SPLITs Followers’ Thoughts for 2012 (JDT)

SPLITs Followers’ Thoughts for 2012

Well, I suspect most of us will be glad to see the back of 2011 –a year of global disasters, death & destruction; and of course wealth destruction on a massive scale as well. If you were prescient enough or cautious enough to have faced the year equity-free, then UK gilts proved to be one of the few asset classes to deliver a gain on the year – UP 9%.

Surprisingly the FTSE held up rather well, falling a mere 5.4% on the year; but the FTSE 250 fell 12.9% and AIM fell 25.8%. Personally I surrendered early gains and closed the year down a disappointing 8.4%.

Of the two stocks I mentioned in last year’s Header – HPEQ closed UP 50%, doing far better than expected due to a great performance from its underlying Private Equity portfolio - & EMED provided a great ride, shooting to a 90% gain in the first week of the year, then sliding remorselessly thereafter as the Spanish authorities continued to dither and play politics over the various mining permits required. They closed the year down 32%.

As for 2012, well I’ve never known such uncertainty. It seems to me as though caution must prevail; and perhaps the most important decision is to which currency you should entrust your portfolio. I choose the £Sterling, the $US and the $Canadian.

My US exposure comes through my stake in various Private Equity (“PE”) plays where the portfolios are heavily US-centric: APEF, DNE, LMS, PEQ & PIN. PE is not a popular sector for PIs; but for those who would like to follow or contribute, I’ve started a PE thread:

http://uk.advfn.com/cmn/fbb/thread.php3?id=26570589

My Share for the Year is Gresham House (GHE) – currently 247p-258p. For me the anticipated gains this year will be merely regaining the ground lost in 2011, as the shares have surprisingly slumped a full 33%. I say surprisingly as the Company is in voluntary liquidation and the last NAV was 488p. That figure will have fallen somewhat; but I would be very surprised if the 31st December result is less than 415p. Electing for a conservative 30th Jun’14 redemption (2½ years) and a 375p pay-out, the Gross Redemption Yield = 16.1%.

As before, I look forward to reading others’ New Year tips and views; and subsequent contributions throughout the year ahead.