Indholdsfortegnelse for Issue 932 i MoneyWeek

Hercules Capital, an American venture capital group, is “almost bulletproof”, Scott Black of Delphi Management told the Barron’s Roundtable. It is extremely good at what it does: not only has it helped develop Facebook and Pinterest, but since it was established in 2003 it has only had to write off an average of 0.04% of its loans every year. It is funding 89 firms, with most loans worth around $20m-$30m. Despite its impressive track record, the market seems to be overlooking it. The group is on a very reasonable trailing price/earnings ratio of 10.7, while it yields 9.7% (the dividend is funded by cash flow, not borrowing). A buyback programme may give the stock a well-deserved lift.…

“Tesco staff must be finding it tough to smile at customers,” says James Moore in The Independent. Up to 15,000 of them are set to lose their jobs. Most of the cuts will take place as a result of eliminating the grocer’s fresh food counters: the in-store butchers, bakers, and fishmongers. Yet “restoring the relationship with customers, and improving the service they received, was one of CEO Dave Lewis’s early priorities and successes”. The cuts are understandable, given Lewis feels he “has got to keep the profit margin promises he’s made to the City”, says The Guardian’s Nils Pratley. And he has a point when he talks about the market being “competitive and challenging”. But it is “hard to believe” Lewis, who was appointed four years ago, “intended still to…

Last Friday, amid “mounting public frustration”, Donald Trump agreed to halt the 35-day US government shutdown that has left hundreds of thousands of federal employees without pay for more than a month, reports The Guardian. Although the Democrats continue to refuse to grant the president the $5.7bn in border wall funding he was requesting, he agreed to a bill that funds the US government until 15 February, thus enabling nearly 800,000 employees to return to work and receive delayed payment. The decision unilaterally to end the longest and most costly shutdown in government history was greeted with relief, but it has led to criticism from Trump’s own supporters that he “caved in”. Trump’s “abject humiliation” was inevitable, says Michael Gerson in The Washington Post. Not only has he “lost the…

Senior Trump administration officials insist that the Huawei crackdown (see above) has nothing to do with this week’s trade talks between the US and China, even if Beijing is unlikely to see it that way, says the Financial Times. If the US and China can’t strike a deal, US tariffs on $200bn of Chinese goods will rise from 10% to 25% on 2 March. Both sides are under pressure. China’s economy is slowing and President Trump needs some good political news. Beijing does not want to be cut off from US technology critical to upgrading its economy, says Tom Mitchell in the FT. In a move intended to “smooth” talks, the Chinese government announced plans to rush a new foreign investment law through that will “formally ban ‘forced’ technology transfers…

Revelations keep coming about Patisserie Valerie, the cake and coffee chain that went bust last week. It now seems highly likely that a huge £40m fraud has been committed, which leaves two main questions for investors: one, is there any way to spot this sort of thing coming? And two, what on earth is the point of an auditor? In answer to the first question, as Phil Oakley pointed out in Investors Chronicle in October when the problems first came to light, there are often red flags in a company’s annual report. Yet in this case, there were virtually none. Patisserie Valerie was not hugely indebted. Profits were reportedly turning into free cash flow at a decent rate. Many of the usual flashing warning signs that have been obvious prior…

Data is, at least according to some experts, the new oil, the essential raw material that drives the global economy. It is fuelling a global technology boom and transforming whole industries, and as more and more of it is collected, that will only accelerate. But which are the leading countries in producing the stuff, the digital equivalents of Saudi Arabia? A study in the Harvard Business Review has some surprising results. The world’s leader is, perhaps inevitably, the United States, but Britain is now in second place, and some other relatively small economies are turning into world-beaters – and that has significant implications for the way the global economy will develop over the next couple of decades. The new GDP There are lots of ways to measure how technologically advanced…

A suffocating grip on the boardroom Patience Wheatcroft The Times The straitjackets on public company boards are becoming ever tighter, says Patience Wheatcroft. That is making private equity look ever more attractive to bosses. But private equity will not remain so congenial an environment for long either: the “governance zealots” have extended their reach to include private companies. In 2018, the Financial Reporting Council (FRC) will regulate large private companies through the so-called Wates principles. Though as yet not overly prescriptive, principles can rapidly escalate into “demanding rules” and, if they do, private-equity houses may well prefer to sell on their companies rather than nurture them. One area already causing concern is the obligation on executive directors to hold shares. While the principle is sensible – the interests of executives…

We are routinely told to pay careful attention to the fees on financial products. But if the fees on your pension plan are only marginally more expensive than a rival product, it’s easy to assume this won’t make much difference to your standard of living in retirement – especially if a financial adviser keeps insisting that the more expensive plan should perform well enough to more than compensate for the impact of the fees you pay. The truth, however, is that even small differences in charges will have a big cumulative impact, and you may be investing for several decades. As for the promise of higher returns, they all too often prove illusory. Charges on pension products are so important that three years ago, the government took the unusual step…

A restored, two-bedroom, 1920s Dutch barge with permanent mooring subject to annual renewal on a waterfront in Chelsea. Anny has a working engine, and having had her hull repainted can be insured for another seven years before a further repaint is required. She has a modern fitted kitchen and bathroom, wood floors, a multi-fuel stove, and a wheel house with views over the marina. She is VAT-, council-tax- and SDLT-exempt and prospective owners are required to have a secondary address. But can you guess the asking price? Answer on the side of this box.…

For many small and medium-sized enterprises (SMEs), the new year has begun with an accounting headache. On top of tax returns, if your business is registered for VAT (any business with sales of more than £85,000 this year should be), you will probably have had a reminder from HM Revenue & Customs (HMRC) that you must comply with the Making Tax Digital (MTD) rules from 1 April. These rules require businesses to keep records digitally and to submit their VAT returns using specialist software. Either way, businesses operating without some form of accounting software are finding life increasingly difficult. If you haven’t previously invested in such a package – or reviewed your options recently – now may be the time to do so. The good news is that competition in…

Walt Disney (NYSE: DIS) is embarking on a pivotal year. It has just completed its $71bn takeover of 21st Century Fox. It expects more box-office blockbusters, while the first-ever Star Wars theme park attractions should draw big crowds. Most importantly, it will make a big push into streaming: delivering entertainment (“content”) to computers and televisions directly over the internet, thus challenging the likes of Netflix. Catching up with Netflix One reason it has seen lacklustre returns is that Disney hasn’t yet embraced streaming, so investors seeking out fast-growing sectors have overlooked it. Although its theme parks and movie studios are growing, its Media Networks business, which encompasses its television, cable, radio and publishing assets, has stagnated as viewers have ditched cable TV for online streaming offerings such as Netflix and…

Online supermarket Ocado (LSE: OCDO) has gone from strength to strength in the past year. Once considered an also-ran in the UK groceries sector, Ocado has transformed its fortunes with deals that have involved overseas partners, including Kroger, America’s top food retailer, buying into its proprietary delivery technology. CEO Tim Steiner is upbeat, saying that 2018 was a “transformative year” for the company, and “the story has only just begun”. Once one of the UK market’s most heavily shorted stocks, it has more than doubled in the last 12 months.…

Bernie Madoff (pictured) got his start in finance in 1960 when, at the age of 22, he set up a brokerage specialising in penny stocks with the assistance of his father-in-law. The firm acted as a market maker and over the years Madoff Securities would play a large role in the development of the electronic exchange Nasdaq. Madoff was briefly considered as a potential chairman of the Securities & Exchange Commission, the US regulator. From the 1980s onwards, his firm ran a large investment management division based on buying and selling options known as “split-strike conversion” instruments, which promised returns similar to that from the stockmarket, but with less volatility. How did they work? Madoff initially claimed his scheme was based on a legitimate strategy (others dispute this). But he…

Australian Rob Deutsch, 39, fell out of love with his job as a City banker and decided to set up gym chain F45 instead, says Sabah Meddings in The Sunday Times. Every hour, in around 1,300 gyms in 36 countries, fitness enthusiasts meet for 45 minutes of hard exercise led by one of F45’s trainers. The chain, which operates on a franchise model, is spreading fast. “There were studios and gyms charging somewhere between A$5 and A$20 a week, where clients would turn up, put their headphones on and jump on a machine. They were really lacking motivation and results,” says Deutsch (pictured). And then there were people who would “pay A$300 a week” to “get that from a personal trainer”. Deutsch set out to fill the middle ground, opening…

’75 Written and performed by Kieran Hodgson Showing at the Soho Theatre, London, until 2 February then the Southbank Centre for a one-off show on Tuesday 28 May With the debate over the withdrawal agreement and the backstop dominating the headlines, one might think that another show about Brexit is the last thing anyone would be interested in. Kieran Hodgson’s one-man show about Britain’s entry into Europe provides a welcome and amusing new angle on the topic, however. The referendum outcome, combined with the revelation that his parents voted Leave, sends Kieran into a nervous breakdown, but also causes him to consider whether he is the one detached from reality. In an effort to understand Britain’s relationship with Europe, Kieran decides to do some research on the events leading up…

The contents of a barn full of sensitive military equipment, some used by the British Army and Royal Navy, are to go to auction next week after the firm that was storing them for Italian defence giant Leonardo went bust. It includes radios, radar jammers for Eurofighter Typhoon warplanes, missile-tracking chips and equipment to counter roadside bombs, reports The Times. The storage group, UES&S, had been contracted by Leonardo for 20 years until the latter started using its own facilities. A legal dispute over fees pushed UES&S into liquidation. Leonardo says the liquidator has legal responsibility for the barn’s contents, and that the MoD was “fully aware of the location and status” of the stash. Good week for: Spanish football club Real Madrid may have been beaten to the top…

Venezuela “has been thrust back into the energy spotlight”, says Sam Meredith on CNBC. The “oil-rich but cash-poor” country is in meltdown (see page 12) and the US is threatening further sanctions. The upshot could be “wild swings in the oil price”. In truth, however, this could prove a fuss about nothing. Venezuela’s oil output has been decreasing for more than two decades. It came down to 1.5 million barrels per day in December, according to data from Trading Economics, falling from its peak of some 3.5 million barrels per day in 1998. Despite having large reserves, the state refinery’s capacity has declined because of poor maintenance and lack of skilled workers. Equally, Saudi Arabia, Mexico and Iraq produce the same variety of heavy crude oil, and they “have been…

Germany’s blue-chips are about to start paying their annual dividends, says the Frankfurter Allgemeine Zeitung. And there’s a record sum in the kitty: according to estimates from Commerzbank, some €38bn will be handed out for 2018, 3% more than in the previous year. The higher dividends are excellent news, as reinvested income is crucial to healthy long-term returns. The chart shows the blue-chip DAX-30 index (a total-return index, so it includes reinvested income) and the Dax price index, which only reflects price movements. The cumulative impact of reinvesting dividends since the turn of the century is huge. Investors who did so would have gained around 60% by now; those who didn’t are marginally in the red.…

The deal to end the US government shutdown is especially good news for a dozen biotech firms that had filed for initial public offerings (IPOs) in December, notes Bertha Coombs on CNBC. Had the standoff lasted any longer, their flotations could have been delayed for months. One group likely to come to market very soon is Gossamer Bio, which specialises in immunotherapy drugs. It lost $108m in the first nine months of 2018. Other companies will soon follow, as the shutdown could resume in three weeks. The “rush to get out of the door”, says Kathleen Smith of Renaissance Capital, bodes well for investors as it implies a “buyer’s market”.…

After 174 years of brewing beer in London, Fuller, Smith & Turner has left analysts and beer-lovers alike “dumbfounded”, say Zoe Wood and Jasper Jolly in The Guardian. It has accepted a “blockbuster” £250m offer for its drinks business from the Japanese beer group Asahi. Asahi has been on a buying spree in recent years, with the Tokyo-listed drinks firm, currently the seventh largest in the world, having scooped up the Peroni, Grolsch and Meantime brands. Fuller’s now plans to concentrate on its pubs (which the brewery will continue to supply) and hotels. “Nostalgic Londoners” may bemoan the fact that the iconic London Pride brand is now in Japanese hands, says Lex in the Financial Times. But shareholders can “raise a goodbye glass to a division that had become a…

Let’s take a look at the various Brexit-related bets available in the market, in the light of the recent parliamentary vote (see left). On Smarkets, punters have wagered £112,305 on the date which the UK will officially leave the EU. As you’d expect, an exit by the end of April is the favourite, but you can still get 2.9 (34.4%) on that date. Interestingly, the next favourite is not before 2021 at 4.3 (23.2%), suggesting that punters think there’s a good chance Brexit might not happen. Still, if the major betting exchanges aren’t confident Brexit will occur on schedule, punters are much more certain that Theresa May’s position is secure, at least for the next few weeks. There has been a flurry of activity on whether the prime minister will…

One obvious question being raised by investors in Patisserie Valerie (and they’re not the only ones) is: “what were the auditors doing?”. Given that it wasn’t running a particularly complicated business, how did its auditors, Grant Thornton, end up giving it a clean bill of health when in fact there was a £40m black hole in the accounts? The problem here, as Grant Thornton’s CEO David Dunckley told MPs at a recent hearing, is that “there is a clear expectation gap... An audit fundamentally gives a reasonable opinion on historic information, and doesn’t look for fraud”. This is the core explanation trotted out by auditors in the wake of other disasters, such as Carillion. In effect, what people think auditors do (check for fraud or general dodginess), and what they…

• Topping the table of Britain’s most generous taxpayers, as revealed by The Sunday Times, is Stephen Rubin (pictured) and family, who, if you count the taxes paid by the business they own (which The Sunday Times does), last year paid £181.6m in tax, or £497,570 a day. Rubin grew his family shoe business into the Pentland Group, a vast global fashion and sportswear conglomerate that employs 41,000 people and owns brands including Berghaus, Ellesse and Speedo. The family also owns 57.5% of JD Sports. • Runner up in The Sunday Times list is the Coates family, which owns the online gambling firm Bet365. Denise Coates built the company from a betting shop established by her father 20 years ago in Stoke. Coates was the highest-paid female executive in the…

“Capitalism has taken more people out of poverty than any other ‘ism’. But it is a wild beast that, if not tamed, can chew up a lot of people along the way.” U2 frontman and social activist Bono (pictured), quoted in The Independent “When human traders show a loss, they search for scapegoats. Perhaps the only real difference between algorithms and humans is that the computers do not blame homo sapiens when they lose money.” Daniel Mauro, chief investment officer at Army Capital, quoted in the Financial Times “It’s de rigueur. If you’re nominated for an Oscar, you sell watches, make millions. An actor who needs money isn’t going to get those ads. Now, if you made $10m selling coffee and you gave that to charity, that would make sense.…

Tuition fees went up considerably a few years ago, yet organisations are still struggling to find applicants for scholarship schemes. So if your child is approaching university age, you have options beyond either funding their course yourself or watching them rack up debt. The number of available scholarships, grants and bursaries is rising each year, yet most people aren’t aware of them, says Karen Kennard, founder of The Scholarship Hub, a database (Thescholarshiphub.org.uk). These terms are often used interchangeably, but generally scholarships are awarded for academic merit; bursaries for financial need; and grants come from charities. “Your child’s extra-curricular activities or ambitions could make them eligible for help” As it stands, there are more than 3,000 scholarships and bursaries available at UK universities, worth more than £150m. These offer financial…

London’s Aim market had a grim end to the year. The FTSE Aim All-Share index peaked at just under 1,110 in the summer. Then, like most other global markets, it began a precipitous slide in early October, and closed 2018 down 23%, at 850. Of course, the nature of Aim and its constituents (often young, high-growth, high-risk companies attracted by light-touch regulations) makes it prone to high-profile failures in risky sectors such as tech and resource exploration. “The Treasury may use tax simplification to tinker with Aim” Yet the nastiest Aim surprises in 2018 did not come from these sectors. Bargain-booze retailer Conviviality went belly-up in spring last year after being hit with a “surprise” £30m tax bill. In October the Patisserie Valerie fraud began to come to light (see…

Britain’s £14.5bn gambling industry was dealt a double whammy last year. First, the government slashed the maximum stake on highly profitable fixed-odds betting terminals (FOBTs), electronic slot machines containing a range of games, from £100 to £2. Second, to make up for the lost tax revenue, it hiked duties on online and mobile casino-style games from 15% to 21%. On balance, this is likely to be neutral or maybe slightly positive for the public finances, but it certainly tears a hole in the industry’s profits; many highstreet betting shops will disappear. Nevertheless, despite the gloomy backdrop and sinking share prices, the sector is hardly a write-off. It is in a state of flux, gradually adapting to the tough conditions and eyeing up future growth in online and mobile gambling. It…

Bruce Stout, 59, is a senior investment manager on the global equity team at fund management group Aberdeen Standard Investments. He joined Aberdeen in 1987, following the acquisition of Murray Johnstone, and has held a number of roles at Aberdeen, including investment manager on its emerging markets team. Stout was appointed manager of the Murray International Trust in June 2004. Since then, the trust has beaten its benchmark in eleven calendar years (including the first nine under Stout’s tenure), only underperforming during 2013, 2014, 2015 and 2018. Between 30 June 2004 and the end of December 2018, the trust has made a total return of 424%, versus a benchmark return of 199%. Bruce graduated with a BA in economics from the University of Strathclyde, and completed a graduate training course…

From 1 June this year, landlords and letting agents in England will be banned from charging tenants letting fees. The Tenant Fees Bill has been working its way through Parliament for some time now, and finally has a definite date for implementation. Tenants have long complained that letting agents charge an unfair number of fees to set up or manage a tenancy. These include referencing fees, credit-check fees, tenancy-signing fees, and administration fees. But for tenancies signed on or after 1 June, the only costs landlords and agents will be able to charge tenants will be: rent, a refundable deposit (capped at five weeks’ rent), a refundable holding deposit to reserve the property (capped at one week’s rent), the reasonable cost of replacing keys or compensating for late rent, and…

• What does your company do? Stashbee is an online, sharing-economy platform that connects individuals and businesses who have spare spaces, such as parking spots, garages, spare rooms and warehouses, with people who need them. Guests can use the platform to compare spaces nearby, while hosts benefit from an easy and safe way to monetise unused space. • What’s been your greatest achievement? We reached our 10,000th user in November. The number of registered users increased by 415% over the course of 2018, and we were absolutely delighted to hit such a significant milestone in just over two years. • What’s been your biggest challenge? Starting your own business is all-consuming. Developing the ability to balance work and life effectively is crucial, otherwise you’ll end up burning yourself out. Running…

Indivior (LSE: INDV) is a pharmaceutical company spun out of consumer goods giant Reckitt Benckiser. It listed on the London Stock Exchange in early 2015. It specialises in drugs to combat opioid addiction, with roughly 80% of its sales coming from its branded drug, Suboxone. After losing its patent protection it has faced fierce competition from generic versions. It hopes to reduce its dependence on one product by launching new ones. In its latest trading update, Indivior stood by its forecasts for 2018 revenue, but the shares are still down by 70% in a year.…

Marie Kondo’s best-selling book, The Life-Changing Magic of Tidying, has sold ten million copies, and it’s easy to see why, says Aaron Hicklin in The Observer. The book aims to help people transform their messy lives simply by prescribing a method for cleaning up their homes. “Putting your house in order is the magic that creates a vibrant and happy life,” says the diminutive Mary Poppins wannabe. Kondo’s book is four years old and there has been another since, but it is her new series on Netflix that has brought her message to a wider audience. Her trademarked “KonMari Method” – which basically involves getting rid of all the stuff you’ve collected over the years that no longer “sparks joy” – has been credited with saving many a marriage. Charities…

In 2010, Taavet Hinrikus, 37, enrolled at the Singaporean campus of French business school Insead. Business school can be a machine for getting you into corporate jobs, Hinrikus (pictured) tells Jonathan Moules in the Financial Times. “But for me business school was a way to rethink my career options.” On returning to Europe, the Estonian decided to put what he had learnt to use by co-founding money transfer service TransferWise, setting up shop in a former tea warehouse in London. Since then, Hinrikus has become “a poster boy for European entrepreneurial endeavour”, says Moules, having built one of Europe’s few dozen “unicorns” (start-ups valued at $1bn and more). In the year to March 2018, TransferWise recorded its first pre-tax profit at £7.9m, compared with a £801,000 loss a year earlier;…

Lab Rats Dan Lyons Atlantic Books (£16.99) Technology startups are renowned for their insane working culture – their staff are expected to work long hours with little job security in an often chaotic corporate culture. Some argue this is a fair trade-off for the chance they will make a fortune through stock options. After all, they choose to work in such businesses,  and less-stressful and more secure alternatives are readily available. Or are they? Journalist Dan Lyons argues that the choice is disappearing: that the “mercenary” ethos of the technology industry is “infiltrating many other businesses”, as Kirkus Reviews says. Lyons’s book is an “entertaining, if scattergun” attack on the effect that the tech industry has had on everybody’s working lives, says The Economist. Lyons blames the technology sector for…

• You can’t blame people for saying “yes, please” to money for not doing much, says Karren Brady in The Sun on Sunday. But there is something wrong if Instagram users aren’t aware that the celebrities they follow are paid thousands of pounds to promote products on their social-media accounts. Celebrities are supposed to make it clear in their posts when they are being paid to plug. But it’s still a bit of a grey area. Last week, 16 British “influencers” were found to have breached guidelines, including models Alexa Chung (pictured) and Rosie Huntington-Whiteley. They agreed to change their ways, and none were fined. But is a rap on the knuckles enough of a deterrent? After all, it is easy to see how an offer of, say, £100,000 might…

“They are going in exactly the wrong direction,” Lorenzo Codogno, former chief economist of the Italian treasury, told The Daily Telegraph. Italy’s anti-immigration, populist government, led by Matteo Salvini of the Northern League and Luigi Di Maio of the Five Star Movement, is dismantling recent pension reforms and introducing a basic income for all. About one in ten Italians live with serious deprivation, says Ferdinando Giugliano on Bloomberg. But the Five Star’s “citizens’ income” risks getting “bogged down by its own complexity and the country’s famously inefficient bureaucracy.” In addition to spending more money it doesn’t have, Italy’s anti-establishment government has been attacking France on various fronts in recent weeks, exacerbating political tensions in the eurozone. According to Politico, 51% of Italian voters under 45 would vote to leave the…

“We are now into month 115 of this economic expansion, about double the post-World War II norm and just five months shy of matching the record-long cycle of the 1990s. Just as was the case back then, hubris has set in, as the consensus believes that the business cycle has somehow been repealed and a recession is a 2020, 2021 or even a 2022 story. I somehow doubt it. A few salient points. A recession is not the end of the world. It is merely part and parcel of the cycle. There is no sense denying their existence or even their inevitability, since we know for a fact that there have been ten recessions in the post-World War II era. Each one the consensus — and the US Federal Reserve,…

Three to buy Blue Prism The Mail on Sunday Blue Prism is a pioneer in robotic process automation, “a fancy way of describing computer software that helps businesses do boring tasks more efficiently”. Clients include Coca-Cola, Heineken, Daimler AG, Jaguar Land Rover, eBay and Boots-owner Walgreens. NHS self-check-in kiosks also depend on the firm’s technology. Heavy investment means that the group remains loss-making. However, recent share-price falls present a buying opportunity for “medium- to long-term” investors to support a world-leading British business operating in a fast-growing field. 1,344p SDL Shares This niche translation software business helps multinational clients with the sort of nuanced and confidential translation tasks that machines cannot manage alone. SDL has been listed for nearly two decades but is still not widely known, despite counting 88 of…

• When it was founded back in 2010, Metro Bank was a “breath of fresh air” with its promises of “seven day opening and... to put the customer first”, says James Moore in the Independent. However, the fact that underlying earnings for 2018 are apparently now set to come in at £50m, not £59m, means it is “suddenly looking a lot less feisty than it was”. The bank has also admitted it made some mistakes in calculating its loan exposure, so it “may now need a cash call to strengthen its capital buffers”. The managers “are going to have to come up with some good answers”. • In the past, Marks & Spencer (M&S) enjoyed “enviable growth” due to steady footfall in its food halls and Simply Food convenience stores,…

“The seeds of the next major financial crisis (or the one after that) may well be found in today’s sovereign debt levels.” In his latest letter to investors in his fund, billionaire value investor Seth Klarman, 61, warns that the increasing ratio of government debt to GDP across developed countries – which has only deteriorated since the 2008 financial crisis (see page 32 for more) – is unsustainable, even for the US, reports The New York Times. “There is no way to know how much debt is too much, but America will inevitably reach an inflection point whereupon a suddenly more sceptical debt market will refuse to continue to lend to us at rates we can afford. By the time such a crisis hits, it will likely be too late…

Five-times Formula One racing champion Lewis Hamilton has seen his salary rise by $17m for 2019, says GPFans.com . Hamilton, who races for the McLaren team based in Woking, will be paid $57m, up from the $40m deal he signed in 2016. His rival at Ferrari, Sebastian Vettel, will get $45m; Renault’s Daniel Ricciardo will have to make do with $17m. At the other end of the income table, Alexander Albon of Toro Rosso will be paid $170,000; Williams’ George Russell will get $180,000; and Antonio Giovinazzi at Sauber will receive £230,000. As well as their salaries, drivers pick up millions in sponsorship and endorsement deals. Hamilton’s deals with the likes of watchmaker IWC, sportswear firm Puma and energy-drink maker Monster netted him a further $7m last…

• The Financial Conduct Authority (FCA), the City regulator, is monitoring the way in which banks are using customers’ data to make money, says James Coney in The Sunday Times. Data is a valuable commodity for banks, and some British institutions have access to a huge amount of information about us. For example, Lloyds controls more than a quarter of the current-account market and also has a giant credit-card arm that includes MBNA, while Barclays and Royal Bank of Scotland each hold 18% of the market. The FCA has raised concerns that the big banks controlling the most data could identify those customers who do not move their money when interest rates drop, making them easy to exploit. In an interview with The Sunday Times, Christopher Woolard of the FCA…

Driver Group (Aim: DRV) Driver Group provides resolution services for handling disputes between clients and contractors on projects that have gone bad through cost overruns, delays or poor workmanship. Under previous management the company had struggled to get paid for work it had done. But a new team came in, raised money, and embarked on a turnaround. Pre-tax margins should rise closer to 10% from 6% last year, as it focuses on higher-margin work. The dividend has just been reinstated, and is covered seven times, giving plenty of room for growth. For 2020, the shares trade on a single-digit price/earnings (p/e)ratio backed by £7m net cash on the balance sheet, and given the type of work it performs, the company should be resilient throughout the economic cycle. Strix (Aim: KETL)…

GVC (LSE: GVC) is still digesting Ladbrokes Coral. Indications are that the synergies between the two businesses are better than originally thought. The group, which is valued at about £3.9bn and is a FTSE 100 constituent, has a good foothold in the US and more deals are likely, increasing exposure to this newly growing market. GVC has also been diversifying its international exposure. It has a big UK betting-shop estate which will have to be rationalised, but the potential upside considerably outweighs this downside and the shares are attractive. About half the size of GVC in market size, William Hill (LSE: WMH) has a similar task at hand with its large retail portfolio. It has had some regulatory problems in Australia, which are now settled, and the shares have performed…

There is no shortage of companies looking to “disrupt” the lettings market by offering a service that promises to make the traditional approach cheaper, easier, or faster. One such scheme, “deposit-free renting”, involves taking out an insurance policy (paid for by either the tenant or the landlord) to cover damage to the property or unpaid rent, without the tenant having to put up a significant amount of money up front. But it’s not clear that deposit-free renting is really helping anyone other than the people selling it. One of the most established deposit-replacement insurance schemes is Dlighted. Its policies are paid for by the landlord, and cost £129 a year for rents up to £2,500 a month, assuming the tenant passes reference checks. At the end of a tenancy, landlords…

Kenneth Griffin, founder of investment firm Citadel, has bought America’s most expensive house, just days after buying one of the most expensive houses in London, says Bloomberg. The 24,000-sq-ft luxury New York flat, on the market for $238m, will “give him a place to stay when he’s working in New York”, according to Citadel. Griffin, who started trading from his dorm room at Harvard University, founded Citadel in 1990, and has since amassed a $9.6bn fortune. The price for the New York property is “more than double” the previous record for a residential sale in Manhattan, which was $100.5m for the penthouse flat in Manhattan’s One57 building.…

Small and medium-sized enterprises (SMEs) will miss out on protection from the Financial Conduct Authority (FCA), the City regulator, after the government rejected calls from an independent group of MPs to regulate SME lending. Although the cross-party Treasury Select Committee said last year lending to SMEs should be regulated following scandals including RBS’s Global Restructuring Group allegedly pushing small companies into bankruptcy, ministers said this could make it harder for smaller businesses to obtain credit. The impasse leaves SMEs vulnerable to poor treatment at the hands of their banks, though separately the government has agreed to extend the reach of the Financial Ombudsman Service. While this scheme currently only covers a handful of very small businesses, from April SMEs with an annual turnover of up to £6.5m and fewer than…

Two crucial observations shape our approach to UK equity investing. Firstly, mid-caps have outperformed both large-and small-caps over the long run. Secondly, both high-yield and high-quality stocks outperform mid-caps. So we focus on high-quality and high-yielding mid-caps. High dividend yields reflect negative sentiment towards a stock and a potential opportunity for contrarian investors. Contrarian investments typically perform well because investors suffer from loss aversion and therefore often ditch promising stocks in a panic. As Warren Buffett says, be “greedy when others are fearful”. A star in a troubled sector “OSB does not need the UK economy to expand in order to grow its business” Babcock International (LSE: BAB) is a topnotch company with a high dividend yield. It has been tarred with the same brush as other support-service companies such…

The Hinduja brothers maintain that they don’t give a tuppence about money in the wider scheme of things. “Money has never motivated me. I follow the Karma Yoga and the teachings of the Bhagavad Gita, which teaches us to do our Dharma or duty to work without expectations of results,” the second brother of the Indian-born dynasty, Gopichand, once explained. Still, after four years topping The Sunday Times Rich List, it would be understandable if Gopi, 78, and his older brother, Srichand, felt a tiny bit put out at being displaced last year by the chemicals tycoon Jim Ratcliffe, who – having gained some £14bn in a year – stormed his way past their own £20.6bn industrial fortune as if from nowhere. A few months later, when Ratcliffe “relocated” to…

The Consumer Electronics Show, held in Las Vegas every January, was attended by 180,000 people this year, with 4,500 companies showing off their wares, says Charlie Burton in GQ. Love it or hate it, the sheer size of the show is overwhelming, but it’s also a fairly reliable bellwether of the state of the tech sector, and an indicator of where it is heading. Among the trends on display this year was the  incoming 5G mobile network. Every previous generation of network has been about connecting people better. The shift with the latest generation is in connecting things with greater speed, greater capacity and lower latency. The aim is for it to “function as the central nervous system of this new autonomous age”. Artificial intelligence (AI) also made an appearance,…

I find myself rapidly tiring of New Zealand sauvignon blanc. I think you are now less likely to find a decent wine than ever before if you simply pick up a random bottle of Marlborough savvy off the shelves. This was not the case 20 or 30 years ago when it seemed every bottle had hand-crafted, raspy, authentic citrus and mineral tones. The explosion of plantings and the commercialisation of this style has knocked much of the uniqueness of flavour out of these wines, but a small band of producers are doing their utmost to maintain the region’s once stellar standards. A new initiative, which will bring back much-needed rigour, is the “Appellation Marlborough Wine” mark (something I have been encouraging wineries to adopt for nearly 20 years). Quality control…

€16,000 The value of stolen skiing equipment discovered by police in the Isère region of France – home to the popular Les Deux Alpes ski resort. Police have warned skiers in the region that thieves are becoming more brazen in their behaviour. £295 The price of a “Brexit box” sold by the Emergency Food Storage company. The “survival kits” are to keep you ticking over in the event Britain leaves the European Union without a deal and food becomes scarce (a widely dismissed scenario). It contains dried food for 30 days and a gel for starting fires. 900 CHF The cost in Swiss francs (£690) of a 3D-printed thermoplastic ceremonial helmet issued to the Vatican’s Swiss Guards last week. The new helmets, scanned from a 16th-century original, weigh just 570g,…