A chapter closes, but it’s not the end of the Share Sleuth story

Richard Beddard shares a message with loyal followers of his model portfolio.

I wrote my first Share Sleuth column over 12 years ago, and it was published in the July 2008 edition of Money Observer magazine. The article was a profile of Haynes Publishing, the company behind the famous motor manuals. The column has outlived Haynes’ listing on the stock market, just. Haynes was taken over by Infopro Digital, a Dutch business, in February, and less than six months later I’m unexpectedly writing my last column for Money Observer.

Forgive me a moment of sentimentality before I get down to business. I had hoped Money Observer and I might grow old together because I hold you readers in high regard. Over the years you have sent me many encouraging and curious emails, even though I write about shares and the magazine is predominantly about funds.

Mutual affection

Our mutual affection may be because we have much to learn from each other irrespective of the financial instruments we buy and hold. I hope it’s also because I have always resisted the urge to pose as an expert. There are many private investors I look up to who don’t even consider themselves to be expert, and the stock market has a tendency to make any expert look foolish. Like you, I am a human being, with some useful knowledge, trying to provide for an uncertain future.

Share Sleuth has a new home, but I’d like to close its first chapter with an observation: which is that in investment, working out which pundits will do well is probably just as difficult as working out which fund managers or companies will. That is the notion that got me into stock-picking 25 years or so ago, and the challenge of finding shares in good companies at reasonable prices has occupied me ever since, as a hobby at first, and then as a researcher and writer. I believe successful investors put their trust in themselves. Based on the emails I have received, you do too.

This being a Share Sleuth column, it would be remiss of me not to report some activity in the portfolio. I have reduced its holding in one of my favourite shares, but not because I no longer rate the company – I do. And not because the directors have been selling shares, although they have. I’ve reduced the portfolio’s holding in XP Power, a manufacturer of power converters used in industrial and medical machinery, because the share price has risen strongly. As a consequence, the size of the portfolio’s holding has grown to nearly 9% of its total value.

To spread risk more evenly, on 29 June, I reduced the portfolio’s holding from 339 to 240 shares. At a share price of £34.45, the transaction raised £3,500 after a £10 deduction in lieu of broker fees. On the day, the remaining holding was worth £8,592. It remains a large holding, worth more than 6% of the total value of the portfolio, and ranks third after Games Workshop, the parent of Warhammer, the wargaming powerhouse, and Solid State, a distributor of electronic components and manufacturer of electronic equipment.

The portfolio’s cash balance has risen to £5,675, more than enough to add to an existing holding or buy a new one. The most compelling of the shares I watch most closely, based on its merits as an investment and the portfolio’s relatively modest position (3% of its total value), is Howden Joinery, the supplier of fitted kitchens to the building trade, which profiled in Share Watch in May. That though, is a decision for another day.

The next Share Sleuth update will be published in early August on interactive investor, so if you would like to keep hearing from me please bookmark my author page. As always, I will be glad to receive your emails.

Contact Richard Beddard by email: richard@beddard.net or on Twitter: @RichardBeddard

Profitable benchmark divergence

Trimming XPower to add elsewhere

Notes: Reduced existing holding. Transaction costs include £10 broker fee, and 0.5% stamp duty where appropriate. Cash earns no interest. Dividends and sale proceeds are credited to the cash balance £30,000 invested on 9 September 2009 would be worth £139,312 today. £30,000 invested in FTSE All-Share index tracker accumulation units would be worth £57,820 today. Objective: To beat the index tracker handsomely over five-year periods. Source: SharePad, 2 July 2020.