Indholdsfortegnelse for Issue 955 i MoneyWeek

“Why don’t we just abolish inheritance tax and replace it with a gift tax?” Almost everyone hates inheritance tax (IHT). It is seen to be the worst of all the double taxations (all money is taxed over and over). It piles needless administration on to grief. It’s needlessly complicated (the newish residence nil-rate band being the last straw for many). It comes with enough loopholes that anyone who doesn’t find a way to avoid it feels like they aren’t trying hard enough to protect their wealth for their children, which keeps them up at night. It isn’t particularly fair. But possibly worst of all, the existence of IHT creates a friction that slows the passage of money, businesses and land through the generations. Those with money don’t understand the annual…

With Germany’s ten-year Bund yield slipping below zero, investors are desperate to find solid income stocks. Enter Munich Re, the world’s biggest reinsurer. It is one of the few “dividend aristocrats” in the German stockmarket, as Der Aktionaer points out. It has raised or maintained its annual payout since 1969. The stock currently yields 4.1%, while the profit outlook is also encouraging. Climate change should prompt companies to hedge against natural disasters to a greater extent than they do now, while cybersecurity is another promising field. It costs the global economy around $600bn a year, but cyber insurance only covers 1% of this sum.…

Deutsche Bank is “throwing in the towel on its ambitions to go toe-to-toe with the big Wall Street firms” in investment banking, says Anjuli Davies in The Daily Telegraph. Germany’s biggest lender has announced a restructuring plan that will involve shutting its equities division and axing 18,000 staff. A decade ago, Deutsche seemed to have beaten the big Wall Street banks at their own game, says Nils Pratley in The Guardian, but now it is a “national embarrassment” worth less than a quarter of Spanish rival Santander. So what’s gone wrong? Deutsche is just one of many European banks to have failed on the other side of the Atlantic. “The numbers just don’t add up” for them, says Davies; making it big in America is “never going to happen”. Even…

The first televised debate between Tory leadership hopefuls Boris Johnson and Jeremy Hunt “exposed two big faultlines”, says Andrew Sparrow in The Guardian. Johnson is “determined to play down the risk of a no-deal Brexit, while Hunt isn’t”. And while Hunt is willing to be “moderately critical” of President Trump (who said that Theresa May’s Brexit strategy has been a disaster), Johnson refused. But as far as the electorate (ie, the Tory party membership) is concerned, Johnson is still winning. It loves Johnson’s “do or die” approach to Brexit, says the FT. Indeed, one survey found that a majority of Tory members wanted Brexit at any cost, including the break-up of the UK, “significant damage to the economy, or the destruction of the Conservative party itself”. The details of whatever…

Following negotiations that went on through the night, the top jobs in the European Union were finally agreed in a package that “is not perfect, but nor is it terrible”, says The Economist. The new president of the European Commission, the EU’s executive, will be former German defence minister Ursula von der Leyen, “a mature and moderate administrator”. Current IMF head Christine Lagarde will run the European Central Bank. Belgium’s PM Charles Michel will become the president of the European Council, the group of EU heads of government. Spanish social democrat Josep Borrell is the new foreign minister. Provided these officials are confirmed by the EU parliament, this “is a win for Macron”, the centrist French president, who has succeeded in “getting friendly faces into both the Commission and the…

“I love gold.” Mark Mobius, perhaps the best-known emerging markets investor in the world, reckons that the precious metal should form at least 10% of any investor’s portfolio (in the form of bullion). However, now looks like a particularly promising time to invest – and it’s all down to central bankers, he tells Bloomberg in an interview in Singapore. For one thing, “interest rates are going so low, particularly now in Europe”. So, as Mobius says, “what’s the sense in holding euro when you get a negative rate? You might as well put it into gold, because gold is a much better currency”. Expectations of even looser monetary policy from central banks across the globe, including the Federal Reserve in the US, have seen gold hit a six-year high this…

Bosses at Thames Water will get bonuses of almost £800,000 this year, reports City AM. Chief financial officer Brandon Rennet will pocket £448,000, bringing his total remuneration including any benefits and pension contributions to £985,000. Director of strategy and regulation Nick Fincham will get a bonus of £346,000, bringing his total to £720,000. Chief executive Steve Robertson will defer his bonus until 2020. Pre-tax profit for the 12 months to the end of March more than halved to £51.6m, down from £137.4m the previous year. In the same year, the company cancelled its dividend payments “until 2020 at the earliest”, was fined £120m for failing to fix leaks, and apologised for letting customers down, says the BBC. It is also planning to cut up to 650 jobs to reduce costs,…

publicpolicypast.blogspot.com Look at the political situation in Britain, as the country tears itself apart over Brexit, and it’s hard not to be depressed, says the anonymous blogger. But when you consider the crises that Britain has sailed through in recent history, it all seems relatively tame stuff by comparison. In 1940, we faced the prospect of an invasion by fascists. The Suez crisis of 1956 was an unmitigated disaster. The country seemed on the brink of ungovernability in 1972-1973. In 1976 we went cap in hand to the IMF. In 1981-1982 Britain’s cities went up in flames. Look out beyond the politics, and today Britain is “not actually on fire”. The economy is growing. Wages are rising. Inflation is low. We face a “climate emergency”, but Britain is taking a…

■ The exodus from active funds is accelerating. American and European investors withdrew €21bn (€24bn) and $12.9bn respectively from actively-managed funds in the first five months of 2019, notes Attracta Mooney in the Financial Times. High fees and poor performances are the key reasons active investors are being ditched and passive funds, or index trackers, keep gaining ground. They now make up 37.5% of the American mutual fund market, up from 36% 12 months ago. In Europe they comprise 18.3% of the market compared with 16.6% a year ago. Active managers’ reputations were dealt another blow when Neil Woodford’s Equity Income fund ran into trouble last month. Investors withdrew £1.9bn from active funds in the UK in June, the highest monthly outflow since June 2016.…

The government plans to ensure that women involved in divorce negotiations will be given much better advice about their pension options. Penny Mordaunt, the minister for women and equalities, said she had grown increasingly worried about the failure of the divorce courts to ensure women are getting a fair share of couples’ retirement savings; just 36% of divorce settlements include provisions for sharing pension assets. The minister promised a new campaign to raise awareness of the benefits of pension sharing as well as more effort to ensure couples understand how the process works. The proposals are especially important given the well documented “savings gap”. Women routinely save less than men for retirement, often because they have taken time out of work to take on caring duties, and may be financially…

Financial advisers are continuing to suggest that clients transfer out of generous defined-benefit (DB) pension schemes despite repeated warnings from regulators that this is the wrong option for most people. The Financial Conduct Authority said its latest investigation of the pension-transfer market found that more than two-thirds of people receiving advice on whether to move their DB savings ended up shifting their cash into riskier defined-contribution (DC) plans. The regulator has grown increasingly frustrated by its failure to deter advisers from offering poor advice. It has already intervened in the market, requiring anyone with a pension fund worth more than £30,000 to take independent financial advice before moving it out of a DB scheme. But despite telling advisers they should start from the position that a transfer is the wrong…

Start with Amgen (Nasdaq: AMGN), one of the largest biotechnology companies in the world. It “has been at the forefront of cutting-edge biotechnology since it was established in 1980 and has more recently been using data analysis to help develop therapies”, says Alex Hunter of Sarasin & Partners. It is working with several local and national health authorities to identify the genes responsible for various conditions. Despite consistent double-digit growth in earnings per share (EPS), Amgen is relatively cheap for a US company, trading at only 12.6 times 2020 earnings, and with a solid yield of 3%. Thermo Fisher Scientific (NYSE: TMO) specialises in diagnostic and analytical products for the medical, scientific and industrial sectors. It also produces a range of equipment to help those involved in genomic research and…

When it comes to auditing, most investors doze off. No wonder: the process of checking a company’s books to see that it is not engaging in fraudulent behaviour is one of the least glamorous jobs in finance. However, it is also arguably one of the most important, and can have serious negative consequences when it is done badly. As investors in Enron and other companies that turned out to be frauds found out the hard way, the fact that an auditor has signed off on the accounts is not necessarily a guarantee that everything is above board. But when auditors raise questions, or decide to stop auditing the firm altogether, the market tends to sit up and pay attention. For example, a US study by Messod Beneish, Patrick Hopkins and…

Go-Ahead Group (LSE: GOG) operates bus and rail services, mostly in the UK but also in Ireland, Germany and Singapore. It also runs the Southeastern and Govia Thameslink Railway through its subsidiary Govia, of which it owns 65%. Its Thameslink and Southern rail franchises botched a timetable change last year, prompting mass cancellations and financial penalties from the Department for Transport. Still, the company is geared for expansion with the recent acquisition of a bus depot in Manchester and bus contracts in Singapore and in Dublin.…

Walter Forbes, then aged 30, set up Comp-U-Card (CUC) in 1973 with Kirk Shelton. The company sold membership cards that allowed customers to buy goods and services from selected firms at discounted rates. During the 1980s and early 1990s the firm grew, attracting 30 million customers. It also started buying other companies, culminating in a 1997 merger with HFS Incorporated, which owned various franchises and hotel chains. The newly merged firm was renamed Cendant in 1997. What was the scam? From the 1980s onwards Forbes and Shelton systematically manipulated earnings to give the impression that their company was more profitable than it actually was, keeping CUC’s share price high. This allowed the firm to use its shares to buy other companies more cheaply than they would otherwise have been able…

Germany has agreed to return Vase of Flowers, a painting by the Dutch master Jan van Huysum, to the Palazzo Pitti gallery in Florence. The artwork, valued at €2m today, had been taken by retreating German soldiers in 1943 from a village where the painting and other artworks had been stored by the gallery for safekeeping during the war. However, Eike Schmidt, the director of the Uffizi, and a German himself, waged a high-profile propaganda war of his own to arrange for the painting’s return. In place of where the stolen painting was meant to be hanging, Schmidt arranged in January for a framed photograph of the still-life, emblazoned with the word “Stolen!” in multiple languages, to be hung in its place. Germany cracked. The painting resurfaced in 1991 in…

£735,000 The amount a medieval chess piece has sold for at auction. It was kept in a drawer in an Edinburgh home after originally being bought for £5in 1964. The piece belongs to the Lewis Chessmen collection, which is believed to date from the 12th century. 48.4 The percentage of cars sold in Norway for the first six months of 2019 that were electric. Tesla’s Model 3 was the best seller for the period. The company was responsible for 24.5% of all cars sold in Norway throughout June. £12m How much the BBC has set aside to settle the historical tax bills of its presenters, worth 77,000 TV licences. The National Audit Office said the payment would be “irregular”, as the BBC was not liable for the money. $2.5m The…

An unnamed driver, whose car had been seized by Greater Manchester Police (GMP) after he was caught driving it with no insurance, turned up at Eccles police station to reclaim it in a £290,000 bright yellow Lamborghini Aventador supercar. Unfortunately for him, that car ended up in the car pound too, after officers checked and found that he wasn’t insured to drive that, either. “If you’re going to turn up at the police station to reclaim your previously seized vehicle for no insurance, it might be worth checking that the car you turn up in is covered on your policy first,” GMP tweeted. It is the third Lamborghini that the force has impounded in recent weeks – one was taken in Manchester city centre, and another in Oldham. Good week…

The flipside of de-equitisation and the decline of public markets (see page 4) is an increasingly busy private market. That helps explain why private-equity deals have soared to the “highest level since the lead-up to the global financial crisis”, say Javier Espinoza and Eric Platt in the Financial Times. The value of leveraged buyouts hit $256bn in the first six months of this year, according to Refinitiv data. That is the second-biggest first-half figure on record after 2006. This kind of deal often involves a private firm taking a listed one private. “The buyout boys” are “back to rock the stockmarket”, says Christopher Williams in The Daily Telegraph. Last year, worldwide public-to-private takeovers reached their highest level since 2007, according to Bain & Company. One of the most eye-catching deals…

One of France’s biggest problems is “chronic structural unemployment”, says Yvan Berthoux of Halkin Services, and one of the key reasons for it is a “mismatch” between workers’ abilities and companies’ requirements. The system just doesn’t produce enough skilled workers. Unemployment is now at a ten-year low of 8.8% and almost 50% of firms are reporting difficulties getting hold of the workers they need. This problem is “creating production bottlenecks” and boosting the annual rate of wage inflation. Another quirk of the French labour market is generous unemployment benefits; these tend to reduce the pool of labour looking for work, which also implies higher salaries.…

The top spot in the annual global initial public offerings (IPO) market has alternated between New York and Hong Kong in recent years, note Hudson Lockett and Mercedes Ruehl in the Financial Times. Hong Kong secured it in 2018. In the first half of 2019 New York came out on top with $17.4bn of listings on the New York Stock Exchange and $14.4bn on the Nasdaq. Hong Kong could only muster $8.9bn. Chinese firms (notably tech stocks) keen to make a splash in the US have so far been undaunted by the trade war. Key debuts included Luckin Coffee and S-Young, an online marketplace for cosmetic procedures. They raised $561m and $179m respectively.…

With nearly a fortnight to go before ballot papers in the Tory leadership election have to be returned, the amount of money matched on the betting exchanges continues to rise. The sum matched on Betfair has grown to £14m; another £2.2m has been wagered on Smarkets. Both betting exchanges predict that Boris Johnson will emerge triumphant, and his odds have narrowed to 1.06 (94.3%). Those on Jeremy Hunt have drifted out to 17 (5.8%). Having tipped Johnson (among a host of other candidates) two years ago, I’m not going to recommend that you put any more money on either candidate. In any case, the odds seem about right, since Johnson has a huge lead in the membership opinion polls. Still, a lacklustre debate performance, his failure to back the (now…

Mexico Finance minister quits: President Andrés Manuel López Obrador has accepted the resignation of his finance minister, Carlos Urzúa. In his strongly worded resignation letter, Urzúa accused the government of forming policy without sufficient consideration. Urzúa wrote, “I’m convinced that economic policy should always be evidence-based, careful of potential impacts and free of extremism, either from the right or the left. These convictions did not resonate during my tenure in this administration.” Urzúa had been seen as a moderate, committed to fiscal discipline. The president, who is seen as a leftist populist, lost no time in promoting Urzúa’s deputy, Arturo Herrera, to the vacant role. “Well known to investors and seen as a competent economic manager, Herrera now has the task of reviving economic growth, while meeting a 1% primary…

The fallout from the gating of Neil Woodford’s open-ended equity income fund, as he tries to sell illiquid assets to pay back disillusioned investors, continues to reverberate through markets. Investors in the UK pulled £1.9bn out of actively-managed open-ended funds in the three months to the end of June, notes Vicky McKeever on Citywire. That’s the biggest such rush since the run-up to the Brexit referendum in mid-2016. Meanwhile, the issue is in the sights of both the Bank of England (Mark Carney has described open-ended funds as “built on a lie”) and the regulator. The problem with open-ended funds owning illiquid assets was made very clear three years ago, when commercial property funds were shut in the wake of the Brexit vote in 2016. Woodford has merely added urgency…

Deutsche Bank has been staggering from crisis to crisis for years now. Its shares have fallen almost 90% from their pre-crash peak, and what was once Europe’s mightiest financial institution is now a shadow of its former self. With 8,000 staff in London, it was one of the largest employers in the City, and it was a mark of the British capital’s dominance of European markets that the German giant chose to run its trading operations from here rather than Frankfurt. Many of those jobs were eliminated in a restructuring this week, and unless there is a dramatic turnaround it is likely that many more will be lost in the next few months. By itself that might not matter so much. Investment banking is a cyclical, turbulent industry. But there…

Capitalism will save the planet Andrew McAfee Wired More than two billion iPhones have been sold since its launch 12 years ago, but some say that extracting all the resources used to make and run them – metal, plastic, glass, electricity, etc – has been “bad for the planet”, says Andrew McAfee. Such critics aren’t seeing the whole picture. Total electricity use in the US has essentially flatlined for a decade; the growth rate of natural resource consumption has “gone negative”. Why? Dematerialisation. The iPhone has obviated the need for clocks, cameras, films, compasses, calculators, and much more. And the “technologies of dematerialisation are all over the place”. Computer-aided design enables thinner aluminium cans, lighter buildings, and more fuel-efficient engines. Precision agriculture increases food production while using less land, water,…

mattstoller.substack.com For much of the 20th century, “Boeing made miracles”, says Matt Stoller. Its engineers designed the B-52 in a weekend, bet the company on the 707 and built the 747 in the face of much scepticism. The 737 started coming off the assembly line in 1967 and was still the company’s top moneymaker 30 years later. And what explains the miracles? The civilian engineers were in charge. That all started to change when, in 1993, President Clinton’s deputy secretary of defence, William Perry, formerly an investment banker, started insisting on mergers. The rationale was to “find efficiencies” and cut military spending. The predictable result was a monopoly with no incentive to produce quality products. In 1997, Boeing bought McDonnell Douglas. But McDonnell’s executives, all financiers rather than engineers, somehow…

The numbers aren’t looking good for residential property investors. House price growth in the US fell to a mere 1% at the beginning of this year, according to the latest report from the Dallas Federal Reserve. Look at global data across the 18 largest economies in the world and things don’t look much more encouraging. This could be the year in which we see “global growth dip to its lowest pace in a decade”. Investment is slowing fast, says Oxford Economics. The UK is no outlier here. The Nationwide index and the Rightmove Asking Prices index show prices and asking prices respectively to be all but flat. The Halifax House Price Index shows a better annual number but suggests prices fell mildly in June. You can see the same trend…

Land used to grow fruit for wine and cider can now be passed on free of inheritance tax, says Carol Lewis in The Times. Earlier this year, HM Revenue & Customs updated its guidance about what counts as agricultural use of land for inheritance-tax purposes, and clarified that when land is used to “produce food for human and animal consumption”, food in this context “would include, for example, grapes grown to produce wine, and apples grown to produce cider” (see gov.uk for more details). It is also interesting to note that “the relief is not limited to land within the UK, but extends throughout the European Economic Area, which could be an attraction for investors looking to reduce their inheritance-tax liabilities while having the pleasure of owning a vineyard”, says…

Around 590,000 people die in the UK every year and 275,000 complete inheritance tax (IHT) forms. Only 24,500 estates ultimately pay the levy, but it is still widely despised. The Office of Tax Simplification (OTS) describes inheritance IHT as “almost uniquely unpopular”. The main complaint is that it is a double tax – the taxman is taking another slice of money you were already taxed on when you earned it – but it is also deemed a tax on dying. Now, however, “Britain’s most hated tax” is set to change, reports Harry Brennan in The Daily Telegraph. A review of IHT by the OTS, requested by Chancellor Philip Hammond, has suggested several changes to make the complicated tax simpler. One key reform would be the gifting rules. At present you…

I’m deeply cynical about corporate virtue-signalling, whereby big companies chase good environmental, social and governance (ESG) ratings in order to appear to be doing the “right” thing. Investing where you have a direct impact on a social need strikes me as much more interesting. It is often done by so-called third-way institutions: mutuals, community enterprises and socially-minded corporations, for instance. In this category we’ve seen the emergence of several new institutions, many of them banks, which have tried to develop new products that should appeal to investors with a social conscience. It was in connection with some of these new investment products that I was introduced to the Community Investment Tax Relief allowance (CITR). The idea behind this tax relief is admirable. There are many potential investment projects that don’t…

The last fortnight has been a mixed bag for my long tips, with three of them going up and three falling. John Laing Group fell from 389p to 378p, Hays declined from 162p to 157p and Superdry fell from 482p to 447p. However, JD Sports rose from 592p to 604p, Safestore increased from 630p to 643p and Bellway advanced from 2,697p to 2,728p. Overall, my six long recommendations are making a total net profit of £572, with JD Sports currently my most profitable single tip. In the last column I recommended that you short Beyond Meat. The strategy here is to wait until it falls below $120, and then short it at £15 per $1, covering your position at $185; that would give you a total downside of £975. In…

Funding Circle Holdings (LSE: FCH) is a peer-to-peer lending platform. It sources funds from retail and institutional investors and lends the money to small and medium-sized businesses. It is one of the largest peer-to-peer lenders, with more than £3bn under management. The industry as a whole has struggled lately; the high-profile collapse of Lendy has dented confidence and tighter regulations have hampered both investment and borrowing. This has slashed Funding Circle’s expected sales growth this year from 40% to 20%.…

Investors went “gaga” over the “mini-flurry” of flotations including Uber, Beyond Meat and Slack this year, says Andy Serwer in Yahoo Finance. But perhaps that is just because such opportunities are rarer than they used to be. Between 1980 and 2000 around 310 companies went public every year in the US; this year there will be just 230. Start-ups are making the most of abundant venture capital and private equity (see page 5). Last year technology and biotech firms raised $50.3bn through public markets, but $130.9bn through private investors. This is part of a broader “de-equitisation” trend, as more of the economy becomes inaccessible to ordinary retail investors going through public markets. The winners are wealthy private investors who use private markets to buy into high-growth sectors from which smaller…

“If shorting Japanese government bonds is the ultimate widow-maker, calling the top of the gravity-defying Hong Kong property market cannot be far behind. The International Monetary Fund... has been warning about the dangers of an unsustainable bubble since 2010. Now suspicions are growing that the stopped clock’s hour may finally be at hand. Last month millions of local residents took to the city’s streets... And last week a handful of young hotheads even invaded and trashed the city’s legislature... Amid such a climate of uncertainty and fear, ask some observers, surely the world’s most expensive residential property market is on the cusp of a deep correction? Even a 1997-style crash? [But] in the last week, a closely-followed index of secondary market residential prices set a new high, up 500% from…

Three to buy Grafton Group The Daily Telegraph A dreary Brexit outlook and worries about the construction sector have prompted many investors to give this builders’ merchant a wide berth. Yet the business is growing market share and making judicious bolt-on acquisitions. A rigorous capital allocation policy has facilitated six consecutive double-digit increases in the dividend. Yet market jitters over the macroeconomic outlook mean that the shares are going cheap: a forecast price/earnings ratio of 12 represents a discount to peers such as Howden Joinery and Ferguson. 821.5p Loungers Shares This newly listed casual-dining outfit looks set to buck the high-street gloom. Equal parts restaurant, pub and coffee shop, the flexible format of its sites makes it able to adapt to ever-shifting consumer trends such as breakfast gatherings or late-night…

• When a company’s leadership changes, the new team often undertake a “kitchen sinking” exercise, notes Russ Mould of investment platform AJ Bell. The key is to release as much bad news in one go as possible so that investors reckon things can only get better under the new regime. Superdry’s interim boss (and co-founder) Julian Dunkerton has found himself “the biggest kitchen sink available”. Last year the group made a £65m pre-tax profit; this year it fell into the red to the tune of £85m as shoppers gave its offerings the cold shoulder. Margins, cash and the dividend are all down. Nobody expected Dunkerton to turn the group around so soon after reinstalling himself at the helm of the company after a boardroom fracas. But investors’ patience won’t last…

Investment trusts are collective investment schemes. Just like any other fund, they allow investors to pool their money and invest in a wide range of companies and other assets, enabling them to diversify in a convenient way. However, there are some key differences between investment trusts (which are closed-end funds) and their open-ended peers. Investment trusts are listed companies whose business is to invest in other companies. This means they raise an initial amount of capital when they go public. After that, if you want to invest in the investment trust, you have to buy the shares in the open market. This differs from an open-ended fund, where any new money results in the creation of new units (and any sale results in the redemption of those units). As a…

• Andrea Orcel, who was offered the job as chief executive of Spanish bank Santander last year only for the bank to rescind the offer, is to sue the bank for €100m, reports The Guardian. Santander said it could not justify paying a €50m signing-on fee, which the bank said was “significantly above the board’s original expectations”, plus €8.9m a year. The €50m was supposed to compensate him for bonuses he would have earned at investment bank UBS. Orcel (pictured), who told the Financial Times that he is “not a person who lets things go”, is claiming for lost earnings and legal fees. • John Jakes, founder and chairman of Acorn Stairlifts, has paid himself £97.5m in dividends since 2010 – just less than all the profits made by the…

Singer Gloria Gaynor (pictured), quoted in The Observer “Boris unashamedly talks about wealth. He is able to sell the idea that we have to defend wealth creators in an inclusive way that resonates and doesn’t sound like we’re rapacious capitalists. No one else bothers.” Local government minister Rishi Sunak on the Tory leadership candidate Boris Johnson, quoted in the Financial Times “The difference between successful people and others is how long they spend feeling sorry for themselves.” US businesswoman and author Barbara Corcoran, quoted in the San Francisco Chronicle “People are surprised at how modest the payment is for producers and presenters in factual television. Journalism doesn’t pay that well. The costs involved in writing books are what people forget: an awful lot of research and an awful lot of…

theconversation.com The Democratic candidates for the presidency of the US have begun their campaigns, but they are making a big mistake in demonising Donald Trump, say academics Jon Herbert, Andrew Wroe and Trevor McCrisken. By attacking him for the radical changes he has wrought, they are deciding to fight the 2020 campaign on Trump’s chosen turf. Trump has actually been a very ordinary president. He has always portrayed himself as an outsider coming to Washington to shake things up. The reality is that he has not achieved very much – and what little he has is standard Republican fare. He cut taxes in 2017 – significant, but not revolutionary. He secured the nomination of two conservative justices to the Supreme Court – pretty standard. As for his more radical ideas,…

Neil Woodford has been caught in a spat between two of his investments, says Tom Rees in The Daily Telegraph. Activist investor Crystal Amber, run by Richard Bernstein (pictured), has threatened to call an extraordinary shareholder vote at Allied Minds that could lead to the ousting of the tech incubator’s new leadership. Woodford owns shares in both Allied Minds and Crystal Amber. The altercation concerns plans to offer Allied Minds’ bosses a controversial bonus scheme despite a recent collapse in the share price. Woodford and Invesco jointly hold a 48% stake in Allied Minds, so their votes could well prove decisive.…

Everybody’s got an answer to the UK’s housing crisis. Jeremy Hunt, for instance, has a new “Right to Own” plan in mind which he reckons will produce 1.5 million cheap homes. The cheap bit will be the result of forcing developers to share the rise in the value of their land post-planning permission with councils (there are echoes of the rationale for a land value tax here – see our website for more on this). He also wants to ease planning regulations so that people can “build up” (he’s talking about putting new stories on top of existing apartment blocks). As far as Boris Johnson is concerned, we need to cut stamp duty, particularly in London, although he is not yet prepared to “put a figure” on it. And Prince…

■ Should you top up your national insurance to boost your state pension? Reforms to state pensions mean anyone retiring after 5 April 2016 must have at least ten years’ national insurance contributions to claim one, while you need 35 years to get the full amount of £8,767 a year. However, if your national insurance record falls short, you can make voluntary top-up contributions, typically for up to six years after periods in which you didn’t pay in full. In principle, topping up national insurance is a good deal. It will cost you roughly £750 to buy each extra year. In return, each year after the minimum ten years you buy will generate roughly £250 of extra pension every year for the rest of your life. The return is even…

“Drugs licensed for a particular use can be effective for other conditions if given to someone with the right genetic profile” Medical treatment has followed the same broad pattern for thousands of years. You wait until you get sick, then you go to the doctor, who tries to diagnose what’s wrong. Once they work it out, they give you what is deemed the correct treatment for the condition. But while this model can work, advances in medical science have exposed its limitations. Not only do symptoms take a long time to emerge, but diagnoses can be inaccurate, so by the time people go to the doctor, the condition may be incurable. Another problem is that not all drugs and treatments are as effective for some people as they are for…

Early this year investors thought that bitcoin, the digital currency, was on life support. After peaking at $20,000 at the end of 2017, bitcoin had slumped to $4,000 by April 2019. However, since then it has tripled to $12,800. So is this the start of a longer, more sustained rally, or is this another bubble that is just going to end up as badly for bitcoin investors as the first one? Bitcoin’s cheerleaders argue that things have changed. In their view, the big rise during the last enormous rally was driven by ordinary investors hearing about the huge amounts of money that people were making, and then blindly buying bitcoin in the hope of getting easy money. When the price started falling, they dumped their holdings, driving it back down.…

Against the backdrop of heightened political risk in the UK and abroad, combined with a notable slowdown in global economic growth, seeing beyond the uncertainty can be challenging. However, because we focus on the attributes of individual businesses we can still unearth companies that are both fundamentally robust and have the potential to be long-term winners, even if the immediate geopolitical and economic climate is tough. We are always poised to take advantage of strategic opportunities as they arise, and the current market environment is generating opportunities to buy potential long-term winners at attractive prices. The Mercantile Investment Trust invests in a diversified portfolio of UK companies outside the FTSE 100 index with significant scope for growth. The UK is home to both domestically-focused businesses as well as those that…

I tasted this wine on 31 January and it moved me so much that I wanted to write it up on the spot. It provides a once-in-a-lifetime sauvignon-blanc experience, but, sadly, it was not due to arrive in the UK until later in the year. Since then, I have been playing a game – trying to think of a finer wine made from this oft-derided grape. I cannot think of a single one that combines all of the epic sauvignon-blanc attributes in a single wine. Pavillon Blanc du Château Margaux; Haut-Brion Blanc (OK, this has semillon on board); Gembrook Hill; early Cloudy Bay; countless Chavignols from Cotat; Redde’s own wines; Cantina Terlano; Colterenzio; Reverdy; Spottswoode; Casa Marín; Daguenea; Dog Point; Te Whare Ra; The Berrio; Iona; Viña Leyda; Dry Creek…

Not for nothing was the auction last Thursday at Christie’s in London called The Exceptional Sale. There were many objects with fascinating histories among the lots. Nevertheless, just one item grabbed all the attention in the lead-up to the sale – and not all for the reasons Christie’s had wanted, as exquisite as that item was. The lot that was hogging the headlines was a bust from around 1330BC of the ancient Egyptian “boy king”, Tutankhamun. With its fine eyes and delicate features, the sculpture is without doubt a work of art. “You’re just blown away by the fact that a sculptor, over 3,000 years ago, used all his skills to create the most beautiful representation of the king,” says Christie’s antiquities specialist Laetitia Delaloye. The Amun Head (pictured), as…

• There is a scene in the film The Big Short where Michael Burry, played by Christian Bale (pictured), is forced to restrict withdrawals from his fund and then sits back with his headphones on while calls and emails from apoplectic investors flood in. “Now, I’m not suggesting that Neil Woodford took such a casual approach when his Equity Income Fund was frozen last month, yet I can’t help but wonder if he does have his fingers in his ears,” says Victoria Bischoff in the Daily Mail. “How on earth can he justify charging his loyal investors millions of pounds in fees when they still cannot access their money more than one month on?” He claims to understand the frustrations of his investors. “But actions speak louder than words Mr…

One of the advantages of having some money is that you get to observe others who have it. Up close, without being arrested. You see the rich in their native habitat. You learn their lingo. You observe their customs. It was in that spirit of anthropological curiosity that we joined a group of some 300 wealthy Americans at the Palace of Versailles in Paris recently. What a place. Over the top. Spectacular. “The 0.01% has money so old most have forgotten how it was made” Our visit began with a noble entry into the palace. Military standards unfurled on either side. Then, we crossed a red carpet to arrive in the Halle d’Entrée. Our group was then escorted on a private tour of the great rooms. We passed through rooms…