Well, the best answer to that terrorist strategy should be business as usual, and it was interesting to observe in the market reactions how there was both very large buying as well as selling volumes going on, in what was an extremely busy, possibly record-breaking day.
The next result was to see the FTSE 100 index down by 70 points, or 1.5 per cent or so. That was in marked contrast to the sustained dives that followed September 11, and it is perhaps proof that we have learned some of the lessons from what was then unprecedented but which is now, sadly, an anticipated event, if unpredictable in its precise details.
Nonetheless, despite the comparative calm (net) reaction of the markets there were some obvious losers, including British Airways and Stagecoach, both holdings of mine, as it happens. yet just as in September 11 I do not believe that the long-term effects on domestic or international travel will be that great. We recovered from September 11, as well as Bali, Madrid, Mombasa, Istanbul, Iraq and elsewhere. Osama bin-Laden and his followers are not going to bring capitalism down, whatever they may dream.
Still, I didn't think it right to venture into to the market in the immediate wake of the London bombings and, indeed, the volumes of business going through the web-based brokers' sites meant that was difficult in any case.
However I will be willing to take any opportunity to buy extra shares in British Airways and Stagecoach if their share prices remain weakened. As I say, long-term the prospects for both companies are excellent, which is why they are long-term core holdings for me.
British Airways will always be hit by terrorism, but as one of the world's biggest and most resilient airlines (as we have witnessed over the last few years) it should continue to benefit form the long-term trend-increase in air travel. There are also strong arguments for Stagecoach, a share that has recovered incredibly strongly from its nadir a couple of years ago. I regret not hanging onto the shares I bought for 15p now that they have topped 100p and look like they would have been a very lucrative 10-bagger. "Always leave something for the next guy", is the oft-quoted motto I followed when I sold them at about 30p, thinking I'd done nicely to double my money. Now I know better. Psychologically, of course, that decision made me very unwilling to buy in again when they rose to 80p, and so I watched their inexorable rise, unable to steer my own thought-processes in a logical direction. Oh well, never mind.
Overall though, the London market had been doing well before Thursday. The FTSE 250 index had hit another high, buoyed up by the news about the 2012 Olympics coming to London, and the markets had recorded seven consecutive gains. The FTSE 100 index was seemingly ready, at last, to escape the pull of gravity that has kept it for so long closely revolving around the 5,000 mark.
Perhaps, when the markets calm down, I'll revisit the list of shares that are expected to do well out of the Olympics. Foreign & Colonial suggested Morgan Sindall, a specialist in the construction of tunnels, and contractors such as Carillion and WS Atkins. But it has been hard to think about such things in a week like the last one.
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- Osama Bin Laden
- World Trade Center, Nyc