No Pain, No Gain: Thank goodness for the miners and oil producers

Despite some disastrous investments – principally the Food & Drink Group and Lennox – the No Pain, No Gain portfolio has displayed rather more aplomb than I had realised.

The star-studded display by Nighthawk Energy and one or two other more subdued but nevertheless resilient performances have helped nullify the impact of my best-forgotten investment forays.

However, the portfolio is looking a little light – down to just 10 constituents following three recent departures and only one addition. My favoured strength is 15, even 16. I hope to enlist recruits over the next few months but although there are apparent bargains around it is wise to display caution in the treacherous conditions now prevailing in the stock market. After all, it is mortifying to descend on a share that is on a low rating and looks an absolute bargain only for it to be even cheaper tomorrow.

The credit crisis, the creation of greedy bankers, is far from over. It is distressing the housing market, which will have far-reaching consequences. A slowing economy has also to contend with uncomfortable inflation as evidenced by the soaring cost of food and fuel.

It is difficult to see shares, with the possible exceptions of miners and oil producers, making much headway. Indeed recent talk that the bear market is over is, I feel, premature. It is only the strength of mining and oil shares, which have more than compensated for despair in other sectors such as banking and retailing, that have given Footsie a respectable, yet in some ways deceptive, appearance.

Most portfolio constituents are microcaps, a friendless category since last summer. The lower reaches of the stock market are always more risky than the blue chip highlands. But, with dedication and a little luck, the undercard in recent years has provided some rich rewards. But the credit crunch and deteriorating economic outlook have prompted many investors to abandon what they regard as a far too risky environment in favour of safer havens. Consequently many smallcaps have suffered a brutal mauling.

Before the bottom fell out of the undercard, the portfolio had achieved a £143,000 gain. It has since been whittled away and at the time of my last calculation – in March – "winnings" were down to £91,000. A modest improvement since then has lifted the profit to around £95,000.

Scottish & Newcastle is the most significant departure. The old established group has been broken up with successful bidders Carlsberg and Heineken sharing the spoils. The shares were the longest serving constituent, joining in July, 1999. The portfolio paid 394p; the take out price was 800p. I remain convinced that Scottish was worth more. Indeed, the ferment embracing the world's big three brewers, InBev, SABMiller and Anheuser-Busch, is likely to illustrate that Scottish represented a bargain for its captors.

The intense institutional pressure on Scottish to surrender its independence was yet another example of the City being anxious to grab easy cash but losing sight of the bigger, more profitable horizon.

Of the remaining 10 constituents, half are in the black with five in the doldrums or hovering around break even level. Rentokil Initial, the only blue chip now in my collection, is one of my losers. Still, new management offers hope of better times, although the company faces a long, hard slog before it can hope to recapture the glory days that prevailed during much of Sir Clive Thompson's reign.

Nighthawk Energy, as befits an oil and gas explorer and producer, is my new star. The latest development is the start of pilot production at its highly promising Devon oilfield in Kansas. It is its second US venture to achieve production status. Hargreaves Services, also deeply involved in the fuel business, has also managed an encouraging display. Printing.com's annual figures are due on Monday, and Lighthouse turned in reasonable performances.

Printing.com, offering small print services, could produce profits approaching £2.5m. Lighthouse, involved in wealth management and financial advice, has just acquired another money firm, Sumus. It now embraces the country's largest independent chain of financial advisers although it remains a smallcap with a value of around the £16.5m mark.

English Wines Group, the Chapel Down producer, has moved into profit although such an achievement has, not surprisingly, failed to influence its already highly rated shares. Like so many other groups relying on the big spending British public, the portfolio's only Plus-quoted share has felt the impact of belt tightening worries. Growth Equities & Company Research expects profits to grow from £86,000 to £200,000 this year.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
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

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Recruitment Genius: Experienced Financial Advisers and Paraplanners

    Negotiable: Recruitment Genius: This extremely successful and well-established...

    Guru Careers: FX Trader / Risk Manager

    Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

    Guru Careers: Investment Writer / Stock Picker

    Competitive (Freelance) : Guru Careers: An Investment Writer / Stock Picker is...

    Day In a Page

    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map
    Lionel, Patti, Burt and The Who rock Glasto

    Lionel, Patti, Burt and The Who rock Glasto

    This was the year of 24-carat Golden Oldies
    Paris Fashion Week

    Paris Fashion Week

    Thom Browne's scarecrows offer a rare beacon in commercial offerings
    A year of the caliphate:

    Isis, a year of the caliphate

    Who can defeat the so-called 'Islamic State' – and how?
    Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

    Marks and Spencer

    Can a new team of designers put the spark back into the high-street brand?
    'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

    'We haven't invaded France'

    Italy's Prime Minister 'reclaims' Europe's highest peak
    Isis in Kobani: Why we ignore the worst of the massacres

    Why do we ignore the worst of the massacres?

    The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
    7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

    Remembering 7/7 ten years on

    Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
    Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

    They’re here to help

    We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
    Time to lay these myths about the Deep South to rest

    Time to lay these myths about the Deep South to rest

    'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
    What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

    What exactly does 'one' mean?

    Court of Appeal passes judgement on thorny mathematical issue