Private Investor: A little Docklands wonder that's worth catching
Saturday 05 March 2005
Regular readers will know that I don't have a terribly well developed theory of investing that I stick to religiously, like Warren Buffet or Jim Slater, say.
Regular readers will know that I don't have a terribly well developed theory of investing that I stick to religiously, like Warren Buffet or Jim Slater, say. The fact that they are where they are and I am where I am suggests that of the three of us, one has not quite got the hang of this getting rich game.
Never mind. Modest returns are the best that I think most of us ought to aspire to, from well diversified portfolios with an eye to the long term. One thing that is always worth looking for, however, is a good "secular" growth story, one that will sustain pretty much whatever happens to the economy short term, and, indeed whatever befalls the nation politically.
Thus the liberalisation and expansion of the gambling market should be one lucrative area for those operating in it, despite the climb-downs the Government has to execute in its Gambling Bill. The relaxation of the licensing laws is another.
Both policies are morally reprehensible, as they will increase drunkenness and addiction to gambling, the evils of which will be known to anyone unfortunate enough to have brushed with them. Booze and betting can be fun, but they can also destroy families. Yet the opportunities for investors to profit from vice are clear to all, and that is why I have shares in Sportingbet and Scottish & Newcastle, for example.
The other secular growth story that has been well chronicled over the years but which never seems to pause for long is the trend to outsourcing. There are plenty of companies now crowding into this field, and I have bought Capita as a good way into this market. I think that Serco is an even better bet though, and one that I have neglected until now, when its very good results this week caught my attention.
For Serco not only gets stuck into the routine sort of PFI style activity such as rail franchising and running young offenders institutes (another play on human vice, but I digress); it also has an interest in running some our speed cameras.
These much loved national institutions can only proliferate as the public authorities use them more and more as a revenue raising device. If they were all about safety - and I concede that they must always be partly about safety - then surely the authorities would not make them so hard to see and easy to miss. For if the Government really wanted its "safety camera partnerships" to keep death off the roads they would be planting gigantic signs warning about speed traps well in advance.
No matter. There are hardly any on the motorway network, they are still relatively uncommon in some parts of the country and developments in technology will make them ever more difficult to evade. Drivers may be infuriated by the fines they have to pay for comparatively minor transgressions, but it is all good news for Serco and its shareholders.
And it's not all Gatsos; the other bit of Serco's business that seems set to continue its success is the Docklands Light Railway in London. Despite the coming of the Jubilee Undergound Line to Canary Wharf and Stratford, the DLR is still a busy little railway, largely automated and very reliable. It is an excellent play on the continued success of London's Dockland business district, which has now grown to such a critical mass that it ought to be able to withstand most recessions (as it spectacularly failed to live through the last one).
Serco seems a good bet to have its contract to run the DLR renewed next year. The only risks with Serco are its expansion into the IT business in the UK and the defence industry in the US, both by recent acquisitions. Companies like Serco ought to stick to their knitting, but the risks seem in proportion. So I shall be buying into Serco on the first hint of weakness in the share price, and possibly before. Maybe Warren and Jim have shares in it too.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Vogue under fire for 'Big Booty' article
- 5 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony