Market beaters 47% ahead

By DAILY MAIL REPORTER
Updated:

 

IN an ideal world chefs should have to eat in their own restaurants, politicians should have to rely on the public services they run and share tipsters - including journalists and City analysts - should have to buy the shares they recommend.

But there are, quite rightly, strict rules on share dealings by journalists. And I have neither the time nor money to become an active share trader, even if that were allowed, writes Brett Arends.

Nonetheless, I should at least try to be accountable to you, the readers. I have been writing occasional Investment Extra columns since the summer of 2001. This seems as good a time as any to provide an update.

When I chased down all my old tips and checked the latest prices, I found that they have done rather well. The average gain is 47%. This looks even better compared to the market, which has fallen 18% since I began in July 2001.

I am sure this is luck rather than anything else. It also makes me worried that my next tip will turn pear-shaped. This is why I have gone for something conservative (See below).

There have certainly been some blunders. I told readers to take profits on British Airways at 169p. It is now 292 1/4p.

Gold Mines of Sardinia has proved, once again, how important it is to run a stop-loss on speculative shares. When I tipped it, I urged readers to sell if it fell below 12p. If you ignored that advice and hung on you have lost much more. After a capital restructuring, the new shares are just 1.12p. In old money that is an 87% loss.

I would sell Marconi because I think the technology rally has probably gone far enough.

Although online bookmaker UKbetting still looks fine, I would be tempted to take profits after such a sharp rise.

I own two of the shares on the list, so I will ask you to make your own mind up about these.

I have been a long-term investor in Vodafone since 1999. I bought Ofex-listed Loyalward, which is developing a holiday resort in Crete, last month, some weeks after tipping it. With such small companies, a stop-loss policy if the price falls 25% is appropriate.

How my tips have performed

Vodafone bought at 140p, now 132p (-6%)
Atlantis Japan $8.10, now $18.68 (+130%)
Centamin Egypt 10 1/4p, now 11 3/4p (+15%)
Brancote 135p, now 186p (+38%)
Gold Mines of Sardinia 15p, now 12p
(-20%)
Hilton 146p, now 236p (+62%)
British Airways* 116p, now 169p (+46%)
William Hill 325p, now 517p (+59%)
UKbetting plc 33 1/2p, now 68p (+103%)
National Grid 395p, now 427p (+8%)
Marconi 286p, now 680p (+138%)
Loyalward 72p, now 63p -12.5%)
Average: +47%

*stock sold

Croda is a little beauty

IT has always seemed a wonder how much women spend on creams, unguents, potions and lotions of all kinds. This makes mid-cap chemicals group Croda a tempting stock to tuck away.

Croda processes the oils, mainly drawn from natural sources, which go into bottles from the likes of L'Oreal and Procter & Gamble. Its speciality chemicals feature in other products from nutritional supplements to fabric softeners.

Croda wisely focuses on niche, high-margin products that need plenty of expertise. Based in Yorkshire, it operates worldwide. Well-informed people in the City rate the management highly - itself a remarkable rarity.

The potential downside is that US profits are being squeezed by the falling dollar.

But the balance sheet is strong and at 267 1/2p the shares look good value on 13 times likely earnings. Another attraction is a juicy yield of 4.5%.

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