Indholdsfortegnelse for 1082 i MoneyWeek

“We live in a world where people pay real money for not-real yachts. This is silly” Last week someone paid $650,000 for a pretty ugly imaginary yacht in the metaverse. I don’t propose to explain this much further (you’ll get a better explanation on Google, I suspect) but the key point is that we live in a world where people pay real money for not-real yachts. This is silly. It’s also symptomatic of the extremes you get in aworld in which too much money is chasing too few goods –an inflationary world. Not everything has gone up by quite as much (I think we can safely say that not too many years ago, imaginary yachts were worth $0). But nonetheless, knowing that US consumer price inflation is now 6.8% a…

Australia’s richest person, Gina Rinehart, couldn’t moor her superyacht in a marina on the Queensland coast after a recent trip because there was no room, says news.com.au. The mining magnate, worth $31bn, told local politicians that marinas are “sadly lacking for vessels over 50 metres”, and called on them to rectify the situation. British tourist Graham George Spencer has racked up a $1,200 hospital bill after being attacked by a gang of 20 otters during a visit to the Singapore Botanical Gardens, says The Straits Times. Spencer suffered injuries to his legs, buttocks and finger as the creatures savaged him during a morning walk.…

Three to buy Ashtead Investors’ Chronicle Industrial-equipment rental company Ashtead has raised its full-year guidance following “an excellent start to the year”. In the six months to 31 October revenue was up by 18% year-on-year. Both its US and UK businesses are reporting strong growth. The company has trimmed operating costs and cut back on discretionary spending, which has strengthened its balance sheet and helped finance ten acquisitions to expand its footprint. 5,954p Tharisa Shares Coronavirus-related concerns in South Africa have weighed on platinum and chrome miner Tharisa’s share price, but it “should regain momentum as evidence piles up of its improved cash flow in 2022”. For the 12 months to 30 September the company reported record pre-tax profits of $185.3m, up by 145% year-on-year. Free cash flow grew to…

• A “giant blunder” in online estate agent Purplebricks’ lettings arm has left landlords on the hook for up to £30m, says Ben Marlow in The Daily Telegraph. Estate agents are supposed to notify tenants within 30 days that their deposits have gone into a national protection scheme. But Purplebricks has not been doing so over the past few years, and now the tenant can claim back up to three times the value of the money. This is another blow for Purplebricks, whose 2015 flotation “has been a disastrous exhibition of value destruction”. • Biotechnology giant CSL is an Australian success story, says Jeffrey Goldfarb on Breakingviews. Its haemophilia and other blood-product therapies have delivered “outsized returns” for shareholders. But the purchase of Swiss drugmaker Vifor Pharma for $12.3bn looks…

Fears that a Russian invasion of Ukraine could disrupt energy supplies over the winter have caused European and UK gas prices to hit another record high this week on Tuesday, say Tom Wilson and Neil Hume in the Financial Times. With an estimated 100,000 Russian troops already on Ukraine’s border and Moscow ignoring calls “to de-escalate and pursue a diplomatic solution”, US officials say that Russia “could be planning to invade Ukraine as soon as early next year”. Such a move “would further delay the controversial Nord Stream 2 gas pipeline as well as risk disrupting other supplies”. Even if Russia doesn’t invade, it could be some time before Nord Stream 2 comes online, says Jillian Ambrose in The Guardian. This week, Germany’s new government enraged Moscow by saying that…

• A Madrid court has ordered Spanish bank Santander to pay Andrea Orcel (pictured), now head of Italy’s UniCredit, €68m in compensation for reversing its decision to hire him as CEO in 2018, says the Financial Times. The payment includes €10m for “moral and reputational damages”, €5.8m for two years of salary, a €17m sign-on bonus and €35m for loss of long-term incentives. Orcel had sought €112m. Santander said that it plans to appeal against the ruling. • Pete Redfern is stepping down as CEO of housebuilder Taylor Wimpey after nearly 15 years at the helm, says the Daily Mail. In 2019, he cashed in nearly £4m-worth of shares comprising more than half of his stake, worth around three times his £852,000 annual salary. Redfern also took advantage of the…

When traders buy shares or other assets, they sometimes borrow money to fund the purchase. The aim of doing this is to increase their potential returns. Assume a trader buys £100,000 of shares and borrows £40,000 to do so. The shares go up by £6,000, they sell the lot and repay the loan. They are left with £66,000, a gain of 10% on the total capital they personally invested (£60,000), even though the share price only went up by 6%. Of course, it works the other way as well: a15% drop in the value of the shares would mean that the trader has lost 25% of their capital. The concept of using debt to fund part of an investment is known as gearing or leverage, but the specific practice of…

Activist investor Mantle Ridge wants to overhaul US discount retailer Dollar Tree’s board, says Reuters. Mantle Ridge owns a $1.8bn stake and has nominated 11 people to Dollar Tree’s 11-member board after a prolonged period of underperformance. The activist also said it wanted the company to hire Richard Dreiling, a former CEO and chairman at rival Dollar General, which Dollar Tree has now promised to do as part of a settlement deal with the activist. Dollar Tree called the attack on its board “unwarrantedly aggressive”. Dreiling’s involvement could be a “game-changer”, say analysts. He was behind Dollar General’s turnaround between 2008 and 2015. Sales doubled in that period.…

“I am not good with money. I started over five times from zero because my personal life has sometimes been a mess. Build another home, buy another bed, c’est la vie. I always help my family, my friends. When somebody has no telly, I buy one.” Opera singer Angela Gheorghiu (pictured), quoted in The Times “When our first child wasn’t sleeping, we hired a night nanny. If money can buy you one thing, it can buy you a good night’s sleep.” Comedian Josh Widdicombe, quoted in The Daily Telegraph “You can’t live a Champagne life on a lemonade budget. You need to have the money in the bank.” Andy Barwell, who owed £35,000 before getting help from a debt charity, quoted on the BBC “No, Santa Claus does not exist.…

piie.com/blogs “A third of the world’s assessed fisheries are being pushed beyond their biological limits,” says Cullen Hendrix. A key culprit is “harmful subsidies”. Many governments support the fishing industry by subsidising the cost of fuel and vessel construction or by artificially propping up prices for fish. The total value of these subsidies is estimated at $22.2bn, equivalent to “14% of the total value of marine catches in 2018”. The problem is especially acute in northeast Asia. Such subsidies can promote overfishing far from a country’s shores, such as when “a large flotilla of Chinese vessels fished near Ecuador’s Galapagos Islands” last year. In 2014, “foreign vessels caught twice as many fish” in Somali waters “as did the Somali domestic fleet”. Poorer countries, which can’t match the subsidies extended by…

The pandemic has sparked a boom in will writing. There was a 267% rise in people making online and telephone wills with will writer Farewill last year. Yet 49% of Britons still don’t have a will, says Co-op Legal Services. Asurvey by the Co-op reveals widespread confusion about what happens to assets if a person dies without a will (known as dying “intestate”). This is especially important for cohabiting couples that are not married (or in a civil partnership). Under the rules of intestacy, an unmarried partner gets nothing when you die. Increasingly common “blended families” also complicate planning. Those who die without a will bequeath their relatives a headache, says James Coney in The Sunday Times. Unclear wishes can lead to “acrimony”. Consider other measures to ease the burden…

Did you know that you can take advantage of the auto-enrolment pensions system even if your employer is not statutorily required to put you in its pension scheme? The auto-enrolment scheme requires employers to enrol all their staff in a company pension scheme and to make contributions on their behalf. But there are some exceptions. Staff below the age of 22 don’t have to be enrolled; nor do those being paid less than £10,000 a year. Importantly however, these employees do have a right to request enrolment, and employers are required to say yes. This can be useful to people who are missing out because they’re earning less than £10,000, but may well have a higher income overall as they have more than one job. In which case, pension contributions…

The last four weeks have been good for my long tips, as five of six appreciated. Media group ITV rose from 108p to 109p, homebuilder DR Horton went up from $99 to $108 and construction firm Morgan Sindall increased from 2,370p to 2,410p. Mobile-phone company Airtel Africa climbed from 122p to 126p, while wealth manager Rathbone Brothers advanced from 1,860p to 1,892p. The only disappointment was supermarket J Sainsbury, which dropped from 280p to 271p. My long tips are now making an overall net profit of £4,959. Interestingly, both my short tips moved in my favour. Cinema chain AMC declined from $36.84 to $23.24, while remote-medicine company Teladoc dropped from $105 to $93 as several analysts cut their share-price targets; what’s more, the firm continues to make a loss. Overall…

James Fisher & Sons (LSE: FSJ) provides marine-engineering services to the shipping, oil and gas industries. The share price crashed to a nine-year low in October after it “sounded the alarm on profits”, says the Daily Mail, and has since failed to recover. When the company reported results for the first half of 2021, it said that profits for the full year would shrink to less than £32m, far below the £40.5m it delivered last year. Clients’ projects have been delayed owing to the pandemic, which has left it with holes in its balance sheet. The stock has slumped by 64% over the past year.…

Subscription boxes are the gifts that keep on giving. Each gift-box delivery by The London Sock Exchange features three pairs of exclusively-designed socks. There’s also an option to refill the first box with old socks and return them for free to be recycled. Select express shipping at checkout for speedier delivery. £80 for a 12-month subscription. thelondonsockexchange.net The Cocktail Man’s monthly boxes are curated by award-winning mixologist James Vyse. As well as an exclusive cocktail recipe, each delivery includes three 50ml bottles of super-premium spirits, one 100ml bottle of Sliqueur (The Cocktail Man’s secret signature cocktail base) and a signature garnish to produce five servings of bar-quality cocktails at home. The first box comes with free 48-hour delivery. After that, they’re dispatched on the 15th of every month for a…

In the latest news from Fantasy Land, a non-existent social-media company has chosen a non-tech, non-media executive to head up its non-operational operations. Devin Nunes, aRepublican congressman from California, is leaving Capitol Hill to run Donald Trump’s media company. Trump and a few Wall-Street whizzes have set up a special-purpose acquisition company (Spac) called Digital World Acquisition Corp. (DWAC). The sole aim of DWAC is to buy a media firm, Trump Media & Technology Group, that they also set up. “Trump’s proposed social-media platform, ‘Truth Social’, invites ridicule” Your correspondent admits to some first-hand knowledge of Spacs. One of the firms with which he is associated recently completed a Spac deal. In our experience, and by our cynical reckoning of the way the world works, it is unlikely that most…

Mayfair’s luxury dating agency Gray & Farrar has successfully reclaimed £1.75m in value-added tax (VAT) after a protracted battle with the taxman, says The Times. The firm, which specialises in finding partners for wealthy clients, charges a minimal annual fee of £15,000 plus VAT to allow customers access to a pool of 2,000 members; for £140,000 it will scour the globe for your perfect partner. The dispute hinged on the definition of “consultancy”. Gray & Farrar insisted it was exempt from paying VAT for international clients from 2012 to 2016 (VAT on consultancy services is taxed in the client’s country of origin), while HMRC argued it didn’t provide the requisite “intellectual advice” to be considered a consultancy. But a tribunal concluded this week that the agency provided “a combination of…

The last time US inflation was this high Ronald Reagan was president and Argentina was about to invade the Falkland Islands. US consumer prices rose by an annual 6.8% last month, the fastest pace since March 1982. Petrol prices surged by 58.1% in the year to November. Strip out the effect of volatile food and energy prices and “core” inflation hit 4.9% year-on-year, its highest reading since 1991. Inflation? What inflation? Markets were unperturbed, says Randall Forsyth in Barron’s. The pricing of US treasury inflation-protected bonds implies that inflation will come back down over the next year or two. For now, investors still have confidence in the ability of central bankers to get price rises back under control. The big worry for the US Federal Reserve is that expectations of…

“When Joe Biden organised a summit for democracy last week more than a few foreign policy experts ridiculed him. What’s the point? America and the West are finished... I am not so sure about the narrative of inevitable decline... the American economy continues to show signs of... enduring good health... In 1980 the US economy represented 25% of global GDP. Today, after four decades of supposed decline, it remains at 25%... in 2019 the US accounted for 56% of global stockmarket capitalisation, up from 42% in 2010... Today, eight of the world’s ten largest companies by equity valuation are American, up from three in 2010. And the share of countries that use the dollar as their anchor currency has risen from 30% in 1950 to about 60% today... Immigrants yearn…

Stocks don’t get much more defensive than America’s Procter & Gamble (P&G), says Focus Money. The group’s 65 brands range from Ariel to Oral-B. Products of this kind are always in demand, whether the economy is shrinking or not. Small wonder then, that sales ticked up in the latest quarter; after the last financial year ended on 30 June, the dividend was raised by 10%. It has increased by 65% in the past decade and has been rising for 65 years in arow. The group is already nudging up prices to compensate for inflation. Meanwhile, it is improving its online operations; internet-sales now comprise 14% of the total. The stock currently yields 2.3%.…

Shares in the Brazilian fintech Nubank leapt after it floated in New York last week, making it “the most valuable financial group in Latin America”, say Michael Pooler and Nicholas Megaw in the Financial Times. Worth around $45bn, its market capitalisation has eclipsed that of Brazil’s largest traditional bank, Itaú Unibanco. The São Paulo-based group has amassed “more than 48 million users of its mobile app-based services”, through which it offers savings accounts, business loans, insurance and investment products. Nubank’s strong debut is good news for investors in Latin American fintech, says Bloomberg. This includes Warren Buffett’s Berkshire Hathaway, which took a $500m stake in the company during the summer when it was valued at only $30bn. An even bigger winner is US venture-capitalist group Sequoia Capital, which initially invested…

The growth of populist authoritarianism in recent years meant US president Joe Biden’s plans for a global democracy summit seemed like a good idea when he pitched it on the campaign trail last year, says Mohamed Zeeshan in The Diplomat. But last week’s virtual gathering of representatives from 111 governments – excluding China, Russia and most other autocracies – was ultimately a disappointment. The summit could hardly have been “more dramatically timed”, says Edward Luce in the Financial Times. It coincided with a “formidable Russian military build-up on Ukraine’s eastern border and in the wake of escalating Chinese military activity around the island of Taiwan”. Yet the pitfalls still got more attention. These are allegations of hypocrisy, given US “support for strongmen regimes”; the “self-defeating effect” of talking rather than…

The selection of Valérie Pécresse as the candidate for Les Républicains in France’s presidential election next year has upended the betting markets. With £734,003 matched on Betfair, the chances of Emmanuel Macron (pictured) being re-elected have fallen to 1.68 (59.5%). Pécresse is now in second place at 4.2, while Marine Le Pen is out in third at 11. Eric Zemmour has slipped to fourth place at 13.5, reflecting the fact that he is in fourth place in national polls, with around 12% of the first round vote. If Pécresse gets to the second round, she certainly has a good shot at winning, with polls putting her neck-and-neck in a run-off with Macron. The big question is whether she will be able to get that far, as she will need to…

Bonus season is coming to the City and brokers, bankers and hedge fund managers have begun the annual ritual of boasting and begging, say David Rothnie and Jim Armitage in The Sunday Times. Thanks to market volatility and a record year for corporate takeovers, this year promises to be especially generous and “the levels of excitement are revving higher than a Maserati on Leadenhall Street”. British banks earned $3.6bn in advisory fees on takeovers in 2021, beating the previous record from 2007. Even junior bankers getting “doughnuts” (big fat zeros) will be few and far between, while their bosses can expect 200 to 300 “bags” (£200,000-£300,000). “We’re all knackered… and I need a rest”, says one senior member at a US-owned investment bank. “But we don’t expect any sympathy –…

“You cannot ignore the supply of money when you talk about inflation. The Fed must pay attention to the supply of dollars it is putting into the economy,” Jeremy Siegel, the almost invariably bullish author of Stocks for the Long Run, tells Advisor Perspectives. The pandemic has permanently reduced the supply of workers in many industries in the US; combine that with the “classic monetary, demand-pull inflation” caused by unprecedented central-bank policies and you have a recipe for sustained inflation. “We are going to have a cumulative inflation of 20%- 25%… [over] a period of three to four years.” The US Federal Reserve is “way behind the curve” and will be “forced to accelerate tightening greatly”, says Siegel. “You can’t keep interest rates at zero to 1% when inflation’s going…

■ Exchange-traded funds (ETFs) have enjoyed record inflows of $1trn this year, says Michael Wursthorn in The Wall Street Journal. They exceeded the threshold at the end of November, surpassing last year’s total of $735.7bn. The global ETF asset market is worth $9.5trn, twice its value at the end of 2018. Asset managers Vanguard, BlackRock and State Street control over three-quarters of all US ETF assets. Interest in tracker funds was boosted by “a lack of high-yielding alternatives” and rising stockmarkets; the S&P 500 has gained 25% this year. Over half of the record 380 ETFs launched in the US in 2021 are actively managed, with managers seeking to launch funds in areas “not already dominated by the industry’s juggernauts”. Asset manager VanEck has just launched an ETF following the…

mises.org What stops government-issued fiat currency from being worthless paper? asks Daniel Lacalle. The willingness of the private sector to accept it asa means of payment and a store of value. If a currency is not backed by reserves and has no real demand you get Cuba, where inflation is running at 6,900%. “The value of the currency… is not decided by the government. It is decided by the last private-sector agent who accepts the promise of payment because they assume that it will maintain its value.” A banknote is a promise by the central bank to pay the bearer on demand. If the private sector no longer trusts that promise, then the state is essentially a debt issuer that has lost credibility. If more of these notes are printed…

New research from the investment platform Hargreaves Lansdown reveals that 60,000 people have asked the Department for Work and Pensions to help them trace lost pension savings over the past year. Good for them: the government’s research suggests Britons have lost touch with £20bn worth of savings for retirement. It is not difficult to see how people lose track of so much pensions cash. Each time you start a new job, you’re entitled to join a new workplace pension scheme – for the past ten years, you’ll have been enrolled automatically – so moving jobs several times during your working life will mean you end up with multiple pensions. In addition, many people start their own plans, but then stop contributing because their circumstances change. For example, they get a…

One of my most profitable tips has been coach company National Express. I suggested that you go long last October when shares were in the bargain basement. Shortly afterwards news that the Covid-19 vaccines were effective raised the prospect of an end to major restrictions, sending the stock soaring. By the time I recommended taking profits six months ago, it had nearly doubled in price. Cashing in proved agood call. Concern that Omricon will once again deter people from using public transport has wiped a fifth off the stock since then, making it low enough to be worth revisiting. One of the reasons to be bullish about National Express is that while it is known for the buses and coaches that it runs in the UK, it actually only derives…

The MIGO Opportunities Trust, previously known as Miton Global Opportunities, seeks to exploit mispricings in the investment-trust sector. Trusts’ share prices trade at the balance of supply and demand in the open market. This can differ dramatically from the value of the underlying portfolio. “Vietnam is benefiting as companies diversify supply chains away from China” We seek out investment trusts trading at a discount to the value of their underlying investments – or net asset value, NAV – and offering a catalyst for both a rerating in the share price and an appreciation in the portfolio. This “double whammy” can produce attractive returns, especially when a particular asset class returns from a period of being out of favour. The new China Covid-19 will be with us for a long time,…

Long before he became Disney’s “celebrated supreme leader”, Bob Iger was a humble weatherman, starting his career in 1973 at a cable station in Ithaca, New York, “doing that awkward talking-into-space thing while reciting temperatures”, says The New York Times. Last week, he “went out as he came in” – marking his retirement with an unannounced star-turn in front of the weather map on an early morning KABC newscast in Los Angeles. “There is a light rain falling,” he announced. “However, this is just a prelude to a big storm.” Disney fans, who have largely enjoyed an enchanted period in the Magic Kingdom under Iger’s 15-year watch, will be hoping there’s no significance in that. Iger’s four big deals Iger’s big achievement has been to leave “a much stronger company…

2016 Yalumba, The Signature Cabernet Sauvignon/Shiraz, Barossa, South Australia £33.99, waitrosecellar. com; £36.05, vinvm.co.uk; £36.68, corkingwines. co.uk; £37.99, reduced to £33.99 on a Mix Six, majestic.co.uk; £38.34, dennhoferwines.com; £41, auswinesonline.co.uk; £41, connollyswine.co.uk; £42.50, frazierswine.co.uk; £312 for 12 bottles in bond, farrvintners.com; £156 for 6 bottles in bond, uk.cruworldwine.com If you track back to 18 June, you’ll find my review of 2016 Yalumba The Caley. I described it as the finest young Aussie Cabernet/ Shiraz I have ever tasted, and I awarded it a perfect 20/20 score. By all accounts, this wine is relatively rare right now, given that only several hundred cases were made, and even though it was priced at the £200+ mark, sales have been brisk. While this was only the fifth release of The Caley, its little…

$2.9m What Napoleon Bonaparte’s dress sword, along with five of his pistols, sold for through the Rock Island Auction Company in Illinois, USA. Napoleon wore the sword during the coup in 1799 that brought him to power. €150m How much the Dutch government has set aside to buy The Standard Bearer, a 1636 self-portrait by the Dutch painter Rembrandt van Rijn, for the Rijksmuseum in Amsterdam. The museum will contribute a further €10m and the Rembrandt Association will add €15m. £2,400 The selling price for a scribbled self-portrait by David Bowie, drawn by the late singer in the early 1990s for the charity Save The Children, at auction with Parker Fine Art Auctions, in Surrey. Another doodle by former England cricketer David Gower fetched just £25. £7,347 The average yearly…

A mountain climber in Chamonix has been rewarded with precious stones worth €150,000 – the value of half of a box of emeralds, sapphires and rubies he found in a Mont Blanc snow drift in 2013 and handed in to the police, says CNN. The collection is thought to be linked to the crash of an Air India flight in 1966. As there were no claimants, the jewellery has now been split between Chamonix’s local government and the climber. TikTok star Kat Norton (pictured) has “made spreadsheets sexy”, says The Times. The former business consultant gives basic Microsoft Excel lessons while dancing or lip-syncing to rap songs asadvice appears on the screen. She first posted a video last June; now she earns $250,000-$300,000 a month by building Excel training courses…

“It’s not just the caffeine that’s making the market jittery,” says Katherine Dunn for Fortune.com. Coffee prices have hit aten-year high, with futures for the higher-quality Arabica bean trading at $2.50 a pound. Lower-quality Robusta beans (used in instant coffee) are also close to a ten-year high. Coffee has posted the biggest price rise of any commodity tracked by the Wall Street Journal in 2021: 84.6%. The main culprit appears to be global shipping shortages; unsure of how reliable the coffee supply is, wholesale buyers have panic-bought everything they could get their hands on. Things may cool down after Christmas, but the “wild card” is the weather in key exporter Brazil. It has recently suffered bad harvests owing to both drought and frost.…

There has not been an initial public offering (IPO) of a big US oil company since 2018. But that could change next year, says David French on Reuters. Private-equity firms Pearl Energy Investment and NGP, which own shale-oil producer Colgate Energy Partners III, are reportedly mulling a listing at a valuation of around $4bn next summer. Colgate has 108,000 acres in the Permian basin, the area of Texas and New Mexico deemed “the heart of the US shale industry”. The Permian’s output is set to reach a record high next month. Oil IPOs have fallen out of favour in recent years owing to the sector’s poor environmental image, but oil prices’ jump to a seven-year high has prompted a rethink.…

Investors in “energy behemoth” SSE have struck back after hedge fund Elliott Management tried to force a break-up of the firm, say Sabah Meddings and Jamie Nimmo in The Sunday Times. Last week the hedge fund called for a reorganisation of the board as well as the sale “of a larger stake in SSE’s electricity networks business and the partial listing or sale of a stake in its renewables business”. However, other large SSE investors disagree with Elliot’s plan. UK boards tend to “capitulate quickly” in the face of such “aggressive attacks” from activist investors, says Ben Marlow in The Daily Telegraph. But SSE has come out fighting, with its CEO Alistair Phillips-Davies issuing a “comprehensive rebuttal” of Elliott’s demands. He says a “standalone renewables arm would suffer devastatingly higher…

Hardly a week seems to go by without a fresh activist assault on a major British company. Last week, it was the turn of the energy giant SSE. Elliott Management, one of the most aggressive activist investors, attacked the company for not spinning off its renewables business, preferring instead to keep itself intact and beefing up its plans for switching out of fossil fuels. Elliott, of course, is best known in the UK market for its long-running campaign against the pharmaceuticals giant GSK, which has had to scramble to defend chief executive Emma Walmsley in response to the pressure. Meanwhile, Shell is under attack from the hedge fund manager Daniel Loeb, who is campaigning for it to split out its renewables unit from fossil fuels. And Barclays has managed to…

Count me among those who are sceptical about how quickly central banks will raise interest rates. Yes, they’re making noises about doing so – and with inflation high, many analysts suggest they should act faster (see right). But our highly indebted world can’t take high rates and policymakers know that. So while rates should begin creeping off the floor next year, the pace of increases is likely to be slow and they will take advantage of every reason – a new variant here, a wobble in the markets there – to hold back. In contrast to the negligence central bankers displayed in the 2000s, when their foot-dragging created the housing bubble and the global financial crisis, that may even be for the best. The economy is so troubled that a…

America’s S&P 500 index is widely held to be in a bubble, or at least very expensive. But when it comes to medium-sized and small companies, it’s a different story. The forward price/earnings (p/e) ratio of the S&P 400 MidCap index is just 16.9 and that of the S&P 600 SmallCap index a mere 15.8, both in line with their 20-year averages. Given the historic record of small-cap outperformance over large caps, this makes US small and mid caps compelling value. Catching up with a rival The better-performing of the two investment trusts specialising in this area has historically been the JPMorgan US Smaller Companies (LSE: JUSC) with a five-year investment return of 86% and £300m of net assets. But its rival, the Brown Advisory US Smaller Companies (LSE: BASC)…

Xi cracks down on his central bank Lingling Wei The Wall Street Journal The People’s Bank of China (PBoC) has never been politically independent, says Lingling Wei. Top-level state approval is needed before making big decisions – on interest rates, for example. Nevertheless, it has enjoyed a “special status” and has worked “for years to establish credibility among investors, at home and abroad”. Now, as Chinese president Xi Jinping tries “to curb capitalist forces” and his “discipline inspectors” seek to ascertain whether regulators such as the PBoC have been “negligent” in fending off risks posed by private companies such as Ant and Evergrande, that work risks being undone. Of the 25-odd key financial institutions now being targeted by Xi, the PBoC is “arguably the most consequential”. As Eswar Prasad, an…

lawliberty.org Everyone is talking about buckling supply chains, says Michael Rentz. But few of us see much of this vast global network, save for the “last mile” Amazon delivery drivers at the end. Every week boats as big as the Empire State Building show up at multiple ports, importing almost unfathomable quantities of goods. “A container, on average, ‘changes hands’ 20 times during its entire journey” from Asian factories to Western consumers as it passes through ports, customs, railways and warehouses. Covid-19 has caused an unprecedented spike in demand for goods. The supply chain has limited capacity to keep up: space on ocean vessels is tight and there was already a shortage of road-haulage drivers pre-pandemic; even containers and the chassis they travel on have been running short. Worse, parts…

• New rules allowing pension providers and scheme trustees to veto suspect transfers came into effect on 30 November. The rules are designed to combat scams that have seen thousands of savers encouraged to give up guaranteed pension-scheme benefits in favour of less attractive schemes elsewhere, simply so that the adviser can secure a commission. In some cases, such transfers have proved to be outright frauds. Under the new rules, where pension-scheme providers have serious concerns about a member’s transfer request, they will be legally entitled to refuse to carry it out. • Tax relief on private-pension contributions cost the Treasury a record £42.7bn in the 2020-2021 tax year, new data reveals. While income-tax receipts on pensions in payments raised almost £20bn, the net cost of private pensions to the…

Insider trading, buying and selling shares based on information not generally available to the public, is illegal. Company executives may need to sell shares for legitimate reasons, however, such as raising cash or diversifying their portfolio. Most jurisdictions thus allow directors to buy and sell stocks under closely monitored conditions. Such sales are published by the authorities (you can find the information on many of the major share-trading websites). Many traders believe that such “insider” transactions provide a good indication of what corporate insiders really think about their company. After all, if the CEO is dumping their shareholding, then they clearly don’t think that their shares are worth holding onto. On the other hand, if they are willing to put their own money into a company, it is likely to…

Vertu Motors (Aim: VTU) is a car retailer. It has benefited from the rise in demand for new and used vehicles caused by shortages in the market, which was in turn a result of global supply-chain constraints. Vertu reported record results for the six months to the end of August, with year-on-year sales jumping from £1.6bn to £1.9bn. The company has continued to make successful acquisitions and has also completed a share-buyback programme. Dividend payments, suspended in the depths of the pandemic, have resumed. The shares have risen by 147% over the last 12 months.…

Bertram Earl Jones (known as Earl) was born in Montreal in 1942. In 1963 he began working at Montreal Trust, in various departments including investment management, estate planning and the mortgage department. In 1979 he set up his own (unregistered) financial advice business, giving free financial seminars to local people in order to identify potential investors. He also targeted the trustees of estates that were being liquidated, offering them interest rates that appeared to be much better than they could get from a bank if they temporarily deposited funds with him. What was the scam? Little or none of the money was actually invested. For at least 20 years, Jones ran a Ponzi scam: the original investors were repaid from the money that came in from those clients who joined…

• In 1798, economist Thomas Malthus wrote in his hugely influential An Essay On The Principle Of Population that population growth would hinder human progress and lead to famine and want, says Tom Utley in the Daily Mail. “Since then, legions of others have piled on to the Malthusian bandwagon – including, I’m sorry to say, several members of the Royal Family.” For they are “plain wrong”, and SpaceX founder Elon Musk (pictured) is right. Civilisation is threatened not by people having too many children but too few. Who will look after us in old age? Who will drive the lorries? There are far more people alive today than in Malthus’s day. But “thanks to the miracle of modern capitalism, most of them are better fed and lead more comfortable…