Indholdsfortegnelse for 1053 i MoneyWeek

“Governments have a firm monopoly on coercion: crypto owners should remember this” The UK was not prepared for the Covid-19 pandemic. We aren’t prepared for much else in the way of crisis either: there are, for example, no plans in place should solar flares knock out our electricity supplies, or should terrorists attack us with anthrax. So said Dominic Cummings when he gave evidence to a Commons committee earlier this week (see page 8). Both of the latter events might seem unlikely – but a year ago so did being ordered to stay in your houses indefinitely while Cummings and Boris Johnson bickered about Matt Hancock’s integrity. There isn’t much we can do about how the government prepares for crisis. We can, however, think about how we prepare – how…

Students could face higher or extended loan repayments as the government looks to reduce its exposure to unpaid student debt, says Emma Yeomans in The Times. Lowering the income threshold at which graduates begin to repay their student debts (currently £27,295 a year) and extending the repayment period past the current 30 years are among the measures being considered. Up to 75% of student loans will never be repaid in full. Thieves broke into the home of Little Mix singer Leigh-Anne Pinnock (pictured) and stole her £40,000 engagement ring, reports Leah Sinclair in the Evening Standard. Pinnock, 29, is engaged to footballer Andre Gray. The ring, an emerald and diamond-encrusted gold band, is thought to have gone missing this month when the pair were moving house.…

The special purpose acquisition company (Spac) boom is cooling. Spacs are shell firms that list on the stockmarket in order to raise cash. They then use the money to merge with another company. For start-up founders, Spacs offer aroute to a public stockmarket listing that is less bureaucratic than the traditional initial public offering (IPO). They have been used to launch everything from electric-vehicle (EV) makers to space tourism business Virgin Galactic. Around 250 Spacs launched in America last year, raising $83bn. Between February and March, 69 companies agreed to merge with Spacs, but that number has fallen to just 30 since the start of April, say Echo Wang and Anirban Sen on Reuters. Dozens of firms have ditched merger plans of late. No wonder, says Heather Somerville in The…

British pay grew by 4.6% during the first quarter compared with a year earlier. That is the fastest rise in the “regular pay” (average weekly earnings excluding bonuses) measure since 2007, says Sanjay Raja in a Deutsche Bank note. The high reading is partly down to one-off effects from the pandemic – job losses have fallen mostly on the low-paid, which mathematically raises average earnings. But even stripping that out, the underlying growth rate of 3% is still “impressive”. Between 2010 and 2016 the same measure “averaged less than 2%” as the economy struggled after the financial crisis. Workers in low-wage sectors are enjoying particularly strong pay growth, with annual pay rising 6.1% in retail and 11.3% in leisure.…

Plant-based milk company Oatly’s shares jumped after its initial public offering (IPO) on the Nasdaq last week, with its debut share price of $17 shooting up to $22 in opening trading, says the BBC. The jump propelled the group to a market valuation of $13bn. The listing is a sign of the increasing popularity of non-dairy products and follows other plant-based food brands that have gone public, including vegan-burger maker Beyond Meat. Oatly raised $1.43bn in the IPO and will use it to expand production. The firm sells its oat milk in 60,000 shops and 32,000 coffee shops in 20 countries, and has expanded its range to include yoghurt and ice cream. Celebrity investors include Jay-Z and Oprah Winfrey.…

Credit Suisse continues to experience the loss of a “slew” of senior bankers, says Nabila Ahmed on Bloomberg. The defections come asCredit Suisse has “slashed” the amount of money set aside for employee bonuses, using the savings to limit the “financial hit” from the recent implosion of the Archegos fund. Other “debacles”, including its links to the collapsed supply-chain finance group Greensill Capital, have also hurt its reputation. Managers are now considering offering “retention bonuses” for staff to “stem the bleeding”. Credit Suisse’s bankers are particularly “frustrated” that the failure of the bank’s prime-brokerage unit, which caters to investors such as Archegos, overshadowed an “otherwise strong” run for the investment bank, says Cara Lombardo in The Wall Street Journal. The bank has advised on several “high-profile transactions” lately, including chipmaker…

Despite fierce resistance from the agricultural lobby, the UK looks set to sign a substantial free-trade agreement with Australia, and one that should be a template for deals across the rest of the world. Once that is completed, we should see a lot more trade between the two countries. But we might see something more important as well: a round of takeovers of Australian companies by British ones – because there are lots of tempting targets. Snap up an airline or a bank An Australian trade deal won’t, of course, be transformational. Its economy is not huge. With aGDP of $1.4trn, it is about 40% of the size of the UK, and far smaller than either the EU or the US. It is unlikely Australia will be selling us vast…

One of the key bullish arguments supporting the idea of a rapid “energy transition” to renewables from fossil fuels is the fact that technological development means costs keep falling. The price of solar modules, for example, has dropped by 90% in the past decade. The cheaper renewables get, the more compelling the economic logic for making the shift. However, inflation is getting everywhere these days and renewables are no exception. According to Bloomberg, the price of solar modules is up by 18% this year alone. The problem is the same one facing companies across the world – soaring raw material costs. In the case of solar the price of a key ingredient, polysilicon, has quadrupled. As a result, growth in solar installations may slow, or even reverse, this year. “The…

Halo slips on our revered institutions Matthew Syed The Times In 2017, Chicago University economists found that working for a socially responsible company increased the tendency to act unethically, says Matthew Syed. A study last week found that tech firms that made public statements in support for Black Lives Matter had 20% fewer black employees. “The perception of virtue provided a fig leaf for its absence.” This might help explain an increasingly familiar pattern at some of Britain’s “most revered institutions” including the BBC, the NHS, the Scouts, Oxfam and Barnardo’s. Each of these “has demonstrated systemic failings that seem wholly at odds with its founding principles” (although of course the pursuit of virtue can “provide cover for unethical behaviour”): the NHS scandal at Mid Staffs; the sex parties organised…

conversableeconomist.blogspot.com In the aftermath of the Texas power failures in February, commentators found that, “amazingly, they had been right about everything all along”, says Timothy Taylor. Those against greenery blamed wind farms. Leftists blamed the market. Some even blamed Enron, a company that has not existed for years. A new paper from the Reason Foundation finds that what actually happened “seems simpler… it got really cold”. For the first time in history, all 254 counties in Texas were put under a winter storm warning at the same time. Although not unprecedented at any particular location, the cold snap was more extreme, widespread and long lasting. And it wasn’t just the state’s energy system that failed: municipal water mains froze, roads were closed, and farmers lost cattle and crops. The agency…

Winston Churchill described Russia as “a riddle, wrapped in a mystery, inside an enigma”. The same could be said of the £370m Hansa Trust, listed and managed in London but registered in Bermuda, which has been connected to the Salomon family since the 1950s. To most professional investors, Hansa is opaque, distrusted and unpredictable. One third of the 120 million shares are voting shares (LSE: HAN) and two thirds (LSE: HANA) are non-voting. A little over half the voting shares are connected to the Salomon family, of which half are attributed to William Salomon, a director of Hansa and managing partner of its fund manager. He also owns nearly 5% of the nonvoting shares and has been buying recently. Both the voting and nonvoting shares are trading at a discount…

Businesses in Scotland will have the opportunity to trial a four-day working week following the re-election of the Scottish National Party. The SNP has promised a £10m fund to help businesses explore four-day working amid claims that such a shift could boost economic productivity and support the wellbeing of staff. Four-day weeks are not as revolutionary as they might sound. Large organisations such as Unilever are already trying out the idea in parts of the business, while a number of high-profile smaller enterprises have also made this move in recent years. “Microsoft says that a four-day week raised productivity” Some economists also back the initiative. The think tank Autonomy has urged the UK government to support a move to a four-day working week in an attempt to combat potential rises…

How we live our lives and how we choose to invest our savings have typically been worlds apart. Happily, it has recently become possible to bring these two elements much closer together. There’s agrowing number of listed companies that are working hard to understand their place in the world beyond simply generating profit. Business leaders have a better chance of building strong foundations for equity returns when they understand that they can only deliver sustainable profits in the long term by respecting the environment in which they operate and the people their organisations affect. Positive impact as an investment strategy builds on this growing corporate self-awareness by championing companies that provide fixes to problems that will cost the planet more dearly in the future if left unattended. “Impact investing champions…

“The UK is today the ninth-largest manufacturer in the world, with up to 23% of GDP coming from the sector” Stolen Heritage The Strange Death of Industrial England Anthony Warwick-Ching Matador,£15.99 David Cameron’s role as a lobbyist for Greensill Capital raised awkward questions about the probity of former politicians appearing to make money from their political connections. Greensill’s role in financing Liberty Capital, one of the few remaining British steelmakers, also highlights the extent to which industries that were once considered key parts of the UK economy have dwindled in recent years and become shells of their former selves. Stolen Heritage: The Strange Death of Industrial England by Anthony Warwick-Ching examines why British manufacturing has declined so rapidly since the 1970s. What caused the decline? Looking at a range of…

• “Greed poisons sport,” says The Sun. It was the driving force behind the European Super League and the reason why two great British heavyweight boxing champions, Anthony Joshua (pictured) and Tyson Fury, will fight in Saudi Arabia this summer instead of somewhere “on nodding terms with basic human rights”. It’s also why the Olympics is going ahead in Tokyo despite the games producing “nothing but public fury”. The official cost of these games, postponed from last year, is £10bn. Hundreds of thousands of people have signed a petition calling for their cancellation. Japan’s vaccination rollout has been slow: only 3% of people have been jabbed. Flying in 11,000 athletes from 205 countries feels like “an act of money-driven madness”. If the games go ahead, it won’t be because of…

A multimillionaire human rights barrister, who counts matrimonial cases among her specialisms, is battling to reduce the £625,000 payout she was ordered to give to her own “mischievous househusband”, after the pair split up, reports Jonathan Ames in The Times. Sorour Bassiri-Dezfouli, 55, and ex-husband, Kianoosh Azarmi-Movafagh, 58, separated in 2017 after an 11-year relationship. In 2019, Bassiri-Dezfouli – whose property portfolio was worth £2.3m – argued that “she was the only contributor to the marriage”, and that her ex, who had been unemployed for the entire marriage, did not need funds to buy his own home. However, the judge ruled that her husband, who claimed to have been the main carer for their son, had a right to “have his needs considered” given the length of the relationship, adding…

There comes a time “in the life of every cryptocurrency investor… when they watch a significant amount of their money disappear in the span of a few hours”, says Jen Wieczner in New York magazine. Bitcoin fell by 30% last week and is down by more than 40% from its mid-April highs. The past week has seen a stomach-churning series of rallies and reverses, including a 30% fall in a single day on 19 May. A poor store of value At the time of writing bitcoin was still well short of $40,000; it traded as low as $31,970 at the weekend. The price has been hit by news from China, where regulators last week banned banks and payment companies from accepting cryptocurrencies. Elon Musk’s Tesla also says it will no…

”Millions of Santander’s customers were unable to make online payments [because of a] day-long computer glitch... anything electronic is bound at some time to go haywire: similar crises afflicted RBS in 2012 and TSB in 2019. It was also a reminder that the continuing shift towards a cashless and contactless economy... brings its own set of perils... the future, [techies] say, is ‘digital cash’ in the form of tokens that can be stored in and spent from mobile devices without creating a data trail... mobile payment systems now widely used in Africa provide a... model. The young — oblivious to online fraud, digital meltdown and the risk of their mobiles being pinched from their back pockets — now hardly use cash at all... But the old still prefer it because…

Six to buy Coca-Cola HBC Shares Coca-Cola HBC has lagged the wider stockmarket this year. But there is plenty of upside for the soft-drink bottling group as the global economy reopens. A first-quarter trading update showed that despite Covid-19 restrictions continuing, sales were up by 6.1% year-on-year. The company’s “geographic diversity” also allowed it to benefit from “accelerating sales in emerging markets”, with Russia and Nigeria both posting double-digit growth. 2,509p Marks & Spencer The Sunday Telegraph Marks & Spencer (M&S) has had a series of “turnaround” executives who have failed to tackle the “deep-seated decline in its fortunes”. Its record pre-tax profit of £1.2bn was achieved in 1998. Last year’s figure was just £67.2m. But new executives Archie Norman and Steve Rowe could turn that around. Norman grasps what…

• No wonder FirstGroup’s investors are furious about the sale of its US yellow school buses and transits for shuttling to airports and universities, says Alistair Osborne in The Times. The deal was agreed when Covid-19 shut schools and airports, depressing the price. Shareholders will see little of the £2.2bn received, with most going to cover debts and pension liabilities. And given that President Joe Biden has allocated $174bn to electric vehicles, including school buses, in his stimulus packages, FirstGroup would have been better off keeping its US businesses. • Trainline has hit the buffers, says Nils Pratley in The Guardian. Until last Thursday it commanded a £2bn valuation based on “its ability to continue extracting 5% commissions on ticket sales”. But the decision to include a “ticketing shakeup” as…

The US is now pressing for a “fuller investigation” into the origins of Covid-19 after new evidence emerged that the disease “was released accidentally from a laboratory in the Chinese city of Wuhan”, says Kiran Stacey and Christian Shepherd in the Financial Times. A US intelligence report suggests that three scientists at the Wuhan lab “fell ill with Covid-19-like symptoms in November, a month before the first official case was reported”. Aprevious report by the World Health Organisation (WHO) argued that the virus was “far more likely” to have spread from animals to humans, but even the WHO’s director-general now admits that his organisation’s study was “not extensive enough”. The way to resolve this would be for both the US and WHO to deploy specialists, including laboratory safety experts, to…

• Nicolas Aguzin, the new chief executive of the Hong Kong Stock Exchange (pictured), will receive a basic salary of HK$10m (£910,000) after taking up his post this week, 7.4% more than his predecessor, reports the South China Morning Post. Aguzin, a former banker who spent three decades at JPMorgan, will also be awarded 211,756 shares worth around $HK96m (£8.7m). Half of the shares will be cashable after one year of service and the other half after two. • Around 2,500 workers at Games Workshop will each receive £5,000 in share bonuses, says Graeme Evans in the Evening Standard, at a total cost of some £12.5m. Last year, staff received £2m in bonuses between them. Pre-tax profits at the company, which makes and sells fantasy games and figures, are set…

Standard deviation is still the most widely used measure of “dispersion”, or in financial markets, “risk”. It is based on the idea that any population is “normally distributed” (it follows a “bell curve” pattern). In other words, whether it contains the height of every adult male in Britain, or the annual return delivered by the FTSE 100 over 100 years, most members of a normally distributed group will bunch around the arithmetic average (the “mean”) for the whole. In the heights example, the mean average would be the sum of every man’s height divided by the number of men in the UK. So a randomly chosen man in the UK will on average be close to, say, 5’10” – with only a few people significantly above or below that “mean”…

“Essex men, we care about how we look and we like spending money on nice things. That’s Essex working-class aspiration. When I got my first pair of Reebok Classics trainers, my life changed.” Actor Russell Tovey (pictured), quoted in The Times “The perfume hall at Harrods. I was probably the most depressed I’ve ever been in my life. Not to say it’s not a good job, but a lot of the people there are out-of-work actors, dancers or singers. Harrods is a lovely shop, but we had to wear three-inch heels for seven-hour shifts and full panto make-up... By the end of it I was really sick of all that. I didn’t wear perfume for years.” Actress Helen George on where she worked between gigs, quoted in The Mail on…

theconversation.com The British royal family, like many family businesses, has had its share of difficulties lately, says Alfredo De Massis. But family firms, although beset by their own difficulties, are often better equipped to ride out a crisis. That’s good for all of us – they contribute between half and 90% of GDP of most countries and employ the majority of people. Here are three challenges family firms can turn to their advantage. First, succession. The pandemic has shown that crisis can strike at any time and it pays to be prepared. Even long-expected successions need to be handled carefully when the moment arrives. Second, tradition. The increasing uncertainty brought on by crisis leads many to look for stability. Along family history and a tradition of upholding longstanding values will…

Hochschild Mining is in the spotlight after shareholder-advisory service Glass Lewis told clients to “reject its pay report “at its annual general meeting this week, says Angharad Carrick in City AM. The advice came after a death last year at one of the group’s mines in Peru; a portion of the executive annual bonus linked to health and safety was nonetheless awarded to Hochschild’s CEO Ignacio Bustamante. Aston Martin Lagonda is facing discontent among shareholders after it handed out a bonus of £142,000 to its CEO Tobias Moers, even though the company had to make use of £13m in emergency state funds during the pandemic. The carmaker is also facing criticism for its gender gap: it has only one female director.…

Chile looks very well placed to thrive in the energy transition. It has world-leading reserves of copper and lithium, while its solar renewable success gives it an advantage in green hydrogen. Uncharacteristic populist legislation has unsettled Chilean shares recently, creating a buying opportunity.The easiest way to back Chile is to buy a local bank with wide exposure to the economy. Banco de Chile (NYSE: BCH) has fallen by 15% this month. It is a cheap way to buy into the country’s energy-transition growth. I have spent the last year interviewing miners in the Andes and there are two that stand out. SolGold (LSE: SOLG) is the best way to play Ecuador’s copper potential. It has several deposits to develop and its first target, Alpala, is the seventh-largest copper project in…

Almost 30,000 small companies that sell goods online to customers in the European Union will face new VAT rules with effect from 1 July 2021. The EU is introducing new regulations removing VAT exemptions for small businesses and shipments worth less than €22. The changes were announced while the UK was still a member of the EU and are aimed at tackling VAT fraud. But while most of the fraud is thought to involve Chinese shoppers, the new rules will apply to all non-EU countries, including British businesses following Brexit. Tax consultancy Avalara believes some 26,000 British businesses will each face average costs of €8,000 a year under the new system. In many cases, these businesses will never previously have had to register for VAT when making sales to customers…

Reach (LSE: RCH), formerly Trinity Mirror, is the national and regional news publisher behind the Daily Mirror and the Daily Express. Earlier in May, it said its annual operating profit will come in ahead of market expectations due to strong revenue growth from its digital business in the first four months of 2021, says Reuters. Revenue from digital business rose 35% for the four months to 25 April, and the number of registered users hit 6.2 million. However, print revenue and circulation dropped 10.4% and 7.9% respectively as newspaper sales continued to fall. The share price is up by 260% in the last 12 months.…

Ding Ning was born in China in 1982. At the age of 17, he dropped out of school to work in his family’s metal-buckle business, helping it expand into can openers and screws. In 2012 he decided to branch out to cash in on the technology boom by setting up Anhui Yucheng Financial Leasing. Two years later, the firm launched the online peer-to-peer platform Ezubao. Aswith other P2P outfits, the argument was that investors who were concerned about inflation but unwilling to invest in shares could get a much better return on their money by bypassing conventional banks and lending money directly to businesses and individuals. What was the scam? Despite claiming to offer investors a wide choice of projects they could lend their money to, executives would later admit…

Doom The Politics of Catastrophe Niall Ferguson Allen Lane, £25 Historian Niall Ferguson has a reputation for being talented and industrious, says Douglas Alexander in the Financial Times. So while others spent their time during lockdown “learning to bake sourdough or watching Netflix”, Ferguson was holed up applying his “prodigious intellect” to placing the present pandemic on a “wider historic canvas”. The result is Doom, a book that seeks to understand “why humanity, time and again”, has “failed to prepare for catastrophes, whether natural or man-made”. It seems obvious that we should do this to help us learn from the past and think about how we can “construct social and political structures that are at least resilient and at best anti-fragile” (a term coined by philosopher Nassim Nicholas Taleb to…

Economists are studying the numbers. Is inflation heating up or cooling off? Should they be looking at the consumer price index (CPI)? The CPI-U (for urban customers)? With or without food and energy? The personal consumption expenditure price index (PCE)? ShadowStats? They watch the thermometer and check the skies. Here, we explain why we think they are wasting their time. “If you wait for the statistics to confirm the trend, it may be too late” You can tell it’s getting warmer by looking at data points. Check the thermometer every day and you may begin to see a trend. But if you are planting a crop, you might also check the calendar: there are bigger patterns; longer, more durable, more predictable trends. Temperatures go up and down. You may see…

£1.70 The price of a block of Marks & Spencer cheese that secured a Mature Blue Stilton-loving drug dealer a 13-year prison term after police identified his fingerprints from a picture of it he posted online. S$5 The price (£2.66) of a breath test for coronavirus approved for use in Singapore. Developed by Breathonix, a start-up spun out of research at the National University of Singapore, the test produces a result in one minute. ¥2.7m How much (£17,500) apair of premium Yubari melons fetched in the opening auction of the season in Japan, up from ¥120,000 (£780) last year. They are considered a delicacy in the Hokkaido region and the first auction of the year marks the advent of summer. $760,999 How much a 55-second YouTube video of a baby…

A woman was awarded a £3,320 payout after an employment tribunal found her colleagues had harassed her at work by branding her a “slut” over “revealing” pictures she had uploaded to Facebook, in which she wore “a black leather basque and fishnet stockings”, reports Alex Cutler in the Daily Mirror. Claire Wallace, a carer and a mother from Hexham, describes herself as an “alternative model”. St John’s College, one of the University of Cambridge’s 31 constituent colleges, is to offer the UK’s “most generous bursary scheme” for students from low-income backgrounds, giving 40 pupils the equivalent of £51,000 each, says Eleanor Harding in the Daily Mail. By giving students full tuition and living expenses for three years, the college hopes to “rival the lavish financial aid handed out to students…

Pan-Asian life insurer AIA Group considers its sponsorship of Tottenham Hotspur, worth around €46m per season, money well spent, says WirtschaftsWoche. The Premier League is very popular in Asia, where millions of people regularly see the brand on players’ shirts. China looks an especially lucrative market. The health system is patchy and state pensions low. There is ample scope for growth in demand for pension plans and products such as life, health and accident insurance. Baillie Gifford’s Jenny Davis estimates that Asia as a whole has a mortality protection gap (the deficit in household income if the main breadwinner dies) of $83trn.…

Cineworld’s shares, which have already more than tripled from a low of 25p last October, jumped by another 4% early this week, says Naomi Ackerman in the Evening Standard: box-office receipts for the first weekend after cinemas were allowed to reopen in the UK “smashed expectations”. Not only has attendance “soared”, but revenues were increased further by punters “splashing out on popcorn and other treats”. All this raises hopes that the chain can recover from a disastrous 2020, when it suffered an “eye-watering” £1.7bn loss and was forced to seek a £900m bailout from investors. It’s not just the UK powering Cineworld’s recovery, says James Warrington in CityAM. The reopening of 167 cinemas in the US means that 97% of its screens are now active, while restrictions are due to…

Ministers backtracked this week over travel advice for the eight areas worst-hit by the Indian variant of the virus that causes Covid-19, after a change in guidance led to widespread confusion. New guidance appeared on a government website last Friday. But the advice – not to meet indoors and leave the area only for “essential” journeys – wasn’t passed on to local health and council leaders, leading to claims that the government was imposing “local lockdowns by stealth”, says Lucy Fisher in The Daily Telegraph. On Tuesday night, ministers reversed the decision and subsequently updated the guidance to say that local restrictions were not being imposed, and they were merely providing “advice” on “additional precautions”. Bolton is dealing with the biggest “surge” in Covid-19 cases, with 1,296 cases in the…

One of the quirks of American politics is that just under half the states allow voters to recall elected officials between elections. While some states limit a recall to specific cases of misconduct, others allow the public to recall officials for any reason at all. Under California’s relatively liberal law, any petition by a number of voters equal to 12% of the votes cast at the last election can trigger a recall referendum with two questions: whether the incumbent should be recalled, and if recalled, which challenger should replace them. In 2003 this procedure resulted in 55% of voters choosing to replace Governor Gray Davis after the state suffered several blackouts. Davis was therefore replaced with Arnold Schwarzenegger, who topped the poll of potential replacements, with just under half of…

Fifteen university vice-chancellors have “quietly” bumped their salaries back up to pre-pandemic levels after taking pay cuts last year as staff were made redundant, says Joshua Stein in The Times. Alice Gast of Imperial College, where 291 staff were made redundant, took a 20% cut in May, but her base salary was back up to £359,000 by November. She also gets use of a residence worth £110,000 a year and £42,000 in lieu of pension contributions. Stephen Troope of Cambridge University, which made 52 staff redundant, took a temporary pay cut to £322,150 for six months, but his salary was restored to £379,000 in March. At Edinburgh, Peter Mathieson’s £342,000 salary fell to £263,433, but was reinstated in February 2021. Other vice-chancellors who have ditched their pay cuts include those…

“It isn’t... difficult to identify a badly overpriced market,” Jeremy Grantham tells Robert Armstrong in the Financial Times. And right now, Grantham, who co-founded US asset manager GMO in 1977, thinks the US is “at the top of the third great bubble in American history”. Grantham has a reputation for bubble-spotting and is probably best known for avoiding the dotcom bubble and bust in 2000. Staying out of tech stocks wasn’t comfortable at the time, he admits – “we had brutal loss of assets” as clients took their money elsewhere while GMO temporarily underperformed more tech-heavy managers – but “we made money in 2001 and 2002 in a diversified portfolio”. GMO defines a bubble as a market that has moved more than two standard deviations (a measure of how extreme…

newstatesman.com During lockdown, I have learnt a lot from picking up the phone and chatting with my gran, says Anoosh Chakelian. It seems I’m not the only one. People have been speaking on the phone more often in the past year. According to Ofcom, the industry regulator, total call volumes in the UK were 15% – or six billion minutes – higher in 2020 than in 2019, “largely due to changing useage patterns during the Covid-19 pandemic”. On mobiles, minutes increased by 16.4%, and calls to landlines rose by 20.8%.There has been a similar trend in the US. UK businesses, too, have seen a surge in calls from customers – some sectors experienced 80% more calls than usual, says recruitment firm Moneypenny. In times of crisis, people want the reassurance…

■ Star US fund manager Cathie Wood has been struggling over the past few weeks. The funds that make up her company, ARK Investment Management, have taken a hit, with the flagship fund down by 32% from its mid-February peak, as fears of inflation have reinforced a rotation towards value funds. In response she has begun to trim her biggest stakes, says Claire Ballentine on Bloomberg. The number of stocks ARK holds a stake of 10% or more in is the same asthree months ago, but now the fund no longer holds a stake bigger than 20% in any stock, down from three such stakes in February. Its largest holding, Compugen Ltd, has dropped to 17.2% from 21.3% earlier in 2021. The shift makes sense: “how much money you put…

Your home is not actually “a piggy bank made of bricks”, says Claer Barrett in the Financial Times. But booming property prices and low mortgage rates mean “many otherwise sensible people” are acting as though it is. UK Finance, which represents the banking and finance sectors, says that over half of homeowners who refinanced last year “withdrew additional equity from their homes”. No wonder. “Rock-bottom mortgage rates” are back, says Helen Crane on thisismoney.co.uk. TSB has launched a two-year fix at 0.99% for remortgagers with a 40% deposit. It is the first such sub-1% fixed mortgage on the market since 2017. Those taking the 0.99% TSB deal are charged a £1,495 fee, so it can still prove cheaper to take a “higher rate with a lower fee”. Someone remortgaging a…

• From next week, small businesses with up to 250 members of staff will be able to apply for Help to Grow, anew government-backed management training scheme. Ministers say the 12-week plan has the capacity to help 30,000 businesses over the next three years, offering support to business owners and managers trying to develop a more strategic approach to running their organisations. The state covers 90% of the bill for the course, leaving participants to pay £750 each. See smallbusinesscharter.org for more details. • Lloyds Banking Group is facing a backlash after raising charges on its Business Extra and Electronic Business current accounts for business customers. In some cases, the charges will double next month. Lloyds said the fee increases, which will mostly affect small and medium-sized enterprises, had been…

Wandisco (Aim: WAND), which helps firms share data across cloud-computing systems, has seen its share price drop 25% over the last 12 months. Results for the year to 31 December 2020 showed revenue falling to $10.5m, down from $16.2m in 2019, says Sharecast. Operating losses widened from $28.3m to $34.3m. It raised $24.9m in cash from investors in June 2020 and a further $42.5m in March. The firm said that the launch of new products for Amazon’s AWS and Microsoft’s Azure cloud systems would mark the start of a “growth phase” and forecast “at least” $35m in revenues in 2021.…

2020 Bob Short for Kate, Sauvignon Blanc, Glover Family Vineyards, Marlborough, New Zealand £16.99, bancroftwines.com Winemaker Ben Glover’s sister Kate passed away, after a long battle with cancer, in 2018, and this wine is a wonderful homage to her. The “Bob Short for Kate” label is a reference to a TV show she loved, Blackadder, and it is fitting that this is an energetic, organic, expressive, uniquely fascinating and memorable wine. Ben has been making stunning wines since 1998 and is responsible for hundreds and hundreds of labels, but this is, not surprisingly, his most sincere and considered wine. On the surface, it might look to the casual observer like just another New Zealand sauvignon blanc, but no. Made from 88% sauvignon blanc and 12% semillon, and sourced from three…