Thanks to many of you for your e-mails, support and comments throughout the year. I have had several enquiries recently about how the various investment clubs I am in are performing, and so I thought it pertinent to give you a bit of an update.
H&G Investments
This has performed probably the best of the three monthly meeting clubs I am in. We have retained the holding in our best performing stock, SFI. This is our oldest holding and still shows an excellent profit for us, even allowing for the fact that the price at the time of writing is some 60% off its peak. Regular readers will know all about the "Boom or Bust" portfolio, consisting of various speculative penny share mining stocks such as Pan Andean Resources (a personal favourite), Atlantic Caspian Resources, Gold Mines of Sardinia and African Gold. There are also two other mining stocks we hold which we consider to be core holdings; Petra Diamonds (currently suspended) and Aquarius Platinum Mines. We have two "safe" stocks, Iceland and Hilton Group, further pubs and bars action with Springwood, and the rest of the portfolio is in TMT stocks, namely ARM, ADVFN.com, GEO Interactive Media, Retail Decisions (another great performer), Baltimore, NXT, Vodafone, Redstone Telecom, Kingston Communications, Parthus and NetB2B2. Over the year we have lost in excess of 20% and are some 70% off the peak, but we have confidence in all of our holdings.
The Brass Monkeys
We don't have a "Boom or Bust" portfolio, but we do hold shares in Pan Andean Resources, as well as mining stocks Aquarius Platinum Mines and Petra Diamonds. Many of the TMT stocks are the same, with holdings in ARM, Baltimore, NXT, Vodafone, Parthus and NetB2B2. However, we also have additional Tech exposure in Sage and Sanctuary Group. Safer plays include Invensys (ex-BTR), SFI and medical companies Maelor and Shire Pharmaceuticals. Our largest holdings are in the TMT stocks, and because of this heavy weighting, we have suffered a touch over the year and the losses are in excess of 30%. In fact, after over 3½ years, the members are showing a small loss each, but we are confident it will turn around in the final year and a bit. But then we've got to be, haven't we?
The Dirty Harrys
Ouch. When the club started in November 1999, we went 100% Tech. This was good for the first 5 months... but then horrible. We are losing heavily on NetB2B2, Kewill Systems, BATM, Reflec and Kingston Communications (all losses over 60%). We also have Pan Andean Resources, purchased at a much higher price than it is now and also more than 60% down. Smaller losses include Baltimore (47%) and Vodafone (27%). We are at breakeven point on NXT and SFI, and are in profit in ARM (17%) and Hilton Group (7%). Overall, we are 38% down, and we are now paying the price for not balancing the portfolio. In hindsight (isn't that a wonderful thing?) we should have taken profits in the Spring and diversified into other sectors. I seem to recall that was actually suggested, but as the club was so young we decided against it. We still have nearly 4 years to run, so there's no need to panic. At our most recent meeting we bought Iceland, so we are now looking away from the TMT stocks, but I can't help wondering whether this is comparable to locking the door after the horse has bolted. We shall see.
So, there you have it. The outstandingly poor last year's performance of 3 high-profile investment clubs. I have seen on the boards that some clubs have actually shown a profit in the last year, and very well done to you. But remember that the market is driven by greed and fear, and that as investment clubs we have a disadvantage compared to the private investor because we generally only meet monthly and so cannot take full advantage of the market's peaks and troughs (see earlier article "Why Trading Doesn't Work"). But we also have a huge advantage as well, because all the risks are shared and we can use the combined knowledge of the club members to enhance our individual expertise, and this type of education is invaluable, and free.
I hope this makes a lot of you feel that you are actually doing pretty well after all!
Where Next?
• Investment Clubs discussion board
• The Fool's Guide to Investment Clubs
• Fool Books -- The Fool's Guide to Investment Clubs
Fool USA