Today’s troubled countries are Russia, where there has been a terrorist bombing on the Moscow subway, and Ireland, where the global hedge fund travelling circus has arrived to help push its weak banking sector into state hands. Nobody knows who did what to whom offshore South Korea. Meanwhile, attacking Greece is so yesterday. And Israel has cocked another finger at the USA by raising interest rates a further 1/4%.
This will be a foreshortened week because of Passover tomorrow and Good Friday.
Let’s talk about Britain, where I am now. The UK is right in the sights of the Tea Party Movement in the USA, because of its redistributive taxation system, because of its National Health Service, and because it is the Mother Country from which our American Revolution was made. But actually, the UK is a good place to invest in despite the negativism swirling around it.
Britain sounds so has-been. Stock- picking here requires little special expertise, as they speak English. It is not exotic, not emerging, not hot. It is damp, with poor food, and thus unlikely to attract hot money flows from the luxury-coddled analysts who handle them. Britain is so old fashioned an investment idea that the first foreign stock listed in the USA came from here. Nobody likes the UK.
To quote Hugh Sergeant, head of UK equities at River and Mercantile Asset Management, where he runs a bunch of Britain funds, “if you share this anti-UK view you are not alone, in fact you are part of the biggest consensus club since the TMT bubble. And huge consensus trades are rarely right.”
I quite like UK companies. The Brit economy is actually doing rather well. Unemployment is falling.
Business surveys appear healthy and suggest there will be a normal cyclical recovery. The prices of assets such as housing and commercial real estate are picking up. Retail sales are rising. Both of these can under-pin an improving banking market. The corporate sector is seeing a very strong pick-up in profits and cash flow, so it too will start putting demand back into the economy by boosted investment in capital and people.
Yes, the British public sector deficit is very large and dangerous. That means whoever wins the forthcoming May election will have a mandate to sort it out.
Meanwhile check the valuation of the UK companies. Many are being given away. They have low p/e rates and often trade at discounts to book value. British banks’ price to tangible book value will be a fraction of that of some hot emerging market one.
Buy British. More for paid subscribers on this below with a new stock idea.
VS writes regarding Demco PCL warrants from Thailand which he owns through Euro Pacific Capital: “Should we exercise single point parts? I never heard back so the 3/22 cutoff is past but I still wondered what to do. Should we exercise single point parts?”
Vivian replied: “I have not had any notification of the oversubscription rights from HSBC where my Demco Bangkok shares are held.
But I have horse’s mouth views of the country. In favor would be
the enthusiasm with which our correspondent Paul Renaud (of Thaistocks.com) views Demco. The negative is how deeply you should invest in Thailand On Sunday Premier Abhisit met for 3 hours with the Redshirt leaders and there will be another round today. After they dumped human blood outside his house, he is chatting with the Redshirts who are demanding immediate elections.
My cousins with whom I dined over the weekend (French; Thais eat French food in England) worry about the red vs yellow shirts, the succession to sickly king Bhumibol, the very unpopular heir Prince Muckamuck.
But they also think, particularly the British half of the couple, that there is something in the Redshirt protests. Poor country people are fed up with the half-Chinese court, and want more handouts such as they were given under the deposed Thaksin Shinawatra premiership.Then Thaksin was overthrown by the army for corruption, and the new man put in place without elections. In any event the royals, backed by the military and the yellowshirts, face a succession crisis because of King Bhumibol’s poor health. The Crown Prince is now on wife No. 4 but all the earlier Princesses continue to lord it over the land and one ex-wife instigated a lèse-majesté case against a Frenchman whom she overheard say something nasty about the monarchy on an airplane. (The anecdote may have been suggested by the feed.)
This Bangkok gossip bit has never been in the papers.) Having lived under a constitutional monarchy here, my British-born cousin is less royalist and more worried than his Thai-born wife..
He believes that while Thaksin now sounds like Hitler in his videos, ranting and raving, the redshirts do have a point against the army and army-imposed government. And the monarchy cannot go on as before if HRH dies. It’s a tough call even if you can get the extra stock.
There are furthermore another set of Demco warrants you can exercise in June, assuming that the brokerage gears up in time.
More for paid subscribers with a new stock pick from England and important news from Finland, Brazil, Canada, and Israel.
