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COMMENTARY
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 retail
market 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. 1979 the Leadership Changes
Time to remember and respect a great leader who came to power in 1979, and changed the economy of their
country irrevocably, reasserting its political strength and overseeing the radical adjustment in domestic society.
These changes would reverberate both domestically and internationally and have a direct effect on the country’s subsequent leaders. These policies were not accepted by all and polarised opinions throughout the nation. I
speak of course about ...Deng Xiaoping, the man who opened up the most populous nation in the world to become
one of the globe’s largest economies. Rest well Baroness T. She certainly brought out people’s emotions;; seemingly you either loved her or loathed her, but either way you couldn’t ignore her. History will probably show that it was as much her actions as anyone else’s that led to us subsequently having Tony Blair as PM and over a decade of Labour. After all, she was not defeated
by her enemy beyond the walls, but rather the enemy within. No need for a Trojan horse in the Tories of that day,
but rather those with a ‘lean and hungry look’ fearful for their own careers.
It will probably be the phrase “the lady’s not for turning” that will resonate over the years reflecting her iron will and determination. Of course the lady was for turning and did so even at the time of the speech. It was the monetarist
gurus of Milton Friedman and Alan Walters goaded on by the ‘mad monk’ of Sir Keith Joseph that set out the
economic course from 1979 until the U-turn in August 1981, and the realisation that something had to be done if reelection was ever going to be a possibility.
Much popular comment seems to have been that she was elected on a wave of enthusiasm in 1979. However to
the best of my recollection, it was rather a resignation that anything had to be better than ‘Sunny Jim’ Callaghan’s pathetic government in the Winter of Discontent when the black bags of rubbish piled twice my height in Leicester
Square. Some may recall the misquoted statement of that lacklustre leader attributed to him by The Sun - “Crisis what Crisis?” However, some statistics are worth recording I believe. Inflation in 1975 peaked at a devastating 27% before
falling to 2.4% in 1986. For those of us around at that time, this was a generational change. Higher inflation was a
given part of the ‘British disease’. As, of course, was also the number of strike days which fell from 29m in 1979 to
just 2m by 1986. Britain had changed.
For the City of course, history is still being rewritten by those with sepia photographs of traditional broking and
jobbing. The good news was that as partnerships, they controlled risk - as it was of course their own money on the
line. The bad news was that it was a cartel of fixed commissions, many ‘fixed’ charges (and some would say even
some prices as well), with houses divided by religion and class as well as being astonishingly white and
exceedingly male. Success could often be more likely to be governed by who you were rather than what you did.
Sadly, we have gone from one extreme to the other with a meritocracy being abused by a greed culture rather than
a service one. Let us hope the pendulum can find a centre line for the future.
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This article represents a personal and lighthearted 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 Services Authority. Member of the London Stock Exchange.
Registered office: 125 Old Broad Street, London. EC2N 1AR. Registered in England and Wales No. OC378740
JUSTIN’S WEEKLY COMMENTARY
So when is a single currency not a single currency?
In the UK, we have a single Sterling currency so that from Fermanagh to Folkestone, and from Shetland to St Peter
Port, the Pound is tradable at a given value (although certain Channel Islands and Ulster notes make for interesting
conversations with London taxi drivers when trying to pay for their services). Please also may I leave aside the
local marketing currencies of the Bristol, Totnes and Lewes pounds. However is the value of Sterling the same
throughout our single currency area?
After all, a Pound in London buys you very little in terms of property whereas just a few miles away from the
metropolis, buying power increases substantially. When West London ‘Coronation Street’ lookalikes which have
been badly built, bombed and flooded can sell for over £1.3m, such buying power can have some hugely distorting
effects. House price inflation has meant that the Northumberland Pound would seem now to have far less buying
power than a London Pound, but on the other hand one buys an estate, the other a terraced worker’s house. So
compare the Northumberland £ with the London £ - the Northumberland pound buys a lots more property than the
London Pound – but who is wealthier?
There is an interesting parallel within the Eurozone where we can find oddities over valuations such that the
Germans’ net wealth may be lower than the southern Europeans. Some of this can be down to the effects of the
local inflationary issues for example, Italian property has been rising due to local pressures, whereas German
property has not been so affected. T hus a German Euro would buy more property in Germany than an Italian Euro
in Italy. So in reality who is wealthier? The inflated asset value holder or the steadier valued property?
Where is the real value of a currency now? Last week we at last saw some greater reality coming into gold as the
price fell. Then we have the cyber currency Bitcoin showing some alarming cracks. Add to that the lack of
confidence in the paper currencies. So where is the real asset value? Are we back to Salt, courtesy of the
Romans? As ever the answer will always be a diversification around the globe to provide greater confidence.
Personally I prefer a 1964 Morris Traveller – it’s not liquid, but it is movable, tradable and going up in value.
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And finally... now if you were ever thinking that our television programmes might be getting a little dull or
repetitive, then spare a thought for the ever patient Nepalese TV viewer.
A Nepali television host has just earned the Guinness world record for the longest television talk show in an epic
discussion about the founder of Buddhism which lasted more than two days.
Rabi Lamichhane, a former TV journalist from Nepal turned manager of a fast food restaurant in Baltimore,
Maryland returned to his homeland to talk on air non-stop for 62 hours and 12 minutes, a feat certified by Guinness
World Records as the longest talk show.
"It was not difficult physically but sometimes I found it hard to concentrate," Lamichhane said. Yes, but just think
about it from the audience’s point of view!
The 36-year-old host talked with politicians, artists, diplomats, businessmen, social workers and journalists about
contemporary issues, mainly in the Nepali language with English sub-titles, on his "Lord Buddha was born in Nepal"
show to beat the Guinness record of 52 hours set in 2011 by two people from Ukraine.
Lamichhane said he did not sleep during the show, ate mainly fruits, drank up to 15 cups of coffee a day and lived
on energy drinks.
Aren’t there moments when you just wish there was an advert break!
Have a good week.
Justin Urquhart Stewart
Director
Seven Investment Management
www.7im.co.uk
This article represents a personal and lighthearted 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 Services Authority. Member of the London Stock Exchange.
Registered office: 125 Old Broad Street, London. EC2N 1AR. Registered in England and Wales No. OC378740