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“Prediction is pointless. So we have – of course – had a go at it for 2022” At the start of 2021 we had some clear ideas on what we expected from the economy and markets. With pent-up demand real –consumers had pockets jammed with newly minted cash and a near-desperate urge to get out and spend – GDP would recover fast. We expected that, alongside staff shortages, to be one driver of non-transient inflation. We thought we might start to see the fruits of the hard labour many companies put in during the pandemic (to cut costs, digitalise, and strengthen supply chains) in the productivity numbers. Finally, we expected interest rates to rise a little (not as much as inflation, but a little); bond prices to fall (as rates…

Musician Eric Clapton successfully sued a German woman known as Gabriele P for trying to sell abootleg recording of one of his 1987 concerts online, landing her with both party’s legal fees of €3,400, says DW News. The woman – who had tried to sell the CD on eBay for €9.95 – said that her husband had bought it from a department store, but the judge ruled that it didn’t matter that she didn’t know the recording was made illegally. Sheikh Mohammed Bin Rashid Al-Maktoum, 72, Dubai’s billionaire ruler, is to pay around £554m in child maintenance and security costs to his “estranged” wife Princess Haya Bint Al-Hussain, 47, reports the BBC. Princess Haya, youngest of the sheikh’s six wives, fled Dubai for Britain with her two children in 2019…

A poll of 45 Wall Street strategists finds a median forecast of 4,910 for America’s S&P 500 by the end of 2022, says Caroline Valetkevitch on Reuters. That’s a 6% gain from this week’s level (other markets tend to follow Wall Street’s lead). The outlook isn’t all rosy though: many strategists think “a correction or pullback” is likely in the next six months as the central bank attempts the delicate task of unwinding crisis-era monetary policy. Tighter monetary policy means there is less liquidity in markets, which is bad for equities. There is little consensus on Wall Street about the year ahead, says Lu Wang on Bloomberg. There is a 20% gap between the highest and lowest predictions for 2022, the “second-widest” spread in a decade. Trying to predict the…

The US dollar index, which measures the greenback’s value against a basket of major trading partners’ currencies, has climbed by 7.5% since the start of January. The dollar’s strength rests upon America’s rapid post-pandemic bounceback, says Buttonwood in The Economist. But the US recovery is now complete, while other regions still have room for catch-up growth next year. That should erode the dollar’s edge. There is also no guarantee that US monetary policy will remain tighter than elsewhere: high eurozone inflation could push the “hawks at the European Central Bank” into ending easy money, which would send the euro up against the greenback. The dollar could well peak in the next few months before heading lower.…

Social-media platform Reddit has filed for an initial public offering (IPO), say Michael Hytha and Priya Anand on Bloomberg. Though it has yet to determine the number of shares and the proposed price range for its listing, the company was valued at $10bn in a funding round this summer. Reddit, founded in 2005, has become “one of the world’s most influential social-media companies”. It boasts more than 50 million daily users who set up message boards to discuss “a wide variety of topics”. It counts over 100,000 active groups, notably r/WallStreetBets, where participants discuss stock and trading ideas, and was instrumental in “igniting the “meme-stock craze” earlier this year.…

Oshkosh The Biden administration is spending big on infrastructure, providing plenty of work for this builder of specialised lorries. Oshkosh produces cement mixers, “truck-mounted cranes” and other industrial equipment. The firm is also a leader in the emerging field of heavy-duty electric vehicles. It has won a federal contract to update the US mail truck fleet, which will include some electric trucks. A good way to bet on a “greener future”. $104 CVS Health “Most Americans live within three miles of a CVS pharmacy.” But CVS is not just where people top up prescriptions. It is also where they go to get vaccinated or have minor ailments examined at its “Minute Clinic”. The group is in the private-healthcare game too thanks to its Aetna health-insurance subsidiary, which covers 39 million…

Smaller boutique investment banks, which are benefiting from increased mergers and acquisitions (M&A) activity, are not covered by rules introduced after the 2008 financial crisis that put limits on pay at the big banks. So they tend to pay out “huge amounts”, says The Observer. Take the three partners of Robey Warshaw, who shared £30m in profits this year, up from £17.9m in 2020, reports The Sunday Times. Former Morgan Stanley banker Simon Robey is thought to have taken the lion’s share of £20m, according to filings. George Osborne, the former chancellor and now fourth partner, receives nothing ashe joined last April, after the financial year had ended. However, this financial year ending in March promises to be another lucrative one thanks to the boom in M&A this summer, when…

“I recommend not investing in companies that appear on the front pages of newspapers, says Francisco Garcia Paramés, the Spanish fund manager who is perhaps Europe’s best-known proponent of value investing. “Good investments are hard to come by [but]… the investor on the street is interested in what has performed well.” So he remains sceptical about many fashionable assets, especially those that do not produce cash flows. Cryptocurrencies “do not generate anything except trust”, he tells Forbes Spain. “How do we as investors measure how much that trust is worth?” There is also a “sense of a bubble” around non-profit-making firms in the US, whose total valuation “is much higher than any maximum ever reached. Not even in 2000 in the dotcom bubble did it get to this”. Paramés also…

■ Three of US star-investment manager Cathie Wood’s best-known funds have launched on the London Stock Exchange and Euronext, the European bourse, says Emma Boyde in the Financial Times. They offer European investors the chance to bet on or against her strategy. Leverage Shares, which makes international stocks available to European investors through exchange-traded product packages (see above), is now offering trackers reflecting Wood’s “high-profile” Ark funds. They allow users to mirror the Ark funds or to amplify returns from her gains or losses. The product launch comes as many of Ark’s funds suffer “unprecedented pressure”. Ark is renowned for its large bets on “hot tech-focused stocks” but its strategy has faltered as the prospect of dearer money “has dented the appeal of some of these often unprofitable companies”. The…

realclearscience.com To nuclear-power opponents, “radioactive waste” is a “trump card to argue why they will never support this safe, dependable, carbon-free source of energy”, says Ross Pomeroy. But this is ignorant nonsense. “Nuclear ‘waste’ is not really waste.” All of America’s spent nuclear fuel (around 2,000 tonnes a year) since the 1950s would fit into one football field stacked ten yards high. Plant operators “are more than capable of handling this amount”. What’s more, this waste could become useful fuel again. “Current reactors used in the US can only extract about 3%-5% of the available energy in nuclear fuel before it is considered ‘spent’”, but reactor designs set to debut in the 2030s could produce energy using this waste sitting in storage. A nuclear start-up backed by Bill Gates, TerraPower,…

Keeping the house warm has never been pricier. UK wholesale gas prices have hit another record. At £3.24 a therm they are dramatically higher than the 50p level seen for much of last year. Energy suppliers are dropping like flies. Zog Energy has just become the 25th firm to go to the wall over the last four months. The renewed surge in wholesale prices means more could follow. If your energy supplier goes bust then regulator Ofgem will switch you to a “supplier of last resort”. Just remember to take a meter reading to send to the new supplier. Shopping around for a better deal seems pointless. As Miles Brignall puts it in The Guardian, “normally, switching would be the response to rising prices”, but “the energy market has all…

• Small business owners and self-employed workers who operate from home often rely on their home broadband service for their business needs. That’s fine until something goes wrong; few home broadband deals come with service guarantees. By contrast, business broadband contracts increasingly come with an “always-on” pledge, where the provider gives you a 4G mobile broadband hub that will kick in if your normal broadband goes down. These contracts are also more likely to feature a guaranteed response time within which your problem will be fixed, with compensation for any failures. If your business could not operate without a broadband connection, paying extra for these safeguards is worth considering. • Worried about your firm’s energy costs as gas and electricity bills rise this winter? There are several steps you may…

A substantial proportion of overall corporate growth now occurs in unlisted companies. This trend is intensifying because of the tendency of growing private companies to stay private for longer before listing. However, there are ways for investors to gain exposure to this growth. Take Molten Ventures (LSE: GROW), previously known as Draper Esprit, a member of the FTSE 250 index of medium-sized companies; it has a market value of £1.4bn. It is a venture capitalist that invests in a diversified set of high-growth private digital-technology companies across Europe. Tapping Europe’s growth A recent example is the digital bank Revolut. In July Molten announced that, following a successful funding round for Revolut, its stake was worth £119m, up from £20m in March 2021. Molten’s other investments include Graphcore, which makes semiconductors…

Go-Ahead Group (LSE: GOG) operates bus and rail services. Its shares plunged by 22% last week after it revealed it would miss the deadline to file annual results (originally due at the end of September) and announced it was preparing for its stock to be suspended owing to “‘serious’ failings in its railway business”, says the Financial Times. The company was obliged to give up control of its Southeastern rail franchise to the government in September after it allegedly failed to declare over £25m in taxpayers’ funding that should have been returned in 2014. The shares have slid by 33% in the past year.…

The best films and TV shows Thanks to near-zero interest rates, technological optimism and a bottomless pit of venture capital and private equity money, there’s been a huge boom in “unicorns” – technology companies valued at $1bn or more. No business has epitomised this more than WeWork, which rose to a valuation of $47bn at one point, before collapsing into near-bankruptcy. WeWork: Or the Making and Breaking of a $47 Billion Unicorn (available from Amazon), tells the story, focusing on the controversial founder, Adam Neumann. There are parts of the story that could have benefited from more detail, especially the boom in venture capital, and the fact that Neumann managed to walk away with a fortune is relegated to a footnote. But the documentary does an excellent job of telling…

• Covid-19 is playing havoc with Theatreland, says Jane Fryer in the Daily Mail. Last week, Andrew Lloyd Webber had to cancel a performance of Cinderella, starring Carrie Hope Fletcher (pictured) in the titular role, after five of the cast tested positive. A cancelled Cinderella costs £80,000 a night. The Lion King and Cabaret – the new up-to-£310-a-ticket extravaganza – have both closed for several performances, as did the Life Of Pi at Wyndham’s Theatre. Christmas sales are usually the “fat” that carries many theatres through the next months, but the “government’s endless mixed messages” will make this a lean year. Lloyd Webber had been feeling optimistic enough to plough £1m a month of his own money into his seven London theatres to keep them afloat. “Not any more.” •…

The death of Zappos founder Tony Hsieh (pictured) without a will has led to a fierce battle between friends and family over his estate, which is thought to be worth at least $500m, reports The Wall Street Journal. Lawyers trying to resolve the claims are now perusing an eccentric collection of sticky notes that Hsieh used to cover the walls of his Utah mansion, which detail everything from his spiritual “life mantras” to specifics of financial deals. Hsieh died in November last year aged just 46, following injuries sustained in a fire. His longtime friend Mimi Pham is seeking $90m, while his financial advisor Tony Lee is pursuing $7.5m. The latter accuses Hsieh’s brother Andy of enabling the drug and alcohol problems that dogged Hsieh in his last year of…

“In December 2020, the Chicago Mercantile Exchange Group created the first futures market in water... This development [is] somewhat premature... Today’s spot markets for water and water rights... are too illiquid and nontransparent to support an economically and socially useful futures market... But there is hope. The regional and global integration of physical water supplies... is making spectacular progress... Globally, over 70% of fresh water is used in agriculture... most of this usage is either free or heavily subsidised. Households in many countries... pay but a small fraction of the... cost of the water they use... The future of water... depends on the willingness of governments... to price [it] at its long-run social marginal cost as a scarce renewable resource... [In a] decade... exchange-traded funds for water and water rights…

Five to buy Revolution Bars The Sunday Times Despite rising coronavirus cases, “the return to normality could be quicker than feared”, making Revolution Bars worth “a small punt”. The potential for further restrictions is “dismal, but not terminal”. The group has raised £34m from shareholders throughout the pandemic, leaving it with net cash of £4.6m, something “few of its rivals can say”. There are 18% fewer nightclubs and 7% fewer bars competing for its customers than before the pandemic, and many of the remaining ones might not cope with upcoming restrictions. That means Revolution is likely to be left in a stronger position when regular trading returns. It’s a risky buy. 18p K3 Capital The Mail on Sunday Talk of mergers and acquisitions conjures up the image of big American…

• India’s most valuable startup is planning a huge special purpose acquisition company (Spac) listing in the US. Byju, the online-education platform, has boomed during the pandemic and reportedly has an offer to merge with a US shell company led by Churchill Capital at a $48bn valuation. A Spac merger is a way for a private firm to list on the stockmarket with fewer regulatory constraints than the usual initial public offering (IPO). Byju boasts 115 million registered users and seven million paying subscribers, who spend up to $170 per year, says Una Galani on Reuters. That reflects Indian parents’ willingness to spend on their children’s education. The deal “closely models” the recent listing of Singapore’s “super app” Grab, which went public in New York through a $40bn Spac deal.…

A new variant of Covid-19. A scandal swirling around Boris Johnson. There are lots of things that we can be sure will happen during 2022. Investors will have already taken them in their stride. But what are the unexpected twists, the surprises that no one saw coming? With an obvious pinch of salt, here are five events that might rock the markets over the next 12 months. Bezos will be back at Amazon First, Jeff Bezos returns to Amazon. In July when the world’s most relentlessly driven entrepreneur stepped back from day-to-day management of the company he founded to spend more time with his space rockets, the share price hit an all time high of $3,800. It was a fantastic achievement. How has it done since Andy Jassy took over?…

“Value versus growth” is one of the easiest frames through which we can look at investing styles. Yes, it is a simplistic divide (see below): no investor can ignore valuations nor how earnings are likely to evolve. But it still says something about the psychology of an investor: do you favour a solid chance of profits today or the riskier possibility of a bigger gain in the future? Splitting markets into growth and value also shines a useful light on trends. The MSCI World Growth index has beaten its value counterpart by six percentage points per year over the past decade, which is remarkable, but by more than sixteen points per year over the past three years, which is barely believable. With the growth index now on a forecast price/earnings…

Congo’s carbon bomb Max Bearak The Washington Post The peatland that stretches across 56,000 square miles of the Democratic Republic of Congo (DRC) and the neighbouring Republic of Congo holds as much carbon as the “whole world currently emits in three years”, says Max Bearak. When disturbed, these peatlands, parts of which have been accumulating carbon for around 17,000 years, can rapidly release the gas, along with another potent greenhouse gas, nitrous oxide, in what experts term a “carbon bomb”. Scientists and environmentalists fear that allowing commercial interests access to these lands will do exactly that, releasing “billions of tons of greenhouse gases into the atmosphere” – and there are huge pressures to do so. Industrialised countries around the world have drained “vast areas” of peatland over the centuries; the…

capx.co Forget the buzz about bitcoin, says Bill Blain. The “blunt and brutal truth” behind cryptocurrencies is that they are simply Ponzi schemes relying on a“steady flow of new entrants” to pay off the older members. The rising prices entice investors who hope to sell it on for more money. The “last man to buy tulips at the height of the frenzy [or] Cisco in 1999 [is now] wondering whether he should buy Tesla and Ethereum”. Meanwhile, as with all cons, crypto has promoted the idea that only very clever people can understand it. Newcomers are assailed with jargon and technicalities, while the supposed computing logic behind blockchains is simply “mathematical dyslexia puked out and dressed up as original thinking”. Just try reading Bitcoin Magazine. Yet why do people keep…

“Despite inflation, bond yields haven’t gone up, which is weird” John Stepek: What surprised you most and what surprised you least in what’s been a very weird year? Simon Edelsten: I totally agree it’s been “weird”. The main thing that everyone had feared would happen – inflation – happened. But according to the economics textbooks, bond yields were supposed to go up, and they haven’t. That confuses everyone. It causes issues for savers and I think it should cause some caution for us. It wouldn’t take much of a move in bond yields towards the inflation we’ve already seen for markets to struggle quite a bit. And yet everyone seems to be dead bullish. Global equities are up 20% this year and they went up even more than that the…

Cyber-attackers have small businesses in their sights. The Federation of Small Businesses says its members are the target of seven million cyberattacks every year. The average cost of an incident for a small business is £8,460, but many prove even more expensive to fix and recover from. In the most extreme cases, the disruption and expense of a serious attack can pose an existential threat to small businesses. However, for many smaller firms, the misconception persists that they are less likely to be targeted than larger companies. While 93% of large companies say cyber-security is a high priority, the figure drops below 70% for the smallest businesses. In part, that may be because firms feel they lack the technical expertise to confront cyber-crime. But even taking some simple steps will…

While the US and UK markets rose steadily in 2021, several sectors suffered great volatility, leading to some painful reversals for this column. But the wins outnumbered the losses, with the current profits on my ongoing positions more than offsetting the losses on the tips that had to be closed. Tips carried forward I started 2021 with ten tips. There were five longs: ITV, homebuilder Bellway, transport group National Express, pub operator Mitchells &Butlers and Norwegian Cruise Line. The five shorts comprised electric-lorry maker Nikola, online-furniture retailer Wayfair, Twitter, Ocado and health-insurance broker eHealth. Except for ITV, all of these were closed. In issue 1038 I closed Bellway, Twitter and Wayfair, with Bellway making aprofit of £750 and Twitter and Wayfair making losses of £990 and £161 respectively. Mitchells &…

Healthcare is an exciting sector. The incredibly rapid development of effective coronavirus vaccines is just one example of its tremendous potential for innovation and making a positive social impact. We also feel there is scope for healthy returns. Healthcare companies are innovating not just in therapeutics and medical devices, but also in terms of big data and analytics. As a result, we believe we are on the verge of a transformation in how care is delivered and diseases are treated. Speeding up drug trials Veeva Systems (NYSE: VEEV) is a cloud-software company whose technology helps plan drug trials safely and effectively. The process of developing a new drug takes over a decade and costs millions of dollars. This use of data analytics and information technology helps reduce approval times and…

Andrew Bailey The Governor of the Bank of England (BoE) was once referred to by his predecessor, Mark Carney, as “the big sexy turtle”: his “considered decision-making” was akin to the mating of Galapagos tortoises, says The Observer. Critics of the Bank’s policy on interest rates will appreciate the joke. “The BoE has spent months dithering” while inflation crept up, notes Alistair Osborne in The Times. Accused of “bottling it” in November after seemingly signalling a rise, this month he changed his mind (see page 6). Bailey was going to be damned if he did and damned if he didn’t. In the autumn, when it seemed that the BoE might lead the advance among major central banks, some accused him of foolishly moving out of lockstep with the US Fed.…

£180 (inc. VAT) for six bottles (£30 each), goedhuis.com In this MoneyWeek double issue, I have two wines for you to consider, especially with New Year celebrations around the corner. They are both exceptional Champagnes that are incredible value for money and also are entirely different in style. First, my headline wine is Paul Goerg, a 100% Chardonnay grown in the village of Vertus in the Côtes des Blancs; 60% of this wine is drawn from the 2013 harvest, and 40% is reserve wine, making for a lip-smacking cocktail of generosity and drama. With perfect balance, matching crystalline fruit with an unnerving crispness, and a discreet, chalky scouring of the palate offset with faint wildflower tones, this wine possesses the magical charm of a thoroughbred Côtes de Blanc classic. Goerg…

■ Dominic Frisby is not only a contributor to MoneyWeek, but also known for his comedy, including regular appearances on the BBC and GB News. In his hour-long documentary, Adam Smith: Father of the Fringe, he brings his two passions together by arguing how the success of the world’s largest cultural festival is explained by the free-market-economy philosophy of Adam Smith, who lived in Edinburgh during the 18th century. While we’ll be running a detailed review in future issues, you can view Frisby’s documentary on YouTube at youtube.com/watch?v=o6e6TpIrba0. ■ Meanwhile, the MoneyWeek Podcast, hosted by Merryn Somerset Webb and John Stepek, continues to go from strength to strength. Recent episodes include what investors can learn from the fall of the Roman Empire to how ESG investing is undermining democracy, as…

Superhero film Spider-Man: No Way Home, starring Tom Holland and Zendaya (pictured), had already sold $587.2m of tickets globally as of last weekend, says the Financial Times – the third-best opening weekend of all time. Sony Pictures’ new film also set a pandemic-era record, outstripping other big releases including recent James Bond flick No Time to Die. Apple employees are being gifted $1,000 by the company to kit out their home offices after it announced they can all work from home indefinitely as coronavirus cases linked to the Omicron variant surge, says The New York Times. The company has temporarily closed three of its shops in Miami, Ottawa and Annapolis after a spike in the number of positive tests among staff in the branches.…

The transition to renewable energy and electric vehicles means copper should profit from years of demand growth, says WirtschaftsWoche. An electric car uses four times as much copper as a petrol-based one, for instance. Enter America’s mining giant Freeport-McMoran. It will produce 1.7 million tonnes of copper this year and comprise more than 75% of copper’s overall sales. It costs the group just $1.90 a pound to dig the metal up, while it can sell it for $4.30. It should earn more than $4bn this year – up from $599m in 2020 – and pay back most of its debt, leaving scope for bolstering production. Freeport also owns one of the world’s biggest gold reserves in Indonesia.…

“First there was cow leather, then plastic leather: now we are wearing pineapple leather,” says Louise Eccles in The Sunday Times. As veganism and environmentalism have gathered pace, clothes makers have embraced “leather alternatives made of leftovers from the wine and fruit juice-making process”. Leaves, stalks and skins are being dried, treated and “rolled into faux leather felt”. London-based Piñatex is leading the charge with pineapple leather, producing leather bags that sell for £655 in Selfridges. Its pineapple leather is produced by extracting long plant fibres and coating them in a thin layer of plastic to reproduce the look and feel of the real thing. Fruit leather has hitherto generally been considered too easily damaged and expensive to make in great quantities, but recent advances in manufacturing technology have prompted…

The EU has “no good cards to play” as China “ups the ante in its economic hit job against Lithuania”, say Stuart Lau and Barbara Moens in Politico. The showdown began in May when Vilnius pulled out of the 17+1 initiative between China and 17 Central and Eastern European countries on the grounds that it was divisive. Tensions “escalated” when Taipei and Vilnius set up diplomatic offices in each other’s countries. A displeased Beijing, which regards self-ruled Taiwan as its territory, then moved to “make an example of Vilnius” by barring the imports of Lithuanian goods. Owing to global supply chains (and, reportedly, pressure from Beijing) , the spat is affecting other countries, says Reuters. Germany says around a dozen firms are affected, including car parts maker, Continental. Finally, on…

• Wall Street bank JPMorgan Chase is handing Daniel Pinto (pictured), its co-president and chief operating officer (COO), 750,000 restricted share options in a bid to retain him, says the Financial Times. They can be exercised at $159.09 a share, compared with around $157 now, from December 2026 and must be held until December 2031. They’re worth around $25m and are conditional on Pinto becoming sole president and COO. He earned $24.5m last year. • Paul Zwillenberg, chief executive of the Daily Mail and General Trust (DMGT), Tim Collier, the chief financial officer, and Kevin Beatty, the outgoing CEO of DMG Media, stand to make a combined £27m as DMGT is taken private, says The Times. The trio sold almost all of their vested shares in the firm for a…

Investors in stocks can follow a number of distinctively different approaches – often referred to as styles – when deciding which companies to buy. The two styles that are most frequently used to classify investors are growth and value. Growth investors look for companies that are expected to grow their earnings faster than their sector or the wider market. They will often be willing to buy shares on valuations that appear quite high compared to other companies if they believe that these may be justified by future profits. This approach places more emphasis on the firm’s potential, as opposed to its current financial situation. Value investing is the opposite. Value investors focus on companies that appear to be cheap today (or sometimes stocks that should be cheap in the very…

US state and private healthcare-plan provider Centene’s long-serving CEO is to retire next year following pressure from activist hedge fund Politan Capital Management, says Matt Grossman in The Wall Street Journal. Michael Neidorff has been Centene’s CEO since 1996, and has turned the group into “one of the largest players in health-insurance plans sold through the Affordable Care Act’s marketplaces [and] in Medicaid managed care”. But margins have fallen behind competitors’ levels in the past few years. Politan’s campaign has prompted Centene to produce a plan to improve its profitability by focusing on its core business, while the group also intends to bring five new faces onto the board.…

“For the majority of my life I have had the privilege of never having to worry about money. But for most people money is a survival dance… now money too is part of my survival dance. I don’t want to be somebody sitting on piles of money… I want to build something that is bigger, means more and can sustain us and other people.” Singer Charlotte Church (pictured) on the huge cost of turning a 16-century mansion in Wales into an off-grid, seven-bedroom eco retreat, quoted in The Daily Telegraph; she paid £1.5m for the property and the renovations will cost another £1.2m “To Nigerian parents… all the sacrifices they are making are to ensure that their children have a better, more financially stable existence than they had… As far…

bylinetimes.com The Turkish authorities have been using artificial intelligence to hunt down former military officers involved in the botched July 2016 coup, says Stephen Delahunty. A unit of the Turkish navy is using an algorithm known as a “FETO-meter” to gauge who might have been guilty. The Turkish government refers to the Gulen movement, an organisation led by an exiled Turkish cleric who was blamed for the uprising, as FETO (“Fethullah Terrorist Organisation”). The algorithm sifts through data collected from internet records and telephone calls to reach its verdict, and has reportedly processed “at least 810,000 individuals from a number of official agencies”. It analyses around 400 absurdly wide-ranging criteria, including which banks and messaging apps people use; getting divorced between 2015 and 2016, and having a disabled child were…

“Never underestimate the regime’s ability to find ways of keeping GDP growing” Chinese president Xi Jinping has a better understanding of the challenges facing his country than most investors. The leader-for-life has warned of the dangers posed by the real-estate bubble, excessive debt levels, widespread corruption and rising inequality. These problems are not unique to the People’s Republic. In the past, every country in the region that adopted the so-called Asian development model has faced similar ones. Xi’s dilemma is that there is no easy way for China to surmount them. The Asian model has several key features. State-controlled banks supply cheap loans to favoured industries; the currency is kept at an undervalued level to boost exports; consumption is suppressed to create savings for investment; and rapid modernisation is achieved…

Just under ten years ago we decided to put our money where our mouths are. So we launched the MoneyWeek Investment Trust Portfolio: six trusts to hold in equal weights, making up a diversified portfolio that should hold up well in most market conditions. I hold all the trusts – and so far I’m pretty pleased. The portfolio, which has seen only a few changes since its inception, has produced an annualised return of just over 17% a year since we launched it. I’m not bothering with decimal figures here as I haven’t factored in the charges you pay as you buy and sell. I’m also pretty sure that not very many readers get around to rebalancing regularly. That’s good in that you will have made a lot more than…

Self-employed workers who operate as sole traders rather than through limited companies could be in for a nasty tax surprise in two years’ time. Last month’s Budget confirmed the reform of “basis periods”, the tax rules that allow sole traders to pick an accounting period of their choice rather than use the standard tax year, which runs from 6 April until 5 April the following year. From 2024, all sole traders will have to switch to accounting periods that match the tax year; as a result, many will face a tax bill for that year that is based on more than a single year’s profit. While the effect is a one-off – with sole traders paying no more in total over the longer term – the higher bill could prove…

Be careful when dabbling in “meme” stocks A key theme of 2021 has been “meme” stocks. People on online forums piled into shares in order to squeeze institutional short sellers, causing the shares to rocket far beyond any rational value. In theory, this created shorting opportunities. But as I found out with GameStop, just because a share is overvalued doesn’t mean that it can’t go even higher. Avoid Tesla Elon Musk’s company has been a favourite of short sellers, due to the sky-high valuation and his eccentric behaviour. However, he’s made a career of defying the sceptics and seems to have created a company that has genuinely disrupted the car industry. With all of my short tips having ended badly, it’s time to throw in the towel and look for…

Music and audio-products group Focusrite (Aim: TUNE) flourished throughout the pandemic as demand for audio-recording products that could be used at home – such as loudspeakers for monitors – jumped, says the Investors’ Chronicle. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) for the year ending on 31 August were up by 67%, which allowed the group to increase its final dividend by a quarter. Its acquisition of live-events business Martin Audio in 2019 seemed poorly timed, but its sales for the year eclipsed expectations. The stock has risen by 62% in 12 months.…

If the stockmarket were an army, it would be knee-deep in mud… overextended… and far from its supply lines. And now, its scouts are staggering back to camp, wounded and hungry. Cathie Wood’s Ark Innovation exchange-traded fund is down 40% from its peak last February. Bitcoin is 30% off its peak. Goldman Sachs’ index of unprofitable tech companies is off 25% over the last month. And yet, there is still no sign of a broad retreat. Stocks rose on the latest inflation news. What to make of it? There are two possible interpretations. One is that investors are very stupid. The other is that they are very smart. “The ratio of the US stockmarket to GDP is at an all-time high Out of line You have to be pretty dumb…