Interesting times with politics and Stamp Duty shenanigans. They all affect investor sentiment too and confidence and upsets are not helpful. I do feel slightly sorry for Angela Rayner on this one in that one relies upon those completing the process to know what Stamp Duty to pay but of course if they were told this was the ‘only’ or ‘main’ house…
I have said before the biggest smell was with the ex-council house, Capital Gains Tax and forfeiting the buyers’ discount by not using it as the main home and that seemed worse – maybe. Of course, the wags have been at work on this and what with significant media access these days, all the old video speeches with Ms Rayner deploring political and financial sleaze in others’ behaviours have come to the fore. She’s sacked her tax adviser apparently – we were all wondering at the time if it was Rachel Reeves I suppose…
I don’t know everything about the constituency home which is now in ‘trust’ for her disabled son; I wonder who else might be the possible ultimate beneficiaries of that Trust. We hear though that it was compensation from the NHS which was then used to buy-out Ms Rayner’s share… so the plot thickens. Allegations of discounted or inflated sums involved have also surfaced and whether these would have any bearing, I don’t know. However, it seems the Liz Truss Iceberg Lettuce should have been replaced by an Angela Rayner Icecube…
It is always frustrating when politicians of any colour bring our nation and its government into disrepute. They are not perfect – no one is and they are not always guilty of what some people accuse them of having done either, I should add but when in a position of authority, leading by example is imperative and whatever, this isn’t the sort of behaviour which should be expected.
Lord Acton in 1887 noted that ‘absolute power corrupts absolutely’ and this seems to be a trait of a certain very thick-skinnedness which some politicians develop – as well as imagining somehow that they function in a little protected bubble where no one notices their misdemeanours and skewed moral compasses as they look to do the best for themselves when they ascend the greasy pole and not for the people they represent. And somehow, it resonates more poorly when it is ‘socialists’ in this position, as they have been elected theoretically in view of their representation of the traditional poorer, working-class roots which they may have shared.
I must be rather odd as clearly, I should not have managed very well in that environment, being far too boring and dependable… on a more positive note, absolutely they aren’t all like that and many have oodles of integrity, I hasten to add and many stood for election because they wanted to do something for their constituents and Country! Finally, Sir Keir should have grabbed the bull by the horns as soon as the story broke, whether guilty of anything or not, it hasn’t helped his government. Honourably too, Ms Rayner should have fallen on her sword immediately to avert any (further) issues for her Prime Minister. Will the indecision reflect badly on him?
And what do readers think of Lloyds’ announcement that it is aiming to shed the least productive staff, as reviewed by an HR tool which assesses individual productivity? That could be 3,000 staff going – 5%. That is a Sword of Damocles hanging-over staff heads and not the best motivational tool I fear… though with very high costs of employing people, maybe we shall have to come to expect more of this type of ‘thing’ and AI engaged to do the data checks on individual output etc. We’re not planning on introducing the same ideas here… Lloyds’ shares rose – as the cost cutting was seen as a positive for the Company.
Missed opportunities
Readers will have not been able to miss the surge in precious metal prices – namely gold at new peaks and silver (the latter is close to exceeding the price the Hunt Brothers’ speculation saw in 1980 – just imagine had you bought then! Ouch!)… However, in most instances, investors may well find they have not enjoyed the benefit of the rise in prices or more impressively, the rises in the prices of gold and silver miners.
I have to say we have held and do hold some – probably not enough but we can’t complain and some have rocketed from very oversold levels in past years when they were so out of favour. We’ve added more but it’s a very specialist market and many gold funds closed years ago through a lack of demand….
There are myriad reasons for price rises, from the political risks (fancy having a mine in Russia for example where your shares could have evaporated), so many other politically charged places (or possibly corrupt regimes with plenty of holes in the ground with liars above them) where the metal may be found. Central banks have been increasing their buying as well. However, the other primary reason why miners’ shares had been dumped unceremoniously is because they despoil the ground and interrupt the natural environment so they failed the ‘green’ or ‘socially responsible’ tests which it seemed the majority of investors and institutions were pursuing, either actively or passively.
It would be suspected, when reviewing the price of a share like Fresnillo (but it’s not unique) that these investors and people are moving-back… other miners had similarly been removed from portfolios on similar grounds and no, they aren’t all coal miners either and despite the colossal demand for base metals to fuel the green revolution. There is some tremendous value in many of these too – and base commodities at very low comparative price levels.
The same ‘after the event’ about-turn has been witnessed by ‘Defence’ stocks which are now acceptable in many ‘socially responsible’ portfolios, as they defend (as well as kill, if used in aggression) and allowed back-in to mainstream funds which otherwise became ESG-pious several years ago to ‘keep the peace’ with investor sentiment. What with the biggest ever launch of an ETF, a Defensive Assets Exchange Traded Fund, maybe this too is after the event in pricing and value terms when the best results were buying them cheaply some years ago.
Would it be controversial, I wonder, to imagine that even oil and gas stocks may re-enter the investment world as being environmentally responsible ‘managers of the necessary, many-year transition’ to a non-fossil-fuel-polluting industry? I didn’t see the change with Defence (though we had some) – nor gold and silver miners, so maybe it is not so far-fetched and then the tremendous value these ‘energy’ stocks represent today would be seen as an even bigger bargain…!
Fortieth celebration
Our celebrations are continuing and with some national trade press too – thank you. If you have been invited to our event on 20th September, please don’t delay your acceptance as time is running against you for catering etc! The party includes music, magicians, fireworks, escapologist…
As part of the story however, we wanted to do something for our ‘community’ as well. With this in mind we launched the 40th Legacy Awards – where we are donating up to £1,000 to 40 good causes. Indeed, the full £40,000 has already been paid to the Philip J Milton & Company Plc Charitable Foundation.
The attached article explains things well and we should be delighted to consider applications which might meet the objectives. Devon company celebrates 40 years by offering £40,000 in grants to 40 good causes
All details in the article. We have already been humbled by the sheer number of enquiries so it will be a significant job of work for us to review them all!
Good news/bad news
Curry’s announces a share buyback and the price rallies 17% as hopes are confirmed for profitability and trading.
Value and Income Property Index Trust announces its tender offer to acquire shares at a 5% discount to its latest asset value – we are ‘obliged’ to accept this as the discount price is too narrow and as much as we like the Trust! However, this rewards our investors with a special bonus being the uplift in the realised price (without brokerage) versus the discounted level at which the shares were acquired for them against the underlying value of the assets held.
Associated British Foods and Mobico disappointed the market with their limp results; yes, this sort of thing can happen.
Inheritance Tax
You can’t give something away to gain an Inheritance Tax saving and enjoy the benefit of the asset. Don’t give your house away for example (other very salient reasons exist for not doing that anyway!). However, last year apparently £61million of gifts were disregarded by HMRC in estates where the donor didn’t know or abused the rule… and it’s too late when it is discovered because that is HMRC clawing-back up to £24million of extra tax as a result.
Investment Trusts usually beat the more popular unitised funds which most investors are sold. Why is that?
This is an interesting article explaining some of the differences and the nuances:- Mick Gilligan: How investment trusts outdo their ‘fund siblings’
It makes no difference to us – we buy and hold what we believe is best for clients. Maybe if you are not with us you need to ask your adviser why they don’t buy Investment Trusts very much – or indeed for many, not at all?
Image: 78art/Adobe Stock
Maxims – being a better investor – from the ‘Basil of Barnstaple’
6. Don’t confuse ‘low charges’ for best value. Buying ‘passive’ funds which track indices because they are cheap may seem sensible but what are you securing for your money over best value for the service you are receiving? And anyway, who chooses the passive; is it currency hedged, equally weighted or not?
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
