Shares: Playing well in second half: The past few months have seen more selections that have made waves in a pedestrian market

THE POPULAR impression that a bull market is raging is a little misleading as far as the UK is concerned.

Measured by the performance of the FT-A All-share index, shares on average are up by 11 per cent since the beginning of the year and by 7.5 per cent since the beginning of June, which is pedestrian compared to many other world stock markets. As with the first half of 1993, however, the second half - see below - has been a good period for the vast majority of my selections.

My worst call in 1993 has been for a continuing bull run in Betterware, when the shares were 240p. The shares are struggling at around 158p with a blitzkrieg of profit-taking unleashed by news that the headlong UK growth is slowing down and pounds 2m lopped off current-year projections to pounds 16m. The behaviour could reflect the arrival in the UK of 'momentum investing'. This is a popular technique in the United States, whereby investors pile into shares in fast-growing companies but head for the exit at the first signs of waning momentum.

Also quickly proved wrong by subsequent events was a recommendation for healthcare shares, including Wellcome at 786p, just ahead of figures that pulled the rug from under the price. I remain bullish on many shares in the sector including the three that I napped: Huntleigh Technology, which has just announced an acquisition to almost double sales; Astra, the Swedish pharmaceuticals giant; and Smiths Industries. The moral in these and all such cases is not to be loyal to an investment that does not develop as expected. The losses taken are soon forgotten, and there will always be other fish to fry.

I began the second half of the year with a series of regional pieces on companies in Yorkshire, the Midlands and Scotland, respectively.

Yorkshire has produced two great performers in Parkland Textiles, up from 130p to 203p, and Headway, up from 22p to 30p. Both companies are being revitalised by new management striving to improve profit margins in businesses with plenty of turnover. Parkland has also ended the anomaly of 'A' shares. There should be gains to come from both.

Featured in the Midlands piece alongside Central TV, up from 1,925p to 2,168p on excitement about merger prospects in the industry, was advice to buy Birmingham-based share dealer ShareLink in opening dealings ahead of the flotation. The shares opened at 250p and are currently 380p, where they still look attractive having been as high as 434p.

In the next two columns, I hit a vintage streak. First came recommendations for the four Hong Kong utilities, China Light & Power, HK Electric, HK & China Gas, and HK Telecom with a side recommendation for HK Telecom's majority shareholder, Cable & Wireless, at 337.5p against 470p currently.

Helped by pronouncements from US guru Barton Biggs that in a matter of weeks unleashed, then partially reined in, forecasts of a tremendous Chinese bull market, these four stocks are showing average gains of about 50 per cent - even after a reaction in the Hong Kong market. They may be overbought short-term, but they still look among the world's more exciting long-term investments.

The following week, I featured shares in five companies that had recently reported doubled profits. The argument was that it takes time for investors to react to favourable 'shocks' like this, creating a window of opportunity for investors.

The five shares were Smith New Court, which was at 271p against the current 373p (after peaking at 408), Perpetual (which reported after the piece was written), then at 520p against 780p now, Sterling Publishing, up from 153p to 160p, Dawsongroup, the truck rental firm, up from 223p to 353p, and Control Techniques, the global electronic drive specialist, barely changed at around 330p.

Leisure and furniture were the themes over the next two weeks. One leisure selection that has boiled over is tennis clubs group David Lloyd Leisure, which is 190p against a recommended price of 194p, having been as high as 231p. Recent new issues such as David Lloyd are subject to periodic bouts of profit-taking, but holders should monitor the performance carefully. The other three leisure selections, Vardon, of London Dungeon fame, Wetherspoon, which is growing fast by pub conversions, and Pelican, where Robert Earl - the Planet Hollywood restaurateur - has just become an executive director, are showing gains of between 15 per cent and 20 per cent. All look full of running.

Star of my furniture pair is Courts Furnishers, which has moved on inexorably from 664p to 824p, helped by its booming overseas businesses in locations such as the Caribbean, Malaysia and Singapore. Essex Furniture shares were also steaming along from 140p to a recent peak of 166p but have come back to 145p because of nervousness triggered by directors' share sales. These are a little surprising, given the group's rate of expansion at what should be an early stage in the spending cycle.

The good performance has continued since then, with more recent promising selections including Hewden-Stuart and Ashtead, the plant-hire specialists; a string of financial shares, where I believe that a sustained boom is under way; leisure shares, where a low-key recommendation for Ladbroke looks premature; and high- yielding shares and convertibles, which both look well- judged as interest rates continue to come down.

At this stage, there are no other shares that I believe should be sold, but readers can make their own decisions on this. My key advice is this:

Don't be in too much of a rush to take profits;

Don't be too patient with loss-makers, and

If your portfolio is not showing healthy profits after what has been a reasonable year in the stock market, think seriously about selling the lot, starting again and not being so loyal in future to dud performers.

(Photograph omitted)