Author: rogerwlawson

Market Gyrations and Other News

It’s been a truly horrific last couple of weeks on the stock market. It’s taken a big dive then reversed direction just as quickly. It’s impossible to keep up with the tariff policy changes announced by Donald Trump.

Folks are still trying to figure out which companies are going to be affected when the target of the tough regulations appears to be mainly China. A good example of a company that is likely to be affected is 4imprint Group (FOUR). This is a UK FTSE company in which I have a holding. It sells promotional goods mainly in the USA but a major proportion of their products are made in China. Since the start of the year the share price has fallen about 35%. EPS forecasts have not fallen much but there is clearly uncertainty about the future business.

Will the company be able to replace Chinese imports by production in other countries such as the USA, the UK or other low tariff countries? There are plenty that could produce the products at low cost so I think the answer to that question is Yes.

It seems way too soon to me to jump to conclusions about what will happen even if there is some short-term disruption to supply chains.

FCA Consultation. The Financial Conduct Authority (FCA) have published a consultation of changes to the regulation of alternative fund managers (that includes those who manage VCTs for example). I have not had time to  read it yet but you may care to do so – see: https://www.fca.org.uk/publication/call-for-input/call-for-input-future-regulation-alternative-fund-managers.pdf

Nationalising British Steel. It looks like the Government may nationalise British Steel, or otherwise financially bail it out. This is very annoying and even the Reform Party is in favour of this stupidity. Unviable and declining industries should be allowed to go bust as they can never be rescued except at enormous cost – to be paid out of our taxes. A short-term bail-out never cures the problems in the long-term. The Labour Government seems not to have learned from their past experience of backing losing horses.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Important Petition to Give Shareholders the Right to Vote

The AIC has launched a Government Petition to change the law so that all platforms give you the right to vote your shareholdings. See https://petition.parliament.uk/petitions/716003 for details. PLEASE SIGN IT!

More background from the AIC here: https://www.theaic.co.uk/my-share-my-vote

This has been a gaping hole in UK corporate governance ever since the use of nominee accounts became widespread. 

You can also read more background on this issue on the Sharesoc campaign page that covers this subject here: https://www.sharesoc.org/campaigns/shareholder-rights-campaign/ which even includes a link to a video with me talking about it. Some action on this issue is long overdue.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Portfolio Review and What To Do Next

It’s the start of a new tax year today and the stock markets fell sharply on Friday – the FTSE 100 was down 5% while both the S&P 500 and NASDAQ were down 6%. Markets worldwide are crashing in response to the Trump tariff changes. As usual my portfolio is not immune to the falls even if I now have a somewhat defensive portfolio which is paying high dividends. When selling gathers momentum there is nowhere to hide. Panic is gripping the market regardless of the fact that the impact of the tariff changes has yet to become clear. Uncertainty is the name of the game and it will be some months before we see the impact on company financial results. I anticipate that it will be less than the doom mongers are forecasting. It is always remarkable how companies can adapt to negative events.

What should one do in such circumstances? Well I have been through such panics before. My tactic is simply to wait for an opportune moment to pick up some cheap shares. I always have some cash in my portfolio (about 10-15% normally) and that will be deployed when the market appears to have bottomed out – but that might be some weeks or months away. I will resist the temptation to buy more shares in response to minor bounces, and I never gear up my portfolio by borrowing cash in response to anticipated bounces.

I will move cash into our ISAs to maximise my ISA holdings now we are in the new tax year with another £20,000 allowance but there is no great hurry to do that.

The moral is keep calm and carry on.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Trump Tariffs and Trade Impacts

US President Donald Trump yesterday announced a whole range of new import taxes (tariffs) on goods imported to the USA. This BBC page gives you a list of major countries affected: https://www.bbc.co.uk/news/articles/c1jxrnl9xe2o

The president said the US had for more than five decades been “looted, pillaged, raped and plundered by nations near and far, both friend and foe alike”.

The UK will face a base tariff of 10% but it will be 25% on motor cars. But we are getting off lightly in comparison with many other countries such as China (54%) and the whole of the EU (20%). Aren’t you glad we left the EU?

These tariff rates are designed to not just be reciprocal rates to those imposed on US imports but also designed to compensate for non-tariff trade barriers such as regulations that discriminate against US products.

The negative impact on the UK stock market has been quite prompt as many UK companies export manufactured products to the USA. But you can also view these changes as giving a competitive advantage to UK manufacturers as tariffs imposed on their products will be less than from many other countries!

In reality many UK manufacturers have facilities in the USA – for example Rolls-Royce aero engines. This will offset some of the damage from tariffs.

What’s my view? Barriers to trade are never welcome as they depress economic activity. But the USA is not being unfair in trying to rebalance world trade more in their favour.

What’s your view?

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Should the Government Protect the Steel Industry?

The potential closure of the last blast furnaces in the UK has brought out politicians in force to condemn the deindustrialisation of the country. Even the Reform Party has commented on it with Richard Tice saying that the UK will be world leading in “naive stupidity”. The main question is should the Government protect “strategic” industries by subsidising loss-making businesses out of taxation. By “strategic” they mean an essential element in the engineering sector which is a cornerstone on which other companies rely.

I exchanged comments on X (Twitter) on this issue where I said “if other countries can make steel cheaper, let them” which got a vigorous response. The Telegraph even claimed that the Government was considering using terror laws to nationalise British Steel.

Now I recall debating the question of whether the Government should interfere in declining industries to protect UK engineering and other “key” industries with a Professor at Cranfield University when I was doing an MBA in 1985 – yes many years ago! The issues are still live it seems.

I do have an engineering degree but at the time I worked for a retailing company. My view has not changed. Our taxes should not be used to prop up declining industries even if there are a few votes to support it.

The Government published a consultation on a strategy for the steel industry in February – see here: https://www.gov.uk/government/consultations/input-into-the-steel-strategy/the-steel-strategy-the-plan-for-steel

There are alternative ways of producing steel instead of using blast furnaces – such as electric arc furnaces which can use scrap steel. And there are many alternative countries who can produce steel and who wish to protect their production as they are fool enough to do so. The world is not going to run out of steel.

If the Government is going to interfere in industries they should be supporting growth sectors not declining ones.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Benefits Squeeze and Moving to Isle of Man

There has been considerable negative comment on the Chancellor’s attack on social security benefits. There could be over 1 million people affected by substantial reductions in Personal Independence Payments (PIPs). I will avoid comment on the morality or necessity of this but the fact that there are such large amounts currently paid out which means the reduction could be up to £6,300 per year surely indicates that the scheme is quite generous at present – maximum payments under PIP can be up to £9,500 per year.

The reports reminded me to look at whether my wife would qualify for Carers Allowance which might be under attack as I am registered disabled and get an Attendance Allowance payment (it’s not means tested). That might qualify her for a Carers Allowance as she does the washing and sometimes takes me to doctor’s appointments. But the rules are so complicated this will take some time to look into. See https://www.gov.uk/carers-allowance/eligibility for details.  The whole system of financial support for disabled people needs simplifying.

Meanwhile should I research moving to the Isle of Man? The island’s parliament has decided to support assisted dying for residents which I wholeheartedly support while the similar English legislation is bogged down in delays. With very low income taxes (see https://taxsummaries.pwc.com/isle-of-man/individual/taxes-on-personal-income ) and no capital gains tax it looks very attractive now even if the weather might not be great.  

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Chancellor’s Spring Statement and MP Evans Webinar

I missed watching Rachel Reeves giving her Spring Statement live because it clashed with a presentation from M.P.Evans Group (MPE) I wished to watch – see below. But there were numerous reports I could read later. There were no great surprises. The Chancellor is aiming to save £3.4 billions on welfare payments and £3.6 billions on “other departmental” costs. But there is increased expenditure on the Justice Department to offset that.

A discussion on tv channels afterwards suggested that some benefit recipients, presumably those receiving Universal Credit payments, will lose over £4,000 per year. There is going to be some squealing as a result no doubt. But when you have to cut your budgets to stay solvent, then there is little option.

M.P. Evans Webinar

M.P. Evans Group is a producer of palm oil and associated products in Indonesia (mainly Sumatra). I recently purchased a few shares and the presentation of their final results was most informative – and kept me awake that is more than I can say for some webinars.

There was a useful slide showing the breakdown of the vegetable oil market. That includes rapeseed oil which I recently commented upon and am now avoiding. Palm Oil is now taking up a larger share of a growing market which now includes usage in biodiesel. Production by MP Evans was much the same as in the previous year despite challenges from dry weather but prices of palm oil increased so revenues and profits increased last year. They could therefore afford a17% increase in the dividend.

On a prospective p/e of 8.8 and a dividend yield of 4.8 according to Stockopedia the shares do not look expensive but there may be substantial risks from investing in a country with its main operations in Indonesia even if the company is registered in the UK and has a long track record. It will clearly be sensitive to commodity prices.

It was interesting to note that the war in Ukraine had an impact on the company as their costs are affected by the price of fertilizer.

I will do some more research on the company and track it for the moment.  

The MP Evans webinar was on the Investor Meet Company platform and will no doubt soon be available as a recording there.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Covid-19 Pandemic Five Year Anniversary

The BBC broadcast a documentary this week commemorating the five-year anniversary of the start of the Covid-19 epidemic. It is entitled “Love and Loss – The Pandemic: Five Years On”.

I watched it because I thought it might be of interest but it mainly consisted of individual sob stories. It didn’t attempt to trace the cause of the epidemic or the Government’s reaction to it. You can find the programme on BBC’s I-Player.

If you wish to trace the track of the epidemic and the prevention measures taken in the UK you might do better to read the diary I started in 2020 which was later published on Amazon under the title “A Journal of the Coronavirus Year”. See https://www.roliscon.com/journal-of-coronavirus-year for more details.

I started it because I thought I had little chance of surviving as I have a suppressed immune system but I never got the infection. That may be because I had numerous vaccinations for the disease and was careful to avoid crowds and public transport.

Some members of my family did seem to get infected but with relatively mild symptoms.

It is still unclear exactly where the disease originated from but it now seems likely that it escaped from a laboratory in China that were experimenting on viruses. The latest death toll from the disease is reported to be over 7 million worldwide.  

The cost of the epidemic had a major impact on the UK Government’s finances and we will learn the latest bad news on that later today when the Chancellor gives her spring statement.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Spring is Here

Spring is definitely here. The daffodils and narcissi in our garden are flowering (see photos) and other plants are sprouting. A tip: if you find that squirrels dig up your newly planted daffodils and eat them, switch to narcissi which are smaller but apparently less favoured for consumption.

Spring might be here and this seems to have made the UK stock market look a bit more attractive. It’s probably just temporary optimism as the economy is definitely in the doldrums. I have been purchasing small and mid-cap UK stocks but some of them have then promptly fallen. I must stop reading the share tipping publications! They are full of good “stories” and some of them certainly look cheap but the media rarely give you a balanced view.

Chancellor Rachel Reeves apparently plans to cut public expenditure so as to balance income with current expenditure but will it happen? I doubt it. Socialists have a propensity to spend other people’s money as I recall Margaret Thatcher said. Dismantling bureaucracies such as NHS England and all the numerous other quangos that have been invented in recent years will take both determination and money. At best it will take years to do unless we have a more forceful leader like the USA now has.

The only positive sector is defence where UK and other European expenditure will rise. But expenditure on defence does not make us wealthier. Bombs and shells create loud noises and kill people but they don’t make us richer or improve our lives.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

NHS England Scrapped and Fundsmith Annual Meeting

The Prime Minister has announced that NHS England is to be scrapped and its functions will revert to democratic control under the relevant Minister. There are over 15,000 people employed in NHS England and this abrupt dismantling of a system introduced in 2012 to give more independence and hopefully improve the performance of the NHS is to be scrapped. It clearly has not helped and has led to duplication of functions and muddled responsibilities. But there are going to be large costs involved in reverting to political control of the NHS.

Such reorganisations of large bureaucracies cost money as some staff are made redundant and then simply rejoin a new organization doing similar jobs. Offices need to be closed and opened, staff relocated and new IT systems installed. In the short-term this change will cost many millions of pounds, not save it.

As a big user of the NHS I wonder how this will make my life better. I doubt it will. It’s surely a case of moving the deckchairs on the Titanic. Unless the management and culture are changed, nothing will be altered.

I spoke to my sister, Baroness Murphy, about this news and she was of the opinion that little would change. She used to chair an NHS Trust so has first-hand experience of the defects in the NHS bureaucracy. She happens to be in hospital at present – but not an NHS one of course.

There is more information on this change in a Guardian article here:  https://www.theguardian.com/society/2025/mar/13/why-has-nhs-england-been-abolished-and-what-does-it-mean-for-patients . It includes a link to an NHS England article that explains what it does.  

Fundsmith Equity Annual Meeting

Fundsmith recently held it’s Annual Meeting for shareholders. A recording is now available here: https://www.fundsmith.co.uk/tv/ . Fund manager Terry Smith is always worth listening to. Witty and informative at the same time.

As a holder of the Fundsmith Equity Fund I am happy to stick with it during the recent under-performance against the World MCSI index. The market is very distorted at present by the over-concentration on large tech stocks.

Terry quotes John Bogle about the distortions created by the increasing dominance of index funds. I am happy to stand back from this ill-informed popularity.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.