Investment: No Pain, No Gain - Don't get bitten in the feeding frenzy

THE NO pain, no gain shares have not performed with distinction during my three-week absence. Although the stock market has achieved new peaks, the portfolio's shortage of blue sky technology shares or even spivvy possible shells has blunted its overall display.

Still, as I have often made clear, I am not conducting a short-term exercise. It's a long-haul portfolio I hope will be thriving when the present feeding frenzy disintegrates with tears replacing the high-pitched hysterical laughter.

A week, to misquote Harold Wilson, is a long time in the City; three weeks can create anxious moments, particularly when the market is in a ferment of excitement. Before I left for Lanzarote - and I had a splendid time in the sunshine - I warned readers to be wary of one portfolio constituent, Merrydown, the cider maker. Unfortunately I did not extend my caution to another AIM share, Deep-Sea Leisure, which has shipped water at an alarming rate.

First Merrydown. The interim figures were crisp enough and although some of the more heady estimates for the year may not be reached, the group is in recovery and should turn out to be a good long-term investment.

It is still licking its wounds from involvement in the short-lived Two Dogs alcopops craze but has streamlined operations to concentrate on its Merrydown cider and Shloer fruit juices. It has cash in the bank and assets by a considerable extent exceed its market capitalisation, significant should a takeover marauder appear.

The shares have had a colourful career, once nudging 400p. After falling to 24p they are now back around my June buying price of 35p.

Deep-Sea's performance is causing anxiety, with the shares down to 152.5p; they have lost nearly 100p since I recruited them to the portfolio in September. As far as I am aware, nothing untoward has occurred. Half-year results were disappointing but few shares have changed hands. The biggest recorded deal in nine weeks involved just 3,125 shares; most were trades of 1,000 or less.

S&U, the money lender, has also let the side down and the portfolio's two retail shares, ERA and Safeway, have suffered as high street blues overwhelmed investment sentiment.

But our successes must not be overlooked. Galliford, the builder, regards its outlook as the best for five years. Besides its traditional house building side, it has emerged as a market leader in constructing mobile telephone networks and social housing.

It also has an intriguing transport development at Northampton; Stagecoach appears to be the likely operator of the town's integrated system, with work is to start next year, opening the first phase the following year. Group profits last year were pounds 4.5m; they should be around pounds 6m in the current 12 months.

Global, the food group, has made progress and pub chain Paramount has turned in a heady display although it has failed to hold its best level. The group is in takeover talks with an unidentified buyer - Burtonwood Brewery has emerged as the favourite candidate - and is still thought to be pursuing a management contract for 285 pubs.

The shares reached 42p at the height of the bid excitement; they are now 31p. When they entered the portfolio in April they were 15p.

Miner Anglo Pacific and Burger King-to-garage-group Gowrings remain on the right side and Allied Domecq and discotheque chain Springwood are showing splendid gains.

Some shares I recommended but did not include in the portfolio for a variety of reasons have performed well. After a handsome profit on the portfolio's only Ofex share, the Montana restaurant chain, I drew attention to other likely winners lurking on the City's lightly regulated fringe share market run by old-style jobber John Jenkins.

Motion Media, developing video telephones, is riding at 540p against 90p when I drew attention to it in September. MM is a little 'un, operating in an industry dominated by giants. Yet it seems to be making headway and has clinched intriguing deals with some of the big players, such as Orange. It is likely to seek a full listing early next year.