MoneyWeek 1065

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.

United Kingdom
Dennis Publishing UK
SPECIAL: Save 20% on your subscription!
51 Issues

in this issue

3 min
from the executive editor...

“You have to be prepared for a future with more black-swan events” As regular readers will know, we’re long-time fans of gold here at MoneyWeek. But there’s no doubt that it can be a frustrating asset. As Dominic says in this week’s cover story (see page 18), the idea of owning gold as “portfolio insurance” can sometimes feel like poor consolation for those who would rather see it (and the shares of the companies that mine for the stuff) shooting the lights out. I can sympathise – I still hold gold mining funds in my portfolio in the expectation that they still haven’t seen their highs for this cycle, but for all my bullishness, I’d be deluded not to acknowledge that if I’d sold them a year ago I could be…

1 min
a space-age court wrangle

Blue Origin, the firm owned by Jeff Bezos (pictured), is suing Nasa over its decision to award Elon Musk’s SpaceX a $2.9bn lunar lander contract, exacerbating “tensions” between the world’s two richest men, says The Times. Nasa awarded SpaceX the contract to build a spacecraft that will take US astronauts to the moon for the first time since 1972. The space agency had hoped to offer multiple contracts to develop two competing lunar landers, but awarded just one due to a lack of funding, prompting complaints of unfairness from Blue Origin. While a US government watchdog has backed Nasa’s decision, Blue Origin claims there were “fundamental issues” with the award process and that its lawsuit is “an attempt to remedy the flaws”. It has also claimed that SpaceX’s plan to…

1 min
good week for:

Alexia Inge, “a model turned entrepreneur”, is thought to have made “tens of millions” after she sold her upmarket online cosmetic business, Cult Beauty, to The Hut Group for £275m, reports Ashley Armstrong in The Times. Inge (pictured) said that early seed investors, including friends, family and ten senior staff, had received “life-changing” sums as a result of the deal. E-commerce giant Amazon has overtaken rival Walmart as the largest seller of consumer goods outside of China, report Karen Weise and Michael Corkery in The New York Times. A boom in online shopping saw customers spend more than $610bn via Amazon in the 12 months to June, versus $566bn for Walmart in the year to July. China’s Alibaba remains the world’s biggest seller.…

1 min
bad week for:

Amazon Studios is moving production of its Lord of the Rings TV series to the UK from New Zealand, after spending nearly £337m on the first season, reports the Financial Times. The move is “a blow to the Pacific nation’s two-decade relationship” with the franchise: Peter Jackson’s original film trilogy, based on J.R.R. Tolkein’s novels, was filmed there and is thought to have boosted numbers of tourists by 40% between 2001 (when the first film premiered) and 2006. A Californian man is suing a waste management group and a home owners’ association (HOA) in Nevada after twisting his ankle and hurting his back while retreating from a bear he found hiding in one of their bins, says The Guardian. John Donaldson, who had rented a cottage in the area, is seeking…

2 min
a transitory respite from inflation

When does “transitory” inflation “become persistent?” asks The Wall Street Journal. The US Federal Reserve has spent the year insisting that soaring prices are a “transitory” effect caused by reopening. Yet US consumer prices rose by 5.4% in July compared with a year earlier for the second month running. Energy prices are rising. Ordinary workers are being hurt. “Real (after inflation) average hourly earnings have declined for seven consecutive months.” This week we learnt that UK consumer prices rose by 2% year-on-year in July (see page 10). Price pressures pause Some of the data supports the transitory case, says The Economist. Month-on-month US inflation fell to 0.5%, down from 0.9% in June. The inflationary spike has arguably been concentrated in areas stressed by the reopening, such as used cars and airline tickets,…

1 min
will king dollar lose his crown?

“Will the fall of Kabul now bury belief in a world led by the US as its sole superpower?”, asks Louis-Vincent Gave of Gavekal Research. Can “US military prestige survive a defeat at the hands of untrained farmers driving Toyota pickups?” The US has bounced back from military disaster before. But events in Kabul could come to mirror Suez. Declining US prestige is bullish for gold (the ultimate safe haven) and oil (because of the risk of “heightened tensions in the Middle East”). It is also “bullish for the renminbi… as China is the rising power in Asia”. Above all, it could prove “bearish for the US dollar”. The US dollar is the world’s leading reserve currency. Investors turn to US assets as a safe haven in times of turmoil. Worries that…