I have always been opposed to investing directly in Marks & Spencer. My view was simple. M&S sat in no man’s land. You had John Lewis that provided high-end goods. On the other end, there was Primark. If M&S made a few wrong calls on fashion then they would have a major slump. This did happen quite a few times. Yesterday’s news that M&S is to close down more stores came as no surprise. I strongly believe that M&S food is the ventilator that has kept the company alive. It will continue to do so. As always all you have to do is have a walk through the stores of M&S. In general, M&S Food will have the largest percentage of people. This trend will change unless M&S can appeal to the people who are inclined towards healthy but quick food but their older base that would like their traditional British meals. Will M&S be able to balance their traditional Cottage Pie with their Thai green curry? In light of Brexit, I hope they do as they are one of the iconic British brands. If one has to gain exposure to the UK today then possibly the best way to do it is through VGK. The Vanguard European Fund has about a 29% exposure to the UK. The exposure to the European markets would act as a hedge. I believe we are going through an extremely interesting time right now. I do not like making predictions but there will be a winner and a loser in the whole Brexit process. Either way, the financial markets will get affected. Overall the European markets will go up.
Disclaimer: I do not hold any shares of Marks & Spencer or VGK right now.
Filed under Brexit, England, Europe, Food, FTSE, Indices, Investments, Market Outlook, Market Timing, United Kingdom, Vanguard
(Originally posted on July 21st 2009)
One of the best feelings I get is when the “experts” from the major financial institutions comes up with the same conclusion that I have after I have realised it.Yes it is narcissistic of me but that it is the flower of my birthday and therefore it is to be expected. The latest episode was last night when one of the sports commentators on Sky said “One small step for Flintoff, one big step for England.” Earlier in the day I wrote on my Facebook “One small step towards the Urn and one big step for England.” The ASX increased by .01% today. That .01% increase can be attributed to the applause the populace at Lords gave Ricky Ponting an applause when he admitted that they were outplayed. The FTSE on the other hand has increase by over 1%. The share price of all the sponsors of the English Cricket Team have increased since yesterday. The only sponsor of the Australians who have had their share price increased is 3G. However 3G is 50% owned by Vodafone. Now what would a normal Aussie bloke do if he knew that? Does the average Aussie cricket fan know that Fosters have sold the rights to brew Fosters in Europe to Scottish and Newcastle which is owned by Heineken? In Europe the beer associated with Australia is not Australian!! Everything is not what it appears to be. Pure transparency among equity funds and hedge fund does not, will not and should not exist. If transparency did exist then everyone from a 90 years old grandmother in Timbuktu to Wall Street would be buying the same things. If that would happen then there will be no money to be made. Efficient markets cannot exist. It is the risk and uncertainty that gives rise to opportunity. All creation stories and theories begins with Chaos. Since that is the case then who are we to go against the Gods?
(Originally posted on June 6th 2009)
I hate discussing finance over the weekend.However I am still reeling under the shock that Netherlands beat the English cricket team. The minnows have beaten one of the giants. West Indies are currently over powering Australia. If my theory about the relationship between sport and financial markets are true then the emerging markets should do better than the developed markets on Monday. The Euronext may do better than the FTSE. It will be a close call between the FTSE and the ASX. The advantage that the FTSE has is that it has the the England and Kazakhstan match to redeem itself,the F1 in Turkey and the England vs. Pakistan match tomorrow. If Williams, McLaren and Brawn do well tomorrow then the FTSE may redeem itself. If Renault, BMW or Ferrari does well then I would be reasonably confident that the Euronext would do well. Will my theory be proved right? I cannot wait to see.
(Originally posted on June 4th 2009)
The chances of the Australian cricket team doing well in the T20 have taken a big beating by the disciplinary actions enforced on Andrew Symonds because he had a bit too much to drink. It really does not matter that he was not included in the squad for the Ashes. Now Australia will be on the back foot. Maybe it is time to short the ASX and go long the FTSE.Going long the Sensex will not be a bad idea either. The election result in India has been a big boost for the country. The Indian government has been held to ransom by smaller regional parties for too long. 1991-1996 and 1999-2004 were strong periods of economic growth in India. The ruling party in both these elections had a strong majority in the parliament. The next five years should be extremely interesting.