Five things investors learned last week

9th February 2013

(Week commencing Monday 3nd February)

1. Inflation is likely to be above the Bank of England’s two per cent target for the next two years. The Bank of England (version Mervyn King) and the soon-to-be Bank of England (version Mark Carney) agree. As the Bank’s Monetary Policy Committee was declaring this to be the case, the Governor-designate Mark Carney was setting out the same view to MPs. Here the Telegraph suggests the Bank may be stealing the new Governor’s thunder or perhaps a happy coincidence of opinion?

2. Investors are eyeing Apple’s £87bn cash pile to the extent that one big hedge fund shareholder is suing, as the BBC reports. Greenlight Capital’s David Einhorn filed a suit in New York and is pressing for the creation of preferred stock to pay a fixed dividend over time.  

3. Britain has, occasionally, allies in Europe as David Cameron and Angela Merkel join forces to get a cut in the EU budget. The Telegraph’s series of info graphics is really rather wonderful.

4. Some managers will close their funds when they fear they may be taking in too much money. Fund manager Aberdeen did this with their £3.7bn emerging markets fund (or at least soft closed it by putting up the price dramatically). This allows them to manage the fund with the requisite freedom. Certainly some styles of managing money require them to be fleet of foot. If you are already invested, rather than considering investing, that is probably a good thing. Mindful Money considered the issue of funds getting too big this week.

5. The banks will be subject to an electrified ringfence i.e. if they breach the rules requiring the division of retail and investing banking, the UK regulators can break them up. It may delay the hoped for sale of the state owned parts of RBS and Lloyds to well past 2015. Whatever your views, the next big government sell off looks likely to be Royal Mail.


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