The Share Challenge: Students still in lead as they quiz boss of winning share

It was the potential culture clash that turned into a mutual admiration society.

It was the potential culture clash that turned into a mutual admiration society.

The boys from Moat Community College, Leicester, leading contenders in our three- horse share race, went to the City of London to quiz Brit Insurance, the Lloyd's of London insurer that is one of the team's top-performing shares.

Neil Eckert, Brit's chief executive, won them over with a slide-show presentation to make the case that there is good long-term value in the business.

Brit has so far defied the gloom that has settled over most of the insurance sector lately, due in large part to a recent decision to start paying dividends. At the current price of 79p and an estimated 2004 dividend of 7p, Brit shares are trading at a prospective yield of nearly nine per cent.

Claire Jackson, the students' business studies teacher, said it was an awe-inspiring visit for the 15-year-old inner-city schoolboys, who had had little prior experience of the City environment. "The trip gave them an insight into a world which they would not normally meet," she says. "They were amazed that the chief executive gave up time to talk to them." After touring the Lloyd's building, the boys, all Muslims, made history by holding their midday prayers there.

The three competitors in our Share Challenge competition are leaving no stock-picking strategy unturned in their relentless pursuit of profitable portfolios. The school team are all about short-term buying and selling, while the Lexar investment club turns to analysis and our fund manager, Sean O'Flanagan, sticks by his long-term growth plan. The trouble is that none of them has yet reversed losses or even matched the market.

The boys continue to command a dominant lead over the other competitors, down just four per cent, versus the fund manager's humbling 18 per cent loss and the investment club's troubling 23 per cent drop.

Most of the teenagers' outperformance is attributed to a steady diet of momentum-based trading: the team has little loyalty for most of their shares, often selling out at the first sign of weakness and using the proceeds to hop into other hot-ticket stocks. The method worked earlier in the competition, when the boys caught the tail end of rallies in shares like Safeway and HMV Media.

Unfortunately, though, the system has backfired lately. Investors, spooked by rate hikes and oil price shocks, are taking profits and pulling out of the expensive and hyped-up shares that the boys like to chase. Their losses in companies such as Avis Europe and Yell Group are testament to the risk of relying on past performance as a predicter of short-term growth, particularly in shares that were already looking overvalued to begin with.

The last-placed Lexar club trails the other teams with a loss of 23 per cent. Despite a massive spring-clean of their portfolio, where they ditched a bunch of perennial losers in place of a new crop of cheap and cheerful names, the team still has a lot of ground to make up for, especially after taking a 54 per cent loss in Bookham Technologies last month, when they sold at 76p. So it was a surprise to see the club buying back in at 60p last week. They think Bookham can't possibly drop any lower - but that's also what they said at 140p, 120p, 90p and the rest of the way down.

Lexar are committed followers of the Elliot Wave Theory, a technical system of analysis based on historic stock price movements, or "waves". There is money to be made if Bookham has in fact reached its low point. But the share is currently trading at a loss-making 57.5p.

After briefly falling into last place last month when his portfolio had sunk 25 per cent, Mr O'Flanagan has made a recovery. His current loss of only 18 per cent is still a far cry from the first-placed students. But he has remained unruffled during the market's recent mayhem, continually defending loss-making shares such as Acal, Harvey Nash and Morse Holdings as solid investments in the long term. His portfolio has shown the most improvement since our May review - up seven per cent. Not bad for a month's investing, but it is still too early to tell if Mr O'Flanagan's good news will continue.

* For up-to-the-minute details on the Share Challenge, or to find out more about starting your own virtual portfolio competition, log on to www.bullbearings.co.uk. The Share Challenge is being sponsored by Abbey Stockbrokers, who are launching a new discount sharedealing service on 28 June. Call 0845 600 1623 for details.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
A teenager boy wakes up.
life
Life and Style
tech
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
food + drink
PROMOTED VIDEO
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Arts and Entertainment
A still from Duncan Campbell's hour-long film 'It for Others'
Turner Prize 2014
News
i100
Arts and Entertainment
Tony Hadley in a scene from ‘Soul Boys Of The Western World’
musicSpandau Ballet are back together - on stage and screen
Arts and Entertainment
From left to right: Ed Stoppard as Brian Epstein, Sheridan Smith as Cilla Black and Elliott Cowan as George Martin in 'Cilla'
tvCilla review: A poignant ending to mini-series
News
i100
Life and Style
Bearing up: Sebastian Flyte with his teddy Aloysius in Brideshead Revisited
lifePhilippa Perry explains why a third of students take a bear to uni
Arts and Entertainment
Sir Alan Sugar appearing in a shot from Apprentice which was used in a Cassette Boy mashup
artsA judge will rule if pieces are funny enough to be classed as parodies
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

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

    £300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

    Day In a Page

    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?
    Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

    Homegrown ballerina is on the rise

    Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
    Education, eduction, education? Our growing fascination with what really goes on in school

    Education, education, education

    TV documentaries filmed in classrooms are now a genre in their own right
    It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

    It’s perfectly reasonable to negotiate with villains like Isis

    So why don’t we do it and save some lives?
    This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

    Is a sub-2-hour race now within sight?

    Dennis Kimetto breaks marathon record
    We shall not be moved, say Stratford's single parents fighting eviction

    Inside the E15 'occupation'

    We shall not be moved, say Stratford single parents
    Air strikes alone will fail to stop Isis

    Air strikes alone will fail to stop Isis

    Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
    Witches: A history of misogyny

    Witches: A history of misogyny

    The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
    Shona Rhimes interview: Meet the most powerful woman in US television

    Meet the most powerful woman in US television

    Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
    'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

    Endangered communities photographed 'like Kate Moss'

    Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style