Another good month for markets and the JIC portfolio. It seems a long time since Friday 25th May, when the portfolio was valued at £145,700, down 3.6% on the 1st January valuation. During December the JIC portfolio rose 4.2% to record a total return for 2012 of 21.2% compared to a monthly rise for the FTSE All Share Index (TR) of 0.8% and 12.1% for the year.
The main contributors during December were Findel +21%, Gable +17%, Agriterra +16%, Ashtead +12% and Synergy Health +11%. Gulf Keystone -9% and Telecity -8% were the only real drags on performance. Whilst I shouldn't really grumble about the total return for JIC of 21.2% for the year I feel I should have done a little better! To some extent JIC is diversified away from the UK with about 25% held in various investment trusts. Never the less, against the background of the FTSE Mid 250 Index and the FTSE Small Cap Index (ex Inv. Trusts) rising 23% and 32% respectively , two areas which I consider fertile hunting grounds, I should have been able to pick some better stocks.
The best returns so far: Quindell +148%, Halfords +69%, easyJet +54%, Igas 46% and Taylor Wimpey +38%. Main lessons from 2013. I am perfectly able to pick undervalued growth situations without having to resort to speculative oil exploration companies. Chariot Oil & Gas cost the portfolio £3,514 or just over 2% of my JIC starting capital. True, you can make extraordinary returns if these companies do strike oil, but if they don't....!
In 2010/11 I made good money out of three E&P stocks; Encore, Nautical and Cove but in all three cases I bought after they had made their initial discoveries and the risk was greatly reduced. I need to be more disciplined in implementing stop losses. In some cases, having cut a holding, the shares promptly bounce but that should be seen as water under the bridge. The real damage comes from watching a stock drop when it is clearly in a down trend. The best , (or worst), example was Cape where I had cut my losses for a very small loss ,(£-46) but then for some inexplicable reason tried to catch a falling knife, bought back in and eventually sold out a few profits warnings later for an overall loss of £3490 or 2% of JIC starting capital. I cut a further 13 holdings for losses of on average £250, less than 0.2% of starting capital.
Run your winners: I sold Sports Direct purely because I thought it looked a little expensive. During the next month it went up a further 20% in a straight line. And finally..... There is nothing like a bit of luck! On May 15th I sold my holding in Lamprell for a small profit as I didn't like the way the share price was acting: it seemed a little suspicious. On May 16th it issued a profits warning and the shares promptly dropped 70%. The luck bit was that I sold on the 15th May and didn't decide to sleep on it and leave it to the next day!
Favourite stat of the year: Athens Stock Exchange Index +33.4%, Dax + 31.4%
Happy New Year and Happy Investing
Filed Under: Stock Picks,
"The investments and any other products mentioned in the johnsinvestmentchronicle website should not in any way be considered advice to buy or sell anything. Any information on the website is given in general terms and does not constitute personal advice to any individual. Readers are responsible for developing and applying their own strategies based on their personal circumstances and furthermore readers should obtain independent financial advice from an FSA regulated intermediary before investing money. Information or views in older blogs may become outdated and should not be relied upon unless confirmed by recent comment." "johnsinvestmentchronicle takes every care to ensure that the factual information on its website is accurate but cannot guarantee this."