It's been quite a year, to say the least. Last January few people had even heard of "sub-prime mortgages", but these dodgy US loans have since forced American and European banks to write off billions of pounds of bad debts, caused a credit crunch which is still biting hard, and brought UK mortgage lender Northern Rock to the brink of extinction.
Amazingly, given all of that, the FTSE 100 index ended 3.8% up on the year, mainly boosted by commodities companies and takeovers, real and imagined.
Unfortunately our 10 share tips for 2007 failed to follow suit, registering an overall decline of 6%.
However, takeover bids did emerge for a couple of our companies, albeit late in the year, which helped improve the average performance.
The star of the portfolio was medical equipment group Gyrus, which jumped 65% after agreeing a £935m bid from Japan's Olympus Corporation, while diagnostics group BBI accepted an offer from US group Inverness Medical Innovations and rose 25%.
Three FTSE 100 stalwarts showed their mettle. Catering group Compass proved a solid performer as it recovered from its travails of the previous year, while National Grid and Prudential also moved higher. Dexion Absolute, which invests in hedge funds, did not suffer too much damage from the credit crunch, recording a respectable 14% gain. And Nufcor benefited from a rising uranium price, although its shares did come off their best levels.
Sadly, the portfolio was dragged down by poor performances from a trio of tips.
Transense Technologies, which develops tyre pressure monitoring technology, fell sharply after it found it needed to raise money for working capital to keep the company going. It now has sufficient funds to see it through at least the next two years.
Individual voluntary arrangements were supposed to give a boost to firms like Debt Free Direct, but when banks said they would cut the fees they paid for IVAs, the debt companies were hit hard and have yet to fully recover.
Leisure group Rank was seen as a possible takeover target but so far no bids have emerged, while its core businesses have suffered. The smoking ban has hit bingo revenues, and its casinos faced a surprise tax hike.
Undaunted by last year's performance, here are our picks for 2008, a mixture of the well known and the wild cards.
Mark Milner
Equity markets in 2008 look set for a rough ride as the fall-out from the sub-prime crisis rumbles on and central bankers ponder the conflicting pulls of slowing economies and inflationary pressures. Not a time for taking big risks, which is why Rolls-Royce looks attractive at 546p. It is a strong global brand with a balance of interests across civil and military aerospace, marine and energy. The global aviation industry is continuing to expand and Rolls-Royce business servicing existing engines provides a firm underpinning.
Terry Macalister
There is a barrel full of management expertise at tiny EnCore Oil where chief executive Alan Booth wants to repeat the success he had as head of the British arm of EnCana, founder and developer of the Buzzard field, one of a few world-class finds in the UK North Sea in the past quarter century. Booth has surrounded himself with serious operators such as chairman Michael Lynch who founded and sold Intrepid Energy for $1bn. Now they are chasing exploration success here and abroad while spinning off into a North Sea gas storage business. EnCore, 51.5p, is a highly speculative stock but those with a brave heart and spare cash could take a gamble.
Jill Treanor
In the current financial squeeze, it seems best to pick a company which is unlikely to be hit too hard by any downturn in consumer sentiment. Pharmaceutical company GlaxoSmithKline could fit the bill. It relies on governments to buy its drugs, rather than consumers, and has a reasonable pipeline of new products. Midway through the year Andrew Witty, currently head of Europe, replaces Jean-Pierre Garnier as chief executive. Witty is likely to see through the cost-cutting programme already in place at the world's second largest drugs company, now at £12.79.
Katie Allen
New Britain Palm Oil has only just arrived on the London Stock Exchange and while it has picked a tough year to start life in public markets its prospects look strong. Demand for palm oil for foods is rising fast thanks to rapidly developing Asian economies and vegetable oil products are seen as key to driving the biofuel industry. NBPO is renowned for some of the best plantations in the world and has tax advantages over many of its rivals. The biggest quoted player, NBPO listed at 250p and the shares are now at 375p. That is still cheap relative to palm oil rivals and NBPO shares look set for a strong 2008.
Nick Fletcher
Construction group Balfour Beatty took a £70m hit from its share of the collapsed Metronet Tube contractor, but with that behind it things should look brighter in 2008. It is likely to benefit from increased infrastructure spending, including the 2012 Olympics projects and the Thameslink project, and from the government's continuing desire to build new schools and hospitals. The company is also starting to export its expertise in PPP projects. The shares look interesting at 497.25p
Richard Wray
With last year's tip, BBI Holdings, having received and recommended an offer towards the end of the year, many of its investors are expected to switch their cash into another diagnostic testing company called Immunodiagnostic Systems Holdings (IDH) and it's worth following suit. IDH, based in Tyne and Wear, makes diagnostic kits used in the clinical and research markets to test for such things as vitamin D deficiency which is a key indicator of skeletal and bone diseases. IDH's half year figures in December were slightly above City forecasts with sales of £6.8m and profits of £1.3m. Shares closed on Monday at 232.5p.
Marianne Barriaux
Albidon, an Aim-listed nickel explorer and developer, is expected to go into production within the next six months at its nickel mine in Zambia. The nickel price has come off since its high of $54,100 a tonne in May last year, but still stands way above historical averages. China's ongoing industrialisation will still guzzle copious amounts of stainless steel, which incorporates nickel. Judging by the big miners' rush to gain access to nickel, the metal is unlikely to be a loser. Rio Tinto, for example, recently announced it was entering the nickel market with a $300m investment in a nickel mine in Michigan. Also, there has been rumoured interest in Albidon, 136p, from a Russian fund, so it might become a takeover target. But the investment is risky - it is still dependent on commodity prices, and a downturn in the economy could affect mining stocks in general.
Simon Bowers
The online poker industry is still in some disarray more than 15 months after prohibitionist legislation was passed in the US, prompting an exodus of all but a few rogue operators. Prior to that, no betting group - in Europe at least - could afford to be without an online poker division. It was an internet goldrush and, like all goldrushes, drew far more prospectors than could be sustained. With the vast US market declared out of bounds, retreating operators have turned on each other, competing furiously for share of a greatly reduced pool of players. Customer numbers are still growing, but markets like the UK appear saturated and regulatory uncertainty persists in many countries. The poker business has increasingly become a chase for liquidity - the more players you have, the more you attract. One firm well placed in this race is Aim-listed Playtech. Its business model allows software licensees to plug their player base into a network, pooling liquidity with fellow licensees. Player numbers on Playtech's iPoker network are fast catching up with liquidity market leader PartyGaming. Expect this gap to close further this year - a trend which is not reflected in Playtech's share price of 390p.
Deborah Hargreaves
Next year will be a grim one for markets with an economic slowdown depressing share prices across the board. I am not expecting many winners and a move into cash is probably sensible. Banks have suffered extensively from the global credit crunch and many of their shares are close to a low point for recent years. But the Northern Rock debacle shows that the government will not allow any financial institution to go under. In a market shake-out, stronger banks will pick up business from the weak. Lloyds TSB is a risky bet - its shares at 472p are down a third in the past 12 months. But the bank says it has little exposure to US sub-prime loans and is picking up a lot of new accounts from the Northern Rock fall-out. What's more, its dividend yield is 7.5% against a FTSE 100 average of 3.25%. A dividend cut at Lloyds has been a City rumour for the past five years, but so far the bank has held firm. There is always the prospect of a takeover.
Julia Finch
Tipping a retail stock when consumers are nervous and the economy appears to be heading into a recession is a dangerous game. But at Mothercare sales and margins are on the increase in the UK and the chain is now inserting Early Learning Centre outlets into its stores. Pregnant women and new mothers will also be among the last shoppers to rein back spending. But the real excitement in Mothercare is overseas. The chain, together with ELC, now operates 472 franchised stores in 45 countries. Recent openings range from Armenia to New Zealand, but the group is also opening outlets in India and will trial its outlets in China next year. Mothercare has no debt and no pension deficit and a management which has defied expectations. The shares are 342.5p.
How our 2007 tips performed
Company Price tipped Price now Change %
BBI Holdings 149p 186p +25
Debt Free Direct 449p 182p -59
Gyrus 375.75p 620p +65
Compass 290p 308.5p +6
National Grid 737p 834p +13
Prudential 699.5p 712p +1.7
Rank Group 233.75p 91.25p -61
Transense Technologies 91.75p 27.5p -70
Dexion Absolute 147p 168p +14
Average loss -6
FTSE 100 6220.8 6456.9 +3.8