Innehållsförteckning för 1066 från MoneyWeek

“Children have a long investment horizon – they don’t have to spend it all in the pub at 18” How much will you leave your children? Our virtue-signalling celebrities say increasingly “not much”. Daniel Craig is the latest one to say that he finds the whole idea of inheritance “distasteful” and to suggest his children won’t be getting much of his (pretty large) fortune (see page 32). I get this. Too much money too early can prevent the young finding a purpose in life – and giving most of your money away to those in rather more need than your own children seems a perfectly reasonable idea. But there is a difference between the Craigs of the world and the rest of us – and much of that difference lies…

Property tycoon Shaun Collins has been ordered to pay ex-partner Nicola Oberman £1.4m, after he promised a share of his future earnings to her in 1997 via a love letter written from prison, where he was serving a six-month jail sentence for false accounting, says Jonathan Ames in The Times. Collins pledged to make her a partner in his planned property empire, and on release, went on to build a multi-million pound portfolio of more than 40 properties. The pairnever married, but had two children before splitting up in 2015. Commuters could be facing a near-5% rise in rail fares next year, says Philip Georgiadis in the Financial Times. Annual price rises for regulated fares are based on the retail price index (RPI) for July each year. Last year ministers…

Bitcoin has hit $50,000 for the first time since May. The cryptocurrency reached an all-time high above $64,000 in April before plunging below $30,000 last month. This latest rebound follows a Chinese crackdown on bitcoin miners that sent the market into the doldrums, says Joanna Ossinger on Bloomberg. Now there are signs of a recovery. “The hash rate – a measure of the computational power being put toward the bitcoin network – has… rebounded from early-July lows.” Rising back above $50,000 “has excited the crypto faithful”, who are once again talking about the coin heading towards $100,000. The latest rally came after payments system PayPal said it will allow British customers to buy and sell cryptocurrencies. The announcement was taken as a sign that the sector is becoming mainstream, which…

Inflation in the US and the eurozone has diverged over the past year. Eurozone prices rose by 2.2% year-on-year in July, much less than the 5.4% year-on-year recorded in the US in the same month. What explains this gulf? Some economists point to different pandemic policy responses, says Jon Sindreu in The Wall Street Journal: the US has been particularly generous with fiscal stimulus and reopened earlier than much of Europe, giving price pressures more time to take root. Yet more than half of the transatlantic inflation gap can be explained by statistical differences. Used-car prices and housing costs, two highly inflationary areas, make up a bigger part of the basket used to calculate inflation in America than in Europe.…

Richard Branson’s Virgin Orbit, which provides an airborne launch platform for small satellites, is going public in the US through a merger with a special purpose acquisition company (Spac), says Reuters. The firm, which is led by former Boeing executive Dan Hart, won a $35m US Space Force contract in 2020, and achieved its first successful launch of ten miniaturised Nasa satellites in January 2021. It hopes to profit from the growth of the compact satellite industry. The deal, which values Virgin Orbit at $3.2bn, is expected to raise a total of $483m in funding for the firm, including $100m of investment from aeroplane maker Boeing and other industry investors.…

US technology firm Nvidia has suffered a setback in its bid to buy British chip designer Arm from Japanese conglomerate Softbank after the UK Competition and Markets Authority (CMA) said the $40bn deal “raises serious competition concerns”, prompting it to launch an “in-depth investigation”, says Mark Sweney in the Guardian. The CMA has said that the takeover could reduce competition in the semiconductor market, “pushing up prices of products ranging from cars and games consoles to mobile phones and datacentres”. A CMA investigation is not Nvidia’s only problem: it is already “facing several problems with regulators”, says Ron Amadeo on Ars Technica. Britain is also worried about “national security concerns” given the use of Arm’s chips in a variety of sensitive equipment. And China – which must also approve the…

The UK may seem bad enough (see above) but CEO pay in the US – including stock awards that now make up around 80% of pay deals on average – has risen by 1,322% after inflation since 1978, according to the Economic Policy Institute, says Indigo Olivier in The Guardian. That’s around six times more than the top 0.1% of wage earners have made and 73 times higher than the growth of the typical worker’s pay – up only 18% above inflation. In the year to 2020 alone, CEOs’ pay in the US rose 18.9%. Today, the CEO-to-worker pay gap stands at a “staggering” 351 to one, “an unacceptable increase from 15 to one in 1965… [while] the average CEO makes nearly nine times what the average person will earn…

Michael Burry made his name by profiting from the US housing market crash that preceded the global financial crisis. So when it turned out that the famed short seller’s hedge fund is betting that Cathie Wood’s flagship exchange-traded fund (ETF) is heading for further falls, the ARK Invest founder came out fighting. Wood took to Twitter to praise Burry’s track record. However, she added: “I do not believe he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.” ARK has become synonymous with growth investing after the ARK Innovation ETF – whose top holdings include electric car group Tesla and crypto exchange Coinbase – returned nearly 150% last year. This year has been trickier – the ETF has lost more than 25% of its…

ftalphaville.ft.com The global shortage of semiconductors, and its effects on the production of everything from graphics cards for video games to fridges, has been “one of the more surprising outcomes of the Covid-19 crisis”, says Jamie Powell. The supply crunch seemed to be largely over by June and just two weeks ago a headline in Fortune magazine talked of a glut. We are not, however, “out of the woods quite yet”. Carmaker Toyota has announced that it is to cut global production for September by 40% from its previous plan as a result of semiconductor shortages. Its shares fell on the news, seeing the biggest daily drop since December 2018 and pulling the benchmark Nikkei index to a seven-month low. A 40% cut in global production! And “not for some…

■ Interactive Investor (II), Britain’s second-largest investment platform, is aiming for a “blockbuster” initial public offering (IPO) in 2022, reports Sky News, which could value it at as much as £2bn. “Investors’ appetite for retail platforms such as II, Hargreaves and AJ Bell has soared in recent years”, as customer activity has risen amid the pandemic. II stands out among its rivals for its “flat-fee” subscription model, under which users pay a monthly fixed price, rather than a percentage of assets held. Private-equity firm JC Flowers took a majority stake in II in 2016; since then it has grown into one of the UK’s biggest retail platforms (behind Hargreaves Lansdown) with more than 400,000 clients and £55bn of assets under administration. In its half-year results, the firm revealed it had…

“The first signs of long-term problems appeared under the New Labour government” It seems absurd now that in the second half of the 20th century the main business of government – apart from the military and emergency services – was to own and operate businesses. Yet this was the legacy of total government control during World War II, allied to a subsequent explosion of the state’s role in social security, health and education (still the three largest areas of government expenditure today). Hence it largely owned and operated almost all public transport, trains, planes and buses, coal mines, steel mills, the docks and harbours, telephony, radio and most TV. It controlled over 95% of all electricity, gas and water production, became (briefly) the largest car manufacturer, the largest shipbuilder and…

Getting your hands on a new car today is “about as difficult as trying to buy a four-pack of toilet paper a week into the coronavirus pandemic last year”, says Rob Hull for This Is Money. The global computer chip shortage means that the waiting time for some new models now runs from five months to over a year. Now that pressure is carrying over to the secondhand market, with average prices for used cars rising 14% year-on-year in July, according to Auto Trader. “Used car prices rose 14% year-on-year in July” “Buying a used car can feel like a minefield”, says Will Kirkman in The Daily Telegraph. Legally, cars sold by a dealer must be “of satisfactory quality” and “fit for purpose”. Private sellers, by contrast, are merely obliged…

■ Take action now if you’re determined to start cashing in your pension savings at age 55, despite a rise to 57 in the minimum age at which you may do so. While this change takes effect from 2028, the government has confirmed that anyone joining a pension scheme before 5 April 2023 that allows savers to access their money at 55 will be able to begin withdrawing money at that age – even if they don’t reach 55 until after 2028. At the very least, would-be early retirees need to check their private pension schemes. While some will not be changing the minimum age rules until the law changes, others are increasing their access age to 57 straight away. ■ The UK’s state pension is among the least generous…

This has been a good week for my four active long tips, which have all risen, albeit by small amounts. Media group ITV rose from 114p to 115p. US homebuilder DR Horton climbed from $94.21 to $94.63. Construction firm Morgan Sindall increased from 2,324p to 2,510p. Spread betting firm Plus500 also gained, up from 1,389p to 1,498p. However, both broker TP ICAP and US homebuilder PulteGroup remain below the level at which I suggested you should go long. Overall, my long tips are making a total profit of £3,884, up from a fortnight ago. My five short tips have put in a mixed performance: three have gone down and two increased in price. Cloud computing firm Snowflake fell from $280 to $276; electric car company Plug Power slipped from $28.18…

Biotechnology firm Avacta (LSE: AVCT) is developing cancer immunotherapies and diagnostic tests for diseases including Covid-19. Its shares surged 1,100% in the 12 months from March 2020, but have since given back some gains (although they remain well above where they were before the pandemic). The company has begun shipping its AffiDX SARS-Cov-2 lateral flow test in the UK and Europe and is in talks with additional distributors. However, even after a 40% fall in the share price, its market cap of £320m is pricing in alot of growth for a loss-making firm with forecast sales of just £4.3m in 2021.…

An Everest of a stew The food scene in Madrid is fabulous and good value, says Cathy Hawker in the Evening Standard. Start your explorations in a traditional tapas restaurant. Celso y Manolo (celsoymanolo.es/en) is “an intimate and relaxing tasca in a quiet side street in on-trend Justicia”. With its 1950s floor tiles and thick marble-topped bar, locals and tourists in the know come for the mix of traditional and modern cooking. “Choose from fried calamari (rabas), slow-cooked casserole with octopus and mussels (Cazuelita Marinera Cudillero), melting jamón ibérico and the very finest tomatoes de España.” It’s friendly and fun. Or why not visit a castizo? The term only applies in the capital, “and only to the city’s most authentic, classic taverns”, such as Malacatín (malacatin. com), says Stephen Phelan…

£208 in bond per dozen, farrvintners.com; £205 in bond per dozen, frw.co.uk I love the two 2020 releases from Domaine de l’Ile, and I have decided to lead with the white wine, even though it is less widely available, simply because it is shockingly delicious. It comes from Porquerolles, the largest and most westerly of the three Îles d’Hyères, situated just a few miles off the coast of Toulon. I have long loved the wines from this somewhat barren rock, and rosés have usually been the style that catches my eye, but Domaine de l’Ile’s scintillating white, made from 100% rolle (or vermentino), is like nothing else on the planet. Organically farmed and made by the team behind the elite Left Bank Bordeaux Château Rauzan Ségla, this is a diaphanous…

The financial news in recent weeks has been overshadowed by the disgraceful fall of Kabul. On 8 July, US president Joe Biden said a Taliban takeover was “highly unlikely”, saying there would be “no circumstance [where] you see people being lifted off the roof of an embassy”. And even if the Taliban did eventually take over, said US secretary of state Antony Blinken in June, it won’t “be something that happens from a Friday to a Monday”. But that’s exactly what did happen. The Afghan troops that the US trained, bribed and supported for 20 years didn’t fight to the last man. They simply gave up and joined the other side. “Who wants to see the truth when they’re paid $2trn not to see it?” In all of military history,…

Songs by 1970s punk band the Sex Pistols can be used in an upcoming TV series being made about the group’s rise to fame, despite the opposition of frontman John Lydon (pictured), a British judge has ruled, reports the Associated Press. The judge said that an agreement made with fellow pistols Steve Jones (the guitarist) and Paul Cook (the drummer) in 1998, allowed the decision to be made by a majority vote, meaning the pair could overrule Lydon’s objections to the licensing of the band’s hits. Pistol – which is based on guitarist Jones’ 2016 memoir of the band – is being made for Disney subsidiary FX and directed by Danny Boyle, the acclaimed director of Trainspotting. Lydon apparently has concerns that the new documentary drama will depict him in…

“When commodities prices go up, so do emerging market stocks,” says Jonathan Wheatley in the Financial Times. That has been the emerging-market investor’s playbook for decades. No longer. The MSCI Emerging Markets (EM) index has fallen about 2% so far this year, even as the prices of metals, grains and fuel have soared. That caps a decade of disappointment. The index has gained 25% since the start of 2010, while the developed market equivalent has more than doubled over the same period. Once the preserve of Latin American commodity producers, today three-quarters of the MSCI EM is made up of Asian countries that largely import raw materials. Chinese stocks alone account for more than one-third of the index. Hence developments in that country have been the “key driver” of this…

“Recent years have seen an explosion of... unicorns, startups with pre-IPO [initial public offering] valuations larger than $1bn... [many] have been losing money year after year... In both 2020 and the first quarter of 2021, half of the 76 publicly traded unicorns had losses greater than 20% of revenues and one-fourth had losses greater than 40%... Airbnb’s losses were more than 100%. Nonetheless, many of these stocks are investor favourites... optimists might argue that Amazon became profitable after a decade of losses, so why can’t others?...[yet] several unicorns have vastly exceeded Amazon’s peak cumulative losses of $3bn... Most are far older than ten years... and the cumulative losses … continue to rise with no turnaround in sight...it will be extremely difficult for most to dig themselves out of their deep…

Six to buy Jefferies Financial Group Barron’s Jefferies is not the first investment bank to come to mind when you think of Wall Street. But it’s a well-managed company, increasingly able to take on bigger and better-known rivals. It has a larger market share than Barclays and Credit Suisse and may benefit from European banks pulling back from US capital markets. Analysts expect the capital-markets environment to be “stronger for longer” and Jefferies looks poised to benefit from the trend. $35.39 Genuit Investors’ Chronicle Plastic-piping producer Genuit has seen increased earnings due to the residential housing boom. Profits were £183.8m in the first half of 2021, up 63.7% from 2020 and 17.8% from 2019. Rising input cost pressures are “the only fly in the ointment”, but the firm has been…

• ”Good news is so infrequent at Marks & Spencer that one can understand the excitement among shareholders at a rare patch of strong trading,” says Ben Marlow in The Daily Telegraph. Shares surged 14% after the firm said that profits are likely to beat previous estimates. Chairman Archie Norman and CEO Steve Rowe are “quietly cock-a-hoop” about a tie-up with Ocado that they think will “transform its online offering” and there are even signs the “perennially-troubled clothing arm is turning a corner”. After “two long decades” characterised by “repeated profit warnings, costly restructurings and damaging writedowns”, this looks like the beginning of a “long-overdue recovery”. • Stephen Hester used to say that his job at RBS was to “defuse the biggest time bomb ever put on a bank’s balance…

Following “violent antilockdown protests”, Australian prime minister Scott Morrison has admitted that stay-at-home orders currently affecting more than half the population are “unsustainable”, says Bernard Lagan in The Times. The orders led to Sydney, Australia’s biggest city, entering its ninth week of house arrest; Melbourne and Canberra also remain locked down. Still, despite “growing frustration”, lockdowns will remain the mainstay of Australia’s strategy to contain the pandemic for now. Only a third of its over-16s are fully vaccinated – the government has set a 70%-80% target before gradually easing restrictions. Australians may be souring on hardline anti-Covid-19 policies, but New Zealanders remain broadly supportive of their government’s elimination strategy, says Tess McClure in The Guardian. After removing all domestic restrictions for most of the last 12 months, the country returned…

Everyone agrees CEOs should be well paid. It is a stressful job and when they get the big decisions right, they can add hundreds of millions to the value of the business. But paying the boss 40 times more than the average person would seem a fair reflection of the extra burdens of the job, and that would be half the current differential. Figures out last week showed FTSE CEOs’ pay down by 17% for the year. According to the High Pay Centre, the average chief executive of one of the UK’s top 100 companies took home £2.7m last year, down from £3.3m in 2019. Apart from a few Bentley dealers, it is unlikely that many people will be terribly upset about that. Over the last decade, executive pay has…

In investment terms, dividends payouts were among the biggest casualties of the Covid-19 pandemic. Companies slashed their payouts back to 2017 levels on a global basis, according to data from fund manager Janus Henderson, with the UK market being hit particularly hard. And yet what could have been anightmare for dividend-dependent investors has turned out to be far less damaging than feared. According to the fund group’s latest global dividend index, payouts will recover pre-Covid-19 highs within a year. What happened? Unheard-of government support for businesses and employees, combined with a surge in demand as restrictions eased, meant that companies found they had been overly pessimistic. Banks reversed bad debt provisions, while firms across the board found that their main problem was meeting customer demand rather than managing a decline.…

A message from lorry drivers Sarah O’Connor Financial Times A shortage of lorry drivers has led to empty supermarket shelves, says Sarah O’Connor. Remainers may be tempted to say: “We told you so.” But they would be missing the point. Empty shelves are a cry from a workforce that is rarely visible – lorry drivers. The hours are long, unpredictable and anti-social, often requiring working on weekends and through the night. Drivers, who often pay to get their HGV licences, have also been slipping down the wage ladder, under pressure from powerful customers, such as supermarkets, who drive down costs. In 2010, the median HGV driver in the UK earned 51% more per hour than the median supermarket cashier. By 2020, that premium had been cut to 27%. Many drivers…

nytimes.com Some commentators say that pressure could be brought to bear on the direction of the new Taliban government in Afghanistan in the form of threats to withhold humanitarian and development funding, say Graeme Smith and David Mansfield. Given that the state is bankrupt, relying on foreign donors for 75% of spending, that might seem reasonable. But it is unlikely to work. Even before their “blitz into the capital”, the Taliban had already “claimed the country’s real economic prize”: the trade routes that serve as strategic choke points for trade across south Asia. This, not drug trafficking, is “where the real money is”: the illegal movement of ordinary goods such as fuel and consumer imports, and the collection of fees by armed goons. Revenues from such activities dwarf international aid.…

In his 1991 book Parliament of Whores, the political satirist P. J. O’Rourke showed that the US government spent $98bn on poverty relief each year–twice as much as the aggregate amount ($50bn) by which 32.5 million Americans fell below the poverty line. Additional state and local spending of $28bn meant the average poor family should have received enough to raise them comfortably above the poverty line. Yet all that money failed to solve the problem. The US hasn’t got better at poverty alleviation in the subsequent 30 years, and the UK government is no more efficient. There are 288,000 homeless households in the UK yet local authorities’ policy is to accommodate them in expensive and often substandard bed-and-breakfast accommodation. Perhaps the private and charitable sectors can do a better job…

Games Workshop (LSE: GAW) is a £3.8bn FTSE 250 company with a fine record of growth and profitability (see below). The firm’s business model is simple, at least in theory. It aims to “make the best fantasy miniatures in the world, to engage and inspire our customers, and to sell our products globally at a profit”, says the investor relations website. “We intend to do this forever. Our decisions are focused on long-term success, not short-term gains.” More specifically, Games Workshop sells fantasy games such as Warhammer to a large number of devoted customers, both online via its own website and through more than 523 of its own shops and a further 5,400 independent outlets in 73 countries. The shops are not solely for buying: they play a key role…

There are various infrastructure investment trusts that – in practice – give exposure to outsourcing. Several are very well managed, but currently trade at very large premiums – and I cannot recommend buying hope instead of assets. Thus it comes down to individual stocks. By far the best (which I bought last year) is the once rightly derided Serco Group (LSE: SRP). Under its chief executive, Rupert Soames, the company has gradually sloughed off its loss-making contracts and turned away from riskier or lower-margin business. The recent half-year report to June showed a 20% increase in revenue and a 31% rise in operating profits. Most importantly, free cash flow soared by 61%. The balance sheet and business are finally safe. Providing services during the pandemic temporarily helped to boost revenue,…

Thousands of UK nationals planning to move to a European Union country during their retirement could receive lower pensions than expected because of new rules introduced in the wake of Brexit. The changes will potentially impact the state pension of anyone who has spent time during their working lives in Australia, Canada or New Zealand. To qualify for the UK’s state pension, you will usually need to have made at least ten years of national insurance contributions – and paid in for 35 years to qualify for the full amount, worth £179.60 in the current financial year. Assuming you meet these criteria, you can claim the benefit wherever you live in retirement – and anyone moving to an EU country in the future will still be able to claim their…

The past 18 months has been a turbulent time for many technology shares. One that has experienced both highs and lows isTeladoc Health (NYSE: TDOC). In January 2020 it was trading at around $83 a share. By the start of March, as the coronavirus started to spread around the world, it had risen to $124. It continued to climb until it peaked in February this year at just under $300. However, since then, Teladoc has dived, more than halving in value to its current level of $140. So will it bounce back, or continue falling? I believe the latter is more likely. As you’d expect, the company, which was set up to save customers time and money by providing on-demand online medical consultations, has indeed benefitted from the closure of…

After decades of quiescence, inflation appears to be rearing its head once again. With interest rates likely to remain well below inflation for many years, savers face the dismal prospect of ever-diminishing purchasing power. At Capital Gearing Trust, we focus on protecting the value of our clients’ wealth in real (after inflation) terms. There are a number of tools that we use in pursuit of that aim, including substantial investments in inflation-linked bonds. We also focus on specialist equities, typically investment trusts and real estate investment trusts (Reits), which benefit from long-term inflation-linked revenue streams. These are three examples from the infrastructure and specialist property trust sectors. Long-term cashflow from infrastructure “Savers face the prospect of ever-diminishing purchasing power” International Public Partnerships (LSE: INPP) is an FTSE 250 investment trust…

In Ian Fleming’s novels, James Bond was orphaned at the age of 11 and thrown upon the mercy and kindness of an aunt, who helped him complete his education. You might think that the children of the current James Bond, multimillionaire Daniel Craig, would face a more secure future in the event of their being orphaned. But perhaps not. Craig’s three-year old daughter, stepson and adult daughter won’t be getting much of a slice of the millions he has earned from playing 007, says Charlotte Bateman on Sky News. In a recent interview, he said he found the concept of inheritance “distasteful” and does not plan on leaving his children a fortune – instead, he will give it away before he dies. Craig may think this promise comes from “a…

101.8bn The value in Afghan afghanis ($1.3bn) of the gold bars held by the Federal Reserve Bank of New York on behalf of the Da Afghanistan Bank, Afghanistan’s central bank, as of 21 June. They, like most of the central bank’s $10bn in assets, are out of reach of the Taliban. €13.5m The investment from the Italian government in a new museum focused on the life of Federico Fellini, director of La Dolce Vita. The museum opened last week in Fellini’s home town of Rimini, almost three decades after the celebrated director’s death. £2,210 The value of the “union dividend” per person in Scotland. Scotland raised £382 less in tax per person than the UK average, while public spending was £1,828 higher, according to the annual Government Expenditure and Revenue…

Wine drinkers in the UK could benefit from government plans to cut red tape, shaving 10p off the cost of every bottle imported, says Joe Mayes for Bloomberg. The “VI-1” certificate – previously only required for imports from non-EU countries – was set to be extended to EU wine. However, it will now be scrapped altogether, which could save wine importers an estimated £100m a year, according to The Wine and Spirit Trade Association. Britain’s tourism industry is reaping the benefits of a boom in domestic holidays – the cost of holiday accommodation soared by an average of 41% this summer versus 2019, says Joshua Thurston in The Times. Consumer group Which found that a week’s stay in Italy’s Lake Garda this month would have cost a quarter of its…

Drug development is expensive and spending millions developing a product that generates zero sales is common, says The Wall Street Journal. Royalty Pharma offers a lower-risk way to invest in the sector. The firm helps fund clinical trials for promising new drugs in return for a share of the drug’s revenue in the three years after it reaches the market. Royalty Pharma is able to fund new investments with debt, which it can borrow at “rock-bottom” interest rates, and “cash coming in the door”. In 2020 it spent $2.4bn on new deals and took in $1.8bn in cash receipts. The stock is up 37% since it floated in June 2020, but has sold off 19% over the last six months. Take advantage of the bout of pessimism.…

Shares in Sainsbury’s reached levels not seen since February 2014 this week, after reports that the supermarket chain “could be the latest UK company to receive a buyout bid from a private equity firm”, says Joanna Partridge in The Guardian. The group is seen as the “next potential target for foreign private-equity cash” after the recent bidding war for Morrisons “drew investors’ attention to the larger UK supermarket chains”. In particular, there are rumours that US buyout firm Apollo is “scouting for targets in the industry” after missing out on Asda last year. Not so fast, says Mark Shapland in the Daily Mail. Many analysts have been quick to “pour cold water over a possible deal” for Sainsbury’s, pointing out that Apollo remains interested in Morrisons, “which is being fought…

Between the end of 2016 and the start of 2021, a lot of money was placed on whether Donald Trump would last out four full years in office. Ironically, the terms of Betfair’s impeachment market (which only required one branch of Congress to impeach him) meant that both those betting on him being impeached and those who bet on him clinging on ended up making money. This time around, Ladbrokes is offering 1/2 (66.6%) on Joe Biden serving his full term and 13/8 (61.9%) on him leaving “via impeachment, resignation or 25th Amendment”. Smarkets is also running various similar bets, including a market on the year that he leaves the White House, as well as one on impeachment. In the case of the three main markets, Smarkets has stated that…

• Tom Harrison, chief executive of the England and Wales Cricket Board (ECB), is among “six or seven” senior executives set to share in a projected £2.1m bonus, despite the sport’s governing body cutting a fifth of its workforce during the pandemic, says The Guardian. The long-term incentive plan (LTIP), established in 2017, is due to be settled in cash in 2022, despite the board falling to a £16.5m loss last year. Harrison (pictured) was paid £512,000 for 2020. • Stephen Hester is set to steer the post-pandemic recovery at short-haul airline easyJet, says Reuters. The former Royal Bank of Scotland boss, who is credited with restructuring the bank in the aftermath of its taxpayer-funded bailout in the financial crisis, will take over from John Barton as chairman in September.…

Companies pay dividends to shareholders out of their profits. A dividend is entirely discretionary – unlike the interest payment on a bond, it doesn’t have to be paid and it can be cut or even scrapped altogether if deemed necessary. Directors decide what proportion of profits they will distribute: the amount varies depending on how well the company has done (ie, on how much the directors feel it can afford to pay out), but also on other, less tangible factors. For example, directors tend not to be keen on cutting dividends because the market reaction is typically bad. Also, fast-growing firms tend to pay out alower percentage of their profits than more mature firms, because they prefer to invest all or most of their profits in opportunities for future growth.…

“It costs a lot of money to look this cheap.” Oxford locals quote Dolly Parton (pictured) in a protest over a conservation area’s building being turned into a copper-clad yoga studio, reported in the Daily Mail “What I like about money is that if I want to buy a pound of peaches I don’t have to buy half apound. I can have a whole pound. And that’s good, right? I don’t really spend a lot, other than on the things I collect. But it’s nice to know that I can if I want to.” Charlie Watts, drummer for The Rolling Stones, who died this week, quoted in London’s Evening Standard in 1969 “If you work for me, you get paid on the day you invoice, you get mental-health supervision. We’re…

bloomberg.com/opinion The Chartered Financial Analyst (CFA) exams are taken by young workers on Wall Street hoping to advance their careers, says Jared Dillian. Although not strictly needed, apass is more or less essential for some jobs, and the exams are “notoriously difficult”. The latest pass rate for Level 1 was only about 25%. And the cost of sitting them, although not large in dollar terms, is exhorbitant in terms of time – it’s a commitment of four or five years and many hundreds, even thousands, of hours of study. Unless you are in asset management or investment research, that’s probably not time well spent. You don’t learn anything much more than how to pass a test. “I honestly don’t remember a single thing I learned from the CFA programme.” An…

UK insurer Aviva has set out plans to return £4bn to shareholders by June 2022 under pressure from Swedish activist investor Cevian, reports the Financial Times. The £16bn investment fund revealed in June that it had acquired a 5% stake in Aviva and began pushing the company to streamline its management structure and return excess capital. Cevian called for £5bn to be paid out in dividends or buybacks, as well as a £500m reduction in the insurer’s annual costs by the end of 2022. Aviva’s proposals include a £750m buyback to start immediately and a target of £300m cost savings. The firm is in the process of selling eight international divisions for a total of £7.5bn, leaving it with its core markets of the UK, Ireland and Canada.…

Games Workshop has more than doubled its revenue over the last four years and enjoys high operating profit margins of 43% of sales. Its performance during the pandemic has also demonstrated that it is a remarkably resilient business. Revenue for the 2018/2019 year (ie, ending May 2019) was £256.6m. This rose slightly to £269.7m for 2019/2020, followed by a stronger increase of 31% to £353.2m for 2020/2021. Given that many of the company’s shops were closed for much of this time, that’s an impressive result. Operating profit was £81.2m for 2018/2019 rising to £90m for 2019/2020 and then increasing 68.6% to £151.7m for 2020/2021. Free cash flow was £103m with net cash at the end of the year of £85.2m. The company has consistently increased earnings per share (EPS) faster…

“It’s not all doom and gloom. Emerging markets are trading at lower valuations” The US stockmarket has entered a highly speculative phase. By most established investment metrics, the S&P 500 is close to an all-time peak. Yet valuation measures don’t predict how long irrational exuberance might last. The credit cycle, on the other hand, does provide useful information. In the US, credit indicators are flashing somewhere between amber and red. The notion of the credit cycle goes back at least to the mid-19th century and Victorian banker Lord Overstone. Given the financial nature of the modern economy, his insights appear even more relevant today. The Bank for International Settlements has developed a model which it claims helps to predict financial crises and economic downturns. The model measures the extent to…

Will your pension savings come up short because you’re not pursuing a sufficiently risky strategy? Research from investment platform Interactive Investor suggests 66% of savers aged between 18 and 39 are pursuing low- or medium-risk investment strategies with their pension funds, avoiding the stockmarket for fear of losses. More than half of those surveyed believed that a medium-risk strategy is likely to deliver the highest long-term returns. While savers may be nervous about taking on additional risk, Interactive Investor argues that in the past at least, higher risk portfolios with a larger proportion of exposure to equities have proved more likely to deliver higher growth over the long term. Such funds may be more volatile over shorter-term periods, but younger savers have more time to recover from market setbacks. Those…

Gordon Gekko may have said that money never sleeps, but most stock markets have official trading times. For example, the London Stock Exchange (LSE) is officially open from 8am to 4.30pm, with a two-minute break after noon. Others have even shorter hours. The New York Stock Exchange (NYSE) runs from 9.30am to 4pm, while the Tokyo Stock Exchange runs from 9am to 11.30am, before reopening from 12.30pm. As a result, companies tend to time any important announcements for before the market opens, or after it closes, to give investors as level a playing field as possible. Still, some trading does take place outside those hours. Both the NYSE and the Nasdaq in the US allow pre-market trading between 4am and 9.30am and after-hours trading from 4pm to 8pm. The LSE…

Aerospace components manufacturer Meggitt (LSE: MGGT) jumped this month after Parker Hannifin, a US-based rival, agreed a £6.3bn takeover that valued Meggitt’s shares at a 71% premium to the previous closing price. To allay concerns about the takeover and reduce the chance that the UK government will block the deal, Parker Hannifin has pledged to protect jobs at the firm for the next five years. The news came as Meggitt reported half-year pretax profits of £33.6m from revenues of £680m, compared to a loss of £368.4m in the same period a year ago. The shares are up 147% in 12 months.…

Leopold Redpath was born in Greenwich (now part of London) in 1816. He started his working life as a clerk, first with a law firm and then the Penisular and Oriental Steam Navigation Company. He later struck out on his own and became an insurance broker. His speculation with clients’ funds, and general extravagance, led to bankruptcy in 1840. A few years later he took another job as a railway clerk, rising to the ranks of chief clerk in the registration department of the Great Northern Railway (GNR) Company. What was the scam? Redpath’s job effectively put him in charge of GNR’s share register (the list of who owned shares in the company). He took advantage of this to forge GNR share certificates, either by creating new ones or by…

• Laura Whitmore, millionaire host of TV’s Love Island, was very, very upset with her interview in The Times, says Clemmie Moodie in The Sun. The offending journalist had used phrases such as “skips off” (sexist) and “well-behaved baby” (unfair). Never mind that Whitmore (pictured) is paid a “huge” six-figure salary, which presumably contractually obliged her to partake in this “onerous” interview to flog her sportswear brand. At the end of “the brutal Spanish Inquisition” there was even a lengthy plug and website link to said fitness collection. If Whitmore had wanted to promote her fashion line, she should have taken out a full-page advertorial. Sorry, Laura. “You can’t court the press when it suits you and turn against it” when journalists “ask questions that you once asked as a…