The Master Investor Covid-19 Market Recovery Portfolio

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The Master Investor Covid-19 Market Recovery Portfolio

An eighteen-month retrospective shows a massive market beating 114.4% improvement.

In late March last year, as the UK equity market was slashed horrendously in reaction to the global Covid-19 pandemic, the fear of investors, as they saw their investments falling in a steep decline, was almost palpable.

Practically everyone was hurting either by direct diminution of their invested values or through pensions and the like, managed by investment professionals, being severely reduced.

If you can

It is on occasions like that when I am reminded of Rudyard Kipling’s almost immortal words in his poem ‘If you can keep your head when all about you are losing theirs’ – it is not easy to stay calm, especially when it feels as though the world is in a total catastrophic panic.

It was on 25 March 2020, in this column, that I passed on my views of the market and what I suggested that investors should do with their stocks and any spare cash that they may have had to hand.

Quite clearly that day I stated that –

First of all, I would not recommend dumping your stocks – you chose them for your holdings because you liked the story and the investment criteria to back up your selections, so hold tight.”

The creation of a new portfolio

I went on to note that –

Several people have asked me which companies I would select for fresh investment, seeking a good recovery bounce before the year end.

Accordingly, I have compiled a quick hit list of ten stocks – my CV19 Market Recovery Portfolio.”

Well, that list of investments has not done too badly in the last year and a half.

On the previous day, as I wrote that article, the FTSE Index had closed at 5446.01.

Last night it closed at 7078.35, having shown a rise of almost 30% in the intervening period of time.

As you will see below The Master Investor Covid-19 Market Recovery Portfolio has put in a market beating performance of +114.4%.


The COVID-19 Market Recovery Portfolio

Code

Company
Price ThenPrice Now
+/- %

Current View

BILNBillington Holdings242p275p+ 13.6Weak hold
CAPDCapital Limited34.5p78p+126.1Just a hold
FIFFinsbury Food Grp55p94p+ 70.9Top slice
INLInland Homes41p48.2p+ 17.6Get ready to average
MPACMPAC Group185p600p+224.3Top slice
RFXRamsdens Holdings85p172.5p+102.9Good hold
RNKRank Group97p173p+ 78.3Now a good hold
KETLStrix Group122p363p+197.5Strong hold
SURSureserve Group31p81p+161.3A good hold
CTOTClarke71p178.5p+151.4Top slice

Overall performance

+114.4

Avoid over-reaction

Now some words of advice for any times of panic, a bit like we had earlier on this week on the back of exploding gas prices, staff shortages, supply hassles, shipping costs escalating and even the Chinese property market going into meltdown.

That was when I stated quite emphatically that caution was very necessary and over-reaction should be avoided.

My View Going Forward

Always keep up your confidence in your portfolio holdings.

To do so means that you must stay awake to company news relevant to any of the stocks on your list.

Know what you are looking for in terms of current and future performance, whether short, medium or longer term.

Assess the value of each of those company’s shares and log down the ‘price objectives’ made by any of the broker’s analysts that research the company.

Also assess what any competitive sector companies have for price earnings ratings and value estimates, then judge your holding company against those sector peers or averages.

In times of panic, it is best to not get influenced by the media reactions, they are simply gaining column inches as they spell out their ‘shock, horror, calamity, crisis’ stories – that after all is their job and that is why we read their words.

But do not get spooked

The market makers love to slash prices back in any times of market rout – it gives them the ability to close their own short positions, while also taking on board cheap stock.

That is why it really is essential that you do your homework on any of the stocks in your portfolio, that you keep reminding yourself of the reasons that made you take up those holdings.

It is imperative that active portfolios need constant attention, do not give it to someone else to do for you, so do it yourself. It is your money, your responsibility.

Know your companies and what they are doing

Do not get me wrong – shares are for buying, holding and selling – just know your own view when doing so.

It is wrong to get spoofed into this share or that company by way of a ‘tip’ from someone else.

Remember the old market adage ‘where there is a tip there is a tap’ – is someone ‘legging you in’ when actually getting out of the stock themselves?

I cannot be any clearer in reminding you that you must know your stocks and that it is important to keep to the aims that you had when you took them on board.

If corporate news changes any previous opinion, then assess rapidly your reaction going forward.

The UK equity market can be a very exciting arena of action – literally full of thrills and spills on an almost daily basis.

As I stated above it is always imperative that you know what is going on in both the market and in your own stocks.

Most of all it can be fun to get it right.

The old adages ring so true

The market is most dangerous at its best and at its best when at its worst.’

Scared money never makes any money.’

The only way to get a bargain is to buy when most investors are selling.’

To buy when others are despondently selling and to sell what others are greedily buying requires the greatest fortitude, even while offering the greatest rewards.’

But probably best of all,

I like what the late Nelson Mandela once said –

I never lose, I either win or I learn.”


Comments (2)

  • Surinder Douglas-Bhanot says:

    Mark ,
    In regard to McColls on the 16th August 21 you wrote:
    “What a total shambles. That was my reaction to this group’s announcements and funding last week.”

    They are now rewarding themselves with a big helping of free share :
    “The Company announces the grant of awards on 23 September 2021 to the following Directors and PDMRs of the Company in accordance with the rules of the McColl’s Retail Group plc Long Term Incentive Plan (the “LTIP Awards”).

    I cannot believe the RNS, given that the share price has fallen ~94% over the last 4 years. Where is the morality in all of this?

    The board and management have simply been re-arranging deck chairs on the Titanic……how can they consider they deserve all these free handouts when shareholder value has been decimated!

    Surely, it is time to prune some of the dead wood and appoint a new CEO.
    Are the major shareholders making their feelings known?

    I would be very interested in your views on their sneaky schemes to that are not aligned to shareholder value.

    Finally, I would like to thank you for the quality work you present at Master Investor…it has been of tremendous value and is very much appreciated!

  • Surinder Douglas-Bhanot says:

    Mark what are your views on McColl’s Management helping themselves to “big load of free shares” when in the past 4 yrs on their watch the company share price has collapsed by 94%?
    Does corporate governance need to be addressing?

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