Recently, I'm not sure exactly when, the Share Sleuth portfolio reached a major milestone. Dart became its first '10-bagger', which means the portfolio's holding increased in value tenfold.
Before the back-slapping gets out of hand I must confess only a quarter of the £1,000 I originally allocated to Dart has risen tenfold. I agonised about adding Dart to the portfolio in 2009. As the share price flew, I agonised even more about holding it.
Dart operates an airline and sells holidays. Airlines are complex businesses financed by advanced ticket payments and off-balance sheet leases. To manage the risk of dramatic currency and oil price movements airlines enter contracts known as hedges, which complicates the accounting.
Though I admire Dart's flamboyant founder, Sir Philip Meeson, I don't fully understand the financial risks, and I reduced the portfolio's holding in 2013 and again in 2015, taking large profits.
'DEREILCTION OF DUTY'
In hindsight, holding all the shares would have been even more profitable. But I'm not investing with hindsight. As Dart's value rose, it was accounting for more and more of the value of the Share Sleuth portfolio, which was too big a risk. Selling some of the shares gave me the confidence to continue holding the rest.
This experience, and others, have led me to question what it means to be a buy and hold investor. Author and fund manager George Cooper describes buy and hold as a dereliction of duty in the inaugural letter to holders of his new fund, Equitile Resilience.
He says corporate longevity has been in decline for decades because of increased competition from globalisation and accelerating innovation.
Cooper's book Money, Blood and Revolution advocates a Darwinian model to describe the economy and his fund practices a Darwinian approach to investment.
Equitile Resilience is a diversified portfolio of the most resilient companies, the strongest, most adaptable businesses with the strongest balance sheets, similar to Share Sleuth (though the companies are huge and headquartered all over the world).
Cooper says the founder of packaging company Sonoco, one of the fund's holdings, had a dictum that has guided the company for over 100 years: 'Change is an immutable law, eternal adaptation is the price of survival.'
It sounds like a company to buy and hold, but Equitile has another element to its strategy, which it calls Darwin. Should a holding's share price fall sufficiently according to predetermined criteria, the fund sells the shares, a trade known as a stop-loss.
Share prices are influenced by traders' short-term expectations, which are usually irrelevant. A stop-loss doesn't give a company time to adapt.
On the last day of March I added 112 more shares in Goodwin, Share Sleuth's biggest loser, at a price of 2,049p. Like Sonoco, Goodwin is an old company, and I believe the engineer is adapting to changes in its markets.
Investors' loss of confidence does not mean it's no longer fit to survive (and ultimately prosper), but it does mean the shares are good value.
Cooper's letter has inspired me though. Like Equitile, Share Sleuth adapts. Perhaps the modern version of 'buy and hold' is 'buy and evolve'.
I met Andy Walters and David Bridge, respectively managing and finance directors of Quartix after their AGM at the end of March.
Vehicle tracking is a competitive market that Quartix by no means leads, but I was bowled over by the directors and their business model, which is probably unique. Portfolio members BrainJuicer and Science have reported full-year results.