Triumph of Horlick Over Experience

One of the reasons this blog exists (aside from the opinionated proclivities of its scribes) is the lousy job the MSM business correspondents do, with only a very few honourable exceptions.  In particular, it's the uncritical way they swallow press-releases - and of course lunch - allied to the need to keep advertisers sweet.  And we would certainly never fall for that, dear me no.

Might we somehow expect the Grauniad also to be a bit different ?**  As we turn to the Saturday money pages to make an assessment, who is this smiling enigmatically out of a 1-foot square, full-colour photo-spread but Nicola Horlick!

Next month, City "superwoman" Nicola Horlick (right) will ... launch a peer-to-peer website called Money & Co. Like many of the new sites it will allow people to lend money to small and medium-sized enterprises and enjoy returns which she estimates could initially average 8% gross ... the mother of six, whose business ventures already encompass the worlds of investment, movies and restaurants, told Guardian Money that out of all the things she has done in her career, "this is one of the most exciting.  I would expect us to be one of the winners … Our system is built to be global." 

Ah yes.  This would be the same Horlick whose superwoman powers and all-round creative financial genius saw her entrusting previous clients' money to Bernie Madoff.   Not sure what that tells us about her 'estimates' and 'expectations' ...

Still, I expect the new press pack was beautifully presented, and she bought the hungry hacks some very nice lunch.

ND  

** only joking, of course - see this from 6 years ago

Weekend Reading: A Strong Capitalist Recommendation

A couple of weeks ago an old mate of mine (from *ahem* Enron days, since you asked) let me know he was putting out a book - on investment, trading, entrepreneurship, business in general, gambling - and Enron.

Now of all the stuff written about Enron - and that's a few forests' worth - not a single book has come from a true Enron insider.  The omerta has been 100%.  (And before anyone cites Sherron Watkins against me, she wasn't very deep inside at all - double meaning intended.)

So I was quickly into Kindle for Lucky and Good: Risk, Decisions & Bets for Investors, Traders & Entrepreneurs, by John Sherriff.   (At mates' rates it was free, but it'll only be pence anyhow.)  Sherriff was a true Enron insider, as well as being the most creative, energetic deal-maker I have ever met, with the best intuitive feel for risk / reward trade-offs   - and that's from a cast of very many fine dealmakers at the Crooked E.  He's a damn' good poker player, as well ...

Sad to relate, though he peppers the book with Enron stories to illustrate his many excellent points he tells nothing about the scandalous stuff: so the true insiders' book is still to be written.  But that's the only disappointment in an otherwise truly first-class read.  I can't recommend it highly enough for the typical C@W reader (and not just for the traders and investors), who won't just enjoy it tremendously but will probably do better business having done so.  There are so many powerful - and practical - points made, all of which are IMHO entirely correct, on critical issues such as market pricing, liquidity, how to think of sunk costs, macro-trends, marginal advantage, fast feedback, long-term vs short-term, finding free options, understanding what your long and short positions are: and he goes as far as it's probably possible to go in helping people learn to be commercially creative.

In summary, the whole Enron arsenal.

Even better, it's written with a very light touch - for an American (if I dare say this) Sherriff has a very Anglo-oriented sense of humour.  (He's complimentary about several aspects of our regulatory and legal systems as well.)

And he's brutal on the subject of the legal profession ...

Whenever I find myself teaching on business-related topics, students always ask what they should read before attending the course.  I've never before had a single book to recommend, but now I do.

ND

Sell in May and Go Away

Today is June 1st 2009. Any historic look at the markets will tell you that between now and October every year, there is an almost guaranteed annual decline in the value of stocks and shares.

However, this year is of course different (as always!), as we are in the midst of the worst recession since WW2 (and off topic, I agree with this article strongly, suggesting politicians have forgotten all about the economy as they wallow in their own self-pity).

And yet for all that, the markets have surged 28% since march 2009. All on the back of nothing else other than everyone is not going bust. Banks and Property share prices have rallied from near death to stable. Commodity prices have come back up, with oil at $66 up from its low of $33 and this has pushed up oil and mining stocks.

Is this correction now priced in? It has to be, there is still so much bad news to come in the commercial property sector, in government debt, in unemployment, in demand for consumer goods, in mortgage supply.

To top all that, inflation has not gone away like the Bank of England said and we may well be poised to raise interest rates before the end of this year, which really will stall any recovery.

Now is a time to think carefully about ones investments and I am going to review mine. I will update here when the decisions and changes are made.