No Pain, No Gain: The ups and downs that produced £30,000

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The Independent Online

Almost 30 shares have, with varying degrees of distinction, served in the no pain, no gain portfolio since it was launched five years ago. Thirteen remain although I am seeking recruits. S&U, the finance group, is now the longest-serving member, arriving in April, 1999. Galliford Try, the builder, joined the month after. Allied Domecq, Merrydown and Scottish & Newcastle also appeared in our first year of existence.

Four of the early members have performed well. Scottish is the odd one out, although take-over chatter and early signs the nation's biggest brewer is getting its act together have lately encouraged the shares to display a little strength.

But what about those which failed to last the course and suffered the indignity of the old heave-ho? To many readers they are the mystery element when I calculate the overall portfolio performance, now a profit of £30,000. But they are not forgotten. The cost of each of the dear departed and the profit or loss activated by any sale is taken into consideration. Some shares I dumped were past their sell-by date and creating anxiety although seven, for various reasons, were sold at a profit.

I regret the sales of Mears, the support services group, and Inter Link Foods. Both were unloaded at a handsome profit but if I had stayed loyal the rewards would have been much more enticing. Indeed Mears, at 144p, is more than twice my sale price. My defence is that the stock market was looking particularly vulnerable and I decided to lock in profits ahead of an extended holiday.

Paramount, which has been transformed into a restaurant group since I sold, is another profitable share now above my sale price. Montana, the restaurant chain swallowed by the revamped Hartford, also came up trumps. And the departed Six Continents, now split into InterContinental Hotels and pub chain Mitchells and Butlers, and the soon-to-disappear Safeway, achieved gains. Weeks, a little consultancy, was the other share to realise a profit.

Anglo-Pacific was the most galling departure. The shares, bought because of the potential of its Australian mining interests, performed poorly during their portfolio stay and I sold at 13.5p, a small loss. The price is now above 60p, another example of the benefits of patience.

Among others sold at a loss were Deep Sea Leisure, Global Group (now Canterbury Foods) and City of London, the investment and public relations group. Springwood, the night-clubs and venue-bars chain created by veteran leisure entrepreneur Adam Page, has the dubious distinction of being my worst-realised investment.

I paid 131.5p. At one time the shares were comfortably above 200p and I was congratulating myself on discovering a winner. But I was slow to heed the danger signals and did not get out of the stock until the price hit 13.5p. Today the shares are 4p and Mr Page has departed.

Profile Media is still my major disaster. But it is still in the portfolio. So the loss (perhaps, it could even be a profit one day) has yet to be crystallised.

The no pain, no gain portfolio is intended for the long haul, which allows me to avoid the yearly ritual of picking shares for the next 12 months. Yet no investor would undertake such an unreal exercise. Last year I introduced veteran share-picker Arthur Johnson. He is not happy about the year-on-year restriction but his selections last year produced a gain near 30 per cent.

Mr Johnson, who lectures on the stock market at colleges near his Leicester home, has produced a 12-strong portfolio. Ten shares were picked at the start of the year, two recruited later. His dozen are BT, selected when 188.25p, now 177.5p; Dowding & Mills 9.5p (12.25p); Ensor 22p (20.5p); Fayrewood 74p (107.75p); Hyder Consulting 125.5p (140p); International Energy 154p (157p); Jubilee Investment 44.5p (62.5p); Lloyds TSB 448p (455.75p); Oak Holdings 1.75p (2p); Parity 10.75p (12.5p); Real Food Company 137.5p (146.5p) and Tate & Lyle 273p (284p).

The Johnson portfolio has had an impressive start. But the irony is its creator is bearish, a net seller in fact.

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