Indholdsfortegnelse for 1178 i MoneyWeek

“The emergence of a new category of weight-loss drugs… is a testament to humanity’s ability to innovate… Novo Nordisk, the Danish company [has seen its stock rise] nearly 50% this year… Novo’s stockmarket capitalisation is now larger than Denmark’s GDP… the company is raking in so much foreign currency that the Danish central bank has been forced to cut interest rates… to keep the krone… pegged to the euro. Denmark’s pharmaceutical sector… contributed two-thirds of the country’s economic growth last year… [Instead of celebrating, the] killjoys and nannies… are still grumbling… [Their] puritanical response [comes from] the sense that those who have… eaten too much must be punished [but] that… is letting the perfect be the enemy of the good. Yes, it would be better if people chose not to…

Shares in Manchester United slipped by 13% on Monday following the news over the weekend that the Qatari Investors Group, previously deemed the frontrunner in a race to take over the club, was “stepping back”, say Giles Turner and David Hellier on Bloomberg. The withdrawal paves the way for the billionaire Jim Ratcliffe, boss of Ineos, to take control. Ratcliffe is offering close to double the $20-a-share the club is now worth, but he will only end up with a 25% stake in the club, rather than buying it outright. The Glazer family will still retain a big stake in the club, having failed to achieve the asking price for an outright sale that was reported to have been as big as £6bn ($7.3bn). The decision to sell only a…

McKesson “may be the largest US company that investors have never heard of”, says Barron’s. Therein lies opportunity. It distributes drugs to hospitals and pharmacies (ranging from small ones to large national chains), and has built up a logistics network that potential rivals would find hard to copy. The drugs sector is enjoying structural growth as the population ages. Almost half of all US citizens have used a prescription drug in the past month. McKesson is America’s ninth-largest company by sales, which are expected to expand by 10% to $304bn in the year to 31 March 2024. The balance sheet is strong and the group’s plentiful cash flow is being spent on share buybacks.…

Politics & economics Mark Woolhouse, a member of the Scientific Pandemic Influenza Group on Modelling, has told the Covid inquiry that lockdown was a “failure of public-health policy”. A “rare voice of reason” throughout the pandemic, he says his team was “never even asked to model the harm lockdown might inflict” nor “consider alternative ways of mitigating health risks”, says Madeleine Grant in The Times. Yet so many of the problems we now face were “‘manifestly caused, or exacerbated” by lockdown – inflation, waiting lists, a mental-health crisis. And still we suffer from “collective amnesia”: a recent YouGov poll found that almost 60% think it was right to close schools. Meanwhile Neil Ferguson, a Sage adviser who resigned after breaking the lockdown he was instrumental in bringing about,…

The Scottish National Party was dealt a major blow last week when Lisa Cameron, the MP for East Kilbride, became the first SNP MP to cross the aisle and join a unionist party, says Stephen Bush in the Financial Times. She joined the Tories, and is the third MP to defect from the SNP since the last election. The electorate is also thinning the party’s ranks, says Tom Harris in The Telegraph. In the recent Rutherglen and Hamilton West by-election, there was an “enormous 20% swing” from the SNP to Labour. That suggests the party is now at risk of losing dozens of seats at the next general election. The party is “in a total and complete mess”, and leader Humza Yousaf (pictured) has no sense of direction, other than…

The entertainment giant Disney is this week celebrating its 100th birthday with the show-business panache you might well expect. There is, however, a reason why investors and anyone interested in business should be watching, and not just to catch a glimpse of Buzz Lightyear. From the days of its first short animated films, Disney has grown to become one of the most successful entertainment businesses in the world, and in Snow White, Dumbo and Toy Story it has created some of the best films ever made in any genre. But it has also built one of the most powerful brands of all time. No other major global company has quite the same reach as Disney. Its power is unique. It has been a pretty good investment, too. Disney listed in…

Duration is a measure of risk that is typically applied to bonds. It describes how sensitive a given bond is to movements in interest rates. Think of the relationship between bond prices and interest rates as being like a see-saw: when one side goes up, the other goes down. Modified duration (which can be found in the fact sheet of most bond funds) tells you the likely percentage change in a bond’s price in response to a one percentage point (100 basis points) change in interest rates. The higher the duration, the higher the “interest-rate risk” of the bond – that is, the larger the change in price for any given change in interest rates. So if a bond has a duration of ten, it indicates that a single percentage…

“The more I’ve got, the more secure I feel. Having best-selling books is fabulous. It feels like free money when it comes in because you’ve done the work, you’ve had the advance, and then you get royalties. It’s great.” Philippa Perry (pictured), artist and writer, on whether money makes her happy, quoted in The Telegraph “Back in 2004 or 2005 to about 2015 I was earning a million pounds-plus a year. For being a hairdresser. It was obscene. That was for endorsements, scissor deals, electrical deals, turning up at nightclubs and waving at people for five grand. The most expensive haircut I ever did was for an Arab prince in Dubai. That was a regular gig and he paid me £30,000 a time, with a Rolex thrown in, too. Which…

unherd.com In the Nineties, getting a driver’s licence was a rite of passage, says Mary Harrington. Now, young people just aren’t that bothered. This was brought home by the news that the BBC might axe Top Gear. It was first broadcast in 1977 as a straight-faced motoring show, and morphed into a cultural phenomenon of laddish larks after a 2002 reboot that put Jeremy Clarkson, Richard Hammond and James May in the driving seat. The joy of the show in its heyday was the way it captured the two dominant forms of motoring enthusiast – the tinkerer, who loves to potter about making things in his workshop; and the petrolhead, who just likes to make things go fast for the fun of it. Both are endangered species. Modern cars have…

Activist investment fund Starboard Value has built a stake in News Corp and plans to push for strategic as well as governance changes, says The Wall Street Journal. The fund believes News Corp, one of the two arms of Rupert Murdoch’s media empire, trades at a large discount to its intrinsic value owing to its complex structure. It therefore plans to recommend that News Corp spins off its digital real-estate business and collapses its dual-class share structure. This structure gives the Murdochs, who have a 40% voting stake in the group, voting power in excess of their economic ownership. Starboard believes the true value of the business is closer to $20bn rather than its current market value of $12bn.…

One in five small-business owners plans to sell all or part of their firm by 2025, according to a survey by Handelsbanken. If you’re one of them, it might be sensible to confirm your plans this side of an election. A Labour government may yet be tempted to raise capital gains tax (CGT), though the party has said it has no plans to do so. An increase could be expensive. At present, your profit on the sale of a business is typically subject to CGT at a rate of 20%, though you may be entitled to entrepreneurs’ relief, which reduces the rate to 10% on the first £1m of gains. Previous Labour teams have proposed equalising taxes on capital gains with those on income – that would see the CGT…

£45, stannarywine.com If you are seriously excited about fine dining, you are likely to have met Vincent Pastorello. Rewind a decade or so, and Vincent was the wine director at The Dorchester hotel in London. He also worked for Gordon Ramsay in Melbourne and London. He was one of the most talented sommeliers I have ever met. Five years ago, he became global wine manager at Dream International, looking after restaurants such as Zuma, Roka and Coya, among many others. I met him the other day, and he surprised me with a wine he made alongside legendary Spanish winemaker Pepe Raventós. While on holiday, Vincent visited Barcelona and asked Pepe for advice on where to eat and drink. After an epic tour, Vincent returned the favour when Pepe visited London,…

The ultimate guide to understanding and investing in digital assets (Edited by) Sam VolkeringHarriman House, £29.99 The cryptocurrency revolution began in 2009 with the launch of bitcoin. It’s been quite a journey in the 15 years since then. The digital tokens, once confined to the fringes of the internet and a cult “alternative” investment, are now on the brink of going mainstream as central banks around the world scramble to launch their own. The price of bitcoin is now displayed on TV news shows alongside the value of stockmarkets. The opening section of this book gives a basic overview, starting with digital currencies and then moving on to more recent innovations, such as the metaverse, non-fungible tokens (NFTs) and Web3. The middle part looks at the practical aspects of investing,…

Cottesmore School in West Sussex has deployed a deep-learning chatbot as its new headteacher, says Louisa Clarence-Smith in The Telegraph. The artificial intelligence (AI) program, named Abigail Bailey by the private boarding school, will advise headmaster Tom Rogerson (pictured) on issues ranging from how to support fellow staff members to helping pupils with ADHD and writing school policies. It works in a similar way to ChatGPT, the online AI service where users type questions, and they are answered by the chatbot’s algorithms. Rogerson first became interested in the technology at the suggestion of his nephew, who is a pupil at the £32,000-a-year school. “The introduction of AI is not about replacing our dedicated educators but about augmenting their capabilities,” he said. Good week for: Sami Gam, a 22-year-old law graduate,…

Corporate America is still “bingeing on debt”, says Olivia Raimonde on Bloomberg. Although US interest rates have increased steeply since early 2022, firms with “investment-grade” credit ratings have “added more than half a trillion dollars of net debt” since then. Even firms whose bonds are rated as “junk” have been increasing borrowing. The trend has been focused on the US, with European and Asian companies more cautious. Danger could be “lurking in ordinarily safe corners of the market”. The “amount of risk-taking was extreme” in the years of easy money, says Hans Mikkelsen of TD Securities. Something will “blow up”. Most corporations will be fine, says The Economist. Many locked in low borrowing costs when interest rates slumped during Covid. Yet there are areas of concern. Take the leveraged-loan market.…

In the early 2000s the London Stock Exchange was the world’s third-largest, says a report from the Tony Blair Institute. By May this year it had fallen to tenth place globally. A major factor behind the London market’s decline has been an exodus of domestic capital from the UK stockmarket, with the share of pension and insurance portfolios invested in UK equities falling from more than 50% to just 4% since 1990. That dramatic shift was driven by tough accounting changes in the early 2000s that required companies to fund supposed pension deficits. These made them extremely risk-averse, prompting a rush into safer assets. Between 2001 and 2022, UK pension fund holdings of gilts and corporate bonds rose from 15% of total assets to 60%.…

A “record summer” for easyJet means the budget airline can now “embark on a multibillion-pound investment in new aircraft, restore dividend payments and set a target to more than double annual profits to £1bn by 2029”, says Robert Lea in The Times. The “most profitable summer season in the airline’s near-three decade existence” propelled pretax profits up to £670m in the past quarter. This brings the cumulative level of pretax profits between April and September to £870m, making it a “record spring-summer” as well. This recovery is down to “the relaunch of package holidays”, which made up more than 25% of its profits, and “the cranking up of fares and fees charged to passengers”. EasyJet’s management may be “confident” about the future, but the wider market is more cautious, says…

Japanese semiconductor-equipment maker Kokusai Electric has become the local market’s largest listing in almost five years, says Bloomberg. Private equity-group KKR is selling its stake, having spun Kokusai out of Hitachi Kokusai Electric after acquiring the mobile phone and wireless equipment firm in 2018. KKR will raise ¥108bn (£593m) from selling 59 million shares at ¥1,830, the top of the set price range. Kokusai’s semiconductor processing equipment is critical to Japan’s development of artificial intelligence (AI) and supercomputers. Samsung and Taiwan Semiconductor Manufacturing are among its largest customers.…

Just over a year until the next US presidential election, punters are putting Donald Trump as the favourite. With $5.99m matched on Betfair, Trump is at 2.82 (35.5%) to be the overall winner. Incumbent Joe Biden is at 3.05 (32.8%) and California governor Gavin Newsom is in third place at 15 (6.7%). Activist Robert Kennedy Jr, former first lady Michelle Obama and former ambassador to the United Nations Nikki Haley are tied for third place at 23 (4.3%). Ron DeSantis is at 27 (3.7%), and vice-president Kamala Harris is at 47 (2.1%). I think the markets are underestimating the chances of both Biden and Harris, given that Biden seems committed to running. Even if he drops out, Harris has the weight of the vice-presidency behind her. At the moment, polls…

● “Apollo’s noodle buyout requires a bit more spice,” says Aimee Donnellan on Breakingviews. The private equity firm has agreed to buy The Restaurant Group (TRG), owner of the Wagamama chain, for £701m, including debt. Shareholders will not be satisfied. Yes, TRG is an “obvious takeover target” with a “troubled past”: the shares are down nearly 80% since 2018 and CEO Andy Hornby is under siege from two activist investors. It has recently sold the loss-making Frankie & Benny’s chain to slim down, leaving just Wagamama and some pubs and airport concessions. Yet claims that Apollo’s 65p per share is a “superior outcome” are a stretch: analysts at broker Liberium think TRG is worth at least 75p per share. Both activists are backing the bid and there may be few…

“It’s a really challenging time to want to be an equity investor and in US stocks right now,” says billionaire hedge fund manager Paul Tudor Jones. “You’ve got the geopolitical uncertainty… [while] the United States is probably in its weakest fiscal position since certainly World War II with debt-to-GDP at 122%,” he tells CNBC. The war in Israel and Palestine is likely to rattle markets, while the surge in interest rates will also undermine investors’ confidence. “As interest costs go up in the United States, you get in this vicious circle, where higher interest rates cause higher funding costs, cause higher debt issuance, which causes further bond liquidation, which causes higher rates, which put us in an untenable fiscal position.” This is the “most threatening and challenging” geopolitical climate Jones…

snowdon.substack.com The Guardian has lambasted Britain’s pursuit of austerity policies, evidently believing that we are still living in a period of austerity, says Christopher Snowdon. Yet the government is still borrowing more than £100bn a year, and public spending is at an all-time high. “Austerity” today evidently just means “not spending as much as The Guardian would like”. The editorial itself is a “word salad” of economically illiterate ingredients. It wants more borrowing, but doesn’t mention how high the current rate of borrowing is and seeks to avoid the big lesson of Liz Truss and Kwasi Kwarteng’s mini-budget, which is that there is a limit on what governments can reasonably expect to borrow. If you want more public spending, you should demand higher taxes. No one on the left seems…

■ Asset Value Investors (AVI) “has taken a public stance” against the board of Hipgnosis Songs Fund over a “misleading narrative” about its continuation vote and decision to slash its dividend, says Citywire. AVI, which owns 5% of the trust through the AVI Global Trust, says it has spoken to a number of the trust’s other shareholders in recent weeks urging them to “take back our company and secure for it a brighter future”. It argues the decision by Hipgnosis to sell part of its portfolio is a “truly dreadful” deal for shareholders, with the assets being sold at a discount of between 20% and 30% to reported value. The trust’s decision to slash its dividend, purportedly owing to the risk of breaching its leverage requirements with lenders, has only…

● Small businesses with a presence on Facebook need to beware of a new scam, internet security advisers warn. A growing number of small companies have received a message supposedly from Facebook headed “permanent page deleted”, which claims their Facebook pages will be deleted owing to a copyright infringement unless they respond within a set timescale. The messages are fake, advisers explain, but could see businesses unwittingly sharing sensitive data with potential fraudsters. ● The UK’s minimum wage, now known as the National Living Wage, will rise to £11 an hour from next April, Jeremy Hunt, the chancellor, has announced. The increase, from £10.42 currently, will boost the income of roughly two million workers, but some small business groups have warned employers may struggle to fund the additional wage costs.…

Following a “game of cat and mouse” that went on for more than 20 years, the British tax authorities finally caught up with former motor-racing mogul Bernie Ecclestone last week, says the Financial Times. In court, the “diminutive 92-year-old” billionaire pleaded guilty to fraud – he had given a misleading answer to the tax authorities about wealth stashed in offshore trusts – and agreed to pay £652m, more than a quarter of his wealth, in back taxes, interest and penalties. He also received a 17-month jail sentence, suspended for two years due to Ecclestone’s age, health and lack of previous criminal convictions. The court heard that Ecclestone was “seeking to draw a line under investigations into his tax affairs”, reports the BBC, because he “was fed up of paying huge…

How the Handover from Boomers to Gen Z Will Revolutionize Capitalism Ken CostaBloomsbury, £20 Older people complaining about the younger generations (and vice versa) isn’t exactly a new phenomenon, but the generational divide has never been so stark as it is today, argues banker and philanthropist Ken Costa in his book, The Hundred Trillion Dollar Wealth Transfer. With respect to everything from our relationship with technology to politics and the role of business, there is a large and growing gap between the “boomers”, who were born between 1946 and 1964, and the “Zennials”, Costa’s collective name for the Millenials (born after 1981) and generation Z (born after 1996). That matters because, as the subtitle to Costa’s book suggest, a massive and unprecedented transfer of wealth, and hence of power,…

The “magnificent seven” of technology mega-caps (Apple, Microsoft, Googleowner Alphabet, Amazon, Nvidia, Tesla and Facebook-owner Meta) have accounted for the bulk of the S&P 500 index’s 14% gains so far this year, says Ryan Ermey on CNBC. These seven firms have jointly grown to comprise 28% of the US stock benchmark (larger companies are weighted more heavily than smaller companies). On an equal-weighted basis, the S&P 500 is up by just 1% – a sign that the average company has struggled. That reflects an unhealthy market. A bull run supported by “just a handful of influential stocks” is vulnerable to sudden shifts in sentiment. As technical analysts say, “the generals are charging while the soldiers are in retreat”. Bonds’ relative appeal rises Investors buy growth stocks like tech because they…

Net profits at JPMorgan leapt by 35% year on year to $13.2bn in the three months to the end of September, while revenue climbed by 22% to $39.9bn. However, says Callum Jones in The Guardian, this didn’t stop its CEO Jamie Dimon warning that his company may be living through “the most dangerous time the world has seen in decades”. In particular he is concerned that both the war in Ukraine and the recent terror attacks in Israel could have “far-reaching impacts on energy and food markets, global trade and geopolitical relationships”. It’s typical of Dimon to serve his quarterly earnings “with a side of brimstone” as he “frets and rants” about “higher interest rates, smothering regulation, recession, war”, says John Foley on Breakingviews. His “pessimism” is so well known…

Four to buy Genus Shares The pig division of this global animal-genetics firm enjoyed record operating profits in the year to 30 June, while its proprietary breeding lines give it a leading market position. Genus is now close to commercialising a “game changing” gene-editing platform that should allow farmers to breed pigs that are resistant to PRRS (porcine reproductive and respiratory syndrome), an illness that costs the industry billions of dollars a year globally. The shares are a long-term play on rising global wealth and protein consumption. 2,142p Netcall Investors’ Chronicle Rising labour costs are bolstering the case for this customer-experience software specialist. Netcall’s technology platform provides firms with chatbots and analysis data, allowing them to automate parts of their customer service arms. Revenue from cloud products rose by 55%…

One huge benefit of the boom in exchange-traded funds (ETFs) and index funds over the past decade is that investors have far more flexibility when building a bond portfolio. There are now 473 London-listed bond ETFs, according to the justETF database, and while many of these are of little real use to most investors (any takers for a euro-hedged Chinese local government bond fund?), there are still plenty of ways to reflect how you think the bond market will evolve and tailor your investments accordingly, rather than simply holding a bond fund. For ultra-low risk bonds (ie, governments such as the UK and US and to some extent top-quality corporates), the key metric is duration. This refers to how sensitive bond prices are to changes in interest rates (see below).…

Don’t get old before you get rich EditorialThe Economist A number of developing countries have failed to take advantage of a bulge in their working-age population, and the results could be “grim”, says The Economist. Take Thailand. In 2021, the share of Thais aged 65 or over hit 14%, a threshold often used to define an aged society. But unlike Japan, South Korea and much of the West, Thailand, with a GDP of just $7,000 per person in 2021, “has got old before it has got rich”. This is a major problem. The government will soon have to spend more on healthcare and pensions, making it harder to invest in infrastructure and “productivity-boosting skills”. The story is similar in Indonesia, the Philippines and Sri Lanka. It follows that countries such…

cato.org/blog The work of Claudia Goldin, a professor of economics at Harvard University, spans economic history, education, immigration and technological change, but she is best known for her work on the gender pay gap, says Vanessa Brown Calder. She has been awarded the 2023 Nobel Prize for economics, and it is richly deserved. She has an “economist’s empirical eye”, takes a balanced approach to her work and has an “unusual humility” when it comes to making policy recommendations. Her first landmark book, Understanding the Gender Gap (1990), argued that the historical persistence of disparities in wages and the glass ceiling could not be attributed solely to sex discrimination or underlying structural factors in the job market. Later work found that the difference in outcomes could be attributed to career breaks,…

When the Mid Wynd International Investment Trust’s (LSE: MWY) board announced it had selected Lazard to take over from Artemis as the portfolio manager, it came as a surprise. The investment firm hasn’t managed a trust for many years and isn’t well known among investors. Despite this, Russell Napier, chairman of Mid Wynd, says Lazard represented the clearest continuity from Artemis in terms of style, experience and record. This does not guarantee that the investment team of Louis Florentin-Lee and Barney Wilson will outperform immediately (they took over on 1 October). Successful research Still, they stand as good a chance of producing reliable long-term outperformance as Simon Edelsten, the retiring lead manager, and his team. “The best way to generate consistent returns,” says Florentin-Lee, “is to buy great businesses with…

Andrew: Most analyses of the big picture start with inflation. We know that like us, you have always been sceptical of central banks, so we were intrigued a couple of years ago to see that you thought the US Federal Reserve was broadly right in its inflation outlook: that it would subside rather than become ingrained. Do you feel you got that right? James: Yes, I think so. US inflation has come down fairly rapidly from its peak. The supply constraints that had underpinned the price rises have eased. Thanks to energy prices there has been a slight uptick in inflation recently, but there has been no evidence of a significant swing towards workers’ bargaining power. So a wage-price spiral fuelling sustained inflation seems unlikely. The UK is harder to…

The backlash against remote working is gathering pace. Even technology giants Google and Amazon have begun encouraging staff to make more frequent visits to the office. A growing number of companies are insisting that staff now come back to the workplace full-time. Among small and medium-sized enterprises (SMEs), however, remote and hybrid working practices have become the norm. A survey of 500 UK SMEs published by internet service provider Beaming found that 81% now have staff working from home at least some of the time – while almost half (45%) now practise fully remote working. The research also suggests the impact has been beneficial or benign for most SMEs: 43% of owners say remote working has had positive benefits such as improved productivity and lower costs, while 34% say it…

In emerging markets the alignment of societal and environmental development with robust financial growth offers attractive investments. Companies across diverse sectors, from electric vehicles to education and finance, are delivering valuable services while offering solid investment opportunities. Three notable examples vividly highlight this encouraging trend. Burgeoning demand for batteries The first is Samsung SDI (Seoul: 006400) in South Korea, a front-runner in the electric-vehicle battery sector, reflecting a promising mixture of positive impact and financial growth. The firm is a key beneficiary of the burgeoning demand for electric vehicles, propelling a vital global shift toward sustainable transportation. It is a battery supplier to key global carmakers such as BMW, Volkswagen, Audi and Volvo. The group’s estimated compound annual revenue growth rate between 2019 and 2024 is expected to be around…

Marlon Brando fell in love with more than his beautiful Polynesian costar and, later, wife, Tarita Teriipaia, while filming Mutiny on The Bounty in 1962. He also fell in love with Tetiaroa, the sole atoll in the Society Islands, which are part of French Polynesia. Tetiaroa is what is left of what was once an island, like nearby Tahiti and Moorea, that was formed from an volcanic eruption three million years ago. Over time, erosion chiselled away at the island, while the weight of Tahiti, to the south, on the Earth’s crust, lowered the seafloor and submerged Tetiaroa for good. But the reef that had formed around the island remains, formed and maintained by organisms over millennia. It is a living thing. Today, the 25km reef consists of 12 motu…