Investing Knowledge

You may recall I presented a five-point plan last Christmas to recoup the losses we all suffered during last year's market meltdown. Well, I've stuck to the plan and it has worked a treat during 2009. So much so, the shares I've tipped this year for the Motley Fool's Champion Shares service have on average recorded a market-crushing gain of 49%*.

Here are the full details:

Tipped	Share	Buy price*	Latest price*	Dividends*	Gain*	FTSE All-Share (news) *
14 Jan 09	Latchways (LSE: LTC.L - news) (LSE: LTC)	447.5p	650p	23.4p	50.5%	30.1%
11 Feb 09	Berkshire Hathaway (NYSE: BRK-A - news)	£2,019	£2,055	0.0p	1.8%	27.9%
11 Feb 09	Domino Printing (LSE: DNO)	210p	287.2p	12.3p	42.6%	27.9%
11 Mar 09	Ashmore (LSE: ASHM.L - news) (LSE: ASHM)	119p	240.3p	3.7p	105.0%	44.7%
11 Mar 09	City of London Inv (LSE: CTY.L - news) (LSE: CLIG)	124p	284p	0.0p	129.0%	44.7%
11 Mar 09	IG Group (LSE: IGG)	183.25p	316.8p	11.0p	78.9%	44.7%
08 Apr 09	Abbey Protection (LSE: ABB.L - news) (LSE: ABB (Virt-X: ABBN.VX - news) )	57.5p	71p	1.6p	26.3%	34.9%
08 Apr 09	Dealogic (LSE: DL.L - news) (LSE: DL)	92.5p	137.5p	3.1p	52.0%	34.9%
13 May 09	Aveva (LSE: AVV)	584.5p	902p	6.5p	55.4%	21.4%
10 Jun 09	London Capital (LSE: LCG.L - news) (LSE: LCG)	189.25p	215p	2.5p	14.9%	17.6%
08 Jul 09	Record (LSE: REC.L - news) (LSE: REC)	60.25p	88p	0.0p	46.1%	25.8%
12 Aug 09	Alphameric (LSE: ALM.L - news) (LSE: ALM)	27.25p	33p	0.8p	23.9%	9.7%
09 Sep 09	RWS (LSE: RWS)	276.25p	303p	0.0p	9.7%	2.6%
Average					48.9%	28.2%

I'm very pleased all the tips are showing a profit, although I ought to point out the performance of Berkshire Hathaway has been hurt by unfavourable currency movements. When I recommended Warren Buffett's investment vehicle, the B shares were $2,895 and they closed yesterday at $3,360, up 16%. In the meantime the S&P 500 (news) has risen about 28%.Five-point planLet me go through the five steps again:1. First, I'll keep on ignoring the market: ...I'm not going to waste time guessing how the index will perform next year... or any other! Tick. I didn't foresee the FTSE crashing to 3,500 in March or rebounding past 5,000 the other week. You see I've been too busy looking for good, cheap shares...2. Instead, I'm just going to look for good, cheap shares: ...In my view, backing shares that boast cash-strong balance sheets, employ owner-orientated managers and sport modest valuations remains the mostly likely route to long-term investment success. Tick. Take the time to investigate my 2009 recommendations and you will discover a ready mix of cash-flush accounts, durable chief execs and -- at the time they were selected -- modest P/E valuations and attractive dividend yields.3: I'll use my watch list, too: I have my sights on a number of time-tested businesses for Champion Shares in 2009... Tick. I'd looked at Aveva, Domino Printing and London Capital, among others, months or even years before I recommended them. I was therefore ready to strike when the market hit the panic button.4 And of course I'll refer to my existing 'buy' list: There is no shortage of well-run, cash-rich contenders I could 'top up' on during 2009. Tick. In particular, I couldn't resist averaging down on Ashmore and City of London Investment when the market collapsed in March. At the time the yields on both shares were a mouth-watering 10% or more.5 Finally, I'll try to avoid trouble: Falling knives, such as debt-heavy pubs, retailers, car dealers and media firms, is another area that is likely to waste time and money next year. Tick, although no investment plan is ever perfect! In hindsight, I should have piled into every busted bank and broken builder earlier in the year, but they all looked total punts at the time and as I've mentioned before, it's difficult to tell the next Pendragon (LSE: PDG.L - news) (LSE: PDG) from the next Woolworths (Frankfurt: 886853 - news) . Given today's messy economy, I much prefer my Champion Shares members to back companies with greater quality.Exceptional returnsThe Champion Shares performance during 2009 has been exceptional and I certainly can't guarantee the service can pick such successful investments in the future. Indeed, some of my earlier recommendations were thumped in the crunch and have been removed from Champion Shares at a loss. I must add some of my current selections -- including those named above -- could falter and lose you money over time.Including every recommendation since the service launched in September 2005, the full Champion Shares scorecard now looks like this:

Date	Average Champion Shares tip*	FTSE All-Share*
22 September 09	9.8%	4.0%

Act now before the market rallies further...

I'm very pleased my simple, straightforward strategy has rewarded loyal Champion Shares members during 2009. If you failed to act on my five-point plan late last year or earlier this year, don't worry -- there are still companies left on my Champion Shares 'buy' list that I'm confident can help your portfolio during the rest of 2009 and beyond.

This free 30-day trial provides full access to Champion Shares, my 'buy' list and every word I've written about every recommendation -- past and present. I hope you can take advantage of this no-obligation opportunity and the possibility of further index-crushing returns. Good luck and happy investing.

* Champion Shares returns are based on mid prices taken on publication of the 'buy' advice and include paid/due dividends but exclude costs. FTSE All-Share returns are based on the FTSE All-Share total return index, which includes re-invested dividends and excludes costs, and taken on publication of the 'buy' advice. Returns include all current and 'sold' recommendations, and are calculated using closing prices on 22 September 2009 or at the time of the 'sell' advice.

For all Champion Shares subscription enquiries please e-mail ChampionShares@Fool.co.uk or call 0845 226 3237.

Risk Warning

You run the risk of losing money when investing in shares. Prices may change quickly, they may go down as well as up and you may not get back the full amount invested. You should not invest using money you cannot afford to lose. We have taken all reasonable care to ensure that all statements of fact and opinion contained in this publication are fair and accurate in all material aspects. Investors should seek appropriate professional advice from their stockbroker or other adviser if any points are unclear. Champion Shares gives general advice only, and the investments mentioned may not necessarily be suitable for any individual.

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