I really do wish I could protect the terms I use and reap royalties from their reuse. I’d be pretty rich now on Acquisition Indigestion, ‘Boring’, Martini Moment etal. Since using the term Fiscal Fudge in my post on 1st Jan 12, it seems to be cropping up everywhere! The FT even used it in their headline on 2nd Jan 12!
Whatever, the market reacted positively to the Fiscal Fudge and the first trading day of the year was pretty good for tech resulting in a 3% rise in NASDAQ and a 1.5% rise in the UK FTSE SCS Index in just one day.
I’ve made no secret of the fact that I invest in the tech sector. Indeed at this time of each year I have devoted a post to the performance of the Holway Portfolio.
As you read in Holway’s Share Portfolio my portfolio registered a ‘record’ 48% gain in 2010. 2011 was not so good – indeed my portfolio flat-lined. Would have been a fall but for a 66% rise in Autonomy when they were acquired by HP.
But 2012 saw the portfolio reverting to form with a 35% gain. Two long term holdings – Misys and Logica– were acquired resulting in gains on the year of 56% and 74% respectively. My best performing share was AOL– up a massive 102% before I decided to bank the profits. Other really strong performers were CSC (+72%), Sanderson (+71%), RIMM (+62%) and MicroFocus (+54%). My shares in Salesforce.com had risen 64% before I sold as I have increased concerns over their (lack of a) profits model.
Out of the 23 tech stocks in the Holway Portfolio only four registered a loss. Blinkx (-14%), Digital Barriers (-8%), Google (-7%) and Vodafone (-8.2% when the dividend is included).
So the Holway Portfolio has now doubled since 1st Jan 2010. That compares with a 62% rise in the FTSE SCS Index or a 41% rise in NASDAQ in the same three years. And substantially better than the 9% rise in the FTSE100 or, indeed, the returns from any savings account.
My investment criteria are pretty simple. Firstly, I rarely trade. I’ve owned most of my portfolio for many years. A good company (like Capita, Apple etc) is a good company even when out of favour with investors. I’m not clever enough to take advantage of the temporary dips. Every analysis I have ever done shows that long-term investment is best.
Secondly, I don’t invest based on financial valuations. I invest where I know and respect the people who run the companies (like Paul Pindar at Capita, Warren East/Robin Saxby at ARM, Chris Winn at Sanderson, Mike Philips at MicroFocus, Martin Ratcliffe at RM, Tom Black at Digital Barriers, Mike Tobin at TeleCity or Vin Murria at ASW). Indeed as readers know, I bought AOL after having a lunch with Tim Armstrong and Arianna Huffington. I bought into CSC as I had great admiration for what Mike Lawrie had done at Misys. Also where I use the products (like Apple, Vodafone, RIMM, Google, BT).
I feel quite bullish about 2013. The yields on alternatives (like cash) are unattractive. Many of the top companies look cheap and have lots of cash. ‘Diversity of Performance’ will accelerate so picking the best performers is crucial as ‘averages’ will just not cut it.
Warnings– Just to make clear, none of this is intended as any kind of financial advice. We are not registered to provide that. Also we have strict rules about trading in stocks that we might cover and will never do so around the time that we might be writing about them