Indholdsfortegnelse for Issue 947 i MoneyWeek

US companies report their profits based on Generally Accepted Accounting Principles (Gaap), but are also allowed to come up with their own “adjusted” or “reported” figure. This is the one that tends to hit the headlines as companies find a way to present their results in the best possible light. It will tend to include “EBS (Everything but Bad Stuff)”, as a regulator once joked during the dotcom bubble. Absurdly contrived metrics such as “community-adjusted Ebitda” – a recent gem from WeWork – are common, says The Wall Street Journal’s Rolfe Winkler. All this makes a big difference to the perception of company profits. The gap between Gaap and reported earnings per share reached $19 last year, a ten-year high.…

The latest initial public offering (IPO) from China “has plenty of froth”, says Jacky Wong in The Wall Street Journal. Beijing-based Luckin Coffee, the Middle Kingdom’s biggest coffee chain after Starbucks, is raising roughly $560m on America’s Nasdaq exchange, implying an overall valuation of almost $4bn. It appears to be trying to cash in on the ongoing technology hype. Customers can order their drink with an app and have it brought to them within 30 minutes. Like other big tech names, however, Luckin isn’t making any money. Expanding from nine outlets in 2017 to more than 2,000 today has seen it burn through cash and lose $300m in the past four quarters.…

Since Nick Read was appointed as Vodafone’s chief executive, he’s been “adamant” that the dividend was sustainable, says Bloomberg’s Alex Webb. However, on Tuesday morning he bowed to the inevitable, announcing it would be cut by 40%. The mobile carrier’s finances “are stretched to breaking point”, with debt above the sector average at 2.9 times operating earnings. At the same time, Vodafone’s investment in 5G mobile networks means the company “is having to loosen the purse strings”. Cutting Vodafone’s dividend will “assuage” immediate concerns about its cash problems and give the company “room for manoeuvre” if sales slump more than expected, says Liam Proud for Breakingviews. Still, the fact that Read was late to realise that “investors might prefer a lower-levered company to one handing out unsustainable dividends”, means that…

Two weeks ago this column looked at the relative performance of the two major Australian political groupings in tomorrow’s federal election. I’m now going to look at some individual seats that offer value for the punter. However, you’ll have to get a move on – Bet 365 closes its book tonight. The polls suggest a close contest, but the betting markets seem to disagree, as you can get quite generous odds on what are normally considered to be safe Coalition seats. For example, at the moment you can get 1/6 (85.7%) on the Coalition retaining control of Aston in Victoria. Since the Liberal party won easily at the last election in 2016, with more than half the votes on the first round and just under 60% on second preferences, the…

Uber, the lift-hailing app, went public last week. Uber is a loss-making company, with major question marks hanging over both its future growth rate and its prospects of ever turning a profit. The company has plenty of “blue sky” visions of running electric, robot car fleets and building up a trucking division and logistics empire. But for the moment, it’s really just a software platform that connects consumers with drivers, allowing both sides to skirt local taxi licensing laws while also dancing delicately around grey areas of employment law. “Uber’s flop suggests that private firms may be overvalued” None of that should matter – least of all the fact that Uber lost $1.8bn last year – in an exuberant market. As James Mackintosh notes in The Wall Street Journal, during…

Dramatic last-minute comebacks, nail-biting penalty shoot-outs, spirit, determination and the occasional flash of sublime skill. It’s a been a great month for English football. Both the Champions and Europa League finals will be played between English teams, the first time any single country has so dominated the continent’s most popular sporting spectacle. Three of the four finalists are from London. European football is turning into an extension of English sporting rivalries. Money isn’t everything, but it helps Across Europe, the leading clubs have feared for some time that English clubs would come to dominate. Why? Simply because they have so much more money, and because that wealth is relatively evenly spread around the league. Six of the ten richest clubs in the world are English, and nine of the top…

How Preston took back control Hazel Sheffield The Atlantic Thanks to austerity, the average local council now receives 60% less government funding than in 2012, says Hazel Sheffield. This has forced councils to think creatively. In Preston, officials are emulating efforts in places as far-flung as Ohio and Spain by prioritising local spending and encouraging co-operatives. This has been seen by some as an extension of a Brexit-style protectionist agenda, but many are watching closely to see if it works. According to local data, in 2012-13 six Preston institutions, from the council to the local university, had a combined spending power of £750m, just 5% of which was spent within the city. So, instead of always accepting the lowest bid, officials started picking contractors that promised something more – for…

theatlantic.com Studies have repeatedly shown that “esteemed” and “lavishly compensated” forecasters have been “wildly wrong” about everything from the next stockmarket correction to the fall of the Soviet Union, says David Epstein.Yet not all experts fail. Psychologist Philip Tetlock’s landmark Cold War-era study into predictions made by political science experts found that there was a “curiously inverse relationship… between how well forecasters thought they were doing and how well they did”. The least successful were those who doubled down on their original theories in the face of new developments. These people are dubbed “hedgehogs”: a term drawn from the philosophy of Isaiah Berlin to describe those who are focused on a narrow area, but risk missing the forest for the trees. The most experienced and credentialled analysts are actually the…

If I were a Conservative Party enthusiast, I’d be hopping mad right now. Obviously, Brexit hogs the headlines. But the real cause for anger is that the current government’s precarious situation makes a Labour government ever more likely. I’ve watched the transformation of the Labour economic agenda, and it scares the heck out of me. “Shared-ownership projects could be bullet-proof” Thankfully, it could also mean investment opportunities. Let’s start with green power. My sense is that a Labour government could choose to focus on the “third pillar of infrastructure” (after social infrastructure and renewable energy): energy efficiency. SDCL Energy Efficiency Income (LSE: SEIT) invests in projects that have little or no subsidy or regulation risk, don’t take on exposure to energy markets, and rely on so-called “contractual de-risking”. How does…

If your business is looking for financial support, should you consider “business angel” finance? More than 15,000 angels – typically wealthy individuals and serial entrepreneurs – are now active in the UK, responsible for several thousand fundraising deals each year with small businesses. The figure is increasing, according to the UK Business Angels Association (UKBAA), as part of a broader trend towards ethical and socially responsible investment. Many angels feel a responsibility to support the next generation of wealth creators, says Jenny Tooth, CEO of UKBAA. For businesses raising money, angels offer a number of advantages. They provide equity finance rather than debt, so they don’t saddle the business with repayments or the cost of interest, or require any security. Acting individually, rather than as part of a larger corporate…

The best-known medical cannabis stock is Britain’s GW Pharmaceuticals (Nasdaq: GWPH), which is now listed in New York. Its Epidiolex epilepsy drug, recently approved in the US, has enjoyed unexpectedly strong sales, and is set to be approved in Europe in the near future. The “big five” pot producers are all Canadian. The biggest by market value is Canopy Growth Corporation (Toronto: WEED), worth around C$22bn. Despite being the biggest operator and increasing revenue to C$97.7m in the third quarter, compared with just C$21.7m in the same period the previous year, it’s still not profitable and pays no dividends. Indeed, it is losing more money than ever. It’s a similar story elsewhere. At Aurora Cannabis (Nasdaq: ACB; Toronto: ACB) both sales and losses have risen. Aphria (NYSE: APH; Toronto: APH)…

This Grade-II semi-detached home features a piece of apiary history in the garden. The bee bole wall that separates the terrace from the garden was used by beekeepers before the introduction of the modern wooden hive in the 19th century. It has a south-facing wall with a row of recesses into which coiled star hives were placed. The house itself, built from local stone with gothic mullion windows, has contemporary interiors, including a circular extension with floor-to-ceiling windows. But can you guess the asking price? Answer on the side of this box.…

As we’ve previously pointed out, IPOs tend to be a good deal for those who can subscribe at the initial price and then immediately sell. Those who buy after the first day of trading lag the market. An exception to this rule is stock in previously state-owned firms. During the 1980s the British government floated many state-run firms on the stockmarket. Not only did they raise a large amount of revenue, but they also captured the imagination of first-time investors, helped by clever publicity campaigns, such as the “Tell Sid” advert promoting the 1986 listing of British Gas. As a result, governments around the world rushed to copy Britain. (An estimated $700bn in former state enterprises were listed on global stockmarkets between 1986 and 1999, followed by a further $500bn…

Sirius Minerals (LSE: SXX) is a fertiliser company building a controversial mine and underground minerals transporting system in the North York Moors, which it hopes will produce ten million tonnes of polyhalite per year by 2024. The hugely ambitious project grabbed the attention of investors who piled in, driving the share price to a high of 45p in 2016. But in the past year activity has slowed and, according to the Financial Times, the project could come to a halt unless Sirius can find a further $3bn – which it is confident it will secure. The share price has halved in 12 months.…

€500 The fine that authorities on the Italian island of Capri are handing out to anyone caught flouting the ban on single-use plastic from this month. The authorities will be focusing on the beaches and coastline in particular, which are popular with tourists. £7m How much British holidaymakers lost to scams last year – a 14% increase on 2017, according to the National Fraud Intelligence Bureau. More than 5,000 crimes were reported, but the true figure is thought to be much higher due to the reluctance of many victims to talk to the police. 200 The pay per shift in Chinese yuan (£22.50), as advertised by online retailer Alibaba, for part-time crayfish-peelers in its offline food shops. Successful applicants will be expected to peel 1.5kg of crayfish in half an…

A German passport can fetch up to €10,000 on the black market. That’s why 20 German social-media “influencers”have become victims of an elaborate holiday fraud that relieved them of their passports, says The Times. They were offered an all-expenses-paid five-star holiday to Turkey by Constantino Tour, an entirely fictitious travel company. They were flown to the coastal city of Antalya and met by a tour guide who took their passports. They were then bundled onto a tour bus and driven to a remote town two hours away, where they were dropped off, with no hotel rooms booked and no flights back. Instagrammer and reality TV star Natalia Osada (pictured) said: “I can hardly believe that there are people like that in the world.” Good week for: An Australian family could…

“In most countries, a 57% majority would be a thumping victory,” writes Ed Cropley on Breakingviews. But for the African National Congress (ANC) it is “a warning that the public cares less about the party’s role in defeating white rule a generation ago and more about running the $370bn economy properly”. South Africa’s ruling party triumphed in last week’s general election despite receiving one of its lowest vote shares since the end of apartheid in 1994. Once a darling of emerging-market investors, South Africa became mired in endless corruption scandals during President Jacob Zuma’s time in power from 2009 to 2018. He has bequeathed his business-friendly successor Cyril Ramaphosa a struggling economy that cannot even keep the lights on after years of mismanagement at state power firm Eskom. Growth has…

Three to buy AFH Financial Group The Mail on Sunday An ageing population means more people than ever are seeking financial advice in advance of retirement, which is good news for this financial planner. Its customers are mostly aged between 55 and 70, with “a decent amount of cash to invest”. The group puts more money into bonds and property than many of its peers, so it’s less exposed to equity fluctuations and more attractive to cautious savers. AFH listed on Aim in 2014 and is “set to double in size” over the next three to five years. The progressive dividend policy also appeals. 320p JD Sports The Sunday Times Mike Ashley once declared that “JD is crap”, but the retailer has outperformed Ashley’s Sports Direct in recent years. Chairman…

• Even though Uber’s stockmarket debut “came with all the usual razzmatazz” of a big US technology flotation, it still “fell flat”, says The Observer. The stock opened below the level at which it had been priced. No wonder. The company is far from making a profit, and the stock was “priced at slightly more than seven times last year’s revenues of $11bn”. While you should “never underestimate the willingness of investors to keep inflating a bubble” the failure of Uber’s IPO could be seen “as the moment when the mood soured”. Uber’s flop comes as investors are growing suspicious that public markets are “being used as a convenient exit for earlier investors in private funding rounds”, says Robert Cyran on Breakingviews. So while “profitable firms may not have to…

An initial public offering (IPO) represents the first time that a company sells shares in itself to institutional investors (such as pension funds) and often also to individuals (retail investors). This process is also known as “floating” or “going public”. Companies go public for a wide range of reasons. They may want to raise funds for expansion, and choose to do so by selling part of the company rather than borrowing the money. Alternatively, the current owners – perhaps the original founders, or a private-equity fund – may wish to “exit” (ie, cash in on their investment). An IPO is underwritten by one or more investment banks, which typically earn large fees from the process. A prospectus with details of the company and the offering is issued to potential buyers.…

• The number of people in receipt of a public-sector pension of more than £100,000 a year has trebled in the past seven years, reports The Guardian – 375 retirees from the NHS, civil service and teaching took home six-figure pensions. And the number who received a pension of more than £28,000 a year – the average annual salary in the UK – rose by 46% to 115,000. • Dominic Shellard, who resigned as vice-chancellor of De Montfort University earlier this year after a vote of no confidence by the university’s executive board, was not averse to spending public money, reports the Daily Mail. Last year’s £64,000 pay rise brought the professor’s salary to £350,000. Shellard (pictured) claimed £57,000 in travel expenses, including £37,790 on flights, £15,422 on hotel rooms…

“I’m super Californian – highly therapised… I pay to go away and not talk for five days.” Canadian actress Sandra Oh (above) on meditation retreats, quoted in The Sunday Times “I think journalism is a more honourable profession because, unless you’re an exceptional or unusual barrister, if a crook gives you a load of money, you have to work for them.” Journalist Jonathan Maitland on giving up law, quoted in Metro “I am extravagant in almost everything. I can be extravagant in the Oxfam shop or at the funfair — anywhere!” Actress Anna Chancellor, quoted in the Financial Times “My dad would work all the hours God sends driving the buses. My mum… would do piecework sewing clothes – she’d get 50p a dress. We had hand-me-down clothes with patches…

bbc.com/capital There is growing interest in the four-day week, but attempts to cut down the number of hours we spend in the office are not always successful, says Celina Ribeiro. Some American start-ups have trialled the concept only to revert to a standard week after finding that it left them less competitive and employees more stressed. Yet with studies showing that workers are “only productive for around two and a half hours a day” and young parents trying to juggle office and family life, many are keen to find a way to make the idea work. Marketing agency Versa started giving its employees a day off on Wednesdays last July. Since then profits have nearly tripled and sick days are down. The policy forces staff to reorganise work patterns and…

The board of bus and rail operator FirstGroup is “destructive”, according to activist investor Coast Capital Management, says Ganesh Rao on Sky News. The New York-based hedge fund also claimed the company’s recently appointed chief executive Matthew Gregory was “extraordinarily under-qualified”, and only got the job because other qualified candidates withdrew. Coast Capital has called for six of the 11 directors to be replaced. “We don’t think the board, which has overseen an episode of great underperformance against its peers, can get credit for the overall industry being a good one to be in”.…

• What does your firm do? We are a modern cheesemonger selling a cheese experience online. Rather than just sending people cheese, we create a connection between our customers and their cheese, creating a journey as opposed to just a purchase. We provide information and tips on each cheese the customers receive, as well as the best order in which to eat them. Our technology ensures every subscriber has a unique experience, and with our website, app and loyalty scheme, we aim to make sure buying cheese is as fun and easy as eating it. • What’s been your company’s greatest achievement so far? Developing the world’s first ever cheese retail app along with our amazing cheese allocation software, “Cassie”, which ensures subscribers get a personalised and curated cheese journey…

My business doesn’t trade with China or the US – do I need to worry? British businesses need to keep a close eye on this trade war, even if they’re not trading directly with China or the US. If you’re sourcing raw materials or other goods or services for your supply chain, or selling your products overseas, the trade dispute’s impact on currency markets will still have a direct effect on your profitability. In short, while this trade war may feel further away for British firms, it’s a much bigger issue even than Brexit, due to the headwinds it is causing for the global economy. How can businesses prepare for potential trade disruption? If your business is exposed to significant currency risk through your supply chain or customer base, it…

A private island off the coast of Florida is on sale for $15m. East Sister Rock is totally self-sufficient, powered by solar and wind energy. Although it is described as being “off the grid”, nervous buyers might be reassured by the fact that WiFi is available on the island, and it is situated a mere five-minute boat ride from the mainland. The three-bedroom Bahamian-style home on the island comes with a 2,880 sq ft wraparound covered deck, and there is also a helipad, pool, sundeck, and one-bedroom guest cottage. For those looking to avoid enthusiastic visitors, there is a salt-water “moat”. The island is on the market through Private Islands Inc.…

This week’s volatile market backdrop has proved bad news for my recommended long positions, with all eight declining in value. Cineworld has fallen from 321p to 299p, triggering the stop-loss at 300p (which means that you would have made a small profit). John Laing Group slipped from 387p to 382p, JD Sports now costs 611p (from 617p), Hays is 146p (153p), Safestore is 643p (646p) and Somero is 355p (365p). While most of these declines are relatively minor, Bellway and Superdry performed poorly. Bellway declined from 3,157p to 2,998p and Superdry from 534p to 455p. While the share price of Pinterest has declined, it has not yet fallen through the $25 barrier that would show that it had gained enough negative momentum to be worth shorting, so I have just…

Biotechnology is rightly classified as a growth sector, but not all companies have the same earnings potential. The drugs addressing the highest unmet medical needs tend to produce significant profits and consistent cash flows. Products that either cure a previously untreatable disease or improve patients’ quality of life will sell well and are more likely to benefit from reimbursements by governments and health insurers. Ideally, the product should be able to maintain a dominant position in its therapeutic area for a long period of time. A company is better able to protect its drug pricing and profitability if it faces fewer competitors. We have selected three stocks to fit these criteria, each with a different risk profile to cater for a variety of risk appetites. Help for HIV and hepatitis…

So much is made of Travis Kalanick’s association with Uber – it was his “intuition and drive”, notes the Financial Times, that propelled the taxi app into the valuation stratosphere – that it’s often forgotten who originally came up with the big idea. That honour belongs to Garrett Camp, “a serial entrepreneur” from Canada who was by far the quieter player in the double-act with Kalanick, says Forbes. The two men worked together for a tumultuous decade. Camp, now 40, was Uber’s chairman. But he was often absent – and later criticised, along with the rest of the board, for allowing Kalanick’s “frat-house” culture to go unchecked. “He designed the ride-hailing app, but didn’t appreciate its disruptive potential” A factory of ideas That was probably because his mind was elsewhere,…

You will have come across Rivesaltes before – it is home to some of the most extraordinary fortified French wines, which have remarkable ageing qualities and also represent some of the finest value elite wines in the world. In addition, Cazes makes amazing Roussillon wines – Maury, Fitou and so on. But on the seaward sites (as opposed to their landward vineyards) it makes, both Collioure and Banyuls. Its Vins Doux Naturels, or naturally sweet wines, are legendary, but this week’s pick is something out of the ordinary for this estate – a young, dry white wine. Made from 80% grenache blanc and 20% grenache gris grapes, and coming from schist terraces, there is no oak used here and the maritime influence brings a stunning saline tang to proceedings. I…

Going… “The Apollo 11 Lunar Module Timeline Book is the most important manual used to accomplish the goal of landing a man on the Moon and returning him safely to Earth,” says Christie’s. Half a century after the feat in 1969, the book is headlining the auction house’s One Giant Leap sale on 18 July in New York. It was placed between astronauts Neil Armstrong and Buzz Aldrin when the lunar module touched down in the moon’s Sea of Tranquillity with just 25 seconds of fuel to spare. The manual is expected to fetch up to $9m. Gone… A piece of original Star Trek cover art by sci-fi artist Greg Hildebrandt sold for $13,750 with Texas-based Heritage Auctions on 23 April. The artwork, featuring Captain Kirk, Spock and Dr. McCoy,…

• Eagle-eyed fans watching a recent episode of Game of Thrones spotted that a coffee cup from an only-too-modern high-street chain had found its way into the medieval dining hall of Winterfell, says Tony Parsons in The Sun on Sunday. The offending item had been left next to Emilia Clarke (pictured), who plays Queen Daenerys Targaryen. It costs $15m an episode to produce the hit fantasy drama, “and they can’t hire someone to take away Daenerys Targaryen’s coffee cup before they start shooting”. The fourth episode in the final season was “a blinding return to form”, regardless. “But you can’t help wondering about the conversation when Dany was picking up her semi-skimmed latte. “What name on the cup, love?” “Daenerys Targaryen, Stormborn, Mother Of Dragons, Breaker Of Chains, The Unburnt,…

Xi Jinping “had a great deal, almost completed, & you backed out” (sic.), tweeted Donald Trump after Washington more than doubled duties on $200bn of Chinese imports at the end of last week. On Monday the US president tweeted that “China should not retaliate – will only get worse”. But two hours later Beijing announced $60bn of its own tariffs on imports of American goods ranging from foodstuffs and chemicals to toothpaste, effective from 1 June. The new tariffs wiped more than $1trn off global stocks on Monday. The MSCI All World index, covering both developed and emerging markets, has slipped by 5% from its 2019 peak in early May, while emerging-market stocks have lost a tenth. The White House is now considering imposing further tariffs on $325bn of Chinese…

“Sometimes... the crude lesson is drawn... that the only way of saving the planet is by giving up on growth. Not many sensible people say this explicitly, but many activists do, and it is not far below the surface even in some... heavyweight reports. One cites a 15% increase in global per capita use of materials since 1980 as one of the factors behind environmental degradation. It is, however, clear that you can have economic growth and do right by the planet. The UK’s expert committee on climate change, in a recent report, noted that there has been a 44% reduction in Britain’s greenhouse gas emissions since 1990, alongside a 75% increase in real GDP. Economic growth and reduced emissions have gone hand in hand... in the first 15 years…

Investors should look closely at Fielmann, says WirtchaftsWoche. The chain of opticians is Germany’s biggest, accounting for half the glasses sold in the country; it also produces sunglasses, contact lenses and hearing aids. It has managed to grow sales for 15 years in a row, and an ageing population should ensure plenty of growth ahead. It is now concentrating on high-margin varifocals, growing the international business and the digital division. Customers will be able to take eye tests and try out glasses online thanks to 3D, augmented-reality technology provided by a recent acquisition, France’s FittingBox. The balance sheet is solid and the stock yields 3.2%.…

Metro Bank shares have plunged to another record low. While the bank was trumpeting a £350m share sale to repair its finances, it was hit by social media rumours over the weekend that it was about to implode. This prompted some customers to rush to their branches and demand their cash was returned to them. The bank admits there have been “increased queries” about access to safe deposit boxes used to store valuables. It’s “absurd” for people to queue outside Metro Bank branches for their money and valuables, says Jim Armitage in the Evening Standard. Not only is savers’ money protected up to £85,000, but it would be a “grievous criminal offence” for a bank “to go looting customers’ Patek Philippes and gold bars from the vaults”. Still, you can’t…

“Nearly a decade ago, in the wake of the expenses scandal, parliament declared itself thoroughly cleaned up,” says The Daily Telegraph. It has now been revealed that, following a “series of creeping rule changes”, some MPs are able to claim nearly double the amount to which they were previously entitled. Before 2009, MPs were able to claim up to £24,000 for buying and furnishing a London property. Some were claiming for mortgage interest and, when the properties were sold, avoiding capital gains tax and pocketing the gains. In 2010 it was decided that MPs could claim up to £1,450 a month to rent a second home in London. Over the years, additional payments for dependent children have become more generous. Today, MPs can claim £5,435 a year for each “dependent”…

The Australian election on Saturday offers a “chance to reset” after a “decade of political turmoil” that has “resulted in six changes of prime minister in 12 years, leading to policy stagnation and uncertainty for business”, say Edward Johnson and Hayley Warren on Bloomberg. Rule changes within both parties mean that “whoever wins should be the first leader since 2007 to serve a full term”. Although the Labor party led by Bill Shorten is still ahead in the polls, the Liberal-National Coalition led by Prime Minister Scott Morrison has been catching up “as they spar over tax cuts, public spending and tackling climate change”. The reality is that voters aren’t enthusiastic about either of the two main parties, says The Economist. In theory the Coalition should benefit from the fact…

Past performance is no guide to the future, as we’re always told in the small print on financial products. Yet it’s what we’ve used to shape our long-run forecasts for returns from various asset classes. New York University professor Aswath Damodaran is not sure that this is a good idea. For example, he tells Victor Haghani of roboadviser Elm Partners, many of our investment strategies are shaped by the history of the US stockmarket over the past century or so. Yet the trouble with using the US experience as the basis for saying that you should always own stocks for the long run, for example, is that “you’ve got a survivor market... the most successful market of the 20th century.” These strategies rely on “mean reversion” – the idea that…

Robert Downey Jr, who plays Iron Man, is by far the best-paid actor to feature in the Avengers film franchise, says Hollywood Reporter. Downey’s pay includes a substantial profit share of 2.5%, which is reported to have earned “at least $75m” from the 2018 film Avengers: Infinity War, which grossed more than $2bn. And for just three days’ work on Spiderman: The Homecoming, he took $5m. Not that the rest of the Avengers actors are hard done by. Scarlett Johansson will earn $20m for starring in and producing the next Black Widow film, while Chris Hemsworth, who played Thor, earned between $15m and $20m; Chris Evans, AKA Captain America, tucked a similar amount into his tights. But it’s not all good news for the Hollywood A-listers. The amount that a…

blogs.lse.ac.uk Amazon’s closure of its online store in China makes it only the latest Western tech firm to have failed to crack the Middle Kingdom, says Feng Li. Yahoo, Google, eBay and Uber have also admitted defeat in the world’s largest digital market by user numbers, even as their businesses flourish elsewhere. Analysts normally point to factors such as “strict government censorship” for these failures. But that has not stopped other Western multinationals such as carmakers, consumer goods manufacturers and movie producers from thriving in the Chinese market. The real reason may be that technology is a “culture market”, one that favours native firms with a better grasp of their users and the local business environment. Add in low initial barriers to entry, which ensures plenty of competition, and the…

■ Asset managers are thinking the unthinkable, says Owen Walker in the Financial Times: paying investors to manage their money. The race to the bottom within low-fee investing appeared to reach its natural conclusion last year, when Fidelity Investments launched zero-fee funds. However, boutique US manager Salt Financial wants to offer funds that charge -0.05%. Essentially, they would pay customers $5 for every $10,000 invested. “Some will dismiss this as a gimmick and marketing ploy”, says Todd Rosenbluth of research company CFRA. “But there are lots of marketing efforts that investors have got comfortable with”. Salt Financial’s chief operating officer compares the negative fee model to mobile phone network operators that give free phones to new customers as a way to attract long-term business. The Salt Low truBeta US Market…

Almost two-thirds of self-employed people currently have no pension savings, while more than a quarter aren’t making any savings at all, according to new research from asset manager Fidelity International. Employed people are roughly half as likely to be falling short. Fidelity’s report warns that many people working for themselves face an uncertain future, both missing out on financial support from employers such as pension contributions, and failing to make their own provision. The research will add to the pressure on the government to consider mechanisms for bringing the self-employed into the auto-enrolment pensions system, with ministers currently considering several proposals for extending the scheme’s reach. But Fidelity also urged people to take action for themselves. While self-employed people often have unpredictable income streams – and may have little disposable…

Cannabis was added to the United Nations’ Single Convention on Narcotic Drugs in 1961. Since then it has been illegal in most of the world. US president Richard Nixon declared a “war on drugs” a decade later, reinforcing the notion that cannabis was a dangerous illicit substance; virtually every American president has followed suit. But now the prohibitionists are in retreat. The last few years have seen liberalisation spread throughout the West and beyond, spearheaded by a growing acceptance in the medical community that cannabis can be used to treat an increasing number of ailments. In 1978, New Mexico became the first US state to recognise the medical value of cannabis, passing a law that began allowing the limited use of the drug for medical purposes. In 1990 Marinol –…

Professional landlord Tipi is urging people to “join the rental rebellion”. Its Soviet-style advert shows a clenched fist holding a key, and the tagline boasts that it is “throwing the rental rule-book out of the window and making renting better for everyone”. Its competitors have similarly utopian slogans. Get Living offers people “a new way of renting”, while Fizzy promises that it is “reinventing renting” with “zero faff”. These companies are part of the fast-growing build-to-rent sector in the UK, where corporate landlords, often institutional investors, rent out flats in purpose-built towers. These flats are a cut above your typical grotty flatshare: they often come with access to posh gyms, cinemas and additional security. The build-to-rent model is already very popular in the US, but until recently it had been…

What could be better than making money every time someone walks into a shop and buys something? This is how it must feel owning shares in payment technology giant Visa (NYSE: V). By the time you’ve read this paragraph, it will have carried out 75,000 transactions for people and businesses all over the world using bank cards to pay for anything and everything. Whether online or in person, each transaction moves money from customer to merchant, and, as the middleman, Visa takes a cut. It soon mounts up: in the first three months of this year, revenues were $5.5bn with operating profit margins above the typical eye-catching 60% level. Over the decade since it came to the market, sales have risen 12% and earnings per share nearly 22% a year.…

The relative failure of Uber’s initial public offering (IPO) to meet investors’ expectations (see pages 7 and 14) has led to speculation that the seemingly limitless investor appetite for tech shares may be finally cooling. Despite this, it’s not all doom and gloom for the tech sector, since some recent IPOs have performed better than anticipated. One company that has thus far surpassed expectations is Zoom Video Communications (Nasdaq: ZM). After going public in April at $36 per share it has continued to soar to just under $80 a share, which gives the videoconferencing company a total market cap of $20bn. “Microsoft, Google and Cisco could all muscle into the market” It’s not difficult to understand why people are so enthusiastic about Zoom. The rapid growth of flexible, part-time and…

AJ Bell (LSE: AJB) is an online investment platform and stockbroker with £47.7bn of assets under management. The shares soared when it listed on the stock exchange in November last year. AJ Bell’s first trading update as a public company sounded a note of caution as assets under administration slipped despite a rise in customer numbers. But an upbeat second-quarter update predicting unexpectedly strong interim results saw the shares take off again. Since the initial public offering investors have enjoyed a 57% bounce in the share price.…

Cortes Randell was born in Virginia in 1935 and went on to found the National Student Marketing Corp (NSMC) in 1965. The idea behind the company was that the growing numbers of college students (a result of the post-war baby boom) would create huge demand for youth-related products such as employment services. After it floated in 1968, NSMC started buying up related firms, including a computing job placement service, a beer mug manufacturer and a travel guide publisher. Thanks to these acquisitions and a booming equity market, NSMC’s share price soared from $6 a share when it listed to a peak of $144 by the end of 1969. What was the scam? Randell used NSMC shares to buy other companies, so as long as the company’s share price kept rising,…

“The prices of Asian antiques and artworks have rocketed over the past decade, driven by demand from wealthy Asian buyers seeking to reclaim a part of their heritage,” says Victoria Brzezinski in The Times. Kakiemon, a style of Japanese porcelain from the late-17th century onwards, is a case in point. It was originally made and exported to the grand houses of Europe by the Dutch East India Company, Mark Hinton, head of Japanese artworks at Sotheby’s, tells Brzezinski. And centuries later, Kakiemon, along with Japanese porcelain in general, is still seeing “greater interest” from collectors. That shouldn’t be a surprise. Eastern styles have a long history of influencing Western artists, and vice versa. A lost original? One of the most eye-catching recent sales was the portrait from around 1520 of…

The diamonds heading for auction at Christie’s (see left) may be spectacular, but even they can’t compete with the Cullinan. It was discovered at a South African mine in 1905, and remains the biggest rough diamond ever found at 3,106 carats. It was so large, says The Daily Telegraph, that the manager who found it first dismissed it as a piece of rock crystal. The government of the South African Transvaal Colony bought the diamond for £150,000 in 1907 and gifted it to Edward VII. MJ Levy & Nephews, London diamond brokers, then advised the king that only the Asscher Company in  Amsterdam could be entrusted with the risky cutting and polishing. The resulting diamonds today form part of the Crown Jewels. But on 30 April in London, Bonhams sold…

Capitalism has been taking a lot of flak recently. Naturally, Alexandria Ocasio-Cortez, Elizabeth Warren and Bernie Sanders are against it. They bid for votes by promising free stuff. And capitalism doesn’t give anything away. But even rich people seem to have turned against it. They don’t condemn capitalism. They just want to fix it… improve it… make it kinder, gentler, and more politically correct. We were unaware of how pervasive this claptrap was until we appeared on stage a few years ago at a conference. The organisers wanted a debate between the fixers – people who espoused “conscious capitalism” – and capitalists of the unconscious, naked, greedy sort. They figured your columnist would make a good proponent for capitalism of the beastly variety, so they put him up against archangel…