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The Financial Ironmonger Blog No 40/2019

The Financial Ironmonger Blog No 40/2019

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.

–THE FINANCIAL IRONMONGER BLOG NO 40/2019–

I was talking to a chum earlier in the week who has been in the middle of a media firestorm since June; not him, thankfully, but the company he works for. He naively thought that the summer months would offer some respite, only to discover that it is the only story in town, and actually the journalists therefore just doubled down. He was furious to discover that you are not allowed to sue them, so they can just write any old rubbish they want.

Much the same can be said of Crispin Odey, one of the more outspoken city-based hedge fund managers; when I first met him in 1986, he worked for Barings, and whatever he has made since has been done on his own skills. Along the way, he has made occasional donations to the Conservative party, and thus the opposition called a debate in the House of Commons last Monday alleging that Boris was trying to derail any Brexit deal so that Crispin could make a mound of money, having shorted Stirling. This presumes that they know this to be the case, and that the currency would fall further in this scenario.

Apparently, hedging against a depreciation of the currency is a high crime, in their book, but plenty of people do exactly that for very good reasons. You might have a trip to Europe or America planned for next year, and decide to buy the currency now, to avoid a nasty shock to your budget. Plenty of businesses do it all the time, and not just in currencies. Airlines enter in to multi year contracts so that they know how much their fuel is going to cost, and I know of one brewer who has agreed the price of his hops three years forward. So, it is a perfectly normal transaction, even if it is beyond the knowledge base of many politicians.

It does show, however, how a media storm can be whipped up, aided by ignorant journalists. Having fought through the courts to secure the immediate recall of parliament, there is nothing to fill the agenda. On Tuesday, a debate about agricultural standards was attended by four on the government side, and five on the opposition, less than 2% of all MPs.

It is not immediately obvious that much headway is being made on the Brexit negotiations, as the clock runs down towards the end of October. An election seems all but certain before the end of the year, but that might not produce a definitive outcome, so it is probably best to withhold analysis of the probabilities until they become more certain.

Across the pond, the Donald seems less than troubled by the Ukrainian investigations, with his loyal supporters now pouring money in to his re-election campaign. More than $200mn has been raised to date, exceeding the total sum raised by the two dozen Democratic candidates, raising expectations that the final total will exceed $2bn. Of the three main contenders, Bernie Sanders suffered a heart attack this week, whilst Joe Biden has been floored by his son’s alleged misdeeds in Ukraine, leaving Elizabeth Warren to take up the baton.

The fault in that particular theory is that Bernie’s supporters are non-transferable, demonstrated by the fact that none of them moved to support Hilary Clinton last time out. He is not, of course a Democrat, just as the Donald is no Republican. Nobody said that any of this was simple.

–MORE ABOUT OUR GUEST BLOGGER, DAVID OAKES–

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.