Saturday, April 16, 2005
Bye Ben Bailey, fair well Fayrewood
Recent portfolio excitement (if you can call it that) reached a crescendo on Friday. Following Tuesday's purchase of shares in SVB, I took advantage of further price weakness in Fayrewood and price resilience in Ben Bailey, trimming my Ben Bailey holding and reinvesting the funds into Fayrewood at 112.5p.
I first bought shares in Ben Bailey in February 2003 for 178p each. I still have the stake purchased at 390p in June 2004, but sold my original position on Friday at 473p. Bailey's rise has made a huge contribution to overall portfolio returns over the last two years. Recently, the company has comprised over 30% of my portfolio, making a huge contribution to investment returns.
I sold Ben Bailey for the simple reason that a better opportunity came up elsewhere. I kept 40% of my holding to maintain portfolio diversity and for tax reasons I can't be bothered to go into.
Occasionally over the last couple of years I've wondered how I'd feel if I ever sold Ben Bailey. After all, the investment has rewarded me well. Had some sub-conscious emotional attachment to the company taken hold, had the shareholding become not only part of my financial well-being but my psyche too? After all, Bailey's consistent rise always reinforced my belief in myself as an investor and by association, perhaps my all-round confidence too.
I've written extensively to the point of pontiffication on the need to leave emotions out of investment decisions. But how well did I know my own emotions and what emotions was I about to unwittingly unleash after instructing my stockbroker to sell?
None whatsoever. The largest portion of my Ben Bailey stake was removed in the same manner you might remove a toenail. Just part of the regular grooming a portfolio manager does. It looks like I've taught myself well.
Within minutes I placed another order to spend the proceeds of the Bailey sale. Fayrewood, the AIM listed IT distributor, had seen it's shares fall over five percent within the first hour of trading. The price being offered was too cheap to resist, a yawning discount had opened to fair value and I jumped in.
That leaves me with around 15% of my portfolio still in Ben Bailey but 15% now in Fayrewood. It is looking to be a smart move already. Fayrewood ended the day at 114p to sell - I'm in profit.
Here's to Fayrewood continuing its recovery next week and starting to make a contribution at the next portfolio update.
The Artful Dodger
I first bought shares in Ben Bailey in February 2003 for 178p each. I still have the stake purchased at 390p in June 2004, but sold my original position on Friday at 473p. Bailey's rise has made a huge contribution to overall portfolio returns over the last two years. Recently, the company has comprised over 30% of my portfolio, making a huge contribution to investment returns.
I sold Ben Bailey for the simple reason that a better opportunity came up elsewhere. I kept 40% of my holding to maintain portfolio diversity and for tax reasons I can't be bothered to go into.
Occasionally over the last couple of years I've wondered how I'd feel if I ever sold Ben Bailey. After all, the investment has rewarded me well. Had some sub-conscious emotional attachment to the company taken hold, had the shareholding become not only part of my financial well-being but my psyche too? After all, Bailey's consistent rise always reinforced my belief in myself as an investor and by association, perhaps my all-round confidence too.
I've written extensively to the point of pontiffication on the need to leave emotions out of investment decisions. But how well did I know my own emotions and what emotions was I about to unwittingly unleash after instructing my stockbroker to sell?
None whatsoever. The largest portion of my Ben Bailey stake was removed in the same manner you might remove a toenail. Just part of the regular grooming a portfolio manager does. It looks like I've taught myself well.
Within minutes I placed another order to spend the proceeds of the Bailey sale. Fayrewood, the AIM listed IT distributor, had seen it's shares fall over five percent within the first hour of trading. The price being offered was too cheap to resist, a yawning discount had opened to fair value and I jumped in.
That leaves me with around 15% of my portfolio still in Ben Bailey but 15% now in Fayrewood. It is looking to be a smart move already. Fayrewood ended the day at 114p to sell - I'm in profit.
Here's to Fayrewood continuing its recovery next week and starting to make a contribution at the next portfolio update.
The Artful Dodger
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