The market has been having a hard time of it recently. In 2022 the FTSE250 index of medium-sized companies fell 19%, followed by no return in the first quarter of 2023. Fortunately, I guessed there might be tough times, and in February 2022 moved to 40% of my portfolio to cash, ready to deploy when Mr Market’s fear became really manifest.
Having a significant amount of cash helped the portfolio maintain value, but what gave it a real boost was that the few shares I held onto generally moved up, some by a significant margin. Smiths News’ shares rose by 30% in the fifteen months to the end of March – a nice rise. And that is before accounting for its significant dividend: 2.75p paid 9th Feb 2023, following 1.15p Feb 2022 and 1.4p in July. Total dividends in the last fifteen months amount to 14% of the January 2022 share price of 37.6p. bp rose from 400p on 26th January (buying date) to 532p at the end March 2023, a 33% return before accounting for a very welcome dividend of 6%. Coping with two major economic crisis, first Covid then inflation/recession Back in early 2020 I followed a strict caution-first value investing approach at the beginning of the Covid-19 crisis and, similarly to Feb 2022, went to 40% cash. This pile of money was very useful later in 2020 and 2021. The shares bought in those years have generally risen nicely – see first table. A list of all the shares I bought in the Covid-19 crisis and subsequently (up to end 2022) CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Smiths News (Connect Group)18.3.20 £0.151 5.8p £0.488 262% Character5.6.20 £2.52 37p £3.80 65% McCarthy & Stone1.10.20 £0.718 0 Sold 7 Dec 2020 £1.185 65% Capital & Counties Properties6.11.20 £1.032 0 Sold 19 Aug 2021 £1.743 69% Dewhurst “A”11.11.20 £5.94 38p £6.40 14% MS International16.12.20 £1.292 10p Sold 20.9.21 – 7.6.22. £2.488 100% Wynnstay29.12.20 £3.405 15p Sold 24.3.21 – 3.2.22 £5.58 68% Lloyds Bank12.3.21 £0.4169 3.37p £0.4902 26% J Smart18.3.21 & 24.3.21 £1.253 3.22p Sold 7 Feb 2022 £1.575 28% Fletcher KingFeb 20 – May 21 £0.3265 0.5p Sold Sept 21 – Feb 22 £0.40 24% Orchard Funding7.6.21 £0.568 6p £0.415 -16% Caffyns22.6.21 £4.65 30p £5.25 19% Highcroft22.7.21 £8.75 78p £9.10 13% Town Centre Sec10.8.21 £1.426 1.75p Sold 2 Feb 2022 £1.581 12% bp26.1.22 £4.006 24.1744p £5.32 39% Orchard Funding7.12.22 £0.48 2p £0.415 -9% Tandem2.12.22 £2.8221 0 £2.55 -10% AVERAGE 45%All the investments I made through my personal accounts over the nine years or so of writing on ADVFN (after I quit my university chair to concentrate on investing), are shown in the tables below. On ADVFN you can still read the rationales I advanced at the time of buying. More recently, I have transferred shares and cash to my account within the Managed Portfolio Service at Henry Spain Investments. With that, I decide which shares are held. My clients each have their own MPS accounts at Henry Spain and I select the same shares for them. My intention is to move the bulk of my investment money to my MPS so that I eat my own cooking alongside my clients. This might take a few months, as I’m waiting to sell some and then transfer the cash – but need to hold fire until they are ripe for selling (some will be transferred in specie, but I can’t transfer them all as it would unbalance the MPS accounts, e.g. too much Smiths News). I’m sorry, but I cannot divulge the shares I’ve selected for the MPS, because to do so would be unfair on my clients and might influence the prices at which I can buy in the future. Longer run performance When, in the summer of 2013, I quit being a professor, teaching at Schroders and book writing so that I could concentrate on investment the FTSE 100 was around 6,600. It is now 7,742 – a slow rise. In addition, there have been dividends of around 3% per year. The FTSE 250 index has moved from around 15,000 to 18,797. The numbers in the tables below show that I have significantly outperformed, which is quite a relief given the salary and security sacrifice I made all those years ago. The tables display the results (so far) of all the purchases I’ve been writing about in my newsletters. Because the comments I made at the time explaining the rationale for each investment are available for you to read in older newsletters there is nowhere for me to hide from my appraisals I made three, four or seven years ago – all the errors of omission and commission are there in broad daylight. I present the returns after taking the hit on broker costs, stamp duty and bid/offer spread. (Criteria for my portfolios after briefly described after the performance tables.) The 2013 Net Current Asset Value, NCAV, portfolio CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 French Con.25.7.13 £0.3047 zero Sold July 2015 £0.4378 44% Caledonian T25.7.13 £0.70 zero Sold April 2020 £1.391 99% Fletcher King6.8.13 £0.30 14.25p Sold June 2016 46p 101% Northamber22.8.13 £0.287 1.6p Sold Oct 2016 £0.303 11% Titon5.9.13 £0.379 6.5p Sold May 2016 £1.06 197% Mallett12.11.13 £0.7682 12.7p Sold Nov 2014 £0.60 -5% AVERAGE 75% The 2014 NCAV portfolio CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Holders Tech10.10.14 & 3.11.14 £0.47 1p Sold March 2017 £0.33 -28% Airea4.11.14 £0.1195 0.9p Sold Sept 2016 £0.309 166% Northamber17.11.14 £0.4265 0.7p Sold Oct 2016 £0.303 -27% Caledonian T30.12.14 £1.39 zero Sold April 2020 £1.391 0 AVERAGE 28%The 2015 NCAV portfolio CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 PV Crystalox15.1.15 £0.122 zero Sold Dec 2016 £0.237 94% Arden Partners1.9.15 £0.422 1p Sold May 2018 £0.364 -11% Northamber4.9.15 £0.443 0.4p Sold Dec 2016 £0.303 -31% AVERAGE 17%The Buffett-style portfolio This type of share is rarer than the others, and so I combine all years. CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Dewhurst9.4.14 £3.18 70.5p Sold Feb 2020 £7.217 149% MS International9.10.19 £1.723 13.50p Sold 20.9.21 – 7.6.22. £2.488 52% Character20.1.20 & 5.6.20 £2.811 45p £3.80 51% Dewhurst11.11.20 £5.94 38p £6.40 14% MS International16.12.20 £1.292 10p Sold 20.9.21 – 7.9.22. £2.488 100% AVERAGE 73%(I bought some more of Dewhurst in June 2014 at £3.11, December 2014 at £3.75, November 2017 at £5.46, February 2019 at £5.54 and April 2019 at £5.64. These were sold Feb 2020). Modified price earnings ratio portfolio 2015/16 CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Haynes11.2.15 £1.159 33.5p Sold 2.10.19 £2.9175 181% AGA11.3.15 £1.002 zero Taken over June 2015 £1.456 45% Hogg Robinson10.4.15 £0.4709 2.37p Sold June 2016 £0.656 44% MS International3.7.15 £1.86 46p Sold 20.9.21 – 7.6.22. £2.488 58% BHP Billiton24.9.15 £10.43 127p Sold May 2018 £16.90 74% TClarke5.11.15 £0.7916 13.61p Sold Feb 2020 £1.1215 59% Premier Farnell8.4.16 £1.222 3.6p Taken over 20.6.16 £1.632 36% AVERAGE 71%The AGA holding was doubled 30 April 2015 at a price of £0.9466. Modified price earnings ratio portfolio 2017 CompanyPurchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Braemar28.6.17 £2.848 20p Sold June 2018 £2.639 0% Caffyns10.8.17 £5.012 52.5p Sold July 2020 £2.389 -42% Connect/Smiths News27.9.17 £1.046 16.1p £0.488 -38% MS International14.11.17 £1.84 30p Sold 20.9.21 – 7.6. 22 £2.488 52% AVERAGE -7%The 2017/18/19 NCAV portfolio Purchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Caledonian Trust7.11.17 £1.23 zero Sold April 2020 £1.391 13% J Smart30.1.19 £1.13 4.14p Sold Mar/Apr 2020 £1.101 1% Northamber6.12.19 £0.504 0.3p Sold Mar 2020 £0.5717 14% AVERAGE 9%More Caledonian Trust shares bought in February 2019 at £2.29. More J Smart bought 30.4.19 at £1.16 The 2018/2019 modified price-earnings ratio portfolio Purchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Connect/Smiths News14.6.18 £0.285 9.40p £0.488 104% N Brown17.8.18 £1.42 9.93p Sold Sept 2021 £0.557 -54% Spaceandpeople31.10.18 £0.224 0.5p Sold Dec 2020 £0.128 -43% Tandem2.4.19 £1.59 9.49p Sold Aug 2020 £3.707 139% MS International6.6.19 £2.22 20p Sold 20.9.21 – 7.6.22. £2.488 21% Character25.10.19 £3.506 50p £3.80 23% AVERAGE 32%More Connect Group shares bought in February 2019 at 40.86p, March 2019 at 38.29p and May 2019 at 39p. More N Brown bought May 2019 at £1.30. The 2020/21/22 modified price-earnings ratio portfolio Purchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Wynnstay7.1.20 & 29.12.20 £3.33 29p Sold 24.3.21 – 3.2.22 £5.58 76% Daejan5.2.20 £52.90 zero Sold 21 Feb 2020 £79.41 50% Connect/Smiths News18.3.20 £0.151 5.8p £0.488 262% Lloyds Bank12.3.21 £0.4169 3.37p £0.4902 26% bp26.1.22 £4.006 24.1744p £5.32 39% Tandem2.12.22 £2.8221 0 £2.55 -10% AVERAGE 74%The 2020/21 NCAV portfolio Purchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 McCarthy & Stone1.10.20 £0.718 0 Sold Dec 2020 118.5p 65% Capital & Counties Properties6.11.20 £1.032 0 Sold 19 Aug 2021 £1.743 69% J Smart18.3.21 & 24.3.21 £1.253 3.22p Sold 7 Feb 2022 £1.575 28% Fletcher KingFeb20 – May21 £0.3265 0.5p Sold Sept21 – Feb22 £0.40 24% Orchard Funding7.6.21 £0.568 6p £0.415 -16% Caffyns22.6.21 £4.65 30p £5.25 19% Highcroft22.7.21 £8.75 78p £9.10 13% Town Centre Securities10.8.21 £1.426 1.75p Sold Feb22 £1.581 12% AVERAGE 27%Bought more Orchard Funding 7.12.22 at 48p The return reversal portfolio Purchase date Purchase price Divs to 31 Mar 2023 Price 31 Mar 2023 Return to 31 Mar 2023 Havelock Europa20.5.15 £0.14609 zero Sold Dec 2016 £0.0915 -37% AVERAGE -37%Brief description of criteria for the portfolios Shares are allocated to portfolios designed around ideas flowing from research conducted when my PhD students and I asked the question “what works in investment?” These investigations were often inspired by the ideas of great investors such as Benjamin Graham. More detail on these ideas is presented in earlier posts (if you put key words into the search box those Newsletters will appear). Net current asset value, NCAV, criteria
Return reversal
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Glen ArnoldI'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk investing is about making the right decisions, not many decisions.
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