Indholdsfortegnelse for Issue 936 i MoneyWeek

I may have mentioned this here before, but one of the things that often surprises me about America’s view of itself is the idea that it is a relatively new nation – when it really isn’t. The US declared independence in 1776. That makes it rather older than, say, Germany, which unified in 1871 (and again in 1990) and Italy (declared a nation-state in 1861). You could also argue that, while the US may be younger than many of the other European nations, it’s definitely a much older democracy. Spain and Portugal only wrested democracy from the jaws of authoritarianism in the mid-1970s, for example. I was reminded of this when I interviewed strategist Russell Napier this week (the article and the podcast will both be out next week). There…

“After an impressive January, South Africa turned into the sick man of emerging markets in February,” says Craig Mellow on Barron’s. The MSCI South Africa index lost 7% , compared with a 1.5% dip in emerging markets in general. Meanwhile, the South African currency, the rand, lost 5% against the dollar. The immediate problem was a series of power outages caused by issues at state-owned utility company Eskom. South African homes and businesses endured scheduled power cuts to prevent a collapse of the overstretched electricity grid. Eskom’s debt ballooned to 10% of national GDP under the corrupt former president Jacob Zuma. Its debt-servicing costs are almost twice its free cash flow. As it battles to meet demand, it has warned that “it could run out of money by April, defaulting…

Stockmarkets keep a beady eye on Donald Trump. But he is also “sensitive” to them, says Pete Sweeney on Breakingviews. December’s market wobbles have prompted the president to seek a “quick-and-dirty settlement” in the trade war with China. Trump has announced that he will postpone an increase in tariffs on $200bn of Chinese goods set for 1 March. He said there had been “substantial progress” in trade talks. The US might also drop criminal charges against Huawei (for violating US sanctions on Iran and stealing US technology) as part of a trade deal, says The Wall Street Journal. In return, China could agree to buy large amounts of US products, such as soybeans. Chinese stocks surged following the announcement, with the CSI 300 index rising to its highest level since…

Pinterest is reportedly the latest big tech name to contemplate an initial public offering (IPO), says Olivia Zaleski on Bloomberg. The social-media site is based on images and videos of people pursuing hobbies ranging from baking to gardening; these are supposed to encourage users to get in touch with like-minded people. Pinterest is expected to float in the US and seek a valuation of at least $12bn. In 2017 the group raised $150m in a private funding round that valued it at $12.3bn. Founded in 2010, it is among the oldest of Silicon Valley’s unicorns (start-ups valued at more than $1bn) to prepare to go public this year. Ride-sharing apps Lyft and Uber are the most famous.…

Cutting costs is great, says CNN’s Paul La Monica. But as Kraft Heinz is finding out the hard way, it can be counterproductive if it means that a firm forgets to “make tasty products that people actually want to buy”. Ever since Kraft and Heinz merged in 2013, Kraft Heinz has been concentrating on trimming overheads to boost margins. But it may now have gone too far. The stock plunged by more than a quarter early this week after the group reported a big fourth-quarter loss owing to a writedown of the value of its Kraft and Oscar Mayer brands. It also cut its dividend and disclosed an Securities and Exchange Commission probe into its accounting. The biggest individual loser may be Warren Buffett, says the Financial Times. He not…

The market on whether Britain will leave the European Union on 29 March is currently Betfair’s biggest, with £2.9m already wagered. Until the end of last year punters were predicting that we would leave as planned, but Prime Minister Theresa May’s suggestion that MPs will get an opportunity to vote on whether to extend Article 50 (see page 8) has meant that the chances of a 29 March exit have drifted out even further to 6.2 (16.1%). By contrast, the odds of the UK not leaving on the expected date are now as tight as 1.18 (84.7%). It’s clear that the prime minister faces an uphill struggle to get her deal through Parliament, and she may have to get a short-term extension anyway in order to get through the huge…

Book value is also known as equity, shareholders’ funds, or net asset value (NAV). It is the value of all of a company’s assets, less all of its liabilities (debts). Book value is sometimes used as an estimate of what a company would be worth if all of its assets were sold for their balance-sheet values. If you know the book value, you can get an idea of how cheap or expensive a share is by dividing the share price by the book value per share (hence the price/book, or p/b, ratio). A p/b of below one means that – technically speaking – you can buy the company for less than its assets are worth on paper. So if you could buy the whole company, you could sell all of…

• Who needs an Oscar when you can have something far rarer – access to the three-comma club, says Bloomberg. Earnings from holding rights to the long-running Pirates of the Caribbean franchise and popular TV series CSI, among others, have propelled Hollywood director Jerry Bruckheimer (pictured) into the Bloomberg Billionaires index. Bruckheimer has amassed his $1bn fortune over five decades of working in the television and film industry. • Fiat Chrysler Automobiles’ late chief executive, Sergio Marchionne, was paid a total of $54m in 2018, the year in which he died suddenly. Around $42m of that came from 2.8 million shares that were awarded as part of a long-term incentive plan. Marchionne also received a $5.2m bonus for 2017 and $2.3m in salary. His successor at the carmaker, Mike Manley,…

“The only thing I collect is money.” Model Irina Shayk (pictured), quoted in Metro “If your movie doesn’t make a billion dollars, then it’s a disastrous failure. And I didn’t like that feeling. I didn’t like caring that much about the money.” Actor Armie Hammer on making blockbuster films, quoted in The Times “When I was in my 40s people often said: ‘You’d better do this now’ to me… about work offers, because I wouldn’t get asked in my 70s. I remember thinking, ‘I’ll still be good then’ – and here I am.” Actress Jacqueline Bisset, 74, quoted in The Observer “If you want something, work hard for it and go out and get it. Millennials expect too much to come to them easily.” Motor-racing star Susie Wolff on the…

Activist fund Starboard Value is unhappy with drugmaker Bristol-Myers Squibb’s deal to buy rival Celgene, and has nominated five potential directors to its board, says The Wall Street Journal. Given that activists don’t always nominate board members when opposing a deal, the fact that Starboard has done so “could indicate it has ideas for alternatives it would hope to implement”. But it’s unlikely an activist could compel another company to make a bid for Bristol-Myers itself, partly because there aren’t many potential suitors. Yet successfully challenging the deal could be a “long shot”. Starboard owns just one million shares in the company, a “sliver” of the roughly 1.6 billion shares outstanding.…

This castle is listed as a historic monument dating back to the 13th and 15th centuries, and is situated in the Auvergne Volcanoes regional nature park, one of France’s largest nature reserves. It is set in its own nine hectares of parkland and surrounded by formal parterre gardens and knot gardens. The castle has 12 bedrooms, large shuttered windows, stone floors, trompe l’oeil walls and grand fireplaces. The outbuildings include an annexe house and a renovated farmhouse. But can you guess the asking price? Answer on the side of this box.…

The dollar could take a very long time to come to lose its place as the world’s most important currency, and – as we note above – before it does, we’ll probably have to see inflation take off. So if you are concerned about the dollar’s demise – or at least, its being dislodged from its perch, then prepare your portfolio for inflation first. The most obvious asset to invest in if you have concerns about the state of the financial system is gold. Central banks have been loading up on the yellow metal at a rate that we haven’t seen since President Richard Nixon finally took the US dollar off the gold standard once and for all in 1971 (up until then the US dollar had been convertible to…

Joint ownership of a company with your spouse can cut your tax bill: two shareholders can apply the tax and dividend allowances that stock ownership confers. If your spouse wasn’t made a shareholder when you set up the company, HMRC will accept a gift of ordinary shares between you to reduce your overall tax bill. However, if you are a homeowner with a mortgage, selling the shares to your spouse might be a better option, says the Tax Tips & Advice newsletter. There is no tax relief on loans used to buy your home, but there is for loans to buy shares in a company. If the owner sells half their shares to their spouse at a discount, and that spouse takes out a loan on similar terms to the…

Thousands of small shops, restaurants and pubs could miss out on valuable discounts on business rates – the equivalent of council tax for companies – as local authorities are applying new rules in different ways. The confusion follows an initiative by the chancellor, Philip Hammond to help retailers and other high-street outlets, which have seen a spate of closures in recent years amid pressures such as competition from online rivals and rising costs. In last October’s Budget, Hammond said that many smaller retail businesses – those whose properties have a rateable value of less than £51,000 for business-rates purposes – would see their business-rates bills cut by a third in the 2019-2020 and 2020-2021 tax years. Do you need a form? However, while the cost of the discount will be…

The science of who we are and how we got here has advanced in leaps and bounds in recent years. Take genome sequencing, the process of identifying the order of genetic “letters” in an organism’s DNA, or genetic code; “reading” the genetic structure, essentially. The whole human genome consists of three billion of these letters. It cost about $3bn and took 13 years for the very first decoding of a human genome to be completed in 2003. But today high-tech machines supplied by Illumina (Nasdaq: ILMN) do the same job for less than $1,000 in mere days. An exciting field Illumina’s sequencing technologies are central to progress in areas including oncology, pre-natal testing, genetic disease, microbial genomics, personalised medicine, drug development and agriculture. For instance, plant and animal genomics speeds…

• Vakt, an oil trading platform built on blockchain technology, was scheduled to launch this week, having signed up companies responsible for two-thirds of North Sea crude oil trades, says the Financial Times. Vakt aims to use the distributed-ledger technology to carry out post-settlement processing – including confirmation, contracts, logistics and invoicing – and says it can achieve efficiency savings of 30%-40%. Using blockchain means it can create a secure, immutable ledger available to all parties that can do away with paper contracts, invoices and other time-consuming paperwork. The platform went live in November with its original investors, including Shell, BP and Statoil, and will now open to the wider industry, having recently been joined by Chevron and Total. This is an area that blockchain advocates have long touted as…

Royal Mail (LSE: RMG), privatised in a high-profile flotation in October 2013, is struggling as the number of physical letters sent falls: the company reported a drop of 8% in its January trading update. Parcel volumes actually rose by 6% as more people buy online. But the group is struggling to contain costs and failing to improve productivity; its forecast profit of between £500m and £530m is at the lower end of the previous guidance range. The share price has suffered as a result of its continued woes, declining by 45% in the past 12 months.…

“My shelves and conscience groan in unison under the weight of huge history books for which I’ve never found the stamina,” says Helen Brown in the Daily Mail. So three cheers for the “All You Need to Know” series of “easily digestible” bluffer’s guides produced by Connell Publishing. Most similar works are “written in the dry, bullet-pointy style of GCSE textbooks”, but editor Jolyon Connell (MoneyWeek’s founder and editorial director) has enlisted a group of experts who “maintain their literary verve and sharp opinions in short form”. Max Hastings’ book on World War II, for example, “whisks us through the timeline” while delivering “thumbnail verdicts on  the major players” and giving “engaging space to the experiences of ordinary people” – such as the US Marine Corps lieutenant who wrote home…

“The first panacea for a mismanaged nation is inflation,” wrote Hemingway. “The second is war…” The third is concrete. We’ll probably see all of them in the years ahead. Economists are predicting a recession “before the end of 2020”. We’ve already been waiting for years. “Bust follows boom. Always has. Always will” Here on the back page, we take it for granted that the economy will blow up. This is not a prediction. It is an observation. Cycles are called “cycles” because they repeat themselves. Bust follows boom. Always has. Always will. But what then? Our guess is that we’re headed for stagflation. Central banks, worldwide, have added some $21trn in new cash over the last 16 years. Almost all of that money went into the financial economy. That is…

“Post-financial crisis comebacks have been tough to pull off, and Bob Diamond is no exception,” says Vinjeru Mkandawire in The Daily Telegraph. Five years ago the former Barclays boss launched an African banking venture, Atlas Mara, raising $325m when it listed in London. Within a year it had raked in over $400m to scoop up banks and financial assets across Africa. However, since 2013, the share price has plunged by 86% as investors’ confidence has slumped, especially since Diamond’s pursuit of Barclays Africa failed to pan out. Last month he stepped down as chairman to concentrate on turning the business around. The man once dubbed the “unacceptable face of banking” has his work cut out. Good week for: Olivia Colman (pictured) won the Best Actress gong at the Academy Awards…

The German economy minister, Peter Altmaier, a Christian Democrat,has been trumpeting his “national industrial strategy”. He thinks Germany is under threat from both China and the technology giants of the West. He therefore wants to bolster domestic industries through state intervention. A government investment fund is to be created to take stakes in local companies and protect them from foreign takeovers. Altmaier also thinks the state should play a leading role in the development of artificial intelligence and use billions of taxpayers’ money to subsidise companies in the field. In other words, Germany wants to be a bit more like China. As if the German government had foolproof information on what investments are needed today to be successful in 30 years’ time. Who needs socialists these days? German (and Austrian)…

Three to buy Altria Barron’s “Ethically flexible” investors sometimes think that “sin stocks” such as this cigarette giant deliver better long-term returns because others steer clear, making them cheap. That is not always true: alcohol sellers and casino operators currently trade on rich multiples. But the Marlboro maker’s 6.2% dividend yield and 2019 earnings multiple of 12 are attractive. Earnings growth has been remarkably steady while investments in cannabis and e-cigarette businesses give Altria a stake in the future too. $50.38 BBA Aviation The Mail on Sunday Far from the madding crowd of the main airport terminal, the users of business and private jets travel in comfort. BBA helps top executives to move from point A to B with minimum fuss by providing everything from jet fuel and conference rooms…

• General Electric (GE) shares jumped by 6% after CEO Larry Culp “took his boldest step yet to rescue the troubled behemoth”, says Rick Clough on Bloomberg. It involved arranging to sell GE’s biopharmaceutical business to Danaher Corp “for $21.4bn”. Previous attempts to streamline the conglomerate and help it out of one of the worst slumps in its 127-year history have included an overhaul of the ailing power-equipment business, cost cuts and a divestiture of GE’s locomotive unit. This deal looks attractive for Danahar since it “should fundamentally reshape its business and make it a major provider of technology and tools to biotechnology and drug companies”. • The Competition and Markets Authority’s decision effectively to block the merger between Asda and Sainsbury’s may have caused a lot of “gnashing of…

Warren Buffett’s Berkshire Hathaway investment vehicle is on the lookout for “an elephant-sized acquisition”. The hunt for promising companies “is what causes my heart and [business partner Charlie Munger’s] to beat faster... even at our ages of 88 and 95” (Buffett is the 88-year-old). Unfortunately the “immediate prospects for that are not good”, said Buffett in his latest letter to shareholders. “Prices are sky-high for businesses possessing decent longterm prospects”. That “disappointing reality means that 2019 will likely see us again expanding our holding of marketable equities”. Reinforcing his reluctance to buy at a high price, Buffett in effect admitted to CNBC that Berkshire had overpaid for food giant Kraft Heinz, whose shares slid last week after reporting disappointing fourth-quarter results (see page 7). Kraft Heinz is still a wonderful…

“Leadership starts with our choices. That’s why I decided that no one on my staff will make less than $52k/year,” Alexandria Ocasio-Cortez, the Democratic congresswoman for New York, tweeted last Saturday. “It’s likely one of the highest entry-level salaries on the Hill. We pinch pennies elsewhere, but it’s worth every dime to pay a living wage.” The 29-year-old, who last summer unseated Joe Crowley, a longstanding Democrat in New York’s 14th congressional district, went on to explain that staff typically get paid just $30,000 a year. The Massachusetts Institute of Technology’s living wage calculator gives $36,944 as the living wage for someone in Washington DC. The other end of the range isn’t so generous, however – $80,000, according to Ocasio-Cortez’s communications director. That compares to a mean average of $154,634…

• Investors in high-performing funds could be subsidising small unprofitable funds run by the same company, says data provider Morningstar. Almost half of the 8,000 funds for sale across Europe are “orphaned”, or effectively abandoned by investors, says Jonathan Jones in The Daily Telegraph (with the majority in continental Europe rather than the UK). They have less than €100m in assets under management, and investors have put in and withdrawn less than €10m in any of the last five years. Many of these funds are too small to be cost-effective and, languishing with few assets, are disregarded and saddled with high fees, said Jonathan Miller of Morningstar. “Yet asset managers show little willingness to close them” – either because they can’t merge them with a similar strategy, or because it…

An uninhabited island two miles off the coast of Galway is on sale for £1.1m, says Rory Carroll in The Guardian. The 80-acre “swathe of rock, heather and wind” includes two freshwater lakes and “a host of birds”, including Arctic terns and peregrine falcons, making it an EU special protection area. There was reportedly human settlement on High Island around 3,000 years ago, and in the 7th century monks converted a secular settlement there into a monastery. The poet Richard Murphy owned the island from 1969 to 1998 but was deterred from making long visits “after one spell of five days during which he saw the sun for 20 minutes”. It’s being sold by Spencer Auctioneers.…

More than half of us don’t know our credit score, according to market researcher YouGov. Given that your credit rating can decide whether you are approved for a mortgage or loan, what interest rate you pay on your credit card and whether you can get your pick of current accounts, it’s surprising so many of us have never looked at it. The big three credit-rating agencies – Experian, Equifax and TransUnion – hold data on 50 million British adults. “These companies can see into our financial souls,” says the Financial Times. “They can use our borrowing history – including any past mistakes – to predict how likely we are to repay in the future.” A bad credit rating can mean you are rejected from mainstream credit deals. So you won’t…

Good news for many pension savers: one of the UK’s largest workplace pension providers has announced a revamp of its charges, prompting speculation of a possible price war. The People’s Pension, which manages workplace pensions for around four million people, is switching from a flat-rate charge of 0.5% for all members to a tiered structure. From this summer, while savers with smaller funds will continue to pay 0.5% a year, the charge will fall on a sliding scale for larger pension funds. Savings above £50,000 will be charged at just 0.2%. Hopefully, the People’s Pension’s move will persuade other major workplace pension providers to review their charges. Pension-scheme members should also consider their options. The move is a reminder that people with cash tied up in pension plans at employers…

• What does your business do? Our “one-click” email feedback solution helps businesses get accurate feedback from their customers in seconds. You’ve probably filled one of these in without realising it: it normally appears at the bottom of the email and asks how you feel about the service you have just received (such as in a receipt for an order, or confirmation from a helpdesk). You select gold (for great), down to green, yellow or red. • What’s been your greatest achievement? A key milestone for us was reaching 1,000 “true fans”. The idea comes from a famous 2008 blog post by Kevin Kelly (the founding editor of Wired). A true fan is someone who is likely to buy from you no matter what you produce next. They will not…

The perfect investment is a great company with a strong equity story that is misunderstood. There is no treasure map to guide the way, but we believe you are most likely to find gems by concentrating on smaller companies. Small caps get limited coverage from brokers; understanding is poor and price movements can be disconnected from company fundamentals. Nevertheless, small caps are more likely to deliver sharp improvements in performance than their larger counterparts. A new market opportunity or management team can drive meaningful changes in returns. Odyssean’s investment style is designed to find these companies. We build a concentrated portfolio, where in-depth diligence has identified a long-term equity story that is poorly understood and undervalued by the market. We focus less on daily market movements than the fundamentals of…

When dropping off to sleep at night, Karl Lagerfeld used to read classic European literature, usually in its original language. The Chanel maestro “does not do anything as banal as translated books”, observed Geordie Greig in Tatler in 2007. But then Lagerfeld had an esoteric take on most things. “What’s with the shades?” a fashion journalist once asked of his permanently in situ sunglasses. “I am short-sighted,” he replied, “and often short-sighted people have a look in their eyes like dogs who want to be adopted. This is not a look that matches my personality.” “Everything I say is a joke. I am a joke myself” A natural entrepreneur Lagerfeld, who died last week aged 85 after more than 30 years at the fashion house, “was not so much a…

Justine Roberts knew she didn’t want to have a family and work on the trading floor, says Liam Kelly in The Sunday Times. So she left the City and became a sports reporter. But it was a disastrous holiday to Florida in 2000 that drove Roberts (pictured) to start online parenting forum Mumsnet in 2000 from her spare room. The trip abroad had been the first since the birth of her twins, and she had wanted to tap the collective wisdom of other mums and dads, “because none of us are trained to be parents”, as she says. She asked her friend, Carrie Longton, who had worked in television, to come on board as co-founder. They tried to raise £4.5m in venture capital, but the timing was bad – the…

Soho House Berlin This hotel is a “stylish world unto itself, offering decadent interiors, excellent drinking and dining, and a rooftop pool”, says The Daily Telegraph. It is in a central location and there are three restaurants to choose from, but the best is the Italian-themed Cecconi’s, serving “a topnotch menu of risottos, carpaccios, fish and home-made pasta dishes”. It’s an ideal place to stay for “those who enjoy fine design and an air of hip exclusivity”. Doubles from €200, room only. See sohohouseberlin.com SO/Berlin Das Stue This 78-room hotel is located in the former Danish embassy on the edge of Tiergarten – Berlin’s Hyde Park. “Rooms come with high ceilings, Arne Jacobsen Egg chairs and high-end entertainment systems, while the sprawling Stue suites have freestanding silver tubs,”…

I am fortunate to have received an annual tasting case from the Gimblett Gravels Winegrowers Association. This year the vintage under the spotlight is 2016 and there were eight blended reds and four syrahs in the dozen. Andrew Caillard MW selected the wines. I must take my hat off to this industry body because, if more wine regions in the world undertook these thoughtful initiatives, wine writers would be able to taste more widely than we do without having to incur prohibitively punitive travel expenses. Interestingly, Craggy Range had two bottles in the box and they ended up being my top two wines. I tasted this pair again at the annual New Zealand tasting in London within days of my first tasting and they shone brightly, taking every corner of…

My former boss, US asset manager John Angelo, used to say that the best explanation for short-term movements in the stockmarket was that there were “more buyers than sellers”, or the reverse. Media analyses were nearly always nonsense: “fake views” as opposed to fake news. The popular narrative for the past 15 months has been to attribute market and currency turbulence to a rotating litany of Trump, tariff wars, Brexit and China, as if markets were slaves to geopolitical events. James Ferguson of MacroStrategy offers a more profound analysis. The liquidity squeeze In a note written in January 2018, “Winter is coming”, he warned that the reversal in the US of “quantitative easing”, or money printing, combined with the upwards path of interest rates over the next two years as…

After plunging by a fifth last year, copper prices have jumped to their highest level in eight months: around $6,500 per tonne. Tight supplies and optimism over global growth boosted prices after President Donald Trump said he would delay an increase in tariffs on Chinese goods (see above). The red metal is found in consumer products, cars and semiconductors. In 2018 global demand reached 23.6 million tonnes. By 2027, it could hit 30 million tonnes, representing an average annual growth rate of about 2.6%, according to Forbes. Electric vehicles use far more copper than their combustion-powered counterparts. Bullish sentiment has offset recent signs of a downturn in China, the main consumer of the metal.…

Organising staff rotas, especially in large operations such as hospitals, is practically impossible without information technology these days, says WirtschaftsWoche. No wonder more and more companies are discovering Germany’s ATOSS, which specialises in workforce-management software. Major customers include Aldi and Coca-Cola. The market is growing at more than 10% a year as more and more firms digitise and automate their activities. A shift to renting the software on the internet, instead of relying on one-off purchases, has led to steadier revenue streams. The group is set to grow sales by more than 10% this year to around €70m and net income should reach a record €12m.…

When seven MPs walked out of the Labour party to form The Independent Group last week, sceptics questioned what impact they could have, say Jim Pickard and George Parker in the Financial Times. On Monday “they had their answer” when Jeremy Corbyn, “a life-long eurosceptic”, said that he would back a second referendum to prevent “a damaging Tory Brexit” (and more defections). Many Labour MPs worry that any perceived attempt to thwart Brexit will “play badly” in Labour heartlands. However, Corbyn was under growing pressure from “hundreds of thousands of members” who are pro-EU and “ever angrier over Brexit”. We’re not quite there yet, says Dan Sabbagh in The Guardian. MPs first need to vote on Wednesday on Labour’s own softer version of Brexit, which would keep Britain in an…

Fears of an all-out conflict between India and Pakistan were ignited this week when Pakistan shot down two Indian fighter jets and captured two pilots, reports The Daily Telegraph. Pakistani planes have also struck “non-military targets” on the Indian side of the Kashmir border. The incident is “the latest in a dangerous sequence of events” – earlier in the week Indian planes bombed the Pakistani side of the border in retaliation for the killing of 40 Indian soldiers by Islamic militants. The rhetoric on both sides has become “increasingly bellicose” – the Pakistani military has even drawn attention to its nuclear arsenal. We’ve been here before, says Nikhil Kumar on CNN. Three years ago India carried out airstrikes in response to an attack on an Indian military installation in Kashmir.…

In theory, you shouldn’t be able to beat the market consistently. That’s the basis of the efficient market hypothesis, and it’s the main rationale for buying an index fund (one which simply tracks the market), rather than trying to pick one of the few individual active fund managers who does manage to beat the market regularly, whether through sheer luck or unusual levels of skill. However, as we all know, theory and practice often diverge. While it is by no means easy to beat the market, there are various styles or “factors” that have been shown to deliver market-beating returns over the long run, by taking advantage of apparent anomalies. “There are various strategies that beat the market over time” Now a fresh piece of research has taken a look…

Brexit Britain is doing just fine Editorial The Spectator As Honda’s CEO has said, the closure of its Swindon plant is not connected with Brexit, says The Spectator. Nor is the car industry a “bellwether for the UK economy”. It is in difficulties worldwide. In fact, despite the Treasury’s estimate that the Brexit vote would “in itself cost 500,000 jobs”, 440,000 new jobs were created in Britain last year. Brexit negotiations may have been a “shambles”, but employers don’t appear to be spooked. Unemployment, which stands at 4%, hasn’t been this low since 1975. Female unemployment is the lowest on record. Nor can it be claimed that this has been bought at the cost of greater insecurity and lower wages. Most new jobs are full-time and just 2.6% are employed…

It usually makes sense to avoid newly launched investment trusts; better to wait a year until they are fully invested and have proved themselves. This may result in a higher price being paid, but the risk of a mistake is lower. So it seemed when Mobius Investment Trust (LSE: MMIT) raised £100m from investors last September, when the investment climate was rocky and emerging markets (EMs) were performing poorly. Mark Mobius was a pioneer of investing in EMs, launching the Templeton Emerging Markets Investment Trust (TEMIT) more than 30 years ago. He so relished his nickname of “the bald eagle” that he published an autobiographical comic book under that title. His team, which included his deputy Carlos Hardenberg, went on to build a $40bn business at Templeton but, in time,…

If you want to help your child buy a house but you can’t or would rather not hand over a cash deposit as a gift, there are some mortgage products designed to help. Broadly, these involve you offering either a sum of money or a share of your house as temporary collateral, allowing them to access better deals. As you might expect, these are not deals to be entered into lightly. With what are often known as “family-offset mortgages”, parents or grandparents can put savings into an account linked to the child’s mortgage. The lender will then take this amount off the total loan the child pays interest on, thereby reducing their loan-to-value ratio and their monthly interest payments. The balance is not actually used to repay the mortgage; it…

Ever since the Bretton Woods Agreement in 1944, the US dollar has been the acknowledged top dog of global currencies – the reserve currency. And for almost as long, people have been predicting that it would be toppled from that position. As yet, of course, it hasn’t happened. But with Donald Trump running the public finances as imprudently as he managed his own, and his opponents talking about printing money to fund pet projects, could it be different this time? The case against the dollar There are at least two good reasons to fear for the durability of the US currency right now. Firstly, absolutely no one with any power over the dollar has any obvious regard for preserving its value. President Donald Trump is a spender, not a saver.…

There are just five weeks left in the 2018-2019 tax year, so make sure you’ve made full use of your allowances. Once the tax year ends on 5 April, you may rue missed opportunities to maximise tax-efficient savings. First, check you understand exactly how much you’re entitled to contribute to your pension this year. As a broad rule of thumb, the “annual allowance” caps your contributions (including any made by your employer) at the lower of £40,000 or the total value of your taxable earnings over the tax year. However, there are two important exceptions. First, even non-earners are entitled to an annual allowance of £3,600, which costs them only £2,880 to make, since the government tops up such contributions with basic-rate income-tax relief. Second, higher earners may be subject…

Savers who exceed the annual allowance on pension contributions face punitive tax charges. They effectively pay tax on the excess at their highest marginal rate of income tax – potentially up to 45%. However, this doesn’t mean overshooting the allowances is disastrous, particularly if the extra money is coming from contributions made by your employer. Indeed, passing up your employer’s contributions is effectively turning down extra pay. The question for savers getting close to the annual allowance is whether the extra tax they’ll incur from going over the cap will eventually be outweighed by the additional pension benefits they secure from the extra saving. Where the money is coming from your employer, the answer is very likely to be yes – particularly in a defined-benefit occupational pension scheme, where pension…

For small businesses looking for other means to cut their tax bills, the end of the tax year on 5 April is a significant deadline. After this date, you’ll no longer be eligible to claim most reliefs relating to the 2018-2019 financial year, potentially leaving your firm paying more tax than necessary. Here are just three to consider: • Annual investment allowance (AIA): this allows you to reduce your taxable profits by the value of investments you’ve made in plant, machinery and other items crucial to your business. You can claim for investments worth up to £200,000 in a given year (note the AIA year runs from 1 January). • R&D tax credits: you can take up to 230% of your costs off your taxable profits when working on projects…

Dunelm (LSE: DNLM), the homewares retailer, has shrugged off the high-street gloom with improved revenues online and instore; meanwhile, profit margins have risen and debt has fallen sharply. In the six months to 29 December, sales increased by 6.9% and pre-tax profits rose by 24% year on year to £70m. Debt declined by 45.7% to £72.9m. Management is confident that full-year figures will be on target. A new sponsorship deal with ITV’s This Morning should increase customers’ awareness and further boost earnings. The stock has risen by 50% in a year.…

Theranos was a technology firm founded by Elizabeth Holmes in 2003. Holmes dropped out of Stanford University to pursue her dream of devising a medical device that could perform blood tests using much smaller samples than other devices needed, cutting costs and reducing the need for painful needles. Another supposed benefit of the device she invented (named the “Edison”) was that it was physically much smaller than standard machines, removing the need for samples to be sent to a central laboratory. Between 2003 and 2014, Theranos raised $700m in money from venture capitalists and had an implied valuation of $5bn at its peak. What was the scam? The technology didn’t work. Theranos was unusually secretive, forcing employees to sign non-disclosure agreements and refusing to publish scientific papers on its research.…

Food waste costs businesses in Britain around £20bn a year, says Hazel Sheffield in The Independent. That works out at about £300 per person. Elsa Bernadotte (pictured) has set out to reduce the amount of food that gets thrown away by co-founding Karma, an app that allows restaurants and delicatessens to list discounted items to customers for collection at the end of the day. Since it launched in London in February 2018, 80,000 users have signed up to the service. Last November, Bernadotte, who is from Sweden, teamed up with Swedish white-goods manufacturer Electrolux to test a “smart” refrigerator in Stockholm. During the trial at the entrance to a supermarket, registered users could buy discounted chilled items, before unlocking the fridge with a QR code (similar to a barcode, but…

• One minute the Duchess of Sussex is consoling survivors of the Grenfell Tower fire, the next she is jetting off to her £300,000 baby shower, says Carole Malone in the Daily Express. The shower was held in the penthouse of New York’s “super posh” The Mark Hotel, which costs £66,000 a night. Markle (pictured) had a suite that cost £15,300 a night. Then there was the Clooneys’ £100,000 contribution for the return jet. “And, of course, the private plane there – another £100,000.” So much for Markle’s green credentials. “I don’t care if the party was paid for by her rich Hollywood friends. At a time when record numbers of Britons are queueing up outside food banks, it just doesn’t look right”. • Prostitutes at least get paid for…

£389 The average annual cost of the damage to homes in Britain caused by rampaging toddlers, according to a Direct Line Home Insurance poll of 2,000 households. The most commonly affected areas were paintwork and wallpaper (48%) and soiled furnishings (44%). 5,615 The number of homes in Guildford, Surrey, that are worth at least £1m – the highest number anywhere in Britain outside of central London, according to property website Zoopla. Cambridge, with 5,426, was second, and Sevenoaks in Kent was third with 5,188. £14.9bn The difference between what the government received in revenue last month and what it spent. It is the highest surplus figure since records began in 1993 for January, the month when most people submit their self-assessment tax returns. 100m The reported cost in South African…