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MoneyWeek Issue 1016

There's a reason MoneyWeek is Britain's best-selling financial magazine. We exist to help you ground your portfolio so that it keeps your money safe during rough patches and growing in the good times. We don't just look at how to maximise your returns and limit your losses, we also like to look at how you can keep more of the money you've made. 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 editor-in-chief...

“The government may struggle to push the overall tax take sustainably higher from here” The UK budget deficit will go well over £300bn this year. Government spending as a percentage of GDP will hit around 55%, the highest since 1946. Our debt-to-GDP ratio will end the year above 100% – a peacetime first. That’s not OK. It’s not good for sterling, not good for the bond market and not kind to our kids. Something must be done. But what? We’d like to see more effort put into encouraging growth. As Liam Halligan notes in The Daily Telegraph, the best way to tackle a ratio problem such as this is to “raise the denominator”. But it is hard to imagine there isn’t going to be huge pressure for afew nasty tax rises…

1 min.
loser of the week

Tennis player Novak Djokovic (pictured) not only lost all of his US Open prize money, but was also handed two fines after being disqualified for hitting a ball at a line judge, says George Bellshaw in Metro. The world number one was handed a $10,000 fine for unsportsmanlike conduct and a further $7,500 punishment for skipping his post-match media duties. But the financial hit “pales in comparison” to the loss of the $250,000 cheque he was guaranteed to pick up after reaching the fourth round of the tournament. Yet while it might sound like “an excruciatingly large amount of money” for mere mortals, it’s a drop in the ocean for Djokovic; for his “on-court endeavours alone” his career earnings exceed $143m. He was the highest-paid athlete on Forbes’ 2020 rich…

1 min.
good week for:

Philanthropist, author and ex-wife of Amazon CEO Jeff Bezos, MacKenzie Scott, became the wealthiest woman in the world this week, says Jazmin Goodwin on CNN. Her net worth rose to $68bn, “propelling” her past L’Oréal heiress Françoise Bettencourt Meyers. Scott received a quarter of Bezos’s Amazon shares as part of their divorce settlement in 2019. The chunk of stock was worth more than $35bn at the time. The rise of the “kidult” has boosted UK toy sales in lockdown, with Lego reporting a solid rise in sales and profits in the first six months of the year, say Sarah Butler and Jasper Jolly in The Guardian. Lego’s global sales rose by 7% year-on-year in the first six months of 2020 to 15.7bn Danish kroner (£1.9bn), fuelled partly by “more adults than…

1 min.
bad week for:

Japanese billionaire Yusaku Maezawa, founder of online fashion retailer Zozo, lost ¥ 4.4bn (£32m) attempting to day-trade stocks, reports the Straits Times. Maezawa tweeted he was “blinded by the virus-driven market swings” and admitted that he hadn’t “familiarised” himself with short-term trading properly. Reality TV fans were upset to hear that after 20 series and 14 years, Keeping Up With The Kardashians will be ending in early 2021. Kim Kardashian West (pictured), the star of the show, said it was “time to say goodbye”. According to the Daily Mail, the family is now paid in the region of $30m per episode, but viewer figures have been falling from a peak of 4.8 million to less than one million now.…

2 min.
the tech bubble starts to hiss air

America’s stockmarket rally could one day rank among history’s greatest bubbles, says Andrew Parlin in the Financial Times. Shares offering even “a whiff” of exposure to such fashionable areas as “the cloud, digital payments” and “plant-based food” have soared since the pandemic began. Just look at Tesla, whose market capitalisation has vaulted from $80bn in March to more than $300bn today. Turning point or bump in the road? America’s tech-heavy Nasdaq Composite index soared by more than 70% from the March low to the end of August, but September has brought a rare reversal. The index lost more than 10% between 2 September and Tuesday this week, officially entering “correction” territory. This has had little impact on the year’s gains, but still wiped an extraordinary $320bn off the market capitalisation of Apple in…

1 min.
what warren buffett sees in japan

Not for the first time, Warren Buffett is swimming against the tide, says Mike Bird in The Wall Street Journal. Early this month his Berkshire Hathaway group spent $6bn acquiring stakes in five Japanese trading houses. Yet data shows that other foreigners have been souring on the world’s third-biggest economy. However, Shinzo Abe, who took office in 2012 and has just resigned, leaves Japan’s markets better than he found them, says The Economist. Lower corporate taxes and a depreciating yen gave a much-needed boost to shaky corporate profits, while reforms to corporate governance have made Japanese managers more responsive to the needs of shareholders. The Topix index has gained more than 82% since he took office. Reforms in Japanese markets have been overshadowed by the dominance of US-listed tech stocks, says…