Accolades Yet Again


Dear Friend

Accolades Yet Again

Thank you again to our clients and the great staff team as we have once more hit the top 100 firms under New Model Adviser’s annual assessments.

We are only one of twenty-two advisory firms in the top space amongst other investment management firms too and sixth in the last twenty-five announced!

https://citywire.co.uk/new-model-adviser/news/the-top-100-2020-check-out-the-last-25-firms/a1419321

We all know how challenging and difficult the last year has been for all of us and we can only give our very best in the face of those challenges. Rudyard Kipling’s Poem ‘If’ comes very much to mind, though keeping your head when everyone around you is losing theirs is little consolation at the time.

This is being written as the US Presidential Election outcome is awaited. I ‘fear’ my clumsy son Noah’s breaking my Donald Trump mug this morning as he went to the cupboard is a portent for the result. I don’t think the damage can be mended. Helen acquired that when she visited Trump Tower a few years ago with some girlie friends leaving me to fend for myself. I’d just as much drink from a Joe Biden mug I guess!

Last Friday I took what I realised was the first day’s excursion with Helen since about February. We went to Nutcombe Bottom, on Exmoor, to see England’s tallest tree, a Douglas Fir and a magnificent beast it is too, amongst many others of as superb a stature and several there with greater girths. The relevance? It reminded me that despite all, that tree has grown through myriad traumas since it was planted in only 1876. Yes, we too shall still be here ‘through the other side’ and whatever the world throws at us, Covid19 as well, you and we shall continue to be here and survive and thrive into the future and we need some bigger doses of hope and memory for what the future will look like for us all. Yes, there will be tragedy and great sadness too and I appreciate that very much. One of our daughters has contracted the virus and our other (both NHS students) has a house-mate who has gone down with it but they are all young and healthy so should be fine. The world will defeat it and it will become but a memory in time and we must make sure that we plan our lives – and our finances – looking to that future and not simply as if the storm will be here for ever – it won’t. If you like trees, it is worth a visit and is very accessible for those with mobility issues too. Take the Timberscombe road from Dunster.

Value Stock

Yes, a repeat theme. However, whilst you may have read how under-valued ‘value’ stocks are compared to ‘growth’ (and with confirmation that as technology stocks have rocketed this year whilst oil majors have seen £360billion wiped from their market values), the significance of this difference has perhaps not been emphasised enough.

Clearly superstition is not the way to invest however and nor is the gambler’s ‘I am bound to win if I keep playing’ if the odds have not changed. However, there does creep-into the equation the concept of mathematical probability when we are dealing with real things, tangibles.

This is the case here. When lines such as ‘worst run for two centuries’ appear, for the lucid, rational investor it must be something which makes him sit-up and watch. Economists Eugene Fama and Kenneth French have shown that modestly priced stocks have returned more in the long-run than ten broader markets (which somewhat confounds the index-tracking zealots I suppose too).

Research by Mikhail Samonov, head of Two Centuries Investments, a quantitative fund manager, suggests the performance of ‘value’ is the worst in fact not since 1927 when this data was kept but 1826 using rougher data compiled by Yale Finance Professor William Goetzmann based upon the dividends received. On this basis, value stocks have underperformed by a colossal 64% from their peak in 2007 and exceeding the last worst record of 59% from the late nineteenth century to the 1904 trough.

The reassurance with most value is that at the end of the day, there is still something tangible and of ‘value’ there. With the most excitable growth stocks, often when the fan is hit… there is nothing there at all as there was ‘nothing’ there in the beginning; that’s not quite the tech bubble now but so much is predicated on hype and hope rather than reality – at least to the degree of the size of the excessive valuations being seen

Claims Managers

As we have said on innumerable occasions, if you have a claim against bad advice or a liquidation of a previous financial provider, please do NOT use one of the parasitic claims’ chasing firms which takes a colossal percentage of your rightfully due compensation. Readers will know that we offer a free service to guide those in that unfortunate position and we shall direct you to the FOS or the FSCS if it is easy, which are FREE services backed by the Government. Only if you cannot deal with the matter yourself, we do offer to help formally but prefer for you to do it if you can. We don’t share your compensation though!

The Organic debacle will result in millions of pounds in compensation being paid to the afflicted investors. For the vast majority, the cheques are simply waiting for them to claim at the FSCS – nothing more, nothing less. We have guided investors to reclaim over seven figures of compensation already. For those formal cases where we have been instructed, perhaps where it was more complicated, our typical charge has been around £380 plus VAT as they are all similar. Of these cases of which we are aware specifically of the amounts awarded, to date the compensation has totalled £861,827.62. Our total fees for the twenty-seven clients who appointed us formally (of the 1,600 in total who lost from this)? £8,349.60 – that is less than 3% versus the worse claims’ chaser which has taken an immoral 48%. If you are one of those still to do yours, contact us for guidance right away. Had we been like them, we would have taken over £340,000 plus VAT. Who do you want on your side? See us being mentioned in the Financial Times’ sister magazine, taking the whole front cover yesterday:-

https://www.ftadviser.com/regulation/2020/11/05/calls-for-cmc-reform-as-client-faces-11k-charge/

Debt Companies

As predicted, another one of our debt companies which we have been buying (basically portfolios of loans secured against assets) has decided to throw in the towel. Its shares have rallied from the 74p level to 86.5p on the few days after the announcement (17%) as the Fund has announced it plans to close-down in the next couple of years as its loans mature. So the projection is between 7-8%pa interest for those two years and 15% more capital appreciation (so say another 7.5%pa) as we are repaid our investment. It all helps and especially if it is from defensive assets. Well done participating clients! Their shares had been down as low as 64p only months ago.

https://citywire.co.uk/investment-trust-insider/news/overlooked-longbow-leaps-16-on-surprise-move-to-wind-up-7-yielding-loan-fund/a1421350

Curiously I used this exact example opportunity (and in these missives to you!) only a month ago to explain to an investor why so many such opportunities exist in our strategies at the moment. However, rather than keep his recently acquired investment in it, he decided to encash his exposure to this and other similar ones because of their performance. As I said before, there are still sellers at the 86.5p level and if they bought this Fund at the launch (we didn’t) then they have still ‘lost’ 13.5p from the £1 they paid so it is harder for them to reconcile that (just less loss I suppose)… however, that is just our opportunity for our clients going forwards but clearly it wasn’t for him so he will miss-out – a shame.

Another of our larger holdings, Pollen Street as was called and now ‘Alternative Credit Investments’, has also succumbed to a bid as long awaited – but still at a premium to the trading price – I was tipping these in the spring when they fell to £4.50 so the latest offer of £8.70 (and interest dividends meantime) is a great improvement on that level. Sadly though, this means these high income animals are disappearing slowly and the special bonus opportunity for us for buying now from distressed sellers alike! However, there are still a few we are buying with new client funds! It’s not too late if you want to join them.

Scams Again

Please just be wary – no caller will be able to ‘cut-off your internet’ whatever they threaten and Microsoft or BT don’t ring to access your computer… The Telephone Preference service doesn’t ring speculatively to try to sell you a service to stop calls like their own. Regulated investment entities are barred by law from cold-calling you to try to sell you investments, so don’t fall for their scams either. The bank doesn’t ring you to seek your consent to help catch scammers who ‘have had access to your account’ either.

And please, if you are never sure, politely hang-up and ring us to discuss it – we’ll gladly oblige and without charge – anything we can do to help protect our clients and prospective clients is something we gladly provide. It is part of the security bubble with which we try to help surround all our clients and especially the more vulnerable.

Risk Warning

Stock market investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.

To remind you, why do I send out occasional emails? Because everyone can save money. We have no connection with any companies mentioned and you have to make your own contacts and satisfy your own enquiries. What is in it for us? If we can prove that we are knowledgeable and that our service and advice have good value, then you might contact us for professional financial planning and investment help. You don’t have to do that though and there’s no charge for emails. If simply they save you money, then accept them with our compliments! However, you’ll know where we are!

If you have any queries of any form or indeed any subjects you think I could include, please contact me. I also refer you to our website www.miltonpj.net. We celebrate our 35th anniversary in 2020 and have been publishing a well-respected independent column in the local Paper for most of that time and free client newsletters as well.

Do not forget however the usual caveats – this is not ‘advice’ and you are encouraged to seek that before embarking upon any financial route involving investments, etc.

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