Investment: No Pain, No Gain: Our Man's Portfolio - Four go up and only one down

FOUR OF the six shares tipped since this column was launched two months ago are recording gains. One is unchanged and the other is, sadly, showing a loss. Although the Pain portfolio is intended to offer a long- term investment strategy it is still satisfying to achieve more short- term hits than misses.

I remain content with the first half-a-dozen tips but must admit to the odd pang of anxiety over Regal Hotel, the nation's third largest hotel chain.

Regal, which was the first share to be selected for the portfolio, is the one lurking in the dumps. From a price of 29.5p it has fallen to 26.5p, even touching 25.5p for a time.

As far as I am aware nothing untoward has occurred. Profits, if not spectacular, were satisfactory, the report and accounts moderately encouraging. Yet Regal's decline has taken place in a generally more positive climate for the hotel industry, underlined by an unsuccessful bid approach to Jarvis Hotels, and Millennium & Copthorne's ambitious pounds 556m overseas expansion.

Gowrings, the Burger King fast food restaurants to car dealing group, is the unchanged share, losing a modest gain to settle at 103.5p.

Paramount, the pubs chain, emerges as the early star of the portfolio. Recommended at 15p, the shares moved quickly to 22.5p. They are now 21p. In stock market terms Paramount is regarded as an "illiquid" share, so turnover is not published. But with the market short of stock, market makers were caught on the hop.

Montana, the London restaurant chain, has moved from 182.5p to 195.5p. It did for a time top 200p. It is my one Ofex constituent. The lightly regulated fringe market can be high risk. But it can also produce some real gems.

My blue chip stocks have performed well, with speculation about various forms of corporate action making a significant contribution.

Safeway has, not surprisingly, been caught up in the rumours swirling around the retail sector and has surged from 248p to 272.5p. Wal-Mart, the US giant retailer, and Royal Ahold, the Dutch supermarket chain, are regarded as the most likely predators.

Allied Domecq, interim figures tomorrow, is once again feeling the pressure of speculation about a demerger, or, perhaps, the much-needed spirits link with another international player. From a 482.5p tip price the shares have frothed to 521p, despite what is expected to be a weak profits display.

Although it is rarely wrong to take a profit I can see no urgent need to ditch Safeway or Allied. Even if the speculative excitement fades and corporate action fails to materialise there is always another day. Both groups have to pull their corporate socks up or they will be taken out of their misery.

The two shares continue to offer the comfort of accommodating dividend yields in these low interest-rate days. Safeway is on 5 per cent and Allied 4.8 per cent.

Pain's Portfolio

Price Latest

tipped price

Allied Domecq 482.5p 521.0p

Gowrings 103.5p 103.5p

Montana 182.5p 197.5p

Paramount 15.0p 21.0p

Regal Hotel 29.5p 26.5p

Safeway 248.0p 272.5p