Indholdsfortegnelse for Issue 1003 i MoneyWeek

“Let’s not forget what being a shareholder really means – and the rights that entails” I hope that your portfolios have recovered well from the lows of March. You will be wondering what to do next and this week’s issue is full of ideas on that front. But amid all the money sloshing around it is increasingly vital not to forget what being a shareholder really means – it means you own atiny bit of a company (something we’d love Gen Z to get in on – see page 24) and are part of the UK’s vast and growing shareholder democracy. We hear a lot these days about the importance of everyone getting asay in how things work. What better way for that to happen in the corporate world than…

Three teachers have sued actor Reese Witherspoon’s (pictured) clothing brand Draper James, says Ryan Naumann on The Blast, over a promotion that offered teachers the chance to win adress if they signed up for its newsletter. They claim only 250 dresses were available for a million entries and that the “contest was a scam to create a ‘valuable customer database’”. The firm’s lawyer responded: “The fact that supplies were limited, such that a free dress could not be provided to every teacher who responded, was disclosed and is no basis for a lawsuit”. Model Bar Rafaeli has to perform nine months of community service as part of a plea deal with Israeli prosecutors in a £2m tax evasion case, says Anshel Pfeffer in The Times. The 35-year-old’s mother and agent,…

The oil rally is faltering. Brent crude has more than doubled since its April low, and last week broke through $40 a barrel for the first time in three months. The extension of supply cuts by oil exporters’ cartel Opec and Russia (“Opec+”) through July, coupled with the ongoing resumption in economic activity, has given the market buoyancy. Still, Brent remains down by 38% this year. And analysts reckon the rally has gone too far. Morgan Stanley says that demand recovery is proving weaker than expected, forecasting that oil consumption will not recover fully from the pandemic until the end of 2021. Goldman Sachs predicts that the price will fall back to around $35 a barrel in the short-term. A weaker performance at the start of this week reflects growing…

You can tell US investors are very optimistic, says John Authers on Bloomberg. Not only is the benchmark S&P 500 index back in positive territory for the year, but companies with heavy debt loads have actually done better than firms with strong balance sheets since the overall market nadir, according to Goldman Sachs, which tracks both types of firms with indices. Over-leveraged companies, or “zombies”, have jumped by 55% in less than three months. They were brutally sold off in the downswing because everyone thought they wouldn’t survive the pandemic. Now their surge means investors are convinced the recession will be mild “and that there will be no secondary financial crisis caused by insolvency. Let’s hope” they’re right.…

Companies are rushing back to the initial public offerings (IPO) market in the US. A surge in demand for new listings made last week the busiest week in a year, says Richard Henderson in the Financial Times. Flotations raised $3bn, the most since May 2019. On Wednesday, Warner Music became the largest US IPO so far this year at $1.9bn and on the following day shares in ZoomInfo, amarketing software company, rose by 60%. The increased demand for the deals reflected a “renewed vigour” among equity investors, says Henderson. US stocks have risen by over 40% from their nadir in March, which marks their strongest 50-day run on record.…

Britain’s AstraZeneca has been considering “the biggest pharmaceuticals deal in history”, says Max Nisen on Bloomberg: merging with US peer Gilead Sciences to create a company with a market value of $240bn. The aim would be to combine AstraZeneca’s “enviable” drug pipeline with Gilead’s profitable HIV drug business, which has given it a “steady cash flow” and “strong balance sheet”. Any merger with Gilead would be a bad mistake, says Ben Marlow in The Daily Telegraph. Not only is there “overwhelming” evidence that most mega-mergers end up destroying value, but the ongoing travel restrictions also mean that this one could “take several years to be negotiated”. In any case, with AstraZeneca at the forefront of developing a coronavirus vaccine as well as various treatments for those already infected with the…

The good news for US presidential candidate Joe Biden (see story, bottom left) keeps on coming and he is now considered to be odds-on to win the contest, with Betfair putting his odds at 1.93 (51.8%) while Donald Trump languishes at 2.36 (42.3%). Interestingly, Trump and Biden’s combined odds are only 94.1%, so punters think there is a non-trivial chance that neither will win. Betfair puts the odds of aDemocrat winning at 1.79 (55.5%) and a Republican at 2.26 (44.2%). Betfair also runs Betfair Sportsbook, which functions like a traditional bookmaker in that you bet against Betfair, rather than other punters. While the odds aren’t normally as good as on the exchange, you don’t have to pay any commission on your winnings. Betfair Sportsbook is especially  useful in cases where…

The acronym FAANG refers to Facebook, Amazon, Apple, Netflix and Google (Alphabet) – five American companies that have been among the top-performing stocks in recent years and are seen by many investors as core long-term holdings because of the way that they dominate the online economy. The acronym was coined by Jim Cramer, the host of the TV show Mad Money, as FANG in 2013; the second A (for Apple) was added later. Under this definition, the FAANGs do not include a number of other major firms with comparable influence. The most important is Microsoft: it is now as fast growing as its peers, but back in 2013 it was a laggard whose best days seemed long gone. However, when investors talk about the FAANGs today, they are usually referring…

• Tim Davie, the chief executive of BBC Studios, the broadcaster’s commercial arm, is set to become director-general. Davie (pictured) has agreed to be paid £450,000 a year until August 2021, the same salary as his predecessor, Tony Hall. After that date, Davie will receive £525,000 annually –“£75,000 more than Lord Hall, but £75,000 less than he was getting as head of BBC Studios”, says BBC News. The director general’s salary has not risen since 2012. • John Lyttle, the boss of online fashion retailer Boohoo, could be in line for a £50m windfall if he can raise the company’s market value to £6bn over a five-year period to March 2024. The increase in online shopping generally during the lockdown has helped Boohoo more than double its value to £4.8bn…

The value of the holdings in the Woodford Equity Income, now renamed LF Equity Income, has tumbled by another 20% after several of the failed fund’s biotech stocks were sold to US investor Acacia Research in a cut-price deal, notes Daniel Grote on CityWire. Link Fund Solutions, the defunct fund’s administrator, sold up to 19 of the biotech stocks, representing half the fund’s remaining assets, to Acacia in a £224m deal. The price is well under what the stocks were being valued at by the fund, and the sale has wiped £114m off its net asset value, which has slipped from £558m to £444m in a few weeks. Since the fund’s suspension one year ago, its value has fallen by 37%. The Investment Association’s UK All Companies Sector has lost…

“Our industry is still so disgustingly skewed towards what women look like… For years I bought into that, though: I even had to dress and make myself up in a different way – put on my ‘power’ outfit – just to feel like I was good at my job.” TV presenter Fearne Cotton (pictured), quoted in The Sunday Telegraph “All investing is value investing, the rest is speculation.” American hedge fund manager Joel Greenblatt, quoted on Twitter “We’re only down 15% from the all-time high of 19 February, and it seems to me that the world is more than 15% screwed up.” American investor Howard Marks, co-founder of Oaktree Capital Management, on the stockmarket rally in late April, quoted on Twitter “How many boxers just hang around a bit too…

capx.co “Who do you think deserves to be rich?” was the question put to a representative sample of Britons for a new study. The results contain a puzzle, says Rainer Zitelmann. Britons are most likely to think that entrepreneurs deserve their wealth, followed in rank by the self-employed and creative people and artists. Only 11% believe that senior bankers deserve their wedge. Using these results, the study developed a “social envy scale” and divided respondents into enviers, non-enviers and the ambivalents. The odd result is that the enviers are more likely than the other groups to think that lottery winners (a lucky couple from 2011 is pictured) deserve their wealth. Why? Sociologist Helmut Schoeck has previously observed that envious people are most likely to think advantages are deserved when they…

As Grantham and White point out above, big diversified miners offer decent dividend payouts these days (which wasn’t always the case). If you are looking for a single stock to add to your portfolio, the likes of BHP Billiton (LSE: BHP) or Rio Tinto (LSE: RIO) are obvious London-listed options and both yield around 4%-5%. However, we’d probably be more inclined to invest using a fund. Thankfully there is a wide range to choose from. BlackRock World Mining (LSE: BRWM) is a hardy perennial in the sector with a solid record. It currently trades on a discount to its net asset value (NAV) of around 13% and is up around 12% in the past year. The trust invests in many of the biggest mining names in the world, including the…

Thanks to the bullish mood in markets the last four weeks have been good to my five long tips, all of which have appreciated. International Consolidated Airlines Group (ICAG) has benefited from the fact that many countries are starting to loosen restrictions on tourists. Its shares surged from 182p to 309p. Energy giant Royal Dutch Shell has risen from 1,318p to 1,472p; television company ITV from 73p to 87p and equipment rentals company United Rentals from $116 to $158. Even pub chain JD Wetherspoon has managed to eke out a gain, from 1114p to 1,139p, on hopes that pubs could reopen very soon. Overall, the long tips are making a combined profit of £3,331. Sadly, my short positions have also risen. Ride-sharing firm Uber has increased from $31.64 to $37.08,…

When someone dies their estate has to go through afinancial process known as probate. It entails “identifying the dead person’s assets, paying off any debts and sharing out the remaining estate according to the will”, says Patrick Collinson in The Guardian. Probate usually takes three to four months, but lockdown has delayed the process. If you are facing probate here’s what you need to do. The first step is to register the death. In normal circumstances you do this in person at the local register office. During lockdown remote registrations have been taking place. The doctor will send an email of the medical certificate of death to the registrar, copying in family members. The registrar will then ask for additional information before they email a scanned copy of the death…

For more than eight million people the government’s furloughing scheme is a lifeline, enabling employers to keep staff on when they might otherwise have had to consider redundancies. However, if you’ve been furloughed, you do need to keep an eye on your pension savings, particularly as the Job Retention Scheme changes over the summer. The auto-enrolment pension system requires all employers to offer a pension scheme and to enrol you unless you specifically opt out. At least 8% of your monthly salary must go into the scheme each month, with 5% coming from you and 3% coming from your employer. The good news is that furloughing covers pensions: if you’ve been furloughed, you still need to pay the 5% from the wages you’re receiving through the scheme, but the government…

Every stockmarket crash is different. But they are all the same in two respects: they are very scary at the time and they produce amazing long-term opportunities for investors who can remain calm and disciplined when they occur. In the past few months we have been buying shares of world-class businesses at discounts that have rarely been on offer in the past decade, if not longer. As countries begin to reopen, markets are likely to remain volatile for some time. We have no particular insight about when they will return to “normal”, or what precisely that would look like in a post-virus world, but we are enthusiastic about the opportunities that are still available for long-term investors. Sky’s US owner is too cheap Our favourite situations are those where we…

2017 Barbaresco, Bruno Rocca, Piemonte, Italy £289 for a case of six bottles (£48.17 each), thefinewinecompany.co.uk I recently published my 2020 Piemonte Report, which features nearly 1,400 tasting notes from the best 121 wineries, including more than 100 write-ups from the much-vaunted 2016 vintage. I also hosted a one-hour webinar for elite wine club 67 Pall Mall, to spread the word about my report, but also to give viewers an overview of this historic region. If you would like to watch it, it is free to view in the “previous events” section of 67pallmall.com. One of the wines in the line-up was the 2016 6 vintage of my featured wine and it got a lot of praise from viewers and tasters. You can track it down at qwines.co.uk and hedonism.co.uk. It…

$73.13 The monthly pension paid by the US Department of Veterans Affairs to Irene Triplett of North Carolina, and the last of its kind to be related to the American Civil War (1861-1865). Triplett, who died last week aged 90, qualified because her father had defected to the victorious Union side and she had suffered from mental disabilities as an adult. 5,000 The face value in Argentinian pesos of a new bank note featuring Ramón Carrillo, who was health minister in the 1940s. Carrillo is credited with being the architect of Argentina’s health service, but he was also accused of being a Nazi sympathiser. The Simon Wiesenthal Center, a Jewish human rights organisation, described Carrillo as “an admirer of Hitler”. $25trn How much a two-thirds collapse in the value of…

The decade-long hunt for a $1m treasure chest ended this week, says Ben Riley-Smith in The Times. Tens of thousands searched for the riches 89-year-old Forrest Fenn (pictured) hid in the Rocky Mountains – he has now announced that the chest was found. “It was under a canopy of stars in the lush, forested vegetation of the Rocky Mountains and had not moved from the spot where I hid it more than ten years ago,” said Fenn, an author and artefacts dealer who had filled the chest with gold, rubies, emeralds and diamonds and left clues for it in a poem published in his autobiography. It is thought that 350,000 people from around the world hunted for the treasure and at least five died doing so. Fenn did not disclose…

“Should you be investing in China?” asks Ali Hussain in The Sunday Times. Global investors have withdrawn £5.4bn from funds investing in Chinese stocks in the past month. Worsening relations with Washington and Beijing’s clampdown on Hong Kong are causing some to reconsider their positions (see page 12). The long road to recovery Chinese stocks have held up well during the pandemic, with the Shanghai Composite index down just 4% on the year. It has rallied 11% since the most recent low on 23 March. China was the first major economy to enter a Covid-19 lockdown, with reported cases peaking in mid-February. That contributed to an annualised 6.8% fall in GDP in the first quarter, the first decline since the 1970s. The crisis has prompted officials to scrap the annual…

“Most apparently sound stewards of capital were revealed to be anything but during the 2007-2009 financial crisis… The private-equity (PE) industry has been an exception… The funds it deployed during the crisis [have yielded] a median annualised return of 18%... The biggest PE firms have evolved into financial conglomerates straddling buy-outs, property and credit markets… Assets under management have swollen to more than $4trn. Now another savage recession is in full swing... The leveraged companies and debt instruments in PE portfolios are vulnerable and much depends on whether managers can tide these investments over. Meanwhile, they have amassed $1.6trn in dry powder that they can deploy on new deals. PE shops’ fate depends on whether the hit to their existing investments is nasty enough to wipe out the potential gains…

Three to buy Applegreen Shares Drivers are back on the roads, meaning more business for this forecourt operator, which also owns Welcome Break. The group should profit from a “staycation boom” if overseas travel remains restricted through the summer. Net debt sits at over €500m, making this a high-risk investment, but management insists that it has enough cash to withstand even a prolonged period of weak trading. The shares are gathering momentum and there is scope for a 15% increase from here. 320p VinaCapital Vietnam Opportunity Fund The Mail on Sunday Vietnam has delivered economic growth of around 6% a year over the past two decades and should get another boost as ever more firms look to move manufacturing supply chains out of China. This fund offers UK investors exposure…

• The pandemic has caused “widespread financial damage” across the energy industry, says Anjli Raval in the Financial Times. So it is no surprise that BP will now lift a three-month redundancy freeze and cut 10,000 jobs, almost 15% of its 70,000-strong workforce, by the end of this year. At the same time the company will be halving the number of managers to make the firm “leaner”. But even if it manages to drive down capital spending and costs, BP’s dividends still look “unsustainable”: its debt is “among the highest in the sector”. • HSBC and Standard Chartered are feeling the heat over their decision to support China’s new security law, says Jim Armitage in the Evening Standard. Insurer Aviva, which owns £800m of shares in the two companies, says…

The S&P 500 is likely to hit new highs in the second half of this year, says Jeremy Siegel, the author of the influential book Stocks for the Long Run (in which he makes the case that investors should simply buy and hold shares, and not worry about ups and downs in the market). So long as there is not a severe second wave of coronavirus – which Siegel believes can be avoided even without a vaccine, so long as treatments become more effective – the “totally unprecedented” liquidity created by the Federal Reserve will keep powering the rally, he tells CNBC. That’s despite the gulf between the S&P 500 and the wider economy. “One of the unfortunate things about the lockdown is that we’ve actually improved the prospects of…

Graduates are entering the worst US job market in modern history, with unemployment “spiking to levels not seen since the Great Depression”, says Jessica Dickler for CNBC. For most professions affected by the fallout from the pandemic, rising competition for fewer job openings has put downward pressure on salaries. As such, starting salaries have fallen from an average of $59,765 last year to $54,585, recruitment software company iCIMS has found. Newly trained investment-banking analysts have bucked the trend. They now earn $86,076 on average in their first year, up from $85,000 in 2019, according to jobs website Glassdoor. Tech jobs are even more lucrative. Software and hardware engineers both pay around $90,000 to newcomers; the role of data scientist offers the overall highest median base starting salary in the US,…

■ Actively managed investment funds saw over £4bn inflows in April as confidence returned, says Madison Darbyshire in the Financial Times. Active funds racked up net retail sales of £2.7bn for the month compared with £1.4bn for passive tracking funds. The Investment Association said such “strong flows… go some way” towards disproving speculation that investors would permanently shift from active management towards tracker funds. “Investors are backing active fund managers to help navigate the volatile markets,” said Laura Suter, personal finance analyst at investment platform AJ Bell. Now is the time for active managers “to shine” as they target companies that are unfairly discounted or set to rebound. Funds invested in equities saw the greatest inflows in April, with £2.4bn in net sales, followed by fixed-income funds with £903m. The…

mises.org Lockdowns impose their own costs in terms of suffering and lives lost and there’s good reason to believe that they just don’t work, says Ryan McMaken. They may also have contributed to current social and political unrest, in three ways. First, lockdowns have created an economic disaster. “It doesn’t exactly require a crystal ball to see that destroying the livelihoods of countless millions while empowering the police to harass and arrest law-abiding citizens would create conflict.” Second, lockdown has hobbled social institutions, including schools, churches, coffee shops, bars, libraries, barbershops and many others. Binge-watching TV shows is no substitute for the role such places play in preserving the peace and defusing social tensions. Finally, lockdowns have empowered the “police state”, making criminals of citizens who were merely seeking to…

America’s S&P 500 index plunged by a third when the coronavirus crisis struck. But it has since rallied and is back to where it was at the beginning of the year. The remarkable rebound suggests that this may be a good time to consider some short-selling ideas. One company that looks a prime target for short-selling is health insurance broker eHealth (Nasdaq: EHTH). The group is in a sector beset by continual regulatory scrutiny, but has nonetheless been on a tremendous tear over the past two years, rising from under $25 a share in June 2018 to around $120 today. The reason for this surge is that between 2017 and 2019 sales more than doubled, while they are projected to increase by another 50% between 2019 and 2021. The company,…

■ “Homeowners who turned to banks for help in their hour of need could face much higher interest rates in future or even be denied loans altogether,” says Adam Williams in The Daily Telegraph. Millions of homeowners have taken mortgage payment holidays during the crisis. The scheme has now been extended for a further three months, but think carefully before you apply. The Financial Conduct Authority (FCA) warned banks that they cannot leave a black mark on customers’ credit file if they apply for a repayment holiday. But “the rules allow mortgage lenders to examine bank statements to see if a payment break was taken, or to force customers to disclose this fact”. The information could be used to decide a future credit application, resulting in potential rejection or higher…

■ The number of dormant pensions –private pension schemes where the saver has lost touch with their money – could rise by a third this year because of the Covid-19 crisis. According to the pension company PensionBee, which helps people collate their various pensions, the number of dormant accounts could rise to 21.5 million by the end of the year – a 32% increase. The problem is that Covid-19 is leading to huge numbers of people leaving jobs where they have built up pension plans. Unemployment increased by 50,000 during the first three months of the year alone, official statistics suggest, and is expected to rise substantially in the second quarter despite a range of government support schemes. When people leave jobs where they have built up a pension entitlement…

Sumo (Aim: SUMO) produces and markets video games in the UK, India, and Canada. The share price has climbed by 46% in the last year and is now just 7% below its 52-week high. Much of the upswing can be ascribed to the past few weeks. Investors have been impressed by the fact that Sumo grew sales by 27% to £49m in 2019, while pre-tax profits jumped by 30% to £23.9m. It also bodes well that the company is expanding. In mid-May Sumo acquired Lab42, a work-for-hire studio that develops video games, for £600,000, notes Alistair Hardaker on BusinessCloud.…

Nicholas Cosmo was born in Long Island, New York, in 1971, and enjoyed a brief career as a minor-league baseball player. This did not lead to the success he had hoped for, so he decided to become a stockbroker instead, getting his licence to trade in 1993. Cosmo was by all accounts a good salesman, but a gambling habit got out of control and he took $177,000 from clients’ accounts to cover gambling losses. He declared bankruptcy and was jailed in 1998. Released from Federal prison in 2000, he set up Agape World Inc. with money from his parents and a government grant. What was the scam? Agape World claimed to make money for its investors through short-term real-estate loans designed to meet the need of those moving properties who…

Create an atmosphere Putting up some outdoor garden lights is a simple and easy way to create a relaxing atmosphere and ensure you can enjoy your space well into the evening, says Charley Ward in Good Housekeeping. The Squirrel Festoon Lights can be hung from trees or above a dining table and you can connect sets together for larger spaces. Each string comes with 20 bulbs and a standard UK plug, and is designed to “hang effortlessly on pergolas, fences and gazebos”. £70, gardentrading.co.uk Spread out and take it easy The TiiPii hanging daybed makes for luxury lounging at its finest, says Louise Whitbread in The Independent. The large Deluxe Sunbrella version is made with Sunbrella performance fabric (a weather-resistant acrylic), supports up to 250kg, and is easily assembled in…

• “When I first met make-up artist Charlotte Tilbury about 20 years ago, I would have considered her one of the very last people to build a $1bn business,” says Alexandra Shulman in The Mail on Sunday. “Scattering ‘darlings’ in her breathy voice, crystals dangling in her bosomy cleavage and staggering around in maxi dresses and platform shoes,” Tilbury (pictured) could “easily have been mistaken for the archetypal hippy-dippy chick.” She didn’t look like “the formidable businesswomen she has turned out to be”. Her “gregarious and chatty personality” has paid off. When she told friends of “her dream of launching a company selling movie-star glamour in a jar, many of them became the vital early investors”. Now, she has sold her eponymous make-up line to Spanish group Puig, netting herself…

In a “watershed” decision for underemployed French workers, says Adam Sage in The Times, Paris’s appeals court awarded €50,000 to a man who said he had so little to do in his job with Interparfums that “his health deteriorated”, ruling he had suffered from “bore-out”. Frédéric Desnard said his boredom led to a nervous breakdown as a result of the “daily humiliation” of doing nothing. Lyon striker Ada Hegerberg, 24, signed a “historic” long-term sponsorship deal with Nike set to be worth upwards of €1m, says the BBC. Hegerberg parted with former sponsor Puma for the lucrative deal, which is set to run for “at least” a decade. Hegerberg called it a “massive step” in her footballing career.…

Global consumers will buy goods wrapped in 80 million tonnes of plastic packaging this year, says WirtschaftsWoche – especially plastic bottles. Only 14% of this packaging will be recycled, compared with 50% of paper and 80% of steel. That implies ample scope for Norway’s Tomra, which specialises in collecting and sorting plastic recyclables, to keep growing sales and profits for years to come. The group, which also offers food recycling services, operates 84,100 reverse vending machines – where consumers get a deposit on their plastic bottle back – worldwide. Tomra also helps manufacturers, restaurants and hotels recycle more efficiently. Sales have tripled in a decade.…

British Airways’s owner International Airlines Group (IAG) has begun the first stage of legal action against the government, says Gwyn Topham in The Guardian. It had “protested in vain” against the new mandatory 14-day quarantine policy affecting all new arrivals into the UK, which came into effect this week. IAG deems the quarantine “illogical”, noting that the regulations will not only come too late to stop the transmission of coronavirus, but are also more severe than for those infected with the disease. The rules are also likely to kill off any “nascent recovery” in the airline industry. The measures are certainly bad news for British Airways (BA), say Siddharth Vikram Philip and Thomas Penny on Bloomberg. With European countries starting to remove restrictions, BA had been hoping that it would…

At the same time as officially clinching the Democratic nomination for president by securing a majority of delegates, Senator Joe Biden opened an attack on Donald Trump for his “lack of leadership” on the ongoing unrest over the police killing of a African-American man, says Joey Garrison in USA Today. Trump has been emphasising the need to “restore order”; the Biden campaign is “betting on changing attitudes nationally about racism and policing”, endorsing calls for moderate reform. The issue is a “tightrope” for Biden – he is vulnerable to attacks from Trump and from the left, parts of which are demanding more radical action. Some activists are eager “to dismantle police departments”, for example, even if others “favour a less drastic overhaul”, says The New York Times. While Congressional Democrats…

The US is an expensive market by international standards – even more so now that it’s recovered from the March lows faster than any other region. At the end of May, the MSCI USA traded on a price/earnings (p/e) ratio of more than 22. The MSCI Europe traded on a p/e of 15. The MSCI Japan was also valued at around the same, while the MSCI Emerging Markets is slightly cheaper at 14. If you look at price/book value or dividend yields instead, the same pattern holds. “IT accounts for 26% of the US market, but just 7% in Europe” However, there are complications in comparing international markets like this – the composition of each market can be very different. This tends to be obvious when the index is dominated…

If there is one thing that seems clear about the Covid-19 crisis, it is that it has been won by Big Tech. From Amazon to Netflix to Facebook and Google, we have relied more and more on the giants of the internet. And they will emerge from the crisis more powerful than ever. But is this really true? As the economy went into lockdown, the more of your portfolio you had invested in technology shares, the better. Apple, Microsoft and Amazon all quickly recovered from the initial stockmarket slump and went back up above the $1trn market value level and their peers were not far behind. Amazon is up by 33% since the start of the year and has been hitting fresh all-time highs, while Apple is up 13%. It’s…

Syncona (LSE: SYNC), an investment trust containing stakes in privately-held biotechnology firms, has struggled over the past few months. It was formed in late 2016 when the £650m investment trust BACIT merged with the arm of the Wellcome Foundation that had been commercialising cutting-edge medical research. Within two years, the share price had doubled to £3 as investors were enthused by the strategy and some promising holdings, but it had fallen to 220p by the end of 2019 and 200p in March. This was despite the sales of two investments, Nightstar and Blue Earth, for an aggregate 6.2 times cost and the flotation of a third, Autolus, at $17 a share, which provided further uplift. Since March, Syncona has climbed to 231p, but it is remains a strong buy. The…

Boris must summon his inner Maggie Robert Colvile The Times Boris Johnson once described himself as “basically a Brexity Hezza”, but there’s always been a bit of Margaret Thatcher “lurking” alongside Michael Heseltine, says Robert Colvile. While shifting his party to the left to narrow the “opportunity gap” between rich and poor, he has also “consistently come down in favour of the individual against the state”, talking endlessly about the “vital symmetry” between wealth-creation and public services. So, while the blueprint for the post-Covid economic recovery will doubtless recap many Heseltinian themes, there is also serious intent to “set the economy on afar more deregulatory, business-friendly path”. Although the government has committed itself, as part of Brexit, to retaining high standards in areas such as employment rights, there is still…

taxpayersalliance.com Darts tournaments, like all other live sports events, had been cancelled due to the pandemic, but unbowed the Professional Darts Corporation (PDC) set up an alternative: a webcam-based Home Tour, with players competing via a scoring app. This sort of ingenuity is not new in the darts world, says Sam Packer. Before the PDC broke away from the darts establishment in the early 1990s, the sport struggled. The top players wanted to earn more money, but they understood that for that to happen, they needed bigger audiences. So rather than simply accepting their meagre annual allocation of TV coverage, they jumped ship from the older darts organisation and hooked up with satellite sports channels. Out went the beer and fags, in came “glamour, lights, atmosphere”, and regular matches between…

The world is facing the worst downturn since World War II, according to the World Bank, with global GDP set to fall by 5.2% this year. Markets this week may have cheered ajump in US employment last month, but the unemployment rate still sits at a staggering 13% (and due to an error in the calculations, was probably significantly higher) and the economy is now officially in a recession that the National Bureau of Economic Research reckons started in February. In the UK, we’re attempting to open the country up again (see page 9), but while the pubs might be open later this month, we still can’t make any headway on getting children back to school, which promises to make any “return to normal” a tricky task for working parents.…

Short-selling, or “going short” as it is popularly known, is an investment strategy that involves betting against a company’s shares. Specifically, short-sellers borrow shares from long-term investors (such as pension funds) and then sell them, hoping that they will fall in price, so that they can repurchase them for less and make a profit. This is very risky unless you use some sort of stop-loss: your losses are theoretically unlimited as there is no cap on a rising share price. Perhaps the most aggressive short-sellers are “activist” ones. While activist investors take a long position in a company and try to use their influence to improve it, activists not only short astock, but also publish research on why they think it is overvalued. To their enemies they are engaging in…

Over the past few months, country after country around the world has gone from business as usual to lockdown. Deserted streets, closing businesses, mass unemployment and a rising death toll are a very harsh counter to any positive view of 2020 and beyond. Yet on reflection I still believe we should be optimistic about the future. The crisis is terrible but the response shows how we can overcome this challenge through co-operation, applying ingenuity to positive ends and investing in businesses to deliver a positive impact. There are stark parallels with how we have to deal with the challenges of the climate emergency, loss of biodiversity, and sharing prosperity more widely and fairly. I believe that, once this pandemic has passed, we will intensify our response to these challenges, underpinning…

Switching banks has never been easier. You can “use the official seven-day switching service that automatically arranges the transfer of payments and direct debits and costs nothing”, says Kate Palmer in The Sunday Times. But where should you go? If you want good customer service, then Palmer recommends app-based bank Starling, or Nationwide. The latter still pays 2% interest on its FlexDirect account on balances up to £1,500 for the first 12 months. Alternatively, Virgin Money’s current account pays 2% on balances up to £1,000 without the 12-month limit. If you are keen on ethical saving, try Triodos Bank. It invests in sustainable businesses and aims to make the economy fairer, more humane and greener. Its debit cards are biodegradable too. The drawback? The current account costs £3 a month.…

Up to 370,000 women are being paid less state pension than they are owed because of government errors, according to Steve Webb of actuarial consultancy LCP. The problem affects women born before 1953, particularly widows, married or divorced women and those who are 80 or older. Many built up substantial pension entitlements through their husbands’ national insurance contributions, qualifying them for up to 60% of the basic state pension via this route alone. But the state pension system has changed regularly over the past 50 years with state record-keeping and calculations often failing to keep pace. Webb’s research suggests many women are not even receiving the minimum state-pension entitlement, and may have no idea. In several cases LCP has obtained backdated pension payments worth thousands for those who were overlooked.…

Hyve Group (LSE: HYVE) is an international events organiser, responsible for around 130 trade exhibitions and conferences in 14 different countries each year. It has been one of the worst performers in the FTSE 250, with its share price collapsing by over 95% in March as the pandemic “wreaked havoc” on the exhibitions and conferences industry, says Harry Wise on This Is Money. The group announced in early May it was planning a £126.6m rights issue. Sales for the year to September are expected to take an £80m hit, dropping 20% from last year. The stock has fallen by 68.9% in a year.…

A health crisis, an economic meltdown – and now a social breakdown. The protests over the death of George Floyd at the hands of the American police have morphed into riots and looting. Thousands have been arrested. What gives? You’ll remember our dictum: “When the money goes, everything goes”. What’s this got to do with money? Isn’t it just about racism and police brutality? We wish. “Isn’t this just about racism and police brutality? We wish” The monetary foundation of the US (the Federal Reserve balance sheet) began the century at only $674bn. Now, it is $7.1trn and it’s heading to $10trn by the end of the year. Every crisis, every calamity and every disaster, caused by the feds themselves, will be met with more money-printing. Each time, the feds…