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

Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
News
people
News
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want it for the fitness tech, or for the style
Finacial products from our partners
Property search
  • Get to the point
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: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own