Green – one of the many things Britain does well
Colin Haines, a short-lived colleague in the very fast turnover of STM contractors, has posted this (he’s a top bloke – British by the way!)
I can see why he and the FT’s Katie Martin agree. The state of British rock and roll and British stock markets ain’t what it was (back in the 1990s).
Paternoster Square is now a home for tourists who sit outside the London Stock Exchange with snacks bought in Sainsburys and the little huts that have sprung up to get some of the money that has disappeared abroad back into British businesses. London EC4 is a home for tourists who stare up at the quaint St Pauls cathedral – a few yards from the stock exchange.
I remember the 1990s that the stock exchange was full of trading as were the various exchanges around the City where young lads and young ladies, dressed in loud blazers and made the markets. Now this is done with algorithms – a long way from a home market.
People think their pensions.like their football teams, are packed with home grown players
A survey by New Financial — a think-tank that has done a lot of number-crunching on the efforts to revitalise UK markets — revealed last month that holders of pensions in the country think a stonking 41 per cent of their retirement pots is invested in UK companies or stocks.
The guesstimate rises to a little over half in those aged 55 to 64. That was true, or close enough, when bucket hats were in. Now, though, the reality is nowhere close to that. In fact, across all types of pensions in the country, just 4.4 per cent is lodged in domestic equities.
The global average for domestic stocks allocation racks in at just over 10 per cent. We think we are batting for the home team, but we are not.
“Batting” yes; even our top football teams have a home bias but when it comes to the markets we don’t have a clue what is being bought on our behalf.
Last week, our main index, the FTSE 100, hit 9,000 for the first time. Investing in Britain is not a currency bet. Getting currency bets is a punt – we can lose when markets go down and we want them to rise.
America currency has gone down and that means our investments in the States have gone down as well. Mean while the UK market and currency has done damned well. A shame we had our money bet with the yanks (not that we knew).
The macro-economists can argue that we are best to diversify around the world in line with market weightings an give ourselves a “free lunch” which means that we end up betting on a few American technology companies (7 of them are worth more than the UK stock market).
But we don’t live all over the world, we live in Birmingham, Leeds, Glasgow, Bristol – London. We aren’t macro-economists – we don’t want free lunches if they taste horrid!
Rachel Reeves is demanding that we do not have 10 or 11 players in our pension team from overseas. Trustees – like football managers – want to pick to win and if there are no British players to do that, no British players will make the team. Trustees go on about fiduciary responsibilities, football managers aren’t so interested in governance – they talk of league tables.
That’s fine – except when Britain has the best players – which is what we seem to have now and in the 1990s, infact for ever! They seem to make their way into the winning teams – and fans love it!
We always seem to have good football players – we always seem to have good companies-thanks Katie for reminding us that Britain is Great.
Analysis in March from Goldman Sachs’ Sharon Bell and colleagues identified a “very British problem” of low allocations to domestic stocks — a contributing factor in the market’s drab performance compared with other gauges since the crisis of 2008.
KKR’s recent takeover of UK high-tech instruments specialist Spectris, at almost twice its listed value, is also proof that private equity sees some screaming bargains that the public UK market simply does not recognise.
We wouldn’t choose our footballers because they’re foreign, fundamentals matter more than economic theory . That goes for investments too – and it’s a lot better winning with home players!
I’m not alone – here’s the voice of Yorkshire, saying the same thing
