Happy birthday

PORTFOLIO JOHN BULL

Exactly one year ago I allotted myself £5,000 in cash and set about investing it. The result is that I now have a portfolio worth some £6,500, before expenses. My progress has been in line with the stock market averages, despite the fact that I have preserved a high degree of liquidity for most of the period. Looking back, I can say that I did not envisage the market climbing to its present heights, which explains why I have always kept some cash in reserve and why I have been attracted to stocks with defensive characteristics. Most of the shares in the portfolio have done pretty well—British American Tobacco (now sold), Phoenix Assurance, Unilever, Witan, Scragg (part of my holding sold), Clarkson (En- gineers). But this first anniversary is not an occasion for self-congratulation. I have been taking a cold look at each share in my list —Are earnings rising? Are they rising faster than market expectations? Is there any other reason for expecting an improved investment status?

Empire Stores: bought at 55s, now 72s 3d. I have the interim figures in front of me. Sales in the first six months of the year have risen by 29 per cent to £11.2 million. Profits are 26 per cent higher at £855,500 before tax. That is a pretty fast rate of expansion. The second half of the year includes the busy autumn and Christmas trading periods, when mail-order houses transact a substantial portion of their business. The chairman says that a successful start has been made but that increased prices could alter the normal seasonal pattern. All the same, I am keeping these shares.

Phoenix Assurance: bought at 141s 3d, now 172s 6d. Good company in an industry which is in rather poor shape at the moment. American underwriting experience has turned sour at the same moment that home fire and accident accounts have gone sharply into the red. Only life business continues to grow. Phoenix is just possibly a bid situation, however, so I have decided to sell half rather than the whole of my holding.

Lyle Shipping: bought at 19s 9d, now 25s: has risen in line with the market. Freight rates are tending downwards. I have decided to sell my holding.

Unilever: bought at 44s 9d, now 71s 3d. The last results were a shade disappointing (though fully justifying the present price). I am not par- ticularly enthusiastic about Unilever at the moment. I shall wait until the next quarterly results to see whether an exit is called for.

War Loan: bought at £481 per cent, now £4776 per cent. After many disappointments, I see government stocks gradually recovering. I shall hang on for a while.

Witan: bought at 15s 2d (average price), now 21s 101d. I have taken up my rights—one new Valuations at 9 October 1968 First portfolio 100 Empire Stores at 72s 3d .. 25 Phoenix Assurance at 172s 6d 100 Unilever at 71s 3d £2,000 War Loan at £47 76 330 Witan at 21s 101d .. 250 E. Scragg at 33s 50 Barclays Bank at 82s 3d 100 National and Grindlays Bank at 64s 500 Clarkson (Engineers) at 18s 9d xd 60 Rio Tinto Zinc at 136s 6d xd 1,000 Associated British Foods at 12s 9d 1,000 Jamaica Public Service at 6s 3d .. 250 Associated British Picture at 40s ..

Cash with local authority at 7 per cent £1,093 £6,605 Deduct: expenses £169 Total £6,436 Note: The figure for cash with local authority includes £215, proceeds of 25 Phoenix Assur- ance; £281, proceeds of 225 Lyle Shipping; and £190, proceeds of 200 Throgmorton Secured Growth (Capital). The cost °flaking up rights in Witan (30 shares at 20s 6d) was £31.

Second portfolio £5,178: details next week.

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£366 £215 £356 £949 £361 £412 £206 £320 £469 £409 £637 £312 £500 share at 20s 6d for every ten held, so now I have 330 shares. This is a well-managed invest. ment trust with a big 'holding on Wall Street and some interesting unquoted holdings in this country.

E. Scragg: bought at lOs 61d, now 33s. Star turn of the portfolio. I have sold part of my holding already—to my subsequent regret. Scragg's profits are still rising—and the corn. pany could find itself on the receiving end of a bid. I keep these shares.

Barclays Bank: bought at 70s, now 82s 3d. I don't expect fireworks from these shares (I have already sold half my original holding) but I'm holding them because profits this year should be very good—and there is a possibility that the banks will be made to reveal their true figures.

Throgmorton Secured Growth: bought at 15s 101d, now 19s. This split-level invest- ment trust has peiformed well enough, but its super-gearing means that if the market declines the shares will fall very sharply. I have sold my entire holding.

National and Grindlays: bought at 55s, now 64s. Well-managed overseas bank (Lord Aldington at the' helm) which could be taken over. I keep the shares.

Clarkson (Engineers): bought at lOs lid, now 18s 9d. I'm staying with this go-ahead machine-tool group. It has produced a row of extremely good profit figures.

Rio Tinto: bought at 125s, now 136s 6d. Hold—for reasons I gave last week.