One secret of success in life is for a man to be ready for his opportunity when it comes. (Disraeli).

I wonder if Boris Johnson is feeling that his opportunity has now come as he picks up the reins from Mrs May. He has got quite some task to lead the country through this Brexit ordeal, and towards a socially acceptable, and economically flourishing future.

I guess it is excusable if he likens his own situation to that of Winston Churchill at the start of the Second World War. Certainly, in one sense, with politics as it has now become it must be more difficult today to tell friend from foe. It’s going to be interesting to see his cabinet selection and then to see how long that holds together as negotiations with the EU hot up.

Here at Saltydog it has become vital that we do not get diverted away from following the numbers and sector performance as we move towards the 31st October.

The following are some of the thoughts, and distractions, that are rock and rolling around my cranium at the moment; unfortunately, without any answers.

  • Will the EU wise up and admit to the internal economic pain that they will suffer from a no-deal Brexit, and soften their approach?
  • The EU has many other internal problems, both financial and political, to contend with at the moment. Another reason to soften their approach and make Brexit go away.
  • The UK stock market has not yet taken a dive at the thought of a Boris government intent on leaving with or without a deal. The question is why?
  • Does this mean that leaving without a deal will not be as harmful as the “Fear campaign and Hammond” are leading us to believe?
  • How much of an attraction to the EU, if at all, are the billions of euros offered as a divorce settlement for a trade deal?
  • Sterling has recently weakened against most currencies, but not down to the level immediately after the referendum. Does this mean that the markets believe a favourable solution to Brexit is possibly on the horizon with a Boris led government? Otherwise, why has it not fallen further?

The above are all questions to which today do not have a definite answer.

We should consider the consequences of the effect on Sterling of a successful outcome to the negotiations. One would expect it to rise in value, thereby impacting adversely on all funds in foreign denominated currencies. Bad news for many of today’s investments in Technology, U.S. and Global sectors.

This being the case it is probably the time for moving into reverse and re-examining the U.K. sectors.

A Brexit deal might liven up the inflow of inward investment from abroad. Perhaps car companies and financial houses might be more inclined to stay, thereby producing a knock-on effect on employment and a growth in the country’s technical skills.

Fingers crossed, we should be able to track these movements using our numbers and graphs. Then perhaps it will be “toe in the water” time for UK smaller and mid-cap funds.

Conversely, if the country falls out of bed and we leave without a Brexit deal, then our existing investments should continue to thrive as Sterling falls further in value, thereby boosting the worth of foreign currency denominated funds. I cannot see that a Brexit rout will affect the economies of the USA, China and the rest of the world outside of the European Union. It is going to be interesting to see whether a Boris led country will make the changes to taxes, infrastructure spend, education and to the NHS, which have all been indicated in the last few weeks.

As Robert Kennedy said, “We live in interesting times.”

Best wishes and good investing,

Douglas.

Founder & Chairman

‘Hello Vietnam’

Over the last five years I have visited my younger brother in Vietnam three times. He is a doctor, and lives very comfortably with his son, Vietnamese daughter-in-law and three-year-old grand-daughter in Ho Chi Min City. The son is a teacher and the daughter-in-law runs her own business. I mention all of this because when I visit, it gives me an insight as to how the economy and life in general is progressing. To get around in H.C.M.C. you need a scooter and there are thousands and thousands of them, not cars but scooters! A noticeable change from my visit two years ago is that these scooters are being upgraded. Yes, they do still carry the whole family and some livestock, but with more security and in more comfort.

Another observation is about schooling and its importance to Vietnamese parents. Rose, now that she is three years old, spends a full day at school and her education is the family’s top priority. It is not free, but the costs are the first on the list in their budget. Not surprisingly she is speaking both English and Vietnamese and will probably acquire a third language when she is older.

I mention this not because it is exceptional, but because it is the norm. This is a very young race of people who are intent on making their mark on first the Asian, and in future on the world stage. The government spends around 5% of its GDP to provide educational facilities, and this is a high percentage when compared with much of the rest of the world.

Vietnam is intent on becoming the breadbasket for the Asian world. It has a climate that allows parts of the country to produce three crops of rice per year, a lot of which it exports. It is also the largest producer of coffee in the world which is also exported. Its biggest markets are China and America, and it recently has signed a trading agreement with the European Union.

It is, however, in the production of electronic components that it really excels, and many Japanese, American and Chinese companies outsource their production to Vietnam. Foreign Direct Investment has risen to more than $22 trillion per annum after five years of ever-increasing inward investment. It would be nice to think that the UK was capable of attracting this sort of investment after Brexit is finally completed!

All of the above would seem to me, to be a very good reason for looking for the fund that is invested fully in Vietnam. I have said before that this fund exists in the form of the VinaCapital Vietnam Opportunity Fund (VOF), and I have held this fund since my first visit in 2016.

  • October 2016 price 238p…..October 2017 297p an annual gain of 24%
  • October 2017 price 297p…..October 2018 344p an annual gain of 16%
  • Today`s price is 341p – down on last October, but a small gain on the year to date.

I believe that the VinaCapital price has been held back for one reason only, and that reason is the tariff war between the USA and China. Unlike Chinese fund prices it has not fallen back, but its rise has been temporarily put on hold.

A country with a stable economy, low inflation, and an average GDP per person of less than a third of that of China has plenty of room to continue its expansion. No wonder my brother is witnessing an ever-increasing growth in the middle-classes.

I am adding to my holding in this fund on the expectation that the tariff wars will come to a positive conclusion and Vietnam’s trade with China and the USA will return to normal. In addition, it will enjoy an increase in trade with the European Union, whilst internal consumption will continue to grow to support the aspirations of its acquisitive population.

So why not “Hello Vietnam”.

Best wishes and good investing,

Douglas.

Founder & Chairman

Politicians are like diapers, they need changing frequently, and for the same reason

“Politicians are like diapers, they need changing frequently, and for the same reason”. (Although often attributed to Mark Twain, he probably didn’t say it but would have agreed!)

This week the media has been full of Conservative candidates being questioned on their ability to lead the country through a successful Brexit, and also on their suitability to be the United Kingdom’s next Prime Minister. Inevitably they use the word “realistic” to describe their own approach to our problems. Now in my experience, when someone says that they are going to make a realistic decision, you immediately understand that they are likely to make a bad one!

“Where is my lucky scalpel” are not the last words you want to hear as you fade into unconsciousness before a major operation. In a similar fashion, hearing from Bankers that the financial crisis is over, or from Politicians that a no-deal Brexit will be easily managed, is just as disturbing. In the first case the surgeon was not serious, and he found it amusing. Unfortunately, in the second case the Bankers and Politicians are serious and are set to risk the country’s financial well-being and our livelihoods yet again. I liken their policies to army snipers – they are well camouflaged and difficult to see!

I do not intend to dwell on the Neil Woodford and Hargreaves Lansdown drama that is playing out at the moment. This is well covered by the media and was an accident waiting to happen. To a Saltydog subscriber, who is presented on a weekly basis with actual fund and sector performance numbers, this fall from grace is not unexpected. The Hargreaves Lansdown and Woodford funds have not performed and simply do not appear in our numbers. Surely this is another nail in the coffin for a blind “buy and hold” philosophy and “three cheers” for an active informed momentum approach to your portfolio. I will say that the directors of Hargreaves Lansdown must be incredibly lucky people, because without any apparent pre-knowledge they were able to realize some of their holdings a few weeks before this implosion took place. Shame that the public who were invested in these funds did not get the opportunity to use the same crystal ball!

A few weeks ago I wrote about the practice of grandparents and parents gifting money into their offspring’s ISAs. This is a good way to reduce Inheritance Tax for the giver and builds a tax-free pot of money for the recipient. One of our subscribers then emailed me to ask why had I not mentioned gifting the money into a SIPP, as the government will then add 25% to the donation. The answer, I am afraid, was that it had not occurred to me. He makes a very good point.

You are allowed to donate £2,880 per annum which the government then turns into £3,660. Assuming that you could achieve a return of 8% on the money over a continuous investment period of twelve years the final amount for the ISA is £59,000 and for the SIPP it is £73,783. A significant difference. Of course the SIPP has to be held until the owner is 55 years old (shortly to become 57 years). ISAs can be accessed immediately, although Junior ISAs can’t be touched until the child becomes an adult (at 18).

At the same time I touched on the subject of producing numbers on a quarterly basis which would be relevant to the person who only wanted to review their portfolio`s performance on a less regular basis. This makes it a sort of cross between “buy and hold” and a Saltydog active investing approach. We wanted to know which funds, if any, produced a 5% gain every six months during the last three years. The results are shown again in the table below (if the text is too small, you might be better off downloading the table here). Amazingly six funds did manage to do exactly that, and thirty-eight more achieved it five times. It demonstrates clearly the performing sectors and managers. We believe this is very useful, and Richard is continuing to refine the algorithm. In the future it will become a regular feature in our newsletter.
june19_b1

june19_b2

june19_b3

june19_b4

 

A generation goes and a generation comes but the earth remains for ever. (Ecclesiastes 1:4-10)

The above may have been true a few thousand years ago, but listening to David Attenborough’s recent programmes it may well be the case that the world will last forever, but perhaps without people!

Financially, World Debt would seem to be the latest scare words, as if Brexit and World Trade were not enough to worry about. American debt is said to be going to reach $22 trillion, increasing at the rate of $4 trillion per year by the end of a second Trump “sentence”. This USA Saviour or Anti-Christ (depending on your view point), seems totally unconcerned and believes his economy can ride this out, so not to worry. Now whether this is true or not, I am not skilled enough to say one way or the other, but this subject receives lots of adverse comment and seems to feature more and more in financial commentary. It is one of the latest things being used to frighten investors and it certainly frightens me.

There is however another debt ceiling that really concerns me, and that is the planet’s ability to feed its ever growing population. I recently read that today the planet has in excess of 3 billion acres of productive land, which would feed some 9 billion people if they did not eat meat. American style food consumption however reduces this number to below 5 billion, and introduces food poverty for many. Greed in the developed world, and the aspirations and lack of population control in the developing and emerging world would seem like a “rock coming up against a hard place”. With or without a warming world caused by green house gases, we would seem to have an insurmountable problem. I wonder why action on population control does not feature as highly as changes to diet and carbon consumption?

This subject is fresh in my mind as I have just returned from a holiday in Tasmania. An Australian island state to the south of the mainland. What a phenomenal place from which to watch the antics of the rest of the world. It is 35% of the size of the UK with a population of 500,000 of which nearly half live in the capital of Hobart. The island is an agriculturally secure paradise with the bulk of the land untouched and supporting many incredible animals, birds and primeval forests. When things get tough for the rest of the world it would not be a bad place to end up!

Whilst away for the six weeks, thanks to modern technology and my wife’s tablet I was able to stay in touch with Richard and the Saltydog numbers. This was fortunate because I was able to see the continuing rise in the UK, China and Technology sectors. I therefore “phoned home” and increased my holdings in Fidelity Global Technology, Baillie Gifford Greater China, and Baillie Gifford UK Equity Alpha funds. Upon my return last week I continued this action with other funds in these same sectors thereby greatly reducing my cash holdings.

It is interesting to look at last week’s numbers and graphs which show nice fund gains of between 13% and 23% in these sectors over the last 26 weeks.

may1

may2

may3

I wonder whether they still have sufficient oxygen to continue this upward trend into the summer. Only time will answer that question. Perhaps as some people are suggesting we might be going to experience a “melt up”. Certainly the market-falls in the last quarter of 2018 were overdone, and there must be a lot of money in the big boys’ pockets waiting to be re-invested. Also the Banks would seem to be backing off from monetary tightening with some countries still considering more Quantitative Easing. We could be lucky, but who knows where it will go? I will just continue to watch the numbers.

I finish with this observation. In Australia there are a group of people that have been labelled “Grey Nomads”. These are pensioners who have sold up, and now with their motorhomes and caravans endlessly circle the perimeter of Australia living on their pensions. They appear to lead a totally carefree life. The men are immediately recognisable as they do not shave or cut their hair. Mind you upon reflection, nor do the women!

Best wishes and good investing,

Douglas.

Founder & Chairman

Fanny’s rest stop sign reads, “Eat here and get gas”.

Does this remind you of any present location? Perhaps the Houses of Parliament at the moment?

I am fortunate enough to be sitting in the sun on the other side of the world, able to quietly puzzle over questions that have concerned me in the past. One of which is whether there are some funds where the manager has such a good handle on his investments, that he is worth sitting with through the thick and thin of the market machinations. My instinct has always been that this cannot be the correct course of action. A falling tide takes all boats down with it, so why stay invested?  Some funds however definitely recover quicker than others, and even with up-to-date sector and fund performance numbers, there is no certainty when making investment decisions. So, for the future, rather than bailing out completely to re-invest back in when the storm passes, maybe I should only sell half.

There is one fund that for me is worth this experiment, and that is Fundsmith Equity. I have been in and out of this fund over the last dozen years like a ferret down a rabbit hole. Unfortunately I do not have sufficient past information, or the will, to make a comparison between what I gained by moving, against the result from staying. I just know that over the years, Fundsmith has been kind to me.

There are another two funds that constantly receive positive press from the fund platforms and the financial media and these are Linsell Train UK Equity and Woodford Equity. Below you can see the three funds graphed over one year and five years.

sdi1

sdi2

Lindsell Train is reasonable, and its Global Equity fund is better. Woodford however begs questions about the people and financial organisations which push this fund onto the innocent DIY investor. Surely this sort of action should merit a public spanking from the F.C.A., especially if the pushers are making gains from promoting these funds?

Please can we have more openness and visibility.

Best wishes and good investing,

Douglas.

Founder & Chairman

The only function of economic forecasting is to make astrology look respectable.

In December I underwent a TEVAR operation for acute aortic syndrome. The wonderful N.H.S. literally saved my life by successfully inserting a five inch metal mesh graft inside the aorta above and behind the heart to support the tear. Three months on, as part of my six month recovery, my wife and I are going away for six weeks to Dubai to see a nephew, Vietnam to see a brother, Perth to see a daughter, and then on to Tasmania to explore the ancient forests and explore the places I last visited sixty years ago.

This means that we will be away as Brexit reaches a conclusion, or possibly does not, if the can is simply kicked further down the road. The whole saga now has the feeling of having my chest hairs removed by a chimp equipped with tweezers! It is painful, and does not seem to be going anywhere. Nevertheless, as I am going away it is necessary to consider what I should do with my portfolios. A soft Brexit or no Brexit would likely result in a strengthening of Sterling with an adverse effect on Dollar and foreign currency investments. A WTO no deal hard Brexit would produce the opposite.

As I still hold a reasonably large percentage of my portfolios in cash I have decided not to make any changes. The investments I do have are basically split between UK, China, Health and Technology funds. The first will not be affected either way by sterling movements but the latter three most certainly will be. My reason for keeping these unchanged is simply that I believe they will be the strong sectors in the coming year and the decades that follow. So I might lose in the short term depending on the Brexit result, but they should quickly recover in the future.

I also feel quite bullish about the future of the markets in general and the UK in particular. The latter part of 2018 saw quite a major world-wide correction, and the financial commentators were full of gloom and doom. However, perhaps European economic weakness, China’s hard-landing, Federal interest rate movements, the ending of Q.E., and Brexit dread are being overplayed. It would be unusual to have two successive down years, normally there is a V-shaped pattern to the markets as they recover after a correction. Also there was an enormous amount of money withdrawn from mutual funds in 2018 which will now be looking for a home. Similarly, world trade continues to expand as money supply and global lending continue to finance investment. So who knows, maybe 2019 will be a year of recovery.

Recent reports would suggest that the UK, even with the Brexit shambles, is a popular destination for a considerable amount of inward investment from Banks, Pension Funds, Hedge Funds and Industry in general. Apparently the UK is still seen as a place of well-managed capitalism and democracy, and billions of pounds of foreign money is being invested for the future. Our Universities continue to be designated as some of the best in the world and foreign students hopefully return home with Anglophile views. We also have world-beating centres of technological, medical and pharmaceutical excellence to carry our country forward.

UK stocks and funds are undervalued at the moment and must be due for a lift for the reasons I have discussed above. In fact it should be a double whammy, with World recovery, plus a resolution of Brexit, – whichever way that biscuit crumbles. Therefore I intend to leave my UK investments as they are, and will probably “phone home” to increase them, when the result becomes known.

Interesting times!

Best wishes and good investing,

Douglas.

Founder & Chairman

Doubt is an uncomfortable position but certainty is a ridiculous one. (Voltaire)

The year 2018 has certainly been my worst investment year since I started controlling my own portfolio some fifteen years ago. It was a fine start for the first eight months, on the back of the performance of the dollar-based funds, technology funds and Vietnam, but then it all turned South. Fortunately I headed for cash and gold funds in the last quarter, but in hindsight I could have been more speedy and taken larger steps. At the end of the day I have been left with a small annual profit of 2% down from an expected 8%-12%. No question, a very disappointing year.

The big question however is what to expect from 2019? At the moment there are no clear signs as to which direction it will move, be it down or up. If it moves up, one has to be careful that it is not Mr Market coaxing everybody back into the pool before he throws in the toaster!

The graph below clearly shows that during the last financial crisis there were a number of false starts before the recovery really got underway. The decision as to when to re-invest is the generator of goose bumps, and can only be taken by you looking at the best numerical information available at the time. It is only natural to try and anticipate the direction of the market by looking at, and examining, the potential investment opportunities and pitfalls – the difficulty will be in staying your hand before you have finite confirmation. This is no easy decision, and for my part I will take Jesse Livermore’s advice, and when I do decide to start reinvesting I will take small steps first, whilst the direction of travel becomes certain.

b5Looking at the downside into 2019 I see that my Four Horsemen of the Investors Apocalypse are in obvious plain sight. They are Brexit, Trump, Corbyn and a potential EU financial stumble. I can see little point about discussing these, as like me you are probably bored to the back teeth with the endless rambling in the media, none of which can be trusted as meaningful or useful. My own tongue-in-cheek take on the four is – Mrs May is like a fly looking for a windscreen – Mr Trump will continue to frustrate the political world whilst lining his family’s pockets – Mr Corbyn probably wishes he was not in his present role, and hopes that he does not become Prime Minister only to be forced to reveal the paucity of his communist economics – Mrs Merkel, who runs the EU for the benefit of Germany is hoping that her retirement comes before the finances of the EU start to collapse!

Looking to the upside is more difficult. I can see no obvious standout positives. I do wonder whether China and Trump will reduce their differences so that combined with China’s major spend on railways and infrastructure in general, it might kick start a recovery in this market. If this were to happen, then Asian Emerging markets would also pick up and follow suit. Wishful thinking perhaps, but if it did occur then I would reinvest, especially into Vietnam.

I also wonder how long the dollar will stay strong and why the American markets have not reflected the increase in tax take, the dramatic fall in unemployment and the significant increase in labour wage rates. Perhaps when the falls in the FAANG values and the rises in the FED interest rates have been fully absorbed, this will be reflected in a more positive future market price. I guess that Brexit might produce some interesting opportunities for the future, especially should the exit result in some form of WTO. Like it or not, this would certainly produce a switch back ride for both Sterling and the UK markets.

Well, what can we expect from 2019? It is certainly going to be an interesting year and hopefully if there is to be a general recovery, then my cash must be used to join in with these gains. I do believe in being an optimist when looking at my investments and to have faith that tomorrow will be better than today. Surely after the last quarter of 2018 that is not such a big ask!

Best wishes and good investing,

Douglas.

Why did they stop making the Land Rover Defender?

This time last week I wrote about electric cars, Moore’s Law and the Kardashev scale.

It’s always great to hear from our members and I look forward to the comments on the ‘thoughts’ that I send out – thank you, please keep them coming.

Below is one reply that I particularly enjoyed and thought that I would share with you …

Thanks for your thoughts, Douglas.

They call to my mind the question “Why did they stop making the Land Rover Defender?”; the answer to which we might think is “Lack of demand from buyers” – not true – or maybe “Old design of engine not good enough for EU emissions rules” – no, it wasn’t that either.

For a while it has been on my mind that most car miles are travelled with a single person in the car – the driver. So, a person weighing probably less than 100kg schleps around approximately 1000kg of metal with him to get from A to B. This is insanely inefficient.

My take on personal transport in the future is a series of what ifs.

What if people demand smaller, lighter vehicles to get around in? Like this little beauty.

b2(A 2-parent, 2-child family would need two of these little things, but so what? There are loads of two-car families around the UK as it is.)

What if we start taking exercise more seriously (or governments incentivise their people to do so) and, for short journeys, opt for something like the (electrically-assisted) Podbike below?
b3

Or something between the two? Current legislation defines three-wheelers as motorcycles and there is no requirement for fairings to offer crash-protection, so even a fully-enclosing fairing would not add much weight to the thing. Perhaps we could have a fully-faired three-wheel ‘motorcycle’ weighing 250kg ferrying two people around in the dry.

I read recently that the whole planet’s current energy requirements could be met by harnessing the energy from the Sun falling on a small percentage of the Earth’s land area (For example various deserts within, say, 30 degrees of the Equator); so, what if humanity got their act together to exploit the world’s deserts for solar energy?

Finally, the reason the Defender was canned was because it was deemed by the EC to be ‘too solid’. Other supposedly ‘safe’ cars with excellent NCAP ratings were simply obliterated in crash tests with the Defender! What if this marks the high tide mark in the decades-long trend of ever-heavier cars in the quest for ever-safer cars? What if the authorities accept the need for lighter vehicles, requiring less energy to propel them? And, to address safety concerns arising therefrom, we limit vehicles’ ability to hare around at crazy speeds? Given the right incentives, people would respond favourably to such developments.

When all is said and done, I think your conclusion is correct: tech funds should continue to do well for decades to come.

Wishing you a rewarding 2019,

Mark

May you have ten minutes in heaven before the devil knows you have gone.

That is how I feel about Brexit and the stock markets. It would be marvellous to have a period of time without this avalanche of informed opinions, false news and continued market volatility. Time to gather one’s senses. Mind you at the moment, holding such a large percentage of my portfolios in cash, a major bear market would come in very handy. Clear the air and make a nice start again time.

I accept that the finance industry advocates of “hold and grit your teeth” might be taking a different view. Still this is the advice they give to you about what to do with your money. I wonder what they do with their own? We will never know!

I see that our government, amongst others, are requiring that all cars on our roads should be electric by 2050. This sounds a long way away, and one can imagine that our car manufacturers left to their own devices (fat chance) would manage to convert their manufacturing processes to achieve this target. I could also imagine that governments after many cock-ups, overspends and false dawns might have a system in place to satisfy recharge demand. What I struggle with is where the power, the electricity, is going to come from?

It is said that in the UK, we will have to generate an additional 30% more juice just to keep these cars moving. It also assumes that the public will have enough income to finance this change to their vehicles. These are both big questions with “nebulous” solutions. Tidal, solar, and wind will not cut the mustard. It makes no sense to increase coal and oil generation as that defeats the green objective. So for today, and for the near future, that leaves us I believe with nuclear, but possibly not as we know it.

In the late sixties Gordon Moore stated ‘the number of transistors in a chip will approximately double every 24 months’. We now have many other areas of technology that are being subjected to such expansion of knowledge and practical development. One of which is energy generation in all its forms but particularly solar. So perhaps electric cars by 2050 may not be so far-fetched. Desalination plants which run for free would also be a fairly attractive proposition.

Around the same time as the introduction of Moore’s Law, the Kardashev scale was formulated. This is a new name to me – I had thought that this was a measure that American women used when discussing the size of their bottoms!

Apparently not, Nikolai Kardashev was a Russian astrophysicist who developed the scale as a way of measuring a civilization’s technological advancement based upon how much usable energy it has at its disposal.

  • A type 1 civilisation can use and store all of the energy available on its planet – this would give us more than 100,000 times the amount that we currently produce.
  • A type 2 civilisation is able to harness all the energy from its closest star, and this does mean “all” the energy that the star produces.
  • A type 3 civilisation can harness the power of the entire galaxy.

This really is Dan Dare and Mekon stuff and would almost certainly make Elon Musk cough, but who knows what the next centuries will bring when you look at the progress of the last fifty years.

It does leave me very confident that technology companies and funds will still be a strong source of growth and income in the years to come, when the present upsets have passed through the system. For sure, there will be recoveries in the UK, China and the Emerging Markets, and other sectors to take advantage of, as and when they happen, but technology should surely be the “banker”.

I wish you a very Merry Christmas and best wishes for 2019.

Douglas.

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.

conclusion

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,

Douglas.