Indholdsfortegnelse for Issue 1274-1275 i MoneyWeek

The US housing market has suffered its worst spring selling season in 13 years, says Prashant Gopal on Bloomberg. April to June is moving season, with the period as decisive for property firms as Christmas is for retailers. After two years blighted by high interest rates, analysts had predicted a 2025 boom (US rate cuts, currently on hold, began in September last year). Yet fewer contracts were signed this spring than in any year since 2012. Despite sluggish activity, prices remain elevated and affordability is historically low, says Ronda Kaysen in The New York Times. In many places supply is even more restricted than demand. Unlike in the UK, most Americans hold ultra-long thirty-year fixed-rate mortgages. Many locked in sub-4% rates on those loans during the pandemic. Selling today would…

Palantir may be “the most overvalued firm of all time”, says The Economist. Shares in the US data mining-software specialist have increased more than fivefold over the past 12 months. Palantir uses AI to help companies and governments make better decisions and has long-standing contracts with US defence and intelligence agencies. The company recently topped $1bn in quarterly revenue for the first time, but on a stock price approaching 600 times earnings the market is getting carried away. To justify that rating it will need to grow revenue at more than 40% a year for the next five years – not impossible, but a feat achieved by only the “most successful firms in history”. If it fails, Palantir could become a “cautionary tale”.…

Shares in Miami International Holdings (MIAX) surged 34% on their public debut in New York, says Bloomberg. MIAX operates nine securities and derivatives exchanges and holds a 16% share of the US-listed options market, having benefited from the growth in retail trading during the pandemic and the meme-stock trend of 2021. It primarily serves market makers rather than engaging directly with retail traders. The exchange operator raised $345m in a heavily oversubscribed deal that valued it at $2.4bn. MIAX has established a trading floor in Miami, drawn by favourable tax conditions, and plans to list futures and options on the Bloomberg 500 index.…

It’s difficult to imagine a time when anybody was more bullish on Europe than America, but this was a popular investment thesis before the global financial crisis. The US had a giant housing bubble, a vast trade deficit, and a currency in steady decline. Consumers were heavily dependent on spending their savings, according to statistics at the time (this data later got revised and those eight quarters with a negative savings rate turned out to be an error – a good example of how unreliable statistics can be, as I discussed last week). Europe also had housing bubbles, but otherwise looked sounder and was well-placed to benefit from emerging market growth. We all know how this theory turned out. Europe has trailed the US on virtually every financial measure since…

Mani Basharzad / CapX Last month more than 30 so-called “top economists” called for a UK wealth tax, says Mani Basharzad. Many oppose almost any market reform: the likes of Thomas Piketty, and Martin Guzman. Some on the list signed another letter a year ago warning against Javier Milei’s supposedly dangerous reform programme in Argentina. Yet today its deficit is eradicated, its inflation slashed, its growth rate surging. High-profile economists have a decades-long history of being wrong about pro-market policies. They mischaracterise market economics as rooted in “unrealistic neoclassical assumptions such as perfect information and perfect competition”. Yet Friedrich Hayek was himself a harsh critic of idealised conceptions of markets. In real life, he argued, markets are “not fully efficient and competitive, but the discovery process of entrepreneurial trial and…

● Fidelity Japan Trust (FJV) has agreed to a merger with AVI Japan Opportunity (AJOT) following a strategic review launched in April and a failed continuation vote in May. AVI will continue to run the merged trust under its activist small-cap strategy. FJV investors who do not want to roll over into AJOT will be able to take up a tender for up to 50% of the share capital at a 1% discount to NAV. ● Infrastructure trust International Public Partnerships (INPP) has sold part of its stake in Angel Trains – which owns trains that run on UK railways – to fund share buybacks and its investment in Sizewell C nuclear-power station. INPP sold a 1.6% stake for £32m at an estimated 28.5% premium to the December NAV and…

● The government says changes to the inheritance-tax (IHT) rules on pensions will extend to savers who die before the age of 55, prompting anger from those who had expected a softer approach. From April 2027, unused pension savings will count towards the value of your estate, potentially meaning that your beneficiaries could have to pay IHT on the money. Many in the pension industry had expected an exemption for people who die before age 55, since it isn’t possible to access pensions cash before this age. But detailed proposals on how the new regime will work now appear to rule this out. ● Savers who have made thousands of pounds worth of additional national-insurance contributions to qualify for extra state pension have been left in limbo by a systems…

The Global Smaller Companies Trust seeks to offer investors exposure to small businesses both in the developed markets and faster-growing emerging markets. The trust takes a long-term, conservative approach to investing in good-quality, growing businesses when they become available at a significant discount to intrinsic value. This disciplined investment process focuses on capital preservation and long-term value creation rather than chasing short-term market trends. We have found exciting opportunities in companies likely to benefit from increased spending on construction, both in the public and private sectors. Firm foundations Martin Marietta Materials (NYSE: MLM) is a US-based producer of construction materials, such as aggregates, cement and ready-mix concrete. As the business sells products that have a low cost-to-weight ratio, it effectively operates a series of local monopolies. Materials from the company’s…

Rare whisky prices are still recovering from the decade-long buying binge that accelerated during the lockdown periods of the pandemic. In the decade to this year, rare whisky prices have soared 192%, according to Knight Frank’s “The Wealth Report 2025” – and that’s including the downturn that started in 2022. At the end of May of that year, prices for the most sought-after bottles reached dizzying heights before embarking on a long, steady decline that still continues, as shown by the Rare Whisky Icon 100 index, which tracks the prices of the most coveted collectable bottles of whisky. Over the past 12 months, the index has fallen 13%. Is any let-up in sight? No, is the short answer from the latest “Whisky Intelligence Report” from Edinburgh-based investment bank Noble &…

Hong Kong’s markets are “booming”, says Bloomberg. The city was the world’s busiest market for initial public offerings (IPOs) in the first half of the year, with $45bn raised, compared with just $6.3bn for the same period in 2024. The former British colony has endured a difficult period ever since Covid restrictions cut it off from the world, while the local economy remains sluggish. Now a surge in listings is keeping local bankers busy. Most activity is coming from mainland Chinese firms, which account for 75% of the local Hang Seng stockmarket index. In May, battery giant CATL conducted a $5.2bn listing in the city, the largest IPO globally this year. Proceeds will help it finance a “huge factory in Hungary” that it will use to supply the German car…

Five to buy Cranswick The Telegraph The pork and poultry producer is on track to meet full-year guidance and is expected to generate annualised earnings growth of 7% over the next two fiscal years. The company’s solid financial position and competitive advantage show that it is a “high-quality” business worthy of a “premium” valuation. Cranswick is a “favourable long-term investment opportunity”. 5,240p Allianz Technology Trust and Polar Capital Technology Trust The Times Allianz Technology Trust and Polar Capital Technology Trust are ideal vehicles to profit from the growth of AI and hedge against any risks. Their share prices have plateaued recently, presenting a buying opportunity. San Francisco-run Allianz closely follows Silicon Valley’s trends and focuses on a smaller, more concentrated portfolio with riskier, emerging firms, while Polar prefers stable, established…

Navigating financial markets requires a reliable set of instruments. Unfortunately, the pandemic exposed the shortcomings of even the most long-running data series. We have to accept that our statistical indicators have struggled to keep up with the pace of technological change, and have to adjust our course accordingly. It’s time to move from log tables to GPS. The normally staid world of statistics was rocked by US president Donald Trump conducting yet another round of his reality-television show The Apprentice, when he fired the US commissioner of labour statistics. However, the US bureau of labour statistics (BLS) had already been struggling for some time. Over the last 18 months it has “inadvertently” released inflation data early, posted the annual employment revisions late and informed some financial institutions (referred to by…

The final snapshot… the last picture… the end of the reel. The headlines on potential corporate obituaries for Kodak write themselves. There was a flurry of speculation last week that the company that once dominated the photography market – and turned itself into one of the world’s most famous companies – might be on the verge of shutting down. The company says this was a misunderstanding – but the fact that it even sounds possible should be a warning to today’s tech giants. Rewind three decades and Eastman Kodak was still a heavyweight. The business was founded in 1880 at the dawn of the era of mass photography and quickly came to dominate the industry. At its peak, it employed 140,000 people worldwide, and it was worth $30bn. Kodak was…

Standard deviation (SD) is a statistical measure of the dispersion of a set of data relative to its mean (ie, how spread out each value is relative to the average). It is often used in financial markets as a measure of risk. This may sound technical, but it’s fairly straightforward to understand. Take, for example, the height of adult males in the UK. You would expect to see most members of a fairly large and randomly chosen group bunch around the arithmetic average for the population as a whole. A randomly chosen man in the UK will on average be close to 175cm (5’9”), with only a few people far above or below that. SD quantifies the dispersion around that average. The higher the SD, the wider the spread of…

ft.com/alphaville Many economists seem to think that the purpose of international trade is primarily to give domestic consumers access to cheaper foreign goods, says Michael Pettis. But it’s “only by producing more that we can consume more”. The idea is that low-priced imports are an “unalloyed blessing” that lets people stretch their paychecks, thus raising living their standards. Not so. When the US runs a trade deficit, it is buying more from the rest of the world than it sells, and must fund that by “transferring ownership of stocks, bonds, factories, real estate and other American assets”. Cheap imports are therefore a double-edged sword, and international trade is only beneficial when it drives a shift in domestic production that leads to higher productivity. Of course, trade deficits are “not necessarily…

Law Debenture (LSE: LWDB). has been one of the best-performing UK equity trusts over both the short and long term. The trust has generated a share price total return of 48% over the past three years, compared with 35.5% for the FTSE All-Share. Over the past decade, the return has been 187.5%, against 92.7% for the index. The structure of the trust is unique, since it has both an investment portfolio and a professional services business, which account for 82% and 18% of net asset value (NAV) respectively at the end of June. Professional services – which includes pension administration and company secretarial services – generates a steady stream of income, which has contributed roughly a third of the trust’s dividend distributions historically. A diverse portfolio This set-up gives the…

Self-employed workers continue to fall behind on pension planning, new research warns, adding to the pressure for more support for this group of savers. Just 22% of self-employed Britons currently contribute to a private pension plan, according to the Social Market Foundation; and even among those who do, many contribute irregularly, or pay in a flat amount that they don’t increase when their income rises. The result, suggests the think tank’s modelling, is that two-thirds of self-employed people are unlikely to achieve a level of retirement income that the Pensions and Lifetime Savings Association regards as the minimum necessary for old age. More than half are likely to be dependent solely on the state pension. The research highlights the problems faced by Britain’s five million self-employed workers. Almost all employees…

Automatic Data Processing. (ADP) is a global technology company worth $123bn and the world leader in human capital management. The software group boasts several desirable features for investors, offering them enduring competitive advantages, a share price up 119% in five years and a 2% yield from a dividend that has been increased every year for 50 years. The group’s share buybacks have reduced the share count by an average of 1% per year over the past ten years. ADP’s medium-term target is an annual total shareholder return of 13%-15%, with 2% of this figure from the dividend and 1% from the reduction in the share count. For more than 75 years ADP has been helping small, medium-sized and large businesses by providing efficient services such as payroll and tax administration;…

“One of the... most hackneyed ‘solutions’ to the... problems which beset British government [is to] bring in dynamic, no-nonsense leaders from the business world... [The idea has been tried before] and... results have been mixed... John Davies, director general of the CBI in the late 1960s [led the] department of trade and industry. As a former MD of Shell-Mex and BP, he was the ideal candidate... surely? Not quite. Davies was a disaster. He never got to grips with his department of more than 25,000... and he never found his feet in the House of Commons... The skills required to be a successful politician and those which commercial success demands are not the same... ask Archie Norman, or Digby Jones... It is worth remembering that only one prime minister and…

When it comes to German smaller companies, Fielmann, a chain of opticians, is worth a look, says WirtschaftsWoche. The popular brand operates more than 1,200 branches, around half of them in Germany. The rest are in southern and central Europe, along with 200 in the US. The stock has gone nowhere in recent years, but the outlook is improving. Margins, hampered by capital expenditure and labour costs, are recovering, while the son of the company’s founder is now CEO and has been concentrating on innovation. His efforts appear to be bearing fruit: witness an augmented-reality tool for trying on glasses. Costs cuts and a focus on online purchases bode well too.…

● “Mike Henry must surely be battening down the hatches,” says Antony Currie on Breakingviews. BHP’s CEO is trimming mid-term capital spending and increasing the mining giant’s net debt limit by $5bn to prepare for tough times and add flexibility in dealmaking. “It’s smart to flag all this to shareholders now,” and “even wiser to sweeten the news” with a higher-than-expected $3bn interim dividend. BHP is not struggling, but its annual results – which showed a 26% drop in income to $10.2bn – were the weakest in five years on a wide range of metrics. Softer commodity prices – particularly iron ore, which was affected by concerns over China’s economy – were only partly offset by rising copper production and discipline on costs. So these changes leave BHP better-placed for…

“We are now staring down the barrel of a deflationary shock,” says David Rosenberg, the veteran Wall Street strategist and founder of Rosenberg Research. “It amazes me how all the bond bears, inflation-phobes, and [US Federal Reserve] policy hawks are missing this secular shift as they continue to play by the old rules.” The ageing population, immigration restrictions, and trade tariffs could lead to slower consumer spending and lower prices, which would weigh down US economic growth. “The inflation narrative in this demographic debate assumes that native workers seamlessly replace immigrants at higher wages, driving costs up,” says Rosenberg in a recent research note. “Reality check: those jobs don’t get filled. The construction site doesn’t pay more – it shuts down. The restaurant doesn’t raise wages – it closes. The…

noahpinion.blog It’s “conventional wisdom that AI is going to take jobs away from large numbers of humans”, leaving them economically bereft, says Noah Smith. Both economists and popular commentators are so convinced of this truth that many will “jump at practically any hint in the data that allows them to believe that it’s happening”. But it isn’t. Not yet, at least. That much is clear from a new report from Sarah Eckhardt and Nathan Goldschlag of the Economic Innovation Group. They’ve devised a useful measure of predicted AI exposure for various jobs; namely, the ones that involve more tasks that can probably be done by AI. But they find no correlation between AI exposure and measures of current labour-market distress. Unemployment is up, but it’s concentrated among people least exposed…

Third Point Investors – the Londonlisted fund run by US activist investor Dan Loeb – has fired Deutsche Numis as joint corporate broker after Numis’s analysts criticised a deal to turn the trust into an insurer. Last week, Third Point won a vote on the plan, which involves buying a reinsurance firm controlled by Loeb’s New York hedge fund. Many minority investors argued that the change in strategy meant they should be offered a full exit at net asset value – a view backed by Numis. Under new listing rules introduced last year, Loeb was able to vote his 25% stake, despite being a related party to the transaction. This together with votes from a “VoteCo” set up by Third Point for US regulatory reasons – which is supposed to…

Around 70% of the three million savers who have accessed their pension pots flexibly over the past decade were under the age of 65. Analysis of government data by pension provider Just Group says 43% of flexible pension payments were made to savers under the age of 60, with a further 28% going to those aged between 60 and 64. The data will add to anxiety about the long-term impact of the “Pension Freedom” reforms introduced in 2015, which made it much easier for savers to access their private pension funds once they reach age 55. While some savers may be taking advantage of the system to bridge the gap until they become eligible for state pension payments – perhaps because they have retired early or reduced their working hours…

When Tottenham Hotspur’s former captain, Son Heung-min (pictured), played his final game for Spurs after a decade in August, “it took more than three minutes for him to get through the hugs and applause from all the players”, says Bloomberg. The hugely popular Korean attacker – renowned for his “grace, technique and composure”, helped define an era at the club. But a new one has already begun. Son has joined Los Angeles FC (LAFC) for a record fee in Major League Soccer of $26m – more than the club’s total wage bill. “That might seem like a gamble on a 33-year-old whose trademark speed has started to slow.” But what makes this an astute move is Son’s “immensely bankable star power”. In South Korea and among its diaspora, his celebrity…

£14.75, oxfordwine.co.uk; £14.99, tauruswines.co.uk Finally, a red wine that is specifically designed to be served chilled, that tastes genuinely delicious. I love chilled red wine, and in the absence of purpose-built reds, I, like all of you, chuck just about any fresh and fruity red wine into an ice bucket when the temperature rises or the menu demands it. There comes a moment at any gathering when white wines just don’t cut it, and rosé, no matter how engaging and robust, can’t match a carefully chosen, chilled red. Usually, this comes when the main course hits the table, but this isn’t always the case. Cue Michel Chapoutier’s hilariously appointed candidate. It looks cool, and it’s made from 80% grenache and 20% syrah, which means it has more than enough juicy…

Going… Rock guitarist Eddie Van Halen’s Kramer electric guitar (pictured) from 1982 is headlining Sotheby’s inaugural “Grails Week” – a series of auctions held this October celebrating the most important items of pop-culture memorabilia. Photographs accompanying the sale show Van Halen tinkering with the guitar at the Kramer factory in New Jersey, and the guitarist also spray-painted a signature black-and-white striped pattern on the body. Van Halen gave the guitar to his technician Robin “Rudy” Leiren, who later sold it to Mötley Crüe’s guitarist Mick Mars, who played the instrument on the band’s 1989 album Dr. Feelgood. The guitar is expected to fetch up to $3m. Gone… An Omega wristwatch given to Elvis Presley on his birthday by Johnny Cash sold as part of US auction house Goldin’s inaugural music-memorabilia…