Wednesday My diary at the beginning of a week is usually packed with meetings. But, as I return to the office following the two-week break, the only thing in my diary is a reminder to write this journal. Few companies are on the road at this time of year – so there is time for some contemplation of the year ahead. Brokers’ analysts and strategists publish reams of ‘top picks for 2008’ and strategy outlooks.
One piece, entitled “unfasten your seat belts”, suggests that the worst of the credit crisis is behind us. Combined with rumours of an approach for Alliance & Leicester from Santander in the press, and several brokers noting that inter-bank lending rates do seem to be trending down following the central banker’s actions in December, the market starts off on a positive note for the year.
To fund some purchases I put on some orders to shave a few positions in stocks that have performed well. This afternoon I take the children to see a pantomime, in Richmond.
Thursday In a fit of enthusiasm for new year fitness schedules I have signed up to join a London to Paris bike ride to raise money for charity. It will encourage me to cycle in more often; the thought of 300 miles in three days is daunting.
Dixons kicks the reporting season off with a nasty profits warning, sending the shares down more than 25%. I smile as I remember sharing a platform on a marketing trip last year with our bond manager, John Pattullo, who remarked to the audience: “For me, Christmas isn’t Christmas without a profits warning from Dixons”.
Our economics team are concerned about the message given by yesterday’s fall in the US ISM index, suggesting corporates have become a lot more cautious.
Friday I spend my day deep in broker research reports. The macro outlook is gloomy, and the weak non-farm payrolls data showing a spike in American unemployment, along with a profits warning from Land of Leather, only serves to highlight this negative tone. The world has not ended however, as a bid approach for Nestor Healthcare demonstrates there are plenty of value opportunities out there.
Saturday/Sunday We spend the weekend in Kent with my parents and catch up with some old friends for dinner. Our friends highlight that those involved in financial markets are gloomier than those in the real economy – to the extent that picture framing and the wine trade are the real economy. Perhaps this just indicates that the top end continues to do well for the moment.
Monday Seb Beloe starts this morning as head of SRI [sustainable and responsible investment] research. He joins from a consultancy called Sustainability. I think he will make an important contribution through the analysis of sustainability and responsibility issues, which is core to the way we manage our range of funds.
I study Scottish and Southern Energy’s acquisition of Airtricity, which again demonstrates that companies can still make acquisitions despite the gloomy macro environment, and the health of the renewable energy theme, which is important for the funds.
Tuesday I have set today aside to get on with writing client reports. We have several institutional clients for whom we write individually and we also write extensively on our retail funds. Although we write reports at regular intervals, I try to ensure that we focus on longer term developments, in tune with the strategic nature of the funds.
George Latham is head of SRI funds at Henderson Global Investors. His diary runs from January 2-8.