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VALUE INVESTING
A Great Year for Value

By Stephen Bland (TMFPyad)
December 29, 2000

The article last week in which I wrote about my personal value share dealings in 2000 to date caused something of a negative stir on the value discussion board. I never saw why, really. Those who didn't like last week's article might find more to complain about this week, as I show here the performance of those shares about which I have written on occasion in my weekly value series during 2000. Although not necessarily those in which I personally might invest, nevertheless I saw these as having possible attractions for those possessing investment personalities of the value persuasion in its various forms.

Month  Share                Price then   Price now  %change

Mar    Wembley (LSE: WMY)          440       560      +27
May    SVB (LSE: SVB)               82       142      +73
Jun    Allders (LSE: ADS)           93       108      +16
Jun    Garban (LSE: GBN)           210       308      +46
Jun    Prism Rail (LSE: PIM)       435       600      +38 (bid)
Jun    Delta (LSE: DLTA)           137       151      +10
Jul    Laing (LSE: LNGO)           234       398      +70
Jul    AMEC (LSE: AMEC)            189       340      +80
Jul    All. & Leic. (LSE: AL.)     456       694      +52
Aug    Royal& Sun (LSE: RSA)       430       577      +34
Aug    Kier (LSE: KIE)             276       287       +4
Aug    Corus (LSE: CS.)             67        70       +4
Sep    Scapa (LSE: SCPA)           154       147       -5
Sep    Victoria (LSE: VCP)         133       133        0
Oct    Airtours (LSE: AIR)         219       201       -8
Oct    De La Rue (LSE: DLAR)       345       413      +20
Nov    Acal (LSE: ACL)             778       675      -13
Nov    Kleeneze (LSE: KLZ)         198       227      +14
Nov    Morgan Sindall (LSE: SNDL)  270       290       +7
Dec    Slimma (LSE: SLM)            26        40      +54
Dec    Hardys & Hanson (LSE: HDYS) 261       253       -3
Dec    Fenner (LSE: FENR)           93        93        0

A few comments are pertinent.

These prices ignore costs and spreads. They are merely the market prices at the time I wrote the article and the current figure. In particular, note that spreads on micro caps like Victoria (LSE: VCP) and Slimma (LSE: SLM) are likely to be very high.

Value usually needs time to work. It is not normally a particularly rapid process, although that can happen. Consequently the shares I wrote about earlier in the year have had more time for the value to out than the later ones.

With value shares the idea is not usually to buy and hold. It is to buy and sell, when enough of the original value (in the opinion of the investor) has evaporated for whatever reason. This could be because of a decent price rise, or an adverse change in the fundamentals followed by a fall.

There are twenty-two shares in this list. An equal sum of money invested in each would have produced an increase in the portfolio of roughly 24% over an approximate average holding time of four to five months, if you take it that the earliest dates from March and the latest from December. For what it's worth, that annualises conservatively to 50%. Note also that the FTSE 100 index has fallen a little in 2001, so all this needs to be viewed against the background of a falling market in general.

That's it. Happy New Year to all and a successful 2001. I'm certainly not complaining about 2000.

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