The Bad Portfolio

In these days of bad banks and bad loans, I thought I ought to identify the my own bad portfolio. These are stocks that I bought in 2009/2010 which have, let us say, not completely lived up to expectations (mine, that is; they might well have lived up, or down, to the expectations of others). Without further ado, here is the horror show:

AXS: bought for £0.30, value now £.0.08.

COL: bought for £0.26, value now £.0.02.

HMV: bought for £0.64, value now £.0.04.

LLOY: bought for £0.59, value now £.025.

PFD: bought for £0.36, value now £.0.05.

PVCS: bought for £0.84, value now £.0.06.

RBS: bought for £0.37, value now £.0.21.


Why did I buy these? I can only offer the usual pathetic reason that it seemed like a good idea at the time. This was mostly a failure of analysis in the fearful days of the Credit Crunch or Credit Crunch 1, if you prefer. Fortunately, I did make many more good calls than bad ones in companies that trade profitably and maintain dividend payouts, and my gains do still outweigh my losses over the period. Now, not all of these are necessarily basket cases, but I would not be surprised if any one of them were to go bust, be nationalised, taken over or have their stock diluted into investor oblivion.

Accsys (AXS). This was a Victor Kiam moment: "I liked the product so much, I bought the company". The company produces Accoya. This is softwood which is acetylised to remove hydroxyl ions, giving the wood resistance to warping and infestation, effectively turning it into a hardwood (apart from the strength aspect). This is a proven technology and not a new process scientifically, but Accsys claimed to have a viable commercial technique. However, delays in getting their machinery to work in volume and in licensing the technology to others mean that they may have lost competitive edge. The product seems good, but it is not at all clear that it is value for money.

Colliers International (COL). A property consultancy, badly damaged when the floor fell out of office blocks. It looked like a recovery play. Well, commercial property has recovered somewhat, but COL hasn't and I don't really know why, although the recent fate of DTZ gives  a pointer. It could just be unloved or there may be something odd going on. A dilutive share placing last year didn't do the SP any favours and I suspect there may be more traps for small investors to come.

HMV (HMV). Puhleeese. Just a pointless collection of shops debts, now with the winning strategy of consumer electronics on the high street, just like Dixons and Argos.

Lloyds (LLOY). A recovery play bought far too late. Hard to be believe now that they were nearly 80p not so long ago and 20p some time before that. I guess they will show a profit one day if they can survive Euro turmoil. This is one for the kids, perhaps.

Premier Foods (PFD). Does what it says on the label. Britain's "premier" food manufacturer, Hovis, Oxo, Sharwoods, etc. Makes a small operational profit, but is sinking under debt and is now reduced to selling off the silver. Might get taken over, broken up or diluted away. Late SP plunge was the latest of many and in recent days seems to have been subject to pump and dump operations by big players.

PV Crystalox Solar (PVCS). In a time of high oil prices what's not to like about a maker of silicon wafers for solar panels? Plenty, it seems, since they can be manufactured so cheaply in China and the basic operation no longers seems profitable. This might recover somewhat when the polysilicon glut is over, but it's an ex-growth company in all likelihood.

Royal Bank of Scotland (RBS). Like Lloyds, but with knobs on.

Well, all of these are now in my bad portfolio, which means that they have lost too much for it to be worthwhile doing a stop loss and there is a small hope that some of them might recover eventually. At the same time, however, they are too risky to bear further cash inflows. My action in buying these was a classic dash for trash, innocent of thoughtful analysis. Individually, my losses have not been great, but large enough collectively to elicit a mental "ouch".

P.S. I am having difficulty in posting replies to comments, so apologies to anyone whose comment I have not acknowledged.