Innehållsförteckning för Issue 1013 från MoneyWeek

“I had a great relationship with President Xi,” US president Donald Trump told Fox Sports Radio. “I like him, but I don’t feel the same way now.” Washington and Beijing’s troubled relationship has taken a turn for the worse recently, with the two sides clashing over everything from stockmarket listings and tech to Hong Kong. Consulates have been closed and credit cards blocked. Hong Kong’s leader Carrie Lam admitted this week that she has struggled to pay with plastic since she was targeted by US financial sanctions. Ironically, trade is one of the few areas where the two countries still seem able to engage constructively, says Laura He for CNN Business. A cautious truce in January drew a line under a bitter two-year trade war. Scarred by recession, neither side…

Byotrol The Mail on Sunday Hand sanitiser is “flying off the h helves”,but regulation about what is in the products remains surprisingly lax: many are only effective for a short time and often use alcohol l l, which can irritate sensitive skin. This “fast-growing” Aim business offers antimicrobial products “backed by rigorous scientific research” and boasts strong commercial links with the likes of Boots and the NHS. Three positive trading updates in recent months suggest the “best is yet to come”. 6p B&M European Value Retail Investors Chronicle This discount retailer sells groceries, kitchenware and furniture through its 656 UK stores. More consumers than ever are shopping at discounters and lockdown has brought new shoppers through the doors. Once they start using B&M, customers tend to remain loyal, with 82%…

Germany’s CureVac, which is working on a coronavirus vaccine, raised $213m in its initial public offering (IPO) on the Nasdaq last week, say Rebecca Spalding and Echo Wang on Reuters. The biotechnology firm sold 13.33 million shares at $16 each, implying a market valuation of around $2.8bn. The German government took a 23% stake in CureVac in June for around $343m, suggesting that it deems the company’s research “strategically important”. GlaxoSmithKline and the Qatar Investment Authority have also bought stakes in the company. It is backed by Microsoft founder and billionaire Bill Gates and has secured a $85m loan from the European Investment Bank.…

Epic Games, the maker of the video game Fortnite (pictured), has become embroiled in a showdown with Apple and Google. The group has introduced a way of paying for in-game purchases that bypasses Apple’s App Store and the Google Play Store – as well asthe tech giants’ 30% commissions. Epic says that it is stopping its players from being ripped off and has launched an antitrust lawsuit. Apple and Google have responded by removing one of the world’s most popular video games from their stores. Game developers loathe the 30% “Apple Tax”, says Chaim Gartenberg in The Verge. Yet Apple cannot easily afford to drop the charge. While Apple executives like to talk about revenue from the likes of Apple Music, the income from such services is “dwarfed” by its…

Despite the severity of the slump, so far we have not seen atidal wave of job losses. Sure, almost every day there is a fresh round of redundancies at a retailer, restaurant chain or airline. But it is usually only a thousand or two. The latest statistics showed the headline unemployment total remained close to a record low, at only 3.6%, even if, rather ominously, the total number of hours worked showed asteeper decline, as did the overall number of people in employment. Even so, given the scale and the speed of the slump, far more people are still in jobs than you might expect. How bad will it get? The trouble is, that is going to change very soon. Chancellor Rishi Sunak’s hugely expensive furlough scheme has kept people…

The news that Apple is to carry out a 4:1 stock split has sent the tech giant’s shares soaring again. Apple’s stock price is up by 20% since 30 July, when the split was announced, having already doubled over the past year. Stock splits theoretically shouldn’t make any difference to the price of a share. Yet studies show that when companies split their stock, they tend to outperform over subsequent periods ranging from months to years. (The opposite is true for reverse splits, which is bad news for floundering voucher-deals firm Groupon: its recent 1:20 consolidation seems unlikely to check its steady march towards zero.) “When companies split their stock, they tend to outperform” The standard explanation for this is that splits improve liquidity: small investors can now join in…

The exceptional performance of funds run by Baillie Gifford over the last ten years has enabled it to grow existing trusts, launch new ones and take over the management of others. Back in 2014, however, it lost one to Artemis – the strangely named Mid Wynd International Investment Trust (LSE: MWY), which is now managed by the team of Simon Edelsten, Alex Illingworth and Rosanna Burcher. “Five-year returns of 98% are well ahead of the FTSE World” Mid Wynd, named after an obscure alley in Dundee, has grown to £320m of assets, thanks to strong performance and regular share issuance. Returns of 98% over five years and 41% over three are well ahead of the 74% and 25% returns of the FTSE World index, helped by 8% outperformance in the…

Down a rabbit hole with MMT David Smith The Sunday Times Modern Monetary Theory, or MMT, is all the rage, thanks in part to the publication of a popular book on the subject, says David Smith. Pay no attention, however: the notion “requires us to be taken down a rabbit hole of implausibility”. A key tenet of MMT is that the government can always print money to cover a deficit of any magnitude, and even pay off the accumulated debt pile if it wants. The only way a deficit can be deemed excessive is if inflation has taken off. But “if deficits can be costlessly funded… by issuing currency”, why do governments have to raise tax? And why do governments feel the need to borrow by issuing bonds and sometimes…

The prevailing idea of history is that it has been nothing but a tale of woe and injustice, says Theodore Dalrymple. Nightmares have not been lacking, of course. Yet it is undeniable that there has been progress: “very few of us would care to take our chances in the conditions of the 16th century”, say. So why do we prefer the nightmares? Firstly, they are more vivid to the imagination. Secondly, progress takes place slowly and is taken for granted once it’s happened, so we don’t notice it. Thirdly, the fact of progress is much less useful to political entrepreneurs seeking to stoke resentment against the present state of affairs. And the fourth reason is they help explain the failures and failings of everyone dissatisfied or disappointed with their life.…

Record numbers of students are expected to head to university this year. Universities expect a drop in demand from overseas students owing to the pandemic, so they will be desperate to fill the empty places with British school leavers. But with higher education now costing around £55,000, is it worth it? And what’s the best way to pay for it? Research by the Department of Education has found that the average graduate earns £9,000 ayear more than a non-graduate. The Institute for Fiscal Studies (IFS) believes that over his working life a man “would be £130,000 better off on average by going to university after taxes, student loan repayments and foregone earnings are taken into account”, says Sam Benstead in The Daily Telegraph. Female graduates are estimated to be £100,000…

Savers’ appetite for annuities appears to have increased sharply during the Covid-19 pandemic. Financial advisers have been reporting that risk-averse clients are looking for guaranteed income from their pension funds, rather than accepting the uncertainties of incomedrawdown schemes. Annuities, which pay a guaranteed income for life in retirement, have fallen out of favour since the pension freedom reforms, with drawdown plans becoming much more popular. Many savers prefer the flexibility of drawdown arrangements, even though these carry more risk. However, annuity providers have seen a threefold increase in applications for certain types of annuity in recent months, with advisers suggesting that many clients have been spooked by the pandemic-related market volatility. Such a response is understandable, but could prove costly. One market impact of Covid-19 has been a sharp rise…

The news last week that RateSetter has been sold to challenger high-street bank Metro is yet more confirmation that the peer-to-peer (P2P) investment revolution has been delayed, if not cancelled. Metro, which has its own challenges, has agreed to pay £2.5m, with an additional £0.5m after 12 months and up to £9m on the third anniversary of the deal subject to performance criteria, for one of the UK’s largest P2P lending platforms. Industry website AltFi reports that RateSetter’s retail-investor marketplace of loans will be closed to new investors, with all future unsecured personal loans funded by the bank’s own deposit base. RateSetter’s rival Zopa is still offering a marketplace in loans, but is now focused on becoming a digital bank. “When the economic outlook brightens, investors may rush back into…

The UK stockmarket is cheap. The cyclically adjusted price/earnings ratio (Cape), which uses average annual earnings over the past ten years to smooth out the impact of the economic cycle, is very close to the level it reached in 2009 after the financial crisis. Historically, a Cape this low has flagged up double-digit annual returns over the next 15 years. Of course, the market could go lower before it goes higher, but in general we believe it is a market to buy for the long term. The US, by similar valuation measures, is expensive and offers much smaller prospective returns. There is a reason for this: the US has much greater exposure to long-term, or structural, growth stocks such as Facebook, Amazon, Netflix and Google. The UK has very few…

“The will to survive is the will to win too” The death of Sumner Redstone, “a ferocious dealmaker who elbowed his way into Hollywood”, robs the movie industry of one of its most eccentric and influential characters, says the Financial Times. Redstone, who built the Viacom-CBS empire and coined the phrase “content is king”, was one of the last great media moguls. A cantankerous man, who insisted well into his nineties that he was “never going to die”, he strove to fend off the grim reaper on a diet of “goji berries, tomato juice and fish”. At 97, death caught up with him. Living the American dream Redstone’s life story, which began in a Boston tenement, had all the makings of the American dream. And he lived it like a…

Ben Francis, the owner of luxury sportswear brand Gymshark, has become the UK’s richest self-made person under 30, says The Times. The 28-year-old’s recent sale of 20% of his stake in the company means his net worth is now valued at over £650m, with the business itself being valued at over £1bn. Gymshark was founded when Francis was only 19 and manufacturing clothing out of his mum’s garage, but has grown to become a titan of the fitness industry. Following a unique social-media strategy using online influencers on Facebook and Instagram, the business now has offices from Denver to Hong Kong, and made an £18.6m profit on sales of £176.2m last year. Francis now hopes that Gymshark can rival the likes of Nike and Adidas in the coming years.…

“Deep-pocketed streamers are able to strike increasingly big exclusive deals for top on-screen and off-screen talent… The arrival of WarnerMedia’s HBO Max and NBCUniversal’s Peacock [will] further fuel hyper-inflation for premier content. WarnerMedia paid $425m for the rights to Friends for five years, outbidding even Netflix. Traditional broadcasters, lacking the resources to compete, [perceive a threat to] national identity, as cultural touchstones sign with the highest bidder. Last year, former BBC director-general Mark Thompson warned the talent buy-up meant the UK was facing “a total loss of culture sovereignty”. Just as the Silicon Valley giants dominate... the web, from social networking to internet search and shopping, the golden age of streaming could result in an irrevocable shift in power in the TV and film industry to a small group of…

The Daily Telegraph Uranium oxide supplier Yellow Cake stands to gain from a shortage of the nuclear fuel. A buy for the risk-tolerant “contrarian” (213p). Investors Chronicle Mature natural gas-field investor Diversified Gas & Oil proved its resilience in the first half and pays a10%+ dividend (100p). These are grim times for commercial landlords, but Helical’s prime London and Manchester portfolio and robust balance sheet bode well. Buy (310p). Gym closures have driven new interest in solo exercise. That promises new business for US tech firm Garmin, which specialises in exercise tracking gadgets. Buy ($102). The Mail on Sunday Shares in video-games developer Codemasters, best known for its racing games, are up by 40% since January thanks to a surge in demand during lockdown. Take some profits (395p). Shares Higher…

• Lift maker Fujitec is a “test case” for Japan’s shareholder revolution, says Mike Bird in The Wall Street Journal. Its shares trade at a big discount to European peers, showing how limited ambition and cash-hoarding too often reduce returns in Japan. Yet Fujitec is now under pressure from activist investors, partly because more than 37% of shareholders hail from overseas. “Sustained pressure” has slowly started to change Japan’s staid corporate-governance culture. Fujitec will hopefully become another example. • America’s supermarket behemoth Walmart is “killing it”, says Sabri-Ben Achour on marketplace.org. Underlying sales rose by 9.3% year-on-year during the three months to 31 July, with e-commerce sales soaring by 97%. A multi-platform approach covering online ordering, delivery and in-store sales means it is “ready…however customers want to hand over their…

• The pay of Jaguar Land Rover’s chief executive, Ralf Speth (pictured), has risen by 30% to £4.4m in a year in which more than 4,000 workers lost their jobs and the carmaker suffered a second consecutive year of heavy losses, says Robert Lea in The Times. In the past four years, in which he earned a total of £18m, “the Jaguar Land Rover bubble has burst, hit by a collapse in sales in China, consumers turning their back on diesel vehicles, economic uncertainties around Brexit and now Covid-19”. Speth will step down as CEO after a decade in the job, but will stay on as deputy chairman. • BlackRock’s Larry Fink is the investment sector’s best-paid chief executive, according to the Financial Times. The boss of the world’s biggest…

A stock split happens when a company decides to increase the number of its shares in issue by giving existing investors additional shares for each share that they currently hold. The firm’s share price falls to reflect the enlarged share base and its market capitalisation stays the same. The total value of each investor’s shareholding remains unchanged as well, because they hold the same percentage of the firm after the split that they did before. For example, assume that a company has 100 million shares in issue and a share price of £50 per share. It carries out a 2:1 (or two-for-one) split, meaning that the investor ends up with two shares for every one they originally had. Then the total number of shares increases to 200 million and the…

Investor Everest Alliance won a “bitter boardroom showdown” at miner Petropavlovsk as shareholders chose not to reappoint former CEO Pavel Maslovskiy and also removed his co-founder Peter Hambro in a vote last week, says Edward Thicknesse in City AM. The result – which was opposed by Prosperity Capital Management, another activist investor specialising in Russia – comes after months of strife. Maslovskiy was unexpectedly voted out alongside six other directors at the firm’s annual general meeting in June, a decision that led to a “power struggle between rival groups of investors”. Petropavlovsk has had an unstable power structure for years due to a 22% bloc of shares that gets passed from one oligarch to another, says Jim Armitage in the Evening Standard.…

“My mother used to clean toilets in a pub. Men would toss pennies into the urinals and she’d disinfect them and give them to me and my sister so we had extra pocket money.” British supermodel Karen Elson (pictured) on growing up poor, quoted in The Sunday Times “You should never buy a stock unless you would be happy with it if the stock exchange closed down for the next ten years.” Warren Buffett, quoted in The Times “Watch the costs and the profits take care of themselves.” The 19th-century US steel magnate Andrew Carnegie, quoted in The Economist “Can I have a large scoop of statistically inaccurate virtue signalling with my grossly overpriced ice cream please?” Foreign office minister James Cleverly on Ben & Jerry’s after the ice-cream brand…

Drivers for Uber and Lyft are employees, not contractors, ruled a court in San Francisco recently. That means that, for the gig economy, “the jig is up”, says Ashley Nunes. The issue is cost. If Uber and its ilk are to make the profits expected, they will have to disrupt the car industry. Households pay out thousands annually to own an asset that sits idle 95% of the time. If Uber can offer something cheaper and more convenient, it’s in with a shot. The trouble is, a 2018 study put the cost of ride-hailing at more than twice the cost of owning your own car. That’s why Uber and Lyft, which can’t yet cover their cost of capital, seek to cut costs by pretending their workers aren’t really workers, but…

Savers received record average tax refunds of £3,560 each in the second quarter of 2020 after being overtaxed on withdrawals from their pensions. Total refunds since the pension freedom reforms of 2015 have now reached £627m. The issue affects many savers opting to use drawdown schemes to access their pension funds on reaching retirement, rather than converting savings to income by buying an annuity. While savers may take the first 25% of their money tax-free, withdrawals above this amount are taxable at their marginal rate of income tax. Drawdown plan providers often do not have an up-to-date tax code for savers taking money out of their funds in this way for the first time and are therefore forced to apply an emergency tax code. This often results in savers paying…

Everyone has certain expressions they particularly dislike. One of mine is “they’re not making it any more”. It is used by egregiously dim City sales people when promoting various asset classes, including commodities, property and especially land. For making it or not, all asset classes are cyclical. Yet it is in farmland that the irritating saying is most alluring. How do you feed a global population that has risen from 2.5 billion in 1950 to 7.9 billion today and is projected to reach ten billion in 2050? Especially given that, as incomes and living standards have risen steadily in most countries, the result has always been that people eat more (usually more than they need) and better, switching from staples to dairy products and expensive meat. Moreover, farmland has been…

Over the years investors have become very fond of global drinks giant Diageo’s (LSE: DGE) shares as well as its brands, which include Johnnie Walker, Gordon’s Gin and Guinness. A history of rising sales and dividends has kept the market happy. But disruption from Covid-19 appears to have undermined Diageo’s reputation for reliability. The group’s annual results earlier this month left the market unimpressed and the shares down by over 10%. It’s not just that the market was expecting better than the 8.4% fall in sales to £11.8bn for the year to June. The shortfall also appears to have prompted questions about whether Diageo is quite as resilient as widely assumed. It has long been an outperformer, earning its “premium” stockmarket valuation because its well-established and diverse drinks range is…

Kainos (LSE: KNOS) is a software company headquartered in Northern Ireland. It develops IT products for the public, healthcare and financial-services sectors. Shares in the company have been in an uptrend in recent months, and it has performed well against the market over the past year, says Ben Hobson on Stockopedia. Trading boomed in the first four months of its financial year (April to July), which will give full-year turnover and profits a fillip. Investors have also been pleased to hear that Kainos will not cancel its dividend. The stock has gained 130% in a year.…

Ruja Ignatova was born in Sofia, Bulgaria in 1980, before moving to Germany with her family when she was ten. In 2005 she was awarded a doctorate in law from the University of Konstanz. She went on to work for management consultancy McKinsey & Co in their eastern European office. In 2014 Ignatova set up OneCoin, which she claimed was a cryptocurrency that would become a “bitcoin killer”, and began promoting the currency at large public conferences around the world, including one at Wembley Stadium. What was the scam? Ignatova invited investors to buy “packages” that would give the owner tokens that could be used to “mine” OneCoin. The price of OneCoin was displayed on a website. Although this website showed the currency soaring in value from £0.43 in January…

2019 Vermentino di Sardegna, Antonella Corda, Sardinia, Italy £19, woodshirewines.com; £19.95, oldbridgewine.co.uk Ten years ago, after finishing her masters in viticulture at the prestigious Fondazione Edmund Mach Foundation in Trentino, Antonella Corda, the granddaughter of famed viticulturalist Antonio Argiolas, founded her winery, a few miles north of Cagliari in the village of Serdiana. Antonio, who lived to the age of 104, left Antonella two of his prized vineyards, and this wine comes from his favourite, Mitza Manna. Top-level vermentino is a rare beast as, more often than not, it runs out of puff around the £15-mark. This wine, however, is a “Grand Cru”. I first tasted Corda’s wines on a mini-break to Sardinia a few years ago and I have never forgotten the vitality and racy, stone-fruit-bitterness which they bring…

• “Every summer, millions of us suffer from the annual malaise called holiday-itis,” says Jan Moir in the Daily Mail. It is brought on “by overexposure to everyone else’s holiday snaps on social media, while personally remaining marooned and working in a hot, sticky city”. We feel inadequate looking at the snaps of singer Rita Ora (pictured) with Kate Moss on Formentera, for example, or “the Beckhams tanning their tattoos in Puglia”. More cheering was the sight of Joan Collins and Brigitte Macron “in their swimming cossies, both looking marvellous despite having ten grandchildren between them, not to mention a surfeit of decades”. “How do they do it? Brigitte eats a mixture of ten fruits and vegetables every day, while Joan drinks one vodka martini with dinner and always wears…

$1.1bn The estimated collective value of seabird droppings every year worldwide. The deposits, known as guano, can be used for fertiliser and can provide nutrients to coral reefs, boosting fish numbers, according to researchers at Brazil’s Universidade Federal de Goiás. €247,280 The value of undeclared money that Aki, a Malinois sniffer dog, found for German authorities at Frankfurt airport in late June and early July. Cash amounts of €10,000 and more must be declared when entering or leaving the European Union. £25m How much McCain is investing in Britain’s £1bn potato-growing sector over the next four years to support the industry against coronavirus and extreme weather. The Canadian frozen-chip company buys 15% of Britain’s potato crop every year. $14.7m How much the Duke and Duchess of Sussex are believed to…

Dwayne “The Rock” Johnson is Hollywood’s best-paid actor for the second year running, reports Forbes. As streaming services such as Netflix look to capitalise on actors’ star power, Johnson has pulled ahead of the pack, being paid $87.5m for his work last year. Over a quarter of that was guaranteed by featuring in a single Netflix film. The net worth of Apple CEO Tim Cook has just eclipsed $1bn, says The Verge. Cook is not a founder of his company, which is unusual among billionaire corporate executives, but he has grown the tech giant into the highest-valued publicly traded company in the world since he took over from its late founder Steve Jobs in 2011. Since then, Apple’s revenue and profit have doubled and it recently reached a market capitalisation…

Environmental, social and governance (ESG) funds are coming of age. Fund network Calastone says that UK-based ESG funds saw £362m of inflows in July, a new monthly record. Investors have added £1.2bn to ESG investments since April, a figure “greater than all the previous five years combined”. One concern about ESG investing is that by excluding parts of the investment universe (such as tobacco stocks) investors are impairing their returns. Yet S&P Global Market Intelligence found that of 17 American ESG-orientated exchange traded and mutual funds, 14 enjoyed higher returns than the S&P 500 in the first seven months of 2020. Low exposure to energy stocks, hit hard by crashing oil prices, helps explain why. ESG returns have also been driven by the outperformance of big tech stocks, says Camilla…

The Turkish lira has sunk by around a fifth against the dollar over the past year, hitting a record low of 7.38 to the greenback this week. Investors are concerned about the impact of Covid-19 on tourism, which accounts for 10% of GDP, while an ongoing problem has been President Recep Tayyip Erdogan’s insistence that the central bank keep interest rates low, fuelling a credit boom and inflation of 12%. Achronic current account deficit, which needs to be filled with foreign capital, hardly helps. The central bank seems to be running low on foreign-exchange reserves to bolster the lira. That raises the spectre of a currency crisis akin to 2018’s: the central bank had to hike rates sharply to prevent a massive currency crash.…

Electric bicycles, or e-bikes, are on the rise, says Focus Money. In Germany alone the number sold surged by 40% in 2019. No wonder: they allow you to exercise, commute or pop to the shops without exhausting yourself (the electric motor is always there if you need it). It is also a practical option for companies delivering goods. UBS expects demand in Europe to rise by 15%- 25% next year. All this is excellent news for Japan’s Shimano, the world leader in bike components. More than 160 brands of e-bike are equipped with its batteries, motors and computers (registering data such as speed and location). It makes 41% of its sales in Europe and has plenty of cash for further investment.…

The travel industry is in “a tailspin”, says The Observer. While other sectors of the economy are opening back up, the government’s sudden imposition of quarantine measures on people returning from France, Malta and the Netherlands last week did more than wreck millions of holiday plans. It also puts at risk the hundreds of thousands of British jobs that depend on airports and travel operators. Second-quarter figures from tour giant TUI provided a vivid illustration of the damage done to airlines by the pandemic. The Anglo-German business reported a 98% fall in revenue in the period, which coincided with lockdown, says Christopher Thompson on Breakingviews. Operating cash flow in the first nine months of TUI’s financial year hit “negative €2bn”. That has forced it to take loans from the German…

“Did the president of Belarus, Europe’s longest-serving tyrant, just have his Ceausescu moment?” asks Tom Parfitt in The Times. On Monday, Alexander Lukashenko snapped at a booing crowd, “Until you kill me, there will be no other elections.” He may be right – “a grisly death seems unlikely”. Demonstrators in the capital, Minsk, have so far been peaceful at the behest of the 37-year-old opposition leader Svetlana Tikhanovskaya, despite being met with “police brutality”. Still, Lukashenko’s claim to have won 80% of the vote on 9 August isn’t fooling anybody, says The Economist. “Lukashenko has done all this before and got away with it, largely because he retained enough support to claim a degree of legitimacy.” This time, however, he “appears to have lost most of the population, thanks partly…

Charities have ignored calls from the National Council for Voluntary Organisations, an umbrella group for charities in England and Wales, to publish full details of their chief executives’ pay, says Greg Hurst in The Times. Of the 100 biggest charities by income examined by Charity Finance magazine, only nine published the exact figures on their websites; 42% only did so in their annual accounts. The rest published salary bands, which is the minimum required by the regulator for those earning over £60,000 a year. Of the five biggest, only Oxfam gave the precise salary, £120,000, paid to its chief executive, Dhananjayan Sriskandarajah, on its website. The biggest charity, Nuffield Health, listed the total pay of its CEO, Steve Gray, as between £840,000-£849,000, which included a £300,000 performance-related bonus. The average…

Donald Trump will be re-elected as US president in November, reckons Jeffrey Gundlach, America’s best-known bond investor. Polls showing his rival Joe Biden with a commanding lead are “very, very squishy right now because of the highly toxic political environment in which we live”, he told a webcast for investors in DoubleLine’s funds, reports ThinkAdvisor. Many conservatives “have lied about their support for Donald Trump… maybe people aren’t really getting the right read from polls”. Gundlach – who predicted Trump’s victory in 2016 – was also critical of Biden’s choice of Kamala Harris (pictured) as his vice-presidential candidate on the basis that “she’s a little too charismatic … a little too dominant with her personality”– qualities that might normally be seen as an asset in a politician. Regardless of who…

■ The British income funds that coped best with the many firms cutting dividends in this crisis were those that bought the largest stocks or invested part of their portfolio overseas, says Jonathan Jones in The Daily Telegraph. Data from fund group Sanlam, which ranks British income portfolios based on their returns, yield, and whether they were able to protect investors’ money in tough times, found that the £320m Liontrust Income fund topped the table. This fund, managed by Robin Geffen, invested 20% of its portfolio overseas, which boosted returns in recent months when the British market dropped 17% compared with the US market’s 5.3% gain. The £47m Santander Enhanced Income, “which has been among the best British income portfolios for several years”, took second place. The £842m Miton UK…

Governments are currently throwing money at myriad projects, such as those seeking to develop a vaccine, and buying up ones that haven’t yet been shown to work. Yet this is not a mistake, says Tim Worstall. In an emergency, you back everything that might be a winner. “Yes, this is expensive, but for the same reason war is: failure would be worse.” This shows that critics who “scream” about private companies charging more than the production cost for the provision of a public good, such as a vaccine, are wrong. Usually there would be perhaps 100 attempts to develop a vaccine, but we’d never hear about the ones that fell by the wayside. The winner who got it right would have earned their profits from the risk of failure. There’s…

Thousands of employers have failed to make pension contributions for staff on time since the beginning of lockdown in March, according to a survey from the Financial Times. Its research suggests that large numbers of employers have struggled to keep up with pension contributions as the pandemic has left them facing financial difficulties. Some pension providers say one in ten employers are falling behind. The delays could expose employers to regulatory sanctions, with the Pensions Regulator having the option of fining those that do not pay contributions on time. The watchdog said in April that it would try to take a flexible approach to enforcement, given the unique nature of the Covid-19 crisis, but warned employers that their pension obligations remained unchanged. Employees, meanwhile, have the option of complaining to…

I can find no suitable fund providing broad exposure to agriculture, forestry and environmental improvement. All are either too small, suffer from lacklustre performance, or are too widely diversified. Thus the only option is to invest in listed companies directly. Irecommend mostly larger companies that are the best in their class. In agricultural machinery two stand out. The first is New York-listed Deere & Co (NYSE: DE), which with a market capitalisation of $56bn is the largest listed manufacturer. Offerings range from combine harvesters to forestry equipment. Extra profits stem from machinery add-ons and financing for buyers. Many farmers tend to be repeat buyers of a trusted brand such as Deere. Its share price has easily beaten the leading US S&P 500 index over the last three and five years.…

Compass Group plc (LSE: CPG) is a British catering firm. The share price has slid by around 40% over the last year, far worse than the overall market’s 8.4%, says Simply Wall St. It has fallen by a third in three years. The group said that during lockdown its performance was dented by the widespread closure of businesses and education, sports and leisure facilities. The company said it was encouraged by the improvement in its performance in June, but the outlook remains murky. Revenue in its third quarter, which ended on 30 June, dropped by 44% year-on-year.…

The crowd at a recent rally of leftists spontaneously broke into a chant: “Eat the rich… Eat the rich…” The slogan is now all over social media. You can even get a recipe on Twitter. One tells you to “Simmer £100,000 cash in the blood drained from the carcass. Serve on abed of rocket”. We will decline. We have never much liked rocket. Yet tastes change. The newspapers are full of reports that Americans are “gunning up”. Our guess is that many of them will be gunning for the rich. The social contract – the generally accepted principles that bind rich and poor together – is giving way. And why shouldn’t it? The system is corrupt. A few people get richer than ever, while most people fall behind. “The ‘Eat…