists
News
news
Life & Style
Going down: Google's ambition to build an elevator into space isn't likely to be fulfilled any time soon
techTechnology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Arts & Entertainment
film
News
David Cameron sings a hymn during the enthronement service of The Most Rev Justin Welby as Archbishop of Canterbury, at Canterbury Cathedral last year
news
Life & Style
From long to Jong: Guy Pewsey gets the North Korean leader's look
fashionThe Independent heads to an Ealing hairdressers to try out the North Korean dictator's trademark do
Extras
indybest10 best smartphones
Arts & Entertainment
tvCreator Vince Gilligan sheds light on alternate endings
Life & Style
Google Doodle celebrates the 63rd anniversary of the Peak District National Park
tech
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    1st Line Helpdesk Engineer Apprentice

    £150.00 per week: QA Apprenticeships: This company has been providing on site ...

    Telesales & Sales Support Apprentice

    £221.25 per week: QA Apprenticeships: This company is a well established Inter...

    Client Relationship Manager - SQL, Python

    £40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

    **Financial Services Tax**

    £35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

    Day In a Page

    Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

    Ricky Gervais: 'People are waiting for me to fail'

    As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
    Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

    Mad Men returns for a final fling

    The suits are still sharp, but Don Draper has lost his edge
    Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

    Google finds a lift into space will never get off the ground

    Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
    Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics

    Is sexual harassment a fact of gay life?

    Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics
    Moshi Monster creator Michael Acton Smith: The man behind a British success story

    Moshi Monster creator Michael Acton Smith

    Acton Smith launched a world of virtual creatures who took the real world by storm
    Kim Jong-un's haircut: The Independent heads to Ealing to try out the dictator's do

    Our journalist tries out Kim Jong-un's haircut

    The North Korean embassy in London complained when M&M Hair Academy used Kim Jong-un's image in the window. Curious, Guy Pewsey heads to the hair salon and surrenders to the clippers
    A History of the First World War in 100 moments: A forgotten naval victory in which even Nature played a part

    A History of the First World War in 100 moments

    A forgotten naval victory in which even Nature played a part
    Vespa rides on with launch of Primavera: Iconic Italian scooter still revving up millions of sales

    Vespa rides on with launch of the Primavera

    The Vespa has been a style icon since the 1950s and the release this month of its latest model confirms it has lost little of its lustre
    Record Store Day: Independent music shops can offer a tempting alternative to downloads

    Record Store Day celebrates independent music shops

    This Saturday sees a host of events around the country to champion the sellers of well-grooved wax
    Taunton's policy of putting philosophy at heart of its curriculum is one of secrets of its success

    Education: Secret of Taunton's success

    Taunton School, in Somerset, is one of the country's leading independent schools, says Richard Garner
    10 best smartphones

    10 best smartphones

    With a number of new smartphones on the market, we round up the best around, including some more established models
    Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

    Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

    The former Australia coach on why England must keep to Plan A, about his shock at their collapse Down Under, why he sent players home from India and the agonies of losing his job
    Homelessness: Why is the supported lodgings lifeline under threat?

    Why is the supported lodgings lifeline under threat?

    Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
    A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

    A History of the First World War in 100 Moments

    When the world’s biggest shed took over Regent’s Park
    The pain of IVF

    The pain of IVF

    As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal