Bath/Head Office & Unquoted Equity Team:
London Office & Quoted Equity Team:
Edinburgh Office & European Quoted Equity Team:
The Financial Ironmonger Blog No 8/2019

The Financial Ironmonger Blog No 8/2019

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.


Blog No. 6 wondered if America might be flirting with turning left, more progressive, or indeed socialist, perish the thought. Less than two weeks later, Bernie Sanders has broken cover and announced his intention to stand for President in 2020. He lost the nomination to Hillary Clinton in 2016, not least because her machine manipulated the super-delegate vote, but the rules have since been changed to prevent this happening again.

Many thought that he would have beaten Trump then, and will do so next time, sticking to the same script, which as I pointed out two weeks ago, would not embarrass any European fan of free markets. We are enthusiastic supporters of accessible healthcare for all, (however financed), a safety net for those who fall out of the system, and a minimum wage. His recent book is worth reading.

His problem is that he is old at 77, white, male and Jewish, each of those factors reducing his potential support, rightly or wrongly. And, of course, the biggest problem is that his competitors for the nomination don’t have his specific drawbacks, but have seen how popular his policies were, and have tacked in to his ground. Think of this as “Cuckoo” politics, where he has done all the groundwork, and someone else claims the prize. It happens!

The other problem, I guess, is one of mental capacity. Whilst age is no arbiter of this, (one 88 year old won all of the games we played over Christmas lunch), neither is youth the elixir we thought. The UK is currently grappling as to whether we repatriate a 19 year old who fled to IS, and clearly has not revoked their ideals. The equivalent to trying to justify 9/11 to our American friends. Awkward, at best.

However, rising above this defines who we are; “they go low, we go high” in the words of Michelle Obama. I gather her book is fascinating, such that I cannot get my hands on it, despite two copies in this house. Were she to stand………… For now, Kamala Harris, this blog tip from last autumn, leads the polls.

The administrators of Patisserie Valerie, the cake shop which went spectacularly bust last month, have managed to sell the assets for £13mn, compared with a stock market valuation of £465mn not so long ago, with £3mn of that deferred. In the queue are the Revenue for £12mn of VAT, the costs of the professionals involved, and numerous other claimants. The new equity investors, who pumped in £15mn, last autumn, never saw the shares requoted, and have been wiped out. It pays to kick the tires.

On the political scene, the Independent Group sprang in to life on Monday, a gaggle of UK MP’s tired of either Labour or Conservative approaches to Brexit. It generates tons of coverage, and lots of wild speculation, but there is little that binds them together, and no common policy, and if Brexit goes through on March 29th, they will have no purpose, at all.  Nevertheless, there are 11 aligned MP’s, a larger grouping than the DUP, which alters the arithmetic in unexpected ways.

It would be churlish to point out that all of them were elected on party manifestos, which they have now repudiated, whilst still refusing to resign, and fight by-elections. Apparently, the voters are “sick” of elections; not so, try us out. The meaningful vote, slated for next Wednesday, will determine if they have any future at all, but history shows that it is almost impossible to run as any sort of true independent; whilst the Donald claimed that, he got there by high jacking the Republican party.

Meanwhile, we are 35 days away from Brexit, and the Irish have discovered that their exports of beef to the UK would suffer 53% tariffs, if no deal ls achieved. Touchingly, they have appealed to Brussels for emergency aid, which one would suggest is unlikely to be forthcoming.

Thus to Book 2, which there was no space to cover last week. Sir Ivan Rogers was the British Permanent Representative to the EU from 2013 until he resigned early January 2017, months before Article 50 was triggered. Others think he was fired for saying that the UK government had no plan, nor any idea what they were up against, in terms of how the EU works to achieve the outcome it needs. Wise words, indeed. Yet the decision to “take back control” risks losing it.

For now, the City remains the pre-eminent global financial centre, but in the years to come, the EU could change, by degree, the rules for its own internal market, and the UK would have no input to those new conditions. Gradually, these incremental alterations would force UK financial services companies to relocate, and the capital will follow. Might take ten or twenty years, but he reckons that is the plan. Given that former civil servants hardly ever speak in public, let alone one this senior, it is quite chilling. Onwards.


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.