Fund Manager’s Diary

Monday: A quiet start to a big week in the banks sector.

Monday: A quiet start to a big week in the banks sector. Lloyds and RBS reporting results later in the week and news of the government’s Asset Protection Scheme.

Lunch at Cazenove with the management of Morgan Crucible after their results last week. The stockmarket has punished the shares harshly after resilient results for 2008 because of uncertainty over the 2009 outlook. This feels overdone after meeting the chief executive officer and chief financial officer and chatting about the business.

Tuesday: Stockmarket opens weaker again. The FTSE 100 index fell 7% last week and is down 14% since the start of the year. Still no feeling of capitulation – just a grinding erosion of confidence. Our regular Tuesday morning meeting, where our equity and bond teams get together to chat about developments, offers few crumbs of comfort.

A group lunch with Bunzl at the Capital Club at midday. Bunzl is a distributor of products for a range of industries – a nice dull business not too dependent on the economic cycle and potentially interesting on a price/earnings ratio of 10 times 2009 earnings.

Our afternoon stock review meeting at 3pm reviews the oil and life assurance sectors. We think BP and Royal Dutch Shell will pay their dividends this year, while the life assurance sector still looks challenged. It is not helped by being seen as complex, opaque and leveraged to financial markets.

Wednesday: Wall Street rallies, which should mean the FTSE is up this morning. The bond team invite me to see a highly-rated bond strategist at 11am. Wow, I thought the equity side was bearish – tin hats and baked beans please.

Rentokil management come in to see us. Is it a case of good management meets bad business? The jury is out still, given the economic backdrop.

Thursday: The Asset Protection Scheme details are out along with the RBS results. The details of the scheme look generous in terms of size, level of fee and attachment point for first loss. The sector will bounce as there is nothing really new in the RBS results for the bears. I tune in for the webcast call at 9.30am to see what Stephen Hester [chief executive of RBS] and his team have to say. At 6pm it is over to the West End to listen to Sir Nicholas Stern talk about his climate change report. “Optimism is a renewable resource” apparently.

Friday: Greeted by the Lloyds results. Unlike RBS, there is no detail of the Asset Protection Scheme so it is just the results. The more you dig, the worse HBOS looks and the capital position is light. Management are putting on a brave face at the meeting, which I watch on the webcast, but the outlook for 2009 is awful.

In the afternoon, I have a meeting with a corporate governance analyst to talk about the banking sector. With Sir Fred Goodwin [former chief executive of RBS] on the front of most newspapers, the meeting is timely.

Out to dinner at the Windsor Grill with friends who my wife and I met on holiday in Barbados.

Saturday: A lazy day spent relaxing at home. The rugby international between England and Ireland is disappointing, but it is round to a friend’s place for a game of cards and a glass of wine in the evening to brighten the mood.

Sunday: My Sunday football team has a match in Twickenham. After a 1-1 draw, it is back home to have lunch and watch the Carling Cup Final. Unfortunately I fall asleep for most of the match.