JUSTIN’S
COMMENTARY
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators
on television, radio and in the press. Originally trained as a lawyer he has observed the
Investment industry for 30 years whilst in corporate banking and stockbroking, and has
developed a unique understanding of the market’s roles and benefits for the private
investor.
It’s May again!
Oh dear…another one of those tiresome annual market phrases again: "Sell in May and go away, and
don't come back until St Leger Day".
As many will recall, this dates back to the halcyon days of lower, slower summer trading whilst the senior
traders were off enjoying the London summer social season – from Ascot, Wimbledon, Henley to Lords –
then followed by a relaxing holiday in the South of France. Not a bad life…but not anymore.
During this period, volumes fell, prices weakened and trading didn't pick up until that extended holiday
season was over, which was usually after the second week in September. In fact, it was as much an
instruction to not bother your stockbroker during that time rather than providing you with any investment
guidance.
So does it work? Sometimes, but I wouldn't want to bet the house on it. More helpfully though, I think, we
can guide investors that in these days of larger trading volumes, not only from private investors and
institutions but also, more importantly, from the robotic algorithms of the high frequency trading systems,
we are very likely to see periods of quite erratic volatility over
the summer period.
‘a useful instruction for the
braver, private investor, is
to keep a modest amount
of cash to one side’
Thus, a useful instruction for the braver, private investor, is to
keep a modest amount of cash to one side, just so that you
could, courage or foolhardiness permitting, be able to act
swiftly when there are sudden falls or gyrations occur. So what
could make these happen?
Well, frankly, it could be anything from a Brexit decision through to US interest rate fears or, of course,
the erratic and unpredictable behaviour of the spoiled brat and his cohorts about to address their very
important 7th Congress of the Workers' Party in North Korea.
A Contra View.
It is always fascinating when you get to see someone bright or brave enough to make a really contrarian
call. These days you usually hear fund managers refer to themselves as "contrarian" investors, primarily
on the basis that they don't wish to appear dull by following the herd. Of course, if that were really true
there wouldn't be a herd, or even two herds moving in opposite directions. In fact, when you look at the
range of investments from these managers, you will quickly find that most (quite the contrary to their
claims of going against the tide) seem to be more than happy hugging a conservative benchmark along
with the rest of the "mooing" bovine collective.
Thus, when I saw reports that Middle Eastern Investors viewed London Commercial property as
attractive investments, it caught my eye as all the other reports over the past few weeks have been
suggesting otherwise given comments of overvaluations and fears of the Brexit referendum vote. So,
good luck to a family office called 3 Associates Capital Management who have decided to invest some
This article represents a personal and light-hearted view from 7IM, and is based on current financial news and events around the world.
Its content should not be used for investment purposes and you should contact an independent financial adviser before making any investment or financial decision.
Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority. Member of the London Stock Exchange.
Registered office: 55 Bishopsgate, London, EC2N 3AS. Registered in England and Wales No. OC378740
JUSTIN’S WEEKLY COMMENTARY
£500 million in Central London, not only to take advantage of some of these short term fears, but also to
benefit from a weaker Sterling. Could be a good call prior to the vote.
Changing Japanese military signs.
At the end of WW2, the military forces of both of the two main Axis powers were understandably
curtailed. Germany’s armed forces were re-organised for domestic operations only and, when finally
allowed overseas, assigned to provide logistical and medical support rather than front line operations.
That is slowly changing.
For Japan, the Imperial Army was replaced by the Japanese Self Defense Forces, which as the name
implies was for local Nipponese requirements and needs. Now however, as part of the more right wing
policies of prime minster Shinzō Abe, new security legislation has now been passed that will allow them
to participate in peacekeeping missions for the first time versus only the humanitarian missions that they
were previously involved in.
Saving the Rhinos.
After all the frustrating efforts to save these majestic beasts, it has almost become an impossible task.
However, one bright individual thought of shipping 80 of them out of South Africa to Australia. Whilst it
might not be the perfect solution for this tragedy, at least it might provide some form of biological back up
if the worst were to occur and the species are wiped out in Africa.
***
And finally…Drugs, bombs and guns are all targets for the police and especially for their highly honed
nose hounds. Thus, it may come as a surprise that a team of sniffer dogs set up at a British airport at a
cost of £1.25 million has proved to be extremely adept at discovering cheese and sausages. That's the
good news. It would appear that they are not so good at finding smuggled drugs.
An inspection of border security at Manchester Airport found that, during a seven-month period, its six
dogs failed to find any illegal class A drugs, such as cocaine or heroin.
"The deterrent effect of the detection dogs was difficult to measure, but seizures alone represented a low
return on investment, given £1.25 million spent on new kennels and the costs of operating the unit," said
the report by the Independent Chief Inspector of Borders and Immigration.
Each dog has its own speciality in detecting goods (such as drugs, tobacco, cash and meat) being
brought into the airport illegally by the 22 million passengers who use it annually.
However, while the report found that the trained sniffers had helped customs confiscate 46 kilograms of
cigarettes and 181 kilograms of meat, no class A drugs had been seized.
The report said one dog trained to find smuggled animal products had made "multiple accurate
detections, but most were of small amounts of cheese or sausages, wrongly brought back by returning
British holidaymakers and posing minimal risk to UK public health".
Managers are now examining how better to deploy the dogs! "Walkies" perhaps?
Have a good week!
Justin Urquhart Stewart
Co-Founder
Seven Investment Management
www.7im.co.uk
This article represents a personal and light-hearted view from 7IM, and is based on current financial news and events around the world. Its content
should not be used for investment purposes and you should contact an independent financial adviser before making any investment or financial decision.
Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority. Member of the London Stock Exchange.
Registered office: 55 Bishopsgate, London, EC2N 3AS. Registered in England and Wales No. OC378740