I’ve bought some brilliant UK stocks over the last couple of years and thank heavens for that. Because I’ve also picked up five stinkers.
They’ve stuck to the bottom of my portfolio, giving off a nasty odour. So why did I buy them?
With James Bond car maker Aston Martin, the answer is easy. Because I’m an idiot. After the shares dropped 95%, I thought they couldn’t do worse. But they did! They’re down another 34% over the last 12 months. I’m down 30%.
In my defence, this was a flutter with a tiny corner of my portfolio. I’m only holding because selling isn’t worth the trading charges, and to remind myself never to be this cavalier again.
Pretty much the same applies to grocery retailer and robot tech hope Ocado Group. Its shares are down 40% in a year. I’m only down 24%. Perhaps that counts as success. The share price does occasionally spark into life. It’s jumped 17% in the last month. I know the moment I sell it will fly to the stars. So I’m stuck with it.
Five big FTSE 350 fallers
My filthy five includes spirits giant Diageo. It’s down 23% over the last year and 35% over two. Falling profits, inventory troubles, Ozempic, Donald Trump’s trade wars – everything is against it.
I keep meaning to sell but it’s like being in one of those nightmares where you try to run but your legs are made of glue. Maybe it will recover. Maybe…
Mining giant Glencore is down 12% over one year and 33% over three. China is mostly to blame, as its slowing economy hits demand for commodities.
Natural resources stocks are cyclical, and I’d be daft to sell at the bottom. I’m due a juicy dividend in June. I’ve earned it.
My final FTSE flop is sportswear JD Sports Fashion (LSE: JD). Its shares are down 20% over the last year, and so am I. They’re down a thumping 50% over two.
I have hopes for JD Sports shares
JD Sports spent most of last year threatening to recover, but it’s on the back foot once more, after a second underwhelming Christmas. With consumers struggling, inflation sticky, and Trump’s tariffs threatening non-US trainer brands such as Adidas, I don’t expect the stock to suddenly race ahead.
But at some point, I think it will. JD Sports is building a international presence, particularly in the US, after buying retailer Hibbett for $1.1bn. It also has strong partnerships with leading brands, although that’s backfired with Nike struggling. When shoppers have money in their pockets again, trainers could fly off the shelves.
There’s a pattern here. I bought four of these companies after a profit warning. I don’t remember Glencore issuing a profit warning, but it might as well have done. In every case, things got worse rather than better. Turning companies around takes time.
Am I only hanging on because I hate banking a loss? Probably. On the other hand, Burberry was my biggest flop but it’s now flying. Maybe the others will too. Investing is a long-term game and for now I’m keeping the faith. But I’ll tread carefully around profit warnings in future.
