Artful Investing

Sixteen percent of my portfolio is sunk into Chaucer Holdings, the Lloyds insurer. 2005 has been an eventful year for Chaucer. At the March final results announcement, Chaucer confirmed they were in takeover talks with Highway, a rival motor insurer. These talks eventually faltered, both parties threw back their rings and got on with the rest of their lives apart. In June Chaucer shares then soared to 69p on the prospect of a takeover of the company by the top-ranked player in the sector, Amlin. Only to fall back again when the talks were called off (you can see why I aren't getting carried away with the prospect of a takeover at Fayrewood). I made a calamitous mistake here in not selling Chaucer and investing elsewhere as at least two clear opportunities had presented themselves.

Then along came that dame Katrina and the rest of my life was never the same again. Well, not that bad, it's not like I'm renting a basement flat in downtown New Orleans, but the hurricane wiped another ten percent off Chaucer's value down to today's 54p to sell. Chaucer has already produced an estimate on the costs of Katrina and the fact that earnings for the first half of 2005 will exceed market expectations. Tomorrow Chaucer will report an advance on earnings per share from 2004's interim figures and an increased tangible asset value too.

Despite the imminent news from Chaucer, I expect to see more action from SVB next week. We've had a weekend for fund managers to review the interim results and I fully expect this ludicrously cheap share to advance substantially over the next few weeks. My portfolio needs it, Hurricane Katrina has bitten a large chunk out of my gains so far this year.

The Artful Dodger