Derek Pain: I'm going to let profits run with Whitbread and Booker

The last three months have been quite kind to the No Pain, No Gain portfolio.

My stars have performed well and a few constituents have managed to contribute notable "assists", allowing the profit to move forward to around the £123,000 mark.

Last week's trading update from the Whitbread leisure group was generally well received although the shares, not surprisingly in the then prevailing stock-market mood, failed to hold their best level. At the time of writing – I should explain that a hospital visit forces earlier prices than is usual – the shares are 3,499p. They have been around a 3,570p peak.

Once again the Costa coffee enterprise has provided much of the momentum although the Premier Inn budget hotel chain again made a powerful contribution and even the appetite at its pub-restaurants improved. All told, group sales at the end of the third quarter were running 13 per cent ahead of last year's corresponding figure.

Costa growth continues at a rapid pace. Just after the trading update the coffee side reported it was on track to achieve sales of £2bn by 2018.

Not long ago Costa sales were put at £659m. By 2016 its annual coffee pot should be around £1.3bn.

Booker, the cash-and-carry chain, has been in splendid form. The price has surged to 164p on growing hopes that the Makro takeover is progressing ahead of expectations and vague talk of greater internet involvement.

Of course, it occasionally crosses my mind that I should lock in profits from Booker and Whitbread.

Booker has advanced from a 24.5p buying price and the portfolio descended on Whitbread at 1,105p. If there are any pronounced hiccups I may be tempted to unload them. Some time ago I put sell prices on this profitable duo but my caution now looks ludicrous, unless the stock market should return to banking-crisis levels. But the portfolio is so handsomely in the money I intend to follow the first part of that old stockbroker saying – let profits run; but cut losses.

Mind you, I wish I had followed the sell part of the strategy with shares such as SnackTime, the vending-machine group, where losses are so large they are difficult to tolerate. The only other current loss maker is TEG, an environmental group, where I continue to nurse hopes of better days.

Still, it is often wise to accept losses, at least for a time. Mears, the support-services group that has come to life recently, was at one time well below my buying price. At times Findel, the Express Gifts mail-order group, and brewer Marston's, also created a little concern. As I have often said, investors need patience and must be prepared to accept the rough with the smooth.

There is, I feel, every chance that the stock market will continue to make headway next year. Many forecasters expect it to do so. But unexpected events can devastate shares.

I recall the slow, but dramatic, share slump that occurred in the 1970s. In those days the stock-market measurement was the FT 30 index. It bottomed at 146 points. Leading economist Douglas McWilliams says such a level would be the equivalent to 64 on the 100-strong Footsie index that first appeared in 1984.

The advance since the 1970s oil-inspired slump has been quite outstanding.

Mr McWilliams thinks progress in future years could be slower. And he believes investors may be forced to accept lower returns than in the past 50 years.