Indholdsfortegnelse for Issue 1001 i MoneyWeek

“People will return to post-Covid lives that have roughly the same shape as before” A large part of the nation currently seems to be reading Claire Tomalin’s biography of Samuel Pepys. We are too. But my attention has been grabbed not so much by his experiences in the Great Plague as by the aftermath of the Great Fire, which he also survived. The shock of the fire prompted all sorts of grandstanding. Take the rebuilding of the city. No one wanted to go back to the messy jumble of a fire hazard they had lived with before. Everything must change they said. A Rebuilding Act was passed stipulating that all new buildings had to be constructed of brick or stone. Splendid plans were produced of grid systems with church-filled squares…

A German man accused of faking his death to claim €4m in insurance was given away by the glint of his wedding ring in a policeman’s torch beam as he hid in his mother’s attic, says The Times. Cristoph H, 52, went missing on 7 October last year. His wife alerted the police after he disappeared while driving his motor boat, but authorities grew suspicious when it emerged the man had bought a dozen life insurance policies that benefit his wife and 86-year-old mother. Luxury brands have been left tattered by lockdown, says The Sunday Times. Designer Diane von Furstenberg, popular with the Duchess of Cambridge, was forced to close her Mayfair store permanently last week, pushing the subsidiary that ran it into administration. Burberry has written off £68m of…

Yields on gilts have gone negative. The government last week sold a three-year gilt with a fractionally negative yield of -0.003%, meaning that investors were effectively paying the Treasury to borrow money from them. In a further sign that central banks’ quantitative easing is forcing market prices through the looking glass, the yield on the five-year gilt also went negative for the first time, hitting -0.003% at the end of last week. Investors who buy and hold these negative-yielding bonds to maturity will make a small loss. Some hope that the global bond rally will enable them to sell them on at a capital gain, but others may simply have concluded that with the growth outlook shaky there are no better options. Markets have been spooked by poor data, particularly…

A worse backdrop for stocks than Iran’s is hard to imagine, as The Economist points out. GDP shrank by 8% last year and due to an especially nasty outbreak of Covid-19 and US sanctions it is likely to do worse this year; the currency is plummeting and inflation has reached 30%. Yet the local index, the Tedpix, has rocketed tenfold in the past two years when measured in the local currency. Even in hard-currency terms it is the world’s top index; in euros it has tripled in three years. The reason? There is nowhere else to put money. A cash account makes no sense while sanctions preclude investing abroad. Trading volumes have quadrupled in four years. There are now fears that the bubble could burst, leading to social unrest.…

Finnish biotechnology group Nanoform has announced an initial public offering (IPO) to raise €70m to boost its staff and output, says Reuters. One of the key problems when it comes to developing new treatments is that experimental drugs can be hard for the body to absorb. Nanotech’s research has developed particles that make molecules more soluble, getting them into people’s circulations more rapidly and potentially speeding up the approvals process. The group, founded in 2015, is aiming for a valuation of €230m. Meanwhile, the US IPO market is coming back to life. In the past fortnight six firms, including Vroom, an online car dealer, have filed plans to list.…

Facebook plans to “overhaul its working practices”, says Hannah Murphy in the Financial Times. CEO Mark Zuckerberg (pictured) has told staff that the 45,000-strong company is “opening up remote hiring”, with the aim of getting half of its staff to work remotely in the next five to ten years. That would save on office costs and allow Facebook to reduce salaries for those working from lower-cost areas and help it ditch the $15,000 moving bonus it pays to new hires. Facebook isn’t the only company enthusiastic about remote working, says Tae Kim on Bloomberg. Twitter and Shopify are fans too. But the CEO of Take-Two Interactive Software predicts that “sustained strong productivity will get more difficult the longer people are forced to work from home”. Microsoft’s CEO thinks that “managing…

“The risk-reward for equities is maybe as bad as I’ve seen it in my career,” reckons Stanley Druckenmiller, the former hedge-fund manager who made $1bn when he and George Soros bet that Britain would be forced to take sterling out of the European Exchange Rate Mechanism on Black Wednesday (16 September 1992). Investors banking on abundant liquidity are set for a shock. “The consensus seems to be ‘don’t worry, the Fed has your back’,” Druckenmiller told the Economic Club of New York earlier this month. Forecast earnings for the US market have collapsed: even assuming a partial recovery in profits next year to around $145 per share, the S&P 500 trades on around 20 times earnings, which is high given uncertainties due to Covid-19 and the likelihood of soaring bankruptcies.…

Who would furlough themselves? Lib Dem peer Lord Fox, that’s who, says Camilla Long in The Sunday Times. The House of Lords member signed himself up to the government’s job protection scheme (which pays 80% of gross salary, up to £2,500 a month), despite owning two homes worth more than £2m and a communications firm with £100,000 in the bank. It was, he pleaded, what many companies were doing, and that the authorities would have said if he were ineligible. “But Fox isn’t a regular citizen and his company isn’t ‘many companies’ – he is literally paid by us to be the voice of reason.” Since he cannot even be ousted at the ballot box, the standard he sets should be even higher. He would have to be “duck-house level…

■ The two managers replacing Mark Barnett at Invesco Perpetual are under pressure for their “dire” performances at their previous jobs, says Mark Atherton in The Times. Ciaran Mallon and James Goldstone were appointed last week to run Invesco’s £3.4bn High Income and £1.5bn Income funds. Mallon has been in charge of the £322.6m Invesco Income & Growth fund and the £134.1m Invesco Income Growth investment trust for 15 years, while Goldstone has led the £42.7m Invesco Perpetual Select UK Equity investment trust since 2016 and the £158.8m Keystone investment trust since 2017. A vote will soon decide if Mallon’s trust should be wound up. The Keystone trust has lost 18.5% since Goldstone took over, compared with the FTSE All Share’s 6%. “James Goldstone has been poor and Ciaran Mallon…

iea.org.uk Some critics suggest that free-market liberals have changed their tune in the face of the coronavirus crisis. We haven’t, says Julian Jessop. “There is a huge difference between supporting a temporary increase in public spending in response to a one-off shock, which I support, and a permanent increase in public spending and the role of the state, which I would continue to oppose.” Whether this year’s budget deficit is £200bn or £400bn “matters far less than whether this is a temporary increase or a longer lasting, structural deterioration”. There isa case for small rises in state-funded investment over the coming years, but this was true before the crisis hit – the government’s cost of borrowing was already very low pre-Covid-19. The best way the state can support economic recovery…

As Covid-19 spread, the world went remote. People were forced into isolation, physical interaction outside households was outlawed and everything had to be done from afar. This disruption has offered investors their clearest view yet of how the world will adapt and integrate technology. And given tech stocks are trouncing everything else this year, they like what they’re seeing. “Sterling investors in US tech are up by 15% this year” To appreciate tech right now means recognising that it’s serving two needs. There’s the immediate surge in demand so that things can still get done. Online videoconferencing is an obvious one, because people can’t get together for business meetings. Then there’s the more far-reaching paradigm shift in which the way we’ve been doing things changes for good across an industry…

Nine million EasyJet customers have had their emails and travel details hacked in a cyberattack. The airline says all affected customers should change their password for the site. But even if you aren’t an EasyJet customer, it is worth thinking about making your passwords safer. Cyber-criminals seem to have little trouble working them out. On average we all have seven passwords for sale on the dark web, according to ClearScore, a financial technology group. The dark web is the part of the internet that is invisible to search engines, and criminals use it to exchange goods and data. Anew free service, ClearScore Protect, will scan the dark web to see if any passwords associated with your email address are for sale. Taking the time to scan your own email address…

Thousands of savers could face big bills from the taxman following alandmark legal ruling that non-cash contributions to their pension plans should not have been given tax relief. The ruling by the Upper Tribunal court, which considers specialist tax cases, potentially affects anyone who has made an in specie contribution to their pension plan: directly transferring assets such as shares or commercial property into their savings rather than simply paying in cash. For many years in specie contributions were popular and regarded as perfectly normal, with providers applying to HM Revenue & Customs for tax relief on the value of such contributions in the same way as cash savings qualify for relief at the taxpayer’s marginal rate of income tax. HMRC’s own guidance also suggested this was acceptable. In 2016,…

We follow a simple process to allow our portfolio to generate real returns over the long term. The process comprises stock selection and risk management. In stock selection, we are trying to find companies that satisfy three crucial criteria. One, economics: it must make an economic return, meaning that the outputs are more valuable than the inputs and there is some reinvestment opportunity. Two, sustainability: a qualitative assessment of whether the economic return determined in point one can be continued into the foreseeable future, meaning a decade or so hence. Three, management: the company must be stewarded by competent people whose incentives are aligned with shareholders and – crucially –act with integrity and honesty. How to manage risk Risk management is where we consider what can go wrong. There are…

2018 Saint-Romain, Sous le Château, Domaine Henri & Gilles Buisson, Burgundy, France £39, reduced to £34 for MoneyWeek readers, swig.co.uk My old pal Robin Davis from wine merchant Swig told me he had found an absolute gem of a line-up from Burgundy and asked if I would like a look. Not one, but five bottles appeared on my doorstep. Three were 2018 Saint-Romains and two were Corton Grands Cru – true to form, Robin has found five exquisite creations. The entire quintet has made the cut and you simply must taste them all. The 2018 Saint-Romain La Perrière and 2018 Saint-Roman Sous La Velle, both £32 (from £36) and my headliner Sous le Château are all epic examples of 2018s. They are not too fat, too oleaginous or too forward,…

• Actor Steve Coogan “is the worst kind of champagne socialist”, says Jan Moir in the Daily Mail. For decades, Coogan (pictured) has “presented himself as an absolute darling of the Left; the kind of raging lefty who cares more, understands more, feels more and simply knows more than you do”. So much for that! Despite his £10m personal fortune, he has furloughed the gardener and housekeeper at his £4m country home in Sussex. “His gardener and housekeeper!” Surely, this isn’t what Chancellor Rishi Sunak had in mind when he announced the furlough scheme at the start of the pandemic to protect jobs and incomes. Is it right that rich people, such as Coogan, should use taxpayers’ money rather than their own to pay their domestic staff? “No, it is…

Over 90,000 items of art and collectables have been reported stolen or lost in the UK since 1990, with 80,000 remaining unrecovered – a record that makes British investigations of stolen art “an embarrassment”, says Charles Hill, one of the world’s leading art detectives. Hill, whose successes include tracking down Edvard Munch’s The Scream after it was stolen in 1994, blames legislation that has “stymied the police in dealing with informants”, he tells The Times. A further problem is that UK police “do not specialise” and are “inadequate” compared to other countries. Scotland Yard’s art and antiquities unit (AAU) has just three officers dedicated to art crime in Britain. Italy’s carabinieri boasts 300 dedicated officers, while the US has a team of 20 FBI special agents and 400 trained officers…

With the world distracted by the virus, Beijing has been tightening the screws on Hong Kong, says Timothy McLaughlin in The Atlantic. The Chinese Communist Party says that it will impose a national security law on the semi-autonomous city, bypassing Hong Kong’s own legislature. Opponents fear that this spells a “fundamental shift” in the “one country, two systems” framework under which the financial hub enjoys rights such as an independent judiciary and freedom of speech. US secretary of state Mike Pompeo has said that the “disastrous proposal” would sound the “death knell” for Hong Kong’s autonomy. Why British blue-chips are exposed The local Hang Seng index plunged by 5.6% last Friday, its biggest one-day fall since 2015. The property sector was hit especially hard. Shares in local magnate Li Ka-shing’s…

“People touting the strength of the American economy before the pandemic were either ignoring evidence of fragility or misunderstanding the data... Either way they were ignorant and excusing their ignorance does nobody any favours. What they called economic strength was an illusion. The US economy was slowing under the increasing burden of unsustainable levels of public and private debt. It could barely eke out 2% GDP growth despite running depression-level monetary policy for over a decade, incurring trillion dollar annual fiscal deficits and passing a multi-trillion dollar tax cut two years ago. And the healthcare system, where the rubber met the road when the pandemic hit, was hollowed out by high debt levels, massive inefficiencies and fraud, and a rural healthcare system pushed to the verge of extinction.”…

Three to buy Segro Investors Chronicle Segro, the largest UK-listed real-estate group, develops and leases big-box and urban logistics warehouses. Segro differs from many of its peers in that 31% of its rental income comes from the less developed European market. This should “pay off in the long term” as companies invest to strengthen supply chains. It may take a short-term hit to rental income now, but its balance sheet is robust enough to cope. Investors should take advantage of the weak share price. 812p Texas Instruments Shares Semiconductor bellwether Texas Instruments is the kind of “resilient technology business” that belongs in a diversified portfolio. Its microchips are “vital components in all electronics”, a market full of growth opportunities. Its own chip designs, intellectual property and long-standing manufacturing expertise all…

• While the luxury industry is expected to “lose as much as a third of its sales this year”, fashion house Burberry seems to be doing better than expected, says Lex in the Financial Times. It has been forced to close half its stores and cancel its dividend, but the shares have risen after it revealed that April sales in China and South Korea had “bounced back”. While those figures were “flattered” by the repatriation of tourists’ spending, it still shows that designer Riccardo Tisci’s “classic meets eccentric” look is “getting traction”. More broadly, Burberry is “well prepared” to navigate the coronavirus crisis, with £1.2bn in liquidity, while it can also “draw comfort” from its lessening reliance on wholesalers, which gives it “more control over its unsold clobber”. If Burberry…

The outlook for income investors keeps getting bleaker. This week, soft-drinks maker Britvic became the latest company to delay its dividend, despite reporting solid profits. It’s not the biggest payer around, but it’s a good example of how companies are taking an exceptionally cautious approach and hoarding cash as much as possible in such uncertain times. The amount of dividends already skipped by UK companies comes to more than £30bn – and given that many of the largest payers have confirmed that they will be making reduced or no payments for the rest of this year, the final tally will be much worse. It’s difficult to imagine this rebounding quickly. So standard equity-income portfolios are likely to offer a lower yield even after the immediate crisis passes. And income-focused investment…

Investors are betting that once the economy opens up again sales and profits will bounce back. After all, governments and central banks are pumping money into the economy so the demand should be there. There might be a bad drop for six months or so, but that will just be a blip. But will it? Perhaps not. Sales might return eventually. But profits? That is far from clear. There are already troubling signs that even some of the world’s most successful businesses are going to struggle to make money in a world in which Covid-19 is being kept under control, but not yet eliminated. Amazon’s sales are booming, but in its latest results it warned that rising costs meant it wouldn’t make a lot of money on all that extra…

Precious metals and related investments are supposed to be a hedge against extreme market turbulence. But does the evidence actually back up this contention? I decided to crunch the numbers. I concentrated on the immediate aftermath of a huge spike in stockmarket volatility. What I wanted to know is if you’d switched out of equities into precious metals-related structures at the end of a bumper day of market volatility (measured by a US index called the Vix, the so-called “fear gauge”), would you still be sitting on decent profits three months later? Why three months? Volatility after the last 14 spikes during the past 30 years has typically taken 86 days to revert to the average. In other words, it has taken around three months for the market to calm…

The state is coming for the wealthy Philip Aldrick The Times In the aftermath of this crisis, tax cuts will be needed to stimulate demand, says Philip Aldrick. But, eventually, despite “more QE and years of near-zero interest rates”, taxes will have to rise to pay for the rise in spending (think better NHS preparedness, social-care reform, higher key-worker salaries). There will be calls for a “windfall tax on the winners” from the pandemic (eg, tech, pharma and supermarkets), but recurring revenues will also be needed. This is where the wealthy, who have increasingly used capital gains to dodge income tax over the past decade, come in. In 2018, taxable capital gains peaked at £55bn, up from £19bn in 2010. “About half of those relate to occupations rather than arm’s…

johnkay.com A critical issue in the coronavirus pandemic has been whether “R” is greater or less than one – in other words, whether the number of people that each infected person infects leads to a spread of the disease or its demise. So is R greater or less than one? “If only it were so easy!” R is not the same for every individual or group. Medical staff in hospitals, for example, are likely to have a higher R than singles in lockdown. If the infection is brought under partial control, it is likely that a higher proportion of the infected population will be in the high Rgroup than in low R. If so, the average R figure may rise. And even if the average R figure is below one,…

“Every $100 spent on infrastructure boosts private-sector output by $17” Have we passed the peak of the pandemic? The numbers of infections and deaths are dwindling. However, the economic fallout is likely to persist for a long time, even after lockdowns are relaxed. While this is bad news for some sectors of the economy, such as hospitality and retail, it also provides opportunities for others. One key beneficiary of the post-coronavirus world, in which governments look set to embark on a spending spree, should be infrastructure. From support to stimulus Government spending has hitherto focused on measures “to prevent firms going bust”, says Shaniel Ramjee, senior investment manager with Pictet Asset Management. This is understandable given that reducing the number of bankruptcies “gives the economy the best chance to minimise…

■ The government has extended its mortgage payment holiday scheme by three months. More than 1.8 million homeowners have taken a three-month break from mortgage repayments since the scheme began in March, says Mark Sweney in The Guardian. The payment holidays were due to expire at the end of June, but you can now apply to prolong yours until September. “The government said that while homeowners who had taken a mortgage holiday should restart making payments if they could, it was extending the scheme to help those still struggling with the impact of the coronavirus,” says Sweney. ■ Small business owners take note: employers will be obliged “to pay a quarter of the wages of furloughed staff under Treasury plans to unwind the state subsidy scheme”, says Steven Swinford in…

Record numbers of savers made withdrawals from their pensions during the first quarter of the year, new figures show, prompting warnings that the pandemic may be forcing people to dip into pensions cash. Some 348,000 savers withdrew £2.5bn from their pension funds under the pension freedom reforms between January and March, new data from HM Revenue & Customs shows, with pension advisers warning of potential adverse impacts on people’s tax bills and long-term financial planning. First-quarter withdrawals from pensions were around 19% higher than in the same period of last year. But pension advisers fear the second quarter may have seen an even more substantial trend towards higher pension withdrawals, given that the UK’s Covid-19 crisis did not begin to grip the country until mid-March. Advisers warn that while savers…

Naked Wines (Aim: WINE) is an online wine retailer. It is headquartered in Britain and delivers across the country; it also has a presence in the US and Australia. With drinking on the rise during lockdown, investors have propelled the stock up by 204p since March 2020, returning it to the all-time highs seen in 2013. “It’s no surprise that wine clubs previously dedicated to the online sphere have seen a substantial uptick in business,” says Stacy Briscoe on Winemag.com. Nor that sales have climbed by 55% over the past 12 months.…

Belgian Jean-Pierre van Rossem (born 1945) was a star economics student at the University of Ghent, making money on the side writing other students’ dissertations. He became a Marxist, then won a scholarship to study under Lawrence Klein, a Nobel Prize-winner who pioneered the use of computers to predict market fluctuations. Van Rossem later started his own company in the US, but went bankrupt financing a heroin habit and served time for fraud. What was the scam? Upon release he returned to Europe, later claiming he intended to join the Baader–Meinhof Gang of far-left militants, but running off instead with the wife of a rich industrialist (“I dcided to punish capitalism by taking his wife”). To f nance her shopping habit, as he put it, he then set…

Necessity may be the mother of invention. But it is the deadbeat dad of intervention, too. The authorities use “necessity” to meddle, control, tax and spend. They are like quack doctors, promising fantastic elixirs that will grow hair on a billiard ball. When the patients get worse, they come up with even quackier remedies – such as printing $10trn in fake money. Yes, dear reader, welcome to the feds’ treatment centre, where they’re prescribing Clorox Chewables for the economy. Just take as directed… and die! The S&P 500 is trading near the top of its range. Yet anticipated earnings are going down, not up. Go figure. “The feds are prescribing Clorox Chewables. Just take as directed and die!” What we figure is that stock prices reflect not anticipated earnings, but…

Naomi Osaka has surpassed Serena Williams as the world’s highest-paid female athlete, raking in £37.2m in prize money and endorsements over the last year, says Sky Sports. The 22-year-old (pictured right) earned $1.4m more than American great Williams, who had been first on the list for the last four years. An unnamed driver who was charged £182 by a parking company after pulling into a town-centre car park for 11 minutes and 48 seconds has won £529 in compensation, says The Sunday Times. One Parking Solution was ordered to pay the driver after a judge ruled that its penalty was an “abuse of process”.…

Face masks are all the rage now, says WirtschaftsWoche, which is good news for US conglomerate 3M. It produces the N95 respirator mask, originally designed for construction workers to shield them from dust and other particles. But due to Covid-19, the group will churn out around two billion of them this year. Pandemics aside, however, 3M is well worth alook. Diversified conglomerates tend to be resilient during downturns since they can balance slowdowns in more cyclical divisions with growth in defensive ones. The group produces 26,044 products, ranging from filters for pharma companies to stethoscopes and Post-It notes. The shares yield almost 4%.…

Three months ago HSBC announced what many considered to be “the biggest overhaul in its 155-year history”, says Doug Alexander on Bloomberg. Now the fallout from the virus is forcing it to consider “more drastic measures”. While the crisis forced it to postpone plans to “cut 35,000 jobs,$4.5bn in costs and $100bn of risk-weighted assets”, the board is now pressing executives to “restart the overhaul” as well as consider “even more dramatic changes”. This could include more cuts, or even a possible sale of its USbusiness and its retail network in France. It’s not surprising that HSBC is thinking about even deeper cuts, say Stephen Morris and Laura Noonan in the Financial Times. The shares “now trade at their lowest in more than a decade”. The bank is dealing with…

Sweden, which took the unusual step of shunning a lockdown in response to Covid-19, instead introducing “mitigation” measures, now has the “highest coronavirusper-capita death rate in the world”, says Tae Hoon Kim in The Guardian. The country has had 32,172 confirmed cases and 3,871 deaths. Although many Swedes have been shocked by the deaths, and particularly the disproportionately high rates among the elderly in care homes and those from working-class, immigrant backgrounds, about 70% of the public still support the government’s approach. The deaths are “being blamed on structural, economic and social deficiencies, not on the strategy itself”. Swedish health officials also still believe that their “herd immunity” approach will work in the long run, even though by the end of April only 7.3% of Stockholm’s residents had developed antibodies,…

The UK is facing a puppy shortage, says Daniel Thomas in the Financial Times. Demand for lockdown companions among lonely workers and families forced to stay at home during the pandemic has propelled prices for dogs sharply upwards. Breeders reported a big jump in demand, with prices doubling since the outbreak and waiting lists increasing fourfold. French bulldog puppies, for instance, are being sold for up to £4,000 on Pets4Homes, while a buyer could normally expect to pay under £2,500, say Rosamund Urwin and Katherine Forster in The Sunday Times. Cockapoo prices have doubled up to £3,500 and dachshund puppies are listed at up to £3,500, having cost about £1,500 three years ago. Lockdown has relaxed the rules on acquiring a puppy, allowing buyers to view them remotely and sellers…

An option is a contract that gives the buyer the right (but not the obligation) to buy an asset, such as a share, for an agreed price (the strike price), on or before a certain date (the expiration date). If the option gives the right to buy, it’s known as a call option; one that gives the right to sell is a put option. The buyer pays an upfront fee – the premium – to the seller of the option (often referred to as the writer of the option). If the buyer exercises the option, the writer must sell them the underlying asset (for a call) or buy the asset from them (for a put) at the agreed price – they have no choice or opportunity for negotiation. If the…

• A little over a third of Lloyds Banking Group’s shareholders rebelled against the lender’s bonus plan for its top bosses last Thursday, says The Guardian. The pay policy is to switch to more certain long-term bonuses. Under the proposals, chief executive António Horta-Osório (pictured) can earn a maximum annual overall pay package of £6.3m, down from £8.3m previously, according to shareholder advisory group ISS. ISS questioned whether the discount was sufficient given the higher probability of the bonuses paying out. • Susan Searle, the “much-maligned” chair of the former Woodford Patient Capital trust, the investment trust that had been run by Neil Woodford, received a 15% pay rise “following a year when the fund halved in value, losing investors hundreds of millions”, says the FT. She got £46,000 last…

The French business establishment is indulging in another round of mutual backscratching. Luxury retailer LVMH’s billionaire owner, Bernard Arnault (pictured), has agreed to buy 25% of media mogul Arnaud Lagardère’s holding company. That in turn owns 7% of Lagardère, a listed media group under fire from hedge fund Amber Capital, the largest shareholder. Amber Capital has criticised the firm’s lacklustre performance and Arnaud Lagardère’s large personal debts, says Leila Abboud in the Financial Times. Arnault’s “unexpected arrival” should prove helpful to his fellow magnate “on both fronts”.…

“It is just a madness to me but I can’t do anything about it so I just ignore it. I don’t get any money from it, but I am not going to worry about that because otherwise it affects your work.” Artist David Hockney (pictured) on receiving just $14,000 from the $90.3m resale of one of his paintings, quoted in The Times “I didn’t do A-Level mathematics, which is very unusual, actually, for an economist. That came back to bite me later on.” Andy Haldane, the Bank of England’s chief economist, quoted in the Daily Mail “Where does this leave my generation? … Of course people of every age are suffering financially right now, but research shows that coming of age in a great recession permanently damages economic health. To…

businessinsider.com A “perfect storm of stupid” has hit the stockmarkets, says Linette Lopez. As a result of the coronavirus, millions of Americans are bored at home, many without a job. As a result, 780,000 of them have created new accounts with three of the largest stockbrokers in the country, according to the Financial Times. This “herd of newbies has changed the market at a time of incredible uncertainty”. The market is reflecting the “depth of emotion” out there. When pharmaceutical firm Moderna announced positive immune responses in a trial of its vaccine candidate, the stock jumped 26%. Then the market read the actual results of the trial, found that the positive result came from only eight patients, and the stock tanked. Everyone wants to be the one who “scores big”…

One fund that specialises in infrastructure is the LF Miton Global Infrastructure Income Fund. At present it is mostly focused on utilities, telecom and energy companies, with some additional exposure to the transport sector. Managed by Jim Wright, the fund has returned a cumulative total of 12.7%, after annual charges of 1%, since it was set up in March 2017, outperforming both the FTSE All-Share and similar infrastructure funds. Wright’s biggest holding, accounting for 5.5% of his fund’s portfolio, is NextEra Energy Partners LP (NYSE: NEP). NextEra, which is a listed subsidiary of the energy company NextEra Energy, invests in renewable energy infrastructure projects that should benefit from any push to decarbonise the US economy. Its projects are set up to generate stable cash flows, allowing it to continue to…

The FTSE 100 index slumped by more than third between the start of the year and the trough at the end of March. Even after a modest rally, the market is still 20% off its peak, so many solid stocks that were previously too expensive are now priced much more affordably. One is the pub chain J D Wetherspoon (LSE: JDW). Wetherspoon is not exactly a fashionable brand: it is widely deemed to be the Ryanair of its particular trade. However, just as Ryanair has dominated short-haul travel, Wetherspoon has been one of the few success stories in the pub retail trade. It has focused relentlessly on what its customers want: decent food and drink at an affordable price. Unlike its competitors, it has avoided the perils of over-diversification, staying…

The battle for refunds for cancelled holidays rumbles on. All airlines must provide a refund within seven days of a trip being cancelled. While many airlines are doing their best to process a huge backlog, some are digging in their heels. Around 47,000 passengers are still waiting for refunds from British Airways, according to David Byers in The Sunday Times. Now BA has “begun offering passengers points on its Avios air miles scheme instead of cash refunds”. There are two reasons you shouldn’t accept airmiles. First, if British Airways were to collapse before you used your miles you would lose them. Second, the airline can devalue its airmiles at any time, so you could end up with airmiles worth far less than the original price of your flight. BA is…

Pension savers who lose money after making unregulated investments without taking financial advice are unlikely to be able to claim redress from their pension providers following a court ruling last week. The judgment is a blow to the notion that providers should protect savers from high-risk pension investments in all circumstances. Lawyers acting for a saver with a self-invested personal pension (Sipp) run by Options Pensions had hoped the company would be forced to pay compensation after it followed his instructions to invest in a high-risk, unregulated property scheme. The scheme subsequently resulted in big losses for the saver. However, Options Pensions argued that like many providers of Sipps, it operated on an execution-only basis and had made it clear that it did not offer investment advice. It said it…

Shares in Whitbread (LSE: WTE), the owner of British hotel chain Premier Inn, have slipped by 53% from their 2020 high as the virus has forced it to close its doors and forfeit months of earnings. Whitbread was allowed to open its German hotels on 11 May, but lockdown uncertainty in the UK continues to depress the stock. “Even in the autumn, business is expected to pick up only gradually once physical-distancing restrictions are relaxed,” says Sarah Butler in The Guardian. The group has warned that it might make no profits in 2020 and has launched a £1 billion rights issue.…

Investing in whisky has also never been easier from the comfort of your home, even when it’s still in the cask. Whisky Invest Direct (whiskyinvestdirect. com) is a platform that was launched five years ago by the people behind popular gold and precious-metals dealing service BullionVault. Users simply log on and buy whisky that is still in the barrel and kept in the original distiller’s bonded warehouse. The idea is that, as it slowly ages, and other whiskies get consumed, your whisky appreciates in value. Then, you sell it via the platform. Just like on BullionVault, there is a live order board that allows you to set your own asking price. Another option is to buy and sell whisky by the cask via an online auction. In February, Cask Trade’s…

£742.6bn The combined wealth of the 1,000 entries in The Sunday Times Rich List this year, a 3.7% fall on 2019’s total. You would have needed to have at least £120m to your name to make the list, the same amount as last year. £43m The value of the Archer supercomputer at the University of Edinburgh, one of many supercomputers around the world that have had to be shut down after coming under attack from cyber criminals wanting to exploit their immense processing power to “mine” for (create) cryptocurrency. Archer had been used for modelling the coronavirus pandemic. 16.8 The percentage of UK income, including taxable capital gains, received by the highest paid 1% of British earners in 2017-2018, according to analysis from Warwick University, the London School of Economics…