How did your portfolio do?

An end of year spurt in share prices took some of the top performers higher than their placings in the Margin Call column published in the last print edition of NBR in 2010.

This demonstrated one of the main points of the column: past performance is often a sure sign of continued good performance. Those that performed best, however, are usually stocks that have been written down for whatever reason.

While the tables are only a guide, because of the arbitrary choice of calendar-based prices, they provide a much better range than those chosen in so-called best broker picks contests.

Brokers restrict their choice to a handful of stocks, so the chances of getting it wrong are greater. Often they don’t even change their stocks year-to-year.

Share investors should have a wider palate, and seek the higher returns available from non-NZX-50 stocks.

The brokers favour the heavyweights, which by their nature seldom show up in the tables below – examples are Contact Energy, Fletcher Building, Auckland International Airport, Sky Network TV and Sky City Entertainment.

You cannot go wrong with such shares. But picking the turnarounds and trend-breakers provide better returns. Who was looking at Skellerup, Charlie’s and Xero a year ago?

Another thing, don’t be put off by the ignorance in the media about business, profits and the sharemarket. Reports of the latest low-ball share offer scam dragged out the usual comments about “taking advantage of the vulnerable” and calls for more rules, as if there weren’t enough.

Surely most if not all investors know what their shares are worth and how to sell them. Basing the market on rules that reward ignorance rather than knowledge is a sure recipe for disaster.

The share scammers aren’t offering a quick buck, like normal scams, so why should the media assume anyone is likely to accept these low-priced offers?

But the same media also keep reminding us that so-called “mums and dads” don’t invest in shares because it is a casino. The news writers are also besotted with ideas such as “all profits go overseas,” the government should hold on to “family silver” and that companies with overseas shareholders are somehow less desirable than locally owned ones.

WINNERS AND LOSERS

NZX-50 – Top 10

Company, price, return
Restaurant Brands $2.62 47%
Mainfreight $7.70 41%
Hallensteins $4.09 23%
Ebos $7.33 22%
Vector $2.33 20%
Air New Zealand $1.51 19%
Michael Hill 88c 18%
Infratil $1.91 17%
Nuplex $3.50 14%
Cavalier $3.07 9%

Bottom 10

Company, price, return
NZ Oil & Gas 87c -45%
NZX $1.45 -30%
PGG Wrightson 49c -23%
Abano $4.88 -21%
Pumpkin Patch $1.65 -19%
AMP $7.00 -15%
Telstra $3.65 -15%
Kathmandu $1.70 -14%
F&P Appliances 55c -13%
Telecom $2.19 -10%

Selected shares

Top 10
Company, price, return
Diligent 63c 144%
Skellerup $1.16 125%
Charlie’s 20c 120%
Oceana Gold $4.85 85%
Allied Work $1.32 64%
Xero $2.94 55%
NZ Farms 62c 31%
Tenon $1.20 30%
Cavotec $3.35 16%
Opus $1.98 15%

Bottom 10
Company, price return
Allied Farm 2c -82%
Mercer 12c -60%
New Image 27c -57%
NZ Wind 18c -54%
Wgtn Drive 2.6c -40%
Postie Plus 28c -33%
Sealegs 16c -27%
SteelTube $2.12 -26%
Delegat’s $2.00 -25%
Wakefield $5.77 -24%

Note: Returns are calculated from week ending January 21 to December 30. During this period the NZX-50 index rose less than 3%.