The past year has been miserable for many long-term investors. The worst-hit area has been the small-cap sector, where the majority of dealing is done by private investors. The cost-of-living crisis has dampened investors’ appetite, and this been a particularly strong headwind for equities in the consumer-discretionary sector. Many initial public offerings (IPOs) in this area in 2020 and 2021 have joined the 90% Club (a group of stocks that have suffered a 90% decline in their share price since listing).
But let’s see how the companies I picked from last year have fared over the previous 12 months. Three of my four choices rose, and all of them recorded substantial gains at one stage. This is why it is hard to pick stocks for a year. If a profit warning is issued for a company, the stock stays in the selection for the year, even if I want to sell it.
Moreover, in the case of Yellow Cake, which buys and
