We have done very well from ex-star investment manager Mr Neil Woodford’s fallout as the good was dumped with the bad and ugly. We’re still picking-up some of the fire-sold cheap stocks. Schroders Public Private Trust (the old Woodford Patient Capital Trust) was one we chased to the bottom and now have a meaningful stake and also IP Group – each has a chunk of Oxford Nanopore which is floating soon, so see what has happened to the values of our trusts. Remember the adage – buy what everyone hates and sell what everyone loves – not just for the sake of it but keep that adage in mind when you are making your decisions on individual investments as much as whole asset classes too. There are other good stocks like Legal & General too with an income yield of 6.3%pa and sustainable – we don’t have any (yet?) but can you have too much of such a good thing (not that I especially like its model but it’s too cheap and relatively safe. It is still below its February 2020 high and I remember buying these at 29p in the depths of 2009!)?
Did you know that the Chinese shrewdly have been buying UK stocks. Sunday Telegraph analysis shows that the People’s Bank owns £12.4billion of our bigger companies with most emphasis on energy (and oils) and materials. This is part of its Foreign Currency reserves allegedly and a wise move – something I encouraged our lot to think about doing when the markets were in the depths but did they listen… it’s wise to have such assets to offset the National Debt, especially when the cost of borrowing is so cheap for it. Apparently, China has few US entries…and clearly it is comfortable accumulating fossil fuel company assets – no doubt buying these shares very cheaply from all those naïve investors who don’t understand what ‘not holding them’ actually means (and that doesn’t mean ‘doing good’). Just imagine if China ends-up owning some of our giants and relocating them – what controls can the rest of the World impose on them as is possible on UK quoted producers now? Anyway, I digress…
And interest rates? There is still so much cash sloshing around. Danone has raised the lowest yield hybrid bond yet raising E1billion in a ‘Social Bond’ (hmmmm) at zero percent and you’ll have your money back in 2025. At the same time, Eli Lilly, the US pharmaceutical company, raised forty year money on – wait for it – 1.375%pa. Yip – both were lapped-up as they help meet liability models for ‘investing’ – how foolish!
