No Pain, No Gain: You should have seen the ones that got away

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It is possible to make handsome profits and still feel that the stock market has conspired to cheat you. Many investors must have experienced that sinking feeling when they realise they have thrown away cash by selling a share when they should have held on.

"It's never wrong to take a profit" is an old, often quoted City saying. And, of course, like so many adages it contains more than an element of truth. Making a return is what investing is all about. And there is deep satisfaction when a bank balance is enhanced. Even so, it is immensely irritating to sell too early, particularly when a share, once freed from your attention, romps ahead.

Since the No Pain, No Gain portfolio first appeared more than six years ago I have made some daft decisions. Not selling Profile Media, where my £5,000 investment has almost disappeared, is one. But the stupidity of hanging on to the publishing group, despite its obvious problems, pales into insignificance when I ponder the cash I have lost by selling long before I should have done.

Three sales cause me particular annoyance. I realise back jobbing is a fool's game but if I had continued to hold on to the three that got away the portfolio, at the last count recording a profit of around £76,000, would have had a further £80,000 or so in the bank. Investors love to ride on a rising share price. Sometimes they have to sell; quite simply they need the cash. On other occasions it is a strategic decision. Either way they may have to face the infuriating fact that they actually lost money.

As I pointed out recently, any investor who alighted on Tesco shares in 1980 has watched £1,000 mushroom into £115,000. Over those 25 years there were many occasions when the temptation to sell was overwhelming.

Even Tesco suffers the occasional hiccup. And the stock market has endured a number of severe setbacks in the past quarter of a century - including the infamous 1987 crash - that left Tesco shares looking exposed and vulnerable. Still, come hell or high water, our wise long-term investor held on and is now laughing all the way to the bank.

The portfolio likes to take a longer-term view. It is not aimed at professional traders but the investor who wants to dabble in the stock market and is content to hold shares for some years. Of course, an investment picture can change dramatically - Marks & Spencer is an example - and defensive action has to be taken. But I cannot claim that my three recalcitrants hit problems.

The trio is Anglo Pacific, a miner; Inter-Link Foods, a cake and pie maker; and Mears, a support group.

Little known Anglo is the most wounding "offender". I alighted on the shares at around 16p. They moved ahead and then fell back. Inertia seemed to set in and with the shares showing no sign of moving above 15p I decided to sell.

For a little while my decision seemed a reasonable one. Then the resources boom began to influence the price with Anglo's coal mining interests (in Canada and Australia) assuming more and more value.

The shares have in recent times hit 140p; they are now around the 113p mark. The last trading statement, accompanying an 88 per cent profits advance to £7.7m, was bullish. It is, perhaps, not very surprising that I am mortified every time I glance at the Anglo share price.

Inter-Link Foods and Mears were sold in one package. The stock market was at the time in ragged retreat and I was about to leave on an extended holiday. I'm afraid I panicked. I felt it unwise to go away sitting on such handsome but vulnerable profits. So Inter-Link, purchased at 196p, was sold at 365p; Mears, picked up at 23p, went for 71.5p. I should have known better.

Inter-Link, following a series of well-targeted takeovers, is now around 700p. Mears, which has made relentless profits progress, is nudging 260p.

A few other constituents, such as Paramount, have moved ahead after being given the old heave-ho but I do not think any have made the sort of headway achieved by my three that got away. I suppose I should, in an attempt to balance the books, mention that on a few occasions I have got out around the peak or just before disaster struck.

But my mistimed sales will rankle for a long time. I feel Anglo's subdued performance justified my decision to sell. But the Inter-Link and Mears disposals are rather harder to tolerate. Still the profits they produced were infinitely better than losses.

I suppose it is all part of the investment game. And surely we all agree it is no good crying over (even expensive) spilt milk.

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