Wednesday, January 26, 2005
Dana and Chaucer pump portfolio higher
2005 has started sensationally. Of my four holdings, all are up on their closing price at the end of 2004. It is the huge advances in the share prices of Dana Petroleum and Chaucer Holdings, my second and third-largest positions respectively, that are responsible for the surge.
The New Year has been as happy and prosperous as all my Christmas cards wished it would be. Dana have advanced 17% to 488p and Chaucer 10% to 53p. The pair have pulled on the portfolio like a great Dane yanking at its leash on the way past KFC.
After only three weeks of 2005, the total value of my shares has risen approximately 5%, while the wider market has barely advanced by a single percentage point.
These exaggerated, stuccato movements go with holding such a concentrated portfolio but are also common for a collection of value shares. Cheap shares can move fast.
Chaucer's rise can be attributed to the clearing of a large overhang in the stock and improved sentiment toward the entire insurance sector. Any large price movement requires large buys to sustain the rise and today saw announcements that FMR Corp have increased their stake and Aviva have upped theirs too.
Dana have risen in response to the news that a significant increase in production has been achieved, coupled with the resurgence of the oil price on the commodity exchanges.
The recent haymaking does present a problem, however. As prices increase, closer to fair value, I'm more inclined to sell. The funds raised would need to be reinvested elsewhere. Presently, I can sit and wait but if forced to sell some smart reinvestment decisions would be required. The risk is I fail to invest any gains wisely. Research efforts must be stepped up and opportunities identified.
2005 is starting to present challenges I never encountered in the previous year.
The Artful Dodger
The New Year has been as happy and prosperous as all my Christmas cards wished it would be. Dana have advanced 17% to 488p and Chaucer 10% to 53p. The pair have pulled on the portfolio like a great Dane yanking at its leash on the way past KFC.
After only three weeks of 2005, the total value of my shares has risen approximately 5%, while the wider market has barely advanced by a single percentage point.
These exaggerated, stuccato movements go with holding such a concentrated portfolio but are also common for a collection of value shares. Cheap shares can move fast.
Chaucer's rise can be attributed to the clearing of a large overhang in the stock and improved sentiment toward the entire insurance sector. Any large price movement requires large buys to sustain the rise and today saw announcements that FMR Corp have increased their stake and Aviva have upped theirs too.
Dana have risen in response to the news that a significant increase in production has been achieved, coupled with the resurgence of the oil price on the commodity exchanges.
The recent haymaking does present a problem, however. As prices increase, closer to fair value, I'm more inclined to sell. The funds raised would need to be reinvested elsewhere. Presently, I can sit and wait but if forced to sell some smart reinvestment decisions would be required. The risk is I fail to invest any gains wisely. Research efforts must be stepped up and opportunities identified.
2005 is starting to present challenges I never encountered in the previous year.
The Artful Dodger
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