Innehållsförteckning för Issue 983 från MoneyWeek

Jaime Botin, a member of the Spanish banking family that has run Santander for over a century, has been fined €52.4m and sentenced to 18 months in prison, for smuggling Pablo Picasso’s Head of a Young Woman out of Spain, says Bloomberg. Botin had been denied an export permit to sell it through Christie’s in London in 2012. The €26m painting was later found on his yacht, off Corsica, in 2015. It has since been handed to the Reina Sofia art museum in Madrid, while authorities decide where to send it.…

“Coal’s fortunes look bleak”, says Jeremy Hodges on Bloomberg. The fuel’s price fell by almost a third last year to around $62 per tonne with little prospect of a pick-up in 2020. A combination of falling gas prices, “ever-cheaper wind and solar power” and carbon-emissions reduction policies are driving a “drastic” decline in generators that burn coal. Last spring the UK went for a full week without coal power for the first time since the industrial revolution. Bulls point to new coal-fired power stations coming online in Asia, say Joe Wallace and David Hodari in The Wall Street Journal. China accounts for about half of global coal demand. Yet Beijing is taking a protectionist turn as it wants to preserve “the domestic coal industry because it’s the source of employment…

For all the fuss about productivity in much of the developed world stalling in the last ten years, a longer-term view suggests that humanity should continue successfully doing more with less. Take agriculture, says John Mauldin in Thoughts from the Frontline. Research by Jesse Ausubel of Rockefeller University shows that the world is producing almost five times as much corn per acre than 70 years ago; it is using less fertiliser too (fertiliser consumption peaked in the 1970s). We are also squandering much less water. Water use for agriculture has been flat since 1975 while the production of corn and soybeans has quadrupled. Wheat and potato output is up by 60% and 25% respectively. Feeding a growing population will be no problem.…

Tech start-up Casper Sleep, known for selling mattresses on the internet, has filed for an initial public offering (IPO), says Lauren Thomas in CNBC. The company reported sales of $357.9m in 2018, up from $250.9m the year before, with losses of $92.1m and $73.4m respectively. Casper was valued at $1.1bn following its latest round of funding, but it has yet to disclose how much money it plans to raise or the valuation it will seek. Casper’s sales grew by 46% a year between 2016 and 2018, says Tae Kim in Barron’s. After the poorly received flotations of 2019, notably Uber and WeWork, Casper’s IPO will “test market appetite for loss-making unicorns”, says Ciara Linnane on MarketWatch.…

Shares in drinks and mixers group Fever-Tree slid by a fifth early this week, says Joanna Bourke in the Evening Standard. Founder and CEO Tim Warrillow has blamed a “subdued end to the year in the UK” for a 1% fall in UK sales and has warned that Fever-Tree’s “much vaunted” expansion into the US will suffer “slower growth than before”. The warning has reduced the stock price to a three-year low. Fever-Tree’s market value has declined to £1.76bn, down from a peak of £4.5bn 18 months ago. While Fever-Tree’s management has attempted to cushion the blow with talk about “good momentum outside the UK” and has promised that home sales will “return to growth”, this is more than just a temporary blip, says Kate Burgess in the Financial Times.…

An interesting case came to light recently on the betting website politicalbetting.com involving a dispute between bookmaker Paddy Power and a punter who had placed three separate bets on the date of Trump leaving office, a Scottish referendum and alien existence being proven, selecting the option “2020 or later”. The punter assumed this meant that if these events hadn’t happened by the start of this year, he would have won the bet. Paddy Power took the terms literally – that he would only be paid when the events had actually happened. Whatever you think about the rights and wrongs of this case, it does illustrate that disputes do happen. We haven’t had many problems with this column and I generally don’t make my own private bets on politics,  but back in…

It didn’t matter too much what you invested in over the past decade. Most assets delivered strong returns. The MSCI World index of global equities had a gross total return around 12% per year in sterling terms (gross total return means including reinvested dividends but not allowing for the cost of taxes that some countries deduct from dividends). The S&P UK Gilt Bond index of British government bonds managed around 5.5% per year, with bonds with longer maturities doing better because they started on higher yields. UK commercial property has returned around 9% per year, according to the MSCI UK Monthly Property index. “At least there is one asset class that offers some opportunities” Obviously things have got steadily tougher for cash as interest rates dwindle, and emerging market stocks…

Considering its massive potential, investors should be getting behind the most forgotten of the Brics (Brazil, Russia, India, China and South Africa) – Russia. To some degree they have been. Over 2019, Russia’s was the best-performing major stockmarket in the world, rising by 39%, just slightly ahead of Greece. The recovery in oil prices, a gradual thawing of tensions with the West, and some cuts in interest rates, all combined to push equity prices higher. The wrong kind of reforms In normal circumstances, you might expect political reform to accelerate that – and for investors to pile back in. In the last week, President Vladimir Putin unveiled sweeping changes to the constitution (see page 9). If they had been about making the system more democratic, strengthening the rule of law…

Hong Kong’s malaise is deep-rooted William Pesek Nikkei Asian Review The city-owned Ocean Park theme park in Hong Kong may soon receive a $1.4bn public bailout, says William Pesek. The park is heavily indebted; tourist numbers have crashed. But it also needs “fresh leadership”. Its situation is “revealing” at a broader level. Hong Kong regularly tops the list of freest economies, but “only when you look at it with the help of a funhouse mirror”. Yes, it enjoys “low taxes, unfettered capital flows, duty-free ports, ease of doing business and strong rule of law”. But it is also an “oligarch-led economy dominated by a property market rigged for maximum value. The currency is pegged, decision making is opaque… and its leader is chosen by – and increasingly beholden to –…

project-syndicate.org The final figures are not yet in, but it looks as though the decade just ended will turn in a GDP growth figure of around 3.5% per year, says Jim O’Neill. That’s not bad – it’s higher than the 3.3% of the 1980s and 1990s – but it should have been better considering the growth in the size of the global workforce and of productivity. The omens for the coming decade do not look so positive. Growth in the Chinese workforce is peaking and the populations of Japan, Germany, Italy and other key countries are ageing and in decline. The EU’s growth potential is likely to remain unfulfilled without a boost to productivity. Brazil and Russia look likely to continue to rely too heavily on commodity prices for growth.…

After five years in which the investment return of the technology-focused Scottish Mortgage Investment Trust (LSE: SMT) was nearly double that of the FTSE All-World index, relative performance slowed in 2019. In the first nine months an investment return of “only” 16.7% lagged both the FTSE All-World index and the average for the global IT sector. Many believed that high-growth companies had become overvalued and criticism mounted of the low tax paid by the US technology titans, their dominant market positions and their lack of regulation. SMT was increasing its exposure to private equity, yet doubts have grown about some of the valuations of these companies. Optimism has dwindled James Anderson and Tom Slater, SMT’s managers at Baillie Gifford, accept the change of mood. “There was utopian optimism ten years…

Many homeowners will see their mortgages mature before the end of spring. April will be the second-biggest month of 2020 for mortgage deals ending, with £21bn due to mature. “The large loan value reflects the fact that the mortgage market was particularly competitive when the deals were taken out,” says Adam Williams in The Daily Telegraph. When your deal matures you’ll be moved onto your lender’s standard variable rate (SVR), which is typically far more expensive. If you secured a particularly competitive deal, this could mean a big jump in your monthly repayments when your deal ends. You can avoid this by shopping around and locking in a low rate in advance, as mortgage offers usually last for several months. Avoiding a shock when you get your bill isn’t the…

Approximately 11,000 pensioners will see their state pension decline by up to £70 a week following benefit changes introduced a decade ago. Those affected currently receive the “adult dependants’ addition”, which was once payable to hundreds of thousands of pensioners with spouses under the state pension age, but financially dependent on the state pension recipient. The benefit, known as Adult Dependency Increase (ADI), was abolished for anyone claiming their pension from April 2010 onwards. However, pensioners receiving the cash prior to that date were promised it would be payable for ten further years. The nature of the benefit, only payable to couples where one partner is below state-pension age, means relatively few people still receive it. However, aFreedom of Information request that was made by insurer Royal London has revealed…

One video-games company that is worth investing in is the American firm Take-Two Interactive Software (Nasdaq: TTWO). Take-Two benefits from owning a series of “strong franchises”: games with a devoted fan base willing to buy the latest version and upgrades, says Walter Price of Allianz Technology Trust. The best-known of Take-Two’s games are basketball simulation NBA 2K, urban action-adventure series Grand Theft Auto and Western-themed Red Dead Redemption. Despite nearly tripling sales between 2013 and 2019 and boasting a 17% return on equity, Take-Two is still on a reasonable 26 times 2020 earnings. Another games developer Price likes for its franchises is Zynga (Nasdaq: ZNGA). Zynga focuses on mobile games. Although it ran into trouble seven years ago when gamers began to tire of its original hit FarmVille, CEO Frank…

Stick with the UK: ensure any broker you use is UK regulated. And stick to well-known names – online reviews can be faked. Avoid “signals”: magic moneymaking machines do not exist. Watch for fakes: many of these firms have a name that sounds vaguely like a City institution. Check out fca.org.uk/scamsmartfor warnings and check with Companies House to see if a company exists. But even if it passes both tests, don’t assume it’s legitimate. Hang up on cold callers: assume that all cold calls are scams. What’s in it for them? Very often people don’t disclose huge conflicts of interest. Traders aren’t fashion models: Beware people who post more pictures of their lifestyle than of their actual trading.…

It has been another mixed fortnight for my tips. My longs did well, with five out of my seven positions appreciating. Bellway rose in value from 3,894p to 4,055p, Bausch Health Companies went up from $28.66 to $30.45, Volkswagen advanced from €176 to €182 and International Consolidated Airlines Group climbed from 615p to 657p. Taylor Wimpey rose from 194p to 214p. The only disappointments were Safestore, which fell from 785p to 777p, and DS Smith, which was down from 380p to 357p. The profits outweighed the losses, with the overall gains rising from £5,060 to £6,254. The bad news, however, is that all of my six short tips also rose. The digital currency bitcoin rose from $7,869 to $8,659, streaming service Netflix went up from $336 to $339. Ridesharing network…

“Microfinance” group ASA International (LSE: ASAI) makes small loans to businesses and low-income entrepreneurs – mostly women – in 13 countries across Africa and Asia. It has 2.3 million customers and boasts a loan portfolio of around $420m. Growth has been in line with expectations, but unfavourable exchange rates mean earnings from West Africa and Southeast Asia have disappointed. ASA listed in London in July 2018, but after a burst of post-flotation euphoria the share price began to decline steadily and in the last year it has fallen by 40%.…

2013 Paracombe, Shiraz, Adelaide Hills, South Australia £20, cotswold wineimports.com; £21, ozwines.co.uk The wildfires in Australia have been devastating and indiscriminate over the past few months and have led to tragic loss of life, property and businesses, as well as of ancient forests and wildlife. It is the most destructive wildfire season Australia has ever seen. It is hard to try to understand the impact these fires have had in my world, the wine trade. Some of the most saddening losses have been in the idyllic Adelaide Hills. On 20 December alone, one third of the region’s wine production (more than 1,000 hectares) was wiped out, along with 84 homes, including several historic buildings. Fundraising for those affected is taking place, as well as much needed initiatives to drive monies…

A rare 22-carat gold sovereign from 1937, with a face value of £1, has become the first British coin to sell for £1m. The coin (pictured) bears the face of King Edward VIII, despite Edward having abdicated in favour of his brother, George VI, the previous year. Edward had also broken with convention in being depicted facing left, as he preferred his left profile to his right. Since the reign of Charles II in the 17th century, monarchs had traditionally faced in the opposite direction to their immediate predecessors, says Kevin Peachey on the BBC. But “Edward VIII was quite a vain character”, explains Chris Barker, from the Royal Mint Museum. Owing to Edward’s abdication, the trial coin, of which six were made, never went into mass production. Edward asked…

• Two years and £1.5m in legal fees later, it seems television presenter Ant McPartlin and his ex-wife, Lisa Armstrong, have finally come to an “amicable” settlement over their £50m fortune, says Amanda Platell in the Daily Mail. McPartlin (pictured) said he would generously give Armstrong a “staggering” £31m – “more than the half any wife is due by law, plus the £5m family home”. This is the house in which “she had stood by him through years of drug and alcohol dependency and rehab”. Armstrong is entitled to feel angry. “Yet I wish she hadn’t responded to Ant’s claim that they had settled with a social-media retort saying it was ‘a load of nonsense’.” (Her side says it will be more like £20m.) Armstrong can stand on her own…

Shares in the two most valuable loss-making companies have soared over the past three months, with electric-car maker Tesla’s stock doubling and General Electric up 44%. At the beginning of a boom, investors are sceptical. They part with their money reluctantly, almost grudgingly, carefully looking for value. As the boom continues, they gradually forget all about value. They want the movers and the shakers. They don’t care how much they cost so long as they go up. “Tesla is providing a great service to established carmakers at huge cost” Take Tesla, for example. It’s a company that wouldn’t last long in a normal stockmarket. But at the bubble-end of a long, Fed-fuelled boom, it’s a favourite. The more it loses, the more investors want a piece of the action. Tesla…

£210m How much Chinese property billionaire Cheung Chung Kiu has agreed to pay for 2-8a Rutland Gate, which would make the 45-room mansion overlooking Hyde Park in London the most expensive house in Britain. The record is currently held by Park Place, a 300-year-old country house in Berkshire, which sold for £140m in 2011. £500,000 The cost of installing a temporary floor at the Palace of Westminster before Big Ben can chime to mark the moment Britain leaves the European Union at 11pm on 31 January. The bell has been silenced while extensive renovation works are carried out. £130bn The estimated cost so far to Britain from “untethering” its economy from the other members of the G7 ahead of Brexit, according to Bloomberg Economics. An additional £70bn will have been…

Africa’s richest woman, Isabel dos Santos (pictured), is accused of exploiting Angola’s assets to enrich herself while her father, former president José Eduardo dos Santos, was in power, says Michael Forsythe in The New York Times. The “Luanda leak” of 715,000 documents relating to her business activities provides “a paper trail” of how she and her husband, Sindika Dokolo, amassed $2bn via stakes in Angolan telecoms, diamonds and construction firms. For example, in 2017, $57m was transferred from Angola’s state oil company, Sonangol, which she chaired at the time, to a Dubai firm owned by a friend. This “drained” Sonangol’s account at EuroBic, the European arm of an Angolan bank which is 42.5% owned by dos Santos. The bank said it has ended its “commercial relationship” with her and will…

Don’t get too excited about the new “phase one” US-China trade deal, says James Palmer in Foreign Policy. Donald Trump heralded a “momentous step” after formally signing the accord with the Chinese vice premier, Liu He, last week, but this limited agreement will only “forestall further escalation” rather than unwind the damage already done to global trade. Trade truce, not trade peace Markets saw the sunny side. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all posted their biggest weekly percentage gains since August last week, note Chris Matthews and Mark DeCambre for MarketWatch. “The Nasdaq has climbed for six straight weeks, with a year-to-date return of 4.6%”. The pan-European Stoxx Europe 600 hit a new record high on Friday and the FTSE 100 regained a six-month peak.…

“The past year has seen an increase in my intake of literature critical of the current monetary and... debt culture that appears to have infested... Western [countries. I fear we are] close to a cataclysmic popping of the Everything Bubble... The question... is what to do... I look at gold as a currency and a genuine store of value… In ancient times (pre-2000) when cash and equivalents had a time value represented by an interest rate, gold, with its real cost of carry, was a hard call to make, but today it is – as our US friends might say – a doosy (not sure if you spell it that way, but you get my drift). As John Butler writes... in his book The Golden Revolution, Revisited : ‘All purely…

Three to buy Dunelm Investors Chronicle Dunelm operates a UK-wide network of 171 superstores selling home furnishings. The firm went through adifficult period after struggling to digest its 2016 acquisition of online retailer Worldstores, but is now “firmly back on the front foot”. The online business is growing rapidly and the successful rollout of a new digital platform is particularly encouraging. Free cash flow and margins are improving and talk of a post-election bounce in consumer confidence should also provide a boost. 1,082p Travis Perkins The Sunday Telegraph This builders’ merchant has a “do-it-yourself” plan: management has sold its wholesale heating and plumbing business for £46m and also plans to dispose of DIY chain Wickes. That would make it less dependent on the cyclical retail trade and give it more…

• Last year advertising agency M&C Saatchi said it had overstated profits by £12m, prompting founder Maurice Saatchi to resign, says Lex in the Financial Times. Now the group says it has found an extra £10m. Still, any boost is likely to be temporary as “big ideas and bigger specs” are no longer enough to preserve a “dying business model”. Not only has cost-cutting at multinational consumer groups such as Kraft Heinz hurt, but the whole industry is suffering from the disruption caused by Facebook and Google. M&C Saatchi may have made its name through “witty, niche advertising campaigns”, but as the industry becomes “an online scale game” the group is being left behind. • The government has bailed out FlyBe, but “where is the help for Sirius Minerals?”, asks…

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

• Radio presenter Sarah Montague confirmed she won £400,000 in compensation last year, not the £1m widely reported, from the BBC, reports BBC News. In 2018, Montague said she was “incandescent with rage” when she found out that her £133,000 annual salary for presenting The World At One was less than that of her co-workers. • Advisory group ISS has urged shareholders in housebuilder Countryside Properties to reject a £100,000 pay rise in two years for finance chief Mike Scott, says The Daily Telegraph. Scott’s salary rose by 17% in October to £350,000, while another 14% rise is proposed from this October. He received £915,000, including bonuses, last year. Shareholders will also vote on reducing pension contributions for the chief finance officer and chief executive officer roles to 10% from…

“Good genes and a lot of money.” Actress and social activist Jane Fonda (pictured) , 82, explains the secret of her beauty, quoted on Facebook “If I explain it to you, you would just think we’re all mad, in terms of, why would anyone spend that kind of money to go racing?” British female racing driver Jamie Chadwick on the staggering amount of money involved in motor sports, quoted in The Observer “It’s about never going back to the s***hole that is poverty. To living off £60 a month. Where existence is just survival. Now I’m a free man, I never want to go back.” Rapper Big Narstie on what keeps him hungry for success, quoted in The Guardian “I had the chance to buy a one-bedroom flat in Chiswick…

ftalphaville.ft.com The world’s largest fund manager, BlackRock, is offloading $500m in shares from firms that generate 25% or more of revenue from thermal coal. That hasn’t placated green activists, says Izabella Kaminska. Extinction Rebellion huffed that it wasn’t enough and warned of “societal collapse and mass death” if more is not done to stop climate change. The trouble is, “societal collapse and mass death” seems equally likely if we stop burning fossil fuels too soon. It is just not possible to switch to renewables (a switch that would in itself cost a great deal in carbon emissions) without threatening growth. If growth is threatened, countries get poorer – and the poorer you are, the less you can afford to care about the environment. A significant part of the consumption growth…

One of the smaller funds previously run by disgraced stockpicker Neil Woodford is set to reopen in February, says Ben Martin in The Times. Administrator Link Fund Solutions told investors trapped in the £257m Income Focus Fund whose portfolio Aberdeen Standard Investments has been overhauling that it expects to lift the freeze on trading no later than next month. The fund has been suspended since mid-October when it got caught in the panic as Woodford’s biggest vehicle, the £3bn Equity Income fund, collapsed in June. That fund, now known as the LF Equity Income fund, suffered another writedown of the value of its unquoted companies late last week in the final valuation before its wind-up began.…

Will the new Conservative government’s first Budget on 11 March abolish inheritance tax (IHT)? Chancellor Sajid Javid said in September that he was mulling significant reforms, but there were no firm proposals in the Conservatives’ election manifesto and he has gone quiet on the matter. The good news, however, is that the pension system now offers a golden opportunity to cut, or even wipe out, a potential liability. Since the pension freedom reforms of 2015, pensions have become a key inheritance-tax planning tool. The main rules This is primarily because, while pension assets bequeathed to your heirs have always been exempt from IHT in most circumstances, the reforms make it much easier to pass on such assets. You’re now entitled to pass on any unspent money in your pension fund…

If you’re completing your 2018-2019 self-assessment tax return over the next few days, don’t forget to declare your pension contributions. Taxpayers routinely omit vital pensions data from their tax returns, forfeiting valuable tax relief or underpaying tax. Higher-rate taxpayers are most at risk of missing out. If you make regular contributions to a private pension, such as a stakeholder or personal plan, your provider will automatically claim basic-rate income-tax relief on your behalf, reducing the cost of contributing by 20%. But higher-rate and additional-rate taxpayers are entitled to a further 20% and 25% respectively; this relief can only be claimed by declaring your contributions on your annual tax return, so if you don’t provide this information – or you don’t make a return – you won’t get it. Around 250,000…

Sometimes the best opportunities come in sectors that sound desperately dull. Take buses and coaches, probably the least exciting form of transport as they are slower than planes and railways and lack the high-tech glamour of ridesharing services. However, they are ideal for short and mid-length journeys since they are cheap, while they are also more environmentally friendly than some other forms of transport. And as far as operators are concerned, they don’t require much capital investment. One of the most attractive coach companies is National Express (LSE: NEX). “WeDriveU has contracts with tech firms such as Netflix and LinkedIn” National Express is best known for its intercity coach services in Britain, where it accounts for 60% of the scheduled coach-service market; it also operates local buses outside London. In…

We firmly believe that Europe offers fertile ground for investors. Investors unnerved by political and economic uncertainty have overlooked many opportunities. The most reliable way to uncover companies with the best long-term growth prospects is to seek out “compounders”: names that score highly in terms of sustainable profitability, reinvestment for the future and Socially Responsible Investing (SRI). Secular growth is what we look for and innovation is what will sustain it in the long run. Innovation can be found in an array of sectors. For example, as the stocks below illustrate, it is widespread within the healthcare industry; it is at the core of the biotech sector and it is key for selected industrials. Defeating diabetes Novo Nordisk (Copenhagen: NOVOB) is a global healthcare company headquartered in Denmark. It boasts…

Billionaire Peter Hargreaves (pictured) is to establish a charitable foundation, to provide financial support to help underprivileged young people and those with disabilities through education and sport, says The Times. Hargreaves will transfer shares worth £100m from his 32% stake in Hargreaves Lansdown, the investment platform he started in 1981, and stepped back from almost five years ago. The foundation will hold on to the shares for at least two years and draw on the income, which would have been worth around £2.2m last year. The Van Gogh Museum in Amsterdam has authenticated an 1889 self-portrait of Vincent Van Gogh as genuine. Norway’s Nasjonalmuseet has owned it since 1910, but its authenticity had been disputed since 1970. However, Van Gogh refers to the “when I was ill” painting – the…

Two years ago the semiconductor sector was rocketing amid talk of a chip supercycle, says WirtschaftsWoche. The euphoria was punctured by Donald Trump’s trade war, which has severely dented the share prices of major chipmakers and their suppliers. That makes Germany’s Siltronic, a producer of silicon wafers used in semiconductors, well worth a look. It is on a price/earnings ratio of just 12 and yields 3.6%, yet there should be plenty of growth ahead. Long-term trends such as artificial intelligence, the “Internet of Things” and the proliferation of data centres all point to steady rises in demand for chips in the years ahead. Siltronic has net liquidity of €500m on its balance sheet.…

Last year was the worst ever for British retailers, says Sarah Butler in The Guardian. According to the British Retail Consortium and accountants KPMG, total sales slipped by 0.1% , the worst performance since they began monitoring the sector in 1995. One of the main factors behind the downturn was a 0.9% fall in sales in the “crucial” final two months of the year when many retailers make most of their money. In contrast to the high street misery, online sales rose by 2.6% in November and December. Sales of clothing and footwear were hit particularly badly, say Andrew Atkinson and Lucy Meakin on Bloomberg. They fell by 2.3% year-on-year in the last three months, with retailers having to offer “deep discounts” to attract customers. This meant that stores from…

“Workers of the world, good news!” says Andrew Edgecliffe-Johnson in the Financial Times. You have been rebranded as “stakeholders” and your bosses now think you matter “every bit as much” as the shareholders “on whose returns their bonuses are calculated”. The theme for the World Economic Forum in Davos, celebrating its 50th anniversary this year, is all about stakeholder capitalism and sustainability. All talk of buybacks and tax efficiencies are on hold: “this week is about a healthier planet, happier customers – and you”. Wouldn’t that be nice, says Mark Littlewood in The Daily Telegraph. Doubtless, the 3,000 attendees, among them 53 heads of state and a clutch of celebrities including Will.i.am, are “well-intentioned”, but for the most part big business, politicians and lobbyists are “actively engaged in an unholy…

Vladimir Putin’s “sweeping constitutional changes”, announced last week, have created “feverish uncertainty” about what will happen when he steps down as Russian president in 2024, says Andrew Higgins in The New York Times. The reforms amend the Russian constitution “to expand the powers of parliament, the prime minister and a body called the state council”, and were accompanied by the resignation of the prime minister, Dmitry Medvedev, and the rest of the government. The reforms might signal “a rift at the top of Russia’s hierarchy”, but most experts think they are part of a “well-coordinated” plan by Putin “to hold onto power by reshaping the political system”. Putin’s not going anywhere, says The Guardian. Even before this shake-up, most Russians took for granted that he would remain in power after…

The biggest problem for many attendees at the World Economic Forum in Davos is where to put their money, Martin Gilbert, the outgoing vice chairman of fund manager Standard Life Aberdeen, tells CNBC. Slow growth and low interest rates mean that wealthy individuals are struggling to find attractive investments, just like the rest of us – but they have options that smaller investors lack. High net-worth individuals and large funds are continuing to shift out of publicly listed investments and into private holdings in sectors such as real estate and various forms of infrastructure, from student housing to airports. Nonetheless, Gilbert says that valuations in most assets still look “reasonable” to him and only government bonds seem too expensive. Gilbert will leave Standard Life Aberdeen – created through the merger…

The 57 minutes it took Sweden’s Joanna Larsson to become the first tennis player to lose at this year’s Australian Open was enough time for her to make more money than most Australians earn in a year, says Andrew Heathcote on Bloomberg. The Australian Open “rewards its losers like no other” contest. Despite failing to progress beyond the first round, Larsson (pictured) and 127 other players will get A$90,000 (£47,300). Collectively, they will receive A$11m of the A$71m on offer at the tournament. The average Australian earns A$1,633.80 a week as of last May, according to the Australian Bureau of Statistics. Other tennis tournaments were similarly generous to their first-round losers last year. The French Open awarded €46,000, Wimbledon £45,000 and the US Open $58,000.…

unherd.com After its crushing election defeat last month, the Labour Party “faces the most titanic of struggles to reestablish itself as a serious political force”, says Paul Embery. If Labour is serious about winning power in the future, it must reconnect with the millions of working-class voters who have abandoned it. Jeremy Corbyn was right to demand the end of austerity and articulate an economic alternative to neoliberalism. But “it isn’t just the economy, stupid”. Voters want cultural security too. That means Labour must talk much more about the dignity of work, the family as the bedrock of a civilised society, the value of community and law and order. It must end the “crackpot” talk of open borders and understand that rapid and large-scale movements of people can cause disruption…

■ A “darling” of the hedge-fund industry came spectacularly unstuck last year, say Nishant Kumar and Javier Blas on Bloomberg. London-based Northlander Commodity Advisors, which concentrates on the energy sector, plunged by 50.6%. Assets under management at the fund run by Ulf Ek shrank to $310m from $500m at the end of 2018. The decline marked the first annual loss since the fund’s inception in 2012. Northlander generated double-digit returns every year from 2013 to 2018, including an impressive 53.6% return in 2018. The fund profited handsomely from a major bet on the price of European carbon-emissions allowances rising. It has now “significantly reduced” its exposure to the emissions market; the price of the allowances flatlined last year. ■ BlackRock, the world’s largest fund manager, has announced that it will…

A taxpayer who has filled in a self-assessment form is obliged to pay the tax bill that results, however small, says the Tax Tips and Advice newsletter. However, HMRC will occasionally issue tax calculations known as P800s. Instead of asking someone to fill in a self-assessment form, HMRC decides based on the information it has whether someone in a relatively straightforward tax situation has overpaid or underpaid. “It then politely asks” you to pay any money you owe. P800s are “often inaccurate” so check them and send HMRC the right figures if need be. It is obliged to adjust the P800. The debt is not enforceable, however. If you refuse to pay you will be sent a self-assessment form or the tax will be collected through an adjustment of your…

Video or computer games, once a niche pursuit for geeks, have become firmly entrenched in everyday life. According to the market research firm Savanta, 86% of people in the UK have played at least one in the past year. These games are so prominent now that they have begun to set the cultural agenda. “In the recent past, it was usual for computer games to be based on films. However, now you’re starting to see it’s going in the other direction with films and TV shows based around computer games and Hollywood stars attending games-industry events,” says Rob Leane, games editor at Den of Geek. Little wonder, then, that the global games market “is now larger than television, television streaming, the movie industry and digital music”, says Katen Patel, co-manager…

A put option gives the holder the right (but not the obligation) to sell an asset – that is, a share – for an agreed price on or before a given date. When you buy a put option, you pay a fee (premium) to the seller (“writer”) of the option. You can use put options to bet on the price of an asset falling.Your potential loss is limited to the premium paid. Say Acme Widgets is trading at 100p a share and a put option to sell at 90p costs 5p.You buy a block of 1,000 options at a cost of £50 (5p x 1,000). If the shares fall to 70p, you would make a profit of £150 ((90p – 70p – 5p) x 1,000). However, if the shares go…

Companies are increasingly returning cash to shareholders by buying back shares rather than paying dividends. US firms spent $900bn on buybacks in 2018 alone. Buybacks bolster the share price and raise earnings per share, even if a company’s underlying profits aren’t growing, since there will be fewer shares on the market. However, critics of this practice argue that dividends give shareholders more choice over what they can do with their money. They can use the money to purchase shares if they want to, while firms risk wasting money if their shares are already overvalued. Despite the criticism of share buybacks, they seem to have a positive effect for shareholders in both the short and medium term. A study by the investment firm Two Sigma covering 9,698 buyback announcements in firms…

Games Workshop (LSE: GAW) manufactures and sells fantasy board games, including the phenomenally successful Warhammer, and miniature gaming figures to go with them. The company was in the doldrums for many years, but around four years ago sales and profits began to rise and haven’t stopped since. In the six months to 1 December the group made a pre-tax profit of £58.6m, up from £40.8m in the same period in 2018. In the last five years the share price has risen by over 1,000% . The company has raised the annual dividend by 45p to £1 per share.…

Agha Hasan Abedi was born in Lucknow, India, in 1922, and went on to graduate from Lucknow University before taking up a position at Habib Bank. Following Indian independence, then partition in 1947, Abedi moved to newly independent Pakistan and in 1959 founded United Bank Ltd. When that was nationalised in 1972 he moved on and set up Bank of Credit and Commerce International (BCCI), starting up with money from Bank of America (which sold its shares in 1980) and the ruler of Abu Dhabi (in the UAE). Abedi based the bank in London, but registered it in regulation-light Luxembourg. By 1991, BCCI would have 417 offices in 73 countries. What was the scam? To all appearances, BCCI was a legitimate bank. Later investigations, however, revealed that it did business…

Going… Love letters, photographs and mementoes that had belonged to Nobel Prize-winning author John Steinbeck and his wife Elaine are heading for an online sale with New Jersey-based Curated Estates Auctions on 27 February. The items include a lock of his baby hair and a telegram from John F. Kennedy (see right) inviting Steinbeck (pictured) to his presidential inauguration. A bin in the shape of an elephant’s foot and a hummingbird wrapped in thread and placed in a miniature leather coffin crafted by Steinbeck are among the odder items. An earlier sale of Steinbeck’s belongings fetched $154,216 with Heritage Auctions in October. Gone… Memorabilia from the lives of Jackie and John F. Kennedy went on sale with RR Auction in Boston, Massachusetts, this week. The lots included photographs, campaign posters,…