Indholdsfortegnelse for Issue 1268 i MoneyWeek

Two years ago, having decided that we could do with some help on the magazine, I made inquiries about hiring an intern. I gathered that employment law governing work experience had been tightened, and that the person could be entitled to the minimum wage and require a formal contract if doing the sort of work I had envisaged (digital archiving and writing a few small articles). Apparently if the person merely shadowed me, observing my routine but not doing any tasks, there was no need to pay. That seemed impractical and unnecessary (I already had a pet at home that shadowed me everywhere, watching me work rather than helping) and because the whole business seemed to have become so much more complicated and expensive than in the 2010s, when we…

“[What’s] curious about the past decade is the number and severity of external shocks the US has weathered; shocks that, by conventional logic, should have triggered fairly severe recessions. These include Covid, significant inflation, and... the upending of global trade norms... [yet] the US economy continues to roll with the punches in a Balboa-esque fashion... What has changed? In short, the willingness of policymakers to intervene... Following the 2008 financial crisis, the Fed’s QE programme totalled $4.5trn, with a further $2trn injected during Covid... It would take a cataclysmic shock to overwhelm [US policymakers’] capacity for quick and effective intervention. Investors know this. And this added economic armour [acts as a shield] against a meaningful rotation away from US assets, despite recent jitters... We may need to accept that the…

AI-cloud-computing group CoreWeave is to acquire Core Scientific in an all-stock transaction, valuing the latter at around $9bn, says Connor Hart in The Wall Street Journal. Last year CoreWeave tried to buy Core Scientific – one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America – for $1bn in cash. CoreWeave hopes the deal will expand its footprint in the data-centre sector, improving sales, profitability and operating efficiency. Buying Core Scientific means that CoreWeave “will inherit more than a gigawatt of data-centre capacity across the US”, say Bloomberg’s Brunella Tipismana Urbano and Brody Ford. Controlling more of its supply chain will also “eliminate lease expenses, reduce costs, including those associated with financing projects, and “future-proof” its sales growth. Other cloud-infrastructure…

Bavaria’s semiconductor manufacturer Infineon Technologies has made a big bet on a new growth area, says WirtschaftsWoche. Acquiring a division of Marvell Technology for $2.5bn will boost its presence in software designed to run automated vehicles. The core chip business, meanwhile, is starting to recover from a downturn in the sector. Many clients have now reduced their inventories and demand is steadily rising thanks to long-term trends such as AI and digitalisation. Semiconductor prices could soon start climbing again. A collaboration with Nvidia on chips to facilitate the delivery of power to AI data centres also bodes well. Deutsche bank and JPMorgan are both bullish on the stock.…

The Brics group of leading emerging economies held its 17th annual summit in Brazil this week, but despite the long list of commitments relating to global governance, climate change, finance, health and AI, it risks “irrelevance”, says Amalendu Misra in The Conversation. Leaders of the two most prominent founding members, China and Russia, were “conspicuously absent”, and the “most notable takeaway” may have been Donald Trump’s Truth Social post: “Any country aligning… with the Anti-American policies of Brics, will be charged an ADDITIONAL 10% Tariff”. Trump’s ire is largely due to the group’s push to adopt a common currency to challenge the dollar’s hegemony. This is logical given that Brics nations accounted for around 22% of global exports in 2024. Its 11 full members represent around 50% of the…

A wealth tax used to be an idea restricted to the battier fringes of the far left. It might be championed by the people who sell Socialist Worker on the high street on Saturday mornings. But it has no place in mainstream politics. In the last few weeks, that has started to change. Over the weekend, Neil Kinnock, the former Labour leader who in many ways represents the soul of his party, and still has a loyal following among members, advocated a 2% annual levy on anyone with assets of more than £10m. Lots of backbenchers are calling for a wealth tax, and so are many of the Labour-supporting newspapers, magazines and think tanks. It is becoming normalised. And that is a big step towards it being implemented. In her…

“We could bury the hatchet for a quick lap of honour… I’d do it for nowt, but if someone’s going to drop a load of f****** money, I’d do it for that too … [Then] I’d still go back to [my band] Beady Eye and Noel would go back to his thing.” Oasis singer Liam Gallagher (pictured) in 2013 on a possible reunion with fellow band member and his brother Noel, quoted in The Guardian. Oasis has just begun a reunion tour “[Chancellor Rachel Reeves shed] one of the most expensive tears in history.” An anonymous Tory MP on a tearful Reeves after PM Keir Starmer stopped short of giving her his full backing and bonds sold off on the prospect of her departure, quoted in the Financial Times “Lawsuit:…

blogs.lse.ac.uk/businessreview Starting your own business is “not just a strategic or financial undertaking”, says Florencio Portocarrero. It is “primarily an emotional journey”. Indeed, emotion can “make or break a new venture”. Passion, for example, is “what keeps you going through long hours, tight budgets and personal sacrifice”. It “fuels creativity” and generates “persistence”. Yet if it becomes obsessive, the result can be burnout. Similarly with fear and anxiety. Starting a business is inherently risky and a lot is at stake, so it’s not surprising that “fear and anxiety are common companions”. But although usually deemed to be negative, fear and anxiety serve useful functions. Anxiety can enhance performance under pressure, for example; fear can be a signal to warn of problems before they get out of control. Chronic fear and…

Caledonia Investments (LSE: CLDN) is one of the few remaining investment trusts with a significant founding family shareholding. The £2bn trust is 48% owned by the Cayzer family, which was one of the most powerful shipping dynasties in the world in the late 1800s. Today, it looks after £2.9bn of assets, all managed in-house, which are split across three pools of roughly equal size: quoted equity, private equity and direct private-company holdings. Caledonia has been part of the MoneyWeek investment trust portfolio for many years. We like its diverse approach and its aim of earning solid long-term returns of 3%-6% above inflation, while managing risk during periods of uncertainty and instability. A diverse approach The private capital part of the portfolio is focused on high-quality, UK mid-market companies. The holdings…

“Beyond the temporary disruptions, over the long-term travel should keep on growing” In spite of a constant barrage of negative headlines in the press, covering everything from geopolitical tensions and global economic jitters to concerns about overtourism, the world’s travel industry is quietly cementing its position as a remarkably resilient and lucrative sector. Far from being a perilous investment, many industry leaders and financial analysts contend that the post-pandemic rebound, coupled with significant structural shifts in demand and the pervasive integration of advanced technology, has transformed large segments of the industry into “just one great big cash machine”, as Frank Holmes, chief executive and chief investment officer of US Global Investors, puts it. This confluence of factors, he argues, positions travel as “one of the all-time great contrarian opportunities”. Dispelling…

How much do you really need to save for retirement? It’s the most fundamental question of all when it comes to pension planning, but also the hardest one to answer. There is no single target that applies to everyone because everyone is different, not only in their circumstances but also in their aspirations. Pensions UK has tried to offer some advice on this question with its Retirement Living Standards (see retirementlivingstandards.org.uk); these provide estimates of what income single people and couples would need to enjoy a minimum, moderate and comfortable standard of living in retirement. This year, the organisation says a single person would need an income of £43,900 to be comfortably off, rising to £60,600 for a couple. That might give you a benchmark to aim for, but it’s…

Video games are one of the most rapidly expanding forms of entertainment. Thanks to improving technology, today’s games are far more immersive than they were even a decade ago, which helps them compete with alternative forms of entertainment, such as television. The demographics of gaming are changing; middle-aged people who grew up with computer games still enjoy them. Throw in new technologies, such as virtual reality (VR) and the advent of eSports, and it’s no wonder a recent report by consultancy PwC estimated that the sector’s total revenue will exceed $300bn by 2028. One company already benefiting from this is Electronic Arts (Nasdaq: EA). Electronic Arts is one of the largest video-game studios. It is involved with some of the biggest franchises in the industry. These include the Battlefield and…

“Japan’s top four waste management firms make up less than 4% of the overall market” Water and waste management are fundamental to the smooth functioning of any economy, yet these sectors are often overlooked in investment portfolios. The water value chain includes companies involved in pumps and valves; water filtration and purification; water-related infrastructure and networks; metering and billing; and wastewater treatment. Waste solution providers include companies involved in waste collection, transporting, sorting, and recycling; hazardous-waste management; pollution prevention and control; environment planning; and related consulting and engineering services. The Regnan Sustainable Water and Waste Fund combines the best opportunities from the water and waste-value chains. All stocks in this under-researched area of the market undergo detailed scrutiny of their fundamentals and sustainability credentials. The stocks in our theme have…

As the internet is gripped by Labubu-fever (see left), you may well be asking, haven’t we been here before? Well, yes – many times. Cabbage Patch Dolls, Beanie Babies and more recently Jelly Cats and Cry Babies are just a few examples of collectable soft toys that have driven parents to the edge of insanity over the decades. But before them all was Hello Kitty (pictured). This anthropomorphised cat/little girl, who lives in a suburb of London, has been a huge success for her owner, Japanese toy company Sanrio, for the past 50 years and all manner of Hello Kitty merchandise has been sold over the decades. Hello Kitty timed her debut perfectly. Her appearance in 1975 coincided with a decade in which greater numbers of women were joining the…

Hollywood has often lampooned Formula One as “foreign” in Nascar-loving America. No longer, says The Economist. F1 the Movie, which has made $293m at the global box office so far on a budget of roughly $300m, reflects the world’s most popular motor sport’s accelerated ambition and scale. Produced in collaboration with F1, it stars one of America’s most bankable heartthrobs, Brad Pitt (pictured), who got to drive at 200mph. To some, “watching cars noisily circle a track for two hours is duller than wiping a dipstick”. Yet Liberty Media, which bought F1 in 2017, shifting the sport’s focus to producing content, has drawn in the punters. It launched the F1 TV Pro streaming service, and some 360,000 viewers in the US tuned in to Grand Prix races in 2022 after…

The UK housing market is entering a pocket of turbulence. Prices fell 0.8% in June, the largest monthly drop in over two years, says Nationwide. On an annual basis prices rose 2.1%, one of the slowest rates of annual growth over the past 12 months. No wonder. “The legacy of the March stamp-duty cliff edge is high supply and softer demand, which is putting downward pressure on house prices,” Tom Bill of Knight Frank tells Julia Kollewe in The Guardian. Expected interest-rate cuts later this year should provide some support for property. Bill predicts “modest single-digit house-price growth by the end of the year”. Get used to mediocre returns, says Ed Magnus on This is Money. Wealth manager Rathbones argues that “the golden age” of property investing is over. Between…

UK vs US stockmarket valuations The FTSE 100 trades on a price/earnings (p/e) multiple of 16.6, a significant discount to the 27.2 rating of America’s S&P 500. The valuation gap is long-running and reflects the FTSE’s greater weighting towards low-growth industries such as banking and consumer goods. A steady drumbeat of firms quitting London in pursuit of better valuations elsewhere has also contributed to “a lack of self-esteem” in the City, Steven Fine of Peel Hunt tells Chris Price in The Telegraph. The UK’s bargain-basement valuations do at least have the virtue of making the FTSE resistant to bad news, with the index rallying more than a fifth over the past three years in the face of the 2022 gilt crisis and soaring inflation. Gloom about the UK economy is…

Currys remains “one of the hottest stocks on the UK market”, says Alistair Osborne in The Times. Shares in the electricals-retailer jumped 7% last week when it published its full-year figures. They have soared from 47p to 127p in 16 months. Adjusted pre-tax profits rose 37% to £162m and like-for-like sales in the UK division were up 4%, buoyed by progress in “building recurring revenues via the likes of installation and repair services”. At the same time, the balance sheet is “in its best shape for a decade”, while the dividend is back. Currys’s success has shown that an “old-fashioned bricks and mortar” chain can compete with Amazon by combining “real tech know-how with excellent customer service”, says Ben Marlow in The Telegraph. However, CEO Alex Baldock also deserves particular…

US design software group Figma is planning a flotation in New York less than two years after calling off a $20bn sale to rival Adobe amid regulatory concerns over competition. Since that deal’s collapse in 2023, Figma has accelerated the vesting of restricted stock units to help retain and attract staff; issued fresh equity options; and bolstered sales, marketing and AI initiatives, turbocharging growth, says Jeffrey Goldfarb on Breakingviews. Still, achieving the same $20bn valuation may need “some creative licence”, as Figma’s valuation would be 24 times its $820m sales over the past year, more than Adobe’s nine times and software developer Atlassian’s 13 times.…

● “There may be no better example of why listed ownership beats private equity than Sainsbury’s,” says Alex Brummer in the Daily Mail. Supermarkets have faced big challenges, including the rise of online shopping and tough competition from discount chains Aldi and Lidl. Yet since its bid for rival Asda was blocked by the Competition and Markets Authority in 2019, Sainsbury’s has “prospered by focusing on competitiveness”. Its market share – which is second only to Tesco – has “zipped” above 15% again. Sales in the 16 weeks to 21 June rose 4.7% thanks to fine weather, with paddling pools “making a splash” at the Argos brand. Investors have enjoyed a 21% gain in the share price over the last three months. Meanwhile, Asda, under “confused” private-equity ownership and hampered…

capx.co Political leaders have seized on the promise of new anti-obesity drugs such as Ozempic as a “silver epi-pen solution to an overstretched welfare state” – and one that won’t require politically painful decisions, says James Rose. But that may be wishful thinking. The drugs themselves are expensive and long-term use is likely to be necessary. Doctors who are already stretched will have to commit to regular appointments and monitoring. And as the drugs show promise in treating dementia and other conditions, there could soon be pressure to prescribe more broadly. The most profound impact, however, could be demographic. If obesity rates fall, life expectancy will rise, making the existing problem of ageing societies even worse. That has implications for the public purse, not least state pensions. Still, long-term guesses…

US activist Saba Capital – which has targeted a series of investment trusts this year – has exited its 29% stake in CQS Natural Resources Growth & Income under the trust’s 100% tender offer. Investors owning 46% of the trust’s shares opted for redemption, slashing its net assets to just £74m, which may leave its long-term future in doubt, say analysts at Deutsche Numis. Meanwhile, uranium fund Geiger Counter and Golden Prospect Precious Metals – which share the same management company as CQS Natural Resources – have signed standstill agreements with Saba to prevent it from taking action against them until 2028. Since May, Geiger Counter has also bought back nearly 11% of its shares, while Saba’s stake in it has fallen from 13% to 4.2%.…

The easiest way to buy into the travel boom is through an exchange-traded fund (ETF), such as the US Global Investors Travel UCITS ETF (LSE:TRIP). It is run by Frank Holmes and Joanna Sawicka, and follows a “smart-beta” strategy, weighing the holdings in the portfolio based on momentum and earnings (as opposed to market capitalisation alone). At the present time the fund has 50 holdings, around 40% of which are airlines, which account for the top-four holdings (ICAG, Delta, United Airlines and Ryanair). Hotels make up significant chunks of the portfolio, too. The ETF has a total expense ratio of 0.69%. The hotel industry generally obviously stands to benefit from the growth of tourism, as well as from the backlash against Airbnbs and short-term holiday lets. One of the biggest…

Self-invested personal pensions (Sipps) are a good option if don’t have access to a private pension scheme through an employer, or if you want to make additional savings outside of work. They offer plenty of flexibility, can be managed through online savings platforms, and are competitively priced. Still, with dozens of providers to choose from, it isn’t always easy to pick a plan. New research from the consumers’ group Which could help. It has just published the results of research conducted with 3,000 Sipp savers – importantly, Which has focused on customers’ satisfaction with providers as well as charges, which is what most surveys of the market pay attention to. While it’s important that your Sipp keeps charges to the minimum, you also need to be able to rely on…

Just over a year ago, Keir Starmer came into office with a huge majority. A year on, the outlook is grim. Starmer’s approval rating has plunged and Labour is second in the polls behind Reform. Some surveys suggest that if an election took place today, then Nigel Farage’s party would win enough seats to secure the keys to Number 10 without even having to form a coalition with another party. As a result, it is no surprise that the betting markets are bearish about the prospect of Labour winning an overall majority at the next general election. With £10,192 matched on Betfair, no overall majority is favourite at 1.92 (52.1%), with a Labour majority at 4.2 (23.8%). Nonetheless, the market puts Labour’s chances of a majority higher than either Reform’s…

“Pick a side,” says The Economist. While the US and China have smoothed over their own trade spat, US strategy has pivoted to pressuring “unfortunate third countries” to do the dirty work of isolating China – or risk losing access to the world’s biggest market (see page 5). As MoneyWeek went to press, negotiations were ongoing with most US trading partners affected by April’s “liberation day” tariffs. A 90-day pause on most duties was due to expire this week, but Washington extended time for negotiations until 1 August, while threatening steep charges on countries including Japan, South Korea (both 25%), Thailand (36%) and Indonesia (32%). Donald Trump has previously threatened the EU with tariffs as high as 50% if negotiations are unsuccessful. The UK is staying out of the fray…

Only three years ago Pascal Soriot was knighted for services to UK life sciences and leadership in the global response to Covid, says Julia Kollewe in The Guardian. However, last week the market was rocked by a “bombshell” report that Soriot “has reportedly discussed moving AstraZeneca’s stockmarket listing, and perhaps even its corporate base, to the US”. The news propelled AstraZeneca’s shares 3% higher and sent “shock waves” through the UK’s scientific community. It could “topple a key pillar of the government’s fledgling industrial strategy and deprive the London market of its biggest star”. The reports come with several caveats, says Alistair Osborne in The Times. “[The] boards of most FTSE 100 groups regularly review both the listing and domicile,” while any move would necessitate investors’ approval, which might be…

Six to buy Fever-Tree The Telegraph Despite Fever-Tree’s recent poor share-price performance and high valuation, the premium soda and tonic maker’s profits are expected to grow over the coming years owing to greater household spending power, a result of modest inflation and interest-rate cuts. The group boasts an “excellent” competitive position, and is becoming a more diverse business following its expansion into new geographies and product segments. With ample cash, a sound strategy and upbeat growth prospects, Fever-Tree is a “high-quality company ... worth sticking with for the long term”. 938p Empire Metals This is Money Empire Metals’s titanium mine in Western Australia is different from those of conventional producers thanks to its simple and cost-effective delivery of titanium dioxide. Empire is well-placed to benefit from increasing demand as titanium…

A high-tech approach to welfare David Tingxuan ZhangNikkei Asia Last month, Beijing released two major policy documents that signal a “quiet but consequential shift” in its approach to welfare, says David Tingxuan Zhang. The first was on new regulations on data sharing, designed to “break down” silos between state departments; the second, a directive on improving welfare for those in greatest need. These documents provide a glimpse into how Beijing plans to address a “pressing policy dilemma”: how to support consumption and reduce unequal access to basic services without creating a welfare state that encourages laziness or relies on “debt-heavy stimulus”. This approach draws on the “vast troves” of data Beijing has built over the past decade, which allows for a data-driven system that can work “continuously and at scale”,…

ian-leslie.com For all the “sound and fury” surrounding Donald Trump’s first six months in power, his is already starting to look like a conventional presidential second term, says Ian Leslie. His “ineffectualness” at imposing his wilder ideas is also “a sign of how hard it is for any president to make radical changes”. Presidents are more unpopular than they used to be (Trump even more so). Voters are more hostile to politicians and “divided not just politically”, but also in terms of information. “Throw in a degraded governing class and you have the conditions for executive incapacity that are very hard to overcome by any leader.” In short, the “levers of national power” simply don’t work anymore. It’s the same in Britain. We have gone through five prime ministers in…

“In the US and UK, a respective 20% and 22% of listed firms are zombies” Andrew Van Sickle: The developed world has a growth and productivity crisis. Taxes are high, there is growing concern over income and wealth inequality, and the statist populist right and populist left are in the ascendant. Many people think capitalism has failed. You have a different take. Ruchir Sharma: One of the reasons I wrote this book is that in 2019 there was a survey saying that young Americans thought socialism was preferable to capitalism. That struck me as a hugely significant: I grew up in India, which used to be a socialist country, and I experienced the adversity caused by socialism. The young typically revolt against whatever the current system is. The current system…

● Terry Smith’s Fundsmith Equity fund has ditched its stake in Brown-Forman following a prolonged slump in the US drinks firm’s shares. The decision follows the sale of a long-term holding in British spirits giant Diageo last year. Smith also indicated that he is losing faith in pharma firm Novo Nordisk, which has been ceding its initial leadership in GLP-1 weight-loss drugs. Fundsmith Equity has seen £4.2bn in outflows over the past year following a run of weak performance, although it still has over £20bn in assets. ● Gresham House Energy Storage has signed two long-term floor-pricing agreements that will lock-in minimum annual contracted revenues covering 74% of its battery-storage assets once the agreements come into force over the next two years. Once a further pending floor-pricing contract is signed,…

How should investors reduce the risk inherent in their pension savings as they move towards retirement? The conventional strategy was to increase exposure to bonds, but recent market turmoil has undermined confidence in this approach; analysis from BlackRock shows a portfolio split 60% and 40% into equities and bonds delivered average annual volatility of 8% between 2012 and 2021, but that this figure rose to 13% between 2022 and 2024. The only solution, suggest financial advisers, is to diversify with other assets – including alternative assets such as infrastructure, real estate and private equity and credit. Successive governments have doubled down on their commitment to the “triple-lock” on state pensions, apparently deciding the political cost of change would be too high, despite the projections of the ballooning financial cost to…

It has been a broadly positive fortnight for the six long tips in my trading portfolio, with four rising, one unchanged and only one going down. Soft-drinks group AG Barr, the maker of Irn-Bru, appreciated from 688p to 695p, payments firm Corpay went up from $322 to $332 and telecoms firm Airtel Africa advanced from 171p to 179p. Food-packaging specialist Hilton Foods also rose, from 836p to 855p. Shares in vending-machine firm ME Group remained unchanged at 226p. The only exception to the general uptrend was Dunelm Group, which declined from 1,169p to 1,132p. Overall, the losses on my long tips have dwindled from £600 to £389. Sadly, my short tips didn’t do as well, with all but one moving against me. Online food retailer Ocado climbed from 229p to…

Norman Tebbit (pictured), the “longtime keeper of the Thatcherite flame”, has died at the age of 94, says James Heale in The Spectator. His career in public life spanned more than 50 years, from his election to the Epping constituency in 1970 to his retirement from the House of Lords in 2022. An “ardent right-winger”, he might have spent his career in relative obscurity but for the election of Margaret Thatcher in 1975. Thatcher’s roots lay in the lower middle class, Tebbit’s in a “fractionally lower stratum”, says The Telegraph. He was brought up in north-east London and never forgot the Depression of the 1930s, which had forced his father, in Tebbit’s most famous words, to “get on his bike and look for work”. The left caricatured that as an…

2024 the Best Block Series 004, Niederösterreich Zweigelt, Austria £13, reduced to £9 with a More card, Morrisons I have tasted wine virtually every day for 38 years. My job has been to find wines that perfectly fit the desires of my readers and those who happen to walk into restaurants whose lists I curate. Of course, this is a “horses for courses” job that has more runners and riders than I care to admit. When I stopped writing my weekly Daily Mail article in 2022, I no longer needed to taste as many mass-market wines. But that doesn’t mean I don’t pay attention to high-street offerings. While my MoneyWeek readers sit atop my ladder of fine-wine appreciation, some very rare wines stand a chance of appealing to everyone, from…

Going… The shirt Andy Murray was wearing (pictured) when he won his first Wimbledon singles title in 2013 is heading for auction with Northampton-based Graham Budd Auctions. Murray signed the Adidas shirt and it is expected to fetch at least £5,000 as part of the “Grand Slam Timed Auction of Tennis Memorabilia”, which coincides with the end of this year’s Wimbledon Championships on Sunday. The baseball cap Murray wore at the tournament in 2023 is also appearing in the sale, with a guide price of £2,500-£3,500, along with the net used in 2010 in the “longest tennis match in history”, which is valued at up to £3,000. Gone… A signed 2022 NetPro Premium Autograph Golden Slam Rookie Card of Spain’s Carlos Alcaraz sold for $237,907, including the buyer’s premium, with…