Blog

  • Disintermediating the Disintermediators

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    How The Travel Trade is Fighting Back against Online Travel Agencies and Other Intermediaries


    Three interesting new developments in the travel trade caught my eye last week. Airlines have benefited substantially from the internet which has dramatically reduced distribution costs vs 20 years ago. Now one is seeking to reduce its GDS costs while another airline is thought to be seeking to capture some of the intermediaries business; meantime a hotel chain is fighting back against the...

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  • 7 Signals to Spot a Scam

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    The chart shows the share price trend of the South Sea Company, with the famous South Sea Bubble popping in 1720, and being the first of countless such scams in global stock markets. As Edwin Lefèvre points out in the wonderful book Reminiscences of a Stock Operator, “Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock...

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    Posted in Investment
  • Scams in Quoted Equities

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    Last week was a busy week for corporate governance experts, as they were trotted out to talk about three equity price plunges in Hong Kong and a fourth in London. Of Goldin, the apparently well-known financial services, property, polo and wine conglomerate, with two quoted arms,  I know little, but the combination would have made little sense, even to James Hanson. Last week’s events in London at Plus500 reminded me of Refco, and that did not end well; it requires a longer write-up, and I...

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  • Saudi Oil

    The FT’s lead article yesterday is a misinterpretation of the position, in my view.

    “Saudi Arabia claims it has the upper hand in the battle for oil dominance. One of its officials told the FT its strategy of squeezing high-cost rivals by boosting production in order to lower prices is paying off: "There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil including US shale, deep offshore and heavy oils".

    This is consistent...

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  • QE or not QE

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    Gregor Logan has kindly allowed me to reproduce an article of his about QE. When I started out in the City, he was a star fund manager at Fidelity and I never had the privilege of having him as a client. But we met about a year ago, and I have really enjoyed (and benefited from) chatting with him about markets. Today he is an adviser to and non executive director of various investment firms and writes the occasional blog. The article on QE is reproduced below. 

    Why should we be worried...

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    Posted in Investment
  • Lex on Amazon

    I am rather puzzled by the Lex column today which has produced a piece on Amazon's free cash flow. The Lex hypothesis is that Amazon's free cash flow is after capex but does not include capital lease repayments.

    Now I freely admit that I have not looked into this, and it has been a while since I looked at an Amazon 10-K, but I am not sure that everyone understands the problem.

    Assets purchased under capital leases get added to the balance sheet in the same way as assets purchased for...

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  • The Economist Cover

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    The Economist's cover alludes to the difficulty of solving the West Lothian question.

    Uses a photo very similar to the back of my business card.

    I was first!

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  • US Corporate Profits

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    A couple of weeks ago, I posted something on LinkedIn, as I had seen a rather worrying chart of US corporate profits..............Just saw a chart of US corporate profits with the inventory valuation adjustment - it shows a massive drop in Q1. The chart without the inventory adjustment shows a continuing upward trend. It's clear that the level of corporate profits to GDP is worryingly high, the question is has it rolled over? From the looks of the chart, the correction is rather severe and...

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  • Ocado Logistics Update

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    I last commented on the excellent Ocado logistics in April last year, but the process of continuous improvement errrr.... well it continues. Last time, two vans one after another, different colours. This time, they came from opposite directions and were colour co-ordinated.

    What next? Will we have enough parking spaces in the street - watch this space...........

    And Alastair Mundy, don't laugh, I am watching out for those Tesco vans.

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  • Library of Mistakes

    The brilliant Russell Napier has launched his project, the Library of Mistakes. The idea behind the Library of Mistakes is that conventional economic study is generally focussed on unrealistic assumptions - the motivation of the Library is to allow students, professionals and members of the general public to study financial history to understand how finance has worked, rather than how it should work if key unrealistic assumptions are made. I think it's a really worthwhile, fun and...

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