Share tips for 2012: Half-time review

It’s not often that I make some sort of announcement about which shares I think will do well in the short term, but in 2012 I made an exception.  At the end of last year, Philip “the Irish Zero Hedge” O’Sullivan had the idea of putting together a “share tips for 2012” derby between a few of us online commentators, including Expecting Value, Wexboy and Mcturra2000.

So what did I pick?

Well, originally, I had two lists, which is sort of cheating.  However, at this halfway point, I’ll be dropping one of the lists, which was a bunch of small-cap, low-price-to-book type companies which I’m really not interested in at all now.  For me, it’s all about quality, quality and more quality (and a low price, of course).

My selection criteria were simple.  I just picked the 12 highest-ranking shares that my investment screen was showing at the time.

The gain/loss figures are year-to-date.  The FTSE 100 performance figures are from Google Finance.  RWD is highlighted in red because it was taken over by Muller (of rice fame) at a handy 50% plus profit.  The gain/loss figures are excluding dividends, so I’ve included a list of the yields too.

On this very simple basis, excluding trading costs like commission and bid/ask spreads, the portfolio has done well, beating the market by over 8% in capital gains and has a yield of more than 2% higher too.  That’s good, but of course, as a long-term investor, I have to say that this sort of short-term outperformance is meaningless noise – but beating the market still makes me happy, meaningless or not.

Note the slightly different performance number for the FTSE 100; it’s -0.9% rather than -2.5% in the table.  I think the table (from Google Finance’s main page) is looking at the FTSE to the close yesterday, whereas the chart above from their portfolio tool is looking at it now.   So because we’ve had 1%+ moves in the last day or so, that’s something to do with it.

Either way, the portfolio, picked blindly from my screen, has faired well so far.  We shall see what the rest of the year has in store.

Author: John Kingham

I cover both the theory and practice of investing in high-quality UK dividend stocks for long-term income and growth.

5 thoughts on “Share tips for 2012: Half-time review”

  1. Well done, John, you’ve certainly beaten my unimpressive performance. Quality is paying off. It’s interesting to note that AV (Aviva), which is, shall we say, one of the sniffier companies, is also the worst performer. That one has wrongfooted a lot of people, and illustrates some of the problems of value without quality: sometimes the company just flops around getting nowhere.

    1. Hi Mark. I think I’ll hold judgement on Avivia for a while yet. It’s pretty amazing how it keeps going down, but if they maintain the dividend then a 10% yield is fine by me. I guess it’s all down to the Euro-bomb.

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