Indholdsfortegnelse for Issue 963 i MoneyWeek

It’s been a bad week for Marks & Spencer (see below). With its share price half of what it was five years ago, one of our most iconic retailers has been fairly unceremoniously chucked out of the FTSE 100 index. This is hardly a surprise. Younger generations haven’t taken to its clothing lines. The food business is hideously competitive. And M&S is dealing with almost non-stop disruption in the retail environment in the UK. However, given that it was the fifth-largest firm in the index when it launched in the 1980s, the expulsion is still no small humiliation. On the plus side, it is worth noting that M&S still makes a profit and that it pays a yield of 7% (with the dividend nearly twice covered by profits). That makes…

Investors should dip their toes into Fluidra, says Börse Online. This family-run Spanish company is the leader in a fragmented market: it supplies all the key components of residential and commercial swimming pools (everything except the concrete and the water) and all the paraphernalia needed to maintain them. Sales and profits are set to rise now that Fluidra has completed the acquisition of a US rival, Zodiac, a key player in the industry’s most important market. The overall sector turns over around €7bn a year and Fluidra aims to expand its share of the pie to €1.7bn in three years, from €1bn now. As pools age they require more looking after, while emerging markets should also drive growth.…

Last week, tobacco giants Philip Morris International (PMI) and Altria, which originally split from each other in 2008, revealed that they were in “advanced talks” to create a $200bn “blockbuster deal”, say Jennifer Maloney and Cara Lombardo in The Wall Street Journal. The agreement would involve “an all-stock deal with no premium”, which means that Philip Morris would control 59% of the combined entity. This “merger of equals” would involve a “balanced” name, board and management team. It could be agreed “within weeks”. Both groups have been grappling with slowing demand for cigarettes and the advent of new smoking products. The original rationale for the split didn’t pan out, says Tom Buerkle on Breakingviews. The idea was that Philip Morris “would capitalise on the faster growth available in emerging markets,…

If there is a snap election, would Boris Johnson win it? The prime minister’s advisers believe that the Tories could “crunch Corbyn” by presenting the Conservatives as the champions of “the will of the people”, says George Parker in the FT. But he can’t be sure of a Commons majority. While polls suggest that he might take some seats from Labour in its Leave-voting heartlands, the Tories could lose up to 13 seats in Remain-voting Scotland, in the big cities where Labour remains strong, and in the south, where the Lib Dems are “resurgent”. And, of course, Johnson has “already alienated moderate Conservative voters”, says The Guardian. The problem for both parties is that Brexit has reshaped the political map, with voters increasingly identifying as Leavers or Remainers, says Matthew…

Supporters of Italy’s anti-establishment Five Star Movement (M5S) have put the “final nail in the coffin” of Matteo Salvini’s hopes of forcing a general election – they voted “overwhelmingly” in favour of forming a coalition government with their “longtime enemies”, the centre-left Democratic Party (PD), says Nick Squires in The Daily Telegraph. Salvini, leader of the right-wing League party, had precipitated a crisis with a confidence vote in the previous government that he led as deputy prime minister in coalition with M5S. Giuseppe Conte, an independent technocrat who served as PM with Salvini, will lead the new coalition. He will present Sergio Mattarella, Italy’s president, with a list of new ministers, which will then face confidence votes in the two chambers of parliament. Relations with the EU had been strained,…

In economic and political terms, today’s environment has a lot in common with the late 1930s, warns Ray Dalio, founder and co-chief investment officer of Bridgewater Associates, the world’s biggest hedge fund. Writing on social media site LinkedIn, Dalio says that he sees three major parallels with that era which are likely to “produce serious problems” if and when a downturn arrives. Firstly, central banks have reached the limits of monetary policy – cutting rates further or buying more assets can’t be expected to boost economic growth at a time when the world remains heavily indebted. Secondly, wealth inequality is creating polarisation in politics. Finally, a rising world power – China – is challenging the US, the current world power. These issues are driving central banks to take ever more…

Employees at some of Britain’s biggest charities have received five-figure pay rises, boosting their already bumper pay packets, says the Daily Mail. Simon Cooke, chief executive of Marie Stopes International, saw his pay rise from £300,532 in 2017 to £434,000 last year. The pay of Lynda Thomas, CEO of Macmillan Cancer Support, rose from between £170,000 and £180,000 to between £180,000 and £190,000. The top earner at the RSPCA saw their pay jump by £30,000 to £229,999, double that of the CEO, Chris Sherwood. Wildlife charity WWF UK paid one employee almost £60,000 more than its chief executive: CEO Tanya Steele is paid £137,714, while the mystery employee received between £180,000 and £190,000, an amount described by the charity as a “one-off anomaly”. Helen Stephenson, head of the Charity Commission,…

The future of the meat industry Liz Specht Wired The production and market efficiency gains of plant-based and lab-grown meats are “compelling”, says Liz Specht. Livestock farming is difficult. Producers tend to specialise in a species because the production and rendering process is “radically different” for each one. Animals have to be impregnated, raised and killed. Farmers have to predict demand years in advance. Then there’s the “carcass balancing problem” – getting rid of the millions of tons of unwanted parts of animals. Contrast all this with a manufacturing facility for products that are plant-based or for clean meat (created by growing meat from a small cell sample), where a facility can have finished products “rolling off the line in hours or days”. The raw materials for both – protein…

qz.com When people are in dire straits, they are more likely to welcome or vote in populist or authoritarian leaders in the belief that they will lead them back to better times, says Annalisa Merelli. But do the strongmen actually deliver? A new study suggests not. Researchers at the Royal Melbourne Institute of Technology and Victoria University in Melbourne, published in The Leadership Quarterly, shows that, between 1858 and 2010, autocratic leaders either damaged or had no impact on the economy of their countries. The researchers compared growth in per capita GDP in countries with autocratic regimes with those of democracies. They found no demonstrable growth effect connected with autocratic rule. The strongmen failed to deliver when it came to employment, health and education spending, and government debt too. Those…

The concept of cloud computing has emerged from a realisation that there are better ways for the world to manage its information technology. We examine the idea in detail in the box below, but it broadly refers to storing or managing data and delivering IT services on the internet, rather than in-house. It is revolutionising computing and business, and is here to stay. Building cloud platforms and servicing users is big, lucrative work. Tech giant Amazon now makes more money pushing its cloud offering than flogging goods online. Migrating to the cloud And yet it’s still early days. Most businesses have just begun the journey to getting on the cloud, according to consultants McKinsey & Co, and there’s a long way to go. Furthermore, plenty have tired, bespoke and cobbled-together…

Financial watchdogs have made it clear that they believe transferring money out of a defined-benefit pension scheme is a bad idea for most people. And yet people continue to defy this guidance, often with the support of their independent financial adviser: 390,000 savers have transferred cash out of final-salary pension plans since the pension freedom reforms. Now this number may be set to rise. Transfer values offered to savers considering a switch hit a record high at the end of August. A 55-year-old man expecting a £10,000 annual pension would have been offered an average transfer value of £247,000 a year ago. Today, the figure is £258,000, according to the XPS Pensions Group. The rise is down to a sharp fall in long-term gilt yields, which actuaries use to calculate…

■ If you get a call from an heir-hunting company saying you’re due an inheritance, don’t get too excited. These firms can make mistakes that leave people owing thousands of pounds. One reader of The Daily Telegraph was told he was entitled to a £40,000 forgotten legacy, only to find out later on that there was a closer relative who was due the inheritance. “The firm has now left him on the hook to pay back a small fortune after bungling its research, taking £12,000 in finders’ fees and cutting off all communication.” This error isn’t an isolated incident. “Experts have said cases of mistaken identity are common,” says Harry Brennan in The Daily Telegraph. If you are contacted by an heir-tracing company, you are “financially liable to hand back…

This has been quite a good fortnight for my long tips. Three have appreciated, two stayed the same and only one declined. JD Sports went up from 601p to 626p, Safestore from 641p to 648p and Bellway from 2,842p to 2,961p. Hays and Superdry remained the same at 146p and 392p respectively. Bausch Health Companies bucked the trend by slipping from $21.72 to $21.34. Overall, my open long tips are making a net profit of £585, up from a loss of £42 a fortnight ago, with only Superdry, Hays and Bausch losing money. My short tips have also moved in my favour, with all but one declining. Weis Markets fell from $39.40 to $38.23, bitcoin decreased from $10,695 to $9,895, Netflix from $309 to $294 and Uber from $35.70 to…

IP Group (LSE: IPO) invests in and incubates intellectual property-based businesses. It works with universities and research institutions to spin out promising life sciences and technology businesses, including Oxford Nanopore and Ceres Power. It has formed over 300 such businesses so far. In 2018 many of its Aim-listed portfolio firms saw their share prices tumble, with the underlying value of the portfolio down by 5.9%. Add in the fact that major investor Neil Woodford has been forced to sell and it’s no wonder the share price is down by more than 55% in the last year.…

Sports cars, fine art and rare first-edition books are usually beyond the reach of the average investor, says Paul Sullivan in The New York Times. Now tech companies are offering investors the chance to buy a share of such “passion assets” at a fraction of the price of buying the whole thing. The idea is that investors can buy exposure to an asset class that is generally independent of moves in the stockmarket. Rally Rd, for example, recently sold a Ferrari F430 to a private collector, booking a 17% profit. And Masterworks is offering shares in a painting by Andy Warhol of Marilyn Monroe along the lines of the peer-to-peer investment model. A word of caution, however. “Securitisation makes sense when there’s cash flow generated by the underlying assets,” Steven…

A manager at an unnamed UK energy firm has fallen prey to a “deepfake” scam, which led him to transfer almost £200,000 of his company’s money to fraudsters, says The Daily Telegraph. He received a phone call that “accurately mimicked” his boss’s accent and style of speaking. He was told to send €220,000 urgently to a Hungarian bank account, and was assured that the amount would be repaid soon. When it wasn’t, he grew suspicious. While he was on the phone to his real boss, the fake boss called again and the fraud was discovered. Insurance firm Euler Hermes said that email scams of this sort are common, but it was the first time it has heard of criminals successfully imitating a person‘s voice. But it won’t be the last,…

Negative bond yields are “scrambling... basic assumptions of financial markets,” says John Authers on Bloomberg. The dividend yield of the S&P 500 index is now higher than the yield on the 30-year US Treasury bond. That hasn’t happened since the financial crisis. Yet back then the so-called “yield gap” closed because of plunging stock prices. This time the 30-year bond yield that has plunged as debt prices have rocketed. The yield gap between equities and bonds reversed some time ago in UK markets, and now America has followed the trend, says Jeremy Warner in The Daily Telegraph. Stock investors need less protection against inflation than bond investors because companies can grow profits and dividends, while a bond coupon remains fixed. So the post-war norm has been for equities to yield…

This chart “illustrates several truths about the bond market”, says Tracy Alloway on Bloomberg. Investors keep buying Argentinian debt even though they really should know better (see page 10). The price of Argentina’s century bond has slumped by 45% as concern over the latest debt crisis has grown. At the same time, Austria’s 100-year bond has surged this year. It’s not that Austria has covered itself with glory lately; indeed, its governing coalition recently collapsed. But as yields on other, shorter-duration bonds slumped amid the latest bond rally, Austria’s yield started to look relatively juicy. “Even if fundamentals matter, no investment stands out on its own. It’s all relative to something else.”…

This has been the worst year for European initial public offerings (IPOs) since the financial crisis. A mere 84 companies have listed this year, say Justina Lee and Swetha Gopinath on Bloomberg, raising the lowest amount of money since 2013. It hardly helps that European growth is turning down, while a dearth of fast-growing tech unicorns has tempered animal spirits too. But as on Wall Street, IPOs appear to be in structural decline. The number of stocks listed in developed Europe has fallen by 29% since 2000. There is plenty of money floating around in the private market these days, so firms remain private for longer. Cheap credit also reduces the demand for equity funding.…

Tesco Bank has left the mortgage market by selling its £3.7bn loan book, says The Daily Telegraph. This is in line with a strategy to “slim down the number of services and products it offers to reduce costs”. The 23,000 customers will be moved to Halifax, a subsidiary of Lloyds. While supermarket banking services “were once seen as a credible threat to the dominance of major high-street banks”, tighter regulation in the mortgage market and a series of digital-banking apps geared towards winning over younger customers have hampered supermarkets’ financial divisions. The deal is the latest sign of the “convulsions gripping the UK’s mortgage market”, says Ben Martin in The Times. These have been caused by post-crisis regulations forcing banks to separate legally their investment banking arms from their high-street…

The fast pace of events in Westminster means that the odds on the various Brexit- and election-related bets are moving very quickly. It therefore makes sense to turn my attention Stateside and take a look at the US presidential election. While the actual election is still well over a year away, in less than five months the Iowa caucus will take place, the first contest in the cycle of caucuses and primaries that will determine who will face Donald Trump as the Democratic candidate. Betfair and Smarkets both have online markets on the Iowa caucus, but they aren’t liquid enough to be worth betting on, with only £59 and £128 wagered respectively. This leaves bookmakers Ladbrokes, which has Elizabeth Warren as the favourite at 7/4 (36.3%), followed by Joe Biden…

There’s a “bubble in passive investing”, claimed Michael Burry in an interview with Bloomberg last week. The rise in passive investing (funds which simply track the market, as opposed to active funds, which try to beat it) has resulted in money being blindly funnelled into big stocks, leaving other parts of the market neglected and undervalued, he argues. Burry bet big on the US subprime mortgage market collapsing before 2008, a move which made him a fortune and also saw Christian Bale play him in The Big Short, a film based on the best-selling Michael Lewis book of the same name. So naturally, his comments drew a lot of attention. “Passive funds are simply a cheaper way of accessing markets” Is he right? No, is the short answer. The idea…

They were duped, manipulated and lied to. Vladimir Putin and a few tax-dodging billionaires hacked their Facebook feeds with fake news. None of them understood that they were voting to make themselves poorer. Wherever “populist” governments have been elected, plenty of commentators have argued that their working-class supporters were in some way tricked with divisive rhetoric, and that they would suffer the most as the economy crashed. But hold on. It turns out that maybe they were just voting with their pockets. An impressive record “Economic disaster was predicted. That is not quite how it is playing out” By far the most significant of the countries that have broken with the liberal consensus so far has, of course, been the US. Donald Trump mobilised angry working-class voters to get himself…

This hardly seems an ideal time to launch a new investment trust on the London market. But if there is a fund that can pull off a blockbuster launch this late in the cycle, then it will almost certainly be one offering exposure to income-producing real assets. Defying the volatile market “Nothing quite as diversified is on offer in the UK” Over the past year, listed funds that have built a strong presence in everything from commercial real estate to renewables infrastructure have managed to raise more money from investors. Successful new fund launches are much less common, although we have seen some new entrants raise decent amounts of money, including the Gresham House Energy Storage fund and the US Solar fund. In the next few weeks they may be…

“Don’t lend money to friends. If you want to give them money, just give it. Then there’s no awkwardness afterwards.” Singer Sannie Charlotte Carlson (pictured), also known as Whigfield, quoted in The Sunday Times “Ron and I discussed how moving back to California would be great for Katy’s recovery, between the LA sunshine and the amazing strides medical research had taken in the US, not to mention the steady pay cheque.” Actress Joan Collins, now 86, on moving to the US with then-husband Ron and taking on her most successful role, Alexis in Dynasty, when her daughter Katy was in a coma, quoted in The Mail on Sunday “Always be prepared to think that experts are stupid. They often are.” Urban-planning activist Jane Jacobs, quoted on the Farnam Street blog…

collaborativefund.com/blog “Simplicity is the hallmark of truth”, and that applies to financial advice as much as to anything else. And yet “the sore truth” is that it is complexity that sells, says Morgan Housel. Why? One reason is that simplicity feels too easy. Just as we don’t feel we’ve gained anything if we don’t feel pain at the gym, so we feel we’ve missed out on a mental workout if what we’ve been told is too simple. Another is that length is often the only thing that can signal effort and thoughtfulness. You buy a long business book as it seems to indicate the author has spent more time thinking about the problem than you have. But that doesn’t mean their thinking is right and yours wrong. Finally, complexity creates…

The cloud is a collective term for data and application platforms. These have been built by big companies such as Amazon and Microsoft. Their pockets are deep enough to fund the expensive data-storage centres that together make up their platforms. Access to these platforms is offered to businesses and individuals who pay fees to use them and for support. Nowadays people are using multiple devices and applications connected across the internet. These include mobile phones, tablets, computers, watches and TVs, as well as applications such as Netflix, Facebook and Google Maps. Connected devices are very attractive to businesses: they embed them in their customers’ and users’ lives all day and everywhere. This gives them a trove of live data about that individual, which, correctly processed, can offer more business and…

“Which? Travel recommends avoiding Goldcar, InterRent and their parent Europcar” The summer holidays are over. But you may not have finished paying for them if you hired a car during your trip. Kate Palmer in The Sunday Times tells the story of Peter and Lynne Darker, who found themselves chased for a car-hire payment 15 months after their journey. To make matters worse the charge was for damage and breakdown cover after the tyre exploded on the vehicle on a motorway just 15 minutes after they hired it. This shows that “rental companies can charge for alleged damage to vehicles long after customers have returned home”, says Palmer. They can do so because they store your financial details when you hire the car and it is in the terms and…

All retailers have struggled recently, but none has had worse luck than Ted Baker (LSE: TED). Founder and chief executive Ray Kelvin was first forced to take a “leave of absence”, and then had to quit permanently in March after a personal scandal. The group then issued a profit warning this summer, noting that trading conditions were far worse than expected. As a result of all this furore, shares that were trading as high as £23.50 last September fell as low as 806p a few weeks ago. Even now they are over 60% below their 52-week high. Nevertheless, there is plenty of evidence that the fall is due to an overreaction. A strategy of growing the business through small-scale concessions in larger stores, rather than spending large sums of money…

The companies working on answers to critical environmental questions offer the prospect of attractive and lasting returns. They will benefit from rising demand for their products and services, thanks to an increasingly supportive political backdrop, consumer awareness and technological advances. Financial markets tend to underestimate the secular growth potential these drivers produce. Our Global Environmental Opportunities strategy invests in a broad array of businesses driven by these trends. They include firms active in pollution control; water supply and technology; renewable energy; waste management and recycling; sustainable agriculture and forestry; and the dematerialised economy. The latter encompasses companies that enable manufacturers to lower their consumption of raw materials while maintaining their output. “Equinix makes data centres more energy-efficient and reliant on renewables” Finding sustainable stocks But it’s important to find companies…

Over five decades, Charles and David Koch grew their father’s company, Koch Industries, into a sprawling empire – operating oil pipelines and producing everything from fertilisers to paper cups, says the Financial Times. As the principal shareholders of the Wichita-based company (they latterly owned 42% each), the brothers became exceedingly rich. Last year, they were estimated to have a combined worth of $120bn, making them the world’s eighth and ninth richest billionaires. The death of David last month changes the fraternal dynamic, says The Economist. It has also cast a spotlight on plutocracy in modern America. David Koch once referred to politics as “a nasty, corrupting business”, but that didn’t stop the Kochs from using their clout as owners of America’s second-largest privately held business to become “the most influential…

“After just over six years of dawn wake-up calls and holidays when we might just finish reading a solitary book between games of beach football, we are finally alone again,” says Robert Winnett in The Daily Telegraph. Calmness is “the first thing that hits” him and his partner on their adult-only trip to Mexico, while their son spends the week with grandma. The Hotel Esencia (from US$700/£580 plus tax, hotelesencia.com), near Tulum on the Yucatán peninsula, was once the residence of an Italian duchess. Peacocks and large lizards roam its manicured lawns, where afternoon tea is served every day. The decor “looks like it came straight off the pages of a minimalist design magazine”. And with no children in tow, there’s no need for time-watching for early breakfasts and bedtime.…

There are few people as respected in our wine trade as Robert Rolls. I have known him for more than 30 years, but I rarely taste his wines and I am not sure why this is. Perhaps it is that he keeps himself to himself, and his modesty and the scarcity of stock of many of his wines mean that he doesn’t make too much of a fuss about his business. We bumped into each other the other day and he said he would send me a case of samples – and every wine was not only superb, but they were also all stunning value, too. Loires, Rhônes and Burgundies, and all under £25, it was this keenly priced Menetou that completely amazed me with its finesse and control. A…

A reader writes in to ask if there have been any political leaders whom we have liked. We must admit, we were not fond of Bill Clinton… nor George Dubya Bush… nor Barack Obama. But the current occupant of the White House is the most amusing of all. He is not necessarily the dumbest of the lot, or the most conniving, but he is certainly the boldest. His delusions are right out in front. “It’s easy to dismiss Trump as a moron, but he’s so much more than that” Consider the claptrap in his economic pronouncements alone and it would be easy to dismiss Donald Trump as a moron. But he’s so much more than that. He is probably the most gifted natural politician we’ve ever seen – brazen, reckless,…

22,373 The points accumulated by Team UK in the World Skills competition in Kazan, Russia. The trades “Olympics” includes disciplines such as aircraft maintenance, beauty therapy and landscape gardening. Britain won two gold medals, one silver, one bronze and 15 medallions of excellence, placing the UK 12th out of 62 competing countries. Russian president Vladimir Putin addressed the closing ceremony. $50m The combined value of fake gold bars recently discovered in bank vaults around the world. At least 1,000 counterfeit gold kilobars, the standard 1kg size, have been found in the past three years, says The Times. £100m The cost of the government advertising campaign, “Get ready for Brexit”. It launched this week with the aim of informing the public and businesses about how to prepare for a no-deal Brexit.…

“Sad! And self-defeating,” says Eugene Robinson in The Washington Post. It’s now clear that Donald Trump’s “ill-advised gambit of tariffs and bombast” is hurting both the US and China. Yet a president who must face the voters next year is in a much worse position to “stoically withstand the pain” than a tightly-controlled one-party state. Global stocks swooned early this week amid the introduction of new tariffs by both sides of the trans-Pacific rift. Washington imposed duties on $112bn (£92bn) of Chinese consumer imports including shoes, nappies and food. Beijing started applying tariffs on $75bn of US products, including a 5% charge on crude oil imports. By the end of the year there will be levies on “nearly everything that comes to the United States from China”, say Quoctrung Bui…

“Global fund managers [have trimmed] their allocation to equities yet again by 1% to 44.6% – the lowest representation since November 2016. The shift out of stocks was the fifth in a row (monthly)… as investors heed the deflationary message from the fixed-income market rather than look at the situation as a view that bonds are … overly expensive… It makes sense when you consider what the unprecedented level of global trade, political and economic uncertainty has done to global business spending plans. [Meanwhile] gold prices continue to rally even in the face of a strong US dollar, which is a durable sign of a secular bull market in bullion… Gold is firming… in all currency terms, which is overwhelmingly bullish. Not only are central banks rebalancing their reserves [towards]…

Three to buy Morgan Advanced Materials Shares There is more demand than ever for new, smart materials for use in everything from solar panels to microchips. This materials engineer is at the cutting edge of the new industrial revolution. It makes high-performance ceramic and carbon-based products that are highly specialised, which limits competition. A disappointing few years have left the shares trading on a deep discount of less than ten times 2020 forecast earnings. That implies considerable upside potential for shareholders. 246.25p Nestlé Barron’s The world’s largest packaged-foods business is “having a great year”. Shares in the Swiss corporation have gained 30% in the past 12 months as it has “[upgraded] its cupboard”: a licensing deal with Starbucks and plans to launch its own pea-based burger shows that management has…

• After fighting off a bid from Pfizer in 2014, AstraZeneca’s boss claimed that the drug company’s “best days were ahead of it”, says Matt Oliver in the Daily Mail. Five years on, he seems to have been proved right. The shares are at record highs, giving the group a market value of almost £100bn, and could go even higher thanks to a “blitz” of promising clinical trial results. One drug, Farxiga, could reduce a patient’s risk of dying of heart failure by up to 25%; another, Brilinta, could cut the risk of heart attacks and strokes by 10% in certain patients. • Investors looking to invest in Saudi Arabia’s state-owned oil behemoth Saudi Aramco when it eventually lists may be reassured by the fact that it is replacing its…

Climate change, terrorism, cyberattacks, civil unrest – you name it, Larry Hall has a luxury bunker to protect you from it, says Julie Turkewitz in The New York Times. Surviving the apocalypse in style is now big business in the US. Hall is one such “doomsday capitalist” turning a profit from “survival porn”, as John Hoopes, a professor at the University of Kansas, puts it. “Fear sells even better than sex,” he says. The US spent billions building such chambers during the Cold War – often in remote areas. Now developers are buying the sites cheaply on websites such as gsaauctions.gov, and flipping the properties. “Eager customers abound.” Hall has converted a former military nuclear-missile vault somewhere in Kansas into a deluxe condominium built 15 stories into the Earth’s crust,…

“Marking to market” simply means updating the value of an asset or a portfolio of assets to reflect the latest available prices. This is easy to do when prices are readily available and assets are highly liquid (easy to buy and sell) and fungible (one is substitutable for another). For example, the value of a portfolio of FTSE 100 shares will be reliably up to date at virtually any point you look at it. It’s harder when transactions are less frequent, and the asset involved is idiosyncractic – for example, you probably have a rough idea of what your house is worth, but you won’t know for sure until you actually come to sell it, and there may be several years between official valuations from estate agents or surveyors. The…

• Shareholders in pubs and brewing firm Greene King, which recently agreed to be sold for £2.7bn to Hong Kong’s CK Asset Holdings, are being urged to vote against a proposed £850,000 “golden goodbye” to outgoing CEO Rooney Anand (pictured). Shareholder advisory service ISS says the payment is against “market standards”, says The Times. Anand, who was paid £1.6m last year and is in line for £10m from the sale, resigned last November and left in May, saying the terms of his contract were “inadequate”. • New teachers in England could be earning £30,000 a year by the 2022-2023 academic year, says the Department for Education – a £6,000 rise on current pay. The government will also pay contributions of 23.6% of salary into the teachers’ pension scheme. The minimum…

Is Neil Woodford’s time at the helm of his Patient Capital Trust running out? His key ally, Steven Harris – who used to run one of the companies in the trust’s portfolio – has stepped down. He is the third director to have left the struggling fund’s five-member board since May. The directors have been deemed too close to Woodford, so the latest departure has fuelled speculation that he might be sacked. Meanwhile, Woodford last week blamed markets’ “fixation” with a “reflationary global growth scenario” for the poor performance of his frozen flagship Equity Income fund. Energy and bank stocks, which he hadn’t bought, did well. “It’s everybody’s fault but his,” as Shore Financial Planning’s Ben Yearsley told The Sunday Times.…

leftfootforward.org Is Britain a hotbed for radical leftists? On the one hand it would seem not, says Joe Lo. For a start, few can even understand the terms “left-wing” or “right-wing” – just half of people can identify even the most stereotypically left- or right-wing policies as being so, according to a YouGov poll. Yet left-wing policies are mostly pretty popular. The nationalisation of utilities and the railways, for example, is popular, with even large proportions of Tory voters supporting such moves. Tory voters also support raising the minimum wage. Measures to redistribute income are also popular (although specific measures to tax the wealthy to achieve this are less so). The most controversial left-wing views are probably opposing the monarchy and nuclear weapons. Seven in ten Britons continue to support…

Microsoft (Nasdaq: MSFT) is a class act that has been transformed under the leadership of CEO Satya Nadella. Recent results were strong and broad-based across the group, and the outlook is upbeat. The cloud is a key focus and in this context the company should be able to exploit client relationships built on its long-standing Office and Windows products, which still drive significant revenues. These, together with Skype, LinkedIn, Surface devices and Xbox gaming consoles, make Microsoft a strong cash-flow generator. It’s a very attractive long-term bet on 24 times next year’s earnings. Meanwhile, shares in Amazon (Nasdaq: AMZN) peaked earlier this year at just over $2,000, but have since tumbled to $1,750 after earnings in July missed expectations. Growth, however, remains strong, with economies of scale expanding margins. Amazon…

After more than a decade, the payment protection insurance (PPI) scandal is over: the deadline for new claims has passed. But that doesn’t mean you’ve heard the last of claims management firms’ – or, for that matter, potential scammers’ – nuisance calls and text messages. The claims groups have started offering to chase compensation for new problems. The pension freedoms introduced in 2015 have created a new compensation problem: many people received poor advice when they accessed their pension fund. Payday lenders are also being targeted as “PPI set a precedent that firms could be retroactively punished for historic practices judged to be unfair, even if they weren’t against any rules at the time,” says Nicholas Megaw in the Financial Times. There has been a 130% increase in complaints over…

The credit ratings agencies that assess bonds have a bad reputation, not only due to their patchy record, but also because of the way they make their money. While equity analysts are paid (either directly or indirectly) by investors who use their research, bond analysts get their money from the companies whose bonds are being covered. This has led to a perception that they lack objectivity. Many traders believe that the best trading opportunities may come from bonds that have been downgraded, especially those that have been moved from “investment grade” to “high-yield” – or “junk”– status. The rationale is that many investors, especially large institutions or pensions funds, have strict rules limiting the number of risky bonds that they can hold. So when the bond is downgraded, or even…

IWG (LSE: IWG) provides serviced offices and videoconferencing facilities in 110 countries. It owns several brands, including Regus and Spaces, and competes with fashionable upstarts such as WeWork. But despite boasting more office space, more revenue and, crucially, a profit, its market value is less than 10% of the hipster disrupter’s. Perhaps inspired by the latter’s absurd overvaluation, it is mulling floating its US business into a separate listed company. Investors have been rewarded with a 75% rise in its share price over the last 12 months.…

Robert Brennan was born in New Jersey in 1944 and went on to set up First Jersey Securities in 1974, running it alongside two other brokerages – Hibbard Brown and LC Wegard & Company. In the 1970s and 1980s, First Jersey, which specialised in “penny stocks”, grew at a fast rate. Indeed, at its peak in the late 1980s it employed 1,200 people across multiple offices, and made profits of around $95m a year. This allowed Brennan to indulge in a lavish lifestyle – in 1992 he splashed out $40m ($75m in today’s money) on building the Due Process golf club. What was the scam? First Jersey Securities was a “boiler room” where salesmen would use high-pressure techniques to sell shares in worthless companies to unwitting investors. At the same…

• Ruth Davidson (pictured) has quit as leader of the Scottish Conservatives because the thought of spending hundreds of hours away from her home and family, fighting another general election, filled her with dread. “What fills me with dread is the thought of being a stay-at-home mum,” says Saira Khan in the Sunday Mirror. “Deep down, I know I’m not that woman who can spend all my days living and breathing my family… Does that make me selfish? Am I a horrible mother and wife? Why do women beat themselves up for choosing work over children? My husband doesn’t feel guilty.” Those early years of raising children are hard work. It’s great watching your children laugh and learn. But “I found sitting in ‘monkey music’ classes more stressful than sitting…