Private Investor: Never mind the doubters, I'll stick with Rolls-Royce

So much for Malcolm Glazer, then. Having watched my Manchester United shares climb to 283p, I failed to take the tide at its highest point.

So much for Malcolm Glazer, then. Having watched my Manchester United shares climb to 283p, I failed to take the tide at its highest point. I think it's all over for now, but something tells me that Man Utd won't stay independent for long.

Excellent news, I notice from Rolls-Royce. The company secured a £560m order to supply Trent engines to All Nippon Airways of Japan, who is the launch customer for Boeing's new 250-seat aircraft, the 7E7 Dreamliner. The fleet of 50 7E7s will be fitted with the Trent 1000 engine rather than a rival one offered by General Electric. This, so I read, puts Rolls-Royce in a strong position to win more engine orders on the 7E7. Boeing said it expects to have more than 200 orders for the aircraft by the end of this year and puts the overall market at 3,500 jets over the next 20 years. Not bad.

And yet the developments are met in the City with the usual indifference. Now, I know that those who matter may already have guessed this latest development, so the news might well already have been in the price. And I know that Rolls has had its share of problems, not least in funding its pension obligations. But the reaction from the financial world seems pretty grudging nonetheless. Rolls shares remain around the 250p mark, down from a recent high of 270p or so.

Still, I shouldn't grumble. I've been a pretty enthusiastic buyer of the shares in the past couple of years, and have used their 1987 privatisation price of 170p as a rough signal to buy. I have been told more than once in this period that "no one ever makes money from Rolls-Royce" but, on paper at least, I think they've done surprisingly well for me. It is quite something to be able to be both patriotic and profitable, so, even if the City wants to be curmudgeonly about things, I am happy to celebrate Rolls recent run of successes.

Don't forget that Rolls, like most of its peers, makes most of its money from long term serving and repairing its installed base of engines rather than on the sale of the units themselves, so those orders don't just produce returns and protect jobs this year and the next; the good news runs far into the future, for the life of the aircraft themselves.

The clouds, of course, and where the City is entitled to take a sceptical view, are obvious; the high price of oil and the ever present threat to international aviation posed by terrorism. Yet the long-term trend of increasing international air travel is strong and will survive the current turmoil. More and more people want to see the world and the liberalisation of air markets will help them to do so.

This trend, even if interrupted by terrorist activity, is unlikely to be ended by it. That has been the pattern in all the years since those first hijackings in the 1970s, rather quaint affairs by today's standards. Rolls-Royce should survive al Qu'ida.

Which is not to say that the short term outlook is entirely rosy, and what I have tried to do in my portfolio is balance those shares that can have volatile short-term behaviour but good long-term prospects (holdings as diverse as lastminute.com and Rolls-Royce) with those that will be steady performers in recession and boom alike.

None better, in that regard, than Tesco, which, like Rolls-Royce, I've steadily been buying into over the past couple of years. In fact, Tesco, like Rolls-Royce, has an excellent "secular" growth story to tell and has been expanding both geographically and in terms of product range and types of store (more small convenience stores in city centres, for example).

I sometimes wonder what might happen if Tesco could link up with Marks and Spencer.I'll leave that development as a pipe dream. For now the question for Marks shareholders is whether to take up the company's offer to buy back M&S shares for between 332p and 380p, depending on the level of interest in selling that emerges from shareholders. Despite the depressing results I'm tempted to sit this one out and see what, if any, improvement in the share price results from this restructuring.

It's all some way short of the 400p Philip Green was offering earlier this year for those very same shares. That might be the best offer we're likely to see for some time.

s.o'grady@independent.co.uk