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 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

A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Richard Dawkins dedicated his book 'The Greatest Show on Earth' to Josh Timonen
newsThat's Richard Dawkins on babies with Down Syndrome
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
Dinosaurs Unleashed at the Eden Project
Arts and Entertainment
Life and Style
This month marks the 20th anniversary of the first online sale
techDespite a host of other online auction sites and fierce competition from Amazon, eBay is still the most popular e-commerce site in the UK
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

    £45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

    Application Support Engineer (C++, .NET, VB, Perl, Bash, SQL)

    Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...

    AIFMD Business Analyst / Consultant - Investment Management

    £450 - £600 per day: Harrington Starr: AIFMD Business Analyst / Consultant - I...

    Business Analyst Solvency II SME (Pillar 1, 2 & 3) Insurance

    £450 - £600 per day: Harrington Starr: Business Analyst Solvency II SME (Pilla...

    Day In a Page

    Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

    We know all too much about the cruelty of Isis – but all too little about who they are

    Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
    Neanderthals lived alongside humans for centuries, latest study shows

    Final resting place of our Neanderthal neighbours revealed

    Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
    Scottish independence: The new Scots who hold fate of the UK in their hands

    The new Scots who hold fate of the UK in their hands

    Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
    Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

    Blight club: Britain's ugliest buildings

    Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
    eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

    eBay's enduring appeal

    The online auction site is still the UK's most popular e-commerce site
    Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

    'Lack of ethnic minority and black faces on TV is weird'

    Culture Minister Ed Vaizey calls for immediate action to address the problem
    Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

    Magic circles: Artist Olafur Eliasson

    Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
    Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

    Josephine Dickinson: 'How I discovered a new world of sound'

    After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
    Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

    Greggs gives lesson in crisis management

    After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
    Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

    Matthew McConaughey sings the praises of bumbags

    Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
    7 best quadcopters and drones

    Flying fun: 7 best quadcopters and drones

    From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
    Joey Barton: ‘I’ve been guilty of getting a bit irate’

    Joey Barton: ‘I’ve been guilty of getting a bit irate’

    The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
    Andy Murray: I quit while I’m ahead too often

    Andy Murray: I quit while I’m ahead too often

    British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home