Indholdsfortegnelse for Issue 1029 i MoneyWeek

“The UK’s current economic position is not as bad as you might think” Are there upsides to Covid-19? It’s hard to think about 2020 in these terms. The pandemic has left us with tens of thousands dead. The policies put in place to contain it have cost us huge numbers of jobs and businesses (with more misery to come). They have curtailed our freedom; suspended our democracy; caused an educational crisis; and revealed, all too clearly, that many of our government processes and our health system are woefully inadequate in times of crisis. They have also left us with eye-wateringly high levels of public debt – to say nothing of the trying conversations about how the wealth of “the rich” must be confiscated to pay it off that tend to…

Chance the Rapper’s (pictured) former manager is demanding $3m in unpaid commissions from the Chicago-born artist as part of a new lawsuit, says Nick Reilly on NME. Pat Corcoran, widely known as Pat the Manager, is claiming the rapper ignored his advice regarding the timing of his debut album release, and fired him after the record fell short on the charts. Chance’s father, Ken Williams-Bennett, who has managed his affairs since, has offered Corcoran $350,000 to settle the dispute. The 2,000 passengers aboard a “cruise to nowhere” that departed from Singapore were confined to their rooms after one tested positive for Covid-19, says Helen Sullivan in The Guardian. Trips that make no stops and sail in nearby waters have come about as a response to pandemic-related travel restrictions, but despite…

Trouble is afoot in China’s $15trn bond market, says Rebecca Choong Wilkins on Bloomberg. State-owned firms once enjoyed an implicit state guarantee, precluding defaults. Yet in recent years Beijing has allowed more to default. The aim is to allow debt markets to function normally and price risk more efficiently, but there have been surprises along the way. Last month Yongcheng Coal & Electricity became the tenth state firm to default this year when it missed a payment on a ¥1bn (£114m) bond, says The Economist. The news rocked markets as Yongcheng had recently been given a“topnotch” credit rating and was well connected to the powers that be. Debt offerings designed to raise “at least ¥20bn” were then paused as investors scrambled to work out what was going on. Foreign buyers…

Far from causing a collapse, the pandemic has lit a rocket under the UK housing market. Prices are climbing at an annual rate of 7.6%, a four-year high, according to Halifax figures. Since June they have jumped by 6.5%, marking the fastest growth rate of any five-month period since 2004. July’s stamp duty holiday (which runs until 31 march 2021), “a new desire for more space”, and a rush to buy after lockdown froze activity have all contributed to the increase, says Melissa Lawford in The Daily Telegraph. The furlough scheme and mortgage payments holidays have bolstered confidence, which is also reflected in the recent rise in 90% mortgage deals. The average house is now worth £253,243, a new record.…

Burger King India’s initial public offering (IPO) in New Delhi last week drew bids of $9.5bn, over 150 times the shares on offer, say Aditya Kalra and Chris Thomas on Reuters. The high demand shows that investors are optimistic about the country’s food-service sector despite the Covid-19-induced slowdown. The IPO raised around £110m. The company plans to use the proceeds to add new locations to its 261 outlets – it aims to have at least 700 restaurants in the country by 2026 – and to reduce its debt. The local restaurant and dining market is worth $56.5bn; major brands such as Burger King India and Domino’s appear to be eclipsing small local eateries.…

Mike Ashley’s (pictured) Frasers Group is attempting a “last-minute rescue” of Debenhams, the “stricken” UK department store chain, says Nic Fildes in the Financial Times. The talks between Frasers and the Debenhams’ liquidators are taking place “in good faith” despite Ashley’s “public war of words” with Sir Philip Green, whose Arcadia Group, which has also collapsed, owns a large number of concessions in Debenhams stores. Having lost £150m through his doomed equity investment in Debenhams, Mike Ashley “was bound to show up at the administrator’s door at the 11th hour to take another look”, says Nils Pratley in The Guardian. While Ashley won’t be “remotely interested” in owning all 124 Debenhams stores permanently, he may be able to find at least 40 or 50 “in decent locations”. While this means…

The electoral college is only days away from formally recognising Joe Biden’s victory in last month’s presidential election, something that even outgoing president Donald Trump has said he will respect. However, some punters are still not convinced about the outcome. With £1.57bn now matched on Betfair, you can get 1.04 (96.1) on Biden’s victory. While I make it a policy not to recommend bets at such short odds, it’s bizarre that anyone is still willing to bet against Biden, given that the odds of the former vice-president not winning are next to zero. Instead, let’s turn our attention to the two Senate elections in Georgia. As I said in my previous column, the Republicans would usually be favourites to win both contests, as they tend to do better in run-off…

“Arcadia, the collapsed retail group behind Topshop and Dorothy Perkins, has a lucrative pension fund that has been paying former executives up to £1m a year,” says The Mail on Sunday. Ralph Halpern, who was CEO of Burton Group, which became Arcadia, between 1978 and 1991 and incurred tabloid notoriety in the 1980s over reports concerning his private life, is understood to be the biggest beneficiary of the senior executives pension scheme. “Dozens” of former senior staff have also received “large sums”, sources tell the paper. In 2016, the final salary scheme had liabilities of £411m, and it is not known if any recipients had already “cashed out”. Still, current retired members can continue to look forward to future payments. The government’s “lifeboat” Pension Protection Fund, into which the scheme…

Nick Train is one of the UK’s most successful fund managers. His strategy boils down to buying good companies with high-quality brands, holding for the long run and – famously – spending as little time as possible worrying about the wider economy. However, the Covid-19 lockdown has been hard to ignore and in his commentary to the half-year results of the Lindsell Train investment trust (which has climbed by more than 600% over the past decade), he gives his views on prospects for his holdings in a post-coronavius world. Companies with a “digital growth story” have actively benefited from lockdown, notes Train, with payments processor PayPal and video-games giant Nintendo among the trust’s biggest gainers this year. However, the drinks industry – another of Train’s favoured sectors – has lagged.…

bloomberg.com Why are some industries so much more responsive to customers’ complaints than others? asks Tyler Cowen. Complaining in a hotel often works: if you tell reception that there is a problem with your room there isa good chance that you will score an upgrade or some other perk. That’s a good return on investment. Hotels often have empty rooms, so it costs them little to indulge loyal customers – or those who might make a fuss in an online review. In arestaurant the rewards are a little lower: “Perhaps a free dessert.” Cultivating customer loyalty is less urgent as diners tend to go to multiple establishments. Contrast that with”stingy” airlines. Like hotels they often have “free inventory”, but then “almost all their customers have something to complain about”. State…

■ Absolute return funds, which supposedly guarantee positive returns in all markets, look set to experience their worst-selling year on record due to their poor performance during the crisis, says Siobhan Riding in the Financial Times. During the first ten months of the year European investors withdrew €18.6bn from absolute-return funds, including “former blockbuster products”, such as Standard Life Aberdeen’s Global Absolute Return (Gars) fund and funds run by AQR and BlackRock. Over the whole of 2019, investors withdrew €21.3bn, a figure likely to be eclipsed this year. Having gained momentum thanks to the 2008 crisis, the funds began to “lose their lustre” when they were hit by the market turmoil in late 2018. Some of the worst-selling products include the BNY Mellon Real Return, the Aviva Investors Multi-Strategy Target…

Christmas is coming and most of us are now planning presents. If you are thinking about giving a financial gift this year, then there are a few things you need to be aware of. One thing you definitely want to avoid this Christmas is gift cards. When a company goes bust gift cards are rendered worthless and there is no way to get the money back. This year several high-street names have collapsed into administration, most recently Debenhams and the Arcadia group that includes Topshop, Dorothy Perkins and Wallis, among other brands. “If a retailer goes bust its gift cards are worthless – a particular problem in 2020” People with gift cards for the Arcadia group are rapidly discovering how little control they have over spending their vouchers. The group…

Corporate finance advisers report a surge in inquiries from small business owners keen to sell their companies before a likely increase in capital gains tax (CGT) in the new year. Chancellor Rishi Sunak is considering proposals for changes to CGT from the Office of Tax Simplification as he looks to raise funds in the wake of Covid-19. Small business owners could face the biggest hit. Sunak is widely expected to align CGT rates much more closely with the income-tax system. Where most taxpayers currently pay CGT at a rate of 20% – falling to 10% for basic-rate taxpayers – higher- and additional-rate taxpayers are charged 40% and 45% respectively on their incomes. Doubling CGT rates could bring in billions. An additional worry for small business owners is the mooted abolition…

This has been a good fortnight for my long tips, with four out of five of them appreciating. Media group ITV climbed from 95p to 100p, train and bus operator National Express advanced from 240p to 247p, pub group Mitchells & Butlers increased from 238p to 243p and Norwegian Cruise Line Holdings rose from $22 to $26. The only exception was homebuilder Bellway, which fell from 3,112p to 2,885p. Overall, my long tips are now making a combined profit of £4,559, more than they were earning a fortnight ago. Interestingly, my short tips have also done well, with three of the four falling. General Motors’s decision not to take an equity stake in electric-lorry maker Nikola has caused the latter’s shares to fall from $29.41 to $18.44. Online health insurance…

It’s been an awful year for oil producers, but few have seen the depths that Premier Oil’s (LSE: PMO) shares plumbed after the collapse of oil prices as a result of the pandemic, says Alejandro Arrieche on capital.com. The firm has struggled to “turn around its highly indebted ship”. Despite a deal between Premier and UK oil producer Chrysaor, which could see a lot of Premier’s debt repaid, the second wave of Covid-19 threatens to postpone recovery. Expectations for the group are at their “gloomiest level in years”. The stock has fallen by 75.4% in the past year.…

2004 Château Potensac, Médoc, Bordeaux, France (£59.00, Magnum,bbr.com). There is no mystery here whatsoever as this is a well-known château and 2004 is a decent vintage. So why has it gained a place in this stellar line-up? The answer is that we are all so used to tasting young, vigorous wines that we sometimes forget just how beautiful mature wines can be. Potensac is owned by the Delon family and it shares a portfolio with none other than the mesmerising Saint-Julien Deuxième Cru, Léoville-Las Cases. There is pedigree here and at 16 years of age, this wine is at the peak of its powers. So £59 is the right price to pay for a fully mature, top-class claret and this is why it sits on this page. Oh, and £59 is…

The Botticelli auction (see left) is the finale of a flurry of Old Master sales at Sotheby’s this week, Christie’s (15-17 December) and Bonhams (17 December). But if A banquet still life, by the Flemish 17th-century painter Jan Davidsz de Heem, offered at Christie’s for between £4m and £6m, is too rich for you, consider an exclusive (albeit time-limited) look at arguably the world’s most famous painting for a fraction of that price. The Paris branch of Christie’s, together with local auction house Hôtel Drouot, is auctioning off the chance to get up close and personal with the Mona Lisa. Last week, the lower estimate of €10,000 had already been hit. Every year, the painting is taken out of its display case at the Louvre to be examined by restoration…

• Nasa says there’s water on the moon. “I wanted to believe this life-sustaining liquid might mean there would be another celestial body for the human race to survive on,” says Brian Reade in the Daily Mirror. “But I had a hunch it meant that in a few years, as global warming decimates the Earth, the rich elite will fly there in their personal spaceships to live in moonpod mansions. And that water will merely end up being ice in Philip Green’s gin and tonic as he watches satellite footage of the poor drowning back here.” And for all that we still call him “sir”. So to racing driver Lewis Hamilton (pictured), who despite “poor tax behaviour”, is also heading for a knighthood. “If we must hand these trinkets to…

In the 1999 bubble, it was dotcom stocks. In the 2007 bubble, it was the mortgage-finance companies. And now? Several sectors – pharmaceuticals and internet-based services – lead the way. But let us focus on one particularly eye-catching company: Tesla. The carmaker’s stock has sprouted wings. Tesla produces electric cars. Its margins are determined by the difference between the cost of making the cars and the money it brings in from sales and service – now about six cents per dollar of revenue. And its future depends, mostly, on how many cars it can sell. “What is ‘the first-mover’ advantage worth in the world of car sales?” Today’s stockmarket valuation suggests (with an average-ish price-to-sales multiple of 12) that the company would have to generate $600bn in sales in order…

The “lifestyle of the super-rich” has been exposed in the first day of a trial that saw the former wife of a Russian billionaire accuse their son of helping his father hide assets in one of Europe’s “biggest ever divorce battles”, says Jane Croft in the Financial Times. Temur Akhmedov (pictured), 27, is being sued by his mother, Tatiana, who said her son was given a £29m London flat when he was 19, and lost $50m day trading while he was still at university. Tatiana is fighting to get £453m owed to her by her ex-husband from a 2016 High Court divorce settlement, and is also now seeking nearly £70m from Temur. Tatiana has claimed that Temur acted as a “lieutenant” for her ex husband, who she claims hid assets…

Inflation is coming and it will have “‘Made in Asia’ stamped all over it”, says Richard Cookson on Bloomberg. The continent’s economy is “humming”, driving a boom in the price of commodities such as copper. Expect inflation to “pick up both soon and sharply”. A wall of money Inflation remains quiescent for now. Consumer prices rose by an annual 0.7% in the UK in October; US prices by 1.2%. Yet financial-market expectations for average US inflation over the next decade recently hit the highest level in 18 months, say Colby Smith and Tommy Stubbington in the Financial Times: the so-called ten-year “break-even-rate”, derived from inflation-linked and conventional Treasury bond yields, topped 1.8%. The yield on US ten-year Treasuries has climbed to 0.9% since the summer. That suggests investors are seeking…

“[India’s] Sensex, an index of the country’s biggest 30 firms, is up by 72% since 23 March, the day before India went into its strict lockdown... That is one of the largest rises [in the] world’s ten biggest economies.... This picture seems in striking contrast to that of the economy... in the second quarter India’s GDP fell by 24% compared with the previous year... Arenewed appetite for global risk, especially after news of... vaccines broke, has only helped... India has been the recipient of record portfolio flows from abroad. Investors may also have become more optimistic... The crisis has allowed the government to push through... agricultural and labour reforms, which could introduce needed efficiency.... adoption of a goods-and-services tax may have also toughened the environment for small, less formal firms,…

Three to buy Associated British Foods Shares Vale is “back in fashion” on the stockmarket and the high street, so now is the time to buy the owner of Primark. The clothing chain has grown through previous crises thanks to consumers’ bargain-hunting; the demise of Debenhams and Topshop will help. The food division – ABF owns brands such as Ryvita and Twinings – provides diversification, while a solid balance sheet should make it one of the first retailers to resume dividend pay-outs. A price/earnings (p/e) ratio of 17.9 is “undemanding”. Buy. 2,146p Ergomed The Mail on Sunday This Aim-listed business specialises in pharmacovigilance. It works across 60 countries, managing clinical trials, data analysis and monitoring approved drugs once they have been rolled out to the general population. Such work is…

• Shares in cinema groups have collapsed as the “very existence” of movie theatres “has been called into doubt by the pandemic”, says Jim Armitage in the Evening Standard. Warner Brothers is the latest studio to “team up with the streaming giants to get their products directly into people’s homes” by tearing up the three-month “window of exclusivity” between a film’s cinema release and its arrival on streaming services. Still, it would be a bad idea to write off cinema shares “too soon”. Studios “make far more money from a family of five paying £50 to go to the cinema than they do from a tenner on pay-per-view”, which will force a compromise. Cinema shares are a buy for the brave. • Britain’s largest wealth manager, St James’s Place, has…

The creation, approval and large-scale manufacturing of aCovid-19 vaccine in less than a year is among the most notable scientific and technological achievements in history. Led by Operation Warp Speed in the US, and with similar initiatives in other countries, including the UK, vast scientific resources have been mobilised to crack a huge global crisis. The effort has succeeded magnificently. What governments got right Governments around the world got plenty wrong in their response to the virus. But they got one thing right. They threw a lot of money at getting a vaccine. In the US, Operation Warp Speed was given a budget of $10bn to distribute to anyone who might be able to help. In this country, government help was available for the Oxford and Imperial vaccines, and the…

One of our favourite valuation ratios here at MoneyWeek is the cyclically-adjusted price/ earnings ratio (Cape). The Cape – also known as the Shiller Cape, after Professor Robert Shiller, who popularised it – is similar to a standard p/e ratio (see below) in that it looks at how expensive a company or index is relative to the earnings it generates. But rather than a single year of earnings, the Cape takes average real (inflation-adjusted) earnings over ten years. This smooths out cyclical ups and downs and gives a clearer picture of whether a market is truly cheap or not. History shows that buying an index when the Cape is low (ie, it’s cheap) will deliver the best returns, while buying when the Cape is high (ie, the index is expensive)…

Time to depose Old King Coal The Economist The world is gradually turning away from coal, says The Economist. And not before time. In America and Europe, consumption of the top source of greenhouse gases has dropped by 34% since 2009. But it still accounts for 27% of the raw energy used to power everything from cars to electric grids, contributing a staggering 39% to the annual emissions of CO2 from fossil fuels, and Asia is largely behind that. The continent accounts for 77% of all coal use, with China burning over two-thirds of it, followed by India. The region is making changes: the Philippines has now ceased construction of new plants, while Japan and Bangladesh are not building them as quickly as before. But in order to completely retire…

project-syndicate.org Across the developed world, average debt as apercentage of GDP is approaching the highest level since World War II, says Raghuram G. Rajan. Ultra-low or negative interest rates make these debts seem manageable. In many places government interest payments are less burdensome now than 20 years ago despite much higher debt levels. Advocates of Modern Monetary Theory (MMT) claim that the only limit on how much states can borrow is a surge in inflation – with unemployment soaring they say that day is far away. Yet emerging-market history shows that investors can lose confidence in governments when unemployment is still high. Bond holders will only buy new debt if they are confident that it can be paid back through future revenue. Yet tax rises are tricky, and governments are…

Before environmental, social and governance (ESG) investing came along there was SRI: socially responsible investing. Whereas ESG tries to be many different things, SRI involves investing in local communities, charities, and social enterprises and achieving a direct, measurable impact. You should also, hopefully, make a profit. Big Society Capital, a major player in this sector, estimates that the investable high-impact segment of the UK market will be around £10bn-£15bn by 2025. Perhaps the most prominent securities in this context are retail charity bonds, which are issued by leading charities and listed on the London Stock Exchange. A blue-chip partner However, funds are also getting in on the act. Big Society Capital is behind the biggest new fund structure to access the social-impact sector, the Schroder BSC Social Impact Trust, which…

While England’s second national lockdown ended last week, the country’s return to tiered restrictions has left many businesses struggling to trade, particularly in the hospitality sector. It is crucial that these businesses claim all the support to which they are entitled. In addition to the extension of UK-wide initiatives available to all businesses struggling during the pandemic, including the Job Retention Scheme and the two state-backed loan programmes, the Local Restrictions Support Grant (LRSG) offers additional help for English businesses in Tier-two and Tier-three areas. Business rates are key Administered by local authorities, this scheme pays cash grants based on the rateable value (used to determine business rates) of the properties that eligible businesses occupy, with different levels of award on offer depending on whether you’re open or closed. The…

One of the big winners from the restrictions induced by the pandemic has been the online food-delivery firm Ocado Group (LSE: OCDO). Faced with long queues outside supermarkets, people switched to shopping online. As a result, Ocado’s sales surged by 43.7% during the six months to 6 October and at one stage the group’s market value had more than doubled from its level at the start of this year, briefly eclipsing Tesco as the most valuable retailer in the UK. Even today it is up by 75% year-to-date. Despite this, I think it is heading for a fall. The first problem with Ocado is that it is not very good at actually making money. It last turned a profit in 2016 and is forecast to increase its losses in 2021;…

The TM Cerno Global Leaders fund invests in adiverse array of global businesses that the managers believe will occupy leadership positions in their sectors for the next ten years or more. The portfolio has very little overlap with other quality equity strategies. Below is a selection of three quite different businesses that we believe are poised for growth as we emerge from the pandemic next year. Nervous systems for cars Despite many articles suggesting that there is a growing reluctance to own motor vehicles (particularly among the younger generation), the car is not dead. Aptiv (NYSE: APTV) focuses on revolutionising the architecture of vehicles. Architecture in this context is conceived as the “brain and nervous system” required to enable autonomous driving. The electrical power consumption of cars has risen sixtyfold…

40m The cost in Polish złoty (£8m) of building the world’s deepest swimming pool. The water at the Deepspot centre in Mszczonów, a spa town 25 miles southwest of Warsaw, reaches a depth of 45 metres. The pool will be used to train scuba divers and fire fighters. £8.5bn The combined total amount of debt that Britons are hiding from friends and family, with £600 the average size of the hidden amount owed, according to a survey of 1,000 adults for credit ratings agency TransUnion. One in ten people admitted to concealing debt. $463bn The combined fortunes of the 20 richest families in Asia, according to Bloomberg. With $76bn (up from $51bn last year), India’s Ambanis are more than twice as wealthy as Asia’s second richest, the Kwoks of Hong…

Villagers in a hamlet in central Germany have been left €6.2m by a “reclusive widow and former neighbour” who died in November, says Oliver Moody in The Times. Renate Wedel shared a house with her stockbroker husband in the Waldsolms municipality, the mayor of which has said the bequest came as a “great surprise”. The amount is twice the council’s annual budget for investments and comes tax free. Bob Dylan is cashing in on his back catalogue of over 600 songs, selling the complete rights for nearly everything he has ever written for around $300m, says Neil McCormick in The Telegraph. Dylan, “always a fairly canny businessman”, had previously owned everything aside from his first seven songs. The deal sees his fortune, previously put at around $200m, more than double…

Shares in Southern Copper, the world’s fifth-largest producer of the red metal, have surged to a record high, as WirtschaftsWoche points out. But there should be much further to go. The long-term outlook is compelling: the ascendancy of electric vehicles and other renewable energy technologies will boost demand, while more immediate impetus comes from China, which accounts for 40% of global consumption and is enjoying a brisk recovery. Southern Copper, which is based in Phoenix but operates in Peru and Mexico, boasts 67 million tonnes of reserves –among the biggest of all the miners. The shares have just broken out of a 13-year trading range, so the technical outlook is bullish too.…

Until last week UK supermarkets had behaved like “brothers in arms”, says Sam Chambers in The Sunday Times. They “uniformly” rebuffed calls to return the “contentious £2bn-plus tax windfall” that they had received from the Treasury’s 12-month business rates holiday, “despite continuing to pay dividends”. However, last week Tesco declared that it would return the £585m it had been given. This triggered a “domino effect”, with Morrisons, Sainsbury’s, and B&M following suit. Despite most of the supermarkets now pretending that they have been considering returning the cash “for some time”, it was only Tesco’s action that forced their hand, says Ben Marlow in The Daily Telegraph. Even Tesco doesn’t really deserve any praise since its decision came as a result of a “fierce and sustained” public backlash. Of course, the…

The EU may be close to ending a “damaging stand-off” with Poland and Hungary over its €1.8trn budget, says the Financial Times. The two countries had threatened to veto the budget for 2021-2027 over a “contentious” new mechanism linking payments to rule of law principles. One likely solution is for the new rules to stand, but for an “interpretive declaration” to make clear that the mechanism “would apply to the next EU budget from 2021 – and not existing funds”. Countries would also be able to trigger an “emergency brake” over any sanctions process, which would lead to the dispute being taken up by EU leaders. Poland and Hungary’s threat was always weaker than it appeared, says The Economist. On the surface, holding €1.8trn of funding hostage “seems a strong…

• Slack’s British chief technology officer Cal Henderson (pictured) and CEO Stewart Butterfield, both co-founders of the messaging software for businesses, stand to make a combined $2.5bn from a takeover by US tech giant Salesforce, says The Daily Telegraph. Butterfield’s stake is valued at $1.8bn, while Henderson’s share is worth around $750m. The $27.7bn deal announced last week is one of the largest on record in the software sector. • Frank Slootman, CEO of Snowflake, has become one of the best-paid tech bosses in the world thanks to the shares in the cloud-computing company having surged by 223% since making their stockmarket debut on 15 September 2020, according to Bloomberg. A compensation package he received upon joining Snowflake in April 2019 awards him a batch of options every month for…

Many investors use the price/ earnings (p/e) ratio as a measure of whether a share is cheap or not. That’s because it’s one of the simplest valuation measures out there. You just take a company’s share price and divide it by its earnings (profits) per share (which you can read in the accounts). So a company with a share price of 50p and earnings per share (EPS) of 5p would have a p/e ratio of ten. A p/e ratio that is based on forecast earnings is often referred to as a “forward p/e ratio”, while one based on past earnings is sometimes described as a “trailing p/e”.P/e ratios are also sometimes referred to as “multiples”, as in “Acme widgets is trading on a multiple of ten times its earnings”. In…

“When people become hugely successful and find fame and they suddenly become monsters — I don’t think that’s a thing. Ithink you have to have that monster in you. I don’t think it changes people, I think people probably have certain tendencies, then when you get all this stuff given to you it multiplies everything by ten.” Actress Jodie Comer (pictured), quoted in The Times “We were a family who had literally no money and we could get $10 a show. We had to earn money; it couldn’t be done any other way. We probably rented 20 houses during the seven years or so that we were in Australia. I think, without overemphasising it, my father just didn’t pay the rent. We were that family in the middle of the…

adamsmith.org Oxfam doesn’t seem to be very concerned about poverty anymore, says Tim Worstall. Don’t take it from me. New executive director Gabriela Bucher says “we used to talk only about poverty. No more.” The new aim is to fight inequality by addressing “an economic system that is entrenching power and wealth”. She hopes to see “a new human economy” born “out of the ashes of neoliberalism”. What has actually happened, of course, is that “neoliberal globalisation” has proved the greatest poverty-fighting programme in the “history of our species”. The current best estimate is that “$1.90 a day destitution” will be “entirely gone” within the decade, much as absolute poverty is already a thing of the past in the UK. The disappearance of poverty is a problem for those who…

Activist investors are staging a comeback after a protracted silence induced by the pandemic, says Ben Woods in The Daily Telegraph. The number of British companies facing activists’ demands hit a three-year high of 13 in the three months to mid-November. “The shots came in quick succession,” with activist fund manager PrimeStone Capital demanding a new finance chief at medical device maker LivaNova in October; it has also lambasted wealth manager St James’s Place’s “bloated organisational structure”. The crisis has exposed companies’ weak strategies and momentum has also been building behind “socially conscious investing”, making the conditions ripe for attacks from activist investors.…

Above, we’ve mentioned some established businesses that can profit from Big Data and are worth buying. Consumer data providers such as Experian (LSE: EXPN), for example, used for decisions on credit cards and mortgages, could benefit from the consolidation in the financial data industry. It’s also worth looking at the big cloud players (who have the key role of storing all this data) such asMicrosoft (Nasdaq: MSFT) and Amazon (Nasdaq: AMZN). Of the data miners themselves, Splunk (Nasdaq: SPLK) is a front-runner. It is growing rapidly, offers a diverse range of services, and is expected to turn a profit in 2022. Another is Palantir Technologies (NYSE: PLTR). It listed in September but is no newbie – it was established 17 years ago and is expected to grow fast. It has…

• While many businesses have made good progress with their preparations for the end of the post-Brexit transition period, data protection is one area that has been widely overlooked, experts warn. When the standstill agreement comes to an end on 31 December – new arrangements with the European Union on issues ranging from customs procedures to employment rights come into force on 1 January – UK businesses may lose access to data currently flowing from partners, suppliers and customers in the EU. The UK government had hoped the EU would grant the UK “positive adequacy”, certifying that it meets EU standards on data protection. In that case, UK businesses would not have to make new arrangements in respect of data from the EU. So far, however, this has not happened…

Analysts are divided about the impact of issuing debt on a company’s share price. Some argue that it should have no effect, as while it makes the shares riskier, it also increases the potential returns. Others think that the favourable tax treatment of debt (with interest payments at least partially offset against taxes) means that increased leverage should boost share prices. Finally, there are those who claim that taking on more debt should be negative since it can be a sign that a company’s management is unable to use its existing resources effectively. However, most studies suggest that issuing more debt has no impact on a firm’s stock, at least in the short term. A 1991 study by Dartmouth College covering 297 US debt offerings between 1980 and 1984, found…

Blue Prism (LSE: PRSM) is a software company specialising in robotic process automation. Its share price spiked by 10% in mid-November to its highest level since March’s market turmoil after it posted a strong full-year performance, says Jamie Gordon on UK Investor Magazine. Full-year bookings for the company hit £180m, £122m of which was new business, representing year-on-year revenue growth of around 40%. Over the year the company added 490 new customers, increasing its user base by nearly a quarter. The share price is up by 45.3% over the past 12 months.…

Robert Schuyler was born in Rhinebeck, New York in 1798, the grandson of American general Phillip Schuyler and nephew of the treasury secretary, Alexander Hamilton. After graduating from Harvard he moved into steamboats, becoming president of the New York and Boston Transportation Company in 1838. In 1846 he founded R. & G. L. Schuyler, which invested in railroads. His career progressed rapidly and he soon became a major figure in the American rail industry: he was president of several railroads and involved with many others. As a result he became known as “America’s first railroad king”. How did the scam work? In 1848 he was appointed president of the New York and New Haven Railroad, as well at its sole transfer agent, which meant that he was in charge of…

Going… Korean K-Pop music sensation BTS have donated the pastel-coloured costumes they wore for their hit music video Dynamite to raise money for MusiCares, a charity that helps people in the music industry whose careers have been adversely affected by the pandemic. The video, released in August, broke the record for the most online views in 24 hours after it was played 101.1 million times on YouTube. The outfits have been given a “conservative” estimate of $20,000 to $40,000 when they go up for sale with California-based Julien’s Auctions on Friday, 29 January, ahead of the 63rd Grammy Awards the following Sunday. Gone … Three guitars that belonged to rock legend Eddie Van Halen, who died in October, fetched a combined $422,000 last week, also with Julien’s Auctions. The guitarist’s…