David Cameron says; more fear please.

“I’m so sick of arming the world and then sending troops over to destroy the fucking arms, you know what I mean? We keep arming these little countries, then we go and blow the shit out of them. We’re like the bullies of the world, you know. We’re like Jack Palance in the movie Shane, throwing the pistol at the sheep herder’s feet: “Pick it up.” “I don’t wanna pick it up mister, you’ll shoot me.” “Pick up the gun.” “Mister, I don’t want no trouble, huh. I just came down town here to get some hard rock candy for my kids, some gingham for my wife. I don’t even know what gingham is, but she goes through about 10 rolls a week of that stuff. I ain’t looking for no trouble, mister.” “Pick up the gun.” Boom, boom. “You all saw him. He had a gun.”

-Bill Hicks

The government  wants to waste at least £20bn (they aren’t good at estimating so lets call this a floor) of their pounds on renewing the UK’s ‘nuclear deterrent.’ Now lots of people like to harp on about the cost of this versus say a few new hospitals, schools or whatever socialismo initiative is popular with the Guardian readership today. Alas I couldn’t care less whether they spend it all on dancing lessons for the elderly or a reintroduction programme for the red squirrel. What is important is that our ‘nuclear deterrent’ perpetuates a global environment of fear and our government wants to continue to do so.

Now I am no apologist for Kim Jong-Un as the guy is clearly a paranoid egomaniac. I know this because he is a politician. However if I were feeling pretty isolated and marginalised and my greatest enemy was the United States; which is the only country to have ever deployed a nuclear weapon (or two; against civilians) then I might just want to get one myself. The existence of nuclear weapons by any state perpetuates nuclear proliferation. Yet David Cameron tells us because of the Korean nuclear ‘threat’ this is the time to renew our weapons programme. Would this be the same bogus ‘threat’ we saw from all those Iraqi weapons of mass destruction our paranoid leadership and military have been identifying?

The existence of our ‘deterrent’ is just a way of obscuring the environment of fear being perpetuated by the fevered egos of our political class who of course represent our own fears and anxieties. This is the same as rebranding the War Office as the Ministry for Defence circa 1964. We obscure the overt intent of our fear and anger by couching it in appealing pacific terms such as ‘deterrent’ and ‘defence.’

Britons love to decry crazy Americans with their lax gun control. We point out that even our police are not usually armed and therefore our society is safer with fewer guns floating around. Yet having a nuclear weapon is merely the global equivalent of lax gun control. If you have it you might use it and everybody in the world has to live in fear that it might be used so they want to get theit own 'deterrent.' We thus all live in a state akin to pointing guns at one another's heads.

Should we not expect our leaders to exercise some leadership and lead the way to a safer world? If they really want a safer world lets show the way by taking the first step towards peace and decommission our weapons programme.



This is what Nuclear war looks like.



Nuclear weapons are never a deterrent because if they were ever required we would face annihilation. How can our government and our people live in this state of denial and parade around the world decrying human rights abuses whilst harbouring a weapon on 24hr alert capable of burning and poisoning millions of people  indiscriminately? 

Rarely even Hitler had something intelligent to say about this;

“In the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods.”

The nuclear 'deterrant' is a big fucking lie. So lets drop Trident and show our commitment to a truly peaceful world where people no longer live in perpetual fear of total annihilation. This requires all of us to change our hearts and minds and stand up for nuclear disarmament. If Democracy is government by the people, for the people, then lets get involved;

CND

People's Decade

A whole cup of wrong

“I know what all the marketing people are thinking right now too, “Oh, you know what Bill’s doing, he’s going for that anti-marketing dollar. That’s a good market, he’s very smart.”

Oh man, I am not doing that. You fucking evil scumbags!

“Ooh, you know what Bill’s doing now, he’s going for the righteous indignation dollar. That’s a big dollar. A lot of people are feeling that indignation. We’ve done research – huge market. He’s doing a good thing.”

God, I’m just caught in a fucking web.

“Ooh the trapped dollar, big dollar, huge dollar. Good market – look at our research. We see that many people feel trapped. If we play to that and then separate them into the trapped dollar…””

-          Bill Hicks

So the Guardian reports that some yummy mummies are distressed as they can no longer tell what an ‘independent’ coffee shop looks like now that Tesco is disguising its joint venture of rapidly replicating coffee shops as cool places to be seen.

“Bridget Chappell, a full-time mum, said of Harris + Hoole, a new coffee shop in north London…

"I like to try independent shops, and it was really very nice with great coffee," she said. "But when I got home, I looked it up and discovered it was a chain."”

Poor Bridget can no longer tell whether she is cool or not now that the corporations have co-opted her signalling mechanisms for finding an ‘independent’ shop and sold them right back to her. What insecurities does Bridget have which mean that she goes home and googles her coffee shop?

Other coffee shop cools showed similar dismay;

“Katy Smith, another Harris + Hoole customer, said: "I don't really like Tesco. I don't shop in Tesco. Now I'm in one of them. They'll probably be on every high street soon. I would avoid it, like I avoid Starbucks and Costa, which I thought I was doing today – putting money back in the community."”

Well Katy this is news because if you think about it tangentially the money going to Tesco is going back into the community more than an independent shop. This is because Tesco is a public corporation owned predominately by UK pensioners and investors in mutual funds therefore Tesco dividends are funding retiree’s coffee cups. On the other hand a private independent shop is shoving cash into the hands of the usually single family owners enriching them at the expense of the community!

These women fell for the whole ‘independent’ feel and then found out they had been drinking cups of Tesco. Obviously Tesco didn’t call it Tesco coffee because it’s a different brand; its called market segmentation – people who would not shop at Tesco might buy a coffee at a non-corporate looking shop. Clearly the ruse works for Tesco because these people are actually buying coffee and only have a sense of disappointment when they discover after the fact that its part owned by Tesco. Was there anything wrong with the coffee? I think this article says more about the sort of person who spends their time in a coffee shop than the shops themselves.

Hector the bureaucrat slayer

The FT reports that Barclays have announced the appointment of Hector Sants to their executive board as  a measure to ward off evil from bureaucrats;

“The package will make the former chief executive of the Financial Services Authority, who is set to become Barclays’ head of compliance and government relations at the end of January, one of the 10 best-paid executives at the UK lender.”

I applaud Barclays on having the honesty to put ‘government relations’ in Hector’s job title! Much more brazen than the sort of shady nomination that Tony Blair got as a “senior advisor” at JPMorgan. Barclays are going out and calling a spade a spade.

More interestingly Hector has a pay package to the tune of up to £3m including LTIP bonuses. Bizarrely Barclays make the following statement;

“Barclays would not comment on the figures, but pointed out that executives’ LTIPs had paid out at only 37 per cent of the maximum over the past five years.”

This does try to diffuse the pay debate  but it rather insinuates that present management are incompetent at meeting their goals?

Sensationalism

If ever proof were needed that financial journalists are biased, stupid or both the Telegraph has a wonderful confirmation out today.

The subheading reads;

"Apple's share price has dropped below the $500 threshold for the first time since February, fuelled by fears that the world’s biggest company is starting to lose its shine."

This sounds bad - perhaps a clear technical support has been broken? The stock falling is fuelled by fears! ooooh! But wait the facts lie below;

"Analysts warned Apple could be losing momentum as it briefly slipped as low as $497 in pre-market trading. It returned to $508.92 before the markets opened and closed at $518.83."

In what way is this article not misleading? The stock closed up 1,77% and traded in illiquid premarket at $497. I love how journalists are always the last to the party on these stories right behind my favourite lagging indicator; the sell side analyst (of which she quotes plenty).

It is pretty obvious that any darling momentum stock that consistently beats earnings will one day dissapoint. But never fear because Katherine Rushton is there to stick the knife in a twist the actual facts to support her bearish conclusion. Misrepresenting opinion for fact. Who would have thought it?

Newspeak

FT Alphaville has a good comment today indicating the great perils awaiting China with its broken social model. Most noteworthy to my mind is the newspeak which creeps out of the government to soothe the media and analysts with popular buzzwords;

"China’s central bank has called its monetary policy “prudent” since late 2010 even as it has swung back and forth from extremely loose to relatively tight and back to relatively loose again.

Fiscal policy has been “proactive” since late 2008, when Beijing unveiled a Rmb4tn stimulus package in reaction to the global financial crisis but no economists expect the government to launch anything near that kind of response in the foreseeable future."

It sounds like the allusions are all getting a bit stale. Perhaps they need a crack consulting team from the Daily Mail to help them up the hyperbole in their statements.

More evidence that the reality tapes were switched

The BBC has a rather odd news item today from the land of European disciplinarians and moralising creditors. Two things rather stand out in this article;

First is that sex with animals was ever made legal in Germany.

"Germany legalised bestiality (zoophilia) in 1969, except when the animal suffered "significant harm"."

Who lobbied for this law?

The other thing that makes me wonder is the comment from a self-professed zoophile;

"Michael Kiok, the chairman of the pressure group Zoophile Engagement for Tolerance and Information (Zeta), said he was going to take legal action to fight the proposed changes.

"We see animals as partners and not as a means of gratification. We don't force them to do anything. Animals are much easier to understand than women," Mr Kiok claimed."

Whilst I do concur with Mr Kiok on the latter point I can’t see this as a legitimate reason to abandon attempts at fornication with the fairer sex in favour of creatures who will never realise that the reflection in the mirror is themselves.

If this story wasn’t about Germany and wasn’t so utterly bizarre I would definitely be checking my diary for April 1.

Portfolio Update November 2012

Another update to talk my own book on my current personal positions and the why I hold them. I like to think of my portfolio as a way to outperform cash so Im looking for total returns and the key is capital preservation.

SBRY: I topped up some SBRY in June which was a great decision. Since then the stock as gone vertical up 60p to £3.50. Sainsburys is way ahead of Tesco in terms of store quality and home delivery and its outperforming both Tesco and Morrisons. It now looks fairly valued to me unless bid rumours start to resurface but Ill continue to collect my healthy dividend yield and reinvest.

Pandora A/S: I sold out of this completely a few months back around the 80DKK mark. I am of course gutted to see it now trading up at 118DKK which would have been a 200% return rather than the 60-100% return I saw on my sales. Still one can’t be too greedy.

RSA: This stock still just looks cheap to me as it’s a good franchise, internationally diversified and it throws off cash. Dividend yield looks fantastic and is much better than this renewed wave of buy-to-let for income optimism since the yield on RSA is better and one can sell a stock in an instant with no material fees. The UK fetish for all things property continues unabated however.

BBd/B: This stock has continued to languish below $CAD  4 per share which is a shame. Hence I’m nursing a loss here but this still looks like a solid industrial to me which actually makes things that people, companies and governments need. So much so that I bought some more shares around the $CAD  3.3 mark this month. It has continued to decline until yesterday when a massive new order for small jets was announced setting off an 8% rally.  At 7x forward P/E this looks too cheap to me.

ABX: I bought into Barrick Gold during July at $36 and $33 per share because it frankly looked very cheap for a mega cap miner albeit it one suffering from a lack of momentum in the gold price. Since then the stock was doing well but realtively poor results in Q3 caused a significant drop. Im around break even here but I still think it looks cheap albeit not ridiculously so. I continue to like its exposure to gold as most of the mines are in locations which are not politically dangerous or difficult (mines in Nevada rather than South Africa).

FGP: I bought some FirstGroup shares the day after their bid on the west coast mainline was cancelled. I take the view that not winning that bid was a good thing as they had overpaid. It looks to me like it could easily pickup a bit from here with bad news priced in but not my idea of long term fundamental holding. Currently it just lacks a catalyst to see it rerate toward sector peers.

MAYG: I bought shares in May Gurney after their profit warning in September as the stock looked cheap at 4x fwd P/E (it still does; 6x fwd P/E with a 5% yield) with low financial leverage and the bad news seemed well priced in. An intraday drop of >40% seemed like an overreaction to what was basically some poor management decisions. I bought into the shares at £1.32 and £1.20. I sold all my shares this month for a tidy 27% profit at £1.60. I was a bit early as they rallied as high as £1.77 but again to my mind this isn’t a great company it just had an oversold valuation.

Performance has been down a bit with the market and ABX suffering and I’m measuring on a period of around 18 months since April 2011 during which time my total return has been 20.3% to date. My only realised loss was 6% on a short platinum ETF. I have had a dividend yield of 1.73%, realised gains of 20.4% and unrealised losses are currently 1.9% overall. The biggest contributor to my returns has been Pandora where I saw gains of more than 65% overall across my sales.

Current unrealised gains:

SBRY and RSA

Current unrealised losses:

ABX, BBd/B and FGP

Caveat: Clearly I have a financial interest in these investments and this post relates solely to my personal investment positions. It is in no way a solicitation to buy or sell these investments nor does it constitute advice to do so.