Derek Pain: 'I've paid for dumping Mears but cakes could fatten returns'

Although it is a long-term investment vehicle, the No Pain, No Gain portfolio experienced more sells and buys in 2015 than in any year since its creation nearly 17 years ago.

Two shares fell to highly profitable takeovers and three were deemed underperformers. Their replacements have not, with the exception of Patisserie, covered themselves in glory.

The bid victims were Essenden, a tenpin bowling group, and the Spirit Pub Co. The two deals produced more than £30,000 for the portfolio.

Unfortunately, two of the dumped shares resulted in a combined loss of around £4,000; the other disposal, Mears, a support services group, was elbowed with a near £2,300 profit.

I dropped the stock because I felt the social housing and home care business faced difficult times and the shares would consequently suffer.

It was the wrong decision: I sold at 396p after a recovery from 380p – but the price has since hit 465p and, as I write, is 433.75p.

Aside from Patisserie my 2015 selections are mostly in the red. Interserve, enlisted at 599p, is 512.5p; Peel Hotels has shaded and Serco and Staysafe have given ground. But Distil has edged ahead.

Mind you, in the recent market carnage many portfolio constituents suffered. My own view is that shares have over-reacted to problems in China, although the difficulties in the People's Republic are not the only uncertainties that investors are likely to encounter this year.

During last week's unsettling events, City analysts were still busy plying their trade and – as far as some portfolio members were concerned – they were quite bullish.

Stockbroker Peel Hunt did reduce its recommendation on Patisserie from "buy" to "hold". But last week the price hit 450p – the cake shop chain was purchased by the portfolio at 285.8p – and it was felt the shares had got ahead of the game and were overvalued. Long-term prospects, though, remain positive.

Serco, an outsourcer recruited at 98p and now around 85p, got the nod from Liberum with a target of 135p. The group, after an extremely difficult time, seems to be making the right moves. Although the broker cut its pre -tax profit estimation for 2017 from £94m to £70m, that is still comfortably above Serco's own prediction.

Meanwhile the adviser and wealth manager Hargreaves Lansdown has two constituents – Lloyds Banking Group and Whitbread – among the five shares it has picked "to watch" this year. Lloyds is described as lean, simple and committed to a generous dividend policy. It adds that banks should be dull and dependable – "not swashbuckling adventurers".

As for Whitbread, the Premier Inn and Costa Coffee group, Hargreaves Lansdown says it looks to offer predictable growth with a good track record – but as with all investments, there are no guarantees.

Whitbread shares were acquired at 1,105p; they have since hit 5,500p and are now around 4,200p – a level that Bank of America reckons makes them a buy. Lloyds is showing a loss, recruited at 74.8p with the price near 69p.

I think Avation, the commercial aircraft leasing group, was the only constituent to fly higher amid the debilitating market performance. The company's treasury acquired 785,000 shares at 129p and chairman Jeff Chatfield and another director also raided the market, picking up shares at the same price. Oceanwood Capital Management purchased more shares, lifting its stake to 28 per cent. Mr Chatfield controls 20.2 per cent.

Such activity lifted the shares to 149.5p, not so far from their all-time high.