So, after Morrison’s, Sainsbury’s and Tesco jump in anticipation of activity there. We are not unhappy – their shares are and were too cheap based on what they represent anyway and so we had an over-full quota of each (and Morrison’s), thank you very much. As ever, investment results are about tomorrow and not yesterday; too many buy on the past and not the prospects for the future. That is why the majority of investors will not have these stocks because their past performances were poor compared with the momentum and go-go growth stocks of course. That is why we don’t have ‘those’ and have buckets full of ‘value stuff’ that the majority ignores. Previously, I have discussed the price for our investment management and advice… now isn’t that funny… guess how much extra value having these stocks is worth to our clients in overall terms, thank you very much! If all you have is ‘cheap passives’ then sorry but the takeover interest won’t even register on your investment whereas so far this last twelve months, if we did the maths I suspect the extras we have enjoyed from such bids have more than paid all our management fees ‘and some’ for the whole of the related strategies. How much is that worth then in ‘cheapness of your service and advice stakes’…! Sainsbury’s were up over 15% to £3.39 last week, adding £0.25million to clients’ valuations. We increased purchases when, in May 2019, the market pushed them to a thirty-year low after the abortive Asda merger and when I said in an eshot then that ‘someone could easily pay £3 a share to buy the lot ‘ (and we’ve had nice dividends meantime too)… As ever though, we need to look for tomorrow’s and to recycle our cash accordingly as we move along!
When the rules changes so that advisers could no longer offer ‘conditional fees’ (which curiously pushed most people’s guidance to ‘transfer’ rather than ‘stay put’ as that way a chunky ‘fee’ (commission really) would ensue for the salesman), 687 firms gave-up their regulated permission to advise. That was after 700 had given-up just the month before as the regulator tightened its rules. We are now in a select minority and with three advisers qualified to chat about these complicated beasts. Seek advice is all we’d say to start!