Indholdsfortegnelse for Issue 1259 i MoneyWeek

“I made my first investment at age 11,” Warren Buffett likes to remind people. “I was wasting my life up until then.” What a barrel of laughs he must have been as a young man. But this statement, in addition to underlining the value of compounding, shows that when it comes to success in any field, practice makes perfect, or at least highly proficient. Buffett has been an avid reader of financial statements since his teenage years, and he has a photographic memory. These two qualities together, says Jason Zweig in The Wall Street Journal, made him “a human form of artificial intelligence [able to] answer almost any query out of his own internal database”. That means he can spot patterns quickly, and “expertise is rooted in pattern recognition”. “Buffet…

Shares in energy giant BP rose on reports that rival Shell is working with advisers to evaluate a potential acquisition of its UK rival, says Bloomberg. While Shell is “waiting for further stock and oil price declines before deciding whether to pursue a bid”, such a merger, the subject of recurrent rumours, “would be one of the oil industry’s largest-ever takeovers”. Although the companies were once of a “similar size, reach and global clout, their paths have diverged in recent years”. BP’s “prolonged underperformance” stems largely from its net-zero strategy. Even a recent turnaround scheme has “fallen flat” with investors. The stock has lost 33% in a year. BP’s valuation discount to its peers makes it “vulnerable to a takeover”, says AJ Bell’s Russ Mould. The “weaker economic backdrop” also…

Companies with simple business models and juicy yields are always worth researching in volatile times. Enter Swiss regional bank Valiant, with 80 branches in 15 cantons, says WirtschaftsWoche. It focuses on Switzerland only, and restricts itself to taking deposits and making loans. As a result, it has no geographical or currency risk; nor does it have any exposure to risky asset classes, as larger banks and investment banks do. Markets have deemed Switzerland a safe haven, which has fuelled a rise in the currency and bond yields, trimming the interest-rate margin. But the stock is 40% below the bank’s book value, which has been rising for years. Valiant also yields 5%.…

Two weeks after the 22 April terrorist attack in Pahalgam, India has carried out what it describes as “precision strikes at terrorist camps” in Kashmir, says Samuel Ramani in The Telegraph. Pakistan has reportedly shot down several Indian jets and is threatening “imminent retaliation”. The “tit-for-tat strikes”, killing civilians, represent the “most extensive military exchange between the nuclear-armed neighbours in decades”, says Andres Schipani in the Financial Times. Clashes over the past 25 years have in the past “stopped short of a major war”, reflecting US willingness to apply diplomatic pressure and “Chinese reluctance, as Pakistan’s major international benefactor, to allow the situation to escalate”. Today – Donald Trump has already said that he is not getting involved – it is “not clear if either of these conditions still hold”.…

● If Taylor Swift’s performances can boost economies, maybe Oasis do the same for British hoteliers such as Premier Inn and its owner Whitbread, says Jennifer Hughes in the Financial Times. “Crediting the Gallagher brothers’ reunion” (Liam, pictured) for the recent 10% rally in Whitbread’s shares might be “too much”, but their tour is a “starting point for considering what might sustain the group’s gains.” Hotels are cyclical, the economy is slowing, and cost-conscious consumers travel less. Yet Premier Inn serves budget travellers, business travel is increasing, and big sports events and concerts fill rooms. Management believes it can meet its 2030 targets – helped by its fast-growing German business – and the lack of any US exposure may also help. “Whitbread is on the right side of the cultural…

The recent stockmarket volatility is “really nothing”, says veteran investor Warren Buffett, who is to step down as CEO of Berkshire Hathaway after six decades at the helm. “This has not been a dramatic bear market or anything of the sort.” Other periods of upheaval have been far more severe, Buffett reminded Berkshire’s annual meeting last week. The Dow Jones Industrial Average went from 240 when Buffett was born in 1930 to 41 during the Great Depression. Yet despite some “hair-curler” events over the course of his life, US stocks have risen strongly over that time; the Dow now sits around 41,300. Sell-offs are part of investing and it is better to capitalise on them. “I don’t get fearful by things that other people... are afraid of in a financial…

reason.com US president Donald Trump’s tariffs are causing problems for American manufacturers, farmers, energy producers, small businesses, investors and consumers, says Eric Boehm. But there is one industry that’s prospering: lobbying firms in Washington DC. Lobbying expenditures on trade issues were a “staggering” 277% higher in the first quarter of 2025 than in the same period in 2024. Lobbying firms reported spending $4.9m on trade-related issues in that time, up from $1.3m the year before. The number of lobbying firms has also massively expanded as has the average cost to business. None of this is surprising. If the federal government has the power to impose “massive new taxes” on Americans, “without so much as a vote from Congress”, then businesses have a “tremendous” incentive to lobby for exclusions from those…

Food-outlet operator SSP is coming under pressure from a US activist that may aim to position it for a private-equity takeover, says the Financial Times. Irenic Capital Management has built a stake of around 2% in SSP, which runs brands such as Upper Crust and Ritazza in airports and railways stations, and is pushing the group to boost profit margins. SSP has struggled to recover after the pandemic, hampered by cost inflation and the slow recovery in rail travel. However, the group also has a promising joint venture in India, which is set to list this year at a value of around £1bn. In 2023, Irenic targeted The Restaurant Group – which owns Wagamama among other brands – and helped push through its sale to private-equity firm Apollo.…

● In the past learning to drive was straightforward, says Mabel Banfield-Nwachi in The Guardian. You would take lessons, sit the theory test and then do the practical exam, Now the process “involves record waiting times, rising costs and having to compete with automated software bots to secure a test slot”. The average waiting time to take your driving test has reached 20 weeks, according to the AA Driving School. The government has promised to make thousands of extra driving tests available each month with the aim of getting waiting times down to seven weeks on average by the summer of 2026. In the meantime, the delays are adding to the already massive cost of learning to drive. It typically costs £1,575 for the lessons required before you take the…

● Is time running out to grab a bumper annuity rate? The income paid by annuities has soared by almost two-thirds in the past five years, encouraging more people to convert their pension savings into guaranteed income through these insurance contracts. But pension experts warn the market may have peaked for now, with rates likely to fall back if, as expected, the Bank of England begins to cut interest rates. ● Retirement savings could help younger people to get on the housing ladder, the Financial Conduct Authority (FCA) has said, pointing to the way in which the US, Australia and New Zealand have all developed ways for homebuyers to leverage their pension pots. The FCA thinks the UK should look at similar arrangements, perhaps allowing early access to pension savings…

In December 2022, Alexander Soros (pictured) was handed the reins to his father George’s multibillion-dollar empire, says Roula Khalaf in the Financial Times. The elder Soros famously made a fortune shorting the British pound in 1992, and founded the Open Society Foundations to promote democracy and human rights in central and eastern Europe. Thanks to $32bn from Soros, the “vast donor network” he presided over exerts a powerful global influence – something that has made it the target of right-wing hostility and conspiracy theories. Alex, 39, is, like his father, a “major figure on the American left”, says Khalaf. He and his father were some of the largest donors to the Kamala Harris campaign and spent more than $85m backing her. “Some might say Soros is the Elon Musk of…

2024 M&S Garganega Pinot Grigio, Veneto, Italy £7, Marks & Spencer, ocado.com The other week, I posted a photo on Instagram of a Tesco cheapie I found that rocked my boat: the 2024 Costa do Castelo Red, a Portuguese red wine that trips in at a diminutive six quid. Made from syrah, cabernet sauvignon, alicante bouschet and touriga, it is a juicy, ripe and accurate fellow with genuine balance and flair, and it’s easily the best-value red glugger of the year so far. This wine inspired me to find a white counterpart, and M&S came up with the goods. My featured white looks well-designed, like Castelo, but it’s about the contents, not the livery. As always, the trick with inexpensive wines is finding the lowest rung on the ladder from…

The Stoic Capitalist Advice for the Exceptionally Ambitious Robert Rosenkranz Bloomsbury Business, £20 Stoicism, a philosophy championing the mastery of the emotions, might seem an unlikely guide for the high-octane world of finance, often caricatured as being peopled by shouting traders and cut-throat dealmakers. Yet billionaire investor and philanthropist Robert Rosenkranz posits that its principles are not only key to a fulfilling life, but also to both personal and professional triumph. In his memoir, The Stoic Capitalist: Advice for the Exceptionally Ambitious, Rosenkranz charts his journey from modest beginnings – the son of an insurance agent and a drugstore clerk – to the halls of Yale and Harvard Law School, and ultimately to Wall Street, attributing his ascent in part to this ancient wisdom. A central tenet of the book…

“Superfans” of singer Beyoncé (pictured), who paid hundreds of dollars for tickets for her Cowboy Carter tour, are frustrated to find tickets now selling for less than $50, says Phyllis Akalin in The Times. Some had bought tickets during the pre-sale period when demand initially surged and dynamic pricing (which automatically adjusts prices in line with demand) sent prices through the roof. After that, however, interest and prices dropped off. One reason could be that while Beyoncé’s new Grammy award-winning album, Cowboy Carter, was well received by critics, many of the singer’s long-time fans have been less enthused by the pop star’s embrace of country music. The world tour had been expected to earn $294m from the sale of 1.2 million tickets for concerts in 29 cities. Fans also blamed…

UK dividends fell 4.6% year-on-year in the first quarter, according to the latest Computershare dividend monitor. UK shareholders received £14bn in payouts in the first three months of 2025, down from £14.7bn a year earlier. Underlying dividends – which exclude special payouts – fell by a more modest 0.2% year-on-year. Computershare blamed the headline drop on a handful of large cuts, with reductions at just three firms – Vodafone, Burberry and Bellway Homes – jointly accounting for a five-percentage point drop in dividends alone. Disappointments masked progress in healthcare, food, industrials and leisure, says Gary Jackson for Halifax. While “special dividends” are proving vulnerable to economic uncertainty, “we are unlikely to see much effect on regular dividends in the next couple of quarters”, says Mark Cleland of Computershare. For the…

The UK stockmarket continues to shrink. The number of companies listed in London has fallen from more than 3,250 in 2007 to less than 1,800 today. Last year the City suffered its biggest net loss of firms since the financial crisis, with 88 de-listings or primary listing transfers compared with just 18 fresh arrivals. It hardly helps that London has played host to duds such as Deliveroo, says Ben Marlow in The Telegraph. Despite official cheerleading – including from then-chancellor Rishi Sunak – the food-delivery app’s flop has left ordinary retail investors wondering why they bother with UK shares at all. The only people making money from London’s decline are the fee-hungry investment bankers who advise on deals.…

NatWest has reported a 36% jump in first-quarter profits to £1.8bn, up 33% year-on-year and £200m more that analysts had been expecting, says Mark Sweney in the Guardian. The surge, driven by higher deposits in NatWest’s retail and commercial banking services, as well as increased mortgage lending, came as the government reduced its stake in the bank to less than 2%. That paves the way for “a return to fully private ownership after 17 years”. The government was forced to spend £46bn to bail out the then Royal Bank of Scotland during the 2008 financial crisis. The sale of the government’s remaining stake in NatWest will be a “landmark” moment for both it and the wider sector, says Ben Martin in The Times. However, NatWest still needs to navigate the…

EToro Group is considering launching an initial public offering (IPO) in the US next week, becoming one of the first companies that delayed listing plans owing to tariff-induced market volatility to resume its efforts, says Bloomberg. A source cautioned that the Israeli trading and investment platform could still defer the float. EToro was founded in 2007, and had previously tried to go public via a merger with a blank-cheque company (or Spac, a special purpose acquisition company) in 2021 that valued the firm at $10.4bn. Following a funding round in 2023, eToro was valued at $3.5bn. Shares of rival Robinhood Markets have gained over 15% in the past month.…

On Saturday, voters in Australia “offered a potent lesson about the boomerang effect to Donald Trump and his MAGA faithful”, says E.J. Dionne in The Washington Post. As in the recent Canadian election, voters “mystified” by Trump’s tariff threats “gifted” their centre-left prime minister, Anthony Albanese, a “landslide victory few predicted”. There was a lot more going on than an“anti-Trump backlash”, say Victoria Kim and Yan Zhuang in The New York Times. Australia’s biggest trading partner is China, not the US, so the impact of tariffs will be less severe. Aware that he would need to “nurture the American alliance”, Albanese took care not to denigrate Trump and although he labelled his tariffs “unwarranted”, he did not “impose reciprocal levies”. What he did do was “relentlessly” paint the opposition leader,…

How quickly fears change. A couple of years ago, the idea that China had become completely uninvestable was widespread, as a result of the government’s heavy-handed crackdown on the tech sector and its mishandling of the economy. Meanwhile, America was going from strength to strength, with the S&P 500 lifted to steady record highs by the AI boom. Now the outlook has changed a little. Donald Trump’s chaotic start to his second term has made America look less safe than before. While the S&P 500 has erased the losses it made when Trump unveiled its tariffs, it is still lower than it was before election day. In contrast, the CSI 300 is up since before the government began announcing stimulus measures in September – although it has been volatile and…

Private equity for the masses Editorial The Economist As the global trading system “disintegrates”, deals of all types, whether initial public offerings (IPOs) or mergers, have “ground to a halt”, says The Economist. In recent years, as less equity has been issued on global stockmarkets, private markets (traditionally the preserve of “deep-pocketed institutions” and the “uber-rich”) have become the “most exciting corner of the investing universe”. And now private-market firms are dreaming of “luring in the investing masses”. Blackstone launched a property product back in 2017; Capital Group and KKR jointly launched a fund this April. However, private markets are “less liquid, more opaque and much less regulated”. Private-equity funds may exist for a decade before the manager sells or floats the company and returns money to investors. Stakes change…

freethinkecon.wordpress.com The government is hoping to save £45bn through efficiency gains from digital technology, says Giles Wilkes. We should always be sceptical when massive numbers like this (large enough magically to solve all of chancellor Rachel Reeves’ problems) are plucked out of the air. Reducing costs is “hard yards”, with “difficult decisions all the way”, and in government there are no “AI-shaped holes lying around”. Digital technology might help a bit in some “administrative, word-play” jobs, but is unlikely to help much in running a prison or teaching pre-schoolers or triaging health services. The admin budget is a small part of the whole – less than 2%. And the problem is rarely how to get “better words faster without paying people as much”, but with harder, more human difficulties. Besides,…

It has taken barely a month for consensus opinion to shift from thinking that the US market is invincible to declaring that US exceptionalism is over, so its market will underperform indefinitely. And all because president Donald Trump is causing chaos and confusion with tariff proposals, which not only change from day to day, but have also been the preferred economic tool of the US since its creation, as Marc Levinson of Bloomberg reminds us. The S&P 500 did fall 20% from its February peak to its early April low, but is now down just 6% in 2025. Remember that at the start of the year, the US was trading on 22.4 times expected earnings for 2025, so it was ripe for a setback regardless of Trump’s antics. It fell…

■ Middlefield Canadian Income is aiming to become the first trust to convert into an active exchange-traded fund (ETF) after talks with Saba Capital, the US activist that has been calling for it and several other trusts to restructure into open-ended funds. Investors will be offered a choice of rolling over into a new active ETF or receiving cash. Converting to an ETF will result in a tighter bid/offer spread, a share price that trades closer to NAV, and lower charges, says manager Middlefield. The change is subject to approval by investors; Saba – which owns around 29% – is expected to vote in favour. ■ Aquila European Renewables is to sell its 18% minority stake in the Sagres hydro-power project in Portugal in the first significant transaction since it…

You don’t need to own a Michelangelo or a centuries-old antique to make money from an auction. There could be thousands of pounds sitting in your attic in the form of rare and collectable old books, art or furniture. In February, for example, a first-edition copy of the first Harry Potter book sold at auction for more than £21,000 after it was discovered among a deceased man’s belongings set to be thrown away. Auction houses are also increasingly selling everyday items such as records, stamps and watches. Buyers often take part online these days, so sellers can reach an audience far beyond the room. Gauging value The first step to selling your old valuables is to make sure that what you have is actually valuable. Max Hasler, book specialist at…

How are your pension savings invested? If you’re anything like the typical Briton, your money will be deployed with great caution. Just 8% of savers in the UK are happy to hold high-risk assets in their pension plans, according to PensionBee. By contrast, 43% of savers want low-volatility holdings, or investments where there is no risk at all of a fall in value. Unfortunately, that suggests many savers are heading for disappointing growth on pension investments. Low-risk investment very often goes hand in hand with low returns. Indeed, anxious pension savers may even be more likely to lose money over the longer term. Inflation will erode the real value of your money unless you can generate returns to keep pace with – and outstrip – price rises. There’s less chance…

Digitalisation, AI, 5G-mobile networks and the shift to a low-carbon grid are reshaping economies and industries, driving surging demand for critical infrastructure: essential assets powering the digital economy, energy security, and future connectivity. As cloud services and generative AI take off, the supporting infrastructure must scale up just as fast. Data centres, ultra-low latency networks, and flexible energy sources are now indispensable, with demand for data centres projected to grow more than 30% annually until 2030. The amount of power consumed per rack (an open-frame structure holding servers) in a data centre or server room is climbing rapidly, AI workloads are soaring and, as a result, global electricity use is set to triple within the decade. Infrastructure companies stand to benefit, offering a compelling opportunity for longer-term investors. Unlike volatile…

“There’s this feeling that Europe is just a museum; well, the museum is now coming to life,” Catherine Braganza of Insight Investment tells Bloomberg. In the first quarter, the pan-European Stoxx 600 index outperformed the US market by the widest margin since the 2000 dotcom crash. The rally came unstuck last month following US tariff announcements, which sent the index down more than 12%. Europe’s bourses have since bounced back, with shares seeing ten straight daily trading gains through Monday amid a robust earnings season. Europe has plenty of lost ground to make up. Over the past decade, the US S&P 500 has gained 158%, compared with just 23% for the Stoxx Europe 600, notes Jenny Gross in The New York Times. Add in lower equity ownership rates in Europe…

“The amount of alcohol consumed globally is probably in decline for the first time in history... Yet from an economist’s point of view, teetotalism is... damaging... First, teetotallers are free-riders... non-drinkers who go to social events are free-riding on the joviality of hard-working drinkers... Or consider the... restaurant industry. Alcohol offers higher profit margins than food... if no one orders a bottle of Bordeaux, many restaurants will go under... [Secondly], many couples credit alcohol... for bringing them together. So it may not be a coincidence that the alcohol-shunning young are lonely... The third factor... relates to innovation. Today the world sees fewer breakthroughs. Hollywood sustains itself on remakes... For centuries creative folk, from Aeschylus to... Dickens, have relied on alcohol for inspiration. Being intoxicated opens up the possibility of... insight.”…

Microsoft has pleased the market by reporting unexpectedly strong sales and profit growth in the first quarter of 2025, say Brody Ford and Matt Day on Bloomberg. The results suggest that customers’ demand for cloud services has “held steady” despite a wave of tariffs and economic turbulence, with Microsoft’s Azure cloud unit posting a 33% year-on-year revenue gain in the quarter. A further annual 35% increase is expected over the next three months. Microsoft also reported progress in persuading consumers to upgrade to newer versions of its software so that they can use the latest AI features. Despite Microsoft’s “unexpected strength”, there are still clouds on the horizon, says Karen Weise in The New York Times. After ten consecutive quarters of increased spending on AI, the latest figures suggest it…

Five to buy Intertek The Telegraph Intertek’s sales, earnings and profit margin all rose in its latest financial year, prompting the provider of testing and inspection services to raise its medium-term margin target. Profits are set to grow over the next two years, and debt has fallen, so the firm looks well placed to negotiate a rocky economy. US trade barriers are a risk, but Intertek has an “excellent” record. Its “heady” share price looks good value given its long-term growth prospects. 4,594p H&T Group This is Money H&T Group, Britain’s largest pawnbroker with 285 branches and a market valuation of £170m, provides small, quick loans against jewellery and watches to individuals and small businesses. Demand for pawnbroking has grown owing to banks’ reluctance to lend to small firms and…

Over the weekend, Warren Buffett finally stepped down from Berkshire Hathaway, handing over management of one of the largest and most successful investment firms of all time to Greg Abel (see page 30). Investors will be asking whether Abel is up to the challenge, or, if not, where they can find someone as brilliant as the man he is replacing. The blunt answer is this: the markets won’t ever see his like again. There are three reasons for that. First, as Buffett himself was always the first to point out, he happened to start his long career at precisely the right time. The post-World War II US economy in which he made the bulk of his fortune was characterised by a long period of rapid growth that had not been…

“Emerging markets” is a very broad term used to describe countries that are becoming wealthier and more economically advanced, but are not yet classed as developed economies. It was originally coined by Antoine van Agtmael, then an economist at the World Bank, in 1981 as a way of drawing investors’ attention to a set of promising, fast-growing stockmarkets such as Brazil, India and South Korea, and was quickly embraced by the investment industry. The definition of an emerging market is not solely related to a country’s level of economic development. Index compilers also take into account the size and liquidity of local financial markets, and issues of accessibility, transparency and stability for foreign investors. Some of these criteria may be subjective, and firms may come to different conclusions. For example,…

“For me, Coca-Cola is the empire, so not drinking it is a personal discipline and it is also a good topic for conversation.” French far-left leader Jean-Luc Mélenchon (pictured), quoted in the Financial Times “There’s amazing shows and hits, but there’s too much money stuff involved in American theatre, where, apparently, you’re paying $1,000 a night to see Othello with Denzel Washington and Jake Gyllenhaal, who I hear is not particularly wonderful.” Actor Brian Cox, quoted in the Daily Mail “Buying an Arsenal share for about £350 in the 1990s, in the days when they were privately traded. Fast-forward to when the American billionaire Stan Kroenke and his family were in full control of the club and they did a compulsory share purchase – I got around £35,000 for that one…

moneytalksnews.com Economic forecasters are notoriously unreliable, but the writers behind The Simpsons seem to have an uncanny knack for it, says Money Talks News. In 2007, for example, the show’s writers hinted at trouble for the retail sector when they portrayed a sad, empty shopping arcade, with Homer walking past a JCPenney’s store and lamenting how bricks-and-mortar stores were becoming irrelevant. By May 2020, JCPenney had filed for bankruptcy. In 2012, a ticker on the bottom of the screen of a news show showed the headline “Europe puts Greece on eBay”. By 2015, the reality wasn’t far off the show’s joke. In the 2010 season, Bart’s friend Milhouse predicts that the Nobel prize for economics would go to Bengt Holmström. He won the award in 2016. But perhaps the most…

Emerging markets – and notably Asian economies – are still expected to grow much faster than developed economies over the next few years, even factoring in the impact of tariffs. India is the prime example. Its GDP is expected to increase by 6.2% in 2025 and by 6.3% in 2026, according to the IMF, compared to just 1.4% and 1.5% for advanced economies. China is forecast to grow at 4% for the next two years. Yet finding opportunities in these markets requires an edge. Most Asian markets remain inefficient, so an active approach is necessary. An active edge The £460m Pacific Assets Trust (LSE: PAC) has been investing across the Asia Pacific region (excluding Japan, Australia and New Zealand) since 1985. Stewart Investors took over the portfolio in 2010, building…

You might think that creating a highly accurate model of the way air passes through a jet engine would be relatively easy. It is incredibly hard. The enormous number of variables means that it is, in fact, beyond the abilities of our most powerful computers. But maybe not for long. Aircraft engine manufacturer Rolls-Royce has partnered with specialist companies (see overleaf) to produce quantum computers to crack the puzzle. What is a “quantum” computer? You and I live in the “classical” world. The things we see and the ways in which we interact with them are defined by the laws of “classical physics” as laid out by Albert Einstein in his General Theory of Relativity. So far, so straightforward. Einstein’s theory works so well it has been likened to a…

‘Bed-and-Isa’ is an odd phrase but a tax-efficient transaction, writes Katie Williams. You sell investments held outside an Isa. Then you repurchase them within the tax-free wrapper to minimise future income and capital-gains tax (CGT). Some investment platforms will manage the transaction on your behalf. The first two weeks of a new tax year are the most popular time to act. In 2024-2025, more than 25% of bed-and-Isa transactions at Hargreaves Lansdown occurred during that period – at AJ Bell the figure was 33%. Now is a good time to consider the strategy, especially given recent rises in CGT rates and the fall in the CGT allowance from £12,300 to £3,000. The dividend allowance has been cut from £2,000 to £500. Keep an eye on your overall £20,000 Isa allowance,…

Changes to the pension system aimed at helping people who have accumulated 13 million small pots of pension savings could give the average saver a £1,000 boost, the government claims. Under current rules, savers start a new pension plan each time they change jobs, leaving all their previous plans behind. Many lose track of their savings, or see the value of each pot eroded by fixed charges. Now the government plans to ensure pension plans transfer automatically from one job to the next, so that savers have a single pot of cash to manage and monitor. Still, changing the regulation to enable automatic transfers will take time. And in the meantime, there is nothing to stop savers taking matters into their own hands. Anyone with several small pots of pension…