No Pain, No Gain: Received wisdom fails to predict a pubs bonanza

The stock market, as befits a long established institution, is awash with well-meaning advice, purporting to offer investment guidance. "Never average down" and "Always adopt a strict stop-loss policy" are two of the most widely quoted. Yet anyone who blissfully ignored those two overworked pieces of investor folklore would have made a killing if they had played in the shares of a company in one of the most unfashionable corners of the City.

Old-style pub chains, where the licensee rents or leases the property, are enjoying an investment boom. Yet the atmosphere is much more sober at the other extreme of the drink retailing market - trendy bars and nightclubs. The shares of Enterprise Inns and Punch Taverns are riding high, as investors ignore huge debts and concentrate on what seems to be an infallible trading formula. But high rents and soaring staff costs, as well as tight margins and tough competition, have devastated the shares of the high-street groups, once the darlings of the stock market. The Government's ill-directed attempts to curtail so-called binge drinking are also creating difficulties for them.

A number of chains, such as Old Monk and Springwood, have gone belly- up. SFI, the Litten Tree group, struggles in the unquoted wilderness, and Yates fell to a cheapskate takeover bid. The shares of other leading players Luminar and JD Wetherspoon are depressed, a long way from their peaks. But in the past few months, the shares of Regent Inns, known for its trendy Walkabout and Jongleurs outlets, have nearly tripled. They are now 87p against only 30p in October.

Timing is everything in the stock market. And any investor indulging in a little Regent action could easily have come a cropper. But from the autumn of 2003, when the shares last topped 100p, there have been splendid opportunities to average down and reap a handsome reward. All it needed was a little courage. I'm afraid I lack such a quality and the Regent romp escaped me. But spare a thought for any investor lumbered with the stop-loss mentality (the idea is to lock in a loss at a predetermined level, usually 20 per cent below the buying price). They were mostly cursing their luck as the shares staged their merry recovery.

It is surprising that in this electronic age, the stock market still clings to time-honoured saws. They are often contradictory. "It's never wrong to take a profit" and "Always leave something for the market" stand oddly against such phrases as "Always let your profits run but cut your losses". I suppose the most absurd of them all is "Sell in May and go away, buy again on St Leger Day". That may have had some substance years ago, when the rich left the country to spend their summers in the south of France. But it has absolutely no relevance in today's climate. If there is a message to be assimilated from the conflicting nature of this time- honoured but surely discredited guidance, it is that flexibility is the essence of sound investment and rigid rules should be ignored.

Regent is one of those companies that enjoyed a staggeringly successful early stock market life. It then fell from grace - not once but twice. In the distant past, shares nudged 400p before an accountancy hiccup sent them stumbling and led to new management.

For some time, it looked as though Regent had got its act together and the shares topped 200p in 2001, with profits coming in at pounds 14.6m. But then trading deteriorated and a chain that had clearly over-expanded felt the pinch. A rights issue had little impact and profits slipped away with a pounds 6.6m loss last year. Banking agreements were broken and the final dividend axed. The old management departed and new faces arrived. Regent's shares hit an all-time low.

But the newcomers, Bob Ivell and John Leslie, previously with Scottish & Newcastle, seem to have turned around Regent's fortunes. Trading has improved and the stock market is hoping for further cheer when the interim figures are rolled out next week.

Although the Ivell/Leslie contribution has been significant, it has, I suspect, had only a marginal impact on the shares. Much of their recent strength stems from takeover hopes. Financier Robert Tchenguiz had built a 13 per cent stake, and there are stories that he plans a bid or wants to engineer a deal, perhaps merging Regent with his unquoted pub empire. Regent is an intriguing recovery play - almost suitable for the No Pain, No Gain portfolio. But without corporate action the shares look to be ahead of events - unless next week's results prove to be outstanding.

newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10

Kirstie Allsopp has waded into the female fertility debate again

footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
peopleStella McCartney apologises over controversial Instagram picture
Gillian Anderson was paid less than her male co-star David Duchovny for three years while she was in the The X-Files until she protested and was given the same salary

Gillian Anderson lays into gender disparity in Hollywood

Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Arts and Entertainment
Swiss guards stand in the Sistine Chapel, which is to be lit, and protected, by 7,000 LEDs

The Sistine Chapel is set to be illuminated with thousands of LEDs

Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsA Welsh town has changed its name - and a prize if you can notice how
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
Ronaldinho signs the t-shirt of a pitch invader
footballProof they are getting bolder
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.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

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...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?