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MoneyWeek 1040

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MoneyWeek is a weekly magazine that enables you to become a better-informed, smarter investor and enjoy the rewards of managing your money with confidence. Week-in, week-out we'll guide you through the financial world as it changes, alerting you to all the opportunities to profit and dangers to avoid, as they appear. Income strategies, rising-star companies, the best funds and trusts, clever ways to preserve your wealth during market turmoil... you will get the best ideas from the sharpest financial minds and investing professionals in Britain.

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United Kingdom
Dennis Publishing UK
51 Issues

in this issue

3 min.
from the executive editor...

“Big UK value stocks could well be the trade of the next decade” At the beginning of 2010 we offered you an idea about the asset class we thought should do best over the next ten years. Japanese equities, we said, would be the “trade of the decade”. At the time they were, as Merryn pointed out, unloved, unfashionable, underowned and undervalued (see moneyweek. com/japan-trade-of-the-decade). The Nikkei 225 traded on a average price-to-book (p/b) value of about one. That’s cheap. We didn’t expect it to go nuts in a year but we were convinced (as we usually are) that value always outs and that Japan would be a very good long-term investment. It has been. The Nikkei is up around 200% since (see page 4). That hasn’t made it the trade…

1 min.
loser of the week

Elon Musk (pictured) lost his title – for a time, at least – as the world’s richest person after the price of Tesla shares slid 8.6% earlier this week, wiping $15.2bn from his net worth, says Devon Pendleton on Bloomberg. Tesla’s biggest drop since September was partly fuelled by Musk saying the prices of cryptocurrencies bitcoin and smaller rival ether “do seem high” via his “favoured medium of Twitter… two weeks after Tesla announced it added $1.5bn in bitcoin to its balance sheet”. Bitcoin has risen by more than 400% in the past year, but fell sharply this week, slipping below $50,000 at one point. Musk’s loss took his net worth down to $183.4bn and saw Amazon founder Jeff Bezos reclaim the top spot, with a fortune of $186.3bn.…

1 min.
good week for:

John Lewis has seen home accessory sales leap as workers “zoom-scape” their walls for video meetings, says Sam Meadows in The Daily Telegraph. Sales of picture frames, art, and mirrors from the department store chain are up by 80%, 113% and 65% respectively on last year. “Attractive” lamps and plants are also in demand. Rapper and entrepreneur Jay Z (pictured) sold a 50% stake in his champagne house, Armand de Brignac, to luxury goods group LVMH, says Ali Mitib in The Times, for an undisclosed sum. Armand de Brignac sold more than 500,000 bottles in 2019, but 2020 was a “difficult year” for the industry as nightclubs and restaurants shut, and big celebrations were cancelled.…

1 min.
bad week for:

Lockdown has cost budget gym franchise PureGym about £500,000 a day, the company’s boss told the BBC. Eight months of closures have seen the 275 gyms rack up about £120m in costs with no revenue to cover them. While the government furlough scheme has covered a portion of staff salaries, the business still has many other costs, as well as “sizeable” rent arrears. Italian heiress Camilla de Bourbon had to pay a £2m fine this week as part of a “bitter inheritance dispute” over her mother’s €250m (£216m) trust fund, says Harriet Dennys in The Mail on Sunday. The princess was fined in December after Jersey’s highest court ruled she had ignored an order to reveal the location of valuable assets owned by her mother. Her appeal against the penalty was…

2 min.
japanese stocks reach a 30-year high

After several decades of “false dawns” the sun is finally rising on Japanese shares, says Ian Cowie on Interactive Investor. The Nikkei 225 index has broken through the 30,000-point level for the first time since 1990. Roaring Japanese markets had dominated financial headlines for much of the 1980s. When “the music stopped” few could have predicted that it would be such a long climb back. Sadly, “quite a few longterm investors in the world’s third-largest economy” didn’t live to see this day. A protracted post-bubble hangover The “lost decades” after the stockmarket bubble’s implosion have turned Japanese equities into the “red-headed stepchild of global asset allocation”, says Udith Sikand for Gavekal Research. There have been moments of hope: foreign investors poured $240bn into the local market after former prime minister Shinzo Abe’s…

1 min.
us bubble just keeps getting bigger

Could US stocks be heading for their very own “1980s-style Japanese melt-up”? asks Ian Harnett in the Financial Times. The dovish duo of Janet Yellen at the Treasury and Jerome Powell at the US Federal Reserve are boosting valuations by drenching markets with loose money and state spending. The market’s current valuation philosophy is “basically to ignore it”, says Eric Savitz in Barron’s. The likes of Zoom Video Communications and Shopify trade on more than 35 times estimated sales – sales, not profits. Yet an end to the pandemic, which will let us spend more time away from the internet, is starting to take the shine off tech stocks. The tech-heavy Nasdaq 100 is down more than 4% since a recent high on 12 February. The parallels with the dotcom bubble…