Indholdsfortegnelse for Issue 1005 i MoneyWeek

If you had put $100 into big US growth stocks on 31 December, 2019, you would now have $111. Shares in these companies are currently trading not so much as though Covid-19 doesn’t exist, but as though its existence has been a positive for their businesses (which you can argue – they’re mostly tech stocks) and as though they were not already overpriced in December (harder to argue). Look at the speed and scale of the recovery of many of these stocks since March – and they are the ones most discussed in the media – and you will have only one thought: “There’s a bubble out there.” There is still value to be had Not so fast. Do not for a second think that just because US tech stocks…

A painting of the Immaculate Conception by 17th-century Spanish artist Bartolomé Esteban Murillo suffered a botched restoration this week, prompting calls for rules governing renovation to be tightened, says Isambard Wilkinson in The Times. The painting’s owner paid €1,200 for the makeover, but the work of the baroque artist “was returned to the owner almost unrecognisable”. Clothing chain Eddie Bauer, film distributor Magnolia Pictures and ice cream brand Ben & Jerry’s joined a growing advertising boycott that is targeting Facebook’s content moderation practices, says Tiffany Hsu in The New York Times. Patagonia, the North Face, and REI previously pulled away after Facebook declined to take action against misinformation spread on the website. Facebook generates nearly all its revenue from advertisements.…

“British firms have been forced to cut their dividends far further than their counterparts elsewhere. Where can investors turn?... Income investors tend to ignore America as the yield on the market is low at 2%; it is more than double this in Britain. But the market is large and within it there are a number of stocks that distribute large payouts. Many, such as Johnson & Johnson, the consumer goods firm, have increased their payment for the past 25 years or more. Microsoft is expected to become the world’s largest dividend payer this year. While American dividends are steady, one fast-growing option is Asia, which now accounts for £1 in every £6 paid out in dividends globally... While Asia has not been unscathed and some companies have had to suspend…

Three to buy Concurrent Technologies The Mail on Sunday Aim-listed Concurrent Technologies makes high-performance integrated computer systems that are used in such varied areas as telecoms, money printing and defence. The latter is the source of about 60% of sales and partly accounts for its “low stockmarket profile”. Loyal employees who often stay with the firm for years make for a distinctive company culture centred on innovation and research. The order book is strong and it boasts a record of rising dividends. Buy. 108p Wincanton The Times Business at Britain’s biggest logistics firm is already bouncing back after the lockdown induced by Covid-19. Activity is down by about one tenth on last year, but the slump seems to have bottomed out, with revenue advancing 7% on the month in May.…

• Unilever is now trading at a “very big discount” to Colgate and Procter & Gamble, says Hannah Uttley in The Daily Telegraph. No wonder. Not only were sales stagnant in the first quarter of the year, but analysts also expect more poor numbers at Unilever’s half-year results next month. This is putting “great pressure” on both CEO Alan Jope and chairman Nils Andersen, who are clearly worried about an activist investor coming in to shake things up, prompting them to revive plans to establish a single headquarters for the Anglo-Dutch company in London. However, in the longer run they will have to make more radical changes, including exiting the “rapidly declining” tea business, though it may be hard to find a buyer “during the depths of a global recession”.…

It is only the 14th largest economy in the world. It is almost 10,000 miles away. And it mainly specialises in mining, with some sheep farming on the side. As official talks start, many will dismiss a trade deal with Australia as nothing more than a minor side-show of interest only to a few swivel-eyed Brexiteers intent on recreating the Empire. That is a mistake. A gateway to the East It’s not hard to understand why leaders on both sides were so keen to get the talks started. Australia doesn’t have a trade deal with the EU – it is negotiating one at the same time – and while we were inside that trade bloc Australia’s exporters faced tariffs and often quotas, especially on agricultural goods, when they were selling…

Currency effects have done a great deal to improve returns for British investors over the last few years. The gross total return on the MSCI World index in US dollars has averaged slightly under 6% per year over the last five years. The return in sterling terms has been slightly over 11% per year. You didn’t even have to invest in markets that have done well in both currency and stockmarket terms – such as the US, which is more than 50% of the MSCI World index – for this to work in your favour. The MSCI Emerging Markets has returned less than 1% per year over the same time in US dollar terms, but more than 5.5% per year in pounds. The less-happy implication is that if sterling were…

Shares in the listed private-equity sector have recovered steadily from their sharp falls, although many still trade at tempting discounts to net asset value (NAV). However, whereas the NAVs of trusts investing in listed equities are updated daily, those of private-equity trusts are calculated infrequently and even then may be based on a valuation point several months in arrears. Despite some updated valuations and stockbrokers’ estimates for others, the numbers remain uncertain. Many businesses have been directly affected by the lockdown, others indirectly, and some have even done well out of it. Nobody knows how long it will take for business to return to normal, or even what that “normal” may look like. That presents investors with both opportunity and risk. It’s not 2008 all over again Myrto Charamis of…

“I was invited to Elton John’s white tie and tiara party. I didn’t have a tiara. I managed to borrow one from a jewellers and did buy a very expensive dress (thousands of pounds) because I felt I had to look the part. I eventually got my money’s worth as I’m still wearing it ten years later.” Television producer Lorraine Heggessey (pictured) on the most extravagant thing she’s bought, quoted in The Sunday Telegraph “At one point we had eight or nine county court judgments because we couldn’t afford to pay our utility bills. We had to buy blue £5 tokens for gas. All the work I was doing in the pubs and clubs almost dried up. It was a case of hiding behind the sofa when anyone came round…

1828.org.uk As lockdown restrictions began to ease, queues started to form outside shops, says Emma Revell. Cue the sneering: “Really? Primark? Three months stuck at home and that is where you decided to go and queue?” To a certain kind of individual, Primark “represents everything wrong with the world”. Its products are cheap and mass-produced, its fast-fashion is not great for the environment, and its working practices, especially on the production line, “leave much to be desired”. Perhaps – but do its customers deserve derision? For many people, especially teenage girls, Primark provides an exciting experience. If you haven’t got a lot of disposable income, you can still go to Primark and buy a full outfit with accessories for less than £20. That means independence for millions of young people,…

The jury may still be out on the long-term prospects of electric carmaker Tesla, with even founder Elon Musk admitting that it may be overvalued. But it has been one of the most successful investments of the past decade. The stock has risen 50-fold since it first went public in July 2010. No wonder, then, that investors have snapped up shares in similar companies, no matter how shaky their business model. One such Tesla wannabe is lorry maker Nikola (Nasdaq: NKLA). Its founder and CEO Trevor Milton says that he wants to move both pick-up lorries and the freight industry from petrol and diesel towards hydrogen power (hydrogen fuel cells convert the hydrogen into electricity, and there are no harmful emissions). The group also produces battery-powered electric vehicles. Milton claims…

Britain is gradually returning to work, so this is a sensible time to review the impact of Covid-19 on your pension planning. Firstly, if you’re a member of a defined-benefit occupational pension scheme, is the employer that stands behind it still solvent? With company failures set to increase, the guaranteed pensions that such schemes offer may now be in doubt. The golden rule in pension planning is that a defined-benefit scheme, with all the certainty it offers, is almost always a better option than other types of arrangement. However, if your employer goes under and there’s not enough money in the scheme, your pension could be threatened. A lifeboat for your scheme All is not lost if your employer does go bust. The Pension Protection Fund (PPF), the industry lifeboat…

Avacta (Aim: AVCT) is a biotechnology company focused on its Affimer technology, an alternative to antibodies; the aim is to develop cancer immunotherapies. The stock has climbed to around 130p in the past few days, marking a 360% increase in a year, on the news that the Affimer therapy has managed to stop the Covid-19 virus from entering human cells. Avacta hopes to secure help from a large pharmaceuticals group to develop its drugs. The shares have outperformed the market over the past three months and the good news implies scope for further gains.…

Nick Leeson was born in Watford in February 1967 and left school after A-Levels to became a clerk in the Lombard Street branch of Coutts bank. By 1987 he had moved to a “back office” (that is, support) role at investment bank Morgan Stanley before taking up a similar position at Barings Bank, where one of his duties involved investigating a case of fraud. By 1992 he had been promoted to the head of Barings Futures Singapore, where he was responsible for “front office” trading decisions as well as providing administrative support. What was the scam? The primary task of Barings Futures Singapore was to carry out orders for clients and to make money by exploiting small differences in prices between the Singapore and Japanese markets. In an attempt to…

At the age of 19, Ben Francis, an Aston University student who made ends meet working as a Pizza Hut delivery driver, started to sell bodybuilding supplements online. He changed tack when he realised “no one really made clothes for the bodybuilding scene”. So he spent his £1,000 in savings on a sewing machine and screen printer, and learnt how to make garments from his Mum, says Liam Kelly in The Times. The business ticked along until, in 2013, Francis (pictured) secured a stand at a trade show at the NEC. Then things really took off: in the first half hour after the show, the Gymshark website took £30,000 in sales. Gymshark only sells directly to customers online, a strategy that has helped it cope with the coronavirus crisis pretty…

• Manchester United and England striker Marcus Rashford (pictured) scored a goal in forcing the government to retreat over free school meals, says Rod Liddle in The Sun. The football star wrote a letter to the prime minister and, as a result, 1.3 million of Britain’s poorest kids will getfree schoo - meal vouchers this summer. “ Good for him. The government’s decision not to pay for the vouchers was mean-spirited and cheap.” You do have to wonder how the government decides policy when all it takes is “for a footballer to open his mouth”. Still, “Rashford was right and deserves credit”. And while Boris is at it, he could raise the minimum wage for people aged 25 and over. It is low wages that keep people mired in poverty.…

£1,900 The average savings of the typical worker employed in sectors shut down during the pandemic, according to the Resolution Foundation think tank. Those able to work from home typically have £4,700 stashed away. €500 The amount a man in Vienna was fined for breaking wind loudly in front of police. Police said the man behaved provocatively and uncooperatively during an encounter with police, and “let go a massive intestinal wind apparently with full intent”. £100 The cost in subsidies for each rail passenger journey taken in the UK since lockdown. Billions of pounds of taxpayers’ money have been spent on running near-empty services, says The Guardian. $6m What the guitar played by Kurt Cobain during Nirvana’s MTV Unplugged in New York performance fetched at auction, after fees. The singer…

When hedge fund manager CQS held a call in early April to update investors on the 33% loss suffered by its $3bn flagship Directional Opportunities fund during March’s market turmoil, fund manager and founder Michael Hintze (pictured) was nowhere to be seen, says the Financial Times. Investors were disappointed, demanding an explanation for why the fund had lost $1bn — its biggest monthly loss in its 15-year history. On a call earlier this month, Hintze explained what happened, reports the FT. When coronavirus panic hit, many of CQS’s structured credit bets (investments in riskier derivatives of corporate debt) “turned sour”, driving almost all of the losses in March. Unfortunately for investors, he also reduced exposure to stocks, thus missing out on much of the rally in both April (the best…

Central bankers are behaving like “an ostrich putting its head in the sand”, says Charles Goodhart on voxeu.org. The guardians of the world’s currencies have unleashed unprecedented monetary stimulus in response to the pandemic. The US Federal Reserve’s balance sheet has soared by about $3trn since March to over $7trn, more than one-third of US GDP. It could be close to $10trn by year’s end. At £700bn, the Bank of England’s balance sheet is worth roughly one-quarter of Britain’s national income. History shows that “the correlation between monetary growth and inflation” is “as long as your arm”. Yet markets and many economists are strikingly blasé about the risks. CPI could spike… For the moment inflation is quiescent. The annual pace of UK consumer price inflation (CPI) in May was just…

The slump in US inflation-adjusted restaurant sales to 36-year lows has battered the shares of their food suppliers, says Daren Fonda in Barron’s. That makes Performance Food Group worth a look. Some restaurants won’t recover, but that implies fewer miles driven and more cost-effective distribution routes. Performance Food bought the second-biggest private distributor in the US last year and is one of the top suppliers to independent pizzerias, which have done especially well in the downturn. A third of its sales stem from providing snacks to vending machines, theatres and convenience stores; the latter have proved resilient. One analyst sees scope for the stock to rise by 70% from here.…

Markus Braun, who resigned last week as CEO of Wirecard, has now been arrested in Germany on charges of accounting fraud and manipulating the share price, says Simon Foy in The Daily Telegraph. He has been accused by authorities of “portraying Wirecard as financially stronger and more attractive for investors and clients” than it actually was (see story below for details). This comes after Wirecard admitted that €1.9bn (£1.7bn) of cash missing from its balance sheet “probably did not exist”. The company is “now scrambling to stay afloat” and is considering a “massive restructuring”. The latest revelations have been a disaster for shareholders, who have seen Wirecard’s share price plunge by more than 80% over the past few days, says the Financial Times. But things may get even worse, since…

In a scathing interview on Sunday night, John Bolton, Donald Trump’s longest-serving security adviser, said that he would not be voting for Trump in the forthcoming presidential election and that he posed a “danger for the republic if re-elected”. In an interview with ABC News to promote his book, The Room Where It Happened, Bolton described the president as “stunningly ill-informed”, “erratic and impulsive” and motivated only by his wish to get re-elected, says Aime Williams in the FT. He said that Trump was “played like a fiddle” by Russian President Putin and could be “manipulated by other foreign adversaries”, including China. However, critics are asking why, if Bolton was so opposed to Trump, he didn’t testify in the impeachment hearing into the president’s alleged misdeeds regarding Ukraine. Indeed, in…

• Theresa May (pictured) has been in demand from big banks and American universities since stepping down as prime minister last year, says The Times. In that time, she has agreed to give eight speeches around the world, for which she was paid on average £100,000 for each, according to the register of MPs’ interests. May has also declared 14 occasions when she received hospitality from Heathrow airport for use of its VIP package, worth £4,200 each time. The service includes chauffeur-driven cars and use of the royal Windsor suite. • Dutch bank ING’s chief risk officer, Steven van Rijswijk, will be taking over from Ralph Hamers in the top job when Hamers leaves to take charge of Swiss rival UBS in the autumn. Van Rijswijk has worked at ING…

The currency exchange rates that we see and use every day are nominal exchange rates. They tell us what we get if we swap a unit of one currency for another – for example, apounddollar exchange rate of $1.25 means that we get 1.25 dollars for every pound. This is all that matters if we are buying something from abroad or sending money internationally. But it doesn’t tells us everything we want to know about the value of different currencies. For more insight into this, we can use the real exchange rate (RER), which combines the nominal exchange rate with the ratio of the price of goods or services in the two countries. Say that a burger costs $5 in the US, but £3 in the UK. Then the real…

■ The American investor buying cut-price assets from the failed Woodford Equity income fund is selling the equities shortly after completing the deal, says Daniel Grote on CityWire. Acacia Research bought up to 19 of the fund’s biotech stocks in a £224m agreement with Link Fund Solutions, the failed fund’s administrator. Stakes worth up to £150m in eight stocks have been transferred to Acacia, which has raised around £128m after promptly selling them off. Prices were only disclosed for Aim stock Midatech Pharma, which show that Acacia bought a9.9% stake off the Woodford Fund for just £65,000 at a little under 1.7p per share and sold it for over £871,000 at 21p per share just days later. It is “genuinely shocking” that the shares were sold at a considerable discount…

capx.co As state schools engage in a union-led fight to remain closed, private schools are pressing ahead with reopening. There’s an “obvious motivation” – many private schools are in financial dire straits. This should be a reminder of the value of independent schools, and spur the Conservatives to press on with further reform on this front, says Henry Hill. Since “the first major eruption of ‘progressive’ education in the Sixties”, independent schools have been “a guardian of the British educational tradition”, holding out, with grammar schools, against fads and maintaining a strong focus on academic achievement. This has made them ayardstick against which the success of the fads can be measured. Private schools are also valuable in their own terms. Each is a “little platoon”, a community united around a…

In theory, good economic news should bode well for share prices, since it implies that profits and revenues of the firms in the index will be higher. So you might expect an inverse relationship between unemployment and short-term share-price movements. However, things are a little more complicated that you might expect. Since unemployment figures take time to compile (and are frequently revised in subsequent months), they are considered to be a lagging indicator, while shares are based on future earnings. Another factor to consider is that falling unemployment is an indication that the labour market is tightening, which may mean that firms will be forced to increase their wages, reducing their margins and profits. Worse, falling unemployment could increase the pressure on central banks, such as the Federal Reserve in…

Disruption is on the rise and it is all around us. It is affecting every sector of the economy and the implications for the winners and losers it is creating are profound. Disruptive companies are attacking markets with new products and business models, driving huge profits and growth. It is also becoming increasingly common to see the destruction of existing products and business models and the companies – often long-lived and once-loved – associated with them. The rise of disruption is measurable. In the early decades of the last century, it took 26 years for television to be adopted by 25% of the US population, and in the 1970s and 1980s, it took computers 16 years and the cell phone 13 years. But it took only two years for 25%…

■ Pension savers who take out incomedrawdown plans with the firms they’ve used to build up their retirement savings could end up thousands of pounds worse off, according to consumers’ group Which. A saver with a £500,000 pension fund could pay £20,600 more in charges over the course of retirement with the most expensive drawdown providers. For savers who have spent many years saving for old age with a particular pension provider, taking the incomedrawdown plan it offers when it is time to retire is a natural step. But there is no requirement to do so and financial advisers urge savers to shop around: the best pension providers at the “accumulation” stage of retirement planning may be less competitive when it comes to “decumulation”. Which’s analysis, based on the fees…

Hammerson (LSE: HMSO) is a major British property development and investment group. The stock has slipped by 71% over the past decade and by 63% in the past year alone, says The Times. The key problem is turmoil in the retail sector – rising costs and online competition have hit the high street hard. Chairman David Tyler is being replaced as Hammerson’s board commits to a strategy overhaul, but “any turnaround plan is unlikely to be announced for some months”. Hammerson will need to raise around as £1bn to shore up its balance sheet.…

Entrepreneur Tatyana Bakalchuk is “an anomaly”, says Max Seddon in the Financial Times. In Russia’s male-dominated business world, success often depends on ties to the Kremlin. Bakalchuk (pictured), though, is a self-made billionaire, the first such woman in the country. Wildberries, the business she founded in her Moscow apartment while on maternity leave in 2004, has “fought off venture capitalists and state-backed rivals” to become Russia’s leading ecommerce site. Bakalchuk, 44, now has a $1.1bn fortune, and became rich by “reaching deep into everyday Russian life”. Her firm began as an online clothes retailer for women and took time to emerge asa serious business because ecommerce lacked an infrastructure – the long distances in Russia, poor roads and sclerotic postal service held up development. But she ploughed on regardless. “If…

Sir David Attenborough (pictured) is leading an appeal to raise £12m to save London Zoo, says Elisa Menendez in Metro. The zoo is at risk of permanent closure after it was forced to shut for 12 weeks during lockdown. The fundraising campaign is part of a £25m rescue package to save more than 18,000 animals at risk. Culture vultures will be deprived no more: museums, galleries and cinemas will be allowed to reopen from 4 July (see page 10). A report by the Creative Industries Federation showed the sector suffered heavy losses due to coronavirus lockdowns; the sector is set to lose £74bn in revenue, a 30% drop over last year and a loss of 406,000 jobs in 2020, says Martin Bailey in The Art Newspaper.…

Are we heading for another financial crisis? asks Frank Partnoy in The Atlantic. Readers will remember collateralised debt obligations (CDOs) from 2008. These securities, which packaged together US mortgages, caused billions of dollars in losses at banks. Now we have the CLO, or collateralised loan obligation. A CLO “walks and talks like a CDO”, but instead of home loans they are backed by business loans. In the place of “subprime mortgages”, we have “leveraged loans” made to “troubled businesses”. The CLO market is bigger now than the CDO market was in 2007. About half of borrowing in the $2trn US corporate leveraged loan market has been securitised as a CLO, says Telis Demos in The Wall Street Journal. Most are structured defensively and senior holders would be unlikely to lose…

Between February and April, Britain’s economy shrank by a quarter – about the same magnitude as America’s during the Great Depression. March saw a slide of 5.8%, while in April alone a fifth of our gross domestic product (GDP) disappeared. That marked a record monthly drop almost 20 times worse than the steepest fall before the virus. That was in March 2009, when GDP fell by 1%. In the entire financial crisis it only slipped by 6% in total. GDP is now at the same level as it was in 2002. The Bank of England has cut interest rates to 0.1%, the lowest level since it was founded in 1694, and will soon have bought bonds worth £745bn, the equivalent of almost 40% of our GDP, with printed money.…

Last week saw America’s biggest initial public offering (IPO) of the year, says Nathan Vardi in Forbes. Shares in Royalty Pharma, an acquirer of pharmaceutical royalty streams, soared by 60% when they began trading. The company sold 77.7 million shares at $28 each, raising $2.18bn and valuing the group at $16.7bn. The group’s founder and CEO Pablo Legorreta, a billionaire and former investment banker, helped pioneer the idea of investing in drug royalty streams when he set the firm up in 1996. It bought “revenue slices of blockbuster drugs” from Big Pharma “years before these products reached their peak sales”.…

The ongoing scandal is the latest chapter in the story of financial technology company Wirecard, says Kevin Granville in The New York Times. Wirecard was founded in 1999 and flourished in recent years asa provider of digital-payment services, prospering by “making contactless payments seemingly effortless for hundreds of thousands of merchants”. Customers included Apple Pay, Google Pay and Visa. Praised as a “homegrown technology success” in Germany, it was propelled into Frankfurt’s blue-chip stock index, the DAX, in 2018. However, the very same year, Wirecard’s “meteoric rise” came to a halt, says the Financial Times. This is because an investigation by the FT examined its “suspected use of forged contracts”, while a report by a top law firm found “evidence suggesting Wirecard’s employees engaged in a pattern of book-padding and…

As President Trump’s polling woes mount, punters continue to move away from him. With £39.5m already matched on Betfair, Joe Biden’s odds have tightened to 1.74 (57.4%), while Trump’s have lengthened to 2.72 (36.7%). This is quite a change, given that two months ago Trump (pictured) was odds-on to be re-elected, and as late as last month was still favourite. Of course, betting markets have underestimated Trump before, giving him a 25% chance this time four years ago, but his polling situation in the key states is far worse now then it was previously. Indeed, for the first time, punters seem to think that Trump is more likely to be replaced (for whatever reason) as the Republican candidate, than Biden is asthe Democratic candidate. You can get 1.05 (95.2%) on…

Too many companies are returning top brass pay to previous levels having cut them as a gesture of solidarity during the pandemic, says Kate Burgess in the Financial Times. That’s acceptable for firms such as utility Severn Trent that turned to neither taxpayers nor shareholders for help. Others “should adopt the brace position” and prepare for a backlash. Foxtons, the estate agent, for example, “risks irritating investors and staff” as it returns its top executives to full pay after just two months. CEO Nic Budden’s £1.2m total package last year was “more than 30 times that of the average agent’s remuneration”. The company raised cash from shareholders, furloughed staff and deferred what levies it could, including national insurance. It will take a long time for many big businesses to fully…

“Scorn has long been heaped on those daring to question the supremacy of the US dollar as the world’s dominant reserve currency,” says Stephen Roach, the former chief economist at Morgan Stanley. But the time is coming when America can no longer count on this “exorbitant privilege”. The result is likely to be a 35% decline in the real effective exchange rate for the greenback. The seeds of this shift were sown by a persistent shortfall in US domestic savings: in the first quarter of 2020, net national saving was just 1.4% of GDP. This forces the US to draw heavily on surplus savings from abroad to invest and grow – which in turn means it has run a current-account deficit every year since 1982. The Covid-19 crisis will stretch…

The coming US-EU trade war Wolfgang Münchau Financial Times The US doesn’t want the world to tax the “monopoly profits of its tech companies” (it walked out of multilateral talks last week). The Germans want to “press ahead with a sordid gas pipeline deal with Russia” against America’s wishes. The EU protects its car industry from foreign competition, but “hyperventilates” when Donald Trump threatens to do likewise. These are some of the main signs of a “fast approaching transatlantic trade conflict”, says Wolfgang Münchau. A US investigation has already concluded that France’s digital tax constitutes discrimination. Another investigation into the digital tax plans of the UK, among others, is pending. My advice is for the EU to “pick the right fight”: digital tax. The US position is “unreasonable”. The digital…

ritholtz.com Do you believe, as many do, that the post-pandemic world will be unrecognisable? Then, says Barry Ritholtz, “I offer you for sale, at a reasonable price, this bridge connecting lower Manhattan to Brooklyn”. Futurists and doomsters are predicting the end of big cities, the office, public transport, universities and big public gatherings. Count me a sceptic. We’ve been here before. The 9/11 attacks and the 2008 financial crisis too were predicted to have “changed everything” – yet everything actually went back to normal, with mostly modest adjustments. And when big change does come, we tend to lack the imagination to recognise it. The Wright brothers’ maiden flight was hardly noticed by anyone. Cities, universities, offices, shopping malls –all these things were popular for a reason. They will be again…

When it comes to health, drug research tends to hog the limelight – especially in the middle of a pandemic. But there’s a great deal more to the overall health sector than the pharmaceutical or biotechnology companies that concentrate solely on new pills. There are five major subsectors: radiotherapy, diagnostics (detecting and monitoring disease), body-part replacements (from artificial joints to heart pacemakers), robotic surgery and advanced wound care. The UK is well represented in health. Companies range from the FTSE 100’s medical technology giant Smith & Nephew, a specialist in advanced wound care, orthopaedics and joint replacements, to Aim-listed Advanced Medical Solutions, which mostly serves the wound care and surgical markets. We examine a range of global health companies and suggest some of the better ones as potential investments. The…

Even though markets have done reasonably well over the last fortnight, three out of my five long tips still declined. International Consolidated Airlines Group (ICAG) dropped from 309p to 264p as new quarantine rules for travellers into Britain came into effect earlier this month. Energy giant Royal Dutch Shell also fell from 1,472p to 1,376p. Television company ITV declined from 87p to 80p. However, equipment rentals company United Rentals remained at $158, while pub chain JD Wetherspoon even managed to appreciate from 1,139p to 1,161p, thanks to confirmation that pubs will be allowed to reopen soon with reduced social distancing requirements. Overall, my long tips are making combined profits of £2,128, mostly thanks to the £1,764 I have made on United Rentals, though this is down from £3,331 two weeks…

Lockdown is being eased and rumours of quarantine-free air bridges to allow trips abroad are circulating. But before you book your escape you need to check your travel insurance. “Insurance companies are introducing so many exemptions that industry experts have expressed concern that thousands will go abroad without adequate cover,” says David Byers in The Times. If you took out a travel insurance policy for a trip booked before 11 March, you should still be covered for cancellations relating to Covid-19. It was declared a pandemic on that date, so almost all policies taken out after 11 March, or trips booked using annual policies after that date, won’t be covered for any disruption associated with the virus. Times readers who have received renewal documents for their annual travel insurance “have…

“May you live in interesting times.” This apocryphal Chinese curse springs to mind when looking at today’s equity markets. The initial wave of the Covid-19 virus may have peaked in Europe and the US, but the longer-term trajectory of the disease and its economic impact remain highly uncertain. Throw in geopolitical tension between China and the US and aBrexit deal still to be agreed, and “interesting” seems an understatement. Investing against such a backdrop can be a challenge, but it also offers opportunities. At Odyssean we aim to exploit these by retaining a focus on our core philosophy –backing high-quality businesses where engagement can improve returns – and identifying companies that benefit from the current market situation. Finding oversold first-rate cyclicals When cyclicals sell off, investors need to judge the…

2019 Hamilton Russell Vineyards, Chardonnay, Hemel-en-Aarde Valley, South Africa £21.67 in bond per bottle, farrvintners.com; £22.50 in bond per bottle, uncorked.co.uk; £33.40, hedonism.co.uk; £35.99, thornewines.com; £34.99, harrogatefine winecompany.com In particularly challenging vintages there is an outside chance that a winery can make truly remarkable wines. Some estates find it impossible to step up, but others, in the face of adversity, have the confidence, experience and sometimes luck to make the inspired decisions that result in remarkable outcomes. In 2019, Hamilton Russell managed to swerve potentially catastrophic damage from smoke taint caused by a massive fire in January. An unusually warm May, June and July affected chardonnay dormancy and the resulting bud break was extremely uneven. In addition, the vintage was cooler than 2017 and 2018. Rainfall was lower than average,…

In previous columns, we have lamented the fact that the poor have been stiffed while the richest fill their pockets from stockmarkets artificially inflated with fake money. Some of our readers have objected. What the poor in America get is not a result of public policy, they say – it’s what they deserve. Maybe the Federal Reserve is juicing up the stockmarket, but if people are poor, it’s their own fault. There is just no excuse in today’s America, said one reader, for being uneducated or poor. Others agreed, arguing that hard work, grit and clean living can still lift people out of poverty – that most of the poor are poor because of their own bad choices, not because of federal policy. The country was built by people arriving…