Warne bubble fails to burst

It is time for our annual review of the sporting stock market, a Christmas tradition on this page dating back at least to 2005.

We begin, as ever, with the football sector (as measured by the footy index) where the bluest of blue chips, Imperial Chelsea Industries, continue to dominate the market. They have achieved the company’s first objective (the Premiership) while still leaving future opportunities for growth unfulfilled (the Champions League, the double, the treble, the quadruple, the Ashes, the Tour de France . . .). Keep buying. They will.

In the face of this onslaught, their rivals cowered and fell backwards. Manchester United wilted and, in the personal sub-sector, shares in Ferguson fell to their lowest in two decades. However, both these stocks have historically shown remarkable resilience, a fact that might tempt brave investors. The sensible, however, might wish to wait for further evidence of the directors’ intentions. Or, indeed, their existence.

Arsenal have chosen to spend their profits on a new office block rather than investing in the product, with the customary results. Avoid. But both Liverpool and Tottenham made unexpected progress in 2005 and generated justified optimism for 2006. Don’t get carried away, though. Hold. Those who bought into Wigan Athletic in their penny-share days will be delighted with their profits: now could be the time to take them. Reckless gamblers looking for a future Wigan might consider Preston North End or Doncaster Rovers.

In the international market, shrewdies will be enjoying the profits made by investing in England after they lost to Northern Ireland (“Eriksson’s idiots have no chance”) and selling in the euphoria generated by the win over Argentina. Future gains would entirely depend on England winning the 2006 World Cup, a punt that would be the triumph of hope over experience. History would suggest buying Germany. Apparently, they’re no good at football but that’s never been a hindrance in the past.

Beckham shares had an unusually quiet year: he must have been playing football somewhere. Lampard made gains. Owen came back a bit, after head office moved yet again. Rooney fell slightly. Dealings in Gascoigne have been suspended.

On to cricket, where this version of England reached historic peaks in 2005 before falling back to familiar levels. Caution is advised in the short term, although the stock continues to have long-term possibilities. Chartists still note that buying Australia has been far more successful than any alternative. Some suggest buying Pakistan. (Ethical note: like every other sentence in this article, this is a metaphor. We don’t really mean buying the Pakistan team. Cricket’s anti-corruption unit is now alert to that kind of stuff.)

Among individuals, further gains from Flintoff shares can only come if the directors don’t sweat the assets too hard. Likewise, Pietersen needs to concentrate on core activities. There are problems with Vaughan: the body parts may need renewal, and some investors are quietly starting to bale out. There may be more upside from buying Strauss, or even Anderson. Among overseas stocks, Warne and Inzamam remain rock solid (in more ways than one).

In the rugby sector, England had another duff year, and Wilkinson, the boom stock of 2003, appears to have almost ceased trading. Southern Hemisphere stocks have regained popularity and New Zealand remain a solid buy. Henson: see Pietersen above. Investors are also starting to nibble at O’Driscoll as a recovery stock. (NB: “nibble” is used here in the stock-exchange sense of small scale buying. It is unrelated to rugby terms like “bite”, “kick” or “gouge”).

On to golf: anyone who regarded the Woods slump of 2004 as a buying opportunity is sitting pretty again. Slower investors have missed that boat. The absence of other certainties in this sector means it may be safer to steer clear. If you insist on buying Montgomerie or any other British shares, jolly good luck to you.

In tennis, Henman buyers have finally torn up the certificates and put their money into Murray instead. See reference to triumph of hope over experience above. Federer shares continue to yield well, at an unattractive price. Analysts tip Nadal, though successful diversification into grass courts may remain elusive. At present, the women’s sector is more interesting for speculators but confusing to non-professionals, especially those who can’t remember which Williams is which. Clijsters is the recommendation for 2006.

In motor racing, anyone still long on Michael Schumacher has probably had it. Alonso shares are expected to continue to zoom ahead, but in a McLaren rather than a Renault. There are buy notes out on Raikkonen and Montoya. 

There are no recommendations in boxing on the grounds that we haven’t the faintest idea about any of them.
Disclaimer: This column is not regulated, and no responsibility for the advice contained therein will be taken by anyone. Ever. Shares can go down as well as up. In fact, they usually plummet immediately after being recommended here. Happy Christmas.