Fund Manager’s Diary


Sunday: I take advantage of warm weather and spend some time with my one-year-old son at the playground where he monopolises the swing. Afterwards, I do some laundry and pack for my trip to Latin America. By 9.30pm, I am at the airport boarding my overnight flight to Sao Paulo.

Monday: I arrive at Sao Paulo at about 5am and immediately fly to Rio. I meet people from Petrobras an oil company. The firm has announced numerous oil discoveries. I have lunch with mining company CVRD and then fly back to Sao Paulo. I have dinner with the head of equities at Merrill Lynch Brazil at a sushi restaurant, where our selection ranges from classic tuna to more exotic dishes like sea urchin. Monday’s local press features President Lula saying “What crisis? Ask Bush!” But Brazilians are starting to notice that all is not right with the world.

Tuesday: I meet TAM Airlines, which is pleased that oil prices have fallen and its traffic is slightly higher than expected. Next is CBD, a retailer, which has reported stronger sales over the past few months following a difficult period. I then meet representatives from two of the biggest banks – Unibanco and Itau – which have contrasting views about the outlook for credit. Unibanco is less optimistic than Itau. Nevertheless, both banks have reduced their loan growth to about 20% for next year, and are turning down consumer loan applications. The day ends with a delicious Argentine steak dinner.

Wednesday: Still in São Paulo, I meet people from the stock exchange, which has just merged with the derivatives exchange. The exchange administers all stock lending directly, publishing short positions daily on its website so it feels in control of short selling and has no intention of restricting it. We have a fruitful discussion about corporate governance. In the evening I fly to Santiago with LAN Chile, which greets passengers with a Pisco Sour – Peruvian brandy mixed with ice, lime juice and egg white – always welcome.

Thursday: I arrive in Chile and am impressed as always by its modern airport and new, sophisticated highway with electronic toll collection (no toll-booths required). In Santiago, I meet mutual and pension fund clients, who are quite nervous about the markets. Chilean pension funds have increasingly invested internationally, especially in Asia and the rest of Latin America. We discuss market conditions and I try to offer them some reassurance based on the already dramatically low valuations of emerging markets.

Friday: I meet representatives from some Chilean large-cap companies including Antofagasta, which is starting to expand copper mining capacity. It is positive on the medium-term outlook for copper as it says none of its competitors have been expanding their capacity and it thinks the market will remain tight for a few years. I also see the local affiliate of Banco Santander, the biggest bank in Chile, which reined in lending early in 2008 and is still cautious. On Friday evening I watch the American presidential debate at the hotel. It quickly feels like a tit-for-tat scoring contest. Treat myself to a Pisco Sour in the hotel bar.

Saturday: I enjoy a walk in Santiago, a pleasant modern city with stylish new architecture. I buy some wine to take to friends in Mexico as well as some to bring home, as it is difficult to get the best Chilean wine outside the country. I fly to Mexico City later in the afternoon hoping to get a good view of the Andes. Sadly, it is cloudy so I console myself with another Pisco Sour and a good book (“Surfacing” by Canadian writer Margaret Atwood) before the week of meetings ahead.