Even the best can get it wrong

I was coincidentally looking through an article by Geoff Gannon dated 27-Jan-2011, where he looked at UK stocks. He identified "7 decent businesses selling at decent prices": CTO, FBDU, CC, GMG, BMY, FLK, ASY. A little later in the month, a commenter posted:

It seems to me like, in a situation where markets in general may be getting to fair value, you are looking for those still cheap companies…and are lowering your standards and losing sight of the risks these companies may involve… in a desperate attempt to outperform. But is it really worth it?

With the benefit of hinsight, the answer would appear to be: "no", not by a longshot. CC (Clinton Cards) was cancelled from the official list earlier this month on account of going into administration. GMG (Game Group) is basically bust. FBDU (Flying Brands) was taken private. Earlier this month, the company disposed of its gifts division, Garden Bird Supplies, Garden Centre Online and Listen2 business. Sounds messy. I assume that things worked out badly for any long-standing shareholders. Over one year – which admittedly doesn’t coincide with exact timing of the article – the Footsie is down 9.9%, TCO -46.4%, BMY -11.5%, FLK -8.4%, ASY -15.4%. Ouch. Two to three fatalaties depending on exactly what was going on, one major hiccup at another (TCO), with only one share outperforming the index.

Be safe out there.

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About mcturra2000

Computer programmer living in Scotland.
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