Indholdsfortegnelse for 1093 i MoneyWeek

“Odds are that however strongly you feel about it, you hold some Russian equities” I have JPMorgan Russian Securities in my portfolio. It’s down 65% in the last week (see page 17). Worse, a month ago I put gold miner Polymetal in a list of income-producing mining stocks you might look at. It is down 75% in the last week alone. I did say that it came with an extra overlay of risk, but it was still a lousy suggestion. Some of you will look at those numbers (based on its last dividend, Polymetal now comes with a 34% yield) and wonder if it is worth buying now (the answer being that anything related to Russia is now speculation, not an investment, so I don’t know – see pages 4,…

Department store chain John Lewis will end its 97-year-old “Never Knowingly Undersold” pledge this summer, reports BBC News. The company says that the promise to match prices at other national retailers is becoming less relevant as more sales move online and that it plans to spend £500m on lowering prices. John Lewis lost £517m during the pandemic, its first ever annual loss, but returned to profit in the first half of the current financial year. The planned renovation of Parliament will cost £22bn and take 76 years if MPs aren’t willing to leave the premises during the project, says The Guardian. A new report by a body set up to investigate how the renovation should be done says that costs could be cut to as little as £7bn and the…

“The idea that geopolitical uncertainty raises the gold price isn’t mere folklore,” says Chris Dillow in Investors’ Chronicle. “Since 2006, a one standard deviation rise in uncertainty has been associated on average with a $230 per oz rise in gold.” So it’s no surprise that gold has now topped $1,900 per oz for the first time in 18 months. Other safe-havens are also drawing more interest. Bond yields – which move inversely to prices – had been rising this year on expectations of tighter monetary policy, but markets are now pricing in slower interest rate rises. Yields on the benchmark US ten-year bond have fallen back to mid-January levels. Yields on Germany’s ten-year bund have fallen back below zero. Safe-haven currencies have also risen. The Swiss franc has hit its…

Sanctions have driven Russia’s rouble to a record low, says the Financial Times. The currency plunged 29% in offshore trading on Monday, to 118 roubles per US dollar at one point. It later regained a small amount of lost ground on news that the Russian central bank would more than double interest rates, taking them from 9.5% to 20%. Russian policymakers also ordered exporting companies to sell 80% of their foreign currency reserves in a bid to prop up the rouble. However, on a longer-term view, Russia’s currency has been losing value for years. After remaining stable for most of Vladimir Putin’s first decade in charge, it weakened after the invasion of Georgia in 2008, then slumped decisively after the seizure of Crimea from Ukraine in 2014.…

• Warren East chose a “red letter day” to say he’s leaving aircraft-engine maker Rolls-Royce, says Alex Brummer in the Daily Mail. He’s endured some “scary” times with Covid-19 turning £1bn worth of positive cash flow “into a terrifying outflow of £4.5bn in 2020”. Still, he’s managed to turn things around, helped by the fact that flying hours were up 60% in 2021 and set to rise a further 50% this year, and has put new ideas such as electric engines and small modular nuclear reactors in motion. “Chocks away.” • Given that Toshiba is in the battery business, it’s time to show some “shock value”, says Jennifer Hughes on Breakingviews. This week, CEO Satoshi Tsunakawa (pictured) abruptly stepped down in favour of “relative outsider” Taro Shimada, who joined from…

Clean Power Hydrogen (CPH2) saw shares rise more than 30% on its first day of trading on Aim last month, despite raising less than it hoped in its initial public offering (IPO), says Morningstar. The firm, which has developed a “proprietary membrane-free electrolyser” for producing hydrogen and oxygen gas by splitting water molecules, originally announced in January that it planned to raise £50m, but it ultimately took in £30.5m from a float that gave it an initial market capitalisation of £120m. The IPO proceeds will be used to help fund the construction of a factory in Doncaster. CPH2 says it aims to have production capacity of 4GW by 2030, equal to 10% of projected EU electrolysis capacity.…

With inflation at its highest level in 30 years, the global economy struggling to recover from the pandemic, and now with a conflict in Ukraine threatening to send commodity prices spiralling upwards, you might think that the Federal Reserve, still the most important player in global finance, had enough on its plate already. Yet US president Joe Biden is busily appointing a series of woke warriors to its board to see that it is also tackling climate change, promoting inclusion, diversity and gender awareness, and sorting out reparations for slavery. By politicising the Fed, Biden risks destroying its credibility – and that matters for the whole of the global economy. The Fed goes woke The Fed, like other independent central banks, was always meant to be beyond politics. Its role…

A couple of weeks ago, back when Russia was still deemed unlikely to invade Ukraine, I noted on this page that history suggests that markets as a whole tend to get over geopolitical shocks quickly. As a result, I said, other than holding gold as a hedge (which you should be doing anyway), there wasn’t anything you should change in terms of your asset allocation. I also said that if you wanted to bet specifically on tensions diminishing, the easiest way to do so was via the JPMorgan Russian Securities investment trust. “Two things can send a market to zero – war and communism” Well, as we now know, tensions didn’t diminish. Instead, Russia invaded without attempting to find even a flimsy pretext, while the West imposed the most stringent…

Russia’s food weapon David Fickling Bloomberg “One of Russia’s greatest strategic weaknesses has recently turned into an advantage,” says David Fickling. “Climate change may tilt the balance further in Moscow’s favour.” Russia has traditionally “underperformed” in food production due to the poor quality of its “frigid, drought-prone agricultural land”. Conscription during World War I, which turned more than ten million peasants from farmers into consumers, led to a collapse in production and the collectivisation and famine that followed saw output stagnate, leading to “unprecedented” imports. This situation has now been “dramatically” and very deliberately “reversed”. In 2014, in response to sanctions over its annexation of Crimea, Russia “swore off imports” and, in 2020, Putin declared the country to be “fully self-sufficient in basic foodstuffs”. Russia is now the largest global…

robertreich.substack.com Most of the price rises now affecting the US and global economy have been the result of global supply-chain problems, says Robert Reich. But this doesn’t explain why big and hugely profitable corporations are passing these cost increases on to customers in the form of higher prices. They don’t need to do so. Starbucks, for example, is raising its prices, despite reporting a 31% increase in yearly profits. McDonald’s has put its prices up, despite its revenues hitting a five-year high in 2021. Proctor & Gamble is charging more for consumer staples, but continues to rake in record profits. The same goes for Walmart, Amazon, Costco and more. They are raising prices not because they have to, but because they can. And they can because they face so little…

On 11 March 2020, the World Health Organisation officially declared what everybody already knew: Covid-19 had become a pandemic. The two years that have elapsed since then changed the world in ways that most of us never thought possible. Most of these changes have been for the worse, but one of the few benefits may be the way that the crisis has accelerated biotechnology research and development. Even before Covid-19 appeared, there had been many major advances in biotechnology, with an “extraordinary” amount of recent innovation and growth, say Linden Thomson and Cinney Zhang, who run the biotech strategy at AXA Investment Management. But the pandemic has put the sector “centre stage” and the vast amounts spent will have long-term implications in fields from drug development to the way clinical…

The share price of BlackRock World Mining Trust (LSE: BRWM) has risen by 170% since its pandemic low and by 70% since the end of 2019, supplemented by an annual dividend yield of 3.6%. Yet Olivia Markham, co-manager of the £1.2bn trust, is optimistic that there is further to go. “Compared with other cycles, which usually last around 36 months, we are about half way through, but not necessarily that far in terms of investor returns,” she says. “The backdrop for most commodities is healthy, valuations are attractive, company balance sheets are incredibly strong and management is focused on capital discipline.” Still, old hands will remember how the shares fell by two-thirds in six months in 2008, after having multiplied six fold in the previous five years. They then soared…

Whenever you are looking for a new savings account, you decide what account you need – instant access, notice or fixed-term – and look at the best rates. Then you choose the account with the best rate that meets your access requirements. The problem is that this can leave you with accounts across several different banks and building societies, as you seek out the best rates for money you need to be able to access in a hurry and for money you won’t need for a while. That’s where Zopa’s new savings account could be useful. The Zopa brand was known as a peer-to-peer lender, but it closed that part of its business late last year. It now has a banking licence and is offering loans, credit cards and savings…

Interactive Investor’s new low-cost pension plan could kickstart a price war in the sector. The investment platform is launching Pension Builder, a new self-invested personal pension (Sipp) for which savers will pay a flat fee of £12.99 a month, however much their fund is worth. Flat fees tend to work out better value than percentage-based charges on larger pension funds. But Interactive Investor’s fee is low enough to be competitive for smaller funds, too. Analysis from Compare the Platform suggests that on a pension fund of £50,000, only Fidelity Personal Investing and Vanguard would work out cheaper – though the latter offers a more limited choice of underlying investments. On pension funds of £100,000 or more, Interactive Investor moves into the lead. Interactive Investor’s new pension is designed to appeal…

Consumer goods firm PZ Cussons was founded 130 years ago by two Georges – Patterson (a Scot) and Zochonis (a Greek) – to trade commodities between the UK and West Africa. In 1953 the company listed on the London Stock Exchange, valued at £1m versus a £875m market cap today. In 1975 Patterson Zochonis acquired Cussons, which included the Imperial Leather soap brand, and in 2002 the company changed its name to its current form. Aside from Imperial Leather, its other brands include Carex (hand sanitiser), Original Source (shower gel) St Tropez (self-tan) and Sanctuary Spa (shower oil and body butter). Carex is the number one hand sanitiser brand in the UK (with a 36% market share) and sales doubled at the start of the pandemic. The company estimates that…

Riverstone Energy (LSE: RSE), an energy-orientated investment fund, has seen its shares rise after announcing an expanded share-buyback programme, says MarketWatch. Riverstone is selling its entire position in Canadian oil-and-gas company Pipestone Energy for $41.8m, and will use the proceeds to help fund buybacks as well as make investments in decarbonisation and energy transition. The fund has bought back £36m of its shares since May and now plans to seek shareholder approval to spend another £46m The shares have risen 93% in the past 12 months.…

The Hunt brothers Nelson, Herbert (born William) and Lamar were born in 1926, 1929 and 1932 and were the sons of oil tycoon H L Hunt, who ultimately had 15 children and was said to have been one of the wealthiest people in the world at one point. Nelson and William made their own fortunes in the oil industry – Nelson discovered major oil deposits in Libya, only to have the fields nationalised by Gaddafi. Lamar became famous for his role in helping found the American Football League (which later merged with the NFL) and the now-defunct North American Soccer League. What was the trade? Beginning in 1973 the brothers began investing in silver. They said that this was simply to hedge against inflation, which was running at a high…

Ukraine has drawn more global interest in the last month than it has in the last 2,000 years. Every major headline implores us to pay attention. Here on the back page, we have no opinion about foreign policy... except that we are against it. We don’t understand it. But were we to take more of an interest, we would understand it even less. Science, logic and poetry all agree: you can’t be a thing and watch it at the same time. Strictly as a watcher, we observe that public policy – particularly foreign policy – is almost always best avoided. Whether the authorities claim to be fighting inflation or sanctioning Russians, the results will disappoint. “Stupefied by the war and the scale of the catastrophe,” writes Jean-Francois Lecaillon in his…

Rome is offering to pay couples to get married in the city in order to boost the slumping wedding industry, says The Times. Nicola Zingaretti, the governor of Italy’s Lazio region, has announced that €10m in grants will be made available to couples on a first-come, first-served basis to go towards paying for part of the cost of their weddings. Those choosing from a variety of luxury venues in Rome and surrounding areas – such as the historic Odescalchi castle overlooking Lake Bracciano where Tom Cruise and Katie Holmes got married in 2006 – will be offered €2,000 towards wedding expenses. Local couples as well as those from overseas will be eligible. Marriages in Italy dropped by 26% between 2004 and 2019, then almost halved again when the pandemic hit.…

“Investors who lived through the 1980s may be experiencing a sense of déjà vu – persistently high inflation and strained relations with Russia”, say Lauren Foster and Andrew Welsch in Barron’s. Yet the impact of the war in Ukraine on major equity markets has so far been surprisingly modest. America’s S&P 500 is only marginally down since the Russian invasion last week. The FTSE 100 is off about 2%. Other European markets have been hit slightly harder, with Germany’s Dax down more than 5% since 23 February. These fairly small moves may be because “history tells us that major geopolitical events will have almost no impact on markets after six to 12 months”, says Michael Rosen of Angeles Investments. “Looking at the past 70 years, markets have usually taken a…

“One of the most important things to watch will be the severity of OECD sanctions on Russia, what kind of energy sanctions Russia imposes on Europe in return, and how long Europe could withstand them… Over the last five years, Russia has supplied around 40% of European natural gas… European LNG [liquefied natural gas] imports have risen in recent months … However, this rise… does little to change the cost… it would take a flood of LNG imports to change the supply equation enough to drive overall European gas prices much lower… European LNG terminals with the greatest excess capacity are also not adequately connected to the continent’s broader gas infrastructure… If Russian energy capacity to European were to fall in half, there is simply not enough… LNG import capacity…

Oil and gas supermajor BP saw its shares fall 6% on Monday after it announced that it would sell its 19.75% stake in Rosneft, the state-controlled Russian oil firm. The decision was welcomed by the UK government, which had previously demanded that BP’s chief executive Bernard Looney explain the company’s Russian links. BP “didn’t say whether it was planning to sell its roughly 20% stake in Rosneft, or simply walk away”, say Laura Hurst and Emma Rose-Thomas on Bloomberg. But Looney warned shareholders that the move could result in a writedown of as much as $25bn. Potential buyers “would have to navigate a tightening web of economic sanctions that would make any transaction extremely difficult”. The question of how much BP can salvage may be moot as “Russia may simply…

Six to buy Creightons The Motley Fool Concerns around the impact of rising inflation on consumer spending has hurt beauty and personal care product maker Creightons’ share price, which has dropped by around 50% from its September peak. While inflationary concerns are valid, it remains an “attractive investment”. Demand for skincare and healthcare products could jump as people go out again after the pandemic. The firm also recently acquired luxury skincare brand Emma Hardie and personal care product manufacturer Brodie & Stone, which will expand its range. A healthy balance sheet, “could help it hunt for more takeover targets as well”. 70p K3 Capital Shares K3 provides small businesses with advisory services such as mergers and acquisitions (M&A), tax, legal claims and insolvency. The firm has seen an increase in…

Fears that China will impose a citywide lockdown on Hong Kong has led to panic buying that has cleared supermarket shelves and led to long queues outside banks and pharmacies, says the Financial Times. Hong Kong’s chief executive Carrie Lam has said there will be a “limited lockdown” while all 7.4 million of Hong Kong’s residents are tested three times this month. Lam has denied harsher measures will be introduced, but with a “surge in infections” overwhelming the healthcare system, experts warn draconian policies will be “inevitable” if Hong Kong is to keep following China’s “zero-Covid policy”. Hong Kong is currently one of the last places in the world still trying to eliminate the disease as much of the rest of the world opts to live with the highly infectious…

No Bored Ape (of the kind pictured) is safe after hackers made off with the digital artworks (NFTs – non-fungible tokens) from a collector’s online account, says Danny Fortson in The Sunday Times. The collector, Tim McKinney, reportedly bought Bored Ape #3475 on website OpenSea (a kind of Sotheby’s for blockchain art) for $230,000 (£172,190), only for a hacker to seize his account, sell it to himself for $20, then offload it for $308,000. McKinney is now suing the OpenSea platform for $1m. The company denies any blame and claims McKinney must have been the victim of a phishing attack. This is the first case of its kind and McKinney may not receive a payout, as there is scant legal precedent for these collectibles. Hackers have taken advantage of the…

• Steve Schwarzman (pictured), CEO of private-equity giant Blackstone, took home $1.1bn in dividends and pay for 2021 – one of the biggest annual payouts on Wall Street, says Bloomberg. His pay consisted of $941.6m in dividends from his 19% stake in the business, along with $160.3m tied to performance and $350,000 salary. It is the first year Schwarzman, who co-founded Blackstone three decades ago, has topped the $1bn mark in annual pay. • Pharmaceutical firm AstraZeneca has sought to placate shareholders following last year’s revolt over executive pay by promising to freeze the bonus package of its CEO, Pascal Soriot, for three years, says The Mail on Sunday. His salary will, however, rise 3%, in line with the company’s employees, to nearly £1.4m. His maximum bonus will be 250%…

The price/earnings (p/e) ratio is a popular measure for assessing whether a share is cheap. It’s simple to calculate – you just divide the share price by earnings per share. A low number (eg, below ten) suggests that you aren’t paying much for each £1 of earnings, while a high number indicates a stock may be expensive (unless it’s growing rapidly). The p/e ratio has one obvious weakness. Using just one year of profits means a stock – particularly one in a cyclical business, such as mining – can look cheap because profits happen to be peaking at that point and are set to plunge when business turns back down in line with the economic cycle. An analyst looking at a single company may be able to assess whether current…

“Oscars don’t move the comma on your cheque — it’s about getting asses in seats and I’ve done a good job of doing that.” Actor Samuel L. Jackson, quoted in The Times “It’s nice when you get paid, when you’re young, and you’ve gone from having no money, but the Catholic guilt kicks in immediately, and I’m like ‘It’s all going to go wrong. You don’t deserve this’. And I don’t.” Actor Cillian Murphy, quoted in the Daily Mirror “It was a slow year, so about £400,000.” Pop star Leon Rolle on how much he earned last year, quoted in The Times “Some dear friends of ours were struggling through lockdown with various things and I hired a helicopter and took them for lunch as a treat. It set me…

spectator.co.uk Moray Firth Radio (MFR), a local station started by passionate amateurs to serve the small community in the north of Scotland, has turned 40, and is now one of the most successful local stations in the UK, says Darren Adam, who started volunteering for the station at the age of nine. Nobody believed it was viable at the beginning. The target area “contained more sheep than people”. And yet, within its first two years, it was generating the highest listening figures of any independent local radio station in the UK. The secret to success was its “unending commitment” to the area. Listeners would call in and “talk to the presenters as if they were friends”. Missing cats and new weddings were announced. That “MFR magic” gradually closed the gap…

Moderna (Nasdaq: MRNA) has been a big winner from Covid-19 vaccines. Sales rose over 200 times from just $60m in 2019 to an estimated $17.9bn in 2021. The end of the crisis will lead to these sales falling, but the fact that it trades at just five times forecast 2022 earnings suggests that these fears are already priced in. Booster jabs may become part of life, while Moderna is also working on using mRNA technology to produce vaccines and treatments for other diseases. The fortunes of BioNTech (Nasdaq: BNTX) have also been transformed by its mRNA vaccine. Like Moderna, its low valuation of four times estimated 2022 earnings mean that it could surprise on the upside if sales fall less than expected. Long-term prospects come from a pipeline of treatments…

“The stage is set for the next heavyweight battle in Japan,” says Breakingviews. San Francisco-based fund ValueAct is pressuring Seven & i, which owns the 7-Eleven convenience store chain, to dispose of smaller businesses and focus on “wringing more out of its 7-Eleven brand outside Japan”. The company says it sees “little merit in [the] suggestions”, but that “recalcitrance… isn’t justified”. International sales account for almost half of its revenues, yet earn a return on invested capital of barely 4%. Seven & i “outmanoeuvred its last combatant”, activist Dan Loeb, back in 2016, but the climate for activist campaigns has improved since then. The outcome of this clash “will have a sumo-sized effect on the country’s corporate-confrontation arena”.…

• “Councils across England are urging householders to set up a direct debit payment for their council tax so that they can automatically receive the government’s £150 energy rebate in April,” says Hilary Osborne in The Guardian. Anyone living in a property in council tax band A to D is due the pay-out, which is intended to help offset rising gas and electricity prices. If you pay your council tax by direct debit the £150 will be paid into your bank account. You can still get the money without a direct debit, but it will take longer as your council will have to get in touch with you and ask you to make a claim. Thousands of households don’t pay by direct debit so will face delays getting their rebate.…

Surging house prices and strong stockmarket returns have pushed UK household wealth to an all-time high of £11.2trn, data from the Office for National Statistics shows. And as the baby-boomer generation grows old and passes its wealth on to heirs, inheritance tax (IHT) bills are expected to soar. The real value of estates passing on death has more than doubled over the past 20 years and is predicted to do so again over the next 20 years. This means more families are going to need to plan for how to mitigate IHT, typically payable on estates worth more than £325,000. Your pension savings could be your most valuable and straightforward option. However much your pension is worth, it won’t count towards the value of your estate. Even better, the pension…

Given PZ Cusson’s share price returns in recent years, a good deal of past disappointment is already baked into expectations. Current analyst forecasts are for below 4% revenue growth in both 2023 and 2024, according to Sharepad. That seems easily attainable for a business that ought to have pricing power. I’d expect revenue growth to at least keep up with inflation – expected by the Bank of England to reach 7% this spring. At 11.8%, operating margins are below the firm’s historic average, and around half those of peers such as Procter & Gamble. It seems likely that management could also improve return on capital employed from the current level of below 12%. As financial performance improves, shareholders could receive a double benefit. First, profit before tax could grow towards…

Biotechnology firm Synairgen (Aim: SNG) plummeted last week after announcing that one of its drugs has not proved effective for treating Covid-19, says City AM. The shares collapsed by 94% in a day after results of a drug trial on 623 hospital patients showed that those receiving asthma drug SNG001 recovered from Covid no more quickly than those given placebos. The firm’s value had shot up by 3,000% in 2020 after SNG001 was assessed as a possible treatment for Covid-19. Many biotech stocks are struggling as the pandemic recedes. Synairgen’s shares are down 85% in the past 12 months.…

2020 Tapanappa, Piccadilly Valley Chardonnay, Adelaide Hills, South Australia £36, reduced to £27 each for a case of six bottles, threshers.co.uk; £29.50, thechampagne company.com I have a trio of tremendous whites from Tapanappa for you this week, all new vintage releases. In reverse order, starting with the grandest of the three: 2019 Tapanappa Tiers Vineyard Chardonnay (£32, in bond per bottle, Cellar Circle Exclusive, laywheeler.com; £40, thechampagnecompany.com). Only 2,700 bottles have been made and the UK received just 588, so get in quick. There is no doubt that this is one of the most extraordinary wines I have tasted from this legendary site. Next, 2020 Tapanappa Tiers Vineyard 1.5M Chardonnay (£35, thechampagnecompany.com ) is made from a 2003 re-planting of Dijon clone chardonnay and it sits across the road from…

The Global Merchants The Enterprise and Extravagance of the Sassoon Dynasty Joseph Sassoon Allen Lane, £30 The Sackler family is currently paying the price for their role in enabling the abuse of medical opioids in the US, and there are “demands that museums and libraries named after them should be renamed” in the US, says David Abulafia in The Spectator. Still, this is nothing compared with the Sassoons, who a century previously had made so much money from the “enormously lucrative” trade in opium, which they argued was “no worse than tobacco”, that “they even placed a poppy on their coat of arms”. In The Global Merchants, Joseph Sassoon gives an account of the rise and fall of the family, from the beginning of the 19th century to the disappearance…

£90,000 How much a seven-square-metre flat in east London fetched online with platform My Auction. The flat in Lower Clapton, Hackney, has a bunk bed over shelves, drawers and a microwave oven, along with a tiny wet room, with a shower, toilet and a sink. $64,000 How much in total Chris Casey, a part-time meteorite hunter from Staines, Surrey, has made from selling fragments of a meteorite that fell over the Cotswolds last year, including two fragments that sold for $42,000 with Christie’s in New York last week. £88 The price of filling up a typical 55-litre family car when the average price of petrol rises from 149.5p to 160p, as the government expects, says The Times. It currently costs £82.50. The cost for a small 40-litre car will increase…

Michael and Maria Spressler found a pearl “potentially worth many times the bill for their meal” while dining at a New Jersey seafood restaurant, says The Times. Michael bit into a “round and perfectly white” 8.8mm pearl as he tucked into his 12th clam. The discovery may be worth between $5,000 and $10,000 if it’s sufficiently lustrous, a jeweller told the paper. Former Iceland employee Sharon Cassidy has won £3,000 compensation after she was fired from a store in Paisley for eating a 20p Twirl chocolate bar, says The Scottish Sun. Cassidy – who had worked at the chain for 15 years – said she thought the open pack of snacks had been left at the till by a co-worker and that staff often shared food. A tribunal agreed Iceland…

Zoom Video Communications revealed on Monday that it expects sales to grow much more slowly than expected, “ramping up pressure on the software vendor to show it can continue to grow beyond the pandemic boom”, says Joseph Williams on Bloomberg. The firm has already said it is expanding its products “in a bid to broaden its business and ease investors’ fears”. These include a new cloud contact-centre product, an internet-enabled replacement for landline phones and technology to improve hybrid in-person/remote meetings. Zoom desperately needs to find another source of revenue: the promise of a return to normality has caused it to “shed more than three-quarters of its market value from its peak”, says Dan Gallagher in The Wall Street Journal. Still, its decision to reinvent itself as a “unified communications”…

Goodyear Tire & Rubber is a less-obvious way to invest in the electric-vehicles (EV) transition, says Andrew Bary in Barron’s. EVs need “more durable, smoother-riding – and costlier – tyres to deal with their heavier weight and better acceleration”. Goodyear hopes to make 30% higher margins in this market. The shares fell by a third in February after management warned of higher input costs, but free cash flow should improve in 2023 and last year’s merger with Cooper Tire & Rubber will cut costs. On just 6.5 times forecast earnings of $2.32 in 2022, it’s cheaper than Michelin and Bridgestone. “It’s rare to find an industry leading company with such a modest… valuation that makes an indispensable product.”…

Russia’s invasion of Ukraine is expected to lead to a wave of refugees in Europe not seen since World War II, says Oliver Moody in The Times. According to the UN, more than 830,000 civilians have already fled. Up to seven million are at risk of displacement. The exodus threatens to dwarf the 2015 crisis, which saw around 1.3 million people, mostly from Syria, Iraq and Afghanistan, applying for asylum in Europe. The difference this time is that countries led by nationalist governments such as Hungary are now opening their arms, says Lara Jakes in The New York Times. So far, Poland has taken by far the most – more than 453,000, according to the BBC – but refugees are also heading to neighbouring countries such as Romania, Slovakia and…

Ladbrokes and Smarkets have several markets on the outcome of the UK’s local council elections in May, including Barnet, Croydon, Cumbria, Havering, Sutton, Wandsworth and Westminster. They also offer markets on which party will get the largest number of national equivalent votes (votes after adjustments for previous performance). Most of these markets have seen relatively little activity, however, with only Croydon, Sutton and the national equivalent vote liquid enough at the moment to be worth considering. Since I’ve already suggested you should bet on the Lib Dems in Sutton, I’m going to focus on Croydon, which is also directly electing a mayor in a separate contest. With £1,321 matched, punters have Labour as the favourites to retain overall control of the  council at 1.32 (75.2%), the Tories in second place…

Pay for NHS senior managers has risen by an average 65% in the past decade, taking the highest salaries to £310,000 a year, says Laura Donnelly in The Daily Telegraph. By contrast, pay for the roughly one million NHS workers, who have been offered a 3% pay rise this year, has risen by 35% since 2011. Nurses are paid, on average, £34,000 a year, and midwives £36,000. For the wider economy, average wages have increased by 18% over that time. Those classed as “very senior managers”, earning an average of £145,000, include thousands of executives working at hospital trusts and clinical commissioning groups. Amanda Pritchard, head of the NHS, is paid at least £255,000, compared with the salary of her predecessor, Simon Stevens, who held the post for seven years…

”The speculative stuff that I thought was truly insane a year ago — it’s derated very, very substantially”, says David Einhorn in an interview with RealVision, in which he argues that the US market bubble peaked last February. The billionaire hedge fund manager blames loose monetary and fiscal policy for driving the frenzy. Now with goods and services prices rising, “there’s going to be somewhat of a slowdown, regardless of what the Federal Reserve does”, he warns. The downturn could even turn into recession. What should investors do? Purchase commodities that will fuel the industries of the future, instead of trying to pick individual winners. For example, even although Einhorn is shorting electric vehicle maker Tesla, he is investing heavily in copper – a material vital to the electric car…

econlib.org Why do some prices stay high despite “tons of competitors”, wonders Bryan Caplan. The average interest rate on a credit card in the US is 18.26%, for example, yet there are thousands of card issuers. The default commission for an estate agent is 6%, despite competition from more than 100,000 firms. Some economists propose an elaborate conspiracy theory whereby the big guns “unleash hell on price-cutters”. But there is little evidence this happens. Might it not be simply that consumers fail to shop around? Maybe they’re lazy, or fatalistic, or don’t want to look cheap. Whatever the motivation, the result is the same. If firms know consumers don’t shop around, they can simply charge a high price and “see how many suckers come along”. Perhaps each firm will charge…

Even before the outbreak of war last week, investors were getting rattled. Inflation is here to stay and markets are rightly concerned that 2022 will see the first in a series of US central-bank interest-rate hikes. How many hikes do the markets fear? It depends on what day you ask them. When the clock struck 12 on New Year’s Eve, the markets were expecting two or three rate hikes in 2022. At the time of writing, they are expecting six or seven. This alone is enough to explain the sluggishness in markets. The S&P 500 now stands almost 5% lower than it was six months ago. The Nasdaq Composite is down more than 11% in the same period. Pity the person who bought into bitcoin close to its November peak,…

■ Many private-equity investment trusts saw huge returns in the pandemic thanks to “a focus on secular growth stories and sectors such as tech, healthcare and education”, says Investors’ Chronicle. “Yet a harsher environment looms.” The most recent decade has been an exception, but the average private-equity fund has generally underperformed the FTSE 250. Private-equity success “can sometimes rely on savvy timing”, which is harder to sustain in volatile markets. Rising interest rates also make things tricky for growth assets “and private equity is no different”. So the sector could now be in for a bumpy ride. Yes, it could continue to deliver over time and present opportunities for “bargain hunters”, but there may well be a “widening of discounts [to net asset value (NAV)] in the weeks ahead”. One…

At present the cheapest energy deals are offered on standard variable rate tariffs (SVT) as these are limited by the energy price cap. The average household is currently paying around £1,278 a year. But wholesale gas prices are soaring and the cap is almost certain to keep rising. The average household could be paying £3,000 a year for its energy by October, says David Byers in The Sunday Times. If that happens, we could be looking back fondly on the fixed-price deals available today – “even if they are £1,000 more expensive than what the SVT would work out as for the average household today”. Scottish Power’s one-year fix would be £2,502 for the average home. So Energy’s two-year fix is £2,209. The price cap will rise by 54% in…

• Some 850,000 savers have pension plans invested in lifestyle plans that are no longer fit for purpose and could undermine their retirement, says investment platform AJ Bell. These plans automatically move your money into less risky asset classes such as bonds in the last decade or so before you reach retirement age. The idea is to prevent any sudden falls in the value of your savings at a time when you are preparing to cash in the fund by buying an annuity paying a regular income. However, as AJ Bell points out, comparatively few pension savers buy an annuity these days – and so they may be missing out on higher returns from the asset classes they have been moved out of. • The government is to go ahead…

The Aim market is increasingly becoming the UK’s go-to destination for backing innovative, fast-growing public companies. More than a quarter of companies listed on the London Stock Exchange’s junior market operate in the technology, healthcare and biotech sectors, compared with just 11% for the main market. Many Aim constituents are also maturing into some of the UK’s most successful businesses. In 2015, just three companies had a market cap greater than £1bn. Today there are 30. “Aim stocks can be an IHT-efficient solution for Isa investors” Many – but not all – Aim stocks also qualify for inheritance tax (IHT) relief. They can be held in an individual savings account (Isa) and so they could provide an IHT-efficient solution for the nearly six million Isa investors aged over 65 who…

• ”Were I to ask you how much you earn, I’m pretty certain you’d be able to recall the number pretty swiftly,” says Nick Ferrari in the Daily Express. So what on earth is going on with Bank of England governor Andrew Bailey (pictured)? He should be “as quick with figures as a race course bookie”. When Labour MP Angela Eagle quizzed the central bank boss on how much he earns, the “rather monosyllabic money man” replied that he didn’t “carry that number around in my head”. The real answer is “a cool” £575,000, “this from the man who is urging the rest of us not to push for large pay increases for the benefit of the nation’s economy”. To be fair, Bailey no doubt deserves that salary thanks to…