Wilde's Portfolio
The new order
Mr Wotherspool
Young Wilde is by no means my only client, but he is perhaps the most persistent, trying to maximise the return on the e10,000 his Aunt Maud bequeathed him a year ago. Yet even though management of his funds has entailed above-average work I at least feel the brokerage charges are, in this case, fully justified. This has been a moot point with Wilde, who with youthful socialist principles, has criticised the high wages of stockbrokers. Perhaps one day he will join our ranks, recognising the truth of Shaw's remark about socialism only being the philosophy of young men.
I am straying from my brief, however, and returning to matters in hand, rather like a crusading knight, Wilde announced last week that he was appointing me steward in his absence. How long my tenure will last depends presumably on my success or on the return of Wilde. He has. I believe, left for the country to fight in a local borough election. I would hate him to return from his phi
lanthropic campaign and discover his coffers depleted — unfortu nately, however, the investment climate, even in the few days following his own panegyric last week, has decidedly weakened. The time is ripe, therefore, to take the plunge and make some fairly radical changes in Wilde's portfolio.
This, I feel, is very much the time for particular care. I realise the longer-term benefits of spreading the risks and feel that this has paid off handsomely by investing in overseas stocks when the UK market has been weak. Still I feel that for the short term I appreciate there is limited scope in such situations as Sime Darby, Dalgety, Shell and RTZ: these, therefore, leave my portfolio. Furthermore I have sold half my holding in Unochrome which has been something of a disappointment.
The first of my ' special ' situations is Odex Racasan. My friends in Liverpool tell me that several lustful eyes have been cast in the direction of this company.
Firstly, however, let me say something about what Odex Racasan does. It is small, capitalised at something over Om; it manufactures and distributes detergents, disinfectants and deodorants; it has a good record, a high return on assets and is relatively lowly geared. As for prospects, last December the chairman, Mr J. H. Chandler said that he expected rather better growth than the average of the past few years (24 per cent in 1972 and 15 per cent in 1971). At the interim stage profits were, in fact, nearly a third up. Of course, coming the company's acquisition of Downey.
The shares are admittedly selling at about twenty times last earnings though this multiple should fall by four or five points on this year's results. Yet I expect a great deal more interest will be shown in the group when the full year figures are announced.
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