Private Investor: Sometimes it really does pay to invest in a basket case

I'm afraid that I am such an optimistic mug when it comes to the British motor industry that I would have bought shares in MG Rover.

I'm afraid that I am such an optimistic mug when it comes to the British motor industry that I would have bought shares in MG Rover. If the whole company cost £10 when the Phoenix Four bought it from BMW five years ago, I would have been quite happy to chip in 50p or so to make me a significant minority shareholder in the enterprise. I might even have got a discount on a new Rover or MG car.

Actually, there might have been a slightly more serious opportunity for the chaps at MG Rover/Phoenix to have offered shares to the public in 2000, on the clear understanding that punters would have been welcome to invest, only if they fully understood the overwhelming probability that they'd never see their money again.

There are patriots out there and, as I say, optimistic mugs such as me who might have put a few quid into it.

It could have made a slight difference - you never know - and given that the new car was only £80 million and 10 months away from launch, it might have saved the show. Well, it would have been worth a shot, but the interests of the Phoenix Four would no doubt have got in the way.

Sometimes, though, it pays to invest in apparent basket cases. I'm kicking myself that I didn't buy into Avis, the car rental group currently enduring problems, when it was at 50p. Now it's up to 72p or so. I missed that particular race.

However, I was lucky enough to put some money into Reuters at the nadir of its fortunes, two years ago, and this has proved a highly rewarding punt. I bought in at an average of 247p and shares now stand at 425p, somewhat off their peaks but still a satisfactory run.

Now, according to some brokers' gossip that I've read in the press, Reuters' trading statement next week will be a more upbeat affair than had been expected, with subscriber numbers ending their long progress downwards, as confidence and business returns to the City. Credit Suisse, First Boston and Morgan Stanley are all bullish on the stock, so something may well be afoot.

Tom Glocer seems to have done a good job in stabilising Reuters' position and attacking the cost base, although that will have been painful to those affected by that sort of euphemism for the sack. But the mess of systems and products that Reuters had lumbered itself with was an equally difficult problem, and here again Glocer has acted. The new Reuters Trader product is reported to have had a successful launch. Bloomberg has made life much more arduous for Reuters in the past few years, but the fact that Reuters has managed to survive as well as it has done is something of an achievement.

Reuters has come a long way since it was owned by a consortium of newspaper publishers. It was floated in 1984 and the huge proceeds from that sale helped to pay for the investment and for the relocation of a number of our Fleet Street (as was) newspaper titles.

I doubt that that sort of windfall will be falling on shareholders again very soon, but I reckon Reuters is a solid hold on the back of its recovery so far.

Also a definite continuing hold is Sportingbet. A little-noticed clause in the Gambling Act, much mauled as it is, makes it explicitly legal for UK firms to accept internet bets from US citizens (while it remains illegal under American law for American firms to do the same). I also see that the World Trade Organisation has told the Americans to stop trying to prevent their citizens placing online wagers with overseas firms. So that means that, in the short run at least, things are going to continue to go Sportingbet's way.

I do worry, though, about what will happen to Sportingbet and its peers if the US liberalises and lets Microsoft into that market. Stay lucky.

s.o'grady@independent.co.uk

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
football
Sport
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
PROMOTED VIDEO
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
News
people
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
News
BBC broadcaster and presenter Evan Davis, who will be taking over from Jeremy Paxman on Newsnight
peopleForget Paxman - what will Evan Davis be like on Newsnight?
Life and Style
fashionCustomer complained about the visibly protruding ribs
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Sport
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
sport
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
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

    Senior Risk Manager - Banking - London - £650

    £600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

    The benefits of being in Recruitment at SThree...

    £18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

    Test Analyst - UAT - Credit Risk

    £280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Day In a Page

    Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

    The BBC’s wolf in sheep’s clothing

    What will Evan Davis be like on Newsnight?
    Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

    Finding the names for America’s shame

    The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
    Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

    Inside a church for Born Again Christians

    As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
    Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

    Olivier Rousteing is revitalising the house of Balmain

    Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
    Cancer, cardiac arrest, HIV and homelessness - and he's only 39

    Incredible survival story of David Tovey

    Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little