No Pain,No Gain: The signs are more positive, despite this hiccup

Oh dear. Much to my dismay the stock market suffered a severe bruising in my absence. When I left, the Footsie was brushing 5,500 points and, with shares looking cheap, I felt confident enough to predict further progress. Well, since then investors seem to have got themselves into a rare old tizzy worrying about this and that and the index crashed more than 350 points at one time.

The good news is that the falls seem to be over and the atmosphere is once again highly positive - the retreat merely measures as a slight shudder on the notorious October Richter scale. In fact, the market has merely suffered another of those uncomfortable hiccups. After all, shares, even in the crazy dot.com days, did not go up in a straight line. Indeed, they never have.

Setbacks are to be expected. Sometimes there are external influences; on other occasions old-fashioned profit taking, which can snowball, takes its toll. Often it is a mixture. It is worth remembering that one of the wisest City sayings is that it is never wrong to take a profit.

Not much actually changed during my absence. All the difficulties I left behind were still in place when I returned. Perhaps a tendency to dwell on them emerged. Still, the market is often unfathomable in the short term. Yet investors should not lose sight of the fact that on realistic measurements shares remain cheap. If the hesitancy of recent weeks should return they could be even cheaper. However, true value will eventually shine through. I do not believe economic conditions will deteriorate dramatically and so long as international upheavals are avoided shares should remain a buy.

There is every chance of further strong capital appreciation. And in these low interest rate days growth can be coupled with some worthwhile dividend returns. It is not difficult to spot solid shares (such as HBOS and Rank) offering more than 4 per cent yields. And if those yields are too mundane what about United Utilities, with a tantalising 6.8 per cent.

I am not despondent over the way shares behaved in my absence. The No Pain, No Gain adventure has suffered setbacks. Overall profit has wilted to around £65,000 with many constituents at least a few coppers below the level ruling at the time of my last column. Most have been influenced by the market trend. But a couple had to contend with special factors. One, where an array of twists and turns has occurred, is Rentokil Initial, the pest control to security group.

I was pleased to see Sir Gerry Robinson abandon his attempt to assume control without conceding the necessity of making a takeover bid. His signing-on fee merely added to the pantomime atmosphere surrounding the whole episode. Still his withdrawal has not done any favours for the shares and around half of the portfolio's Rentokil profit has disappeared.

For the time being I will stick with the rat catcher. It has some cracking businesses and I am prepared to give the entrenched management a chance. Doug Flynn, the chief executive, faces a struggle. There is nothing in his pedigree to suggest he is up to it. But he was selected by chairman Brian McGowan, an old City hand, and I am prepared to back his judgement.

Lennox, distributing food and drink in Spain, has done itself no favours. After the boardroom bust up and disappointing trading comes a share suspension. The group is investigating a "possible warranty claim" that would appear to involve its chief executive, David Franks. The share freeze could be a technicality because the likelihood of liability was not mentioned in last year's flotation prospectus. But until more details emerge it is not possible to judge. I am, perhaps optimistically, pricing the shares at 32p - the suspension price - for this week's portfolio calculations.

Elsewhere, Access Intelligence is stuck below my buying price, despite some director buying. Georgica turned in mixed third quarter figures although at the nine month stage it had achieved a near £800,000 profit against a £1.6m loss. The tenpin bowling to snooker club chain is, traditionally, more active in its first and last quarters.

Avon Rubber has been on the slide. Results will not be scintillating and I have decided to dump the shares, suffering 20.5p a share loss. I realise the group operates in a tough environment but the big gas mask break through, the reason I alighted on the shares, has still to materialise.

Email: cash@independent.co.uk

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

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

    Guru Careers: Pricing Analyst

    £30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Day In a Page

    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
    The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

    The ZX Spectrum is back

    The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
    Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

    Even the screenwriter pours scorn on Grace of Monaco biopic

    The critics had a field day after last year's premiere, but the savaging goes on
    Menstrual Hygiene Day: The strange ideas people used to believe about periods

    Menstrual Hygiene Day: The strange ideas people once had about periods

    If one was missed, vomiting blood was seen as a viable alternative
    The best work perks: From free travel cards to making dreams come true (really)

    The quirks of work perks

    From free travel cards to making dreams come true (really)
    Is bridge the latest twee pastime to get hip?

    Is bridge becoming hip?

    The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
    Long author-lists on research papers are threatening the academic work system

    The rise of 'hyperauthorship'

    Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
    The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

    The rise of Lego Clubs

    How toys are helping children struggling with social interaction to build better relationships
    5 best running glasses

    On your marks: 5 best running glasses

    Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
    Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

    'Ben Stokes gives everything – he’s rubbing off on us all'

    Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
    Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

    Please save my husband

    As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada