Private Investor: How to keep profits flying high in an age of global terrorism

I don't want to come over all political, really I don't, but I thought the most interesting feature of this week's US election was not the admitted drama of the count on Tuesday night nor even how spectacularly wrong some of the polls were, but the fact that the entire process was conducted under the shadow of nothing more menacing from Osama Bin Laden than a video.

OK, the capacity for al-Qaida to inflict cruel and merciless violence on innocent people is certainly still there, and may even have been perpetrated between my writing these words and their publication. Yet it was remarkable that, for all the threats to American security we have heard about over the past few years, there has been next to no action in the American homeland since 11 September, 2001.

That, no doubt, has had something to do with the continuing upward trend in air travel. Had al-Qaida managed to infiltrate US airspace again, then that might well have precipitated a quite nasty downturn in the entire economy, and certainly in the transportation sector. The fact that this has not transpired, even at such a time of great political sensitivity as the last election cycle, is as good a piece of good news as anyone worried about the world might hope for. And when America is confident, so is the rest of the world.

So it was perhaps not such a big surprise that BAA's results this week reflected this robust confidence in air travel, with numbers flying from the company's airports up by 7.5 per cent to £77.5m for the six months to September, with those flying long-haul up 10 per cent. Pre-tax profits rose from £312m to £363m for the first half. The shares are now up to 575p or so, which is well up on the 450p at which I bought the biggest part of my holding.

I hope it isn't tasteless to talk about such matters in the same piece as one that mentions terrorism, but I do think that one of the aims of the terrorists on 11 September, 2001, was to cause as much economic damage as possible, as well as attacking some symbols of capitalism itself.

It is up to the rest of us to defy them by living our lives as normally as possible - flying on 11 September, taking holidays in Bali and Istanbul, and supporting those businesses and livelihoods that the terrorists seek to destroy. The past few weeks have been relatively benign for the transport sector and the economy generally, as the oil price seems to have calmed down a little.

Even those of us who think the war on Iraq was mis-sold to the public ought now to dare to hope that after the elections next January, Iraq will begin its slow process of healing and reconstruction and that the oil will begin to flow, for the good of the Iraqi people and the rest of the world alike.

George Bush wins the war on terror? It's worth hoping for. If things don't get better - perfectly possible - then this week will be seen as the time when President Bush's problems began rather than ended.

Yet, whatever happens in the macro-economy, there is always scope for strange and intriguing things to happen in the undergrowth of smallcaps and penny shares. One such I have been taking an interest in is a tiny outfit named Matrix Communications Group. This IT support company has been tipped in the Investors Chronicle and a friend of mine - and no, that is not some euphemistic formulation - has invested a five-figure sum in this highly speculative share, recently the subject of a 40-to-1 share consolidation, which has removed its technical penny-share status but perhaps not its risky nature as an investment.

In all events, it has had a good week, up more than a quarter on the back of a 450 per cent jump in sales - even more impressive than those at BAA - and talk of a dividend next year.

I don't have nerves as steely as my friend's, so I won't be committing much to this share. But I'm along for the ride at just over 140p. It joins Urban Dining (holding its own) and Falkland Oil and Gas (up about 10 per cent) in my gang of three crazy punts. Watching these three should be almost as exciting as the US election.

s.o'grady@independent.co.uk