CITY AND SUBURBAN
Goodwill to men in the City is subject to seasonal fluctuations
CHRISTOPHER FILDES
Goodwill in the City is proclaimed not by angels but by auditors. You can find it in balance-sheets, where, on my definition, it represents the difference between what you paid for something and what the chap who sold it you thought it was worth. Accoun- tants being the sobersides they are, they have been trying to crack down on good- will. They leave it to the big investment managers, who think that this is just the season for it. This year, as every year, they have been trying to make the Christmas account at the Stock Exchange a happy one — though I feel that their effort lacks con- viction. It is not they have suddenly turned into Cheerybles. The fund managers' chari- ty begins at home — they have their eyes on the year-end valuations by which their own performance will be measured. A little friendly buying in a thin market to nudge prices up, and they can all be sure of their bonuses. You might think that this is just the sort of behaviour which has set the Posthumous Fraud Squad running after Robert Maxwell, but it is different when done by respectable City people, as any fund manager will tell you. It should not be taken too seriously as an exercise in finan- cial forecasting. Markets have a phrase for that: looking beyond the valley. They have spent quite a lot of the year in that posture, but the valley seems to have got wider. The Prime Minister, I notice, has been making promises about a pre-election boom. There will be none of that kind of finagling, he says. I am sure that he has no plans to declare war on China, either.
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