Share Sleuth: why I ignored this trading nudge

Scoring Goodwin last week aroused lots of conflicting emotions. I didn’t write about them, because I was trying to be dispassionate. I was evaluating the business and ignoring, as best I could, the fact that the share price had fallen 50%.

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I didn’t want other traders’ radical reappraisal of Goodwin (LSE:GDWN) influencing me because I realised that months earlier, when the share price had melted upwards, irrational exuberance probably had swayed my analysis.

Share Sleuth had a relatively small holding in Goodwin before the plunge (it’s even smaller now!) because I had persistently liquidated shares on the way up.

“b” indicates the addition of shares to the portfolio, “s” indicates a reduction in the holding. Share Sleuth has consistently maintained a Goodwin holding since 2014.

In hindsight, the last two reductions look smart. I recognised that Goodwin’s share price had risen higher than the level that could reasonably be justified by what the company had actually achieved.

In one respect that’s untrue. The Decision Engine is not designed to suggest trades that work out in the short term. If these decisions were smart, then the reduction in August 2025 was stupid because the share price rocketed for the rest of the year.

In another respect, it is only partly deserving of credit. The Decision Engine’s price score indicated the shares were very pricey, which reduced Goodwin’s score and the holdings’ ideal size. I liquidated shares because Goodwin had got too big for its score.

I might have liquidated more, though, had I scored the business more critically in November 2025. Abetted by very bold statements from management and the rocketing share price, I let my enthusiasm for Goodwin colour my judgement.

I jacked up Goodwin’s quality score, ignoring risks that were either obvious (novel products as yet untested in the market might not flourish) or that I had previously penalised. The company was firing on all of its many cylinders, but risks do not just disappear because a company is doing well.

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Goodwin is a conglomerate, to stretch the car engine analogy it’s at least a V8, and I’d assumed it would continue firing on all of them. Historically, that has not been true, and neither should I expect it to be for a capital-intensive business operating in unpredictable markets.

I don’t want the fact that the chart makes me look perspicacious to cover up errors of judgement. I separate research (scoring) from making decisions (trading) so that I can be dispassionate.

The lesson of my latest escapade in investing is that I don’t always achieve that mindset.

The lesson is relevant because the Decision Engine has suggested I reduce Share Sleuth’s holding in another business that it’s easy to assume can do no wrong.

Reductions: Games Workshop

On Tuesday 31 March, Share Sleuth’s cash balance was £3,199, well shy of my minimum trade size of 2.5% of the portfolio’s total value (£4,759 on the day).

The only “sell” offered to me by the Decision Engine was Games Workshop Group (LSE:GAW), and it was marginal. The Decision Engine encourages me to reduce a holding when its size (ss%) is more than 2.5% of the portfolio’s total value greater than the ideal holding size (ih%), as determined by the share’s score.

In other words, the Decision Engine nudges me to reduce a holding down to its ideal size, but only if it will be a meaningful trade of at least the minimum trade size. I don’t want to be trading in increments of pounds or hundreds of pounds because I would be trading every day.

Click on Games Workshop’s score to see how I scored it

With a score of 6.8, 24th-ranked Games Workshop accounted for 6.2% of the Share Sleuth portfolio, 2.6% of the portfolio’s value more than its ideal holding size of 3.6%.

Because I haven’t re-scored Games Workshop recently, this nudge came about because of the relative performance of Games Workshop’s share price to the rest of the portfolio.

“b” indicates the addition of shares to the portfolio, “s” indicates a reduction in the holding. Share Sleuth has consistently maintained a Games Workshop holding since 2009.

Games Workshop’s share price has been relatively flat so far this year (barely visible on the scale of the chart, which shows Share Sleuth’s entire holding period). Since an AI related sell-off in February and war in the Persian Gulf in March, the portfolio is well down.

The decision was marginal, so there was no hurry to take it.

Potential additions: Hollywood Bowl, Porvair

The table shows the top nine shares in the Decision Engine. With additions, the ideal holding size (ih%) must be 2.5% (or more) greater than the actual holding size (ih%).

Only two shares qualify, Hollywood BowlHollywood Bowl Group (LSE:BOWL) and Porvair (LSE:PRV) (I have frozen trading in Softcat (LSE:SCT) while I reconsider its score). I would not add shares in Hollywood Bowl, the ten-pin bowling centre operator, even if it was the only candidate. It was too soon. I last added the shares in February, and I like to wait until I re-score a share before trading it again. That can take up to a year.

Porvair is a candidate for investment, though. I re-scored it in February, and liked what I saw.

Click on a share’s score to see how I scored it

It’s almost exactly five years since I added Porvair shares to the portfolio:

“b” indicates the addition of shares to the portfolio. Share Sleuth’s holding in Porvair has never been reduced.

Trade: bottled

This time, I slept on the decision, which proved decisive.

Share prices are volatile at the moment and on 1 April the Decision Engine was no longer recommending I sell Games Workshop. A marginal sell (2.6% of the portfolio’s total value more than its ideal holding size, had become a marginal hold (2.4% more than the ih%).

There is nothing precise about the Decision Engine’s nudges, it is just a guide. Had I really wanted to trade Games Workshop at the minimum trade size, I could have.

Unlike Goodwin, the Games Workshop trade is a marginal decision, and not the result of a short-term spike in the share price.

As a long-term investor, I don’t like trading unless I feel compelled to and with a major war going on, there’s only so much emotion I can deal with!

I think it is best to keep calm and carry on.

Share Sleuth performance

At the close on 2 April, Share Sleuth was worth £197,147, 557% more than the £30,000 of pretend money we started with in September 2009.

The same amount invested in accumulation units of a FTSE All-Share index tracking fund would be worth £112,067, an increase of 274%.

Past performance is not a guide to future performance.

After dividends paid during the month from Thorpe (F W) (LSE:TFW), Games Workshop, Renishaw (LSE:RSW) and Renew Holdings (LSE:RNWH), Share Sleuth’s cash pile is £3,510.05.

The minimum trade size, 2.5% of the portfolio’s value, is £4,929.

Notes
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
Objective: To beat the index tracking fund handsomely over five year periods
Source: ShareScope.

Richard Beddard is a freelance contributor and not a direct employee of interactive investor.  

Richard owns all of the shares in the Share Sleuth portfolio.

For more on the Decision Engine and Share Sleuth, please see Richard’s explainer.

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