|Well, I think that all which remains is to wish all our supportive readers a very Happy Christmas and dare I suggest a prosperous 2023. It’s certainly not been an easy 2022 and the Ukraine War is still over-shadowing so much and causing such grief but we must pity the poor Ukrainians and indeed the majority of Russian soldiers who have no choice but to do as Putin demands.|
Let us pray that the true spirit of Christmas and what the time celebrates may awaken the reality of what is happening and what must stop.
Here at home, the strikes dominate the news – not being political but for myriad reasons between the extremes of inadequate industrial relations and unreasonable expectations they should never be happening and it is hard for the general public to differentiate between rightfulness or greed versus what ‘everyone else’ has had to endure, especially these last few difficult years. Fuelling the inflationary spiral to ever higher prices leads to awful conditions for everybody and there are few winners. Even in the face of the present staff shortages, excessive wage levels lead inevitably to job losses too to fund the higher costs of those remaining, especially in the public sector where the taxpayer is paying the biggest levels of liability since WW2. I am afraid too the 1970s’ style ‘no negotiations over reform’ agenda cannot hold sway – things change and they must with working practices, output and productivity to warrant the demands made. However, let us all trust for swift resolution for everyone’s happiness, from strikers to service users – and much overdue reform in the entities involved too.
How quickly things can change economically. The US Dollar had its worst month for twelve years and all the pundits were pointing to Sterling (amongst others) going even lower and parity, etc. Well, as you know, this small provincial brokerage wasn’t and was skewing assets to avoid the almost inevitable decline in the Dollar from the artificially inflated levels and with more to come. Where have all those other experts gone? All those with global tracker funds with an excess of US stocks will find that they have lost more on the currency movement than they have gained on the market.
What did I say about those ‘cheap passives’ (index-tracker funds)? As ever too, if you have money in the ‘wrong thing’ it is not in the ‘right thing’. So for each Dollar we didn’t hold and each Pound or Yen (our two preferred currencies) we did hold, we didn’t lose on the Dollar and we gained on the Pound and Yen. Of course we are never 100% one way or another but even a heavy skew is invaluable in times like this – or the realisation as to what factors may affect clients’ returns – too many advisers seem oblivious to the global scene and what may impact things, let alone what’s happening under the bonnet. For us, that’s the value in paying for ‘active oversight’ at the necessary times, even just to have the ability to act rather than not at all.
And we read that last year we built the largest number of new homes the Country has seen for 30 years, but still not enough. It is hard to know when the supply is going to outstrip demand but we may be close to that and this being just one of a whole series of factors which brings the average house price tumbling-down as there is no way the average house can be priced at 9x average earnings for ever – wholly unsustainable.
What else? Exxon Mobil of the US has increased its share buy-back up until 2024 to $50billion, a sum which is actually over the Company’s total value when ESG and Covid popular Peloton managed to rush past it… aaah – the thoughts of Christmas Past! If only we’d all filled our boots with Exxon (and sold Peloton and Zoom short…). Exxon has paid handsome dividends too – and its shares are up three-fold on March 2020. Some more interesting news on inflation? Prices to ship a container from China to the US West Coast have dropped from $14,000 in 2021 to $1,403 now. There are 40% fewer orders from China in a year.
Oil prices are down a bit (up these last few days) and natural gas is continuing to press downwards, as the UK has doubled its orders from the US. We need this – especially when the wind stops blowing and the sun stops shining. Meantime, the UK economy rose 0.5% in October… despite the quarter being down and the gloomsters predicting ‘Recession’. Let’s wait and see. The strikes and bad weather are the portent for the bad but the significant spend on discretionary things seems persistent by consumers (and despite what the media keeps telling us about affordability) so that may well counter that.
Bad news and badness generally
Why is the news so full of badness? Are things really that despairing for the vast majority of people out there? I am not talking about complacency now nor compassion for those in real and desperate need but the evidence doesn’t support all the rhetoric. To be frank, if the busyness of spending in towns and on the internet is taken into account, food outlets, entertainment and sport and the expectation generally of the things to which we are all ‘entitled’ to have (even after the energy crisis are taken into account), something doesn’t match.
Why can’t we – and the media, start from a perspective of ‘contentment with where we are at’ first, gratitude for what we have and appreciation that someone else will be in a worse position than us. No, this isn’t naivety but a constant depressive overtone doesn’t help us individually or the Nation, and whatever you read, the embarrassment of riches which the vast majority of us has compared to the real destitute across the world or the poor Ukrainians with no power and day-to-day resources as the temperatures plummet.
So maybe this Christmas try to look around you, appreciate all the great things you have and not grumbling about what you don’t, the enviable public services at our beck and call (when they are available…), our families and friends and think of those less fortunate than ourselves. And prioritise spending on the necessities before you spend on the discretionaries – pay the mortgage, the energy bills, the other necessary payments before you splash-out on takeaways, sport and entertainment – or even excessive generosity to those around about us if you can’t afford it. Don’t go getting yourself into misery and then having the Devil’s own job of ever escaping it and blaming ‘others’ for your life choices – whether that is ’The Government’ or your perception of an inadequate income as a consequence of your excessive expenditure.
And then there is simple corruption – it has nothing to do with ‘political affinity’ either, whether it is ex-Conservative Baroness Mone (appropriately elevated to the lords as a consequence of her past business success) but if she and her family have corrupted themselves then funds need retrieving and criminal action to ensue. This is the same as Labour’s biggest donor, the Unite Union over-charging for the building of its new hotel and training centre – it doesn’t matter who has perpetrated the crime – they need prosecuting and compensation claimed.
The law makes a mockery sometimes of things however – I read this week of a fraudster who took two Bounce-back Loans in the Pandemic (only one was allowed) by fabricating records and turnover of his business then putting that into liquidation after spending the money on personal things. However, was he jailed or a confiscation order made against him? No – it is wrong – he needs to pay and repay
I don’t care what colour their politics are – if they are corrupted and have abused their positions for personal gain then they must pay and the greed which seems to be permeating all of our Society must be reined-in.
We organised a day out for all the staff and families to go to Dunster on 2 December to see its famous Christmas Lights’ extravaganza Dunster by Candlelight. Starting with a lovely lunch in the Yarnmarket Hotel and then left to our own devices before returning to the Coach.
Everyone enjoyed themselves and it was lovely to see the late autumn colours on the trees on the road across the top of Exmoor.
When to complain
We are regulated in claims’ management work too. Be very careful on longer-term issues to avoid losing the opportunity of referring to the Ombudsman, such as with mortgage advice.
One unfortunate new client came to us and in the end we could not help. I’ll precis the case. They had little money, took a big mortgage based on the guaranteed income from a local holiday lodge firm (which still advertises) for a unit which would instantly start falling heavily in value. The local mortgage saleswoman fraudulently used the inflated income to substantiate the mortgage and no way for repayment at the end. Lodge firm reneges on its promise and stops sending-along the lettings’ money. Trading Standards doesn’t care and no external authority seems bothered about the fraudulent practices of the entity. Mortgage expires and clients are forced to take an unneeded Equity release mortgage at great cost, to refinance and of course, more commission to the saleswoman.
They should not have been able to borrow against their home for a speculative investment project like that and one without security of its income. There should have been a repayment programme. Had they been in time, the complaint would have been found in their favour but as more than six years from the initial mortgage had gone-by and they knew about the problems more than three years ago, the complaint is time-barred. No, the mortgage adviser never once said they could complain to them (despite a regulatory responsibility to note all client concerns of such dissatisfaction as a formal complaint and to refer to the time limits and Ombudsman reference).
Have you borrowed lots of money in similar circumstances? If so, don’t leave it too late. If you have concerns over any financial advice you have been given or any financial product you may have bought, don’t leave it till it’s too late and remember the sales(wo)man of the product may well not remind you of your rights to complain and the time limits you have to do that. If you are unsure, contact us without any cost or obligation to do anything and we’ll gladly give our view. Remember too, investment performance per se is not a complainable issue but the inappropriate advice to acquire unsuitable products can be.
I am very angry for these poor clients who still have an unsaleable lodge, tens of thousands of prospective unpaid rents and the lodge firm still operates and the financial advisory entity involved has gone from strength to strength – I would never use such a firm if that is their practice and worry for all of its clients if that is a reflection of their moral integrity.
Blue Planet Investment Trust Plc
Despite the Investment Trust writing to all of our clients of whom details were demanded under Companies Act legislation (and despite being provided on the provision that they were not to use the information for any such purposes) and still not being registered with the Information Commissioner for the holding of and management of personal data, Blue Planet has changed its website to say:- ‘Blue Planet Investment Management Ltd does not hold individual shareholder details’.
So if that entity receives a colossal sum every year to deal with all the administrative needs of the Investment Trust, who held the personal client information and who authorised the letters? Did their solicitor, Samuels in Barnstaple, who were acting for them at the time, as I can’t imagine they would do anything as reckless without seeking legal advice?
Of course the managers, directors and administrators have common personnel and the Murray Family permeated the whole shebang… however, if this is all the regulator has done so far to tackle the disenfranchisement barring our votes against them, let alone the gross negligence in the Portfolio’s management, what hope is there? Of course, the requests for the client information all came from ‘Blue Planet Investment Management Ltd’ and that was where it was sent and clearly that entity has breached all protocols in sharing that with BPIT if it now says it doesn’t hold any data. Hmmm. Please do complain! Did lawyers also have investors’ personal data illegally?
Last week the Chief Executive of the FCA wrote to all regulated firms to inform us that it is important we report all concerns about regulatory breaches. What is the point if we do that and no action of substance takes place?
As I repeat for this tiny holding, we have not rested but concentrate upon managing the 99.5% of clients’ other assets effectively and successfully, as you would expect us to do!
I know it’s Christmas but so kind of some clients to write and say:- ‘We called in (from Yorkshire!) to see Felix, whilst having a coach holiday. Just mentioning this because of the excellent advice we received about post-retirement pension contributions, topping up basic State Pension and other matters.
‘All advice was acted on, and resulted in a four-figure instant gain. We are delighted, naturally, but equally happy with great service from polite, knowledgeable staff members, who always pick up the phone after the first few rings! You can’t put a price on this and we are happy to recommend you to prospective customers. Thank you very much!’
Big banks’ mistakes
So do you trust big institutions with your cash and investments? What always frightens me is that it seems the bigger they are the easier they slip into stupid mistakes…
Credit Suisse has been savaged by some of its shenanigans and has seen floods of clients and funds flee the bank… and over here, Lloyds Banking’s £57billion Pension Scheme with 47,000 members (one of the largest final salary schemes) was purportedly one of the biggest losers as a consequence of the volatility around the Minibudget when its special ‘Liability Driven Investments’ didn’t do as they expected.
BT lost £11billion so how much did this scheme lose? They haven’t said – yet… they say it won’t affect pensions as gilt yields rising also reduce long-term liabilities but what if they didn’t move back in again (as those yields are now lower than before the MiniBudget)? I wonder what their annual statements will say and as long as there are not big holes in expectations…
On the same tack – BT’s giant £47billion pension Fund has 270,000 members and a £4billion deficit. ‘All is well’ said the spokespersons and now, it is rumoured that the parent company (which has been paying-in £2.5billion pa for years) may have to pay-in more to make up the shortfall. How can any company manage to pay all its costs and such colossal past deficits as well?
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