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“With central banks and government stressed, this is no time for financial passivity” We’ve been worrying about a sharp rise in inflation for years – now, we finally have something to worry about.UK inflation (using the consumer price index) is now 5.4%, higher than most economists expected (it always is these days) and the highest for nearly 30 years. The retail prices index (RPI) – once the UK’s main measure – is 7.5%. This is nasty news. Living costs are rising fast (see page 10). The purchasing power of your savings (on which you will be getting less than 1% in interest) is falling fast. And thanks to the fear that rates will soon rise a percentage point or two, large parts of the stockmarket are falling. There is a…

A Thai hotel guest named Khing who posted a mildly critical review of her stay online is being threatened with a lawsuit by the hotel, says The Times. The Ozone Hotel near the Khao Yai national park has demanded 3m baht (£66,600) in damages plus 50,000 baht per day in compensation for every day the review (now removed) remained on the Agoda website. Thailand’s strict defamation laws are often used by businesses to quash complaints. Jailed pharmaceutical executive Martin Shkreli (pictured) has been ordered to repay $64.6m of profits made by hiking the price of an anti-parasitic medicine by 4,000% in 2015, says Associated Press. Shkreli, who is serving a seven-year prison sentence for securities fraud, has continued to control Turing Pharmaceuticals (now Vyera) from behind bars, said the judge,…

Institutional investors are increasingly turning to private markets as an alternative to richly priced stocks and government bonds with negative real yields, says Katie Martin in the Financial Times. That means buying assets such as debt, equity, infrastructure and property that is not listed on public markets such as the London Stock Exchange. Today, even so-called high-yield bonds yield just 2%-3% in Europe, says Philippe Lespinard of Union Bancaire Privée. By contrast, you can lend directly to real-estate developers for a housing project at 6%-8%. The borrowers are “good quality and you are earning two to three times what you would be earning” from corporate bonds. “Private assets were once so obscure they were called ‘alternatives’,” says The Economist. Not anymore. “Private-capital firms manage a record $10trn of assets, the…

British stocks are historically cheap, says Simon Nixon in The Times. After six years of lagging global peers, UK shares trade on just 14 times expected 2022 earnings, versus 16 in the eurozone and 21 in the US. “On a price to book value basis, they trade at a record discount to the MSCI World index”. The makeup of the UK stockmarket partly explains the gap – London has a disproportionate share of lowly-rated financial and commodity stocks, and few of the tech businesses that attract high valuations. But as this chart from Simon French of Panmure Gordon shows, the start of the discount coincides with the June 2016 Brexit referendum (the dotted line) and has grown steadily wider since, suggesting that the decision to leave the EU has also…

Six to buy BHP The Daily Telegraph Miner BHP plans to focus on growing demand for the raw materials that will be used in the electrification of the economy. It’s selling its oil assets and will concentrate on producing iron ore, needed to make steel for renewable energy assets, and copper and nickel, which are essential for electric vehicles. The company is in a strong financial position (net debt fell from £8.8bn to £3bn during the 2021 financial year), yet offers an attractive yield of 9.3%. “Now is the right time to buy… on a long-term view.” 2,379p. DWF The Sunday Times DWF is the only law firm listed on London’s main market. Last week “it finally returned to the price it listed at in 2019”. The stock had underperformed…

• Many investors thought that António Horta-Osório (pictured) would survive as Credit Suisse chairman with just an apology or fine for his two high-profile breaches of Covid-19 rules, says Rochelle Toplensky in The Wall Street Journal. His departure this week could mean “the board wants to demonstrate that rule breaking won’t be tolerated”. But a more worrying interpretation could be that insiders took “an opportunity to get rid of someone who was making life uncomfortable” at an institution that needs a shake-up. New chairman Axel Lehmann – who Horta-Osório brought onto the board – “needs to show early turnaround progress” to calm those concerns. • Online fashion retailer ASOS is finally going to “stop hanging around with the small fry on [Aim] and get a premium listing on London’s main…

Now that its hand has been revealed, there is no question that Unilever will do its best to acquire the consumer division of GlaxoSmithKline as it completes its demerger (see page 5). Its £50bn offer may rise to £60bn, £70bn, or more. But the institutional investors that will make the decision should still say no. Sure, it is a lot of money to turn down. Shareholders may well be tempted to discreetly get in touch with GSK chief executive Emma Walmsley to quietly point out that they wouldn’t mind 50 or 60 billion in cash, all things considered, especially given that the shares have drifted for years and no one has made much money from their investment. But the deal is not in their interests or anyone else’s. A woke…

Markets have been rather unsettled as we enter 2022. There are all sorts of “big-picture” reasons to be rattled, from rising inflation to rising interest rates to rising geopolitical risks (see page 22). So what better time to turn to that question which has vexed investors through the ages: when should you sell a stock? Conveniently enough, highly respected credit investor Howard Marks of Oaktree Capital has just put out a new memo discussing the role of selling in the investment process. He concludes: “there are two main reasons why people sell investments: because they’re up and because they’re down”. “It’s a mistake to sell just because a price goes up or down” Those are both bad ideas, says Marks. If you sell purely because “no one ever went broke…

The rise of the bossy state Editorial The Economist Governments everywhere, emboldened by pandemic policy “experiments” and voter concerns over huge issues such as inequality and climate change, are becoming increasingly “bossy”, says The Economist. US president Joe Biden is pursuing “soft protectionism”; China has its “common prosperity” crackdown and the EU is embracing “strategic autonomy”. “This opening of the interventionist mind”, often on the grounds of security and self-sufficiency (think energy and tech; vaccines and minerals in the future), “is coalescing around policies that fall short of ownership”, tightening rules on incoming foreign investment, for instance, and imposing wider obligations on businesses. The motivation may be admirable, but dangers “loom”. There is a risk that state and business, facing conflicting aims, will “fail to find the best trade-offs” (eg,…

issuesinsights.com It has long been known that people leave countries known for “authoritarian tyranny, stagnation, stultification, crime and excessive regulation” to find the opposite: “economic freedom, dynamism, social diversity and good government”, say the editors at Issues & Insights. It happens within countries too. It is in fact “one of the most significant trends in America today”. More than a million Americans have upped sticks, moving largely from Democratic states to Republican ones, expressing dissatisfaction with “high taxes, rampant crime, lockdowns, vaccine mandates, excessive regulation, a stifling ‘woke’ culture and lack of economic opportunity and freedom”. Census data from 2010 to 2019 show that the top ten mostly Democratic states lost 845,000 citizens while the top ten mostly Republican states gained just over a million. That should make the most…

Confronted with an investment trust yielding 8.7% and trading at a 26% discount to net asset value (NAV), most experienced investors would assume that there was something wrong with it. Was the dividend about to be cut? Were the assets wrongly valued? Were the shares highly illiquid? Or maybe all three? On being told that the investment return of the trust in question, which had unleveraged assets (ie, no borrowings) of £350m, was up 41% over one year, 89% over three years and 102% over five years, the same investor might mutter something about it being “too good to be true”. Lending to early-stage firms Yet VPC Specialty Lending Investments (LSE: VSL), run by Victory Park Capital, looks like a genuine anomaly. If there was a problem, the four brokers…

A regular and surreal night-time discussion with friends at my expensive single-sex boarding school was what we would do after the four-minute warning went off. This was the public alert system, which from 1953-1992 would warn of an imminent nuclear strike by the USSR. Rather than seeking shelter, it was agreed the best course of action was to race down to the nearby girls’ high school. Given it was at least a three-minute sprint and willing partners were probably hiding away or in a shelter, the naivety of our tactical plan is obvious now. Yet even during the MAD era (mutually assured destruction, in a nuclear conflict), warfare was still conventional and consisted of throwing vast amounts of ordnance at the enemy from the land, sea and air, then putting…

With just over a week left until the end of January, many of us are thinking about our tax returns. But this year you have a bit more time to sort out your taxes because HMRC has extended the deadline. In normal years you have until 31 January to file your tax return, but this year the taxman has pushed the date back to 28 February. However, that doesn’t mean you should wait. Not filing until February could still cost you money. The new deadline “HMRC has extended the deadline to 28 February, but try not to wait” In recent weeks, HMRC has come under increasing pressure to extend the deadline for submitting 2020-2021 tax returns, because the Covid-19 pandemic has left many people struggling to complete their accounts. Accountancy…

Next Fifteen Communications (AIM: NFC) is a data-consultancy and marketing group, working with clients such as Microsoft, Amazon and Google. The share price has risen 76% over the last 12 months, thanks to rapid growth. Like-for-like sales were up by almost a quarter year-on-year in the six months to July 2021, and house broker Numis reckons that rate will continue over the full year. Clients are starting to spend again after the pandemic and that, combined with the strong US dollar, has led management to increase earnings expectations for the fourth time in this financial year, says The Times.…

Ronald Wayne was born in Cleveland, Ohio, in 1934, and went on to train as a technical draftsman at New York’s School of Industrial Arts. He then headed west to California, arriving in 1956, and founded a slot-machine company. This was a limited liability company, but he felt so guilty about losing investors’ money when it didn’t work out that he eventually repaid them out of his later earnings. He took a job at Atari, where he met a young computer programmer called Steve Jobs. What was the investment? Jobs, having been dissuaded by Wayne from setting up a slot-machine company, included Wayne asa partner in his new venture, a company called Apple Computers, set up with Steve Wozniak in 1976. Despite drawing up the papers for the company and…

How Civil Wars Start And How to Stop Them Barbara Walter Viking, £18.99 It’s been one year since the “rampage at the Capitol”, when a mob stormed the Capitol building in Washington DC intent on keeping a defeated Donald Trump as president, and already chatter about a 21st-century American civil war “has seeped from the fringes into the mainstream”, says Jennifer Szalai in The New York Times. In How Civil Wars Start, academic Barbara Walter looks at how civil wars have started in a number of places around the world, including the former Yugoslavia, the Philippines and Iraq. She argues that the American belief that “political collapse is something that happens elsewhere” may be complacent given that the US is now brimming with the “risk factors” associated with conflict. The…

When people hear that you live for part of the year in a chateau, they get the idea that you must be rich. But chateaux in France are a dime a dozen – and everybody here sees them not as a sign that you are rich, but that you are stupid. They are expensive to maintain, impractical and uncomfortable. They drain your savings fast and your own energy as you struggle to keep up with the repairs. But we’re hanging on to ours. It seems as good a place as any to ride out a storm. “When prices are falling, cash goes into hiding” What storm will batter us next? How about a stockmarket crash followed by another multi-trillion-dollar rescue programme? The likelihood is hard to gauge. But it is…

$1bn How much Google says it is spending to buy London property development Central Saint Giles, near Oxford Street. The deal will give the search giant 50% more space in the capital, where it expects to raise its headcount from 6,400 to 10,000. €100 The monthly fine levied on Greeks aged over 60 who refuse to be vaccinated against Covid-19 by the government in Athens, from last Sunday. The funds will be handed to hospitals. The province of Quebec, Canada, has said it will also introduce a fine. 1m The total prize money in Saudi riyals (£195,000) for the top five participants in the first women’s camel beauty pageant, according to Agence France-Presse. Previously, only men were allowed to enter the event, which forms part of the prestigious King Abdulaziz…

A group of science-fiction fans who paid €2.66m for the artwork from an unmade Dune film are about to discover the iron law of copyright, says Kotaku. “Buying the book does not give you the rights to what’s in the book.” The SpiceDAO project raised $12m by selling tokens that give shared ownership of a book of concept art from director Alejandro Jodorowsky’s failed attempt to make a version of Dune in the 1970s. There are at least ten copies of this book, one of which sold three years ago for $42,500 – but the copy that SpiceDAO acquired via auction in November fetched 70 times as much, for reasons that remain unclear. The group then said that it will make the book public and use the rest of the…

Electric vehicles (EVs) “are careering towards a giant pothole”, says Jon Yeomans in The Sunday Times. “There isn’t nearly enough metal around to put in all the batteries we need.” Prices are soaring as carmakers engage in a worldwide race to secure supplies of lithium, nickel, cobalt and graphite. “One noted mining investor predicts the coming boom will dwarf the supercycle in commodities unleashed by China’s rapid growth 20 years ago.” Commodities sit “at the crossroads” of some of today’s key investment themes, says Reshma Kapadia in Barron’s. Digital and green trends will require masses of copper wiring, lithium is needed for batteries and aluminium is required “to build solar panels and wind turbines”. Most commodities spent the 2010s in a bear market, but last year the Bloomberg Commodity index…

Last week MI5 took the unusual step of warning that a Chinese agent had “infiltrated Parliament to interfere in UK politics”, says Gordon Corera on BBC News. The security service alleges that Christine Ching Kui Lee had helped China to establish “extensive” links with “current and aspiring MPs” from “across the UK political spectrum”. This included donating money to Labour MP Barry Gardiner (pictured), Lib Dem MP (now leader) Ed Davey, as well as the Conservative Party, though there is no suggestion that any British politician acted improperly. MI5 increasingly sees Chinese attempts to gain influence as a greater threat than those of Russia. China and Ms Lee have denied wrongdoing, says The Sunday Times. But the scandal may in fact be only “the tip of the iceberg”. Chinese infiltration…

Cameco is the biggest supplier of uranium outside Kazakhstan. The firm is an “industry leader”, says Philip MacKellar in The Globe and Mail, but for many years, the “post-Fukushima chill” and legal issues, including a dispute with the tax authorities, meant “few investors wanted to touch the company”. However, the tax issues are over, the balance sheet is strong (net cash of C$170m [£100m], from net debt of C$132m in 2019) and uranium prices are rising. Four of Cameco’s five mines in North America are idled as it waits for further price gains – in which case, production could be increased and profits would improve. The shares have almost tripled since 2019, but “there may still be significant upside left”.…

Whistleblowers in the US are often put off from holding “well-resourced” corporations to account by the prohibitive costs of navigating the US justice system, lawyer Kyle Roche tells Maxwell Strachan on Motherboard. Ryval, a tech start-up co-founded by Roche, is taking advantage of a change in the law under former president Barack Obama that allows private companies to raise up to $5m from ordinary Americans, to change that. The way it works is a “little like a cryptoinfused and lawsuit-focused GoFundMe” (a crowd-funding platform), says Strachan. Investors will be able to buy and sell digital tokens on the Avalanche blockchain (a digital ledger) that represent individual legal claims vetted by Ryval. Meanwhile, the claimants receive the funds to pursue their cases. The tokens will then rise and fall in value…

• A judge in Madrid has reduced the amount of compensation that investment banker Andrea Orcel (pictured) will receive from Santander by €16.4m, to €51.4m, says the Financial Times. Orcel will be paid €18.6m of the total amount in Santander shares over a period of seven years. The Spanish bank had originally been ordered last month to pay €68m in cash for attempting to hire Orcel as CEO, when he was running the investment banking division at UBS, only to later withdraw the offer. Orcel is currently CEO at Italian lender UniCredit. • WHSmith was facing a major shareholder revolt this week over a £550,000 bonus for the high-street retailer’s boss, Carl Cowling, says Sky News. Proxy advisors Glass Lewis, the Institutional Shareholder Services and the Investment Association warned against…

The simplest way to measure the value of a company is to use its stockmarket capitalisation – the value of all its outstanding shares. However, this may not always provide a useful reflection of all the claims that different groups of investors have on a business. For example, a company may be heavily funded with debt rather than equity. Conversely, it may have a lot of unused cash on its balance sheet offsetting some of that debt. It might also have preferred stock in issue (securities that rank above ordinary shares, but below debt), or some of its subsidiaries may be partly owned by other investors (known as minority interests). These last two factors are usually less significant compared with debt and cash, but could be important in some situations.…

“One year I got into trouble with tax, like most actors, because it’s so hard to pay a year later… [Collectors] came to my… flat. That taught me a horrible lesson. I wrote a cheque then and there and it was all right. Ever since I repeat to myself: ‘At least a third of your money is not yours.’” Actor Eileen Atkins (pictured), quoted in The Daily Telegraph “After leaving school at 16 I worked the markets in east London… for eight quid a day. One day I saw a woman making off with a load of coats from our stall, so I rugby-tackled her and my boss Harold put up my wages to a tenner.” Writer Kimberley Chambers, quoted in The Times “All successful women know this: you pay…

bloomberg.com/opinion The past 60 years or so was “the age of the charismatic capitalist”, says Adrian Wooldridge. The “paragon of the species” was Apple founder Steve Jobs. Jack Welch of General Electric was a demigod. Michael Milken was “revered for spinning junk bonds into gold”. Jack Ma of Alibaba entertained the troops by impersonating Michael Jackson. These charismatic figures burst onto a business scene that had “degenerated into grey bureaucracy”. That’s what we risk heading back to now that the likes of Elizabeth Holmes of Theranos and Adam Neumann of WeWork have tainted the brand. But the charismatics will not disappear from the scene. Elon Musk is routinely forgiven his “bizarre behaviour” because he is “spectacularly successful”. And business needs its Elon Musks. “In eras of disruption, leadership is more…

A battle between UK housebuilder Countryside Properties and US hedge fund Browning West has ended with the departure of chief executive Ian McPherson, says The Evening Standard. Browning West, which has a 10% stake in Countryside, will gain a representative on the board; in return it has committed to end its long-running public activist campaign. The fund has successfully pressured Countryside to pivot away from private sales and towards low-cost social housing. The builder’s trading update last week showed weak results for the last quarter, despite the booming property market. Sales fell from £363m in the same period a year ago to £250m, while adjusted operating profit dropped from £36.6m to £16.5m. The shares fell by more than 20%.…

Listed defence companies are cheap in part because of the trend towards better environmental, social and governance (ESG) standards. While these are largely to be encouraged, the industry is going through a rather prissy, virtue-signalling phase classifying defence companies – conventional or cyber – in the same socially harmful box as tobacco and slavery. This seems a little short sighted. Hence in the UK and Europe there are no defence funds and only a handful of cybersecurity ETFs, of which the largest is the L&G Cyber Security UCITS ETF (LSE: ISPY) – I bet the marketing department was pleased with that ticker symbol. But this fund doesn’t really cut the mustard in terms of holdings in cybersecurity. In performance, it mirrors America’s Nasdaq (tech) index, which I think will be…

■ “Banks have warned of an alarming spike in ‘loan fee fraud’ – just as Britons struggle with surging gas, fuel and food bills,” says Harry Brennan in The Daily Telegraph. This scam targets people who are looking at loan rates online. You list your details on a comparison site to find the best interest rate for a loan. Then you receive a cold call telling you that you are eligible for a cheap deal. “Criminal gangs posing as lenders ask victims to pay some upfront set-up fees… but no loan is ever granted.” Victims lose £300 on average, but losses have been as much as £3,500. The increasing cost of living means consumer borrowing has reached its highest level since before the pandemic. The number of cons reported almost…

New data from the Office for National Statistics (ONS) suggests that average life expectancies in the UK are now declining – raising the question of whether the government should delay upcoming increases to the state retirement age. The current plan is for the state pension age to move to 67 between 2026 and 2028, and then to 68 between 2044 and 2046, although the second change could come seven years earlier if a review scheduled for next year concludes this is justified. However, these increases were planned for on the basis that life expectancies in the UK would continue to increase – and that people would therefore be claiming pensions for longer. In fact, the opposite may be happening. The 2020 statistics just published by the ONS show that men…

UK toilet roll and tissue supplier Accrol Group (AIM: ACRL) is struggling with rising energy costs, inflationary pressures on paper-pulp prices and supply-chain costs, says Shares. Its shares slumped almost 19% last week after a second profit warning in four months. Sales are now expected to grow 17% in the year to April 2022, down from a previous forecast of 25%. Management believes the firm can pass on rising costs to customers, but the time lag in doing so will hurt next year’s profits. Accrol made an operating loss of £0.6m last year and the shares are down more than 70% over the past 12 months.…

YouTube star Jimmy Donaldson, known to his followers as Mr Beast, was the video platform’s highest-grossing star in 2021, making an estimated $54m, says BBC News. Donaldson’s videos – known for elaborate stunts, pranks and cash prizes – have been viewed more than 10 billion times, helped by people spending more time online in the pandemic. An anonymous detectorist in Devon stumbled on a rare gold coin worth at least £400,000 during his first detecting trip in a decade, says The Telegraph. The Henry III coin, minted in 1257, is one of eight known examples of England’s first gold coinage. The man was entitled to keep the coin because it was not part of a larger find and has put it up for auction on 23 January.…

“Fund manager Cathie Wood became a superstar in 2020, after her ARK exchange-traded funds [ETFs] earned some of the highest returns in history. So far this year, ARK Innovation… is down more than 15%… [That] is a counterblast to the belief that ETFs are superior in every way to mutual funds… ETFs… are, on average, much cheaper and more tax-efficient than mutual funds… [but they] have one critical flaw... They can get too big too fast… Unlike mutual funds… ETFs generally don’t close to new investors. The ability to issue shares continuously is what keeps the price of an ETF trading in line with the value of its holdings… success carries the seeds of its own destruction. It’s a lot easier to rack up giant gains with a small fund…

Home secretary Priti Patel’s planned crackdown on protests was “in disarray” this week after the House of Lords rejected half a dozen government amendments to the Police, Crime, Sentencing and Courts (PCSC) Bill, says Oliver Wright in The Times. The Bill would have criminalised those who lock themselves to “street furniture” and made it a criminal offence to obstruct major transport works or national infrastructure. Because the measures were introduced after the Bill had passed through the Commons, they cannot be sent back to MPs; new legislation would have to be introduced if they “wanted to proceed”. This Bill is only part of a “deluge of legislation” this government has been working on in the pandemic, designed to expand police powers, increase “government influence over the courts” and undermine human…

Punters continue to move away from Boris Johnson (see page 8) after the latest blows, including the defection of Tory MP Christian Wakeford (pictured) to Labour, aswell as further calls for him to resign, including from former Brexit secretary David Davis. Indeed, with £487,283 matched, the odds on him departing in 2022 have tightened to 1.43 (69.9%). At the same time, the odds on him making it to the Tory party conference, currently planned for October, have drifted out to 2.82 (35.4%). Indeed, things have become so tough for the PM that both Betfair and Smarkets are now running markets on whether he will resign by the end of January. In both cases a resignation statement would be sufficient to settle the market in favour of Yes, even if he…

South Korean battery-maker LG Energy Solution (LGES) has raised 12.8trn won (£7.9bn) in its initial public offering (IPO), becoming the country’s largest IPO to date, says Reuters. The deal values LGES at 70.2trn won, making it Korea’s third-most valuable company after Samsung Electronics and SK Hynix. Parent firm LG Chem will retain a stake of 81.8%. LGES, which supplies batteries to carmakers such as General Motors, Tesla and Volkswagen, should profit from soaring electric-vehicle sales, which are forecast to reach 31.1 million per year by 2030. South Korea saw more than 20 main-market IPOs last year, raising 17trn won – twice the prior record of 8trn won in 2010.…

Hollywood blockbuster Spider-Man: No Way Home helped revenue at Cineworld, the troubled cinema chain, hit almost 90% of pre-pandemic levels in December, says Mark Sweney in The Guardian. Coming after the successful new James Bond movie No Time to Die in October, it was enough to make the struggling company cash-flow positive in the last quarter of the year, according to a trading update last week. The shares rose almost 4% in response. Investors hope that “Cineworld’s recovery will accelerate this year”, says Roland Head for The Motley Fool. Analysts now think that the group could generate around $420m of surplus cash in 2022, allowing it to start repaying some of the $8.4bn net debt it carries. The shares are now trading at “just 4.2 times projected 2023 earnings”, meaning…

A group of the 20 best-performing hedge funds of all time made a record-high combined net return of $65.4bn in 2021, up from $63.5bn in 2020 and $59.3bn in 2019, says Reuters. Together, they earned around a third of the $176bn total made by all hedge funds last year, each returning 10.5% on average, according to LCH Investments, a fund of funds firm. Chris Hohn, the British manager of The Children’s Investment (TCI) fund, topped the list with a $9.5bn gain, followed by Ken Griffin’s Citadel, which made $8.2bn for investors. Ray Dalio’s Bridgewater, the world’s biggest hedge fund, returned $5.7bn after making a loss in 2020, while Daniel Loeb’s Third Point broke into the top 20 with a $3.3bn gain. Chase Coleman’s Tiger Global, which made $10.4bn in 2020…

“In investment, as in life, you cannot have your cake and eat it. So it is difficult, if not impossible, to find companies that are resilient in a downturn, but which also benefit fully from the subsequent recovery,” says Fundsmith’s CEO Terry Smith in his latest letter to investors. Smith’s strategy has always been simple: “buy good companies, don’t overpay, and do nothing”. The Fundsmith Equity Fund underperformed slightly relative to its benchmark, the MSCI World index, during 2021 – the fund rose by 22.1% compared with 22.9% for the index, although it still outgrew the FTSE 100. Smith attributes this slight miss to sticking to a strategy of investing in high-quality firms for the long term, rather than those with strong “recovery potential” but poor fundamentals. On the big…

unherd.com/thepost The Bank of England has been considering launching a digital currency, colloquially known as “Britcoin”, says Philip Pilkington. But it’s hard to see what the point would be. The idea behind decentralised digital currencies was that they would circumvent central banks. So what on earth is the point of one that is issued by a central bank? The House of Lords did the British people a favour by pointing out some of the flaws in the idea; namely, that it would facilitate state surveillance of people’s spending choices and lead to an increase in central bank power and giving “overzealous technocrats” the ability to “snoop and pry in ways most of us would not be comfortable with”. That’s probably a feature not a bug, given the general trend in…

■ The global exchange traded fund (ETF) industry attracted record inflows in 2021, while also racking up “extraordinary growth in the breadth and depth of its offering”, says the Financial Times. A total of 1,503 ETFs were launched in 2021, and only 264 ETFs were liquidated or “merged out of existence”, down from 510 the year before. ETFs attracted over $1trn of fresh cash for the first time in 2021, taking total assets to over $10trn. Record inflows were likely to have been driven by strong financial markets (the S&P 500 gained 27% in 2021) and the continuing trend towards long-term “thematic investments”. However, while the drivers behind most new products in Europe were environmental, social or governance (ESG) and/or thematic, over half of the new listings in the US…

As limits on tax-efficient savings vehicles such as private pensions continue to bite, venture capital trusts (VCTs) could be set to break fundraising records in the 2021-2022 financial year. By the end of 2021, with just over three months of the tax year still to run, investors had already put £580m into VCTs according to the investment platform Wealth Club. That compares with £256m at the same time a year ago. “Investors put £580m into VCTs by the end of 2021” The tax benefits available on VCTs – collective funds that invest in portfolios of early-stage, small-scale businesses – are certainly generous. As compensation for some of the risks of backing these less mature businesses, investors are entitled to claim 30% tax relief on their initial VCT investments, plus there…

Asia is home to a wealth of innovative businesses generating valuable intellectual property. This often translates to defensible economic moats and higher profitability. At Cerno Capital, we look for companies in structurally growing industries providing critical products or essential services that cannot be easily substituted. The spectrum is wide and the opportunity set is deep. An auto-parts powerhouse Japan’s Denso (Tokyo: 6902) is one of the world’s largest vehicle component suppliers. It manufactures a diverse portfolio of products, including thermal systems, powertrain systems, mobility electronics and electrification systems. “We look for companies whose services cannot be easily substituted” Denso’s economic moat is supported by innovation. It owns a deep portfolio of core intellectual property. Historically a powerhouse in traditional auto-parts, it is increasingly orientating its business towards the electric-vehicle supply…

It’s about time I wrote you another shopping list, and this time it takes the form of a billet-doux to the wine buying team at the Co-op. One could be forgiven for not thinking of the Co-op as a fine wine merchant, but there are so many gems on its shelves it is astonishing. I will start with my featured, truly MoneyWeek-worthy Amarone – abargain at 18 bangers. Beautifully made and superbly balanced with raisiny spice under a deep black-cherry core, this is a terrific wine, and its honed tannins mean you can drink it today. Next,the 2020 Vanitá Grillo (£7) is a floral, slightly honeyed and exhilaratingly refreshing example of this delicious Sicilian white grape. The 2021 Nautilus Sauvignon Blanc (£13) is a benchmark, top-quality Kiwi Savvie with uncommon…

• Reality TV star Molly-Mae Hague (pictured) is “popular, beautiful, hardworking, successful and a role model for young women”, says Saira Khan in the Sunday Mirror. But she has been accused of being “tone deaf” after suggesting in a recent podcast that those less fortunate than her only have themselves to blame for their financial instability. “To be fair to her, I believe” she intended ”to be motivational, rather than offensive.” And it does remind us that we do need to teach our children “financial literacy”. Knowing how to be savvy, how to invest and the tools available to them to do so are crucial if we are to close the wealth inequality gap. Investing isn’t just for City boys in shiny shoes. “If financial literacy is instilled in them…