Census Results – A Problem the Government is Ignoring

Yesterday the Office of National Statistics released the first results from the 2021 Census in the UK. The population of England and Wales rose to 59.6 million which is an increase of 6.3% since the last census 10 years ago.

This substantial change which directly affects our quality of life was barely covered in the national media. More people mean more stress on housing provision, more vehicles on our roads and a bigger demand for health services (particularly as the population has aged – there are more older people and they are living longer). Some of the age increase can be blamed on baby boomers growing old.

The population increase has been concentrated in London and the South-East but older people have tended to move out of London being replaced by young immigrants (not just from overseas but from within the UK). The census data might also have been distorted as people tended to move out of central London boroughs to the country during the pandemic.

England now has the highest population density of all major European countries.

One major impact of more population is degradation of the environment – more air pollution and more waste. Here’s a good quote from Sir David Attenborough that is very relevant: “All our environmental problems become easier to solve with fewer people, and harder – and ultimately impossible – to solve with ever more people”.

What is the Government doing to try and tackle this problem?  In essence very little apart from rather feebly trying to restrict immigration. The birth rate is forecast to fall, but there is as yet no sign of any reduction in the population growth. A growing population might mean a healthy economy but the shortage of housing, particularly in the South-East, has been a major factor in political unrest while the elderly are facing problems in getting medical treatment as the NHS is over-stretched to cope.

The Government is being distracted by many other issues at present in a reactive fashion. Such problems as food and energy security would not be a problem if the UK population was reduced.  

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

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Train Strikes – What’s It All About?

The national rail strikes this week have been incredibly inconvenient for those who rely on trains to get to work or for essential trips such as visits to hospitals. In London the strike has also extended to the London Underground. Commuters have been badly affected although the ability to work from home (WFH) has softened the blow and reduced the impact.

Why are RMT union members striking? It’s partly that they want a pay increase to offset the impact of inflation. But it’s also about whether rail management have the power to decide on jobs and working practices. For example, they wish to block any forced redundancies such as the closing of ticket offices. In London they are even intervening over the outsourcing of the contract for underground cleaning by TfL.

It should be a business decision as to whether ticket offices should be closed. There are now generally alternative ways to buy tickets although a few people might be inconvenienced. But if it saves money then management need to decide on a commercial basis whether to close offices.

National Rail Chief executive Andrew Haines said: “We cannot expect to take more than our fair share of public funds, and so we must modernise our industry to put it on a sound financial footing for the future. Failure to modernise will only lead to industry decline and more job losses in the long run.”

In reality the national railways have lost money for the last 100 years and have been massively subsidised by the Government (i.e. by you and me from our taxes). It’s exactly the same in London. With reduced passengers on all services due to the Covid epidemic and more WFH all rail services need to cut their costs to get revenue and costs more into balance.

The rail system is an enormously labour-intensive operation to maintain the track and signalling. Railways are also enormously expensive to build – just look at the cost of HS2 or Crossrail (about £100 billion and £19 billion respectively) – both projects are late and over budget.

The big problem is that railways use old technology and are operated using archaic working practices. The rail unions are trying to protect their pay, their jobs and working practices which is simply unjustifiable. They need to accept that passengers have alternatives and if they are unwilling to use the railways as much as they used to do then management has to retrench.

The unions need to face up to reality or they will go the way of the dinosaurs (like the coal miners did when faced with the Government being unwilling to subsidise perpetual losses).

But the core of the problem is a confrontational approach from both sides. There should be a consensus about how to run the railways profitably for the benefit of both the owners and the workers.

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

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Barton Biggs and Hedge Hogging, plus NHS Dysfunction

I managed to finish reading the book Hedge Hogging last week during my 7 days in hospital. Here is a longer review.

The author Barton Biggs spent 30 years at Morgan Stanley building up their investment management business. In 2003 he formed his own hedge fund named Traxis Partners which was wound up after his death in 2012. But this is no out of date history of past financial events as much of what it covers is topical and relevant to today’s stock markets.

It’s partly a journal of events in his life but with extensive diversions into the big issues most investors face particularly the psychological difficulties that you can face. Topics such as short-selling, private equity, emerging markets, market bubbles and investment cycles are covered – we certainly seem to be in a down cycle at present rather than a temporary correction. As an investment strategist over 30 years he obviously experienced a variety of market conditions. He covers the two main investment approaches – based on growth and value but in essence was agnostic.

He has some interesting comments on Ronald Reagan and Margaret Thatcher – the latter he met more than once. He explains the success of the Yale Endowment Fund under David Swensen and explains to an audience of tech stock fanatics that “the human emotions of fear and greed that drive the stock market to excess have not changed over the course of human history and remain as valid today as in the past. Busts are busts, booms are still booms, and bubbles always burst, but this was boring stuff, and the crowd stirred restlessly. The glitterati understandably had no interest in hearing about busts or bursting bubbles. On to the next IPO and salacious stock idea”.

A good paragraph that gives you an impression of his writing style is the following: “If you hang around the investment business long enough eventually you experience some mysterious, almost supernatural events because the stock market is a capricious beast, almost a force of nature like the sea or the arctic. It can be bountiful and loving in its embrace but also hard and cruel and sadistic. Making your living from the stock market is a strange, hazardous, yet beguiling occupation. It’s a little like being a ship’s captain back in the time of wind and sail. As the master of a whaler out of Nantucket in those days of yore, in good fair, you blissfully rode the ocean’s friendly currents. Then suddenly without warning, the sea would turn and you would find yourself driven helplessly toward some distant rocky shore by one of its fierce, irrational storms. Men and women who live at the mercy of the whims of the sea and weather are a superstitious lot”.

He ends with a review of the biography of John Maynard Keynes by Robert Skidelsky which I have lined up as my next book to read. In all Hedge Hogging is a fascinating look at the world of hedge funds but there are many lessons to be learned from it for ordinary investors.

Lastly let me say about a few words about my stay in an NHS hospital, which was not for the first time. The popularity of the NHS is falling and quite rightly. It is a dysfunctional organisation that does not compare well with the systems in other countries (bar the USA).

I cannot complain about the treatment I had but the big problem is the culture. Treating patients as children to be organised and disciplined, not as people. It was also very wasteful, keeping me in bed when I was only “walking wounded” as the army might say when I could have been treated at home for most of the time at less cost. How do you reform the culture of an organisation? With great difficulty is the answer. Easier to start from scratch.

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

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Is the Investment World Changing?

With the war in Ukraine continuing and inflation hitting over 6% (and likely to go higher), it seems a good time to review one’s investment strategy. My thoughts on this were prompted by watching the panel discussion at the Mello Trusts and Funds webinar on Tuesday. Some members argued that now is the time to move into commodities and out of the high growth technology stocks that have been such winners in the last few years. Is growth going to go out of fashion?

It’s certainly very clear that high inflation in basic commodities such as food (likely affected by the war in Ukraine who are a major producer) and oil/gas (also affected by the war and the associated sanctions on Russia) will have a big impact on consumers in the UK in the coming year. We are already seeing this in the shops and in on-line stores from my brief shopping experience yesterday.

As the Chancellor’s Spring Statement indicated yesterday, the UK is facing its biggest drop in living standards on record as wages fail to keep pace with rising prices. His measures to relieve this by raising the National Insurance threshold and cutting fuel duty will help a few people but not the retired or those not in work. The basic rate of income tax will fall slightly in 2024 in time for the next general election but the country will remain a high tax environment. Perhaps the Chancellor has decided he cannot protect people from the world economy which is undoubtedly true so he has just made a few gestures.

Economies might grow less rapidly or recessions hit as a result of these adverse economic winds, or we might see the dreaded “stagflation” return to the UK. But does this mean I should change focus on the types of companies I invest in?

I don’t think so and I shall repeat what Investment Manager of Smithson Investment Trust (SSON) said in their Annual Report which I was reading today: “One might then ask, if interest rates are so obviously on the rise, and this so obviously creates a more favourable environment for value companies rather than quality or growth companies, shouldn’t we adapt our strategy to buy the companies which stand to benefit? Well, no. Owning high quality companies with sustainable growth is a winning strategy over the long term, has been shown to work through several economic cycles, and is one which we know we can execute successfully. Whilst other managers may be able to run a value strategy, we believe it is inherently more difficult, as you cannot hold value companies for the long term if all you are doing is owning a poor quality company at a low price, which you hope will re-rate in the future. If this does happen (there is no guarantee), you then have to sell the company to find another such investment, and so on. This means that unlike our strategy, time is not your friend, because the longer you are holding the company and waiting for it to re-rate, the lower your annualised returns become, and if you’re particularly unlucky, the worse the company becomes. On the other hand, it matters less if it takes more time for the market to appreciate the value of the type of companies we hold in our strategy, because the highest quality companies are constantly getting better, or at the very least bigger, owing to their growth. So, once we have found the right companies, all we have to do is wait. We think that patience is one of our competitive advantages, because with the strategy we employ, it tends to pay off”.

Commodity companies go in an out of popularity as their profits depend on the commodity demand and prices. But the production of most commodities responds to price changes so in a year or two the boom is over and the bust follows as over-capacity has been created. Chasing these rotations requires a large amount of time and effort when I prefer to purchase companies that one can stick with for many years.  

The impact of high inflation does mean that one has to be careful in selecting companies with high margins and pricing power, i.e. the ability to raise selling prices when their costs rise. But that is a truism in all economic circumstances. Those are two factors that differentiate quality companies from the pedestrian ones.

Companies that have index-linked contracts with their customers might be worth looking at now that inflation is heading to 10%. That applies to many infrastructure investment companies for example and another sector is property companies who often have inflation linked rent reviews. I hold a few shares in Value and Indexed Property Income Trust (VIP) which is one such company.

Incidentally Smithson noted they had sold their holding in Abcam (ABC) which I also commented on negatively recently. They are concerned about the uncertain paybacks on the investments being made which I completely agree with.

Changing my investment strategy which has developed over the last twenty years and has made me an ISA millionaire does not seem to be wise. There was an interesting article published today in the Daily Telegraph on ISA millionaires of which there are apparently over 2000 in the country now according to HMRC. There may be more than that as Hargreaves Lansdown alone claim to have 973. See article here: https://www.telegraph.co.uk/investing/isas/meet-millionaires-made-fortune-using-isas/

The average age of ISA millionaires is apparently 71 and the article reports that the top three stocks favoured by these investors are pharmaceutical company AstraZeneca, insurer Aviva and oil giant BP. Popular funds include Artemis Income, Fidelity Global Special Situations and Fundsmith Equity. That tells you that you don’t need to be a speculator to become an ISA millionaire. You just have to invest the maximum possible every year in a diverse portfolio and stick with it.

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

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Should Evraz Have Been Suspended?

The listing of shares in Evraz (EVR) have been suspended so all trading is barred. They were not suspended at the request of the company which is the more common circumstance but at the behest of the Financial Conduct Authority. The suggestion is that this was to protect investors pending clarification of the impact of the UK sanctions.

But the suspension of shares should in my view be an action of last resort. The suspension of shares is enormously damaging to investors because they are then locked in, and such suspensions can last a very long time. Investors may have borrowed cash to purchase the shares and then can’t get out.

Similar problems are affecting other Russia-linked firms such as Polymetal, Petropavlovsk and Raven Property as they are deleted from FTSE indexes and it is reported that brokers are refusing to trade their shares.

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in Russia, the United States, Canada, the Czech Republic and Kazakhstan. EVRAZ is one of the top steel producers in the world based on crude steel production of 13.6 million tonnes in 2020. Picture above is of one of their steel mills from their annual report.

It is a UK registered company but Roman Abramovich owns 29% of the shares and allegedly has close links with Vladimir Putin, although he denies that. The BBC recently ran a programme which did a hatchet job on his reputation and alleged he acquired his wealth by fraud. Without going into the accuracy of those reports, it does seem to me that sanctions are being imposed on political grounds in an extra judicial process.

I think few people might question the imposition of sanctions on individuals who are linked to the Russian regime. But the problem is Evraz has a wide shareholder base. That includes many private shareholders. According to an Investors Chronicle article, they said AJ Bell had revealed that shares in Evraz and Polymetal were its two most bought shares over the past week. With both stocks plunging more than 80% year to date, this has led some to buy in as an opportunity to reap dividend payments potentially higher than the cost of the shares. However dividends have been suspended at Evraz.

The suspension of shares in Evraz might harm Abramovitch and his Russian friends but it will also damage the interests of other innocent people. This is not reasonable.

Evraz is clearly in a difficult financial position as the company will suffer from sanctions and all the non-executive directors have now resigned. Is that justification for halting trading in the shares? I am not convinced it is.

Companies can rightly, in my view, request suspension of their shares when past accounts are shown to be dubious – for example because of discovered frauds. This is to give time for the company to report what it knows and ensure all shareholders are aware of the issue before the listing is reinstated.

But simple doubts about the future prospects of the company should not be a sufficient justification for suspending a listing. I recall the example of Northern Rock where it got into financial difficulties and there was a run on the bank. It was running out of cash and there was a threat of nationalisation, but the shares were not suspended. It was only delisted when nationalisation took place.

It does seem to me that ShareSoc, which represents private shareholders, should take up this issue and request that the listing be reinstated as soon as possible. And the FCA should establish clear rules about when a listing should be suspended.

A suspended share listing can create enormous problems for investors. For example, if they have borrowed to buy the shares, or are trying to act as executor for an investor. Valuing the shares for probate is very difficult and there is no way to realise the value to pay IHT.

Mixing politics (the attack on all things Russian) with finance is a very bad idea.

For the avoidance of doubt, please note I have no interest in the shares of Evraz or any other Russian linked companies.

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

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Is Location Important?

The issue of where a company chooses to locate itself came to mind on reading an FT article about the Financial Conduct Authority (FCA). They have moved to Stratford in East London when they were previously at Canary Wharf. It seems that some staff are unhappy.  Will the FCA really recruit high quality staff when based in Stratford? I doubt it.

This issue also arose when I spoke to DotDigital CEO Milan Patel after their results webinar last Friday. The discussion made it clear, as I thought, that all had not been well with their US business which is why forecasts had to be downgraded. DotDigital chose to set up their US headquarters in Manhattan, New York City and they are still there. To my mind that is the worst possible US location for a technology company. It would make recruitment difficult and expensive. It now seems they have staff mainly working from home.

I do get the impression that DotDigital have made the same mistakes as many British companies entering the USA, i.e. not understanding the culture, not spending enough on marketing, not talking in American rather than English, etc. But they are learning.

Does it matter where the office is located if everyone is working from home to avoid catching Covid? I think it does. Not meeting colleagues regularly, if not everyday, is very important for motivation and for management to understand their concerns. I speak from experience of both managing remote teams and working in the USA. OK we can hold Zoom meetings but those are not quite the same as they are more formal events. They do not provide the opportunity for casual conversations.

Another webinar I attended today was a results presentation by Bango (BGO). At least I got my question answered this time which was: “The big loss in the associate was of some concern. Please explain the reason for that and its prospects”. The brief answer given was that the joint venture was still in the development phase and revenues were starting to come through. But a lot more explanation would have been preferable.

The stock market seems to have stabilised as the news from the Ukraine does not get much worse and I perceive glimmers of a possible peace settlement on the horizon – along the lines of what I suggested in a previous blog post. But I don’t think the comments of my M.P. Bob Neill about the pursuit of war crimes by Russia were helpful. They might have made for good politics for UK listeners but are not likely to encourage peace to break out.

With oil/gas prices at record levels this week should I have piled into their producers as others have done? I think not as I hate commodity businesses. Earnings are volatile and unpredictable. But there certainly will be a big focus by Governments to ensure countries are less reliant on imports of oil and gas. I have therefore been investing in alternative energy suppliers (wind farms, grid stabilisation, etc).

There are also possibilities in the defence sector where there will be an increase in expenditure no doubt as people come to realise that peace does rely on strong defences.

In the Ukraine they did have a big nuclear weapons arsenal which they inherited from the USSR after its break-up. But they gave them up after assurances by major powers (including Russia) of their security. What a mistake that was!

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

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Ukraine – A More Balanced View

I attended a meeting of investors on Sunday and the main subject discussed was the war in Ukraine. Most attendees clearly had a gloomy prognosis for the outcome mainly because of a belief that Vladimir Putin was a lunatic who desired to restore the USSR, i.e. he would not stop at Ukraine but would thereafter move into Moldova, Estonia, Latvia, Lithuania, Romania et al.  This view is very much reflected in the Western media with concerns that the war could very rapidly develop into a nuclear one.

President Zelensky is clearly a masterful politician. He came from nowhere to win the election for President when historically he was simply a comedian who pretended to be President. There are few more unusual biographies. He also became a master of social media and has won the hearts and minds not just of Ukrainians but of most of the western world – the British do of course love underdogs. Meanwhile Putin has failed in terms of public relations by not putting his case well and has even publicly suggested that Ukraine should not be considered an independent country.

I take a somewhat different view to the popular consensus although I would not want this to be seen as an apology for the acts of the Russian military. As in any war it is unfortunately the civilians who are suffering the most. A peaceful solution needs to be found because if the war is escalated, with more sanctions being imposed on Russia, then the economic damage will be severe and widespread on both Russia and many European countries.

I think when looking at political conflicts which lead to war then it is best to look at the conflict from the point of view of the enemy when pursuing a solution.

Ukraine has historically been closely linked to Russia after being dominated by Poland. To quote from Wikipedia by the Treaty of Perpetual Peace [surely a wonderful name for a peace treaty], signed in 1686, the eastern portion of Ukraine (east of the Dnieper River) came under Russian rule. As a result a large proportion of the population (about 30%) speak Russian, particularly in the Eastern region and the Crimea. In fact President Zelensky was brought up in a Russian speaking family. In other words there are strong cultural ties with Russia. Ukraine was also a founding member of the USSR until that was dissolved in 1991.

Russia is clearly concerned about the encroachment of NATO and the EU eastwards that could both militarily and economically threaten Russia. Only Belarus, Moldova and Ukraine are not in the EU but Zelensky has indicated his desire to join. There is also the problem of the insurgency in the Donbas region which was long-standing before the latest events plus the takeover of the Crimea by Russia which Ukraine wants back. The longer the war goes on, the more difficult it will be to reach an amicable solution as attitudes harden on both sides and people look for revenge. As has been pointed out, Russia might be able to achieve a complete occupation of Ukraine but that might be followed by many years of constant insurrections and guerrilla warfare against them.

Russia has now offered to cease fighting on the following conditions: Ukraine changes its constitution to enshrine neutrality, acknowledges Crimea as Russian territory and recognises the rebel-held areas of Donetsk and Luhansk as independent territories.

This appears to be a reasonable basis for a settlement that would halt the damaging fighting and cease the escalation. If all military forces were withdrawn by Russia from the rest of Ukraine and Ukraine itself committed to the above (including no applications to join the EU and NATO), then a modus vivendi could be achieved.

Many people suggest that Putin might be removed as sanctions bite and his economy collapses or the war goes against Russia. But that seems very unlikely to me. Opposition to Putin in Russia is quite small and exaggerated by western media. Putin re-established Russia politically and economically after the collapse of the USSR so many people respect him for that. The war in Ukraine will not undermine the regime in Russia unless it broadens into a much wider conflict with bigger military losses which seems unlikely to me. NATO is not likely to get involved and quite rightly because to do so would simply damage western European countries even worse as Russia retaliated by halting exports of gas and oil. Sanctions on Russia will not halt the fighting alone and will take too long to have an impact – they can only encourage Putin to reach some kind of settlement.

A settlement that gives time for countries like Germany and Italy to wean themselves off Russian gas is a better solution. There are many worse options.

Here’s a good quotation from the book by Barton Biggs I mentioned in a previous blog post:

“ Disregard the ranting and raving of the self-proclaimed elite thinkers and alleged experts on wars, economies, politics, and, above all, the stock market” and “History doesn’t evolve in a slow and orderly way; often it leaps forward in disorderly, chaotic jumps. People with wealth should assume that somewhere in the near or far future there will be another time of cholera when the Four Horsemen will ride again and the barbarians expectedly will be at their gate”.

So far as Ukrainians are concerned, those circumstances have already arrived.

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

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An Exciting Week for Investors

Last week was certainly an exciting week for stock market investors. The FTSE 100 index fell sharply on Thursday but recovered to rise almost 4% on Friday. The US S&P 500 showed a similar pattern. This was no doubt from the initial reaction to the Russian invasion of Ukraine with an initial panic followed by a more considered response.

Sanctions against Russia might have some impacts particularly on oil/gas prices but Russia is not the only producer.

I thought it interesting to look at the Ukrainian and Russian stock markets. Yes Ukraine has more than one but all trading was suspended by their regulator on Thursday. Moscow’s stock market was hit by a big collapse with the RTS index falling by 38% on Thursday and the rouble plunged to a low against the dollar. But there was a significant recovery on Friday. The bounce back on Friday in the markets seems to be based on some relief than sanctions were not as extreme as feared.

But there is a call to exclude Russians from the Swift international payment network. I recall reading a note some years ago that explained how interbank settlements still took place during the Second World War between the combatants. It would seem unwise to block access to Swift which would be damaging not just to Russia particularly as there are alternative payment networks that are already in place or could soon be created.

There is a book that was recommended by Jonathan Davis at a Mello event last week entitled “Wealth, War and Wisdom” by Barton Biggs which covers how the turning points of World War II intersected with market performance. I have ordered a copy to read and may write a review of it later. In my experience big political events have a big short-term impact as investors hunker down and cease buying or selling until the picture is clearer. With no trading prices rapidly fall. But markets can soon recover as soon as the long-term picture is clearer. It is best not to take hurried decisions about your shareholdings in such circumstances.

As it stands the Ukrainian army is apparently putting up a better fight than was expected although the fog of war is clouding the picture with reporting of military activity being mainly anecdotal. I recall looking at the comparative armed forces numbers of Russia and Ukraine a week ago and the 190,000 Russian troops surrounding Ukraine did not seem enough to ensure a quick victory even if Russia had more heavy equipment to hand. Russia does not seem to have captured the main communication centres, the TV and Radio stations or the heads of Government which is the typical prerequisite for a coup d’état. Even if Russia manages to install a puppet government it could be a long-drawn out conflict and Ukraine is a big country. As Russia and the US learned in Afghanistan, it’s easier to get into a country than to get out. Establishing long-term regime change is very difficult when most of the population opposes you. That is particularly so when there are lots of weapons in the hands of the population which is apparently now so in the Ukraine with many volunteers willing to fight. They may be short of ammunition in due course so the question to ask is how they might get resupplied? We may simply end up with another proxy war with Russia and the West fighting a guerrilla war in Ukraine by supporting local militias with very negative impacts on the local civilian population.

The outlook is bleak unless there is some desire for a political settlement that meets the aspirations of both Russia and Ukraine which does not seem impossible to me.

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

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Another Bad Day for Small Cap Shares

It looks like it’s going to be another bad day for small cap shares and even the FTSE-100 index is down by 2.8% at the time of writing – but that might have been affected by mega miner BHP going ex-dividend today.

This is what the Chairman of Abrdn UK Smaller Companies Growth Trust (AUSC) had to say in their half-yearly results statement this morning:

“The Board has noted the fall in the share price and the NAV per share since the end of the period, each by more than 19%. This is evidence of the significant and severe rotation that we have seen in the market where investors have been moving out of quality and growth stocks and into value. This is an established phase in the market cycle and, while it makes for grim reading, the Portfolio Managers do not believe that they should try to become timing experts to try to time the change in market sentiment. Past experience leads them to conclude that this phase in the cycle should not be long lasting and that this will, over the longer term, come to be seen as a blip. The Board understands the premise and supports the stance that the Portfolio Managers have taken and I hope that we will be able to confirm this to have been the case when we report on the full year results in the summer”.

They could be right and let us hope so as I hold some shares in the company although I was selling some of them late last year as it seemed that some of their holdings were becoming over-valued.

But some of the abrupt market falls on fears of war in the Ukraine are now providing some buying opportunities.

Anyone who has studied the complex political history of Ukraine will realise that it is rather simplistic for western powers to claim that Russia is simply invading the country in an aggressive show of military power. Ukraine has had close links with Russia since the time of the Cossacks in the 16th century. The Cossacks served Russia in the Napoleonic wars and in the first world war. Ukraine was part of the USSR from 1922 until its breakup in 1991 and a significant proportion of the population speak Russian in the Eastern side of the country.  

The notion that Ukraine is not a country in its own right, but a historical part of Russia as Putin has claimed, is not totally unrealistic or unreasonable. One can also understand that Russia might be concerned about the expansion of Nato to include Ukraine when Russia would prefer to have Ukraine as a “buffer” state on its borders.

Peace won’t break out until both sides choose to take less extreme stances in my view.

For those who wish to listen to some great music about the Cossacks from the film Taras Bulba, here is composer and conductor Franz Waxman in a recording: https://www.youtube.com/watch?v=CovY06K3NnY

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

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Baronsmead VCT AGM and P.J. O’Rourke Obituary

This afternoon the Baronsmead Venture Trust (BVT) is holding its Annual General Meeting. I made some very negative comments about corporate governance at this company in a previous blog post – see  https://roliscon.blog/2021/12/24/baronsmead-vct-more-corporate-governance-issue/ . But the good news is that long-standing Chairman Peter Lawrence is stepping down in March according to a recent RNS announcement. And about time too, one might say.

Unfortunately I will be unable to attend the AGM as it is only being held as a physical meeting so will be unable to raise the other issues mentioned in my blog post. I hope somebody else will.

The bad news yesterday was the death of wit and comic writer P.J. O’Rourke from lung cancer at the age of 74. A writer on a wide range of subjects including politics and economics and it’s not many writers who can make those topics amusing. He wrote a digest and analysis of Adam Smith’s book “The Wealth of Nations” which I commented on previously and he wrote on the war in Iraq and on motoring stories in such books as “Give War a Chance” and Holidays in Hell” which are also worth reading.

A sad loss to the world indeed and it always makes one feel depressed when someone younger than you dies – but his lifestyle certainly did not encourage an extended career.

There are lengthier obituaries in the national media which you can find on the web and which shows how influential and popular he was.

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

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