Ian Cowie in today's times10 Nov 2019 12:03
Fever-Tree . . . hard to swallow
Soft drinks left me with a sore head on Monday when my favourite share, the tonic-maker Fever-Tree, fell another 5%. Since some readers felt I talked too much about this stock when its performance was sparkling, it’s only fair I should ’fess up about how it has fallen flat.
Fever-Tree closed on Friday at £17.84, down about 50% since I sold half my holding on October 1 last year at £36.52. As reported here at that time, I needed the money to help buy a tiny coastguard’s cottage on the Isle of Wight.
Few shares have suffered as much as Fever-Tree since the start of a stock market correction that has become known as Red October because of the colour of falling prices on brokers’ screens. The downturn began on October 3 last year, shortly after I sold more shares in a single day than I had ever done.
I also took profits by selling 10% of each of my 10 most valuable holdings to raise cash for the cottage. My timing was lucky but not pure luck because I reasoned that holding shares any longer, when I knew I would need the house deposit soon, would leave me exposed to short-term setbacks or stock-market volatility.
This column makes no claim to have a crystal ball or know what will happen next. I am a long-term investor, not a short-term speculator, who first bought Fever-Tree shares at £2.11 each in March 2015, as also reported here at that time.
I am hanging on to my remaining shares in the company in the hope that the party is not over. The main lesson this investor has learnt from Fever-Tree is that paper profits are all very well but you haven’t really made a penny until you sell.
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