Innehållsförteckning för Issue 946 från MoneyWeek

America’s discount retailers “occupy a rare… bright spot that has been mostly immune to Amazon’s price-cutting”, says Teresa Rivas in Barron’s. People still like going to these shops and hunting for bargains, while higher-end brands and designers are more inclined to give discounters a good deal on their leftover stock because department stores are struggling. This auspicious backdrop makes Burlington Stores well worth a look. Offerings range from shoes and clothing to accessories and baby gear. It is branching out into beauty products and home goods, while as the sector’s number three, it has more scope for growth than bigger rivals. Earnings should rise by 8% this year and 14% next.…

“You can turn any investment into a bad deal by paying too much,” lamented Warren Buffett of his Kraft Heinz holding during the recent Berkshire Hathaway shindig (see page 14). Berkshire took a $3bn impairment on its 26.7% stake in the consumer food group in February following its $15.4bn writedown to reflect the fall in the value of some of its top brands. Buffett insists that though he overpaid, Kraft is “still doing very well operationally”. Yet this week’s news that the US maker of Jell-O, Capri Sun and HP Sauce will restate earnings for almost three years because of “employee misconduct” casts new doubt on the Sage of Omaha’s rosy assessment. Kraft Heinz announced more than $180m in adjustments after it uncovered mistakes in how it books costs and…

After “years of growing authoritarianism” under President Recep Tayyip Erdogan, an opposition victory in Istanbul’s mayoral election on 31 March “offered a ray of hope that democracy in Turkey was not dead,” says the Financial Times. But on Monday, the country’s electoral board cancelled the result and called for a rerun on 23 June, extinguishing that light. This may give Erdogan and his Justice and Development (AK) party a chance to “regain power”, but it is a “hammer blow” for the country’s “political and economic standing”. AK hardliners applauded the decision. “The opposition called it a disgrace,” says The Economist. Ekrem Imamoglu, who won the March election by a narrow victory of 14,000 votes out of eight million cast, “came out swinging”, condemning the board for caving into pressure. His…

It’s not easy having $114bn in cash. Not if your job is to invest the money in assets that will make any difference to the overall performance of your portfolio, at a time when lots of equally well-funded rivals are chasing the same deals. That’s the problem besetting Warren Buffett, the world’s most famous investor. As Buffett told the Financial Times last month, there are maybe 100 listed shares that are big enough for his conglomerate, Berkshire Hathaway, to even look at. You won’t find any hidden gems there. “What we see in the way of marketable securities, everybody in the world knows about them.” “Succession risk looms large at Berkshire Hathaway” As for big deals – the “elephants” Buffett often cites – there is so much competition from private…

Emmanuel Macron came up with a predictably tepid series of minor reforms this month. There was, however, one really eye-catching idea: scrapping the Ecole Nationale d’Administration (ENA), the elite finishing school that dominates French life. The Strasbourg-based school has a mere 80 graduates a year, compared to 6,000 at Oxford and Cambridge, and a similar number for Harvard and Yale. And yet the “enarques”, as they are known, go on to dominate the country’s institutions. Macron himself is a graduate, as were four of the eight presidents of the Fifth Republic, Prime Minister Edouard Philippe and eight other PMs since 1958, and virtually all the top civil servants. A narrow pool of talent The enarques are just as dominant in the corporate world as they are everywhere else. Of the…

It’s time we helped our tinkerers Daniel Hannan The Daily Telegraph We should have a school like the JCB Academy in every town, says Daniel Hannan. Children can go from the age of 13. It focuses on engineering and business, and offers “a mixture of A-levels, technical qualifications and apprenticeships”. Leavers are “hugely sought-after”. A happy side-effect of greater engagement is that the children’s academic grades “also shoot up”. A third of the students have special educational needs and 85% are boys. “Yet they flourish” when given practical tasks, and they leave with many key life skills. We tend to think of manufacturing as declining, but this is only in relation to services. Our industrial sector has grown on average 1.4% since 1948. We now import engineers and welders for…

voxeu.org The Peter Principle says that organisations promote people who are good at their jobs until they reach their “level of incompetence”. Research by academics Alan Benson, Danielle Li and Kelly Shue shows that this is more than just a good joke and is actually at work in companies and other organisations. Using data on worker and manager-level performance for almost 40,000 sales workers across 131 firms, they found evidence that firms systematically promote the best salespeople, even though these do not make the best leaders and there are other observable traits that better predict who will make a good manager (for example, sales workers with team experience who are good at generating leads and then passing them onto colleagues, or who maintain contacts initiated by others). They also found…

With the rules and tax treatment of buy-to-let becoming ever more stringent, most investors will find better returns for a lot less effort in the property sector of the stockmarket. These companies offer scale, diversity, experienced management, low and tax-deductible borrowing costs and high and growing dividend yields. Moreover, they are eligible for inclusion in an individual savings account (Isa), reducing the tax liability of the investor to zero. “Don’t wait for the end of the tax year to put it in your Isa” High on the buy-list should be Hansteen (LSE: HSTN), a company founded by Morgan Jones and Ian Watson soon after they sold their previous one, Ashtenne, in 2005. Hansteen (note the anagram) also invests in industrial property (mostly warehouses and distribution depots), but focused initially on…

Most of us would like to have as little as possible to do with financial-services companies, whether banks, insurers or pension providers. But if you reach a stage where you need to make a complaint about a service or product, you need to know how best to go about it. As with most situations where you want to make a formal complaint, your first step must be to contact the firm directly. Before you do so, make sure you have an idea of what you’re looking to get out of the situation. Is your ultimate aim to receive financial compensation? Or are you merely looking for an acknowledgement that they have mishandled your case in some way? Ideally, your first complaint should be by letter, or at least by email,…

The damaging effect of high fees on your investment returns is well documented. So the government edict that workplace pension funds must not charge more than 0.75% a year (implemented in April 2015) seems eminently sensible. But there’s a problem, says the Association of Investment Companies (AIC), a trade body: fund managers offering exposure to illiquid assets such as private equity and infrastructure have higher costs and are struggling to keep fees under the cap. As a result, workplace pension scheme members may not get the opportunity to invest in such funds, and therefore could be missing out. The AIC’s warning follows a review of the charges cap announced by ministers earlier this year. The government is eager to persuade pension schemes to invest more in infrastructure, so it’s considering…

Storage-unit investment schemes have a terrible reputation. Dodgy set-ups promising “guaranteed” returns of up to 12% have lost people millions, often from their pension funds. But scams aside, reputable companies that run storage facilities in the UK could prove lucrative investments. Across all UK real-estate investment trusts (Reits), self-storage was the best-performing asset class last year, according to real-estate services firm JLL. These listed property funds rent out lockers and self-storage units to businesses, who want the space to store excess stock, and individuals who need more space than is provided by their city apartments or have perhaps got carried away with the Marie Kondo decluttering movement. “In dense urban centres such as London, shrinking dwelling space, coupled with a growth in demand for rental accommodation has led to an…

An luxurious apartment in Knightsbridge building One Hyde Park is available to rent for £40,000 a month, or more than £2m per year, says Jonathan Prynn on Homes & Property. The apartment stretches the entire seventh floor of the building, and is laid out in two separate wings, one of which overlooks Knightsbridge, while the other provides a view of Hyde Park. It spans 9,215 sq ft – roughly 20-times the average-sized London flat – and features five bedrooms, a ten-person dining room, a cinema room and two studies. The apartment is owned by property developers Nick and Christian Candy and the former prime minister of Qatar.…

The combination of a global slowdown and regional turbulence has led to growth expectations for Europe in 2019 falling below the relatively unexciting long-term trend growth rate of 1.5%-2.0%. So, should we write the continent and its markets off? On the contrary: we believe that any market weakness based on these concerns creates attractive entry points for appealing European stocks. We always look for companies that can grow steadily under their own steam despite a subdued economic backdrop and generate good long-term returns. Europe has many such dependable companies. A software star SAP (Frankfurt: SAP) is one of the world’s largest software companies; it concentrates on products to help companies manage their operations. We like software business models at attractive prices: sales are predictable and profit margins high. SAP is…

Slightly longer than a year ago, when Barclays woke up one day “to find a bull called Bramson in the shop”, the City prepared for some sport, says The Guardian. “An activist investor out of New York, with a taste for barging into boardrooms and metaphorically smashing up the crockery,” Bramson had taken a 5% stake in the bank in hopes of dictating terms. His chief aim – drastically shrinking Barclays’ underperforming investment arm – put him in direct conflict with CEO Jes Staley (an American, formerly of Morgan Stanley) who had staked his reputation on reviving it as a key engine of the bank. “Bramson’s accent gives the impression he has just stepped off the set of a 1940s film” Trousers from another era At last week’s annual general…

The animals you holiday with don’t have to be abroad—and they don’t have to be alive. The Museum of London is offering an £85 taxidermy masterclass on 15 June. Artist Elle Kaye will guide participants, who must be at least 18 years old, through the process of stuffing a mouse in a four-hour session. The museum warns that the experience “is not for the faint-hearted”. It also asks politely: “Please do not bring any dead animals with you to the class.” Tickets include entry to the Beasts of London exhibition, tracing the city’s history through animals, which runs until next January.…

I have nothing less than a global scoop this week: 2014 Coeur de Cuvée is the second vintage release from the remarkable Kit’s Coty vineyard, and it goes on sale any minute. Kit’s Coty is an exceptional 95-acre vineyard with a perfect southerly aspect and pristine, free-draining chalk soils. When the yields are restricted the resulting fruit is epic. Made from the “heart” of the Chardonnay grapes’ first pressing, the juice undergoes wild fermentation and maturation on its lees in French oak for seven months. Immediately sensational on both the nose and palate, this is a grand wine with an expansive flavour and terrific potential. If you want to form an image of just how serious the Coeur de Cuvée is prior to taking the £100-plunge, then 2014 Kit’s Coty,…

Ramona Ang, the wife of Craig Wright, an Australian who is one of several people to have been identified as “Satoshi Nakamoto”, the mysterious inventor of bitcoin, told the High Court she lost $2.3m when her bitcoin trading account was frozen. In 2014, she and Wright registered a company called Denariuz, intended to be the first bitcoin-based bank, to a terraced house in Doncaster. The business was dissolved in January 2017, and Ang opened a bitcoin trading account with Cyprus-based Reliantco Investments. She invested $200,000 from the sale of a house in Australia, and proceeds from Denariuz. That sum had grown to $700,000 before it was frozen by Reliantco without warning. Ang argues the sum would now be worth $3m. Reliantco argued the case could only be heard in Cyprus,…

Investors are “flocking” back to the same kind of debt instruments implicated in the financial crisis, says Joe Rennison in the Financial Times. So-called “synthetic” collateralised debt obligations (CDOs) bundle together derivatives ultimately linked to bonds and loans. But where banks piled into CDOs backed by subprime mortgages in the years prior to the 2008 crash, this time hedge funds have a new darling: corporate debt. There’s plenty of it to bundle up. Non-financial business debt-to-GDP in America has ballooned over the past seven years to a record of around 78% of GDP, almost as high as household debt. Loans going to already heavily indebted borrowers, known as leveraged loans, grew by 20% in 2018 to $1.1trn, while their share of the market is at a record high. Defaults are…

Profit margins are supposed to revert to the long-term average. In the US, however, they appear to be in a structural upswing. The chart depicts the overall profit margin of the 500 firms that comprise America’s blue-chip S&P 500 index: their total earnings divided by their total sales. As Epsilon Theory’s Ben Hunt points out, $1 of sales produced around 3 cents in earnings a quarter of a century ago. Now a record 11 cents will reach the bottom line. A key reason for this is an increase in pricing power amid a gradual decline in competition throughout the economy, with several industries now dominated by just a handful of players. Easy money and low interest rates keeping zombie companies alive have also hampered competition.…

WeWork is the next unicorn to seek an initial public offering (IPO). Its last fundraising round valued the group at $47bn, which seems a lot for a company that simply leases offices. It sells itself as a provider of shared workspaces for tech start-ups, and it seems that some of the tech-sector cachet has rubbed off on it. “The only thing that could possibly make Uber look anywhere close to profitable in the next three decades,” says Thornton McEnery on Dealbreaker.com, “is a comparative look at WeWork’s bottom line.” Last year its net loss jumped to $1.9bn from $933m the year before. Sales reached $1.8bn, compared with $886m in 2017.…

Spotify has hit its 100-millionth paying subscriber, but it will “have to change its tune” if it is to retain the title as the world’s biggest paid music streaming platform, says The Observer. Revenue at the New York-listed Swedish business jumped by a third year-on-year in the first quarter to €1.5bn, although it still made a loss of €142m. Paying subscribers are Spotify’s main revenue source, with a £9.99 per month plan granting access to a library of about 40 million songs, says Simon Duke in The Times. Spotify has played a vital role in “reviving the fortunes of the music industry in the digital era”, says The Observer. Yet it is now a “victim of its own success”. Major record labels such as Sony and Universal are squeezing it…

Warren Buffett’s Berkshire Hathaway has a strong record of outperforming the US stockmarket. As the chart on the left shows, Buffett trounced the S&P in the decade from 1999 to 2009, which encompassed both the tech bubble and bust, and the financial crisis. Indeed, in the 30 years from 1979, Berkshire outperformed the S&P 500 by an average of around 12% a year, according to the Financial Times. However, as the second chart shows, since the financial crisis bottomed out more than ten years ago, Berkshire Hathaway has actually underperformed the S&P 500 – you would have been better with a simple US tracker fund (which merely aims to copy the underlying index, rather than beat it). Of course, many “value” investors have struggled in the years since the financial…

• Gavin Williamson (pictured) will receive a £17,000 pay-off despite being sacked as defence secretary last week. A Cabinet inquiry found evidence that he had leaked secret information concerning Chinese telecoms company Huawei from a meeting of the National Security Council, says The Guardian. No 10 confirmed that Williamson is entitled to three months of his £67,505 annual salary under the terms of a normal severance settlement as a Cabinet minister. • Shareholder advisory firm Glass Lewis is “especially troubled” by BAE Systems’ decision to award bonuses to its executives based on the defence giant’s safety record – following the death of an employee at an ammunition factory, says The Daily Telegraph. The firm’s safety record accounts for 5% of the total payment under BAE’s bonus structure. BAE executives received…

“If you spend it when you’re drunk, it still comes out of your bank account.” Comedian Lucy Porter (pictured) on the hardest lesson she has learnt about money, quoted on telegraph.co.uk “I have to earn some money in order to maintain a reasonable lifestyle… I live the life of a well-to-do man but not a rich one. One house is enough.” Former South African president FW de Klerk, 83, who tops up his state pension of £60,000 a year with lecture tours, quoted in The Sunday Times. One of his successors, Jacob Zuma, 77, will get his full presidential salary of £160,000 for the rest of his life “When I get a big role, I know I’ve earned it by myself. That’s something you get as a working-class person that…

ft.com Millennials aren’t bothering to save. I think they have the right idea, says Janan Ganesh. Were my employer to double my salary, I would save none of it. And might that not be an eminently rational thing to do? Just because economists do not know how to price something as ineffable as an experience does not make it worth less than, say, equity in a house. I spent my 20s living in rented flats that were better than anywhere I could have afforded to buy. “The idea that I have ‘nothing to show for it’ is eccentric. I have the best years of my life to show for it.” During a recent illness, a friend in his 70s realised that what he most treasured were his romantic relationships and…

“Revered” Wall Street activist Elliott Advisors is plotting a radical overhaul of Whitbread’s Premier Inn brand, says Oliver Gill in The Sunday Telegraph. Elliott is “becoming increasingly frustrated” by the leisure giant’s strategy of owning Premier Inn hotels outright, claiming this depresses the share price and leaves it open to a cut-price hostile takeover. Premier’s approach is unusual; the likes of Intercontinental Hotels has sold off property and managed hotel brands on a so-called “asset-light” basis, which frees up cash and allows for faster expansion. Elliott, known for being one of the world’s most aggressive fund managers, wants Whitbread to sell 10% to 15% of its hotel portfolio, and “continue to be open-minded about the rest”.…

Should you give up work to avoid a nasty tax bill? This, apparently, is the dilemma now facing doctors in danger of reaching caps on pension-contribution limits. The generosity of the defined-benefit (DB) NHS pension scheme means many are incurring extra tax charges, either as they near retirement, or when they take on overtime and extra work. The British Medical Association (BMA) thinks the problem is so acute we need to change the rules in order to avoid losing crucial frontline staff from the NHS. “It’s not just high-earning doctors in a difficult position” However, it’s not just high-earning doctors who find themselves in a tricky spot. The annual allowance, limiting the amount of pension contributions you can make each tax year, and the lifetime allowance (LTA), a cap on…

Anyone reviewing their saving for retirement is routinely advised to ask the Department for Work and Pensions (DWP) for a forecast of their state pension. State pensions form an important foundation of most people’s income in retirement. But what if the forecast is wrong? There is growing evidence that thousands of people may have been given wrong information. The problems are related to poor record-keeping during the 1980s and 1990s, when many savers chose to contract out of part of the state pension system, receiving national insurance rebates that they then invested in private pension schemes instead. In many cases, the DWP’s pension forecasting service does not appear to have the full detail of savers’ contracting-out records; as a result, it is overestimating their state-pension entitlements. Such problems are unlikely…

A restored and extended Grade-II former windmill in an elevated position with views over the surrounding countryside. It is just three miles from the town of Llangefni and close to the seaside village of Benllech. With bright and modern interiors, the two-bedroomed home has floor-to-ceiling windows on the ground floor and a staircase following the curve of the original windmill. The top floor, currently a viewing room, has windows all the way round, and could be turned into a third bedroom. Can you guess the asking price? Answer on the side of this box.…

Diabetic eye disease and age-related macular degeneration (AMD) are becoming increasingly common. AMD is especially serious since it damages the central area of the retina, making it difficult to read and watch television; it is the leading cause of blindness in people over 65. Eylea, a drug produced by US biotech Regeneron (Nasdaq: REGN), is saving the sight of millions of people suffering from these conditions. It is the market leader, notching up annual sales of $6.7bn a year, helped by its dosing regimen of injections every eight weeks compared to competing drug Lucentis’s every four weeks. Analysts are pencilling in peak sales of $8bn a year for Eylea. A full pipeline Eylea is far from the only reason to invest in Regeneron. The company has six other approved and…

4imprint Group (LSE: FOUR) makes promotional products ranging from pens to reusable coffee cups to help companies market themselves. Almost all its sales are made in North America. Buoyant annual results caught investors off guard in March, as growth far outpaced guidance. The company had forecast sales growth in the low teens and flat profits. But as orders rose by 17%, revenue rose 18% to $738m and pre-tax profit climbed 9% to $44m. The firm now says it expects to reach $1bn in sales sooner than its target of 2022. The stock is up 62% in a year.…

MiniScribe was founded in 1980 as a manufacturer of computer disk drives. Thanks to a strong relationship with IBM, it grew quickly enough to be listed on the stock exchange at the end of 1984. However, MiniScribe  was hit by two shocks: firstly by the shift away from 5.25” to 3.5” disks, and then by IBM’s decision to produce its own. With the share price plunging, and the company facing bankruptcy, the venture capital firm Hambrecht & Quist (H&Q) bought a 12% stake in MiniScribe for $20m. As part of the deal, H&Q insisted that turnaround specialist Quentin Thomas Wiles (pictured) be appointed chief executive officer. What was the scam? Wiles attempted to save MiniScribe by making drastic cuts, restructuring the firm into autonomous divisions and setting ambitious sales targets.…

• A woman called BBC Radio Manchester to reveal how she had sent hundreds of thousands of pounds to a fraudster posing as Hollywood actor Jason Statham (pictured), says Jane Moore in The Sun. The conman made contact through a Facebook fan page. “I thought, ‘Oh, that’s nice of him, talking to his fans’. I might have been star-struck,” the anonymous victim admitted. The fraudster said he was having some financial difficulties owing to a delayed film payment. He wrote: “I really need you to do this for me honey, I can’t trust anyone but you with my money honey.” At this point, “did alarm bells ring that she was, in fact, conversing with the Honey Monster? Nope, seems not.” It’s easy to be cynical, but even the most tech-savvy…

£50m How much the ferry contracts with Brittany Ferries and Danish operator DFDS are going to cost the taxpayer after the government ordered them to be cancelled. The contracts had been signed to ensure Britain did not run short of supplies after Brexit. $700m The value to Nasa of the loss from two failed satellite-launch missions, stemming from faulty materials, the space agency has found following an investigation. Sapa Profiles Inc, an Oregon-based company, had fraudulently supplied poor-quality aluminium parts. $147,000 The minimum price per seat on board a private jet operated by Four Seasons as part of a holiday itinerary. The luxury hotels group announced last week that it would add another jet to its fleet to replace an existing one in 2021. 439,000 The number of people in…

China’s stimulus might have worked too well, says Thomas Gatley of Gavekal Research. Beijing responded to slowing GDP growth last year with a mix of monetary and fiscal measures including roughly $2trn in tax cuts. Yet stronger than expected March data has prompted the Politburo to pivot back to calling for “structural reform”, a tonal shift implying that easing is over for now. Downbeat manufacturing surveys have also injected some “healthy scepticism” into the China rally, says Laurence Fletcher in the Financial Times. The country’s CSI 300 benchmark of domestic stocks had rocketed 30% this year, but with factory output gauges virtually flat in April investors are re-examining their assumptions about how much the stimulus can do for China and other emerging markets. And that was before this week’s trade…

“If you’re a bloke in a suit who’d like to apply for the governorship of the Bank of England (deadline 5 June)… You’ll probably already have read the job spec on the Cabinet Office website, which refers to candidates as ‘she/he’… you can be pretty sure Chancellor Philip Hammond has asked the headhunters to come up with a shortlist that’s at least 50-50… that’s a good thing: not only because the Bank has fallen behind the zeitgeist in largely failing to appoint or retain women in its top ranks throughout Mark Carney’s governorship, but also, as this column has argued ever since the 2008 crisis, because women often make better senior bankers than men, being less prone to machismo. So I’d say Ladbrokes has mispriced the female favourite, Santander UK…

Three to buy GlaxoSmithKline Motley Fool UK The introduction of a generic competitor in the US for asthma drug Advair is weighing on this pharmaceutical giant’s share price, with earnings forecast to fall by up to 9%. Nevertheless, a new HIV treatment and shingles vaccine Shingrix helped GSK to deliver first quarter figures “comfortably ahead” of expectations. Last year’s £9.8bn deal with Pfizer should reduce debt and secure the dividend. The stock yields a forecast 5.1%, making it a “good long-term buy”. 1,557p Water Intelligence The Mail on Sunday This US-headquartered business uses state-of-the-art technology to “pinpoint and repair” water leaks as quickly as possible. More than 650 million gallons of water are lost through leaks every day in the UK, and even more in America. The group works with…

• Shares in online estate agent Purplebricks dropped by more than 5% last Tuesday on news that founder and boss Michael Bruce is to leave, says Cat Rutter Pooley in the Financial Times. A lacklustre housing market is bad news for any “jobbing estate agent”, but chairman Paul Pindar has also noted that rapid overseas expansion came at the expense of “quality of execution”. The group is now scaling back its international arm, with a full-scale retreat from Australia. Management has also admitted to “suboptimal decisions in allocating capital”, which is not exactly what shareholders employ them to do. • BMW reported a mammoth 78% drop in first quarter operating profit, says Al Root in Barron’s. The carmaker set aside €1.4bn as a contingency for a looming EU fine over…

Warren Buffett, chief executive and chairman, Berkshire Hathaway “I’m not an Englishman but I have a feeling it was a mistake to vote to leave. But it doesn’t destroy my appetite in the least for making a very large acquisition in the UK.” Buffett on Brexit, quoted in Financial Times “It’s a gambling device... there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything… It doesn’t do anything. It just sits there. It’s like a seashell or something, and that is not an investment to me.” Buffett on bitcoin, quoted in the Financial Times “With some people, in negotiations, the best technique is to act half crazy.” Buffett on Donald Trump’s approach to discussing trade with China,…

The box-office success of last year’s Freddie Mercury biopic, Bohemian Rhapsody, has left the three surviving band members of Queen with a collective fortune greater than the Queen’s, says The Sunday Times. Brian May, Roger Taylor and John Deacon are worth a combined £445m, having each added £25m to their fortunes over the past year. That compares to the monarch’s fortune of £370m. The criteria for the newspaper’s annual Rich List, to be published in full this weekend, excludes the Crown Estate and the royal art collection from her assets as she does not have control over them. Lead guitarist May’s net wealth climbed to £160m, and drummer Taylor is worth £155m. Both served as consultants for the film that charts the life of Queen’s charismatic singer, Freddie Mercury, who…

adamsmith.org/blog Thirteen years ago, we said goodbye to a remarkable woman, says Madsen Pirie: Jane Jacobs, who died in April 2006. In her 89 years, she changed the way we think about cities, their growth and development. She blamed “urban renewal” programmes, for example, for destroying communities. She opposed visionaries who would impose their visions on people, destroying large parts of existing cities in the name of modernism. She advocated the abolition of zoning laws and the restoration of free markets in land, which would result in dense, mixed-use neighbourhoods that served the wants and needs of people. What others called “slum clearance”, she regarded as vandalism. Her vision of vibrant societies that were not planned from above and outside, but arose naturally and spontaneously, is very much in line…

■ “Beleaguered” fund manager Neil Woodford has promised to sell all of the unquoted holdings in his Equity Income fund following widespread criticism of his strategy, says Holly Black in The Sunday Times. In March, Times Money reported that 36 of the fund’s roughly 105 holdings were in unquoted businesses, while the proportion of the portfolio invested in FTSE 100 companies had fallen from 53% at the time of the fund’s launch in 2014, to just 16%. Woodford has “always been absolutely adamant that this was all by design”, says James Coney in the same paper. But “I never believed a word of it”. Isn’t it more likely that it ended up like this because “he had to sell so many...mainstream shares” following a series of bad bets and investors’…

HMRC is cutting tax relief on the interest paid on loans used to buy properties to let. Transferring property to a company will mitigate the impact; so will joint personal ownership, says the Tax Tips & Advice newsletter. If you have a spouse or civil partner (or, in certain circumstances, an unmarried partner) who pays tax at a lower rate than you, you can transfer all or part of the ownership to them and reduce the tax bill. Unlike with transferring to a company, you won’t have to pay capital-gains tax when transferring to a partner. If the transfer is made as a gift, stamp duty will only be payable if your partner doesn’t take on a corresponding share of the mortgage. Finally, note that each partner is taxed on…

Cruise holidays are something everyone seems to have an opinion on – people either love them or hate them. Speak to analysts and investors, however, and the view tends to be positive, which is hardly surprising – profits at the leading operators have doubled or even trebled over the past five years. But does this strong performance mean investors have missed the boat? In a word: no. Recent results were better than analysts had hoped for, and outlook statements have been upbeat. The industry has been telling investors that existing ships are full and demand for berths high. To carry even more passengers, nearly $10bn of brand-new ships are launching in 2019, more than in any previous year, according to Cruise Industry News. While boosting capacity doesn’t automatically mean more…

The idea of the Russell 1000 Value Index is to reflect the performance of “value” stocks in the Russell 1000 Index, which in turn is supposed to represent the market as a whole. However, look closely at the 1000 Value and you will see that it has 725 stocks in it – so not far off three-quarters of the Russell 1000. That makes it more of an index that excludes the most expensive stocks, rather than focusing on the least expensive (as you’d expect from a measure of value stocks).The index also uses price-to-book (p/b) as the main factor to determine value. P/b has long been used by academics for this purpose (and we often use it at MoneyWeek). However, Andrew Wellington of Lyrical Asset Management reckons the ratio has…

A new property platform is offering investors the chance to buy a ready-mortgaged, ready-designed, managed property “in minutes”. Dot Residential will set up a special-purpose vehicle on your behalf, through which it will buy and run flats in Manchester and Liverpool. These properties come with a three-year “Dot Instant Mortgage”, at a rate of 4.99%, and don’t require a credit application – you can move on to lower-cost funding if you go through a full credit application. You put down a 30% deposit, and then receive rent, less all the finance, management and maintenance costs. Dot predicts you could make between 4% and 6% in rent. Given that the property is held via a limited company, you pay corporation tax (at 20%) rather than income tax. But as with most…

Regeneron’s 2018 results are given in the table and show a 14.3% increase in revenue with a 40% rise in earnings per share (EPS). Research and development (R&D) is a very high 32.6% of sales compared to most biopharma companies which typically devote 15%-25% of sales to R&D (Merck, for example, invested 23% in 2018 and Pfizer 14.9%). Regeneron also has a healthy cash balance of $5.6bn, which it can use both for advancing the pipeline and for acquiring smaller biotechs. After Eylea, Dupixent is the second-highest selling approved drug with sales of $374m in the first quarter of 2019. It is thus already a blockbuster drug (one with annual sales over $1bn). Dupixent was approved for asthma late last year and has just been given the green light to…

Capital & Regional (LSE: CAL) is a real-estate investment trust that owns shopping centres around the UK. Its stock has been sliding since 2015 as the “high street crisis” has tightened its grip. The trust managed to defy the gloomy backdrop in 2017, returning to profit and hiking its dividend, but it couldn’t build on this success. In March annual results confirmed fears that had seen investors selling it off for most of 2018. It revealed its net asset value per share had fallen by 11% to 60p. It cut its dividend by a third after losing £25.6m. The stock has fallen 51% in 12 months.…

Upheaval How Nations Cope with Crisis and Change Jared Diamond (Allen Lane, £25) Jared Diamond has written several books on what makes nations successful. Originally he was a “geographical determinist” who believed that an “abundance” of food gave inhabitants of ancient Eurasia “the time and energy to invent the guns and steel that they used to conquer much of the rest of the world”, says Peter Coy on Bloomberg. However, his latest book downplays geography in favour of therapy. In particular, he “likens nations in trouble to individuals going through a recovery” and tries to draw lessons from case studies of countries that have been through trauma. Diamond’s approach of “drawing direct parallels between personal and national” contrasts with conventional historians, who “tend to emphasise the particularity of circumstance and…

We have previously made three bold predictions in this column: that the US Federal Reserve will never voluntarily normalise monetary policy; that Donald Trump would never go the whole hog on his trade war with China; and that Republicans and Democrats would both come to embrace modern monetary theory. As to the first – check. The “Powell Pivot” ended the Fed’s hesitant, pseudo-tightening programme. The Fed chairman, panicked by the market’s decline at the end of 2018, said there would be no rate hikes this year. As to the second, well, so far, so good. The negotiators are at work. Most likely, the president will soon announce a wonderful, beautiful trade deal that will satisfy lobbyists and cronies while having little real effect on the economy. “Even the worst economic…