Good afternoon. We hear BP may be in play as Elliott Investors in the US has accumulated a stake in one of our biggest companies. It’s ridiculously good value regardless and hasn’t kept up with other energy stocks. Meantime, our funds under management see yet new heights which is good, as many deep value assets continue to reflect greater interest in their potential
Running yields remain very rewarding however – there aren’t many places where you can receive a ‘sustainable’ income of say 5% or more, opportunities for increases in that, inflation protection of some form and also capital gains’ potential, whilst also having vast diversification and hence risk mitigation (also from uncorrelated assets), are there?
So the first of several further cuts in interest rates and the UK market shoots ahead, scaling new peaks for the FTSE100 and the FTSE250 hot on its heels (but a bigger loser from the Budget changes and with more UK-centric businesses). Of course, that and the related strong and deep cuts in the growth projection published by the Bank Of England to justify the first of several rate reductions, hit Sterling, as the international hopes had been for maintained rates to counter the inevitable increases in inflation caused from a weaker Pound and more expensive imported goods plus increasing costs created by the Budget.
What’s so frustrating about the latter is that so much of that is self-inflicted – and nothing to show for it. On the good news front, a strong olive oil harvest should see prices of that commodity plummet by as much as half.
Confessions of a Prime Minister…
So, apparently whilst the markets are ignoring the latest political shenanigans whether it is the gift of the Chagos Islands with more treasure sitting on the beach than Long John Silver could even have shaken his parrot at, let alone his stick, we hear that the Prime Minister’s non-critical, critical Voice Coach, Leonie Mellinger was once married to Robin Askwith, the ‘Confessions of a …’ film star, herself once a rather steamy (or perhaps more accurately ‘seamy’) actress too we understand. Is this Sir Keir’s Carole Caplin moment asks Sky News…
Boris might coach the PM on the matter and confirm that in the end, confession may be just a piece of cake… but the problem is, ‘this lot’ stood on a platform of no sleaze and no repetition of the shenanigans which went-on under the last regime.
Regardless, the US market is taking tariffs and offers to buy Gaza in its stride as more Americans than ever are now borrowing to invest in their stock market, we are told.
Peace and tranquillity
There seems to have been many more Bull Finches around this year (a Bull Finch market perhaps…) – have you seen these brightly coloured birds which were once the bane of orchards everywhere (as they eat the buds of fruit trees amongst other things)? King Henry VIII paid a penny reward for each bird destroyed. Negatively as I am sure you will have heard, let alone noticed, the numbers of insects generally have plummeted – including pollinators like moths and butterflies.
It’s not all about ‘climate change’ too as some species are thriving but what about the explosion of pesticides and detergents – even giving our pets flea treatment means that the poisons are then going into water courses and our green environments (including popular dog-visiting nature reserves and sites of special scientific interest), killing untargeted species and that in itself then impacting birds and bats which rely on the insects, etc, even if they too are then building-up these poisons in their own bodies.
I was thinking about the privilege of where I live here at www.trimstone.co.uk and where guests can come and share the peace and tranquillity which the spot provides, with verdant greenness to help relieve the worries and stresses of a busy life. Green is my favourite colour so I am very much at home! It will have been surreal for many a visiting broker or company representative coming to see me to discuss business and investment strategies, when we have been able to sit outside with only birdsong to disturb us.
The end of May/early June is the Garden’s most colourful phase with beautiful old azaleas, clematis and wisteria in full bloom and this year we’ve had to be quickly considering the flowering for the end of August when son Noah is marrying Kate and their reception is here. It’s a different challenge to portfolio management and financial advising but perhaps in some regards it is the ‘same’, all needing planning, monitoring, knowledge and experience too as well as pruning and even removing some of the dying. Of course we are but mere custodians of the Site which was mentioned in Domesday and all are welcome to come and enjoy the ambience here by taking a cottage or serviced guest rooms if you wish too and to explore the beautiful North Devon countryside – or go surfing at what is fabled as the ‘best beach in the whole country’ – Woolacombe! Parking will be better there this year as the National Trust has taken-back a large carpark so members can park for free.
Testimonials
It is always nice to receive testimonials and I must repeat a couple which have just arrived and for which we give very grateful thanks. It is very humbling – we always try our best and can never be perfect – and we listen where things may either have not gone to plan or where we can possibly improve too. Anyway, it reminds us of some of the atrocious service we all still receive elsewhere sadly!
J & JA: “Well done to PJM for having the most efficient admin department we’ve ever dealt with.”
C & LJ: “Thank you for the statement and all your hard work to constantly maintain a high level of investment. Please pass on our gratitude to Philip.”
Gold
So gold has been seeing new heights too. Some are predicting even higher levels but I have to say, I think the price is up with events. Yes, this precious metal can be over-priced, even if the Russians and Chinese (and others) are stock-piling it. Certain short-term factors are fuelling speculation but people can also forget that the price can fall as well.
It is trying to punch-through $3,000 an ounce, having peaked at $1,772 on 30/9/12 before slumping to $1,057 on 27/11/15. In between times, it saw $2,034 on 7/8/20, then slipping all the way back to $1,644 on 23/9/22. One thing which is true however, is that gold miners’ share prices are not keeping-up with bullion so there’s plenty of geared value there, though remember with the smaller ones – the latest reported discovery might just be a liar on the top of a hole in the ground. Yes, we have a useful amount of miners and related funds.
Good news/bad news
So the main residual cash from one of our biggest holdings has now arrived. The Blackstone Loan Financing Trust has just repaid us £2.9million, brokerage free. It’s one of those strange frustrations – we liked the Trust which paid us a double-digit income pretty much the whole period we owned it and we were buying each share at a deep discount to the underlying asset value, so we’d have loved for that to continue, both to keep enjoying the income but also because of that discount for new investors to enjoy too.
However, instead, the decision to close-down meant that we have received almost the underlying net asset value, so in simple terms, say a share bought at 75p one day being repaid to us at £1 the next. This was truly one of those opportunities to have your cake and eat it. Remember, investing in typical ‘open-ended’ funds elsewhere will never see these bonuses-for-free. If you are not sure what you have, if you are not with us, it’s a pretty safe bet to say it is likely that you will have the latter!
Some may have said it was in a high risk segment but it spread its risks very widely too and we were more than rewarded for the ‘risks’ at the prices we were paying. Alternatives to this one are becoming fewer and harder to find but we shall keep looking.
Going downhill fast
I trust not the portent for the markets (even if the US could well reflect that at some point) but some of my Family has forced my arm to return to the piste for a short trip after a gap of several years. What with no pantomime this year, hopefully the expression ‘break a leg’ does not relate here!
I remember many years ago in Austria on the Slopes when the Children were young, seeing a German newspaper headline that the then British Steel (Corus) shares had hit 3p each. It was a good moment for me to have been away from the carnage that was hitting the markets. However, I have reflected upon that before – after a cash raise the Company was taken-over so those buying at those levels would have been rewarded many tenfold.
As ever, it is up to us also to try to select the assets which are going to do well tomorrow and not rest on our laurels of yesterday, yet presently also balancing very carefully the extreme risks presented by some parts of the investable world.
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
