High Street Decline

Dear Friend

It’s a sad occasion to see the likely demise of Debenhams and Arcadia group. Not only are all those jobs lost but the High Street will look more desolate and things will have to change. Really too, the big online, multinational retailers have had it too easy and for too long and the monopoly arrangements they enjoy have been unchecked and as we know, some have been ‘cheating’ the tax system and hence more able to undercut these others too. One big issue is the pension deficit at Arcadia. If it was not there, would the company have sunk? A £350million hole could have kept the Company going and indeed offered a suitor a possibility but who would want to buy that and regardless of what they say, Sir Philip Green has no obligation to fund that from his pocket either – whether you like him or not. It would be better for the PPF lifeboat fund to take the pension debt and let Sir Philip (or others) buy the Company from the administrators. And contrary to what many and the regulator may say, there will be thousands who should transfer their pension benefits from the old scheme before being transferred across as when they go over, no transfers are allowed. Of course, what level is the transfer value with a deficit like that? The ‘good news’ is that with less competition, the survivors (like Sports Direct which owns House of Fraser) has more chance of surviving and thriving and I wish Mike Ashley all success in that regard. Of course, he is liked and disliked alike too!

So, what is new? The Pound hits the highest levels against the US Dollar since May 2018, a bounce of 17% from its low in March. At some point and latest negotiations allowing, it will climb against the Euro (meaning more likely the Euro will fall as it has been fundamentally overvalued for too long).


Hot on the heels of the last awards, it is lovely to announce that we have been selected by SME News as the “Best Financial Planning and Wealth Management” firm in Devon for the ‘Business Elite Awards 2021’! Thank you to them for choosing us and indeed for all our staff and clients who have made this possible.

The publication says that it looks to “celebrate those enterprises who consistently provide the best services and products for their clients, allowing them to stand out within their representative fields.” It notes that it undertakes comprehensive analysis and research and states that “this proven approach ensures that we award on merit, not popularity and recognise the very best in business. We award those that are succeeding in their endeavours, innovating, growing, and improving.

Straw Poll

Here is an interesting test. When I flagged how ludicrously cheap HSBC was on about 4 October (it is rare for me to be specific in view of the ‘regulatory requirements’), how many of you went out and bought some? We added a few to strategies. The shares have now been up 50% from their twenty-five-year low point and as you will know, that is not unique in the recovery of ‘value’ which started almost to the day of the vaccine’s announcement. If you are a client and added funds to your strategies with us here as we have been encouraging during the financial trauma, you may well have had some added for you. It’s still not too late for so many situations, in our view and despite several doubling as well!


There is a number of interesting adages which come to mind about certain markets and stocks at the moment. They are old themes of course. However, one says ‘something is worth what someone will pay for it’ and at the moment, the lunatics are running several asylums from Tesla to Bitcoin and many other tech companies’ share prices. Yes, the more people who buy their shares then the higher their prices will rise – simply supply and demand. Well done Elon Musk for tapping the market for yet more money, raising $5billion of new shares at these toppy levels. He knows a good thing there! However, whilst I admire the phenomenal space programme which Mr Musk is also running (SpaceX), the destruction of the rocket with an horrendous landing could just be a portent for what will happen to Tesla’s share price as it too all goes up in smoke.

It reminds me too of the tech bubble in 1999/2000 – companies like Colt Telecom whose share price rose the higher the spending and thus the losses went, as it pointed to even more glorious times ahead (well, theoretically and not actually!). Then there was Bookham Technology where the employees were all given preferential access to the shares at the float and many saw this as their ‘lottery’ moment – mortgaging their homes for big sums to buy the launch shares – the whole company went phut shortly afterwards.

Fund managers holding these over-valued stocks justify their positions and can often do so with fancy figures, graphs and predictions and some may well come true but when the horizon is so far and they have lost their strategy base for any investment management decision, then they are just like the rest of the crowd and are into the ‘greater fool’ theory – of course they’ll have sold out at the ‘top’ as some other fool will buy their stock from them for the expectation of a yet higher price. Sadly, I am fearful, very fearful, that instead the adage is the one which goes ‘it is a fool who knows the price of everything but the value of nothing’. This selective, boozy party has been raging at the top of the brash office block for too long and even the wise ones haven’t realised a fire’s licking-up the lower floors and soon their exit will be impossible, or at least at reasonable prices. As for us? We’re concentrating on those companies which are mining their copper for the wires for green energy and should we say, selling water and fire hoses… You can pick these up for a song and the companies will still be around afterwards, internet or not. Will the Dow Jones at over 30,000, dominated by these aberrations, be like Tokyo, the largest stock market in the world in 1989 and which would have dominated ‘cheap’ index trackers (which would have had to have it simply ‘because it is there’), which then went all the way down from 39,500 to 8,000 at its trough in 2003, though even just three years after that peak in 1992 it was 16,000 (down 60%)? I have to admit, we started nibbling away a bit too soon but we kept the faith in those troughs and now that market has quietly regained its poise and with a far more balanced and stable portfolio of companies than seen in the big US stocks today. It’s now back at 26,800 and at very fair comparative prices and with a fair dividend yield too. It has done our investors proud.

Premium Bonds

Just to remind you that you are relying on luck only if you hold these. However, to disappoint you but being factual, you are not going to win big. There are far more chances of your going outside and being struck-down by a lightning bolt than a big win and in the cold light of day, statistically actually the lightning is more likely… As from December, the prize kitty has been cut by another 40% – yes, 40% less prize kitty than even the meagre offerings last month – 1.1million fewer prizes… funnily enough, the numbers of savers in the things has hit a record – there are now £99billion in them!

Please don’t hold them on the basis of superstition. By all means, hold them as a cash reserve (which means you MUST encash them if you need funds and you don’t keep ‘another’ cash reserve too) or if you are super-rate taxpayers and have exhausted every other possible tax-planning opportunity but otherwise, you are going to lose money which your funds could have been earning for you somewhere else if you keep them and as inflation builds… The real value of a Bond is falling too. We still see forlorn original bonds every so often – especially in deceased’s’ Estates – (they started in 1956) – if you had bought £100’s worth then the comparable real value today would be £2,650 and that excludes all the interest you may have earnt meantime too. It’s a sobering thought. Still, the good news is that you are lending the Government money at almost zero percent, so it helps in that way even if it isn’t helping you! More sobering is that if that person had put that £100 in the Stock Market (Dow Jones for this purpose) and reinvested all the income, it would be £122,887 now.

State Pension Credit For Carers

If you care for a grandchild or another’s child aged under twelve, then have you realised that whilst you are doing it, you could be qualifying for credits to your National Insurance record for State Pension?


This could be valuable to some readers who otherwise may be short of the full entitlement especially during these strange Covid19 requirements.

Environmentally Good Investments

It is important to keep one’s feet firmly on the ground with investing. Sadly, an honourable idea or intention to support say a ‘green project’ can be a very bad investment. Sometimes corners are cut or emotions are used to counter financial common sense and that is the beginning of the end. Sadly too there are plenty of charlatans out there who, for them, see ‘ESG’ simply as another bandwagon to exploit real and well-intentioned people’s plans for their investments and it’s not just so-called ‘greenwashing’. Earthworm Ltd is the latest company that promoted environmentally friendly investments to go into liquidation so questions will be asked about what happens to investors’ funds. I am not being negative but simply saying that the standard due diligence criteria must still be engaged and we must all be wary because things can go awry and often more frequently on ‘these’ than with ‘normal’ investments.


Unfortunately sometimes it proves to just be a marketing strapline to entrap investors – Earthworm said: “We want everyone to invest in things they care about…we consider the consequences of our actions before making any investment.” “And every investment we make is about delivering returns as well as achieving positive environmental and societal outcomes.” As expected, all the right sound bites were engaged too – ‘impact investments’, ‘doing good’ and so on. Being the Devil’s advocate here but aren’t these the characteristics to which ethical businesses (meaning ‘fair, professional and principled’) attempt to meet consistently even if they don’t try to use it to unethically remove your money from you to earn a ‘commission’, management fees and big salaries? Earthworm only incorporated in 2019 and in that time has not even filed any accounts – managing your own money carefully has to be important before you start offering to manage others’ and how many advisers supported a company which wasn’t financially stable enough in the first place…? Companies House’s records for either director don’t provide a great deal of financial comfort for their prowess in being able to invest multimillions in green projects…

Risk Warning

Stock market investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.

To remind you, why do I send out occasional emails? Because everyone can save money. We have no connection with any companies mentioned and you have to make your own contacts and satisfy your own enquiries. What is in it for us? If we can prove that we are knowledgeable and that our service and advice have good value, then you might contact us for professional financial planning and investment help. You don’t have to do that though and there’s no charge for emails. If simply they save you money, then accept them with our compliments! However, you’ll know where we are!

If you have any queries of any form or indeed any subjects you think I could include, please contact me. I also refer you to our website www.miltonpj.net. We celebrate our 35th anniversary in 2020 and have been publishing a well-respected independent column in the local Paper for most of that time and free client newsletters as well.

Do not forget however the usual caveats – this is not ‘advice’ and you are encouraged to seek that before embarking upon any financial route involving investments, etc.

My best wishes

Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB
Chartered Wealth Manager
Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers