Saturday It is the last weekend of the holidays for me after a refreshing two weeks off. I make blueberry pancakes topped with Vermont maple syrup for breakfast, take a walk on windy Dartmoor with the family to clear the cobwebs, and then we set off back to London.
Sunday The day brings a splendid dim sum lunch in Hampstead with an old friend and my three-year-old son Ben, who decides that egg fried rice is the only interesting thing on offer. It is a beautiful day and Hampstead Heath is busy.
Monday Spend most of the day catching up on the global equity market action from the past two weeks. Particularly notable is that telecoms stocks have been rallying 2% a day simply because investors are selling cyclicals and financials. No-one wanted to buy them two years ago when valuations were 30-40% lower, and the consensus was that new technology would commoditise mobile revenues. Now telcos are the markets’ favourite place to hide, and I resolve to sell as our holdings hit fair value. I also resolve not to pay too much attention to what happens in the markets before January 15, as it is a notoriously unreliable trend indicator for the rest of the year.
Tuesday I begin by writing the month-end report for the Schroder Global Climate Change fund. I focus on the U-turn by America in Bali that offers the prospect of a new international treaty on climate change that will include America, China and India. Then lunch with the management of a Chinese solar company with plans to grow capacity 10 times in the next four years and want to raise capital. I am left with the feeling that they do not really take the risks involved with growing so fast in a commodity business seriously enough. Nevertheless, alternative energy stocks have been on fire, driven by government incentives and climate change targets, and it is a pleasurable report to write.
Wednesday The day is focused on the weekly global team research meeting. Any one of the 11 investors on the global team can present on an investment idea or research report. It is a great sounding board for investment ideas, where team members, each with differing specialities, look for the holes in your thesis – constructively, of course.
We decide to back our conviction on the agriculture cycle and increase exposure to support industries such as crop protection chemicals, while reducing auto parts exposure where American and European consumer confidence is weakening. Our video conference call with the American research team is depressing, with analysts in sectors from retail, media, industrials, financials and materials all seeing downside to earnings during January reporting. I end the day writing emails to our Japanese analysts as part of ongoing discussions on end market demand for some of the key exporters such as Honda, Bridgestone and Sony.
Thursday and Friday I prepare for a trip to Asia, which includes a three-day conference in Shanghai. China has underperformed India by close to 30% in the past few months, and some of the domestic Chinese stocks are beginning to look reasonable value for what is still a phenomenal structural economic growth story. I am hoping that this trip will throw up some new investment ideas in a region we are looking to remain overweight. There is no substitute for doing your homework before the company meetings. These will be back-to-back for most of the conference, so research time is essential.
l Simon Webber is the manager of the Schroder Global Climate Change fund. His diary runs from January 5-11