The Share Challenge: Students still in lead as they quiz boss of winning share
Saturday 19 June 2004
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
The Independent's live blog of today's Premier League action
Mark Dampier: An infrastructure fund that builds returns by taking different roads
Simon Read: Timeshare owners accuse Macdonald Resorts of land grab
Five Questions: Changes to car tax discs
How to save money: UK is crashing down the European league table for putting money away
Bargain Hunter: Win a new iPhone 6
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Matthew Miller: American sentenced to hard labour in North Korea 'wanted to be Snowden II'
- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
Day In a Page
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize