Author: rogerwlawson

Aberdeen – Basic Branding Mistakes Repeated

Highlighted in a lead article in the FT today is the failure of what used to be named Standard Life Aberdeen to get their branding right. They report that several advisors told the company not to use the proposed name of Abrdn which has been widely ridiculed. The company has now decided to use simply “Aberdeen”.

Now I have some knowledge of this subject and the latest choice is no better. Aberdeen is the name of a city and hence not easily protectable as a registered trademark. The web address http://www.aberdeen.com is also already in use by someone else.

They should have started from scratch with a new and easily protectable name. Better late than never is the motto here.

Aviva is a good example of a wise and successful name change from CGNU, Commercial Union and Norwich Union. It can be done even if it takes some time for customers to get used to a new name. But trying to use a name like Aberdeen just shows that whoever made that decision does not understand the basics of sound branding.

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

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Attending AGMs and World Kidney Day

There is a very good article on the benefits of attending Annual General Meetings of companies in the Investors Chronicle – see https://www.investorschronicle.co.uk/content/fd80e2d6-d2b2-4f56-a0ee-8be30d818d99 . I always try to attend them although being now less mobile I can only do so if companies provide for on-line attendance (via a “hybrid” meeting).

It is preferable if you can attend in person as you can learn more that way. Even if you are in a nominee account you should be able to obtain a letter authorizing attendance.

I wrote an article for ShareSoc when I was Chairman that spells out how General Meetings should be run. It still makes for good reading – see https://www.sharesoc.org/How_To_Run_General_Meetings.pdf . It is not just guidance for company directors but also worth reading for shareholders planning to attend such meetings.

This is what I said in my book “Business Perspective Investing” on attending AGMs at investment trusts:

AGMs – Are They Well Run? Good investment trusts have well attended Annual General Meetings with an informative presentation from the fund manager. Few open-ended funds have meetings for investors but Fundsmith Equity Fund is one commendable exception. How the Chairman handles the meeting, and their willingness to answer extended questions can also provide an indication of their competence”. I also said on general companies: “A good indication of how much attention a board of directors takes to the interests of minority shareholders is the conduct of the Annual General Meeting” and “As with politicians, some company directors are experts in avoiding responding to straight questions with simple answers. Investing in companies where the CEO or Chairman is of that ilk should be avoided”. See page 71 of the book.

This is what is said in the IC article: “Those who already see the value of going to AGMs like to hear what the directors have to say, especially about strategy and the future. They can also share views about the company with other investors, and maybe have a quiet word with a director or two. No secrets will be spilled, but sometimes those casual chats can give unexpected insights into the business. Body language can speak louder than words”. I very much agree with those comments.

World Kidney Day

I was reminded via an email that today is World Kidney Day. This is aimed at promoting awareness of kidney disease (many people are not aware they have it when early treatment is preferable). See https://www.worldkidneyday.co.uk/ for more information. It gives a list of possible symptoms and a simple blood test or urine dipstick test can confirm if your kidneys are functioning well or not.

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.

When Your Internet Goes Down

This morning I learned how dependent we are now on the Internet. My hub (router) power plug loosened so it lost power. So I was out of action for about 12 hours. Blood pressure rose in response until I identified the problem.

You might say, was that not easy to identify? No it was not as I have multiple BT boxes on my desk and I thought my gardener might have cut through the cable when planting a new rose yesterday. It’s now taken a few hours to catch up with my emails (I can pick them up on my phone but it’s tedious to do so, particularly if I need to reply).

BT support was quite bad – expecting me to log into a support service on the web. What do people do if they don’t have access by other means if their main internet connection fails? It seems impossible to speak to someone.

I think it might be time for me to fire BT and switch to another internet provider. Please advise any recommendations.

The moral is make sure you have a back-up system for accessing the internet.

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

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Tariff Wars and Reform In-fighting

The Investors Chronicle editor (Rosie Carr) led with an article this week on the tariff wars that have broken out – headlined with “Facing up to America First”. High tariffs (i.e. taxes on imports) are certainly extremely damaging and should be avoided if possible. They reduce trade and raise the cost of products that cannot be easily replaced by domestic production. Inflation tends to rise as a result.

She concludes with this statement: “Even if these fears are overdone, lack of diplomacy and disregard for consequences do not bode well”. But I just see it as the consequence of ignoring the trade imbalances that have been allowed to rise in recent years with unfair tariffs and taxes imposed on US products by other countries.

For example, UK car exports to the US attract a 2.5% tariff, while US exports here face a 10% tariff. This is one reason why there are not many US manufactured cars on UK roads and that has been the position for many years. With this price barrier, it is not practical for US car manufacturers to build European model cars as the market is simply not large enough.

In other words, Europe and the UK have brought US attempts to rectify the imbalances upon ourselves. Donald Trump has been right in taking steps to rebalance the situation even if he has done so rather abruptly.

The Japanese and Europeans almost destroyed the US car industry in the last 50 years by lower costs and technological innovation while protecting their own home markets by tariff and other regulatory barriers. This needs to be stopped. Other products and markets have been corrupted in similar ways.

Reform Party In-Fighting

As a supporter of the Reform Party, I am somewhat dismayed by the latest spat among the leadership. Rupert Lowe, M.P., has been making public some of the issues. But having a public debate on them is not the way to behave for a Party that wants to be seen as being a responsible organisation.

They need to all calm down and resolve their issues and complaints in private! If Rupert Lowe cannot follow the leadership he should depart to other pastures.

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.

Lower Thames Crossing – An Example of UK Planning Ineptitude

The Lower Thames Crossing tunnel has been under consideration, but not actual construction, for many years. It would relieve traffic congestion on the A2 and M25 by allowing traffic to avoid the Dartford Crossing. Many people, including me, would benefit, but this is what the FT had to say recently on the planning impediments to getting the project moving forward:

“Lower Thames Crossing has cost £1.2bn even before construction starts. The scheme to build a 14-mile road and tunnel to connect Kent and Essex has become a totem of Britain’s snarled-up planning system, in which ventures are tied up with years of delays and mountains of expensive compliance documents.

The planning document for the project — the first wholly-new Thames river crossing east of London in 60 years — runs to 359,070 pages, while around 150 staff are employed on the project, as well as an eight-strong management team.”

Comment: This is a typical example of UK management incompetence with overpaid consultants creaming off enormous fees and delaying projects while environmental concerns are exaggerated by pressure groups.

See FT article here for more information: https://www.ft.com/content/917d4b7f-318e-46fe-ba44-664551ebcf13

Will I see it completed in my lifetime? It seems doubtful.

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.

Political News and Defence Expenditure

Every few years, one wonders how our stupid political leaders managed to get elected. After Rachel Reeves actions to depress the economy by raising NI and other taxes, we have Keir Starmer saying that the UK was willing to put “boots on the ground and planes in the air” to defend any future Ukraine peace deal.

The PM said the UK and other European countries were willing to defend Ukraine militarily if a peace deal with Russia is agreed – that sounds like a defence agreement like Britain made with Poland before World War II which the UK had neither the resources nor geographic capability to uphold. An enormously expensive war was the result.

The PM might be trying to impress his fellow European leaders and they are probably quite happy to let the UK take the lead on spending money and killing soldiers in a war for Ukraine but it makes no sense to me. This tub-thumping rhetoric is plain daft to my mind. It will be a red rag to a bull so far as Putin is concerned.

The only positive is that shares of defence companies have soared on the prospect of more revenues and profits (for example, I hold QinetiQ – up 8% this morning). Taking the funding out of the AID budget makes sense but I would still prefer peace to war.  

I shall write to my Member of Parliament on this subject and encourage him to change the approach of his leader. I suggest you do the same. See https://www.parliament.uk/get-involved/contact-an-mp-or-lord/contact-your-mp/

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.

BP About Face, Nvidia and Tesla, Ukraine Politics

The big news last week was that major UK oil company BP (BP.) is reducing investment in renewable projects and investing more in oil and gas. This is a reversal of previous strategy which I and many major investors such as Elliott welcome although it has angered some of the chattering classes.

As I have said before, I am a holder of BP shares but I have been selling the shares after profit forecasts declined and the share price fell. BP simply said it had been too optimistic in its decision to move to green energy when its rivals took a more conservative strategy.

Well it’s never too late to change your mind if a strategic decision proves to be a mistake. So congratulations to BP for making this decision. One of my stockbrokers now rates BP as a “buy” with a p/e ratio of 9.7x and a prospective dividend yield of 6.0% but I won’t be rushing in to buy back the BP shares I sold. I might even have to sell more to realise some capital gains tax losses before the end of the tax year that is looming. Turning around this giant is going to take some time. There may be better opportunities in US oil companies subject to less political interference. Now if BP was to move domicile and share listing to the USA, the story might be different……

There have been sharp falls in Nvidia and Tesla shares of late. Neither of which I held for reasons given below. There was a good article on Nvidia in Investors Chronicle the week before last. This AI semiconductor specialist is facing new competition from DeepSeek and other challengers while Tesla is seeing falling sales with Chinese competitors such as BYD moving into the electric car space with good products while the older car manufacturers are also catching up.

The big problem with shares in such technology companies is always that the competition can leapfrog with newer products and more advanced technology. It’s very difficult to predict what will happen and when. The only protection is to build an ecosystem of services around the products (as Apple have done to some extent) or have products that customers have come to rely on and are locked in with proprietary technology (as Microsoft has done). But the car market is still wide open to new and cheaper  competition.

On the war in Ukraine, it was fascinating watching the Trump/Zelensky press conference where they seemed to want to negotiate a deal in public. Trump was quite rightly in my view refusing to guarantee a Ukrainian peace settlement which he rightly said was a path to World War III. This was a big missed opportunity though to achieve some progress in halting the war.

Media comments in Europe unfortunately mainly supported Zelensky when the USA see him as the main problem, and so do I.

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

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Book Reviews – J.D.Rockefeller and Ed Conway

I am currently reading a couple of books. The first is “Letters from J.D. Rockefeller to His Son”. These were written in the years around 1900 when Rockefeller was probably the richest person in the world.

He built Standard Oil into a virtual monopoly in oil production, refining and storage and also owned major parts of the US rail transportation industry. If you wish to learn how to build an industrial monopoly this is a good book to read. Taking over weaker competitors is one tactic to follow.

There are a couple of good letters on the benefit of borrowing money to finance expansion (so long as you never default on the loans), and what you can gain from business failures. As one letter says “Failure is a good thing as long as it does not become a habit”. But you can gain much from failures. He says “Once avoiding failure becomes your motivation to do things, you have embarked on a path of laziness and powerlessness”.

This is a good paragraph: “If you are afraid of failure, you will not dare to take risks and then lose the opportunities that are placed right in front of you. Therefore, my son, in order to avoid losing opportunities and retain your qualifications for competition, it is worthwhile to pay for our failures and setbacks!”

There is a lot of business wisdom in this book which is as relevant today as it was over 100 years ago. I therefore recommend this book to all budding entrepreneurs.

The books cover photo is of Rockefeller probably wearing a wig. He suffered from alopecia totalis like me so I have always felt some sympathy for him.

The other book I have been reading is “The Summit” by Ed Conway. It is a history of the Bretton Woods conference attended by all the major powers in 1944 which set out the economic framework we have been living in since then. It established a new monetary system and subsequently helped form the United Nations organisation.

A big influence on the outcome was John Maynard Keynes and the book covers his background at some length. You can understand how he came to influence economic policy in many countries.

At 454 pages the book is rather long for my liking but it certainly helps one to understand the influences that have formed the economic and monetary policies of the current world.

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.

Copyright in the Modern World

Before I move on to more serious matters, is it not appalling that politicians are spending a lot of time arguing about who started the war in Ukraine? There are many sides to that argument. Actions by Ukraine, Russia and surrounding countries including the USA all contributed to pushing Russia into invading. Shots were fired well before it turned into a clear invasion. There does seem to be a willingness to try to reach a peace agreement and that needs to be urged on all parties.

Copyright and Artificial Intelligence. That is the title of a public consultation published by the Government in December which is about to close.

Copyright has historically been designed to protect and financially support the authors of literary works. But the scene is being clouded by use of AI Models trained on existing material available on the internet and used to create new “works of art”. Cribbing material from other authors is nothing new. William Shakespeare copied some of the plots of his plays from other literary works. But it’s getting more and more difficult to identify the creators of new material where AI software is being invoked.

As the foreword to the latest consultation says: “At present, the application of UK copyright law to the training of AI models is disputed. Rights holders are finding it difficult to control the use of their works in training AI models and seek to be remunerated for its use. AI developers are similarly finding it difficult to navigate copyright law in the UK, and this legal uncertainty is undermining investment in and adoption of AI technology. This status quo cannot continue. It risks limiting investment, innovation, and growth in the AI sector, and in the wider economy. It effectively prevents creative industries from exercising their rights”.

If you are the author of published books or other written material, as I am, this should concern you. I have submitted a brief response to the consultation which closes on Tuesday (the 25th Feb). But this is a very complex subject and I think it needs extensive thought and discussion before any proposals to change UK law are firmed up.

The consultation is here: https://www.gov.uk/government/consultations/copyright-and-artificial-intelligence/copyright-and-artificial-intelligence . If you have an interest in this area, please respond.

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.

Ukraine and the Economy

It is good to see Donald Trump taking a vigorous approach to settling the war in the Ukraine. I have written on the subject of the Ukraine before – for example here in 2022: https://roliscon.blog/2022/03/08/ukraine-a-more-balanced-view/ . My view has not changed. There is now little chance of Ukraine winning the war militarily so they should settle for the best peace terms achievable. An enormous amount of money is being wasted on this war – including billions of pounds by the UK.

Keir Starmer has announced he is “ready and willing” to put British troops on the ground in Ukraine to enforce any peace deal. What lunacy is this? He is pretending to be able to act like a world power such as the USA when we are not. Simply delusional. Our economy can simply not support thousands of troops stationed overseas. The British army only has about 75,000 full time personnel and the number has been falling for years. One wag suggested that with all these unaccompanied male illegal immigrants they should be conscripted into the army – a good idea. You give them the option – join the army or be repatriated to where they came from!

If we want to have a growing economy we need to have a peace settlement in Europe where we stop wasting money on military equipment and munitions, and reduce the cost of energy by consuming Russian gas.

The TaxPayers Alliance recently made a very good point. The country’s GDP figures may be slightly positive overall (so small to be within the range of statistical accuracy), but individually we are getting poorer – see their press release here:  https://www.taxpayersalliance.com/taxpayers_alliance_declares_personal_recession_in_response_to_gdp_figures

Our economy is in deep doo-doo in reality with Reeve’s rise in NI meaning many companies are reducing staff and profits are falling. High taxes are leading to economic doom as the TaxPayers Alliance frequently points out. It is an organisation well worth supporting. See https://www.taxpayersalliance.com/donate

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.