The company in question was polyhalite miner Sirius Minerals, whose story we pick up again in this week's issue – and readers will be pleased to hear we are no longer happy to sit on the fence with this one. Reaction to the experiment was mixed – many readers really didn’t like it, suggesting it was our job to weigh up the bull and bear case behind closed doors and present a definitive view publicly. "Strap on a pair IC and make a decision,” as one reader bluntly put it. But a fair few of you quite liked the approach, reflecting the debate at the heart of all investment decisions, especially when it came to more speculative investment cases such as Sirius.
As it happens, I now look back and feel vindicated, because both writers were, in fact, correct to a large degree. At 22p today, Sirius’s shares have risen a meagre 11 per cent since 27 March 2013. By comparison, the FTSE All-Share has risen 49 per cent on a total return basis – and unless you enjoy sleepless nights owning a tracker would have offered a much more gentle ride. It is, perhaps, a classic example of the often-disappointing realities of stockpicking that Chris Dillow warns of in his column this week.
But even if your money would have been better invested elsewhere, Sirius hasn’t collapsed either, as it may well have done given the scale of the challenges it faced half a decade ago. And many of these challenges have now been overcome to the extent that we can now take a view based on fact rather than pure hope, while five years of development pain and miserly share price performance could have laid the groundwork for significant upside – a possibility that reminds us why we haven’t abandoned stockpicking for trackers entirely.
But while we won’t be repeating the Sirius experiment in our tips section, we do still recognise the importance of debate in formulating investment decisions – there are rarely any clear-cut answers in equity analysis, reflected in frequent disagreements among the IC staff over the prospects of companies and markets. That’s why we’ve introduced another new innovation in our successful experiment in podcasting, Bull vs Bear, where we’ll be having those arguments in public, starting this week with a debate between myself and retail correspondent Harriet Russell over the future of M&S. If there are any other companies you can’t make your mind up on, let us know.
