AI Tipped for Rapid Adoption by PCT, and Understanding Business Models

It’s summertime and the stock market continues to drift downwards with little share trading. It’s certainly not the time to be trading small cap stocks.  So I decided to catch up on some reading. I always like to read the Annual Report of Polar Capital Technology Trust (PCT) and that’s not just because I hold the shares but because the commentary on the technology market by Ben Rogoff is usually well-informed. This year is no exception but he is betting on AI to be a new growth phase stimulant.

He says: “After decades of unrealised hopes around artificial intelligence, we believe that generative AI is likely to prove the technology’s so-called ‘iphone moment’”, with mass adoption to follow. I am not so sure. There is no doubt that software such as ChatGPT might enhance search engines such as Google and Bing but will they enable lower cost or faster production of products? It might be just another over-hyped technology that will find a place in the market but not cause a revolution.

The latest book I have read is entitled “The Business Model Navigator” by three business school academics Gassman, Frankenberger and Choudury”.

Understanding a company’s business model is very important. I said this in my own book entitled “Business Perspective Investing”: “A company’s business model describes how the organization creates, delivers, and captures value via its adopted business processes. The accounts are only a good pointer to the future if the world, and the markets in which the company operates, are in stasis, i.e. nothing about the market and the company is going to change”.

The Business Model Navigator covers how companies can and have transformed their operations and profitability by adopting new models and includes many examples. It’s full of useful ideas that can be applied to any business.

The book is not light reading so might best be studied by those with an academic bent or business management background but there is certainly good content to fill up your summer holidays.

Roger Lawson (Twitter  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Flint Report – A Betrayal?

Sharesoc has published a strongly worded criticism of the Flint Report on Digitisation. Written by Cliff Wright it calls the recommendations a “betrayal” and quite rightly.

It removes very important rights from private shareholders and perpetuates many of the wrongs present in the existing nominee system. To remind you, you need to be recorded as a “Member” on the share register of a company to preserve important legal rights!

Sharesoc’s comments are here:

My submission to Sir Douglas Flint containing my mainly negative comments:

Make sure you support the ShareSoc campaign on this subject.

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

A Political Manifesto

A few years ago I penned some policy suggestions for a new political party. I just had a clear out of some of my old files and thought it was worth publishing as it’s still very topical.

Reference Policy Suggestions My suggestions for policies in those areas and others are below:


1.       The personal taxation system is way too complicated and needs drastically simplifying. At the lower end the tax credit system is wide open to fraud while those on low incomes are taxed when they should not be. The personal tax allowance, both the basic rates, and higher rates, need to be raised to take more people out of tax altogether.

2.       The taxation of capital gains is also now too complicated, while tax is paid on capital gains that simply arise from inflation, which are not real gains at all. They should revert to being indexed as they were some years ago. For almost anyone, calculating your own tax that is payable is now way too difficult and hence requiring the paid services of accountants using specialist software.

3.       Inheritance tax is another over-complex system that wealthy people avoid by taking expert advice while the middle class end up paying it. It certainly needs grossly simplifying, or scrapping altogether as a relatively small amount of tax is actually collected from it.

4.       The taxation of businesses is inequitable with the growth of the internet. Small businesses, particularly retailers, pay a disproportionate level of tax in business rates while their internet competitors often avoid VAT via imports. VAT is now wide open to fraud and other types of abuse such as under-declarations, partly because of the EU VAT arrangements. VAT is in principle a simple tax and the alternative of a sales tax would create anomalies but VAT does need to be reformed and simplified.

5.       All the above tax simplifications would enable HMRC to be reduced in size and wasted time in form filling by individuals and businesses reduced. Everyone would be a winner, and wasted resources and expenditure reduced.  

6.       The taxation of company dividends on shares is now an example of the same profits being taxed twice – once in Corporation Tax on the company, and then again when those profits are distributed to shareholders. This has been enormously damaging to those who receive dividends and the lack of tax credits has also undermined defined benefit pension funds. The taxation of dividends should revert to how it once was.

7.       The regulation of companies and financial institutions needs very substantial reform with much tougher laws against fraud on investors. Not only are the current laws weak but the enforcement of them by the FCA/FRC is too slow and ineffective. Although some reforms have recently been proposed, they do not go far enough. Individual directors and senior managers in companies are not held to account for gross errors or downright fraud, or when they are, they get off too lightly. We need a much more effective system like they have in the USA, and better laws.

8.       Shareholder rights as regards voting and the receipt of information have been undermined by the use of nominee accounts. This has made it difficult for individual shareholders to vote and that is one reason why investors have not been able to control the excesses in director pay recently. The system of shareholding and voting needs reform, with changes to the Companies Act to bring it into the modern electronic world.

9.       The pay of directors and senior managers in companies and other organisations has got wildly out of hand in recent years, thus generating a lot of criticism by the lower paid. This has created social divisions and led partly to the rise of extreme left socialist tendencies. This problem needs tackling.

10.     Governance of companies needs to be reformed to ensure that directors do not set their own pay, as happens at present, but that shareholders and other stakeholders do so. Likewise shareholders and other stakeholders should appoint the directors.

11.     Insolvency law needs reform to outlaw “pre-pack” administrations which have been very damaging to many small businesses. They are an abuse of insolvency law.


1.       Way too much money is spent on rail transport and trams which cannot be justified on any cost/benefit analysis. HS2 is just one extreme example of this. Meanwhile the road system does not receive enough investment – this has resulted in traffic congestion, wasted time which is damaging to the economy and lots of poorly maintained roads (e.g. potholes). Only 25% of direct tax on vehicles is spent on the roads.

2.       Public transport should generally pay for itself. In London alone there is a subsidy of £1 billion per year on buses which is totally unjustified. Many of these subsidies are given to people who could afford to pay for their travel, even when they are receiving social security benefits.

3.       Road safety has flat-lined due to an excessive focus on speed reduction and the perversion of the law by the use of police waivers to force people to take useless “education” courses. Policies have been distorted to enable the police to make money from drivers, while improving the roads, better education and other policies to reduce road casualties have been ignored.

4.       Charging of drivers via road pricing to reduce congestion should be opposed (as it does not work and is just a money-making taxation scheme). Likewise Clean Air Zones where drivers are taxed for driving some vehicles, all of which were legal when purchased, should be stopped and the whole focus of environmental legislation should be reviewed. EU regulations in this area have made illegal air pollution levels when there is no real evidence of danger from them. ULEZ and CAZ schemes are just a way to raise taxes with little real benefit on health grounds and no cost/benefit justification.

5.       Likewise the EU has mandated speed limiters (ISA – Intelligent Speed Adaptation) for all vehicles in future which will delay vehicles and not contribute to road safety, while generating millions of speeding fines on innocent drivers. There should be a commitment not to follow the EUs lead on such legislation.


1.       Education should be free for all those who can justify they will benefit from it. At present too many people go to university who will be unlikely to benefit from it and they should be redirected to lower cost vocational courses.

2.       Loans to support students taking courses should be interest free.

3.       There needs to be a much stronger focus on technology education in the UK as only people with such education will contribute positively to the economy.

4.       There needs to be more emphasis on the use of technology in teaching to improve the productivity of that profession which has basically not changed in hundreds of years. The use of on-line resources can assist and would enable teachers to be more productive and hence be paid more.

Environmental, Climate Change, Population and Housing

1.       There should be more attention paid to the real science of environmental impact rather than the hysteria of left-wing campaign groups.

2.       Mrs May’s commitment to a zero-carbon economy, which is financially unaffordable, should be scrapped because there is no practical way to achieve it and it is based on very dubious scientific analyses.

3.       The population of the UK needs to be controlled, if not reduced, to improve living conditions and ensure a healthy economy. This can be achieved by tougher limits on immigration (along with better enforcement of existing rules), and encouraging the population to procreate less.

4.       Housing costs, and the inability to find suitable accommodation, are major problems for the young. Controlling/reducing population would help but other measures need also be considered including the financing of more social/rented housing.

Local Councils and London

1.       The funding of local authorities, and some of their important functions such as providing social care, needs to be reformed. At present they are too dependent on central Government funding which means obligations are often put on them without the funds to cover the cost.

2.       There are wide variations between the efficiencies of different local councils with many being wasteful. They should have guidelines and limits on how they spend their money, laid down by central Government, to avoid waste.

3.       London is a particular problem where it has become dominated by populist Mayors (both Labour and Conservative) and where elections are driven by national politics rather than local issues. The most recent Mayor, Sadiq Khan, has been pursuing a “gerrymandering” policy of increasing immigration to gain more people that are likely to vote for him, thus making London even less acceptable as a place to live than it has been for years. Crime, transport and housing are all in a major crisis. I suggest the position of the Mayor, and the Greater London Authority be scrapped as Mrs Thatcher did with the GLC when Ken Livingstone became so damaging. In other words it should revert to central Government control, with the local boroughs having more control over their own affairs. That would no doubt be popular with London borough councillors.

4.       Transport for London should be taken out of the control of the Mayor be made an independent body with an objective of making it a profit centre rather than a consumer of enormous subsidies. They should also lose control of the road network (the TLRN) where they currently have a perverse incentive to make the road network unfit for purpose so that more people use public transport from which they gain income.

I hope you find the above useful.

Yours Roger W. Lawson, M.B.A., M.B.C.S. ++++++++++++++++++++++++++++++++++++++

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added. 

Dividend Exasperation

Since share registrars have been discouraging dividend payments via cheques, and some companies have insisted on bank transfer payments, it has become increasing difficult to keep track of dividends.

In the good old days you knew the dividend had been paid and who it was from when a cheque in the company’s name was received. Now some payments arrive into our joint bank account and some arrive via cheque still. Some also go into our accounts with ISA and SIPP providers where the shares are held in nominee accounts.

The direct bank payments do not indicate whether they are for me or my wife so I have to figure it out from my Sharescope system and the worst culprit is City Partnership who send dividend payments for some VCT holdings without referencing the company name in the bank transfer.

Other companies send dividend cheques where the company issuing the cheque is not clear.

These changes mean I have significant extra work to figure out the dividends received and to check none have gone missing. It’s becoming quite exasperating having to waste time on this. Basically the system is a mess and not fit for purpose.

Paying in cheques has also got more difficult as so many bank branches have closed. And paying in a cheque via scanning it with a mobile phone app only works for smaller amounts.  In addition, one recent such transaction for one our trust accounts was rejected for no good reason.

The assumption seems to be that recipients don’t bother to check dividend payments received (which I certainly do) and that they are always paid correctly (which is not the case).

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Babylon Healthcare and WeWork Collapsing

A report in the Daily Telegraph has suggested that Babylon Health is close to collapse. Babylon have developed an innovative software product for diagnosis in a GP environment and has been used by the NHS. The company listed in the USA in 2021 and was one of the UK tech hopefuls for which a bright future was foreseen. It was even backed by the Government as it might relieve pressure on GP services. But the party is over it seems. I am not clear why it is failing – lack of cost control may be the problem.

I have been using the NHS a lot of late due to declining kidney function (25-year-old transplant is failing) and had a fistula added in readiness for dialysis last week. Am apparently not fit enough for another transplant at present. I am receiving lots of advice about improving mobility and health from an “elderly person’s review” at Guys Hospital and from local social services (albeit 3 months too late). My short-term memory is clearly declining not helped by the drugs I am taking but I can cope with that. If we meet don’t be surprised if I can’t remember your name!

Another past shooting star that has fallen back to earth is WeWork which I commented on in previous blog posts – see The FT has reported that “substantial doubt exists about the Company’s ability to continue as a going concern”. This is a property company in essence, renting out short-term office space with a dubious business model particularly when New York and other major cities are now awash with empty office space.

Bearing in mind I am averaging two hospital appointments per week at present, you may find my blog posts become less frequent. Just had another call to arrange a heart scan.

The NHS, particularly Guys Hospital, are generally efficient and do not deserve all the criticism they get although they could certainly use more technology.

Can’t say the same about other hospitals or GP services.

Roger Lawson (Twitter:  )


You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Digitisation Task Force Proposals

Sir Douglas Flint has published his Interim Report from the Digitisation Task Force – see This covers many important issues for private investors such as the use of nominee accounts, the scrapping of paper share certificates (dematerialisation) and many other important issues. You can read the comments I have submitted here:

I would encourage all private investors to send in your own comments.

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Elon Musk Biography Book Review and Comments on Twitter Takeover

It’s summertime and with markets quiet it’s time to look for some holiday reading. One book I can recommend is “Elon Musk” by Ashlee Vance. Published in 2015 it covers the early life of Elon and his early business ventures at Zip2,, SpaceX and Tesla.

It reveals a lot about his personality and will to revolutionise the space exploration and banking sectors. Like Bill Gates and other successful entrepreneurs he clearly has a forceful manner and does not suffer fools gladly.

The subtitle of the book is “How the billionaire CEO of SpaceX and Tesla is shaping our future”. If you want to know how to become a billionaire and the richest person in the world (roughly $250 billion at the time of writing) then this is a book well worth reading.

Elon’s career was not without its problems and failures. SpaceX rockets blew up repeatedly and technical problems with the first Tesla car delayed its public launch (over-heating batteries and breaking transmissions). But despite consuming most of his fortune from the sale of Paypal he persisted and eventually they were successful products.

The book also provides some interesting background on the VC world in Silicon Valley in the 1990s and 2000s, which I was familiar with from running a software company in the period and having an office in Los Altos.

Why was Elon so successful? He was willing to take risks and focussed on revolutionising sectors such as space exploration with low-cost launches, the banking world with internet banking and the automobile industry with electric vehicles when other people just said the goal was impossible. But he was not a one-man band and made sure he hired the best people as employees.

He could clearly be persuasive in raising capital when needed helped by the availability of funding for new ventures at the time.

In summary one of the best books on Elon Musk and a New York Times bestseller.

The latest gamble by Elon is paying $44 billion in cash for Twitter. As a user of Twitter it has always seemed to me to be an essentially simple software product that should have been low cost to develop and maintain. Since Elon Musk took the reins at Twitter as its CEO in October 2022, its workforce has dropped by 80% and reportedly hovers at around 1,300 employees, according to CNBC.

There was certainly an opportunity there to massively reduce costs. But other people have seen that also with the launch of “me-too” products that have imitated Twitter functionality. Will they be successful? I doubt it.

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

You Can’t Replace Striking Staff

The High Court has ruled that allowing agency staff to replace striking workers is unlawful. This is yet another example of legal challenges to decisions by Government.

The High Court has ruled that Government legislation introduced last year which said employers can use agency staff to fill in for striking workers during industrial action is unlawful. The Government decision was challenged by a judicial review from a number of trade unions. So we now have a situation where doctors or nurses, that are required to keep patients alive, but who have gone on strike cannot be replaced. Likewise for other essential workers such as railway staff.

The challenge was based on lack of public consultation, but this is surely madness. I hope the Government attacks this little publicised decision. Workers may have a moral right to withdraw their labour but employers should also have a right to replace them when it is essential to maintain a public service.

See: for more details of the legal decision.

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Banking Made Difficult and Savings Rates Inadequate

Having a bank account into which you can pay money, or from which you can pay money out, is essential in the modern world. You can become a non-person if a bank closes your account. You can be cut off without notice and effectively instantly impoverished by a bank even if you have been a customer of theirs for many years and have a perfect credit record.

This has been happening to many people lately and not just to Nigel Farage. If you are judged to be a “Politically exposed person” (PEP) then you might have great difficulty opening a bank account and will certainly have to answer many questions about your activities and sources of funds. Just being related to a PEP is enough it seems to raise eyebrows and start an inquisition. Simply being involved in politics or having the wrong opinion on controversial subjects is enough it now seems to cause difficulties and result in a Kafkaesque proceeding.

In addition banks are closing accounts without giving clear reasons and without notice, although they dispute this. These problems have arisen recently because banks have become paranoid in adhering to FCA rules about “knowing your customer”.  

You may think this problem is not a common one. But it is. For example I am related to a Member of the House of Lords and she had this to say:

“Yes. Total nightmare with Nationwide, They just sent a rather ill spelt text about a year ago to say they were going to cut us off If we did not give them a huge amount of information in 24hrs. They wouldn’t say why, after to-ing and fro-ing for 6 weeks or so it was all sorted out and got profuse apology but meanwhile I removed all our cash immediately because of the threat to freeze the account. There’s been a great stink in the Lords because we’re all in the same position and finally the banks seem to have started to behave slightly better.

Nationwide had set up a new unit to pursue anybody with any likelihood of being a politically exposed person, It seems to be full of teenagers who couldn’t read or write so we thought it was spam. It wasn’t. Eventually sorted out but it was a year before I put any money in Nationwide again.

But it’s been dreadful for some people, totally unjustified”.

The other complaint about banks recently is that they raised mortgage rates in line with changes in interest rates but have not improved their savings rates on instant access accounts. The FCA have published a note on tackling this issue – see

It urges people to change banks to improve competition but will people do that if the process of opening an account is subject to tedious scrutiny and subsequent risk of closure?

The Treasury is apparently looking into this issue but bearing in mind this problem has been known about for many months, don’t expect any action soon.

Postscript: The latest news is that even Chancellor Jeremy Hunt was denied a Monzo account.

There surely needs to be some regulation of banks’ actions in this area.

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Cutting Oil and Gas Production Could be Dangerous

The CEO of Shell has told the BBC that cutting oil and gas production would be “dangerous and irresponsible” because the switch to renewable energy is not happening fast enough. It would result in energy bills rocketing higher again.

The slow energy transition was also obvious from a recent report from the Energy Institute that notes that the consumption of crude oil continued in 2022. Although coal consumption fell in North America and Europe, overall global usage increased by 0.6% due to higher demand in India and China (see last week’s Investors Chronicle for more details).

It is very clear that demand for energy is still rising and that the alternative uses of oil/gas in industries such as plastics production and fertilizer production cannot be easily replaced.

The Just Stop Oil promoters are simply ignorant of the consequences of their campaign. See the book “How the World Really Works” which I reviewed for more explanation of the reality – see .

It is very clear that so far as investors are concerned, we should not be dashing headlong away from investment in major oil and gas companies. The world’s reliance on them is not disappearing and is actually growing regardless of the hectoring of politicians and environmental campaigners.  

Moving to alternative energy sources for some applications and sectors of the economy, or reducing energy consumption by improved building insulation, may make sense but they are only partial solutions and may only have a major impact in decades in the future, i.e. in longer time horizons than most investors.

Roger Lawson (Twitter:  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.