Money: Star names have to go

SHARE CLUB

There are now around 4,000 share clubs in Britain, meeting regularly to pool cash and invest in shares. For the past year we've followed the fortunes of the Reservoir Dogs, a group of London friends.

Our first meeting after the AGM proved a rather more cautious affair following news of the 41 per cent annual increase in the value of our shares. We decided it was time to do some pruning of the portfolio.

Our first priority is to balance up our portfolio by not having it too weighted in favour of one share - so we decided to sell half our stake in ARM, a stellar performer from the hi-tech sector. We also considered selling some of our shareholding in Oxford Glycosciences but, as the shares are only just above the price at which they floated on the stock market two years ago, we reckon there's a lot more value left in them yet.

Next up for consideration was Carlton Communications. We worry that Carlton's involvement in ONdigital is not going well. Carlton is gambling that its stake in ONdigital will be the group's salvation in the internet-driven multimedia age.

Carlton makes stacks of money from duplicating cassettes and processing cinema film, both of which are under threat from the digital warriors. Carlton has also had big problems in its TV companies, even though they're very successful. Sadly, ONdigital looks to have more than a few troubles. We decided to sell.

But media is important so we decided to buy another television company, Border TV. Border isn't cheap, but it is interesting. Sooner or later ITV will be composed of just two big TV companies, and neither of them will be Border.

Although its TV arm will be taken over, Border also has a huge investment in radio. We like radio, which is going to be transformed by the advent of digital technology. It will make someone huge amounts of money.

We have also decided, with much regret, to sell our shares in the Rolls- Royce aerospace group. We only bought these a few months ago but, despite a pretty steady stream of excellent news, the share price has slowly deflated by as much as 10 per cent. We really do think Rolls-Royce is a great company but you have to ask some tough questions: if the Rolls-Royce share price falls at the height of a five-year-long bull market, when will it pick up? Deep down, I suspect the City just doesn't like companies that invest huge sums in R&D and go head-to-head with giant American competitors. We may think it's callous and short termist but it's City sentiment that determines share prices.

To our two other big transactions. Neither Dialog, the information company, nor TransTec, the engineer, has done us proud. What to do with them? Choice one is to dump them - but when the share price is so low we won't get much back. And anyway, we still (sort of) believe in both companies.

Choice two is to leave them as they are and hope they'll pick up. Choice three is to take a gamble. Double your stake and double your chances of big gains. We've decided to double the admittedly reduced value of our holdings in both companies.

The logic is simple though risky. If we're right, these companies' share prices will swing back up sharply when a) Dialog finally deals with its debt problems and b) TransTec finally produces some interim results which show that it still can make decent profits in a recession.

The Far East has always interested us, and we've wanted ways of buying into the recovery story there. The one country that seems to be going great guns in reorganising itself fast and shedding idle businesses is South Korea. There aren't many ways of getting exposure to the market other than through unit trusts. Save & Prosper's fund is one of three focused on Korea and has the best performance.

All of which leaves us in an interesting situation: we have lots of cash. So what should we do with it?

A recent monthly broker's summary from Killik & Co said it all for us. Killik tends to stand on the rooftops and shout very loudly about growth- oriented shares like ARM or Psion, but even it has been counselling extreme caution. It is better, the thinking goes, to have a large pile of your money in cash ready to pick up bargains. The first key barrier Killik identifies is the 6,000 FT-SE 100 mark. When that's broken, it expects a bottoming out at around 5,700, triggering a whole load of buying opportunities.

And there are plenty of shares on our watch list. Stat-Plus, a steady, reliable stationery company supplying the legal world, is interesting, as is an investment trust concerned with hi-tech venture capital start- ups, Prelude. But there's nothing to lose at the moment from keeping your powder dry and waiting for bargains to present themselves.

n We are looking for other investors, in share clubs or not, to join a campaign to get directors of failing or fallen companies to answer for misleading private investors. Contact us at thedogs@theupside.com

We have also established our own website, as well as a centre for other share clubs to swap info and tips. Visit the Dogs section of www.theupside.com

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Travel
travelWhy Japan's love hotels are thriving through an economic downturn
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Sport
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
News
i100
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

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.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week