No Pain, No Gain: Taking stock: a brief look at six years of investment

I have been asked to explain how, at the last count, the No Pain, No Gain portfolio had achieved a £39,000 profit.

I have been asked to explain how, at the last count, the No Pain, No Gain portfolio had achieved a £39,000 profit. After all, the 14 constituents, although mostly in the money, fail to tell the whole story as, like any investor, I have been forced to chop and change to try to keep on top of an often volatile stock market.

So, perhaps, it is time for a recap. And with the portfolio well into its sixth year it may also be appropriate to outline the rules governing its performance. But first a quick look at the highs and lows that have created its present composition and so, I hope, throw some light on how I arrive at the overall profit figure.

First I should explain that the portfolio did not enjoy a "big bang" launch. It evolved, put together as and when suitable purchases materialised. All told, 31 shares have been recruited, with a few surviving from those early days. The first constituent, Regal Hotel, fell to a far from generous takeover bid and checked out with an uncomfortable loss. Some, such as Mears, Inter-Link Foods and GallifordTry, were sold at handsome profits. Others have more than washed their faces, while nine have been kicked out at a loss.

Profile Media is by far my worst performer. But it remains in the portfolio, so there is still a chance of redemption. Of those sold Springwood, the nightclub chain, represents the most haunting setback. It managed to turn £5,000 into £513. I sold a few weeks before it went belly-up.

After allowing for the profits (and losses) achieved by the former constituents, the performance of the 14 survivors is calculated. With £5,000 invested in each share the basic outlay, £155,000, is subtracted from the overall value.

The £5,000 requirement has presented difficulties. It prevents increasing involvement in a share when a cash-raising exercise is under way. It was unable to take up its entitlement when Profile produced a rescue package. That may have been a blessing, although the shares were this week more than double their rescue price. Its cash call, a placing, is the only one the portfolio has encountered.

There has not been a solitary rights issue. Indeed, I wonder what has happened to what was for years the most popular method for a company to raise cash on the stock market. The record £5.9bn BT rights fling three years ago seems to have killed the desire for such simple exercises. I suppose if a constituent did raise cash the old-fashioned way, the portfolio would have to sell its rights.

The £5,000 rule also created difficulties when Six Continentssplit in two. The portfolio was faced with splashing out to retain the £5,000 limit in the two new companies or sell one and put the cash into the remaining constituent. To preserve transparency I sold, with some regret, Six Continents before the demerger was effective. Sticking with a £5,000 limit also banishes such manoeuvres as top-slicing and averaging down.

Although run-of-the-mill dividend payments are ignored, special dividends such as the 18p a share being handed out by Stagecoach seem too weighty to exclude, so my Stagecoach buying price will be reduced to account for the dividend. A similar exercise was carried out over an Allied Domecq cash handout. The portfolio's overall performance is also influenced by my decision to take no account of dealing costs. They are so variable that I thought it safer to strip them out altogether.

I have tried to stick to the basic rules, although new situations can arise. But my intention is always to keep things as simple as possible.

The current 14 constituents have been rather quiet in the past week or so. Only Printing.com, the Ofex member, has made a significant announcement, with its decision to switch to the junior Alternative Investment Market (Aim).

The fringe Ofex share market has this week experienced its own "big bang", with competing market makers now in session. Ofex is being drained as many of its better constituents move to Aim, and it needs more recruits. Aim, meanwhile, is going from strength to strength and could lift its membership to 1,000 before the end of the year.

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

News
Richard Dawkins dedicated his book 'The Greatest Show on Earth' to Josh Timonen
newsThat's Richard Dawkins on babies with Down Syndrome
Extras
indybest
Life and Style
food + drink
Life and Style
fashionLidl to launch a new affordable fashion range
PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    .NET Developer

    £650 per day: Harrington Starr: C#.NET Developer ASP.Net, C#.net, WCF, WPF, .N...

    Planning Manager (Training, Learning and Development) - London

    £35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

    Asset Finance Solicitor

    Highly Competitive Salary: Austen Lloyd: CITY - ASSET FINANCE - An outstanding...

    HR Analyst - Banking - Bristol - £350-£400

    £350 - £400 per day: Orgtel: HR Analyst - Banking - Bristol - £350 - £400 per ...

    Day In a Page

    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
    Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

    Lauded therapist still in limbo as battle to stay in Britain drags on

    Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
    Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

    Lewis Fry Richardson's weather forecasts changed the world...

    But could his predictions of war do the same?
    Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

    'I want to have contact with the audience, not iPhones'

    Kate Bush asks fans not to take photos at her London gigs
    Under-35s have rated gardening in their top five favourite leisure activities, but why?

    Young at hort

    Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
    Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

    Beyond a joke

    Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    Sadly though, the Lawrence of Arabia star is not around to lend his own critique
    Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

    A wild night out

    Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
    Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

    Comic Sans for Cancer exhibition

    It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
    Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

    Besiktas vs Arsenal

    Five things we learnt from the Champions League first-leg tie
    Rory McIlroy a smash hit on the US talk show circuit

    Rory McIlroy a smash hit on the US talk show circuit

    As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
    Boy racer Max Verstappen stays relaxed over step up to Formula One

    Boy racer Max Verstappen stays relaxed over step up to F1

    The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
    Fear brings the enemies of Isis together at last

    Fear brings the enemies of Isis together at last

    But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
    Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

    Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

    Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment