A conclusion is the place where you got tired of thinking.

We have all been in the situation on a night out where the people you are with want to leave, and after you have left they don’t know where to go to enjoy a better experience. You cannot return to the original venue, because they won’t let you back in without charging you more. It is your own fault, you left without a sensible back-up plan, and now you end up line-dancing when you wanted to tango, eating a kebab when you wanted steak!

If Mrs May’s Brexit negotiations are a success it leaves me wondering what would count as a failure? I admire her tenacity and how she fights on against what appears to be universal condemnation of her plans by most other MPs of all persuasions. Unfortunately this may be a case of pig-headiness rather than a considered reasoned conclusion. At the moment her plan appears to be like a corpse waiting for an autopsy. We have however been treated to the spectacle of EU democracy in action. Twenty-seven wolves and one lamb debating what to eat for dinner.

It is about time that it was explained to our politicians and media commentators that communicating poorly and acting smug is no substitute for intelligence. Instead of giving them the keys to the city it might be better to change the locks!

During the last two years, whilst the Brexit shenanigans have been taking place, it would appear that UK stocks and funds have become uninvestible. There was the golden opportunity, immediately after the referendum in 2016 when Sterling fell in value, to make considerable gains from those technology funds which were priced in dollars. It was a double whammy, tech funds going up and a 12% currency gain in addition. Even our relatively cautious Ocean Liner portfolio (which at the time was holding 30% in cash) experienced a dramatic uplift. Since then however, it has been one-way traffic downhill and billions and billions of dollars must have been withdrawn from UK stocks and funds. After all, as an international investment manager why would you gamble forward and take the risk of a no-deal Brexit, or a Corbyn government with the accompanying higher taxes and capital controls.


We as UK private investors can take a more simple approach and wait and see what actually transpires. We might get a repeat of 2016, and sterling collapses again. This would benefit funds holding assets overseas which would experience a currency gain along with any capital gains.

If Brexit turns out to be better than forecasted, then the UK businesses and funds under-priced for so long, should leap ahead. Having been immersed in UK manufacturing and exporting for more than thirty years, I am supremely confident in the ability of this country’s people and management to succeed under most circumstances. We just need to encourage more and more SMEs whilst reducing the dominance of finance and the interference of inexperienced and misguided politicians.

Best wishes and good investing,


It’s inevitable that you will lose sometimes. The trick is not to make a habit of it!

I have no mind-blowing observations to make, but then those of you who read my emails are already aware of that fact. I am not in the business of forecasting the future. I will report that the tide is coming in, but only when my feet get wet.

Stock markets, as you can see from the table below, are showing drops of anything between 3% and 27% from their highs earlier this year. The only important question to ask is which way will they move now?


These corrections occur at regular intervals, and normally after such an event one watches and waits for the signs of a recovery. Not so this time. World debt, Mr Trump and Brexit all combine together to make me feel that there is more pain to come. More a time for asbestos underwear than sunshades!

As a subscriber to Saltydog, I hope that you have followed the direction of our own portfolios and like me are sitting on large percentages of cash. When the world changes then you can use this cash to move into the new progressing sectors, leaving behind those areas that are failing. It is not much fun at the moment making no gain from the cash, but it is surely better than losing.

It would be worse to be fully invested all through a crash and then try to recover with half your initial investment already lost when the markets start to pick up. That would be like starting a game of strip poker already naked. Rather like the UK Brexit negotiations!

I recently read an interesting observation about the American economy. We are all aware that the Fed intends to continue to lift interest rates throughout next year with the possibility that US Bond rates would follow on and could reach 4%. That alone would possibly mark the end of the meteoric rise of growth stocks such as the FAANG businesses. These companies are due a correction and that could be the banana skin that sets it off. The other interesting observation was that the FED has stopped doing Q.E. and is set to recover much of these monies. What I had not been aware of was that it was the intention of the American government to spend more than $700billion on defence with this money aimed at American manufacturing and development companies. This is simply Q.E. in a different guise. Less being purchased abroad, and in particular from China. It is a sad thought but perhaps this, along with the trade wars already launched, means America is already involved in a second cold war. This time with China!

On a lighter note I read a paragraph written by Merryn Somerset Webb which gives an explanation as to why Momentum Investing, although successful, does not receive much press. She wrote, “Fund management companies are mostly paid a percentage of the assets they have under management. In the main, it is easier to get in new assets by getting a good marketing manager to tell an interesting stock market story to investors, than it is to grow by performing well. After all, what kind of marketing story would include the words “we just buy the stuff that is going up and sell that which is going down.” Spot on Merryn!

Best wishes and good investing,