Fund Manager’s Diary

Monday I perform well in Monday morning’s obligatory game of spoof. A colleague represents the UK desk at the weekly investment floor meeting, leaving me free to spend the bulk of the morning revisiting our assumptions on Shell. Having been underweight during the recent share price declines, it’s now tempting to close out the bear position, but we’re more convinced than ever that the shares will continue to underperform.
Grab a sandwich lunch with a City telecoms team – no prizes for guessing that Vodafone’s US adventure dominated conversation. The company’s current posturing in the US market is keeping the wires buzzing and the conspiracy theorists busy, which makes for an interesting meeting. We’re expecting further weakness in the price as Vodafone CEO Arun Sarin is bidding high for rival AT&T Wireless to force another American player – Cingular – to pay top dollar. However, we don’t expect that Vodafone will eventually get AT&T Wireless, which should be worth much more to other operators on many metrics.
Tuesday Disappointing results from BP prove an unexpected fillip. The flight of my colleague Joel “Utility” Marks is delayed this morning and he has a chance to do some reading up on ancient Pompeii: it seems the aqueduct owners were making a killing before the city’s untimely demise. It prompts a thought that it’s time to seriously consider UK water companies when they’re yielding 9%, regulator or no. Let’s hope Arthur’s Seat stays dormant.
Spend a lot of time considering Cable & Wireless. Our view is clear, but I need to spend time benchmarking our assumptions against the market to see what has already been priced in. Off to see Swip’s new CEO strut his stuff tonight.
Wednesday UK Growth fund manager Peter Cockburn was crushed in last night’s buzzword bingo: he had grossly overbought “objectives”, while finding himself painfully short of “research”. Shame.
Results this morning are broadly in line and pleasantly unexciting. A large placing of AstraZeneca by Swedish firm Investor AB knocked the shares and serves as an unexpected bonus for our funds, which are underweight in the stock – a helping hand two days in a row from the big boys. The big news today is Comcast moving in for Disney, which has added an extra bit of spice to the media sector.
I dreamt last night that I was lunching with Alan Greenspan when he informed me that Warren Pharmaceuticals had been hoovering up shares in Glaxo. Despite the warning, I’m holding my resolve ahead of tomorrow’s results and staying underweight. After incorporating downgrades for dollar-denominated earnings, the shares don’t seem cheap and it’s hard to imagine what Glaxo boss JP Garnier can say to inspire a reversal in performance.
Thursday A bruising and tiring day in all. Luckily, the apparition of Greenspan didn’t spoof me into closing the short position on Glaxo. What price the Frenchman now?
See Shell chairman Philip Watts: no clogs, but no progress on the board structure either. Barclays’ results seem to show that it offers good value, but the market treats them with disdain. Centrica goes net cash positive and is also churlishly received. London Bridge is falling down and Marconi is moaning. The Butler bought a Lastminute holiday and Rolls-Royce is flying away. At least I got a share in the sweepstake pot with colleague Tony Foster.
•David Urch is investment director, UK equities, at Scottish Widows Investment Partnership. His diary runs from February 9-12.
Subject: Last Friday
What a lovely little cottage you have. I could get quite used to starting my weekends with lunch at the Anchor, followed by a digestif at yours.