Just when you thought the eurocrats couldn’t make a bigger mess of the PIIGS problem, along come the non-EU Swiss PIIGSto deliver the coup de grace and show us how it’s really done.  David Cowell of Myddleton Croft Investment Managers says it isn’t a surprise but the timing is terrible.

Portugal’s first auction of 30-year bonds since its EU/IMF bail-out took place yesterday and drew strong investor demand, the WSJ reports. Portugal managed to sell €2bn of 30-year bonds at an interest rate of 4.1%.Then the Swiss remove the cap on the franc/euro and all hell breaks loose. Where would we be without politicians and central bankers? Don’t answer that.



myddleton croft

My recent comments and charts on our Tactical Growth Portfolio have generated some interest so I’m repeating the exercise:

MC chart






Doctor Copper’ seems to be pointing the way to lower growth by hitting a 5.5-year low. However, is it all that it seems? Are the fittest copper producers doing what the iron ore miners seem to be doing? What is that, you may ask, to which the short answer is ‘Dunno’. A longer answer may involve some students of Machiavelli in the more healthy miners trying to do a Saudi and weed out the inefficient producers. If so, we could see lower prices for quite a while. I will explain more fully should anyone be interested. E-mail me.

The lack of platforms offering live ETF trading is becoming a much more serious concern for UK investors amid increasing equity market volatility, as they could be missing out on returns due to being hampered by daily dealing. In the last five to ten years, intraday volatility is averaging above 2%, meaning that clients lose out due to the lack of dealing flexibility.

The difficulty stems from the fact that UK platforms were originally created to trade funds, not securities, and therefore do not have the infrastructure to easily trade ETFs and shares. According to a platform survey published by the IFP’s Financial Planner magazine in March, 72% of platforms in the UK market offer ETFs, but only a quarter are members of the London Stock Exchange, which allows them to trade ETFs intraday at a lower cost. So who do platforms benefit?


The adviser analysis by Schroders concluded that more and more client portfolios are being deployed to third parties. Presently just over half, at 56% of respondents, do not outsource, falling from a higher 60% 12 months earlier. It also found that 68% of advisers have increased the proportion of assets they outsource while 93% assert that they will continue to do so. Some 45% of advisers, marking a significant 16% rise on 2013’s total, charge an average of 50 basis points, while only 4% now charge in excess of 1%. On top of that, 70% of drivers reckon that they are better than average.

PricewaterhouseCoopers is to be formally investigated by accounting standards watchdog the Financial Reporting Council over its audits of Barclays Bank client asset segregation systems. The FRC said its decision to investigate followed the £37.7 million fine levied by the FCA in September . At the same time the FRC said that it would be launching an investigation into the preparation of accounts over a three-year period at Tesco, following the supermarket’s admission that it had inflated its profits by £263 million.  If this goes on, the NHS will either be a world beater or GPs will be earning £1m a week.

Bloomberg reports that, according to unnamed officials, ECB staff presented a plan to the Governing Council for €500bn in purchases of investment grade assets on 7 January. No final decision was taken and the plan was one of the number discussed for further ECB asset purchases.The European Commission on Tuesday published new guidelines on the enforcement of EU fiscal rules, which are expected to grant more flexibility to countries such as Italy and France. The Commission said that, provided certain conditions are met, Eurozone countries facing an economic slowdown could be allowed to cut their structural deficit at a slower pace. More fudge.


Thanks to Richard Henderson for this:

Dan was a single guy living at home with his father and working in the family business. When he found out he was going to inherit a fortune when his sickly father died, he decided that he needed to find a wife with whom to share his fortune. One evening, at an investment meeting, he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away.   “I may look like just an ordinary guy,” he said to her, “but in just a few years my father will die and I will inherit $200 million”.

Impressed, the woman asked for his business card. Three weeks  later, she became his stepmother.



Have a good weekend.


David Cowell


For and on behalf of Myddleton Croft Investment Managers

1 Woodside Mews

Clayton Wood Close


LS16 6QE

Tel:        0113 274 7700

Fax:       0113 274 7711


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