UK investment blog and feed aggregator. Last updated: 2012-01-28 05:10:27
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Important: This article is not a recommendation to buy or sell shares in Aberforth Smaller Companies Trust. I am a private investor, storing and sharing my notes. Please read my disclaimer.
Name: Aberforth Smaller Companies Trust
Ticker: ASL
Business: Investment trust
More: Trustnet / Google Finance
Official site: Caledonia Investments
Many active stock pickers spend their days trawling in the lower reaches of the index, searching for small cap bargains to boost their returns.
As we’ve written many times on Monevator, most of these would-be Mini Buffetts will fail to beat the index. Stock picking is immensely hard (although ...
RBS’s award of a £963,000 bonus to Stephen Hester has provoked anger. My chart shows one reason why. In the last 12 months, RBS’s share price has underperformed the market; it has also underperformed two of its three main peers - HSBC and Barclays but not Lloyds. Insofar as Hester’s job is to raise the value of RBS for the tax-payer, he has failed in the last 12 months.
But is the share price the relevant measure of performance?
In one powerful sense, yes. A share price assesses the overall value of the firm. It is (almost ...
There are more credit card products on the market than ever before.
The choice can be confusing and understanding the terminology can require at least A-level Finance qualifications
Eurozone monetary statistics for December confirm that banks have shifted from selling to buying government bonds in response to the ECB’s interest rate cuts and liquidity injections. However, the positive monetary impact of these purchases, and the ECB’s own buying via its securities markets programme, has been offset by a fall in private sector lending.
Banks bought €5.1 billion of euro-denominated government bonds in December after an upwardly-revised €4.6 billion in November – see first chart. The sums are small relative to cumulative sales of €57.5 billion over the prior four months, and to a €267 ...
Whatever your reason for buying abroad there are some basics that need to be covered. A family retreat or holiday home in the sun, a retirement home, a rent producing investment or an upmarket city center crash pad the issues are similar.
The good news is that in the UK you are able to benefit from the National Health Service and our welfare state.
The bad news is that there are some reasons you may still wish to insure your health.
A quick search of the internet offers hundreds of ideas for items under £5, pointless services for £5, even great date ideas if you’re on a budget (usually within the £5-£10 range).
Image by: andrewrennie via Flickr
While the internet is often a useful and informative tool, there are many websites offering a laugh or a roll of the eyes just as often.
Over at fivesquids.co.uk, members ...
The US Conference Board has overhauled its leading indicator index, making changes to four of the 10 components. The new version has performed more weakly in recent years and over the last 12 months – see chart. It has recovered, however, from a low in September to reach a five-month high in December.
The revision is of questionable value. The Conference Board claims that the new index is a more accurate predictor of business cycles since 1990 but its earlier performance is inferior – as the chart shows, it failed to turn down before the 1960-61 recession, in contrast to its predecessor ...
The US Conference Board has overhauled its leading indicator index, making changes to four of the 10 components. The new version has performed more weakly in recent years and over the last 12 months – see chart. It has recovered, however, from a low in September to reach a five-month high in December.
The revision is of questionable value. The Conference Board claims that the new index is a more accurate predictor of business cycles since 1990 but its earlier performance is inferior – as the chart shows, it failed to turn down before the 1960-61 recession, in contrast to its predecessor ...
Jean-Claude Mas (72) and his former chief executive Claude Couty were both arrested in South-East France earlier today. Already having been charged as part of a parallel fraud case, the two are now facing the prospect of the much more serious charges of manslaughter and involuntary injury.
No copyright applies to this image, via Wikimedia Commons
Under French law both men can be held for up to 48 hours while a judge decides whether or not to charge the pair with ...
Honeymoon over before the wedding
I’m grateful to Rijk, John Kingham and Trident for giving me something to think about as I stumbled through equipment hire company Vp’s past annual reports.
There’s a danger, voiced most succinctly by Franko, that I’ve already made my mind up about Vp, without having done all the research. Enthusiasm can tarnish analysis when I torture the facts to give me the conclusion I want (Buy! Buy! Buy!), rather than letting them speak for themselves.
I thought Vp was a stalwart masquerading as a cyclical. It may be the other way ...
Part exchange is a type of contract that allows you to trade in your home as part of the payment for your new home, avoiding the stress, costs and delays of selling.
Image by Bohman via Flickr
Housing developers Barratt Homes were pioneers in offering this service in the UK. According to the house builder the part exchange market has seen a 42% rise during the past 6 months, Barratt spokesman Patrick Law ...
Consider four issues:
1. John McDonnell objects thusly to the EU-India Free Trade Agreement:
If multi-brand retailing is suddenly and without safeguard opened up to EU retailers such as Carrefour, Metro and Tesco, 1.8 million jobs may be created, but at the cost of up to 5.7 million people working as street vendors.
But there are reasons to agree with Peter Mandelson that those 5.7 million are only “short-term losers”. Those 1.8 million new jobs will be (relatively) high productivity an high wage ones. As those workers spend their higher incomes, they’ll create new demand ...
The UK has experienced its longest post war recession, and the deepest since the Great Depression. In 2011, the recovery was disappointing, and prospects for the rest of 2012 are poor. However, the UK recovery is likely to be relatively better than the Eurozone, which retains even more serious problems. Therefore, despite the fact UK interest rates are likely to stay very low (see latest: prospects for UK Interest rates), the Pound should maintain its value against the Euro, and could increase towards the end of 2012..
The Pound will tend to ...
Global business surveys continue to surprise positively, the latest examples being the German Ifo and UK CBI manufacturing polls released today and yesterday’s Eurozone flash PMIs.
A cautionary note, however, is sounded by recent earnings revisions by equity analysts. The world revisions ratio (i.e. analyst upgrades minus downgrades as a proportion of the number of estimates) correlates with G7 PMI manufacturing new orders and fell back in January – see chart.
The suggestion is that the remaining PMIs released next week will break the run of favourable survey news. US ISM manufacturing new orders, in particular, could subside from ...
I’m intrigued by Duncan’s idea of an austerity curve. - the idea that:
cutting government spending up to a certain point leads to lower deficits but beyond a certain point, the impact of lower growth and higher unemployment means that deficits get worse as the government cuts more.
If you support the Labour party’s position of supporting small cuts but not large ones, you have to believe something like this*.
It seems to me that this is only possible if the multiplier varies with the size of cuts. For small cuts, the (negative) multiplier must be sufficiently small ...
The official first guess that GDP declined by 0.2% in the fourth quarter is within the margin of error of a flat economy. There may have been a small depressing effect on the number from a combination of mild weather, the public sector strike and one fewer working day in the quarter compared with the prior four years. (Mean temperatures in October, November and December were above long-term averages, contributing to lower electricity and gas consumption.)
GDP is estimated to have risen by only 0.9% in 2011 but there was a big drag effect from the North Sea ...
Image by: gruntzooki
United Polymers specialise in the manufacture and distribution of several types of plastics and polymers to the injection moulding industry. The company has a strong customer base in this industry and is known for its good working practices, hard working staff and attention to detail.
One of the several thermoplastics United Polymers manufactures
The company has well-established relationships with suppliers such as Polyram or TKV, world leading thermoplastic manufacturing companies. The high-end speciality grade polymers that United ...
UK public sector net borrowing excluding the temporary effects of financial interventions (PSNB ex) remains on course to hit or undershoot the OBR’s November 2011 forecast of £127 billion (revised up from £122 billion in March) despite economic weakness.
December borrowing of £13.7 billion was down from £15.9 billion a year before and £1.2 billion below the consensus forecast, according to Reuters. There was, however, an upward revision of £1.3 billion to prior months in 2011-12.
PSNB ex was £124.8 billion in calendar 2011, implying that borrowing in the first quarter of 2012 must ...
As it seems unlikely that Vince Cable’s plan to empower shareholders will greatly rein in bosses’ pay, George Monbiot is proposing a simpler alternative - a maximum wage law. I’m not sure that either proposal is good enough.
Granted, they might be. There’s an element of the arms race about bosses’ pay. It’s possible, therefore, that anything that can achieve co-ordinated control of pay will reverse this. If company A knows that company B is not paying silly money (either because of a law or shareholder activism), then it won’t do so either. The bubble thus ...
Image via eisenbahner on Flickr
If you’re plotting an escape to the sun, the many low cost airline seat sales lighting up the internet at the moment are doubtless a tempting proposition. However, before booking that cheap flight, there are a number of pointers to keep in mind to make sure you really are travelling with the best-value airline.
While budget ...
If you find the range of index funds aimed at UK investors about as appealing as snacks on a train’s buffet trolley, then take a look at the BlackRock family of trackers known as the BlackRock Collective Investment Funds (CIF).
Nestling within this series of index-hugging Unit Trusts is:
The best picks from this Blackrock range offer a useful alternative to the tasty TER troika of Vanguard, HSBC, and L ...
A classic net-net
This is the reason to hold Titon: The market has given up any prospect of recovery. The share price values its assets at 30% less than my guesstimate of their valuation in liquidation.
Disengaged investors could be right. If you look at the window handle manufacturer’s record, competition was eroding Titon’s profitability before two years of losses due to recession, and now a nascent recovery has faltered.
Faced with vertiginous charts like Titon’s you really have to believe companies can pick themselves Rocky-like from the floor before the final body blows thunder down from ...
He said that there was once a day when a kid would see a guy drive by in his Rolls-Royce and the kid’s father would say, “There goes Mr. Jenkins – look up to him. That guy works hard. That guy built a company.” But nowadays, Carolla explains, people look at the rich man and think “Why does he need that car? Let’s go up there are throw a rock at it!”
Image ...
Nick Clegg says we need a cap on benefits “not least to increase the incentives to work.” This runs into an obvious objection - that the big problem right now is not so much a lack of incentives to work but a lack of opportunities to do so. There are 2.69 million unemployed chasing 459,000 vacancies - that’s 5.85 unemployed per opening.
Prating about incentives when the big issue is the lack of demand for workers requires the sort of stupidity that doesn’t emerge unaided. It requires the help of ideology. There are several cognitive biases which ...
Bad news in perspective
Diminutive window latch and ventilator manufacturer/distributor Titon made a far from titanic £5,000 operating profit in 2011. Courtesy of interest and a tax credit, net profit actually made it into the hundreds of thousands. Just.
Last year’s paltry profit of £400,000 was an improvement from recession-induced losses, which I hoped the company might build on but, according to chairman John Anderson, the economy and competition have seen to that.
The market for window handles, hinges, and so on is moribund because the number of new houses being built is still very low ...
A post last April suggested that G7 consumer price inflation would peak in autumn 2011 and decline into 2012. Relief, however, was expected to be modest and temporary.
The forecast is on track, with annual inflation topping at 3.2% in September and down to an estimated 2.5% in December. A slowdown in commodity prices during 2011 points to a further decline in early 2012 – see first chart.
The forecast was based on the monetarist rule that money supply changes lead inflation by about two years. A smoothed measure of G7 narrow money growth rose between September 2007 and ...
Note to self: don’t just check. Think!
I must have been drunk on Monday. Drunk on the idea of adding brewer, pub and restaurant chain Greene King to the portfolio.
I was seduced, initially, by an error in Sharelockholmes’ record. The database had used the wrong figure, a higher figure, for shareholders’ funds/equity/book value (now corrected). That, and the fact Greene King is a local company of national significance. I eat and drink at Greene King establishments. Oh, and my uncle is from Bury St Edmunds, home of Greene King, and the company is as close to ...
Journalists are undoubtedly having hard time following official economic policy in Spain at the moment. The core of the problem they face is that we have a hydra headed government which speaks with many tongues. In some ways the lack of coordination can be put down to simple newness and inexperience, although it should be noted that all the principal actors were in action the last time the PP was in office, as part of the Aznar government.
On the one hand there is Luis de Guindos, the former Lehman Brothers Spain CEO, who is now economy and competitiveness minister ...
A new paper by Daniel Hausman raises an important question which conventional politics ignores: why should we satisfy people’s preferences?
Hausman’s answer is that preferences have no intrinsic value. Instead, they matter only to the extent that, under some circumstances, they reveal people’s welfare:
When people’s preferences are undistorted and largely self-interested and their beliefs are true, preference satisfaction indicates welfare. It is because preferences often indicate welfare that policy-makers should aim to satisfy preferences.
This, of course, poses the question: how we can tell when preferences are undistorted and beliefs are true?
One might think ...
The three main party leaders have all recently made speeches on capitalism. All three - though Clegg to a lesser extent - seem to be stuck in an out-dated mindset.
What I mean is that for years, politicians from the centre-right leftwards agreed that capitalism was unfair but at least delivered the goods. However, it is now questionable that it can even do the latter. The problem is not, then, simply that capitalism is predatory, irresponsible, unfair or immoral. It’s that it is inefficient too. As Faisal Islam rightly says, the party leaders just don’t see this.
Now, before the ...
This site is run by Graeme Pietersz, who also writes Moneyterms, an investment reference site.
Investment Reads is a simple feed aggregator for sites of interest to British investors. It combines the feeds published by blogs and other sites to allow you to:
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