Having grabbed a week to visit Chamonix and on one day to travel up to Aiguille du Midi (3,842 metres) to view Mont Blanc (4,805metres), gave me an opportunity to see ‘risk’ in a different context. The height, the highest I have ever been excluding flights, puts risk in a different perspective altogether
The engineering feat of the gondola and then the construction of ‘everything’ on the top of that shard of rock is quite breath-taking but also watching the hordes of skiers, with harnesses and special crampon-adorned boots clambering very tentatively down the tiny path to arrive at the top of the ski area to traverse carefully (before catching the train which goes up to the glacier) and over the slow-covered glacial area. This is, whilst at the same time trusting they avoid the odd crevasse which can have opened-up underneath them… or the ski-brand advertising promotion being filmed with a couple of leading skiers from France and Canada clinging to the sheer precipices for effect, looking cool in their latest fashion accessories of course – how drones help make the cameraman’s work so much more effective! Yes, risk exists with everything and in myriad guises!
In the same time of my absence, the risks of geopolitical events raise their ugly head in different ways again as a game of Stud Poker emerges beyond the more carefully thought-through Bridge or even Chess which the key players had been playing up till that point. What on earth will be the outcome for Ukraine and how will Europe be left reeling as a consequence of some of the rhetoric? Will the arrival of Sir Keir after M. Macron have any sway with Mr Trump?
Meantime, we are reminded that the EU is still consuming more oil and gas from Russia than it is providing in financial support to Ukraine; I am reminded of the Zeiss lenses and Commonwealth Rubber proposal with the Germans during WW1 and perhaps the legend that the French were fighting the British whilst using British leather boots during the Napoleonic wars. Has nothing changed?
Company visit

It was a pleasure to be invited to join the institutional investor visit to SEA Group Ltd, Barnstaple, not only to enjoy a tour of the facility but to have the management presentation and interim analysis by AIM parent Cohort Plc. The technology being developed here is quite impressive and the Company appears strong and well-positioned going forward.
This was hot on the heels of attending the launch of North Devon’s Angel Investors’ group, where I enjoyed the presentation by Tech South West, North Devon Council, Torridge District Council and Angel Investors Bristol and individual presentations from local businesses seeking capital to fund their future plans. The idea is to link ‘angel’ investors with enterprises and innovation seeking capita to take their businesses to the next level.
New investment group launches to support local startups
Where-to UK economy?

That’s a hard one. Despite net revenues to the Chancellor’s coffers being at a record in January, it was £5billion odd short of the revered OBR’s projections (upon which the Chancellor relied foolishly for her autumn statement) and still showing the government having borrowed £12.8billion more than expected for the 10 months to January.
Tax receipts fell short despite record Inheritance Tax and Capital Gains Tax – not a surprise to be frank in relation to budget announcements and also sending some of the biggest payers abroad as well… Then retail sales were a tad higher than expected with food payments bigger – though it was suggested that is a case of more eating at home than supporting hospitality as people feel they can’t afford dining-out and takeaways so much, so a bad portent.
Civitas announces that the highest 20% of earning households pay 55% of all direct taxes now too, six times the amount paid by the poorest fifth. The top 10% pays over 40% of national direct taxes and a third of all tax. At the same time, almost 53% of all households receive more in cash benefits than they pay in tax, the third highest record and way above pre-pandemic levels. That figure has risen by almost a third from pre-financial crisis levels (1999-2000). Now, 35million are net beneficiaries of the tax and welfare system (including State Pension), up from just 24million. Translated, this means that those with an average household income of £47,000 are net recipients of the State – a ridiculous figure and as the researchers noted, ‘an economy where more than half of its households are not able to support themselves cannot be sustainable’. It has been suggested that what with everything unhelpful the government is doing, it has confused ‘net zero’ as its target for economic growth – it seems to be well on line for that, at cost to us all.
Markets

The global political shenanigans appear at last to be causing some wobbles in the US market and the Apple data reverberations have not yet had effect. However, here is some encouraging news for you and yes, we have been overweight banks…
The Stoxx 600 banks index covering the 47 largest European listed banks has returned over 200% since the beginning of 2022, more than the ‘Magnificent Seven’ US tech stocks at ‘only’ 190%. The big difference too is that they were seriously undervalued but still have tangible value within them and the gains are not based on excess hype. Indeed, share prices are still ‘only’ at book value. Fat dividends are likely to continue too and other ways of returning cash to shareholders. The FTSE100 is bloated with banks as well so it all helps our index versus the US.
Meantime whilst we watch, are we experiencing the collapse of Crypto? With ‘experts’ (including pundits from Standard Chartered Bank) having predicted $200,000 for Bitcoin in 2025, instead it has been on a descent and dropping nigh 20% since 17 January – hardly the mark of a ‘stable currency’. Readers will know my view and no, we’re not involved in what may be the biggest speculative mania (over ‘nothing’) in all history.
Political opprobrium, integrity & regulatory oversight

I am struggling. Not only do we have a Chancellor who some might say cruelly is being successful only at being economic with the truth as she exaggerated her experience, tenure at the Bank of England and also other professional work but we now have the Business and Trade Secretary (one whom I thought was one of the better ministers to be frank) suggesting a short training position meant he was a ‘solicitor’ and the Deputy Prime Minister even exaggerating her time as a personal carer.
Why am I struggling? Because in my profession, where ethics and probity are not only valued highly but regulatory and professional body reprimand and potential censure and dismissal could follow, don’t seem to have deterred these individuals from sharing untruths on CVs (etc) and in interviews. They have used mistruths to help elevate their political status to achieve the roles they now fulfil and to mislead those who have relied upon them, to create an opinion of their capabilities.
Excuses of ‘clerks’ making mistakes, etc only compound the issues as that becomes lies. Having a little experience by standing as a parliamentary candidate in the past, dare I suggest that such politicians are actually pretty peacock-like and love to read their own work and public testimonials which in this regard means posting, checking, double-checking and ensuring things are accurate to avoid future criticism and certainly not leaving it to underlings to ‘make mistakes’.
Indeed, their good political aides are there to ensure too the elected politician presents only the most accurate things about themselves, checking and double-checking what is posted so in this instance, they are complicit in the ‘crime’.
If we employed a regulated individual who we found subsequently had misrepresented critical facts on their CV, it is likely to lead to dismissal as obligated by the regulatory bodies which demand the highest of integrity to ‘protect customers from harm’ and indeed to endeavour to preserve the highest standards of professionalism. There is very much a difference too between a clerical mistake and a downright factual lie on matters which are not subject to interpretation. Who is holding these people to account? How would these matters be treated by a regulator outside of Parliament (perhaps when they have to apply for a new job)?
Good news/bad news

Fair Oaks Income is returning more cash to shareholders at the net underlying value by compulsory redemption. We can’t complain – we have bought our stock mainly well below asset value. It’s a shame – we like it but shall continue to buy when the opportunity arises but the shares now trade at or around that asset value. The yield is double digits of course.
Wood (John) Group continues to defy ‘luck’ as much as anything as the CFO resigns after having over-stated his CV… what more clumsy actions can the Company deliver? An increased contract with Shell doesn’t really offset the negativity. Then on Monday the shares jump 41% as old suitor Sidara notes it may bid. Chemring also jumps as Sky reports Bain Capital may be interested in bidding for the Company – we shall watch there too!
Middlefield Canadian Income is the latest to be attacked by activist investor Saba which owns a 29% stake – we like the Trust but cannot complain when the discount has diminished, as much as we like the Trust, its assets, a rather forlorn currency and the market there presently. I’ve suggested the Trust tells Saba to take a running jump…
Investment Trust opportunities

Two groups are launching special funds to exploit the vast discounts on many closed-end investment funds presently. Achilles and RM Catalyst have similar ideas – concentrated engagement and a short investment return period. RM expects there to be a running income of c8%pa as well and will target Trusts with discounts to the underlying assets of over 30%, so useful double-digit opportunities for improvement exist.
We intend to participate for investors; there’s no brokerage on purchase and none on redemption either so attractions all-round and a relatively low risk chance to secure a very good return without worry about what the main markets are doing, just the unlocking of the discounts from the real assets held within each Trust. Retail investors won’t be able to participate (or easily) and we should benefit doubly as it is expected some of their ‘victims’ will be Trusts we hold already, so watch the whole sector’s prices rise as a consequence of this £100million anticipated new money chasing the concept.
Dogs

St James’s Place takes the biggest two fund positions in the ‘dog performance’ tables this year. Yes, it has lots of funds and manages lots too but should investors be concerned? We think there are superior alternatives regardless, so choose the independent options instead and Investment Trusts for the extra discount opportunities anyway.
Then, Terry Smith’s Fundsmith is not enjoying its time in the spotlight with under-performance after a time enjoying plenty of good news – and unsurprisingly investors are fleeing in big numbers – as the core fund sees the biggest net redemptions of all funds, that then putting pressure on the manager as he has to sell assets to meet the repayments.
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