Indholdsfortegnelse for Issue 990 i MoneyWeek

The arrival of coronavirus in China at the beginning of the year represented an immediate supply shock to the global economy (the Chinese stopped producing and exporting). That created its own demand shock (they weren’t buying either – and the rest of us started to get nervous as the virus spread). This was unusual enough – you don’t often get demand and supply shocks at once. But it’s got a lot weirder since. First another supply-shock bomb appeared in the form of the new oil wars (see page 4). And then, another whopping demand shock (a positive one this time) turned up in the form of massive monetary and fiscal stimulus in the UK. On Wednesday, the Bank of England cut interest rates by 0.5% and took various measures to…

Hedge fund manager Philip Falcone and his Harbinger Offshore fund’s assets have been frozen after he failed to pay millions in legal fees following a high-stakes litigation against US regulators, says Ortenca Aliaj in the Financial Times. With an estimated net worth of $1bn, Falcone has defaulted on his debts and sold some of the underlying collateral, which included art works by Pablo Picasso and Andy Warhol. The South By Southwest arts festival, which was to be held this week in Austin, Texas, has been cancelled due to concerns about Covid-19. Last year it brought in $356m for the local economy, says The Guardian. It bodes ill for this year’s postponed Coachella festival, which was to feature headline acts such as Travis Scott (pictured), in California next month. Pulling such…

Italy suspended mortgage payments for households and small firms as the country entered a coronavirus lockdown this week. Meanwhile, on Monday the spread between Italian and German ten-year debt (the gap between the yields on each) went above 2% for the first time since mid-2019. That suggests that the current sovereign bond rally is not completely indiscriminate, with investors reassessing the risks of lending to Europe’s second most-indebted nation. The Italian economy now looks set to contract sharply in the first and second quarter. In the world of sovereign debt risk, Italy is “the elephant in the room”, says Hung Tran in the Financial Times. The country is almost certainly heading for its fourth recession since the global financial crisis. That will push government debt above $2.5trn, equivalent to an…

Three to buy Admiral The Times This motor-insurance business has operations in the UK, Europe and the United States and also owns the Confused.com price-comparison website. Admiral prides itself on its strong culture, happy workforce and steady management. These priorities have yielded results: a 10% jump in 2019 pre-tax profit compares favourably with falling earnings at rivals Direct Line and Hastings and enabled Admiral to raise the full-year dividend by 11%. The stock is a long-term buy. 2,238p Ocado The Sunday Telegraph The online grocery specialist’s critics say it is loss-making and overvalued, but fans insist it will profit from the future of retail. Ocado’s proprietary technology is much in demand in the UK and overseas, which is why it is valued like an international technology business rather than a…

• Boeing’s shares have lost 30% in a month, double the S&P 500’s slide, says Robert Cyran on Breakingviews. The company faces a war on two different fronts. The Federal Aviation Authority’s rejection of Boeing’s assurances about wiring will further delay the 737 Max’s return to the sky. And the Covid-19 virus means that people and firms are “cutting back on travel”, so airlines will “cut orders or payments”. With Boeing burning through $2.7bn in cash last quarter and with debt over $27bn, no wonder new CEO Dave Calhoun has admitted that “the company’s problems are “worse than he imagined”. • Twitter CEO Jack Dorsey (pictured) is claiming “victory” after an agreement between the social network, activist fund Elliott Management Corporation and private-equity group Silver Lake ensured that he will…

Saudi Arabia’s decision to raise oil production and sell it at sharply discounted prices at a time of declining oil demand “has sent shock waves” through the oil and stock markets, says Karen Young in The Washington Post. The price fall will hit Middle Eastern countries that rely on crude exports particularly hard. Most Gulf nations have tried to end their dependence on oil, but they have few alternative sources of revenue. And the price falls coincide with the Covid-19 crisis, which “has seized business and tourism activity globally”, creating “a simultaneous demand and supply shock”. The oil-price collapse may have “set a timebomb underneath the economy” of Saudi Arabia’s neighbours, but ironically its old enemy Iran will be less affected, says the Financial Times. Iran has bitterly criticised the…

Regular readers will know that we’re big fans of investment trusts here at MoneyWeek. One aspect of trusts that we like seems particularly relevant this week – the fact that you can sometimes pick them up at a discount to the net asset value (NAV) of their underlying portfolio. That’s because, unlike open-ended funds, investment trusts are listed and so the value of their shares trades independently of the value of the assets they own. As a result of this, when there’s a big panic in the markets (as there has been this week) it’s quite feasible that the share price of the trust will be hit alongside the value of its portfolio. So not only are you getting the underlying assets more cheaply than before, you’re also then getting…

And then there were four. In the latest FTSE reshuffle last week, Kingfisher was demoted from the main index. There are now just four retailers left, the lowest number ever. Marks & Spencer, once a bellwether of the British economy, was kicked out last year, and over the last few decades so were WHSmith, Boots, House of Fraser, Habitat, Mothercare and many others. It may be even fewer soon. The supermarket chain Morrisons only just survived this week, and may not make the cut next time. Whatever else we are, we aren’t a nation of shopkeepers – or shareholders in shopkeepers – anymore. It would be easy to regret the decline of a once huge industry, and one in which a series of brash, go-getting tycoons built their fortunes. And…

Twitter could do with a neutron blast John Thornhill Financial Times The two corporate Jacks – “Neutron Jack” Welch and Jack Dorsey – could not be more dissimilar, says John Thornhill. The late Welch was a “capitalist carnivore” who defined winning as generating returns for shareholders (he boosted General Electric’s market cap from $15bn to $402bn in 20 years). Dorsey, the “Gwyneth Paltrow of Silicon Valley”, advocates a “goopier form of capitalism”. But some of Twitter’s “agitated shareholders” think Dorsey’s firm could “do with adose of Welch-style… managerial vigour”. Elliott Management, which owns a $1bn stake, says Dorsey, who also co-founded Square, the fintech payments company, should stand down. Twitter’s shares have performed relatively “limply” since it was listed in 2013 and there are reasons to question Dorsey’s devotion. His…

capx.co Worker co-operatives –businesses that are collectively owned and managed by the staff – are a fine thing, says Tim Worstall. A new report from Stefan Stern of the High Pay Centre makes the case for promoting them. But just because we can point to a few successful co-ops doesn’t mean they are a good idea generally. The question is, when is a company better off with staff ownership and when with a traditional corporate structure? The answer, as with most things in economics, is – “it depends”. When the necessary capital for the business resides in the workers themselves, then employee ownership of the organisation makes “a great deal of sense”. This is why most professional services firms are partnerships, which is itself a form of worker ownership. If…

Market mayhem usually prompts investors to keep a much closer eye than usual on the performance of their funds. This can be frightening if markets go into freefall, but it is useful to assess whether funds based on a certain investment strategy behaved as expected. Did the funds deliver on their promise? During the latest correction (my performance figures were calculated on Monday evening) the huge range of investment trusts behaved as you’d expect, but with some interesting wrinkles. Diversified global equities funds have had a bad few weeks. The sector lost 11% in a month and 8% year-to-date. The FTSE All-Share is down 19% in a month. Miraculously, given its growth-stock focus, Scottish Mortgage seems to have suffered smaller losses than its main rivals Alliance Trust and Witan (which…

Black Hole Hollow Farm, the six-bedroom country house where Bond Author Ian Fleming wrote Diamonds Are Forever and Goldfinger, isup for sale for £2.3m, says Amira Hashish in Homes and Property. Fleming “lived [there] like a king [in] luxurious solitude”. The 440-acre property is set in a valley on the border of Vermont and New York. It contains the White Creek brook and is dotted with tiered ponds and 30 miles of trails, says estate-agent LandVest. The 8,143-square-foot main house’s living-room, dining room and downstairs bedrooms all open onto the gardens. The property has seven bathrooms, a greenhouse and an outdoor pool.…

Cineworld (LSE: CINE) is the world’s second-largest cinema chain with 9,500 screens in 11 countries. Shares swooned when the release date of the latest James Bond film No Time to Die was pushed back to November from April owing to fear of the coronavirus, says Dominic Walsh in The Times. Cinemas will suffer if governments try to clamp down on large gatherings as the virus spreads. The business has been struggling in any case. Profit before tax for the six months ending in June 2019 was $139.7m. The stock has fallen by 55.1% in a year.…

2018 Gavi di Gavi, Lugarara, La Giustiniana, Piemonte, Italy £18.49, £16.49 each if you buy six bottles, thewinereserve.co.uk; £17.80, toscanaccio.co.uk; £15.95, dunells.com; £15.15, exelwines.co.uk; £15.18, thedrinkshop.com Back in 2012 I published a book, 100 Most Iconic Wine Estates. It was a devilish task whittling down my favourite wineries to the final century of greats. Over the intervening eight years I cannot seem to stop myself mentally editing this list of wineries as I taste and learn more about my beloved subject. Ithink that I might make as many as 25 changes if I were to repeat the exercise today. This shows just how fast the wine world evolves and it also reflects the slight changes I sense in my own tastes, too. I venture that La Giustiniana would make the…

A board game designed by Paul Brinkkemper Available from the website at moneymaker.games, €40 The humble board game is experiencing something of a revival with games that focus on strategy and choices, rather than luck. Money Maker puts you in the shoes of a 16th-century merchant trader in Amsterdam. Whether you’re playing the beginner’s game or the regular version, the aim is to emerge with the greatest amount of net assets, including gold and the ownership of businesses and resources. The big difference between the two versions of the game is the role that debt plays in them. In the simple version you can only use the money you have on hand, plus any money that you can raise by selling the resources that the various firms you finance produce.…

The Federal Reserve slashed interest rates last week, prompting a short-lived stock bounce. Central banks are powerless against viruses. All they can do is add money to the financial system in one way or another. This may create the illusion of wealth, but it does nothing in reality. Even if stocks go up in nominal terms, they will go down in real terms. Gold will tell the tale. Your best bet is to find a nice place to wait it out. We’re still in Nicaragua. What better place to enjoy a pandemic, or stockmarket crash? What’s to worry about here? Nicaragua doesn’t fear coronavirus or a stock crash. It is already depressed. The other resorts up and down the coast have almost all closed their doors. We stay open, still…

Anthony Levandowski, the former head of Uber’s self-driving efforts, has declared bankruptcy after being ordered to pay $179m in damages related to his alleged theft of trade secrets from Google, says Patrick McGee in the Financial Times. Levandowski (pictured), one of the founders and key engineers in Google self-driving project Waymo, left Google in 2016. Shortly after this he co-founded Otto, an “autonomous trucking company”, alongside Lior Ron. It was later bought by Uber for $680m. Waymo sued soon after, accusing Levandowski of “absconding trade secrets”. He was fired by Uber in 2017 when he refused to testify. The lawsuit was settled in 2018, but Levandowski was found liable for $127m. Whether Uber pays for the fines “is subject to an ongoing dispute”, but the company said the resolution of…

“Now comes the oil shock,” says The Wall Street Journal. A “game of chicken between Riyadh and Moscow” has sent oil prices plunging and produced the worst day for many equity indices since 2008 (see page 5). Major oil producers led by the Saudis and the Russians, a grouping known as “Opec+”, have been cooperating to limit output and support crude prices since 2016. The Covid-19 demand slump saw Opec propose a new 1.5 million barrels per day (bpd) cut. That plan was rejected by Moscow, which has grown critical of an approach that it says only props up prices for US shale producers. A nasty break-up Rather than compromise, Riyadh retaliated. The Saudis slashed prices over the weekend in an all-out attempt to steal market share. The resulting “price…

The market meltdown has given investors the opportunity to pick up first-rate German technology stocks on the cheap, says Christof Schürmann in WirtschaftsWoche. One to consider is Secunet Security Networks, a cybersecurity outfit. It protects sectors including carmakers and energy suppliers in addition to key public infrastructure such as border controls. Sales have jumped from €91m in 2015 to €227m last year; earnings per share jumped by 94% over the same period. The structural growth outlook is compelling: as the global economy digitises, the need for cybersecurity will rocket. The market is expected to grow sixfold between 2011 and 2025.…

The Saudi oil giant Aramco is to slash the cost of a barrel of oil by up to $8, reports Benoit Faucon and Summer Said in The Wall Street Journal. At the same time the company is prepared to increase its output to its maximum capacity of 13 million barrels a day if needed. The move – which comes after a “longstanding partnership” between some of the world’s largest oil producers, including Saudi Arabia and Russia, “splintered” at the end of last week – has helped send oil prices down by more than 20% to a four year low of $33 a barrel (see page 4). Aramco’s move is partially prompted by “tensions” between the Saudi government and the Russians, says the Financial Times. In particular, the Saudis complain that…

In central-banking circles, the package of measures unveiled by the Bank of England on Wednesday is called a “big bazooka”, says Philip Aldrick in The Times. To “bridge the economy” over Covid-19 and shore up confidence, the Bank has cut interest rates by 0.5 percentage points, back to a record low of 0.25%; announced a £100bn cheap funding scheme for banks to support small businesses and cut the countercyclical capital buffer so much that “lenders will be able to pump an extra £200bn of credit into the economy”. The Bank’s Prudential Regulation Authority also sent a stern warning to banks not to  increase bonuses or dividends in response to its policy actions, notes Paul Dales in Capital Economics. Gratifyingly, lessons learned from the previous crisis are being applied, says Mark…

Joe Biden’s triumph (see left), combined with Donald Trump’s controversial handling of the coronavirus outbreak, have seen both punters and bookies start to edge away from the incumbent US president. The implied chances of Trump’s re-election have fallen from around 60% a few weeks ago to essentially being at even money (50%). With £18.3m matched, Betfair has him at 1.99 (50.2%) to be the next president, while Ladbrokes has him at 10/11 (52.3%). While the state-by-state markets aren’t very liquid at the moment, they also seem to be predicting a close outcome in the electoral college. Smarkets currently has Trump as favourite in several swing states, putting him at 1.36 (73.5%) to win Ohio, 1.37 (73%) to win North Carolina and 1.71 (58.4%) to win Florida. It also put the…

Many investors use the price/ earnings (p/e) ratio as a measure of whether a share is cheap or not. That’s because it’s one of the simplest valuation measures out there. You just take a company’s share price and divide it by its earnings (profits) per share (which you can read in the accounts). So a company with a share price of 50p and earnings per share (EPS) of 5p would have a p/e ratio of ten. A p/e ratio that is based on forecast earnings is often referred to as a forward p/e ratio, while one based on past earnings is sometimes described as a trailing p/e.P/e ratios are also sometimes referred to as “multiples”, as in “Acme widgets is trading on a multiple of ten times its earnings”. In…

• Emma Walmsley (pictured), CEO of pharma giant GlaxoSmithKline (GSK), received a 42% jump in pay to £8.4m last year. It came as a result of a number of share-based awards, worth £6.8m, vesting. However, under new rules at GSK that cut retirement contributions for its top directors from 20% to 7% by 2023, Walmsley will receive only £77,700 in pension contributions for 2019, based on her £1.1m salary, compared with last year’s benefits of £230,000, says The Daily Telegraph. • HS2 boss Mark Thurston has been handed a £46,000 bonus linked to “control” of the controversial high-speed railway line’s “spiralling finances”, says The Sunday Telegraph. The estimated cost of the scheme is expected to almost double to at least £100bn. Lord Berkeley, who led the review into HS2, said…

“The reason we don’t have as many female leaders is down to likeability. The data shows conclusively that as men get more successful they are better liked by women and men — but as women get more successful they are less liked by both.” Facebook chief operating officer and self-help author Sheryl Sandberg (pictured) on the dearth of female company executives, quoted in The Times “I’ve refused to resuscitate Spitting Image for years, but when my pension ran out and my palm was crossed with silver what could an old man do?” Roger Law, co-creator of the 1980s satirical puppet series, quoted in The Times “Traditionally, we were savers… but my attitude has changed as I’ve got older. Time is running out. In the last year and a half we’ve…

hbr.org Getting along and working with people you don’t like is a challenge and not being able to do it can derail your career, says Mark Nevins. Here are three ways to manage your enemies. 1. Reflect on the cause of the tension. And consider honestly your own role in creating it. If you can change your own reactions and reach out, and see things from their point of view, your enemy may transform into someone you can work with. 2. Become a problem solver, not a critic. Instead of competing, try collaborating. Ask your colleague how you might both work together better to resolve problems. Instead of asserting your own point of view, ask open-ended questions about theirs and have the patience to listen to the answers. 3. Ask…

US activist investor Coast Capital is making waves at First Group, says Oliver Gill in Daily Telegraph. The hedge fund, which organised the ousting of First Group’s chairman last year, said shareholders “have heard nothing” since FirstGroup announced a “strategic review” of the North American business three months ago. Unless the board gets its act together, Coast intends to request an extraordinary general meeting to “provide investors with the opportunity to vote on an immediate demerger of the North American operations”. Coast is First Group’s second-biggest shareholder with a tenth of the company. The hedge fund believes selling the divisions, FirstStudent and FirstTransit, would raise at least £2.8bn.…

One of Jim Wright’s favourite stocks is Union Pacific Railroad Company (NYSE: UNP). Union Pacific was founded in 1862 and is the second-largest freight railway in the US, with over 32,000 miles of track. Between 2014 and 2019 it grew earnings per share by nearly 50% (or around 8% a year). It has also managed to make a return on capital expenditure, a key gauge of profitability, of around 15%. It trades at a very reasonable 14.9 times 2021 earnings, with a dividend yield of 2.8%. Wright also likes East Japan Railway Company (Tokyo: 9020), the largest of the seven private railway companies in Japan. It serves the northeast of the country and operates both freight and passenger rail, including the high-speed trains in the region. East Japan Railway has…

In the property world, the vast majority of the market is made up of mundane, functional buildings that provide businesses with premises at a reasonable cost. Real estate investment trusts (Reits) that invest in these can be attractive for income seekers. AEW UK Reit (LSE: AEWU), for example, is the highest-yielding fund in the property sector. It pays aquarterly dividend of 2p, fully covered by earnings. With a share price of 91p and a 2% discount to net asset value (NAV), the shares yield 8.8%, from which it might be assumed that the fund was in trouble and the dividend under threat. Yet of this there is no sign. A portfolio of £196m at the end of 2019 was financed by £147m of equity, though another £7m of share capital…

When investing in any emerging market, looking beyond immediate uncertainty can be challenging. However, with a total population of over 1.4 billion, China’s scope for long-term structural growth remains appealing, especially in sectors such as healthcare, technology and consumption. These areas are capitalising on the country’s transition to a more consumer-driven economy. Since mid-January, Covid-19 has changed the landscape, at least temporarily. The situation is highly uncertain and still may worsen before it improves. Nonetheless, the fact that the Chinese government has mobilised its resources comprehensively and quickly suggests that the impact on consumption and business confidence may be cyclical rather than structural. So as long-term investors we continue to be positioned to benefit from the secular growth in emerging-market consumption. Millennial momentum Driving this shift in consumption patterns is…

$10,000 quadrillion The value of the iron and nickel in 16 Psyche, an asteroid that was probably once the core of a planet, according to American scientists. That’s about £1bn for every person on Earth. In July 2022, Nasa and Elon Musk’s SpaceX will send a probe on a324-million-mile journey to explore it. £1.2bn The annual cost of helping problem gamblers, the National Audit Office estimates. The industry makes £11.3bn in profits every year, but almost 400,000 people have gambling problems, including 55,000 children. £700m The value of the first wave of child trust funds (CTFs) that will mature in September as the first children to benefit from the tax-free accounts turn 18. Around 400,000 teenagers will be eligible to claim the funds, according to wealth manager Quilter. Babies born…

Maisie, a wire-haired dachshund, was awarded “Best in Show” at Crufts in Birmingham. She won her owner, Kim McCalmont, “a modest” £150 in cash, says The Metro. However, “the prestige... can earn them extra profits through advertising and sponsorship”. A “Best of Breed” winner can also “rake in up to £250,000 in stud fees”, adds the Birmingham Mail. An appeals court in San Francisco, California, has ruled that Led Zeppelin did not steal the opening riff to one of their most famous songs, Stairway To Heaven. In 2014, US band Spirit accused the British rock icons of ripping off their song, Taurus, which had been released three years earlier in 1968. Led Zeppelin would have faced paying millions had they lost. In the time since the case first went to…

The bill for America’s energy boom could now be due. Shale energy firms have borrowed billions of dollars over the past decade to finance the exploration and drilling of thousands of wells, says Ryan Dezember in The Wall Street Journal. In a world of ultra-low interest rates investors were delighted to snap up the higher yields on offer. Moody’s Investors Service reports that North American oil and gas firms have $200bn in debt maturing over the next four years. And now slumping oil prices are sending jitters through the bond market. On Monday energy bonds issued by smaller operators traded so low that the market seemed to have concluded they were “already out of money”. Around 12% of the $936bn of debt issued by US oil and gas firms are…

The collapse in the oil price has wrought havoc on the share prices of oil companies everywhere – with double-digit drops in the share prices of FTSE 100 stalwarts BP and Royal Dutch Shell, and the spreads on US shale oil companies debt exploding higher (see page 4). So what does it mean for your portfolio? The first question is: will the oil price stay here, or perhaps fall further? This depends on several factors, none of which look especially promising for oil bulls. On the demand side, coronavirus will have a huge impact. The International Energy Agency reckons that global oil demand will fall this year for the first time since 2009. On the supply side, Saudi Arabia and Russia have flung the taps open, with Saudi upping the…

Defying the slowing Indian economy and jittery global stockmarkets, the State Bank of India’s credit-card company is going public, say Benjamin Parkin and Henny Sender in the Financial Times. SBI Cards plans to raise Rs103.5bn ($1.4bn). Last week’s four-day share sale was more than 20 times oversubscribed. Investors appear to be taking a long-term view and are counting on India’s second-largest card issuer to “ride a wave of newly financially literate Indians taking out cards for the first time”. The firm’s sales have jumped by over 40% a year since 2017. There is ample scope for further growth. India had two credit cards per 100 people in 2017; China, 42.…

Tesco shares escaped the dramatic falls suffered by the rest of the FTSE 100 this week, say John Reed and Jonathan Eley in the Financial Times. That’s because it agreed to sell its southeast Asian operations to Thai conglomerate Charoen Pokphand for $10.6bn in cash. This will produce a “lavish” special dividend of £2.5bn; the remainder will be used to eliminate Tesco’s pension deficit. The deal, the biggest in Thailand’s history, sees Tesco return its 2,000 stores in Thailand and 74 in Malaysia to CP Group, who sold its Lotus supermarket group to Tesco for $180m during the Asian crisis. There’s no doubt that the owner of CP Group “has got his hands on a fine business”, says Ben Marlow in The Daily Telegraph. Of all Tesco’s attempts at expansion…

One of the main justifications for the bull market in shares since 2009 has been the idea that “There Is No Alternative” (Tina), due to the fact that government and corporate bond yields have been kept so low by central banks over the years, notes Albert Edwards of Societe Generale. This notion that high equity valuations can be justified by low bond yields – in essence, that dividend yields on stocks should typically be lower than yields on bonds – took hold in the 1980s and 1990s, during which period it was indeed a “very stable and useful” valuation measure. However, says Edwards, there’s a big problem with “Tina” theory today – “in a deflationary environment, equities should be cheap relative to bonds, which is exactly what happened in Japan”.…

The “dramatic fall” of office space startup WeWork “should have deprived” top executives at Jefferies Financial Group their bonuses, says Anders Melin on Bloomberg. Instead, the investment bank’s board authorised $10.7m in cash payouts to the chief executive, Richard Handler, and three of his deputies, according to a recent filing. The executives had been due to forfeit their bonuses because Jefferies had to write down the value of its stake in WeWork by $182.3m last year in the wake of the start-up’s disastrous initial public offering, which “backfired spectacularly”. That charge to the books “cut an earnings ratio used by the board to determine bonus payouts for senior bosses, effectively denying them their payouts”. But in the end, the board decided the “massive collapse” of WeWork’s valuation had been “completely…

bbc.co.uk In 2015 Dan Price, boss of card-payments company Gravity Payments, gave all of his 120 staff apay rise, introducing a $70,000 minimum salary, says Stephanie Hegarty. Price was angered by inequality, but realised he was part of the problem. So he slashed his own salary, mortgaged his two houses and gave his staff the news. Pundits predicted doom. Since then, the business has thrived and the headcount doubled. Staff are able to buy their own homes and are having more babies. They are saving more for retirement and have paid off debt. And far from slacking off as predicted, junior staff have been pulling more weight. They are less stressed and more healthy, and more focused on doing a good job. Price did hope that his example would inspire…

■“Millions of people who have invested for income... may not have as diverse a portfolio as they believe,” says Mark Atherton in The Sunday Times. GlaxoSmithKline, the pharmaceutical company, Royal Dutch Shell and fellow oil giant BP, Legal & General, miner Rio Tinto, Unilever and Lloyds Banking Group all featured heavily on over 50 funds’ top-ten list in a study by Octopus Investments. There is significant concentration risk within the UK equity income sector, says Octopus’ Chris McVey. Investors are “getting a very similar product, just [in] different... packaging”. Two-thirds of the dividends paid out by UK firms come from just 15 companies. The oil and gas sector accounts for 17% of dividends while mining and banking each account for 14%. ■ Another absolute return fund has failed, says Daniel…

With less than a month to go until the new tax year begins on 6 April, it is clear that the government has no intention of delaying its controversial IR35 reforms. From 6 April most private companies hiring contractors will be legally responsible for judging whether such workers should actually be classed as employees – and taxing them accordingly. The changes are intended to tackle a system that has undoubtedly been open to abuse. For contractors, operating as a limited company rather than accepting a short-term employment contract has generated tax savings for both them and their clients. Where contractors are genuinely freelance (working for a number of clients, managing their own time and workloads and deciding how work is delivered) that’s not a problem. But the Treasury thinks many…

Biffa plc (LSE: BIFF) is a waste-management company that provides collection, landfill, recycling and specialist waste services to local authorities and industrial and commercial clients. The group’s underlying profit before tax in 2019 is now expected to be around £66m-£67m, up from £64m the year before, thanks partly to higher demand for recycled plastics. The company said it has not yet seen any impact from Covid-19. In 2020 profits are likely to reach £70.2m. Just before the latest sell-off the share price had gained 53.9% in a year.…

Jacob Simon Herzig was born in Manhattan in 1870. In 1890, he was convicted and spent the first of several spells in prison for stealing from his father’s firm in order to cover gambling debts. While inside he changed his name to George Graham Rice, who had been one of his fellow inmates. Upon release Rice worked as a journalist and betting tipster. When the authorities shut down his racing tips business, he switched to promoting mining companies, as well as writing a popular newsletter about the industry. He was convicted of mail fraud in 1911 and wrote a memoir, My Adventures With Your Money, which was serialised and then published as a book in 1913 . What was the scam? Rice’s most notorious scam was his involvement with the…

Facebook The Inside Story By Steven Levy Penguin Portfolio, £20 It is a “fashionable moment” for cautionary tales about big tech, says Hannah Murphy in the Financial Times. There has been a “flock” of Silicon Valley reporters racing books to the printing press about companies that have risen out of the ashes of the dotcom crash and then “carelessly or inadvertently wrought havoc on the world”. In the case of Facebook, the outstanding allegations are “many and severe”, including claims that it has become a “fake news factory” and a “democracy destroyer”. Facebook: The Inside Story by Steven Levy, which charts the company’s rise from a “cliquey, college-focused networking website” into an “open social utility” with nearly three billion users, is a timely addition to the genre. As with Levy’s…

• Singer Lady Gaga (pictured) has been seen “wearing 2020’s hottest new accessory”, says Jennifer Selway in the Sunday Express – a normal boyfriend. The man in question isn’t a celebrity, he wears sensible clothes and isn’t wanted by Interpol. It’s all the rage. But on closer inspection, perhaps her boyfriend isn’t all that “normal” after all. He’s not the sort of “normal” who files CDs in alphabetical order, for example, or keeps bits of string. Lady Gaga’s Mr Ordinary is Michael Polansky, the rich and successful CEO of the Parker Group, set up by Facebook’s first president, tech entrepreneur Sean Parker. In fact, Polansky is “so abnormal that your mother would have to get the house redecorated if you brought him round for tea. But congratulations to Lady Gaga.…