Private Investor: Take a deep breath and jump into the takeover scene

Another week, another four- year high for the FTSE 100 index, although it stumbled a bit towards the end of the week. I'm still trying to work out quite why the markets have been perky recently when there's so much gloom around about the "real economy".

It's not the first time that the Stock Exchange and the wider economy have moved in opposite directions, of course. They did much the same thing in the nuclear winter that was the British economy rate of growth you understand, in the long term the prospects for the UK should still be relatively benign, especially when we look over the channel at France and Germany. Isn't it funny how no one but no one is talking about Britain joining the euro any more?

Perhaps the most remarkable aspect of the stock market's bull run is how much merger and acquisition activity there has been. These are times when the benefits of holding shares in a nominee account at a broker can be felt most keenly, as they happily sort out the paperwork associated with such activity.

It makes it just a little easier to bear when, as I have written before, excellent stocks such as Manchester United or Belhaven, to name two disparate examples, find themselves being gobbled up by much bigger predators.

These were companies carefully chosen by your correspondent in the hope and expectation that they would be long-term success stories. Clearly cleverer, richer people than me agreed with that.

Not that I'm ungrateful for the premium that attaches itself to such take over targets, sometimes long before the corporate action actually happens.

So it continues to be with my holding in the telecoms company O2, the eternal takeover target, and to which I added another slug of shares last week.

Talk about O2 being bought by Royal KPN or Telefonica or someone else never seems to die away for long. Even as it posted increases of 1 or 2 per cent a day in its share prices I was readying myself to dive in and buy some more O2, buoyed by the knowledge that even at such record highs my past purchases, made at anything from 48p to 151p would keep my head above water.

The other great thing about O2 and the appreciable rise in its value since the great telecoms slump of a couple of years ago is the way that my accumulation of shares has offset the lacklustre showing of BT.

You see, O2 was spun out of BT in 2001 and the shares formed the foundation for my current, much bigger, holding.

Anyone who held on to or added to their O2 shares would have done quite well, with the shares up now 50 per cent on their notional price when O2 demerged. They way outperformed BT over the same time period.

If only Vodafone were showing anything like the strength of O2 or, indeed, the wider market, remarkable considering its size and the weighting it has in the FTSE 100 Index.

However, the shares just seem stuck at the 150p level.

It seems that no one wants to view Vodafone as a growth stock anymore or even as a proxy for general world economic growth (it is a global enterprise after all).

In fact, Vodafone doesn't even seem to command the dignity that a rather more old fashioned utility might enjoy. Yet there can be few better hedges against a global slowdown, and there are plenty of emerging markets where Vodafone might well find itself benefiting from the leap frog effect, as communities that never had much in the way of land line infrastructure just migrate straight on to mobile technology for their telecoms needs.

I hope, and expect, Vodafone will catch up with its peers. It certainly isn't about to be taken over.

s.o'grady@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
News
The 67P/CG comet as seen from the Philae lander
scienceThe most important scientific breakthroughs of 2014
Arts and Entertainment
Ian McKellen as Gandalf in The Hobbit: The Battle Of The Five Armies
film
Sport
football
Arts and Entertainment
Sarah Koenig, creator of popular podcast Serial, which is to be broadcast by the BBC
tvReview: The secret to the programme's success is that it allows its audience to play detective
News
Ruby Wax has previously written about her mental health problems in her book Sane New World
people
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Marketing Services Manager - (communications, testing, DM)

    £32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

    Guru Careers: Finance Account Manager

    £Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

    Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

    £40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

    Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

    £45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

    Day In a Page

    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas
    La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

    Deaf community outraged by La Famille Bélier

    The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
    10 best high-end laptops

    10 best high-end laptops

    From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers