Tips from Jamie’s Kitchen

Jamie Oliver would make an excellent investment manager. Not because he’s moonlighting as a private-equity mogul — although his rival influencer of public opinion, the rockstar/philanthropist  Bono, is doing exactly that — but because Jamie knows that in putting together a good dinner, or even a single dish, two aspects are vitally important. All the ingredients must be of the highest quality, and they must complement each other perfectly.

If the white wine is too warm and the lollo rosso too limp, Jamie will see his friends stampeding for McDonald’s. Investment management is similar, though unlike celebrity cooking it hasn’t yet entered popular culture. No television programmes called Ready, Steady, Trade!; no Nigella Lawson Eastern Opportunities Fund (not yet, anyway). But many investors, reading the money pages of the popular press and seeing countless articles touting this or that fund, might appreciate a recipe to help them cook up their own investment soup.

Usually, investing is equated only with the stockmarket. When we hear on the news that the market has hit the skids, or reached an all-time high, we assume that they’re talking about shares, not government bonds or commodities. We’re familiar with this world: most of us work for a company, good companies generate wealth in the form of profits, and we can participate in their success by buying their shares through the stock market. And we know what riches such shares can bring. Warren Buffett has become a multi-billionaire through his extraordinary ability to spot shares that the market had undervalued.

Unfortunately for the rest of us, our share-picking abilities fall far short of his. While he can take huge stakes in a tiny number of companies with great success, we would be ill-advised to try to do the same.