Member Since: 23rd Aug 2015
10th Jul 2020
So is this another reasonably good business where Private Equity has bought in, squeezed all the cash and asset value out and replaced it with debt, then continued to suck as much out as possible, and pulled the plug when they have drained every bit of value except the brand name which they then sell as a finale? And all the employees get the boot?
When I first started investing that sort of behaviour was called asset stripping, and whenever it happens there's a few more people who look at capitalism, ask "What's in it for me?", get a hollow echoing silence as a reply, and are utterly alienated from the system and society.
19th Jun 2020
My wife and I must reduce our outgoings because two substantial sources of income have temporarily ceased and one is unlikely to recover. Sadly our weekly (sometimes twice weekly) visits to pub restaurants will now be limited to special occasions only, and in any case if Irish-style practices are introduced so that we cannot just drop in and stay as long as we like we will not enjoy our visits. If staff have to wear masks and the whole event has a clinical atmosphere we will not go at all.
I shall really miss the pubs when they have gone. They are part of the fabric of British life.
I feel very sad these days.
22nd May 2020
Home networks are potentially a problem if there are insecure WiFi links between devices and the router, if other devices are connected to the router while business traffic is taking place, or if the router is configured insecurely. In my experience the average user would find these risks difficult to understand and mitigate. Would it be overkill to pay for a separate business line and a dedicated router which does not broadcast its SSID and has a WPA-PSK ("password") which is installed on approved devices by the business and not divulged to the user? That wouldn't solve the problem of stolen laptops but it would make it quite difficult for anyone to breach security between the router and the business device. It would also make it difficult for the user to potentially breach security by using an un-approved device to connect to the business network. If it is overkill to have a separate business line the business's router could be connected upstream of the household router and an instruction given that business devices are never to be connected other than directly to that router. Would that work?
There are other measures which could and should be taken to make home working secure and effective. I can see a business opportunity!
29th Feb 2020
On a far-off sunny summer's day my young wife who had an eye for fashion pointed out to me that many of the people we were passing in the street were wearing M&S - all age groups. She said their buyers had a good eye for colour and once you got your own eye in you could see the M&S colours tripping past in huge numbers.
And at that time M&S were almost invulnerable to the effect of rent reviews because they owned the freeholds of most of their shops. The M&S shop was frequently the "anchor" of the towns they were in. Zone A rents were often highest on either side of the M&S and fell away gradually from that focal point.
In their heyday M&S food was a bit of an afterthought - clothing was the big earner. It's sad but true that in the rag trade every brand has its day and when sunset comes there is never a new dawn. The only thing you can do is re-brand, like Chelsea Girl transforming to River Island. M&S tried that trick by letting St. Michael die and bringing in their other clothing labels but nobody was fooled. Their core female customer isn't in her twenties now, she's in her sixties or even older, and she doesn't like the decline in quality or the ludicrous (and failed) attempts to attract the younger customer by stocking trendy fashion items (which the younger customer doesn't want anyway). Their core male customer probably doesn't even buy his socks and pants there now, he gets them on line. He certainly doesn't want their suits - he stopped wearing suits a few years back.
And those freeholds became a liability as the years went by, tying M&S to town centres that had seen better days and never able to offer free parking to their customers.
But food was thriving and in fact keeping the whole ship afloat. It gave them a fighting chance of survival. So what did they do? Because they have completely lost the self-confidence (and in some areas the in-house skills) to run their own affairs they bought 50% of Ocado, thinking that Ocado will know how to manage a profitable transition to delivered groceries. The trouble is, nobody makes any money out of delivered groceries. The so-called high-tec online world of buying groceries on the internet and having them delivered is a con-trick of the first order, as Ken Morrison realised from the very beginning. And I cannot see how Ocado can be "integrated" with the M&S food offer without tarnishing the M&S food brand.
Successful turnrounds of big old businesses are much rarer than people believe. They do happen sometimes, but not here. I'm not saying M&S will go bust, but this is no time to own the shares. Sell.
12th Feb 2020
The idea I have seen floated which is more likely than a mansion tax is to introduce additional bands to Council Tax to get more revenue from expensive dwellings. Of course this makes Council Tax more like the old rates system which we were told was unfair because the lonely widow in her mansion paid more than the family of 6 in their semi, even though the family of 6 consumed more council services.
Meanwhile, having effectively destroyed defined benefit pension schemes by removing dividend tax credits, and decimating the senior staff count in the NHS by the pensions cap, the next step will presumably be to deter saving into defined contributions schemes by reducing the tax credits. Following which we will all be told we are not saving enough for retirement.
Politics is all about pendulums. Everything comes and goes in an eternal swinging back-and-forth of failed policies dreamed up by people who haven't been around long enough to remember what happened last time. For the first time in my life I spoiled my ballot paper at the last election. I could see Boris was a fraudster making impossible promises and I have completely lost faith in the system.
31st Jan 2020
The tsunami of capital destruction that is hitting us now and will flow over the next 2 years is extraordinary and it is caused by the Uniform Business Rate and the increased Living Wage. Probably the majority of city centre retail premises will have to be re-let on nil rents when leases expire or occupants fail, or even in some cases negative rents, so that the freeholders can recover service charges and avoid having to pay UBR themselves. In other words prime retail property that forms a bedrock for many pension funds and other pooled investments is going to produce no yield at all until solutions are found to this crisis. Billions and billions of pounds are going to be wiped off portfolios and it's going to happen fast.
17th Jan 2020
Thanks for that.
16th Jan 2020
.... when SSAP 10 was killed off (for good reason)...
May I repeat my earlier question. Why was SSAP10 (specifically the Statement of Source & Application of Funds) abolished?
15th Jan 2020
I think many private investors would agree 100% with Richard Murphy. More and more commentators are saying that accounts for public companies no longer help investors decide how to price shares.
I have insisted on cash flow statements being included in the accounts for 2 private companies where I am a substantial shareholder. Perhaps a Source & Application of Funds statement would be even better, although it would amount to little more than a re-arrangement of the same information.
Why was SSAP 10 abolished?
9th Jan 2020
This is important:
I was interested in this statement in the article: 'If someone hosts a party or function at the club, they pay a fee to hire the room (exempt from VAT)...' so I did a search.
What I found is that in October 2011 VAT Notice 709/3 'Hotels and holiday accommodation' was updated, and followed by HMRC Brief number 02/1, and that the rule is this; 'where a room.... is supplied for the purposes of catering, whether or not the catering is supplied by the same establishment, the room hire is subject to VAT at the standard rate.'
Is the article correct?