The Private Investor: 'I've achieved my goal at Man United. So what about the profit?'

It's nice to be right, but it is strange to be even righter than you thought you were. Last week you may recall I wrote about the recent dramatic turn of events at Manchester United. I was principally concerned, of course, with the recent rapid rise in the share price and the swirl of speculation about the future of the company.

I regretted not following my instincts and buying the shares this year, when, I think, they languished at 100p or so. By last week that had just about doubled, then hit 250p before dropping back to 225p by the end of the week. At which point, all the shares in Manchester United I've purchased over the past few years are in the money.

Trebles all round? Well, that's the funny thing about paper profits; you just can't spend them down the pub, or anywhere else. So the question is, what next? Leaving the temporary difficulties of Rio Ferdinand aside for a moment, the outcome is by no means clear. I shall sit tight for now.

Another little conundrum I have had to solve is what to do about Oxford Biomedica's rights issue. I bought into this particular growth story seven years ago, believing it was on the verge of a cure for cancer, and it has not yet proved to be a profitable venture.

Not the least reason for this is the countless cash calls the company makes on its shareholders. Now is not an especially good time to be tapping the market for funds, and dispirited Oxford Biomedica shareholders are not the most enthusiastic souls.

So here we go again, and this time we shareholders are being offered 27 new shares for every 50 we own. At present, Biomedica shares stand at 20p, just above the theoretical ex- rights price of 17p. There are positive and negative sides. First, the £22.1m the company hopes to raise would help it make more ground with its cancer and neurotherapy drugs, and will strengthen its bargaining position when negotiating licensing agreements.

But analysts rightly point out the high underwriting costs of £1.7m, or almost 8 per cent of the money being raised. The really negative point is what Alan Kingsman, the chief executive, said, that without the issue the company's cash would run out early in 2005.

The legendary investor, Warren Buffet, always said you shouldn't invest in anything you don't understand, and my venture into biotechnology is a spectacular defiance of those wise words. The company says its products "use genes as the mediators of a therapeutic effect and/or immune response.

"The company's gene therapy products deliver therapeutic molecules in vivo, whilst its gene-based immunotherapy products deliver genes that recruit the patient's immune system to mediate a therapeutic effect. The genes are delivered by the company's highly engineered viruses or cells". Actually, although there are an awful lot of big words there, I think I grasp what they're trying to do. I just feel in a very exposed position about judging whether they can deliver. It isn't a huge amount of money though, so I may go along with this call.

More encouraging has been the progress of Abbey National. With much of the rest of the market, it hit a nadir in March at almost 300p, but has bounced back to about 530p.

Far off its peak of 1450p, but welcome relief nonetheless from some appalling self-inflicted wounds. I notice it has been treated to one of those slightly absurd makeovers high street banks feel themselves bound to go through every so often. I took my dividend this time in the form of an "alternative", in other words used it to buy more shares in Abbey through its dividend reinvestment plan (or Drip).

Dividend scrip issues have become rare nowadays and while bigger FTSE100 concerns such as Abbey or Rolls-Royce offer scrips or drips, lots of smaller but still substantial concerns - the likes of Tate & Lyle, say - don't seem to want to do so.

It's a pity, because it does offer a very neat way of making the magic of compound interest work. They can't be that expensive to administer. Just a thought.

s.o'grady@independent.co.uk