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The Financial Ironmonger Blog No 6/2017

The Financial Ironmonger Blog No 6/2017

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.


Every day, I get an e mail from a site called CapX which usually contains their top five stories. These tend to cover politics, economics, technology, but many other things as well. I have no idea how it is funded, or what the business model is, but it seems to be run by refugees from the Telegraph, now bent on becoming a broadsheet version of the Daily Mail. I would recommend that you take a look, and even sign up.

On Tuesday, they published a piece by George Trefgarne; I met him some twenty years ago at a fund launch in Mayfair, which probably coincided with him joining the nursery slopes of journalism. Recklessly, I offered him a lift back to the City afterwards, since the company that I worked for then forbade any contact with the press, at all. But he seemed a good guy, and I am glad that he has resurfaced.

His article, on Tuesday, explored the possibility that the FTSE index, (a measure of the value of the 100 largest, UK quoted companies), could surge, to 8,000 by the end of the year, and 10,000 by the end of the decade.

In part, this is due to the fall in sterling, making UK listed companies cheaper for overseas investors, and corporate buyers. Secondly, very low interest rates, and the abundant supply of cheap money has to find a home. Bonds do not look attractive, and equities are under owned by pension funds, in particular.

The economic disaster that was to be the outcome of Brexit has failed to materialise, indeed the economy is growing strongly. You might expect some turbulence round the trigger date for Article 50, mid-March, but the market seems to have been genuinely surprised by the willingness of other countries, noticeably America, to strike trade deals. This is far from plain sailing, but as ever, it is the direction of travel which matters.

Finally, he points out that whilst UK companies trade at a multiple of 13 times earnings, in line with Europe, American companies are rated at 19 times. A deregulated UK might, therefore, be accorded a higher multiple, outside the EU.

For me, the answer still lies in the politics. Certainly, the tone has moderated from the initial reaction, with the Germans now saying that a way must be found to keep our financial services industry on side, and the Italians have indicated that they wish to be constructive, going forward. Cracks are therefore appearing in the united 27 approach, again for domestic political reasons.

The attempt by the French to persuade bankers to move to Paris has proved a resounding flop; indeed there are thought to be up to 400/- French people working in London, the 6th largest French city by that measure. And if they cannot persuade their own to stay at home, it is unclear why anybody else would volunteer.

If nothing else, the terrorist activity would rule it a non-starter, which makes you think about the effect it must have had on tourism. Elections are due in April and May, the choice is between the nationalist Le Pen and the independent Macron, who has no political background. Whichever wins, the comfortable status quo looks like history.

I am off to Venice tomorrow, where the two week annual carnival has just started. Subject to a lack of over indulgence, and the technology working, I will post from there next week.


David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.