We are not nerds and don't need your pity

Terry Bond's Diary of a Private Investor

It's time to dispel a few myths. The private investor - or, at least, this private investor - is not a nerd who spends eight hours a day hunched in front of a computer screen, gnawing his knuckles and watching the flickerings of changing prices. Neither is he or she constantly on the internet or the phone wheeling and dealing, buying and selling shares in order to make a fast buck.

It's time to dispel a few myths. The private investor - or, at least, this private investor - is not a nerd who spends eight hours a day hunched in front of a computer screen, gnawing his knuckles and watching the flickerings of changing prices. Neither is he or she constantly on the internet or the phone wheeling and dealing, buying and selling shares in order to make a fast buck.

I feel it my duty to correct these mistaken impressions because last week an old friend expressed dismay that my application for a new passport described my occupation as private investor.

"What? One of those boring old farts I always seem to get landed with at parties?" he exclaimed. "Well, I pity you. Stuck in an office all day, frightened to leave the computer in case your shares take a tumble. Surrounded by accounts and statistics. From what I remember you can't even add up, never mind understand an annual report."

Ignoring the slight on my mathematical abilities I tried to explain that his perception of a private investor was far from the truth. I pointed out that it can be the most interesting, stimulating, exciting and rewarding occupation imaginable. (I omitted to mention such adjectives as frustrating, annoying and depressing).

But, it is difficult to explain to the uninitiated what makes the lifestyle so appealing because from day to day, week to week, its content is so varied. So here, for my friend's edification, is this week's true diary of a private investor. I have omitted the repetitious parts - taking the dogs for a walk, routine office work, writing, talking with contacts and so on.

SUNDAY: Early morning drive to Bristol for an investment club seminar. Around 350 club members attend, they've each paid £19.50 (snack lunch included) to listen to a series of speakers talking about subjects including the internet, overseas markets, options, strategies and how to identify growth stocks.

It's rather daunting giving a talk at these events because I have a recurrent nightmare that someone will start a question with "as a chartered accountant myself", and then have the most detailed query that I haven't got a hope in hell of answering. Fortunately the chartered accountant did not turn up.

MONDAY: On the dog walk I ponder the future of two stocks I own that are showing a substantial loss. Westside Acquisitions and the oddly-named Ninth Floor are shares I have held well beyond their sell-by date. Why? Goodness knows. They come under the heading of "hope stocks" and obviously my hopes were too high. They will have to go.

Back at the ranch I update my portfolio prices via the Internet. This is a daily task and I use two programs, Finsight (which used to be called Infotrade) and Sharescope. I use Hemscott for real time prices but, lest my friend is misled into thinking I can't tear myself away from the computer screen, the check takes no more than five minutes and I probably do it on average three times a day. Even when the market is extremely volatile I do not watch movements as I don't want to be tempted into a knee-jerk reaction.

Over the weekend two investment newsletters arrived. This afternoon I read them and note their recommendations. I would never rely solely on a newsletter tip but some of them do research their recommendations in depth and provide me with a firm basis for my own enquiries. There's no denying too that they spark off good ideas.

TUESDAY: I have a number of telephone chats with investor friends including an acquaintance in Chester. She bemoans the fact that while her research to identify undervalued growth stocks has been diligent, the shares do not seem to be obeying the rules. In particular she mentions a favourite of hers, Northern Leisure. She has read that this company is in takeover talks with Luminar and my friend can't understand why today's price does not reflect the value of the rumoured offer. I make a mental note to look at the share this week.

Train to London. Luncheon at Brooks Club with my friend Jim Slater. We meet quite regularly to discuss everything from the state of the stockmarket to whether the Chateau Mouton Baron Philippe '71 Pauillac is still drinking well. Jim has earned a legendary reputation as an investment guru and his ability to forecast market movements is uncanny.

Today I find him apparently cautious but in reality decisive. He has an unusually high proportion of his investment funds in cash because two months ago, shortly before the market correction, he sold a substantial number of his positions.

"I could see valuations, particularly in technology stocks, were ridiculously high," he explained to me. "It simply could not continue. Remember, everything eventually regresses to the norm." So, emulating the move of his great friend, the late Sir James Goldsmith, just before the Crash of '87, Jim Slater cashed in a lot of his shares.

Ominously, he is not rushing back into the market other than to buy a handful of traditional "old economy" shares which he believes are attractive enough to warrant ignoring the vagaries of the present market. His shopping list includes Abbey National, Alliance and Leicester, Boots, Whitbread and Northern Rock.

WEDNESDAY: What a stupid boy! After my chat with the Chester lady yesterday why didn't I look at the Northern Leisure situation straight away? This morning I check out the details and it immediately captures the imagination. We are as far away as you can get from high tech and dot.com here, this is the world of late night discotheques, fast-food eating places and themed bars with names like Jumpin' Jaks.

Northern Leisure has combined fast expansion with increasing profits and dividends and the talk is of a friendly merger with Luminar which runs, amongst other things, the Chicago Rock Cafés. The brokers love both companies and the marriage would seem to be made in heaven. If the details published in the Independent last week are correct - one Luminar share plus a 4.5p special dividend for every four Northern Leisure shares - the deal would make today's Northern Leisure price of 159p look very low indeed.

I turn to the news pages on the internet for some more information. Surprise, surprise! The Northern Leisure directors are recommending the deal, which makes the shares worth around 197p. I've missed the boat. But never mind, my lady friend will be happy.

THURSDAY: London twice in a week! This time it is dinner at the recently re-opened Belvedere restaurant in Holland Park as a guest of my old school chum Peter Reynolds. As well as being chief executive of Wilshaw plc, Peter is also a serious international investor. Like most of us he is smarting from the downturn, particularly in his American holdings.

Peter regards the Nasdaq market as a barometer of the future and says he will be pessimistic if it drops below 3200. "There has been a lot of margin trading in the United States in recent months and if the markets drop much further there will be margin calls," he says. "Some private investors will find themselves in serious trouble because they will not be able to honour their obligations. This will have a detrimental knock-on effect, not only in the US but around the world."

Peter Reynolds believes investors should hold fire at the moment. "Let things settle down," is his advice. "There's no rush. Investing is a long term business."

FRIDAY: Portfolio day. Take the phone off the hook and get down to the serious business of examining my portfolio. PEPs, ISAs, Aussie and American stocks, loved ones, forgotten ones, nothing escapes scrutiny. My routine is to look at each share and check the prices and charts to see whether there have been any significant changes. If so I want to know why. I check the news archives to see whether I have missed anything during the week.

This week I decide to hold tight.

terry.bond@hemscott.net

PROMOTED VIDEO
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Extras
indybest
Arts and Entertainment
Chocolat author Joanne Harris has spoken about the financial struggles most authors face
books
Arts and Entertainment
Characters in the new series are based on real people, say its creators, unlike Arya and Clegane the Dog in ‘Game of Thrones’
tv'The Last Kingdom' is based on historical events
News
people
Arts and Entertainment
filmSir Ian McKellen will play retired detective in new film
Life and Style
tech
Arts and Entertainment
'Molecular Man +1+1+1' by Jonathan Borofsky at Yorkshire Sculpture park
tv
News
Glamour magazine hosts a yoga class with Yogalosophy author Mandy Ingber on June 10, 2013 in New York City.
newsFather Padraig O'Baoill said the exercise was 'unsavoury' in a weekly parish newsletter
Extras
indybest
News
people'She is unstoppable', says Jean Paul Gaultier at Paris show
Sport
Alexis Sanchez and apparently his barber Carlos Moles in Barcelona today
football
Finacial products from our partners
Property search
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

    Financial Accountant-IFRS-Gloucester-£300/day

    £250 - £295 per day + competitive: Orgtel: Financial Accountant - IFRS - Glouc...

    SharePoint/C# Developer - Aberdeen - Circa £40K + benefits

    £30000 - £40000 per annum + excellent benefits: Deerfoot IT Resources Limited:...

    The benefits of being in Recruitment at SThree...

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

    HR Advisor - 6 months FTC Wimbledon, SW London

    £35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

    Day In a Page

    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
    Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

    Hollywood targets Asian audiences

    The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
    Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

    Grindr founder Joel Simkhai: 'I've found love on my dating app'

    Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
    Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

    Is it time to ditch autocorrect?

    Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
    10 best girls' summer dresses

    Frock chick: 10 best girls' summer dresses

    Get them ready for the holidays with these cool and pretty options 
    Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

    Westminster’s dark secret

    Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
    A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

    A History of the First World War in 100 Moments

    Dulce et decorum est: a life cut short for a poet whose work achieved immortality
    Google tells popular music website to censor album cover art in 'sexually explicit content' ban

    Naked censorship?

    The strange case of Google, the music website and the nudity take-down requests
    Howzat! 8 best cricket bats

    Howzat! 8 best cricket bats

    As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
    Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

    David Luiz falls from leader figure to symbol of national humiliation

    Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil