AGM Formats – Online Only?

This morning I received notification of the forthcoming AGM of ShareSoc. This will be an on-line only meeting via Zoom which surely contradicts the recommended format for AGMs even if I personally would only attend on-line due to current disabilities.

This morning I did attend the AGM of Kings Arms Yard VCT (KAY) which was also an on-line only meeting via the Lumi platform. It was well managed and all questions were answered. There were no significant issues raised and all votes were passed with large majorities. One point that was raised however was the increasing director remuneration and I voted against the Remuneration Report for that reason.

I do feel however that AGMs should be hybrid meetings not solely on-line unless there are good reasons to do otherwise. Meeting the directors in person and being able to ask questions in an informal setting gives you a lot more information and enables one to better judge whether they are competent.

Roger Lawson (Twitter:  )

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Should I Invest in Oil and/or Buy a New Car?

The stock market is quiescent and it is time to ponder questions such as should I buy more BP shares and should I buy an electric or hybrid car? There is an article in the FT today on the rejection of resolutions focussed on climate change at the ExxonMobil and Chevron annual meetings. It said: “shareholders solidly rejected climate change proposals at the US oil majors’ annual meetings on Wednesday, scaling back support from last year and splitting with results at peers in Europe where resolutions related to global warming have won stronger support. Only 11 per cent of Exxon shareholders supported a petition calling for the company to set emissions reduction targets that would be consistent with the goals of the 2015 Paris climate agreement. A similar proposal at Chevron received less than 10 per cent support”. See FT article here:

Resolutions on this subject at the BP and Shell AGMs were similarly defeated even though many institutional holders like to promote their green credentials.

Individual shareholders need to make up their own minds on how to vote on whether to put companies like BP and Shell out of business by stopping their oil development activities. Both BP and Shell argue for a transition to renewable energy at a pace acceptable to their customers and which does not impose unreasonable short-term costs and I agree with them. The transition to renewable energy for many purposes may make sense but for transportation carbon fuels have a very high energy intensity and the infrastructure to support electric vehicles means a high loss in the transmission system.

I have a pressing personal decision to make on this issue. My diesel-powered Jaguar XF is almost ten years old now and I like to buy a new car when they have done more than 60,000 miles as they get more unreliable and expensive to maintain after that. I don’t do many miles now so a somewhat smaller car might make some sense. But should it be an electric vehicle, a hybrid or a petrol/diesel one?

I think a hybrid is the best bet and have booked a test drive of a Toyota Corolla. They are self-charging hybrids but can only run a short distance on battery power so I am betting that petrol will be readily available for at least the next ten years.

I am surprised that Jaguar are still selling XF models but they do now have a petrol option and a “sportbrake” version which probably shows how well liked the car is but I fear that diesel will be discouraged by regulation soon.

They do sell all-electric models now but they are expensive and are bulky SUV style cars when I prefer smaller vehicles. Note that the environmental benefits of electric cars over petrol ones are quite marginal if you take the all-in lifetime environmental impact costs into account and the latest scare is that the heavier weight of electric vehicles is causing damage to our roads – thus explaining why there are so many potholes in our roads of late. The weight of current electric batteries is becoming a major problem while the production and recycling of batteries is a negative aspect not yet confronted.

Electric cars are cheaper than they used to be but they either have limited range or are expensive (£43,000 to £58,000 for a Tesla Model 3 for example, or over £70,000 for a Jaguar I-Pace).

Readers of this article can suggest alternatives for me to look at. Use the comment box below.

I could of course hold on to my current vehicle for another few years in the hope that Sadiq Khan changes his mind on the ULEZ expansion (my Jaguar XF is not compliant) or is not elected again next May. There are several strong contenders lining up to take him on. But I do so few miles within the ULEZ area (current and future) that it does not bother me much what the Mayor decides to do. Whatever he decides he is bound to be wrong based on his past decision record.

Roger Lawson (Twitter:  )

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Revolution Demanded at Abcam – Quite Rightly

The former CEO and founder at Abcam (ABC) is planning to call an EGM to replace the Chairman. He has published an open letter to shareholders which spells out the reasons – see

My comment is the sooner the better. His letter is a very good summary of where Abcam has gone wrong recently. I hope shareholders will support him.

I purchased Abcam shares in 2006 soon after the company listed on AIM in 2005. I still have my analysis of the shares made at the time which included a cash return on capital of 78% and a prospective p/e of 22. Revenue was growing at a fast pace and all went well under the leadership of Jonathan Milner as CEO for several years.

But even before he stepped down in 2020 the business was clearly in some difficulties. I commented on this blog negatively about the large expenses on new IT systems (which was capitalised) and very generous remuneration schemes. I could not get my reasonable questions answered by the Chairman at the AGMs I attended and subsequently voted against him.

You can search this blog for the past articles on Abcam which reinforce what Mr Milner is saying.

But the last straw was the delisting from AIM and the move to NASDAQ in 2022. As Mr Milner points out, this was pointless and has not benefited shareholders. I sold most of my shares starting in 2020 and the balance only recently – overall return of about 30% per annum since 2006. But the recent financial figures have been disappointing with margins declining and way too many adjustments.

The conversion of Abcam shares to ADRs for the NASDAQ listing may help to frustrate the calling and voting at an EGM.

Mr Milner says the current Chairman is weak – I agree. He needs to go with a refreshed board put in place.

Roger Lawson (Twitter:  )

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EKF Diagnostics AGM Report

This morning I “attended” the Annual General Meeting of EKF Diagnostics (EKF).  This was a “hybrid” meeting with the physical meeting in Cardiff and the on-line aspect run on Zoom which I logged into. It was reasonably well attended both ways with a number of questions posed. The meeting ran for about one hour.

The company benefited greatly from the Covid epidemic when revenue peaked at £82 million in 2021, but it reported losses in 2022 as the epidemic declined and the market changed. Profits are forecast in 2023 however.

I did not learn much from the meeting except they are apparently still looking for a new CEO (they currently have an executive chairman which I generally dislike). As usual with medical companies they have difficulty in selling to the NHS who want to do everything centrally (different to the rest of the world) but they are still selling in Russia and don’t plan to withdraw from that market – profits generated there cannot be repatriated but by increasing their product prices they can obtain a return.

The meeting was difficult to follow because the internet link at the company’s end kept breaking. If companies are going to run hybrid AGMs they need to use reliable technology such as by using the Investor Meet Company platform.

Otherwise the meeting was well run.

I asked one question as to why they had a share buy-back resolution on the agenda which I voted against. Apparently they have no current intention of using it.

The company clearly has ambitions to grow its revenue and profits and the share price does not seem expensive to me on prospective earnings and dividend yield, but readers can no doubt make up their own mind on that.

Roger Lawson (Twitter:  )

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Inflation Not Under Control

Back in March I said: “As I suggested in my comments on the budget, the probability of inflation falling to 2.9% by the end of the year is a grossly optimistic forecast”. And so it has turned out to be. Instead of inflation falling below its 2 per cent target within a year, which the Bank of England had forecast, the Bank now thinks it will only hit the goal in 2025. So Bank Rate has been raised again to 4.5%.

It really brings into question the competence of Andrew Bailey and Bank of England forecasters when an amateur financial commentator like me can be more accurate.

Inflation is always very sticky. When people see prices rising they adjust the prices they expect to pay and the wages they demand. And companies pay little attention to the exhortations of politicians.

Roger Lawson (Twitter:  )

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Politics and Technology Problems

It’s been a while since I wrote a blog post. Too busy sorting out some technical problems and keeping up with medical issues – I just booked my seventh Covid vaccination which does not scare me. But I would like to comment on some topical issues.

Should Dominic Raab have been fired, or encouraged to resign, which is the same thing in reality? There is one simple question to answer which is “would you like to work for him as a boss?”. My answer would be an undoubted “no”.

Leaders who wish to get things done need to be popular to some extent at least if they wish to have people work hard and follow the policies laid down. You certainly can’t get people to do what you want by bullying them.

Raab was apparently warned several times about his behaviour so the final outcome was hardly unexpected. In any organisation, and Government is no different, you have to have consensus and leadership by example. If Raab could not get Civil Service staff to do what he wanted then he needed to change his approach.

My first technical problem was that BT and Microsoft decided to stop supporting POP email clients, for alleged security reasons after 20 years. That meant potentially losing access to thousands of older emails I have received over the last 15 years. No workarounds provided unless I paid them money. I am very unhappy about being treated in this way and Outlook on the web is not nearly as good as Outlook 2016 as a local client.

My latest technical problem was configuring and learning how to use a new Samsung smartwatch (a Galaxy 4). This is replacing an older Huawei smartwatch which did basic functions very well but was not really compatible with the Apple i-Phone I currently use. I don’t like Apple watches – too expensive and I prefer a more traditional design. The Galaxy watch is also incompatible but you have to read the very small print on their web site to discover that. You even need a Samsung phone to set it up which is ridiculous. The user interface is horribly complex and it’s taken me hours to learn all the functions and configure it. Watches should be installable in a few minutes, not hours, and all common phones should be supported.

That’s the rant over for today.

I was alerted by the new emergency phone alarm just now. I presume that’s in case Russia launches World War 3, and we get 3 minutes warning of a nuclear attack. Reminds me of the 1960s but most people decided then that there was not much to do in 3 minutes except hide under a table.

Meanwhile Sadiq Khan is pushing ahead with the ULEZ expansion despite widespread public opposition. Financially it makes no sense and it will make no difference to air quality in the outer London boroughs. There will be a legal challenge in the High Court in July but I am not very hopeful of a successful outcome. But it’s worth supporting anyway.

The only way you can remove idiots like Sadiq Kahn is at the ballot box.

Roger Lawson

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Lying for Money – Book Review

With the long bank holiday I managed to finish reading the book “Lying for Money” by Dan Davies. This is one of the best books I have read on fraud.

It covers the history of fraud through the ages including most of the great cases and the most recent big ones. Fraud is still rampant despite many of the obvious ways it can be executed blocked by better laws in the last 100 years. For example, the FCA announced last week that three individuals have been convicted and sentenced to a combined 24 years for an “all-or-nothing” investment fraud. Punters were persuaded via cold calling to invest in binary options via a sophisticated online platform that appeared to show their funds being traded, however, this was manipulated to show trading activity when there was none.

His Honour Judge Hehir, remarked that ‘[BMG] was no more than a money-making machine, which operated to transfer as much of its unfortunate customers’ money into [the defendants’] pockets as possible’. ‘All 3 defendants were a loose confederation of criminally minded associates’ and ‘equally responsible’. He stated that they lived a lavish lifestyle from the money and often misery of the victims, including large cash withdrawals, expensive foreign travel, cosmetic dentistry, online gambling, property purchases, a wedding reception and partying in nightclubs. Binary options have subsequently been banned for retail investors.

There is a particularly good chapter under the heading “Cooked Books” on stock market fraud. These paragraphs are from it: “There are many reasons one might want a crooked set of books — to present an image of financial soundness to the victim of a long firm, for example, or to pretend that a sum of money has been spent honestly rather than embezzled. But the most common one is that you want to show your crooked accounts to investors so that they give you money. For this reason, any discussion of accounting fraud needs to be put in the context of stock market fraud, because one is usually the point of the other. With that in mind, here’s how one steals money by lying to the stock market.

A public financial market provides the same service to liars that it provides to honest businesses — it converts stories into cash. If you own a profitable enterprise in an economy with functioning stock markets, you hold a form of ‘Supermoney as the fund manager and auditor George Goodman noted in a book of that name. Super how? Not only does the business provide a steady stream of income; the stock market offers a way to acquire and spend years of future profits before you make them”.

If a company is trading on a prospective p/e of 30 then it is multiplying its future profits by 30 in terms of market capitalisation.

This book should be essential reading for all investors and for all auditors as it covers the most common types of frauds. Does the book help you to spot frauds? Perhaps in that there are often warning signs. Such as high growth rates and consistently better financial performance than similar competitors (Madoff investment funds or Patisserie Valerie).

But here is one warning in the book: “Small investors in the stock market legitimately expect that they ’re going to have a chance to make a profit; if, instead, they’re systematically going to be filled up with the duds, then they are going to find something else to do with their savings and/or gambling money. And even in the modern world of huge fund managers and high-frequency robot traders, retail investors are more important than you might think.

Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the rime they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t.

This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling

The book is an easy read and does not get too bogged down in the technicalities of fraud (even the complexities of VAT carousel fraud). Most frauds are quite simple in essence – lying about assets, revenues or profits.

Altogether a highly recommended book of 300 pages.

Roger Lawson (Twitter: )

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Parliamentary Petition and Rio Tinto AGM

A new Parliamentary petition has been raised to give all shareholders a voice by bringing Company Law into the 21st Century. It includes the requirement to make email a requirement for shareholding registration which is an important way to improve shareholder communication both from and to shareholders.


Today I watched the Annual General Meeting of Rio Tinto Plc (RIO) – all two and half hours of it. I no longer attend meetings in person, particularly FTSE-100 company ones, due to physical incapacity and an unwillingness to be bored.

The Chairman said they are now more aligned with societal aspirations and have a critical role to play in energy transition. But there are environmental dilemmas arising in a critical industry. It was later mentioned that the world needs to produce more copper in the next 20 years than has ever been produced! They cannot overstate the scale of the challenge.

There was an interesting precis of the history of this 150-year-old company. The company had a Return on Capital Employed of 25% last year but has not always been so careful about its capital investment as one shareholder pointed out who was concerned about rising debt levels.

Most of the questions from attendees, including those on-line, referred to local issues in Arizona, Serbia, Australia and Mongolia, particularly environmental protection issues. The Chairman seemed to handle them well and the meeting was generally well run. There were no surprises.

I am happy to continue holding the shares. Current forecast p/e is 8.5 and dividend yield 7.4%.

Roger Lawson (Twitter: )

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New Roliscon Web Site

The Roliscon company is one used to promote the books I have written and the web site ( ) also contains all the consultation responses I have written over the last few years, a link to my blog and other material.

The web site has been redeveloped in Wix so is now more user-friendly on mobile devices. Take a look at the new web site if you have never visited it before.

This work was done by Barker Online Marketing (see ) who I can highly recommend if you need some web site development work done.

Roger Lawson (Twitter: )

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When Should Directors Intervene in Trust Management and Scottish Mortgage Ructions

The FT published an interesting article on Friday about recent events at Scottish Mortgage Investment Trust (SMT) under the headline “Inside the boardroom bust-up that shook Scottish Mortgage”. It provided some explanation of why director Amar Bhide has left and chairperson Fiona McBain is departing.

SMT has a great long-term track record which it has achieved by investing up to 30% of its assets in unlisted companies – typically high-tech “unicorns” that had good prospects of listing in the future. This all went wrong when the enthusiasm for technology companies collapsed and the share price of SMT has halved in the past 18 months (and the shares are currently on a 19% discount to Net Asset Value).

With a policy that limits the level of investment in unlisted companies, which cannot be easily sold, this has limited the company’s ability to manoeuvre and certainly inhibited new investments as the share prices of listed holdings fell.

This comes back to the old question of how much the board of an investment trust should interfere in the management of the portfolio. Should they let the managers get on with it, or should they review and possibly veto individual investments rather than just set general policy? If they don’t like what the manager is doing should they intervene?

Or should they wait long enough to see whether the manager’s decisions are clearly right or wrong? If obviously wrong they can be fired of course but often that is way too late.

I recall this was a common problem in the early days of Venture Capital Trusts. New and often inexperienced fund managers in the small cap sector took them on and boards of directors would be made up of those with general experience and willing to turn up once a month for little pay to oversee matters, but often with no background in small cap investment management. There were several disasters as a result.

Boards that reviewed new investments and intervened in the management when necessary, proved to be the best. This was not a case of second-guessing the management or looking continually over their shoulder. Simply a way of getting a kind of “peer-review” of the decisions being made.

In the case of SMT should the board have reviewed and revised the management’s predilection to invest in unlisted shares when it started to lose performance? There is not a simple answer to that question.  It should certainly have merited a review but whether it makes sense to change the strategy really depends on how long technology stocks might be out of favour.

There is certainly grounds for criticism that the board lacked directors with hands-on investment management experience and with too many academic professors plus a chair who had been there too long. These things can be easily fixed.

As a holder in SMT, I think it wise however for them to stick with the strategy of holding a significant proportion of unlisted shares. Companies in the technology sector are often reluctant nowadays to go for a stock market listing so if you ignore unlisted companies you can miss out on high growth opportunities. But valuing unlisted companies can be tricky. There is a big temptation to over-value their growth prospects as happened in new VCTs twenty years ago.

The board of SMT should be reviewing carefully the decisions of the investment manager until the company has stabilised, and not be afraid to intervene when necessary.

Roger Lawson (Twitter: )

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