25th March 2011

Artemis: The Hunters' Tails

Facing Fukushima ...

Life goes on. As the Japanese try to come to terms with their terrible tragedy, Princess of Peace, a biography written by a Tunisian of Aisha Gaddafi, sole biological daughter of the bad, mad Muammar, has been published. But (mercifully) it is not (yet) available in translation.
Because he has armed himself with a 'super-injunction' to that effect, no-one can describe Sir Fred Goodwin as "a banker" any more. Enraptured by an eternal now, on average each of the 30 million Britons who have joined it spend 2 ½ hours a day on Facebook; and 15%, or 4.5 million of us, say they log on at least 20 times a day. More than 100 state schools did not enter a single candidate for a GCSE in History last year.

The blackthorn-loving Satyrium pruni, the black hairstreak, is as rare a British butterfly as any. Yet it is endangered by the intended eradication of its favourite habitat, Sheephouse Wood in Buckinghamshire, in favour of a certain high-speed railway.

The Portuguese understand lepidopterists' laments. Bail-out, or default? The latter would be the first by an industrialised nation since WW2. The country has $5 billion to find in May, and then €5 billion in June, and yet lacks a functioning government to negotiate such largesse. Not just the Germans; now the Finns are finding this more than febrile. Our man on bonds, James Foster? "They'll probably fudge and fiddle; and muddle through."

Stocks' allure ...
Perhaps it's spring. Investors are preferring the (considerable) good news - like falling unemployment in the US, or encouraging earnings - over the great deal that is threatening. Who now remembers or cares, it seems, that oil was 'only' $42/barrel at the end of 2008? We continue to concentrate on stocks, and are finding much to bring us cheer.
In UK Special Situations, Derek and Ruth have kept faith with Cowdery's Resolution. Yesterday this owner of Friends Provident, Axa UK and Bupa, increased its final dividend by 15% vs last year's. Goodness. Even Adrian Frost (of Income) is said to be thought to be close to being impressed. Indeed the insurance sector as a whole (Derek and Ruth also own Prudential) is bringing rewards. Says Ruth: "The market's coming to realise that these companies can deliver cashflows and dividends - rather than practising the arcane art of 'embedded value accounting'."

Meanwhile, their holding in Xaar (inkhead printing) is proving very profitable. The pair have also used the drop in its share price from fears of Japanese 'dislocation' to buy more AZ Electronics, which makes chemicals used in, inter alia, iPads and iPhones. Ditto, on drops, more Hunting, Devro, ITV and Reed.
For Global Income, on relative valuations Jacob de Tusch-Lec is continuing to restore the emerging markets weighting he reduced late last and earlier this year. Enter, for example, a Brazilian bank. For Global Growth, Peter Saacke has been buying "US retailers such as TJX Cos, Collective Brands and Guess? Inc, where improving Q4 results hint at a degree of recovery in US consumer spending."
And for Strategic Bond, James and Alex are enamoured of OTE, the Greek telecom. It's part-owned (20%) by the Greek government which, in fishing terms, is as all know down to its backing. James and Alex think the question isn't whether that 20% will be sold (to Deutsche Telekom?); the question's simply when.

And finally ...

This month marks the 10th anniversary of our European Growth Fund, managed then as now by Philip Wolstencroft. Do look at its numbers over the period - despite a humbling 2008 and 2009.
In any case, it's the next decade that interests us. Recent additions are stocks that "appear to be embarking on stronger operating trends: Siemens, Enel, KGHM and Gazprom." From these and other stocks that are cheaper than but growing faster than the market, Philip is hoping for the sort of performance over the next 10 years that you would like - and he intends to deliver.
Speakers' corner ...
“In a revolution, as in a novel, the most difficult part to invent is the end."
– Alexis de Tocqueville (1805 - 1859).
“People demand freedom of speech as compensation for the freedom of thought they rarely use."
–Søren Kiekegaard (1813 - 1855).

Investments