David Cowell: “Theresa May had to wait…”

by | Oct 21, 2016

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Singing for one’s supper took on a different meaning last night as Theresa May had to wait until 1.00am to get five minutes of the EU leaders’ time to say – very little. At home, MPs had a two-hour debate on whether to strip Philip Green of his knighthood. If they and the mini-speaker consider that this was a good use of parliamentary time there is no hope for sensible government in the UK. I suggest that we follow the Belgian model instead.

It would appear that, due to various foibles within Microsoft software, only the year-to-date chart was published last week, not the three-year one. For this Bill Gates apologises and will donate another $10 billion to charity. However, it does give me another shot at blowing our own trumpet so here goes:



This return of nearly double that of the FTSE All Share (gross of our fees) has been achieved without much relative volatility and with equities forming, on average, only about 60% of the total portfolio. As the maximum number of holdings is twelve, we are obviously doing a lot right.

European asset managers operating profits could decline by between a fifth and a third because of the research unbundling required under Mifid II, analysis by S&P Global has found. Crisil, an S&P company, believes most large European asset managers will absorb research costs, rather than adopting research payment accounts, which it describes as a “strenuous” process. As we already know, on the whole they are very profitable businesses.

China has reported annualised gross domestic product growth of 6.7% for the third quarter, in line with market expectations and the government’s own forecasts. Surprise, surprise.


Mario Draghi has suggested that the European Central Bank will continue its €80 billion-a-month quantitative easing programme beyond March when he announced that the organisation was intending to keep interest rates at record lows. At the same time, Carney has been whining that politicians are trying to interfere in the BoE’s affairs and the tools (laugh, cough) they are using, i.e. QE. Politicians have their own agendas but this time they unusually coincide with common sense – a commodity sadly lacking in the bank. Further QE won’t work – end of story. Please see Einstein’s definition of insanity.

In a new survey by an unnamed university, it has been established that the number one killer in the large cohort of human beings studied was death.

Of the 52 S&P 500 companies that have reported results to date for the third quarter, 81% have reported earnings that topped average analyst estimates, according to Thomson Reuters. That is not unusual in itself as US companies always estimate lower than they actually expect just so that they can trumpet virtual success. Meanwhile, reports on inflation and home-builder confidence that were in line with forecasts, underlining market expectations that the Fed is likely to raise interest rates in December. It won’t have escaped your notice that that is after the presidential election so we will also know whether they are going for protectionism or ultra-protectionism. In either case the dollar will rise so be prepared.


“Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months. Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term.” BHP Billiton.

It’s a funny old world innit? There are many illustrations of the classic sine curve: One is alternating current; another is the business cycle, but a third is not yet complete as, in the 1960’s, people took acid to make the world weird – now the world is weird and people take Prozac to make it normal.

Have a good weekend.


David Cowell, Director

Myddleton Croft Investment Managers



Leeds, 0113 274 7700




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