This is where we highlight some of the best bits from all the free emails, newsletters, blogs and MoneyWeek magazine that we’ve published in the last week.
● Gordon Brown, David Cameron and Nick Clegg battled it out on TV this week, with Mr Clegg roundly agreed to be the victor. But if you were to judge it purely on column inches, the Icelandic volcano probably beat the lot of them.
● Our newsletter writers had their views on what both events meant for investors. “I don’t support Labour, the Tories, or the Liberal Democrats,” said Riccardo Marzi in the Events Trader newsletter. “The only aspect of this election that I’m interested in is how I can trade it.” And Riccardo thinks one institution will do rather well, regardless of who wins – “the traditional British pub.”
Bear with me. “Britain’s ‘binge-drinking’ problem attracts a lot of overblown press,” says Riccardo. “But it’s difficult to argue with the fact that Britain’s drinking habits have changed in recent years.” The availability of cheap booze in supermarkets means “there has been a move away from the traditional pub towards drinking at home (or in the park). In my area alone, three pubs on the high street are now sitting derelict.”
That makes cracking down on cheap supermarket booze very appealing for whichever government comes into power. “First they can be seen to be working to fix ‘broken Britain’ – cue a lot of grandstanding about bringing the country back from the brink and saving the traditional British pub in the process.
“Secondly, it’s an easy way to raise a chunk of revenue for the Exchequer. They could raise taxes on drink, while cutting spending on policing and the NHS. But they could go one further and impose a minimum price for a unit of alcohol. In fact, I think there is a good chance this could happen.”
That would help the pubs regain market share from the supermarkets, especially with the World Cup looming this year. Riccardo plans to look at the best way to play a British pub revival in the next couple of weeks.
● As the name of his newsletter – Events Trader – suggests, Riccardo is all about responding to opportunities as and when they arise. And would you believe it, he managed to uncover a way to profit from Iceland’s volcanic eruption. He sent out a quick unscheduled email to his subscribers yesterday afternoon, urging them to take advantage of this short-term opportunity.*
● I did spend my Thursday night watching the debate, despite my better instincts. I found it depressing and a little disturbing. All three takes on immigration pandered to mindless populism. We don’t need armed police guarding the borders. International labour mobility is a good thing.
If we really want more of our labour to be sourced domestically, then we need a better-educated population and more importantly, a reformed benefits system that makes getting a job worthwhile.
And all the bickering over £6bn in cuts, when we’ll need a damn sight more than that to get us out of the hole we’re in, was a waste of time. As Tim Price puts it in The Price Report newsletter, “What is distressingly clear so far is that no party is willing to be honest with the electorate about the hard choices lying ahead. If anything, the reverse: we are still being wooed with the prospect of bread and circuses.” With that in mind, Tim’s sticking with his view that you have to avoid most government debt and stock up on gold.
● With all this misinformation flowing around, the election is just making it much harder to work out what the future holds for the UK economy. So what’s an investor to do? Well, says Tom Bulford, the good news is that you don’t have to do anything.
Tom wrote a cracking piece in his Penny Sleuth email (which is free by the way, so sign up here if you haven’t already), talking about the bewildering range of data that pours out of the financial world. Tom’s point boils down to this. All this data overload has one purpose – to get ordinary investors like you and me to trade more.
“Indecision breeds activity, and activity means fat commissions for financial intermediaries… To make money you need a clear head, and here is how. Begin by ignoring all of these daily data. You don’t need financial experts to tell you that the UK economy is in for a struggle. The backdrop against which business is operating is clear enough.
“So forget about the obfuscations of the City men. Here’s one simple action that you should definitely take: resolve either to keep your money in a safe cash deposit somewhere, or else invest it in a straightforward business that can make and multiply its profits.”
Tom prefers to focus on penny share stocks. Why? Because “understanding companies is much easier than understanding economies – and understanding small companies is easier than understanding large ones. For a clear headed approach, stick to penny shares!”
● Someone who I suspect shares Tom’s view on the big picture is Dr Mike Tubbs. In his Research Investments newsletter, Mike focuses on stocks paying what he calls ‘invisible dividends’. By this he means companies that are investing in creating future profits for their shareholders by funding research and development to create innovative products.
It might sound like a biotech newsletter, and that’s part of it – indeed, Mike has just suggested his readers get back into a stock which originally made them more than 250% when he tipped it for the first time.
But the ‘invisible dividends’ principle is much wider than that. Mike’s portfolio covers everything from defence stocks to oil services to software. What links them is that they’re all high-quality stocks investing in their own futures. I like the idea behind Research Investments I have to say, and so far Mike’s track record speaks for itself. We’ll be sending you an email with more details on the newsletter later today – do keep an eye out for it, it’s well worth 10 minutes of your time.
● My colleague David Stevenson will be back on Monday, where he’ll be taking a look at an interesting niche in the technology sector.
• Oh, and don’t miss next Friday’s issue of MoneyWeek magazine – we’ve got a group of investment experts, including James Ferguson and Liam Halligan, arguing about the biggest investment question we face today – should we be preparing for rampant inflation or a dive into deflation? If you’re not already a subscriber, subscribe to MoneyWeek magazine.
* Events Trader is a regulated product issued by Fleet Street Publications ltd. Your capital is at risk when you invest in shares, never risk more than you can afford to lose. Please seek advice if necessary. 0207 633 3600.