Stuff That Interests Me

John Stepek is leaving MoneyWeek. I’ve known for a while, but as his final day was yesterday and we have just had his leaving drinks, so the implications are just sinking in. I first started writing for MoneyWeek in 2006, which means John has been my editor for 16 years. Week in week out, he’s had to plough through my twaddle. I reckon I have written at least 800 Money Mornings in that time (one Money Morning per week for 16 years), though the figure is probably closer to a thousand, as I’ve often written two per week. Plus the stuff I’ve written for the main mag. Each Money Morning averages 1,000 words, often more, so I make that close to a million words of mine that John has read, suffered and edited. What a saint.  A happy accidentI’ve been racking my brains as to a memorable and suitable present to buy him, to say thank you. Then it came to me. What more appropriate way of expressing my gratitude than through a Money Morning itself. For all

The Edinburgh Fringe Festival starts this week. It’s the world’s biggest arts festival, an event that sells more tickets than any other event in the world, with the exception of the Olympic Games.I shall be making my way up to Scotland’s capital to make my own little contribution, a new show that I haven’t finished writing yet (!), “a lecture with funny bits”, about the eternal subject that is weights and measures. Why do I say eternal?Because people have been arguing about them, and trying to impose them since forever.How French revolutionaries tried to decimalise timeThe very first legal documents we have from Ancient Mesopotamia depict rulers with the rod and ring – a yardstick and a measuring string – usually being handed to them by God, as they try and standardise measures in law. Ancient Egyptian documents, illustrations and hieroglyphs abound with similar references. Scales are prominent too.The opening words of the Bible establish our basic measures

Are the people at the top – the directors – buying or selling shares in their own company?If they are buying, that’s usually a good sign. But if they’re selling, not so good.They might be selling because they need the money for something: to buy a property for example, to pay school fees, to settle some debts.Then again, they might be selling because they don’t like the look of what’s going on.Directors’ dealings can offer telling signals as to whether insiders think the company is about to thrive or dive. That’s why so many follow them.With that in mind, I had a meeting with Joshua Saul yesterday, CEO of bullion dealer and storage company, the Pure Gold Company. He told me something that I found fascinating - similar to the value of director dealings as a potential indicator. I’d like to share that knowledge with you today.Who’s been buying bullion and why?Why are doctors queuing up to buy gold?The Pure Gold Company must now be one of Europe

I was at a dinner the other night with a buddy who is a much cleverer investor than I am. The conversation went something like this.Clever Mate: “Inflation is 10%. Rates are going to have to go to 10% to get it under control. I’m 60% in cash.”Me: “The system can’t take rates at 10%.”Clever Mate shrugs. There is an awkward silence.Clever Mate: “It will have to.”Another more awkward silence follows as I digest the implications. Do central bankers have what it takes to tackle inflation?Have today’s central bankers – the liof Jerome Powell, Christine Lagarde and Andrew Bailey – got the bottle to “do a Volcker” and put rates up to these kinds of levels? (In 1981, then-Federal Reserve chairman Paul Volcker raised the Fed Funds rate to 20%.).It’s not just the chair or the governor, of course – though they will be the ones making the announcement – but the boards behind them. To make such a decision, with such ra

Metals are not going to stop crashing until the US dollar turns.I’ve been banging on about that for some time. I don’t know when that will be. Nor does anyone. But this US dollar action feels like the parabolic blow-off that you get towards the end of bull markets, rather than the creeping disbelief you get at the beginning.I’m hearing talk of forex interventions coming. That may or may not be so. So I’m not ready to pull the trigger just yet. But… I’m closely following the price action of two metals that look remarkably cheap. They are silver and platinum. I mentioned them last week.Platinum looks cheap, regardless of what happens nextThe case for platinum, the main use of which is in catalytic converters for diesel engines, is pretty simple. You would normally expect it to trade at a 25% premium to gold. That is the historical average. But demand has been shattered since the Volkswagen emissions scandal of 2015 and the subsequent move away from diesel engin

We suggested a couple of weeks back that oil might due a hit as seemed the only sector that hadn’t been walloped and so it has turned out. Both Brent and West Texas Intermediate slid back below $100 a barrel joining metals on the downward slope. Metals have been battered even harder, of course, with silver – as often seems to be the way – leading the fall downwards. How can silver be trading below $20 an ounce? How can platinum be below $850?I’m not saying they aren’t going lower. They probably are. But there’ll come a time in the future when we’ll be wondering how on earth it was possible to buy these metals at these prices. Silver below $20. Platinum below $850. Platinum is half the price of gold!Remember when nickel went to $100k per tonne? It’s $21k now.Wheat’s at $800. It was $1,300 in March. Corn, oats, soybeans, lumber – you name it, there’s pain. Never underestimate the bust-to-boom-to-bust potential of raw mate

A week or so ago, the selling action in the stock market had grown so bad that a number of folks thought a crash was back on the cards. It started to feel like that again this week.But crashes are rare events. They don’t come along very often.The 21st century has seen two so far. That’s rather a lot by the standards of the previous century, when there were perhaps five or six in the US over the course of 100 years – 1907, 1929, 1937, 1962, 1987 and 1990. It depends how you define crash of course. You could argue there were just three. The probability is, then, that if you forecast or expect a crash, you are going to be wrong. Even the great short sellers who made fortunes during crashes – Jesse Livermore in 1929, Stanley Druckenmiller in 2008 – will tell you that 90% of their fortunes were made on the long side, especially in growth stocks. (That’s what Druckenmiller says, at least).Yet, a bit like ghosts and UFO landings, crashes make for good copy

I haven’t covered the perennial disappointment that is gold for a while, and I felt the metal is overdue some attention, so that will be the subject of today’s missive. I say perennial disappointment, because gold “should” be so much higher. In any case, it’s summer. Usually, the best time of year to buy each year is in the June to August timeframe, so perhaps it’s time to allocate some funds that way. I stress “usually”, not always. A summer low in gold is frequent enough to be noticeable, but not consistent enough to be reliable. A bit like your errant teenager’s mood swings.In terms of price, the high for the year was $2,080 per ounce – printed in March shortly after you know who invaded you know where.The low for the year was $1,780 – that came in January. We also came close to that figure in May ($1,785 was the low).And today we are meandering around the $1,820 mark, which is also where the 52-week moving average lies. That&

I keep thinking about that interview with Stanley Druckenmiller.Druckenmiller, a legend in US investing, worked with George Soros for many years, 12 of them as lead portfolio manager of Soros’s Quantum Fund, when he, among other things, spearheaded the infamous “Black Wednesday” raid on the pound in 1992 that forced the UK out of the European exchange rate mechanism (ERM). His own fund’s performance over many decades, year-in, year-out, is almost without equal.The part that really struck home with me is what he says was the key thing he learnt from Soros: “sizing”. Others might call that: how much to speculate or invest. Others: how much to risk. Others: how much of your portfolio to allocate. “Sizing is 70% to 80% of the equation. Part of the equation is seeing the investment, part of the equation is seeing myself in a good trading rhythm. It’s not whether you’re right or wrong, it’s how much you make when you’re right and how much you lose wh

I wanted to discuss the natural resources industry today – energy and mining – because I see an industry caught between a rock and a hard place. If I get a bit ranty, I apologise. But this impossible situation makes me get a little frothy at the mouth, because it is in large part so unnecessary – and not the making of the industry itself, but of idiotic policy.We, as investors, however, need to understand the binds in which businesses find themselves, so here goes.We’ll start with supply chains.Disrupted first by Covid-19, then the Ukraine War, then more lockdowns in China, supply chains are still not working as they should. You don’t need me to tell you that delays cost money. Imagine a workforce ready to go, and being paid – but without the right equipment to get started. Money is draining out of one side and nothing is coming in on the other. This is particularly punishing where capital is tight. And boy, is capital tight in mining.Then there is, as we all

I don’t listen to as many interviews and podcasts as I used to, or indeed as I should (more fool me), but this interview this week with legendary investor, Stanley Druckenmiller, happened across my desk and I highly recommend it, if you can find the time. It’s long, but well worth it.Druckenmiller founded Duquesne Capital in 1981 and closed it 2010 with some $12bn in assets. He is said to have made $260 million in 2008 alone. He was also, from 1988 to 2000, lead portfolio manager of George Soros’ Quantum Fund. (Many of the best parts of the interview regard what he learnt from Soros).There are great stories, insight and wisdom, and a great deal to learn from him.Here are some of my take-aways:In his 45 years as a chief investment officer, today’s set-up is like nothing Druckenmiller has ever seen, because the bond market is so distorted with all the central bank buying of the last 12 years. He is not sure how it pans out. Normally, if he sees a bear market, he would hide in bonds. But

Like Brexit, Trump, what a woman is, the BBC or vaccines, bitcoin has proved itself one of the battlegrounds in the ongoing culture war. Some people like it a lot. “Bitcoin fixes this” is the slogan, and bitcoin is thought to be the answer to any number of societal problems – from unaffordable housing, to government overreach, to the financial inclusion of the unbanked, the world’s poorest.There are many, however, who take the other view. It’s only used by drug dealers and money-launderers. It’s a Ponzi scheme, it can’t scale and it’s destroying the environment.The latter have been rather noisy of late. The reason? Bitcoin’s crashed. Again…Bitcoin has had a painful crash – but this isn’t that unusualLet’s start with the price. What was $67,500 back in November is now $21,000. It touched $20,000 on Monday. I make that a 70% haircut. Not good.But not so abnormal either. Bitcoin has had at least six corrections of 8

Further to last week’s piece on, “acquiring the right investment psychology” (if you missed it here is the link) I enjoyed listening to Bloomberg’s Odd Lots podcast this week with Goldman Sachs metals strategist, Nicholas Snowdon.The recent price action in metals has cast doubts in my mind as to the secular bull market. I needed gee-ing up with some bull food. I came away from the conversation wanting to buy as many metals producers as I possibly can…The outlook for copper is very bullish“By the middle of this decade, we're forecasting the largest ever deficit in the copper market,” says Nicholas Snowden of Goldman Sachs. “So just two years away from now. And by the end of the decade, the largest ever long-term deficit. It's just an impossibly tight future.”When I hear stuff like that from randos on the internet I tend to call “BS” – it’s usually sensationalising or click bait, so my instinct is to filter out. But when it’

[Warning: this is a long post, and probably not of interest to everyone, but you never know. Also it’s probably one to read rather than listen to, but some prefer the audio, so I’ve given you the choice.]As regular readers of my stuff will know, I’m of the view that a society should be designed around direct democracy and very low levels of land value tax (LVT), what Milton Friedman called “the least bad tax”. I may dream of Ancapistan, a land of no government, but the reality is that taxation of some kind, even if it be voluntary, is inevitable. There has never been a civilisation without taxation.Ideally, land value tax would replace ALL other taxes. However, if you offered me LVT in the UK and all other taxes, income tax especially, slashed to 10, 15 or even 20%, I’d bite your hand off. My friends in the countryside hate the idea, and I get angry messages about it, but the reality is that it is the owners of prime city centre real estate, the likes of the Crown, the Gro

I remember having lunch once upon a time with a fun manager of the old-school, refined Englishman variety. He rather took me aback towards the end of the meal when he started talking about this company his fund had put money into…You need faith – but you need to back that faith with something real Previously so understated, my fund manager acquaintance became wildly enthusiastic about this company, speaking with surprising zeal - and passionate volume - about cash flow and profit margins. I almost wondered if it was the same chap.“He’s fallen too much in love,” I thought. “He’s never going to be able to sell.”Then I took stock. “This is one of the most successful fund managers in the business,” I thought. “If I compare my investment success to his, well, he is clearly a lot better at it than I am. But … he’s in love with this company to the point of being delusional.”It was then that I had a bit of a lightbulb

I have an odd professional life.  I double as a financial writer and a comedian. It seems to work. I specialise in unacceptable songs. You’re bound to have stumbled across one of them at some point. Apparently, I’m Nigel Farage’s favourite comic.  I’ve just made what many would consider a comical investment. I have put more money than I care to think about into a theatrical venture on which I am almost certainly going to lose my shirt. It’s got a cast of over 50, a 15-piece orchestra and more. But I don’t care, because this is more important than money. My father, Terence Frisby, had a full and successful life. His play There’s A Girl In Soup was, for a time, the longest-running comedy in the history of the West End and a worldwide hit with runs on Broadway and across Europe (in Paris with Gérard Depardieu, in Rome with Domenico Modugno). It was made into a film with Peter Sellers and Goldie Hawn, and my father won the Writer’s Guild Award fo

Back in 2016 we learnt a new word. “Lustrum”. It means a five-year period. Given how long decades are, I can’t believe it doesn’t find more use. Even if we don’t use the word, we investors often think in terms of lustrums. Many of the investments we make are made with a three-to-five-year time horizon in mind.Which is precisely why I started using the word. We had identified a trade of the lustrum. It was oil. So how’s it doing?Oil still looks very cheap relative to most other assetsVery well, is the answer. But it hasn’t been an easy ride. At times we have really had to bury our heads in the sand. Crude was in the mid-$30s when we recommended it, but at one stage we found ourselves $60 underwater! How is that even possible, you might wonder? Well, of course, oil went negative back in 2020.But like all normal humans when presented with facts they don’t want to hear, we put our hands over our ears, shouted, “blah, blah, blah fishcakes

Back in the early 1990s comedienne Mandy Knight did a show at the Edinburgh Fringe called, “Some of my best friends are ginger”. I always thought it was an inspired title, exposing a double standard that still persists today, and it always stayed with me.Then, a few years back I presented a series for Italian TV about beauty, Senso Della Bellezza - Sense of Beauty - and we did a feature on red heads. I thought it would be a nice piece today to mine that feature and expand on it, explore the history of redheads, and thereby celebrate the unjustly mocked 1% of the global population that carry the MC1R gene.The Book of Genesis is perhaps the first book to have been written down and, in the book of Genesis we have the first celebrity redhead, and a victim of some treachery, Esau. Esau came home hungry one day after a long shift in the fields, and his brother Jacob offered him a bowl of soup, but only in exchange for something: his birthright, his first-born son status. Esau, who seems to have been a b

Not being a Fed-watcher, I have been rather slow to this particular narrative, I’m afraid, and it only really dawned on me last week as I was losing money trying to catch falling knives in the stock market.It was Zoltan Pozsar writing for Credit Suisse who switched on the lightbulb for me. He’s the new rockstar among institutional market strategists.A couple of other analysts have reached the same conclusion.It’s this: the Federal Reserve and America’s other policy-making powers that be, actually want the stock market lower…The Federal Reserve really does want to fight inflation I’ve heard so much hot air coming out of government officials’ mouths over the years that I think my mind is actually programmed now not to believe a word they say. It’s not that I’m treating what they say with a healthy dose of cynicism. I’ve reached unhealthy levels of cynicism. My default, so low is my trust, is now not only not to believe a word they say: it is

‘Due to our low tax policy . . . revenue has increased.’John James Cowperthwaite, Hong Kong Financial Secretary, 1961-71Fourteenth-century Tunisian, Ibn Khaldun, is probably the greatest philosopher of the Islamic Golden Age. In his magnum opus, The Muqaddimah, he wrote: ‘In the early stages of an empire, taxes are light in their incidence, but fetch in large revenue. As time passes and kings succeed each other, they lose their tribal habits in favour of more civilised ones. Their needs and exigencies grow . . . owing to the luxury in which they have been brought up. Hence they impose fresh taxes on their subjects . . . and sharply raise the rate of old taxes to increase their yield . . . But the effects on business of this rise in taxation make themselves felt. For businessmen are soon discouraged by the comparison of their profits with the burden of their taxes . . . Consequently, production falls off, and with it the yield of taxation.’ Never mind his own Islam, he might have been d