Benjamin Graham, the Anglo-American investor rightly dubbed the founding father of investment analysis, ran his portfolios by numerical rules. One such rule told him to sell any holding if it had done nothing after two years; Graham rarely kept holdings for all that long anyway.
True, Graham, whose active investment years spanned the middle decades of the previous century, was operating in simpler times. Not that simpler necessarily meant easier; after all, in those days mandatory disclosure of company information was minimal compared with today’s overload, so a determined investor had to do a lot of digging. But at least it meant there was always another barely-researched stock to move onto if the likes of Cleveland Gramophone & Radio didn’t deliver.
What, therefore, would Graham make of the holding in Real Estate Credit Investments (RECI) in the Bearbull Income Portfolio? It is now in its 11th year in the portfolio, during which time the price has done nothing much at all. The holding was bought for 109.5p in January 2013 and its mid price is now 125p.