Qualiport

[ September 4, 2000 ]

Back In The Black

By Bruce Jackson (TMFGoogly)

There's plenty of Qualiport-related reading attached to this article, including a link to Maynard's review of PizzaExpress' (LSE: PIZ) annual results of today. I'll keep my bit rather brief.

Back In Black

Last week, the Qualiport moved back into the black. We are also running neck and neck with the FTSE 100 index in the race for 2000 supremacy. Not that I was looking much! Not much at all. Really! Honest!

Of course the Qualiport is still getting well and truly thumped by both the FTSE 100 and All-Share indices since January 1st 1999. In short, we'd have been better off putting our money into a low-cost index tracking fund. We'd also have been better off leaving our money in the bank.

Minimise The Mistakes

But we're not about to give up on our quest for this managed portfolio to beat the market indices. Twenty months is a relatively short amount of time over which to judge a portfolio's success or failure. During that time, we've made a few mistakes. But as time has passed, I'd argue that we've made fewer and fewer mistakes.

We've made 12 trades since January 1st 1999. Of them, only one mistake really stands out -- paying too much for Dell Computer Corporation (Nasdaq: DELL) way back in January 1999. We've made two excellent sell decisions -- Marks & Spencer (LSE: MKS) and Rentokil Initial (LSE: RTO).

The jury is still out on most of the other decisions, with most wavering surrounding the price paid for Lloyds TSB (LSE: LLOY) in September 1999. At this stage of proceedings, it's looking like we could be on the right track with many of those trades. It's far too early to say one way or the other. But one thing is for sure -- we're trying to minimise our mistakes.

Buffett Sells!

The Qualiport's aim can be simply put as buying good companies at cheap prices. What we haven't been so certain about is the selling strategy. The ideal holding period is forever (copyright Warren E Buffett), but there are very few ideal companies. Maynard has been exploring the issues surrounding the ideal holding period. I've explored similar issues too.

For a forthcoming Duelling Fools feature, I discovered Warren Buffett's selling strategy. From his 1987 letter to Berkshire Hathaway (NYSE: BRK.A) shareholders, he said; "Sometimes, of course, the market may judge a business to be more valuable than the underlying facts would indicate it is. In such a case, we will sell our holdings."

That's pretty clear. I'm sure Maynard will further discuss this when he carries on from Friday's article titled "Are We Too Long Term?" It is linked below. It's not to late to vote in the poll.

PizzaExpress Results

Here's the link to Maynard's article. In very brief summary, this year's profits were slightly below expectations, but management remain very confident about the future. The share price barely budged. This is one company we're very happy to hold in the Qualiport.

See you on the Qualiport discussion board, linked to below in the Qualiport Resources area.

Where Next?
Are Too Long Term?
We Were Wrong