Indholdsfortegnelse for Issue 1285 i MoneyWeek

The past may be a foreign country, but it often feels very familiar. The first edition of MoneyWeek appeared 25 years ago this week, on 4 November 2000, just as a huge stockmarket boom based on a potential technological revolution was beginning to lose momentum. Today, the buzz is all about AI (see Dan’s analysis on page 38). Between these two neat bookends, however, the past quarter-century has felt like history on fast forward (see Alex’s review on page 4). We’ve seen two enormous bear markets in equities; a global financial crisis leading to a 1930s-style balance-sheet recession; the ascendancy of China; a commodities super cycle; a pandemic; the return of inflation; a structural bull market in gold; and the end of the liberal internationalist order. “I don’t recall another…

Associated British Foods (ABF) is mulling a potential break-up as part of a strategic review, says Emma Taggart in The Telegraph. It is exploring plans to spin-off discount-fashion chain Primark thanks to its robust growth in recent years. Primark, known for its cut-price clothing and homeware, now has 460 stores in 17 countries, with £9.5bn in sales. It comprises half of ABF’s revenue, underpinned by what ABF sees as Primark’s strong brand and major growth opportunities. By contrast, it thinks the rest of its business, including its role as one of the world’s largest sugar producers and owner of a number of grocery brands,“has not been as well understood”. If Primark is split from ABF it “would be the end of one of very few conglomerates left in the UK”,…

Luxury bellwether LVMH has endured a tricky year, with weak demand in China contributing to falling sales in the first half. However, the negative trend may have reversed in the third quarter, with a modest 1% rise in revenue compared with the same period a year earlier coming as a welcome surprise, says Olivier Dauzat in Le Revenu. Performance in Asia was especially encouraging, while beauty products retailer Sephora continues to gain market share. The sales inflection may herald stronger growth next year. The shares are still in the red for the year to date, and on 26 times forecast 2026 earnings the valuation is “reasonable” for a global leader with a solid balance sheet.…

Zohran Mamdani was elected mayor of New York on Tuesday after “handily” dispatching his rival Andrew Cuomo and winning more than 50% of the vote, say Nicholas Fandos and Jeffery Mays in The New York Times. In an “era of low turnout”, participation in this “electric” election approached numbers not seen for 50 years, with more than two million ballots cast. Mamdani has built a new Democratic coalition, winning over progressive, affluent voters in Brooklyn and Manhattan as well as blacks, Latinos and working-class Asian immigrants energised by his focus on affordability. The city chose the “socialist over the status quo” in the hope that 34-year-old Mamdani can reverse the Big Apple’s “downward slide”, says The Wall Street Journal. Since Mike Bloomberg left office, crime has returned, taxes are higher,…

● “Talk is cheap, and getting cheaper,” says Louise Lucas in the Financial Times. BT may enter the low-cost mobile market to tackle competition from other UK telecom sub-brands and new players. “To some extent, this looks like damage limitation.” Telecom companies have mostly left this lower-end market for mobile virtual network operators (MVNOs) such as Lebara and Lyca Mobile, which lease unused capacity from the physical networks. MVNOs and cheap sub-brands used to target users who would not have signed up to more expensive deals. But now even better-off consumers are tempted to decamp, since there is minimal difference in network quality. Hence MVNOs are capturing most of the growth in Britain’s mobile market and stealing sales from pricier brands. If BT launched its own cheap sub-brand, it could…

● Underperforming Bellevue Healthcare will change its fund manager to Columbia Threadneedle from Bellevue Asset Management, and rename itself CT Healthcare Trust, subject to shareholders’ approval. Under its new mandate, the trust will adopt a long-short investment strategy, which is based on the idea that healthcare has a high dispersion between winners and losers. The trust will also ditch its zero-discount policy and annual redemptions, which have seen it shrink significantly in recent years. Instead, it will allow quarterly exits for up to 15% of shares at NAV, while also trying to grow assets through month-end issuance offers at above NAV for institutional investors that want to invest large amounts. Columbia will receive a 0.95% management fee, in line with existing terms, but also a 15% performance fee on returns…

We didn’t make any specific calls in our first edition, but flicking through it at the British Library the other day (none of us have a copy) I was struck by how we managed to highlight important themes that recurred during the subsequent 25 years and remain relevant today. They included the flaws inherent in the euro, the burgeoning British public sector, the need to hold technology stocks for the long term, cybersecurity, and the wisdom of investing in gold. It proved an auspicious beginning. The commodities supercycle (Oct 2001) By issue 50 we had started to notice that raw materials were historically cheap following a bear market throughout the 1980s and 1990s. Commodities, like other assets, move in long cycles, and a turnaround seemed likely. Supply had dwindled as…

Labour’s Employment Rights Bill continues to bounce back and forth between the House of Commons and the House of Lords. Peers are particularly concerned about changes to the rules on unfair dismissal, questioning the government’s insistence that employees should be able to make unfair-dismissal claims from day one in a new job. It’s not yet clear whether ministers will be forced to compromise, but small businesses need to recognise that they will definitely be affected by a broad range of other changes. Some of these reforms are due to come into effect as soon as April next year, with further new rules introduced in October 2026 and April 2027. Critical measures include the introduction of a right to paternity leave and unpaid parental leave from day one of employment, with…

At the height of his power as Fed chairman, it was often observed that policymakers had fallen under a collective spell – “the cult of Greenspan”, says Prospect. It’s fitting, then, that the most formative thinker in his own life was herself something of a cult leader. Throughout the 1950s and 1960s, Greenspan was a member of a circle dubbed the “The Collective”, dominated by Ayn Rand (pictured) – “the poster girl of a particularly hardcore brand of free-market fundamentalism” whose “Objectivist” philosophy was driven by what she called “the virtue of selfishness”, says The Guardian. Expounded in two bestselling novels – The Fountainhead and Atlas Shrugged – the philosophy holds that an individual’s own rational self-interest and happiness are the highest moral purpose in life. Rand, who had arrived…

2024 Mas de Daumas Gassac Rouge, IGP Saint-Guilhem-le-Désert, Cité d’Aniane, France From 9 November, £222 per six bottles in bond, bbr.com; from mid-November, £210 per six bottles in bond, yapp.co.uk This week, I am attempting to enter the book of Guinness World Records by mentioning the largest number of grape varieties ever in one wine article. I promise that not one is gratuitous, because they are all included in my two featured wines! During the next week or so, the annual En Primeur release of the iconic duo of Mas de Daumas Gassac wines occurs. The physical bottles will land in six months, but you must put your hand up now to reserve your stock, because they are so sought after, and in 2024, both sublime! The red is a…

The CEO’s Guide to the Investment Galaxy Navigating Markets to Build Great Companies Sarah Keohane Williamson Wiley, £23 Virtually all investment books are written from the perspective of the investor, as Sarah Keohane Williamson notes in The CEO’s Guide to the Investment Galaxy: Navigating Markets to Build Great Companies.This may seem logical given that most people become involved with financial markets when they are looking to invest their money. However, this is only half the story. The capital markets exist to help businesses raise money. Williamson’s book is a guide to investment from the perspective of business leaders. The book is divided into three sections. The first gives a general overview of how modern markets work and explains why finding investors who can stick around for the long-term can be…

The death spade holding West led the seven of Clubs and declarer eagerly awaited dummy’s Spade holding – North’s reply to the 4NT Roman Key Card Blackwood and indicated that there would be one outside loser. He was hoping for a doubleton or the Queen… but got the one holding that gave him a certain loser, namely three small cards. Ugh. Trying to conceal his disappointment, declarer won the Club lead and led a casual low Trump. East casually played low. Casually – and fatally. Declarer won in hand, and now began a partial elimination. He crossed to the Ace of Diamonds, cashed the other top Club, ruffed second Diamond, then led out the Ace-King of Spades. At trick eight, declarer exited with a second Heart. His hope was that…

Argentina’s president, Javier Milei, is one of the few bright stars in the vast, dead, black, cold and empty universe of politics. Whatever else can be said about him, that star is rising. Milei led his party to a landslide victory in elections at the end of last month following a two-year stint characterised by radical spending cuts and free-market reforms. His party, La Libertad Avanza, won nearly 41% of the vote. His gains will make it much easier for the president to push ahead with his programme of libertarian reforms and deregulation. Before the vote, US president Donald Trump made it clear that the US’s recently announced $40bn lifeline for Argentina depended upon its voters choosing correctly in the election. Using US taxpayers’ money to influence any election is…

Europe’s biggest no-frills carrier, Ryanair, is flying high. It increased sales by an annual 13% between April and September, while profits surged over 40%, says Peter Campbell in the Financial Times. The timing of Easter helped boost the figures, but CEO Michael O’Leary said the jump was mainly due to more and more European families “staying at home and holidaying in Europe, particularly in the Mediterranean”, rather than going to the US. He was also bullish about the future, increasing annual passenger forecasts following the delivery of new aircraft. He thinks the new aeroplanes and strong demand will enable Ryanair to expand to 300 million passengers a year before 2033. Ryanair’s latest figures provide evidence that it has “outclimbed” the pack, while proving that a “little turbulence” in the wider…

Tinned tuna group Princes received a “lukewarm” reception from investors to its debut on the London Stock Exchange, says the Financial Times. The company, which also sells pasta, sauces and cooking oils, raised £420m and achieved a market value of £1.16bn, lower than the £1.5bn it had hoped for. The shares closed flat after a volatile first day’s trading, despite the business minister hailing Princes’ initial public offering (IPO) as a sign of the London market’s recovery. Italy’s Newlat Food bought Princes in 2024 for £700m and then rebranded itself as NewPrinces. It retains an 82.7% stake after the listing. Last year, Princes generated revenues of £2.1bn.…

The “stunning success” of the liberal D66 party in Dutch parliamentary elections last week is good news for the Netherlands and for Europe, says the Financial Times. The pro-EU centrist party, led by the “telegenic” young Rob Jetten, tripled its seats to 26, putting it on a “level pegging” with the far-right Freedom party (PVV), which lost nearly a third of its MPs after its role in one of the “ineffectual coalition governments” of recent times. Although it’s still possible that the PVV, led by “anti-Islam troublemaker” Geert Wilders, may win the most votes (the official result isn’t due until Friday), the mainstream parties have ruled out working with him, which means he won’t be able to form a government. The baton will then pass to Jetten. However, given the…

The fruits of AI will be rotten Adrian WooldridgeBloomberg The “most important question” that companies face regarding AI is whether they should use it to increase the power of managers or “liberate front-line workers”, says Adrian Wooldridge. The first approach is appealing because there is so much low-hanging fruit. By using AI to monitor every detail of employees’ daily routines, managers can measure their precise contribution, increasingly for white- as well as blue-collar workers. JPMorgan’s managers now use AI, with its all-seeing eye, to write performance reviews. But the fruit will “eventually prove to be rotten”. Studies consistently show that employees want to feel that they are part of a community, that their contribution is valued, that they can grow, that they can exercise their creative faculties and that they…

The combined market capitalisation of the Magnificent Seven group of US mega-cap stocks – Alphabet, Amazon, Apple, Meta , Microsoft, Nvidia and Tesla– is now over $22trn, meaning these seven stocks make up about 37% of the S&P 500 and 23% of the MSCI World index. As a result, most investors are likely to be heavily invested in this handful of tech giants, which has worked well for the past five years. However, with the market looking increasingly frothy, it could be time to take some money off the table. Mega-cap tech has sucked up capital at the expense of other businesses, meaning there are now some exciting opportunities appearing in corners of the market. STS Global Income & Growth Trust (LSE: STS) is one way to invest in these…

“If AI defines the next quarter-century, Microsoft is how you play it” Stephen Connolly Every generation gets one industrial revolution. Ours is AI – still novel, not yet fully understood, but certain to become so embedded in life that we’ll forget how we ever worked without it. The question isn’t if AI will transform the world, but who can be relied upon to profit from it throughout the 25-year arc ahead of us. My bet is Microsoft (Nasdaq: MSFT). Now 50 years old, Microsoft has turned repeated reinvention into an art. Windows in the 1980s, Office in the 1990s, the cloud in the 2010s, and now AI integration. It is the same playbook: build essential tools, make them indispensable, then charge rent for their use. This quiet consistency has made…

The chancellor has finally admitted that “further measures on tax” will be announced in the Budget on 26 November. “Those with the broadest shoulders” – the ever-growing number of higher- and top-rate taxpayers – are likely to bear the brunt of it. Meanwhile, pensions, traditionally a bastion of tax-efficiency, have begun to look less appealing, thanks to limits on what you can contribute, restrictions on tax-free cash and the prospect of death taxes of up to 67% following changes in the last Budget. Against this backdrop, venture-capital trusts (VCTs) look startlingly attractive. When you support young British companies by investing in VCTs, you could receive up to 30% income-tax relief – a tax break of up to £60,000 if using the full £200,000 VCT allowance. In addition, any dividends VCTs…

Household goods and personal-care group Kimberly-Clark’s (KC) shares have suffered their worst daily fall in 25 years. They lost 15% on the news that KC has agreed to buy Kenvue for $40bn. KC’s management argues that snapping up the embattled firm’s “storied brands” will create a company that will be the second-biggest seller of health and wellness products after Procter & Gamble, with $32bn in revenue, say Bloomberg’s Redd Brown and Crystal Tse. But the deal comes at a 46% premium to Kenveue’s closing price last Friday. Critics are also worried by the fact that Kenvue’s biggest product, Tylenol, is in the “crosshairs” of the White House after president Donald Trump alleged that it could cause autism. Kenvue’s board says this notion is “unsupported by scientific evidence”. True or not,…

Five to buy The Gym Group The Times The Gym Group operates 252 branches open 24 hours a day and seven days a week. It has 949,000 members, a figure set to keep rising as consumers become more health- and budget-conscious. The group plans to open 50 gyms over three years, increase returns from its existing estate, and bolster revenue by offering corporate memberships. Its tie-up with corporate wellness platform Wellhub could add £3m to sales. The stock’s low valuation fails to consider the “favourable structural demand for health and fitness”. 139p The Beauty Tech Group This is Money The Beauty Tech Group sells LED face masks that can be used at home, app-connected spot treatments, and laser hair-removal devices. Its first-half sales increased 27%, with underlying earnings of £22.9m.…

1. The demise of the smartphone It is hard to imagine life without them. There are 7.4 billion smartphones in the world and the typical user checks them 144 times a day. And yet, 50 years ago we would have said the same of cigarettes. Everyone smoked in cinemas, on trains and, though it seems unimaginable now, on aeroplanes. Once it was clearly shown that smoking was very bad for your health, it went into steady decline. We are just starting to work out just how bad smartphones are for our mental health. There is a growing body of evidence to show they have a negative impact on cognitive ability, memory, attention and sleep, and create addiction and anxiety. That’s just for adults. The impact on teenagers is worse. There…

“If you want to know what God thinks of money, look at the people he gave it to.” Dorothy Parker (pictured), quoted on wisebread.com “As successive governments know only too well, cutting the disability budget is extremely difficult. We need maverick ideas… self-immolating cars for the disabled would eventually lead to significant cost savings. What will it be next week? We can only wait and see.” Times columnist Tom Peck on Reform’s idea of bringing back the blue three-wheeled car for the disabled, which was scrapped in the first place for being prone to flipping over and catching fire “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.” John Maynard Keynes, quoted in Fortune “Life is easier to take than you’d think; all…

The opportunity to hear presentations from multiple companies, investment trusts and funds in one place is very useful for active private investors. The twice-yearly Mello conferences in London have become one of the staples of the investing calendar, with several hundred investors attending over two days to hear pitches and make connections. The latest edition will take place on Tuesday 18 and Wednesday 19 November in West London, with more than 30 speakers and exhibitors scheduled to present on a wide range of sectors. Mello is offering MoneyWeek’s readers a 25% discount on tickets – to book, go to melloevents.com/mellolondon2025 and use the code MLMW25. Some of MoneyWeek’s contributors will be in the audience – say hello if you see us!…

Before we launched MoneyWeek I worked in finance, mostly as a junior broker selling Japanese equities to international clients out of Tokyo. I liked it. It was intellectually challenging; involved hanging around with lots of clever and interesting people; and, crucially, it was fairly well paid. I stopped in my late 20s, however, when I was fed up with mergers (there was a wave of consolidation underway in investment banking) and with living in Tokyo. And it was only then that I began to pay any attention to what the business I worked in actually did. That sounds ridiculous. But here’s what I mean. In no training courses or continuing professional development (CPD) events at any of the places I worked did anyone ever mention whose money we were happily…

With just a few weeks to go until Rachel Reeves unveils her Budget, speculation is reaching fever pitch. But small-business owners and managers worried that the chancellor is poised to hit them with higher tax bills can take action. Don’t try to second-guess the Budget: there’s no way to be sure what the chancellor will announce and missteps could prove costly. Instead, focus on every existing opportunity to minimise your firm’s exposure to tax. That sounds like common sense, but research suggests that thousands of businesses routinely fail to take full advantage of the rules. Making use of the various tax allowances and exemptions offered by HM Revenue & Customs is perfectly legitimate. Here are six opportunities that small businesses frequently overlook. Use your capital allowances Investments you make in…