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QUALIPORT
By
Carburton Street, London -- It's been a successful year for the Qualiport. The portfolio was up nearly 10% in February, had fallen over 20% by September, and presently stands 3% down on the year. Unless anything dramatic happens in the last few trading days of 2001, the year has seen the Qualiport handsomely beat the stock market. Final standings Here's how the Qualiport stood at the close of trade yesterday. To clarify, the Qualiport's value encompasses all dividends received and charges incurred (dealing commissions and stamp duty) over the year.Company Number Average 19/12/2001 Value
Of Shares Cost Close Price (£)
(p) (p)
Carpetright 675 562.7 615.5 4,154.63
Emap 616 796.9 741 4,564.56
Johnston Press 1,421 267.3 349.5 4,966.40
Lloyds TSB 510 690.0 728 3,712.80
PizzaExpress 355 696.5 854 3,031.70
Cash 1,062.93
Portfolio Value 21,493.01
And here's how the Qualiport performed against the FTSE 100 and the FTSE 100 Total Return Index (which accounts for reinvested dividends) in 2001.
Value at Value at Change
29/12/2000 19/12/2001 (%)
Qualiport 22,157.22 21,493.01 (3.0)
FTSE 100 6,222.50 5,120.60 (17.7)
FTSE 100 TRI 2,882.16 2,443.88 (15.2)
Although the Qualiport's value declined during 2001, it clearly outperformed the FTSE 100 in what was a very poor year for most investors. You have to go back to 1974 for the last time the London stock market lost more than 17% over a calendar year.
Indeed, such a minor fall in the Qualiport's value is remarkable given the shares held this time last year. It's worth remembering that the Qualiport entered 2001 with six stocks, one of which would subsequently go bust (Independent Insurance) and another that would lose some 80% of its value (MMT Computing (LSE: MMT)).
Buys and sells in 2001
Here are the buy decisions the Qualiport made during 2001, with the buy prices including dealing charges and stamp duty.
Company Number Buy 19/12/2001 Change
Of Shares Price Close Price (%)
(p) (p)
Carpetright 514 583.8 615.5 5.4
Emap 168 593.8 741 24.8
Johnston Press 1,100 272.7 349.5 28.2
Carpetright 161 495.5 615.5 24.2
Lloyds TSB 128 621.8 728 17.1
Emap 147 541.9 741 36.7
Johnston Press 321 248.9 349.5 40.4
Overall, seven investments were made during 2001, all of which currently show varying degrees of profit. Although it's very early days, that consistency is quite an achievement given the stock market's overall slump.
Here are the Qualiport's sell decisions of 2001, with dealing charges included in the disposal prices:
Company Number Sell 19/12/2001 Change
Of Shares Price Close Price (%)
(p) (p)
Dell 74 1,918.9 1,980.1 3.2
Ind. Insurance 1,133 269.7 0 (100.0)
MMT Computing 1,093 118.6 126 6.2
PizzaExpress 576 864.0 854 (1.2)
Obviously the Independent Insurance sale was very prudent. Of the others, it's too early to say. Dell Computer Corporation (Nasdaq: DELL) was sold on overvaluation grounds back in January. While Dell's stock price remains the same, its price to earnings (P/E) ratio has risen from 33 to 43 since the Qualiport waved goodbye.
With MMT, I frankly have no idea how the company will perform in the future. And selling a large chunk of the portfolio's PizzaExpress (LSE: PIZ) shares, which promptly helped fund six of the year's seven investments, looks quite prescient with hindsight.
Back to 2000
Of course, one year is too short a timescale to accurately judge any investor's talent. Here's how the investment decisions of 2000 stand up at the moment, with the buy and sell prices again including all costs:
Company Number Buy 19/12/2001 Change
Of Shares Price Close Price (%)
(p) (p)
MMT Computing 1,093 566.9 126 (77.8)
PizzaExpress 726 658.8 854 29.6
Company Number Sell 19/12/2001 Change
Of Shares Price Close Price (%)
(p) (p)
Rentokil 783 239.6 269 12.2
Unilever 266 435.6 551 26.5
Misys 542 626.2 333 (46.8)
Hoverer, things now start to get more complicated. For instance, the sale of Unilever (LSE: ULVR) was hardly the greatest decision the Qualiport has ever made. But the proceeds from Unilever went straight into PizzaExpress, which makes the disposal somewhat more bearable.
Index pudding
The proof of any portfolio pudding is in how it compares to the stock market itself. If the Qualiport had decided to invest in an index tracker over the years, would the portfolio have been better off?
For reasons explained in this article, the comparison starts from December 31st 1998. At that point, the Qualiport was worth £16,809.60. A further £8,000 was then added over 1999 and 2000. With the FTSE 100 Total Return Index presently standing at 2,443.9, how much would the Qualiport be worth today had everything been invested in an index tracker?
Date Amount FTSE TRI Value at
19/12/2001
31/12/98 16,809.60 2630.5 15,617.17
01/04/99 2,000.00 2825.6 1,729.83
01/10/99 2,000.00 2697.0 1,812.32
01/04/00 2,000.00 2949.7 1,657.02
01/10/00 2,000.00 2900.1 1,685.38
Total 22,501.72
With the Qualiport's present value standing at £21,493.01, disasters such as MMT, Marks & Spencer (LSE: MKS) and Dell mean the portfolio would have been slightly better off with an index tracker from 1999 onwards. While the figures from the FTSE 100 Total Return Index do not include any costs, it's unlikely tracker charges would impact significantly on the £1,000 shortfall. That said, considering the Qualiport's current incumbents and the general improvement in stock picking, the relative underperformance should reduce in 2002.
More: The Qualiport Year In Full | The Qualiport's Trade History | The Easy Way To Invest: Index Trackers
The author owns shares in Carpetright and Johnston Press