This is your captain Warren speaking – it’s going be a long night. Three out of four engines are on fire, the fourth is running rough

I sparked up Warren Buffett’s Berkshire Hathaway livestream, well, the recorded version anyhow. H/T Monevator. Some Ermine tips – start about an hour in, and I had to click n the unmute audio to get to hear anything. It was a funny old feeling. Warren’s sitting more or less on his tod in a massive convention hall with hardly anybody out there. It’s all very 1950’s, there’s no top end in the audio and you can hear the 60-cycle hum and noise in the amplifiers. BRK clearly doesn’t spend money on young media-savvy hipsters to tart up the presentation slides either. This is part of his homey schtick of course, but you’re sitting there watching one of the richest people in the world.

He cut a lonely figure on the podium. And while I wouldn’t go quite as far as to say he sounded scared, the headline sums up what I heard. Sure, you can count on the tailwind of American exceptionalism, but you gotta live that long to get into the upswing. And at 89, in some ways it’s in doubt that he will.

He spent a lot of time describing how if you’d been unlucky enough to buy into the DJIA before the Depression, you would have to be ready to fall back and fall back and fall back to hope that the engines of American exceptionalism would fire again into the low-water mark, and it would be 1951 before you break even. He’s not saying this will happen again, many things are genuinely different now. The intercession is likely to be much shorter, and of course he was quick to state he does not know what the markets will do tomorrow or next year.

But he didn’t give the impression he sees a V shaped recovery. He didn’t even see BRK shares as a good buy now. And he’s dumped airline stocks. I wonder what else?

In some ways I was cheered by Warren Buffett. I dumped a lot of rubbish in the first half of March. In a single hit on mainly one day. I had gotten decadent with the long bull market, and had a significant holding of the FTSE100 in VUKE. ZXSpectrum summarised it well on this Monevator thread

The high street was obsolete anyway, airlines should go bust, the petroleum industry needs massive downsizing. The FTSE is not coming back because it full of crap companies with obsolete business models. The S&P and Nasdaq are not.

I’m also more relaxed about higher unemployment. The UK made a sort of Faustian bargain: low unemployment for high underemployment and low skill base.


Machine learning and AI is going to make many middle class people unemployed. We might start getting used to it now and stop stigmatizing those who don’t have jobs. A generation or two from now being unemployed might well be the norm.

I was heavily in the FTSE100, and I was buying rubbish because the yield was decent. My main ISA1 is 13% down on what it was in January, so I showed a clean pair of heels in time. I got rid of a lot of other rubbish, because in a decadent bull run shit looks attractive and safe. It wasn’t.

And WB reminded me of that. I had lost my way, and was buying trash. Quality is worth having now. If you are going to buy, buy quality. WB doesn’t forget that, but I did.

Warren’s patriotic American exceptionalism shtick got on my tits. America is captained by a uniquely talented buffoon of the first order, who is a danger to the world and his own subjects. Trump reminds me of The Mule in Isaac Asimov’s Foundation trilogy. Just as Asimov’s psychohistorians foresaw the arc of history but failed to model a mutant intellect, the founding fathers of the United States got an awful lot right. They put checks and balances to try and control the temptations that absolute power brings. But they had no model for Trump’ particular talents resonating against a particular slice of history. There is at least cheer to be had in that like the Mule his particular combinations talents seem sui generis; we will get at least another four years of him, but the magnetic combination will probably die with him. So no, Warren, Americans do a lot right, but not so much as you’re cheering. However, in economics ZX48’s observation support WB’s thesis – compared to the US indices ours are full of crap businesses, and the US appears the only place in town for quality.

But Warren Buffett is a much better investor than me and his point is right. I need to favour quality – companies supplying what people actually want and need. I did well getting rid of the rubbish before it had fallen too far. I am intrigued the WB finds nothing at attractive valuations, because he credits the Federal Reserve with forestalling another credit crunch for companies. He thoroughly approves of the action, compared to the results of inaction, but it has corrupted the signals given by the market because of its indiscriminate behaviour. Noise floods the input, but he prefers that to the deathly silence of no noise and no signal.

And yet if Warren Buffett is saying that the compass spins and knows no North, then perhaps I have not missed the opportunity. My guess is the signals will start to return at the start of November, as we start to enter what is likely to be a long winter low in reserve capacity.

And while it’s all different now are the most dangerous four words in investing. I need to start to challenge some assumptions I have held from 2008. One is I have always been weak on the US – it looked overvalued and as I started to buy a lot of my holdings in the 2008-2014 period. Most of my US holdings are in the half of VWRL, and yes, I was wrong earlier. Don’t bet against America 😉 My market timing scored over sector selection.

In the early stages just after the GFC when I have bought individual shares, I thought more like WB. I still have nearly all those shares, mostly in my HYP. But as an index investor you can’t think like that, because you’re not buying individual shares. And I started chasing meta-parameters like yield, and following stories. The best story is Lars Kroijer, but sadly I picked up that signal late, it was only written in 2015. I still have all my VWRL.

I have been fortunate in being able to shoot the other index crap early enough, but I need to get back to basics. Good quality at the right price – and also perhaps take another line from WB. It is better to buy a great company at an okay price than an OK company at a great price. In index investing that means no FTSE100, not VHYL (which I have never owned) and perhaps I need to suck it up and consider the S&P500, and maybe the CNDX on the NASDAQ100, preferably after Trump has either won or lost and the new administration suckout goes on top of the pandemic recession. In the meantime I will continue to buy little bits of smallcaps which will become more and more bombed out. I am where I want to be with about 2/3 equity exposure now, because I have serious firepower. Buffett gave me the hope that I will have somewhere to aim that in the year(s) to come…

No, Buffett’s message wasn’t quite Bill Ackman’s self-serving Hell is Coming interview, I am glad I sold before he opened his bloody great big gob 😉 But it sure as hell rhymed.

Capt’n Buffett will make it across the water on the one defective engine, but it’s going to be a very long and rough ride to get from here to there. And he seems to believe that there is an outside chance that Dubya’s angle from 10 years ago is a very real possibility, leastways in the time he has left.

  1. My secondary one with Charles Stanley doesn’t revalue in Jan. It isn’t underwater on purchase, but is mainly a DevWrldExUK index fund LGITI, so similarish to VWRL and also about 13% off Jan from its chart 

37 thoughts on “This is your captain Warren speaking – it’s going be a long night. Three out of four engines are on fire, the fourth is running rough”

  1. The maths is simple.

    A 25% fall in revenue equates to a 50% fall in earnings per share.

    A 50% fall in revenue equates to a 75% fall in earnings per share.

    If you can maintain 75% of your revenue you are doing marvellously, and all things being equal your share price should be half.

    There are many companies that may not recover and carry massive debt, Cineworld, Marstons, and Carnival all come to mind.

    Please be careful.


    1. And if anyone shouldn’t believe the math wait until 2Q results are presented – they will apocalyptical. A depression cometh.


      1. A piece in today’s FT points out that during the Spanish flu pandemic in 1918/19, output fell dramatically in the worst quarter and then recovered by about the same figure in the next. Presumably this is the main aim of the policy of various governments of ensuring liquidity and funding loans and handouts. The bounce in asset prices could be seen as a side effect.

        Liked by 1 person

      2. And so it begins. From today’s FT, ‘The UK on Tuesday will announce that sales in April fell 97 per cent, with similar declines in Spain and Italy.’


      3. > during the Spanish flu pandemic in 1918/19, output fell dramatically in the worst quarter and then recovered by about the same figure in the next.

        There was a war on and then reconstruction though. Let’s hope we escape that this time, it’s not a good way to achieve a V shaped recovery!


      4. > In regards to Auto.

        You shouldn’t infer the general from the particular though. Some things have been obviously wrong for many years. Every time I look over Mrs Ermine’s Facebook I saw people in jobs that paid less than mine posting about their fourth of fifth foreign jaunt that year. Usually just below how everyone should be going going vegan for the environment because they cared about their grandkids’ world. A lot of stuff has been pumped up by cheap money, and tourism and airbnb is one of those- there’s far too bloody much of it. Creative destruction needs to be brought to bear on it and many other things. A 97% fall is no bad thing in many cases.

        Same with cars. I’ve never been rich enough to even think of buying a new car. Sure, I could do it tomorrow, cash, but it would be barking mad. So why are all these twits buying motors on PCP, or even worse – PCH – the latter must be looking pretty pig sick if their income has disappeared and they need to pay a couple hundred on the big Merc sitting on the driveway going precisely nowhere for three months, at least the PCP guys end up with no money and no motor which is not the worst thing in the world at the mo.

        We need to scale down a lot of the frippery and bollocks we have been spending money on, and arguably spend more on the needs of life and less on the wants, and all round get our priorities right. That means demand destruction of a lot of high-profile sectors. Oil, cars, the half of meals eaten out in London and New York, Kardashians, Influencers. Here’s hoping some sectors have a 100% demand destruction, and tourism needs to go down by 75% IMO. One foreign trip a year is cool. Four is taking the piss.


  2. Everyone likes to mock “this time it’s different” but move your point of reference far enough back (and really not all that far) and it actually is different. The internet actually did change the world in 2000. The end of oil and climate change will make it different again. I don’t know if COVID-19 is an inflection point – I doubt it – but it’s always possible.


    1. > The internet actually did change the world in 2000

      This time it’s different tends to be a leading indicator even when it applies. See: dotcom bust, BTDT 😉


  3. I also came to the same conclusion as you. I saw an interview with Charlie munger which had a similar thesis in which he indicated an intention to sit tight. The siren call of the ftse 100 is strong and they aren’t all poor companies – Unilever? – but it is instructive to compare the overall composition with the s&p. Almost all my equities allocation is a global tracker with a slight overweight to the U.K. for that reason. Mind you I feel zero desire to buy more equities for now, cash, tips and gold in that order for me given I am overweight risk assets as am in accumulation. I haven’t sold anything and have no intention of doing so as I am a terrible market timer. I do think one thing which is different now to 1929 is the fiat currency – in an extreme example there is nothing to stop the govt printing money and putting it on your bank account monthly – after all that’s what’s basically happening with the furlough scheme isn’t it? It’s a powerful force to combat deflation which is essential to keep the show on the road. It will lead to other problems in the medium term. fwiw – nothing – I see a very small chance of inflation in the short to medium term. The world is awash with surplus capacity. On the other side of the stimulus coin rates can go further negative and suddenly very high p/e’s look relatively less expensive. So yes strange times and I haven’t got a clue what will happen. A tough gig as always if you ate de-accumulating and a healthy slug of cash, bonds and some gold seems sensible – which as current rates has to mean a lowering swr – hey you can’t even get a hair cut at the moment so what’s to spend it on! Good luck!


    1. Ah ULVR. I got an alert on them, perhaps to add to the HYP. At £25-ish – I missed the boat a while ago. I could be moved to 30 though – in general if I start to see prices similar to back i nthe first half of the bull run getting out of the GFC I take interest.

      I confess to being tempted by oil, but as WB says, the signal is unclear. No, of course not all companies in the FTSE100 are crap, but you don’t get to pick and choose with an index, and with far too many of the bigger caps it’s hard to answer “Hell yeah” to the question “Do I want to be owning this firm in 20 years’ time?”

      Now there’s a different reluctance to the Hell Yeah with the S&P – do I want to own FBK in 20 years’ time? What kind of world will have that still raring strong. Will we all end up like Solarian Spacers, shunning contact other than by telepresence?

      And yes, sure, indices are mutable, the FTSE100 of 20 years’ hence will be different from todays. And yet I recall the FTSE100 of the GFC with its financial concentration, and now oily and financial, and I wonder if the UK isn’t just too small a universe to be safe for indexing without great sector concentration. But perhaps that is my active heart of darkness, after all the S&P in concentrated in IT which is having a successful crisis, But I think SPY is a broader index by definition, being the largest 500 of a bigger pool than the largest 100 of a smaller pond.


  4. Steady on with the demolition of cheap flights there, ermine! I’ve been watching the commentary around this topic with some interest. There’s been quite a bit of speculation about how the air industry is going to develop post-pandemic, including the possibility of fewer planes & much more expensive flights. Wearing my environmentalist hat, I can only approve, but wearing my endless summer hat, not so much. My annual trip to the UK for the summer fell by the wayside this year; the hazards of a 24 hour journey mid-pandemic via two of the world’s biggest airports and various lockdowns made it impossible: tbh being locked down in Oz (fewer than 100 deaths so far) vs the UK (40k? 50k?) is currently a no-brainer, but I do like to make an occasional return to civilisation to stop the brain from turning to mush…


    1. I think we’re going to have to agree to disagree on that one 😉 Just be glad I am in zero position to influence things – here goes. The long-form version. Nobody wants it, but I feel better

      Rant on

      When I moved to Suffolk in 1989 there were military airbases (Woodbridge, Bentwaters) and obvs the associated racket. However, although the military were noisy SOBs they kept it to the day mostly, unless they were attacking Iraq, and I believe military airbases protect residents from commercial traffic. In Somerset Yeovilton seems to reduce jet overflights, the downside is choppers in the day. But my sleep is much less troubled than it was in Ipswich.

      Anyway, these military airbases were canned in the 1990s ISTR, Bentwaters are executive homes etc. And the traffic to the bastard spawn that was Stanstead increased. And increased. And increased. The bastards got so the endless roar of overflights at cruising altitude made it hard to get to sleep before some past midnight and in the light summers they started being noticeable at 6 am.

      I haven’t got it in for air traffic so much because of the environmental impact, unless of course I happen to be listening to an environmental activist who cares so much about their grandchildren’s future as they return from their fourth short-haul flight that year or their spiritual jolly to Bali where they got so in touch with the planet. It is because I am old enough to remember when the sky wasn’t scarred with endless contrails and drone and rumble of air travel.

      And the day can’t come soon enough, IMO, before air travel got screwed back to the 1990s. I’m not asking for the 1970s when I could get 15 minutes between aircraft in SE London, though it’s an ill wind and all that. But the 1990s, when you could get into the countryside and hear the birds for half an hour without being reminder that you got out in the great outdoors to share it the noise of some berks going to piss on the war memorials and in the 18th century fountains of our neighbours.

      Some tourism is great, and probably does broaden the mind. The sort of thing driven by unfettered capitalism is a cancer on the globe. I would love to see the entire cheap airline industry destroyed by creative destruction. Air fares should be about where they were in the 1990s IMO – about £300 a head to Europe, about £600 to the US. Enough to make people think.

      Some things are sufficiently antisocial that they need to be severely discouraged. And post dot-com tourism is one of those things – air travel, cruise ships the lot. They need racking back to a civilised level so that they are just less wantonly destructive of other people’s lives, I will leave parents and grandparents to add in “destructive of future generations worlds” though to be honest by their actions I don’t really think they giveashit. And air travel needs to pay its fuel taxes – why do we tax car, bus and train fuel but not aircraft fuel?

      I’m not actually that bothered about business travel. It’s the increased demand due to low cost airlines that hacks me off. Air travel shouldn’t be low cost, because it f*cks up people’s lives when taken to excess. Let’s face it, mass air travel propagated Covid-19 around the world in two months, perhaps mass air travel needs to take the bullet back it unleashed. With less air travel we might have had a bit more time to respond to this, though it’s a moot point for the UK because we seem to lack competence even when warned. But other countries might have had some benefit. There’s a strong argument that this applies to many things in late stage capitalism where money drives out the public good, see AirBnB, cruise ships, BTL property, and perhaps running these excesses out of town will be one of the few benefits of this time. I won’t quite go all James Lovelock and say it’s the revenge of Gaia yelling in our shell-like to get our shit together and stop taking the piss. Others can do that.

      Some of this is distorted by my viewpoint from a densely populated country in the rich world. There are many places that need air travel to get around, arguably the US, AUS, NZ, Russia. Different rules will apply there. But I’ve never really understood why mainland domestic air travel in the UK was even allowed, never mind promoted – nowhere in the UK is more than 12 hours from anywhere else. In the 1970s my family travelled by train from SE London to Switzerland by train and ferry. It wasn’t so terrible. And as for all the boosters for LHR as a hub, no, I don’t want the noise, the air pollution etc of turnaround flights. If Schiphol or CDG want it, good luck to ’em.

      Rant off

      > My annual trip to the UK for the summer fell by the wayside this year;

      You would still be able to afford it under an Ermine scenario, although I would say you dodged a bullet 😉 I’m sure you can find the 1990s price. If you also wanted an annual trip to the US and one to, I don’t know, South Africa, then you’d need to save up more, or do without. As I say, for people living in the Southern Hemisphere distance may make some of this grouse much less relevant. There are a lot fewer of you, too. Mass air travel tourism falling by 75% and staying down can only be A Good Thing in my book. Some is good, more is not always better applies to many things in life, but the search of profit does not seem to be able to comprehend that there are limits to some kinds of growth, even if you can outsource the cost of externalities.


      1. I reckon people will cling to old habits again as soon as they are able to, even just for the reassurance of normality through familiarity, so maxing out the credit card to go to the usual Costa del Chav will still be in plenty demand cos YOLO. The vast majority of people don’t change easily, so they’ll only make significant behavioural changes if kicked in the head by a horse for example, but even this viral scare will die down when they get panic fatigue. It’ll be fascinating seeing how it plays out though, because it’s going to come down to whether the lockdown(s) rendered Joe ‘n Jane Sixpack sh*t-broke that ultimately decides it.

        As for investing in the crisis here now or to come, risk is building in all asset classes while cash is similarly climbing in risk when central banks double the money supply in months by digital printing. So you can flip a coin for whichever asset feels safer at the time, watch cash deflate or both. Years of deregulation have sleepwalked us into a kleptocracy where large companies borrow up to the eyeballs to get too-big-to-fail, then blow that cash instead of re-investing in their own futures for the longterm, so all financial gimmickry is going to blow up again better than 2008. Those still standing will tend to be older, own their homes outright, have low maintenance needs, good health and useful skills whatever the weather. (financial or otherwise) You see this,so should be Ok.


      2. Surprisingly perhaps, I pretty much subscribe to all of that. Back in the dark ages (1970s) I was quite a right-on eco-warrior, and much of the thinking from then still lingers on in the corners of the mind. I’m also old enough to remember clearly a less polluted, less crowded, less affluent and less mobile world, and I’m pretty sure that life for most people then was in some important respects more pleasant. Change is hard because people get attached to the status quo, not for what it is but because it is. Maybe the current disruption might allow through at least a partial reset, although I feel somewhat naive even putting that down in black and white. I’d welcome a less frantic, less greedy, more reflective world.

        Liked by 1 person

      3. @Ermine – Wizz Air actually has about 22 months of cash in the bank, assuming no flights. They’re one of the strongest airlines in terms of available cash. They did just take a £300m loan from the UK government, but seeing as it was offered at a 0.6% interest rate I think they just replaced all their higher interest loans with the much cheaper money. They’ll be around for a while.


      4. I am pleased you qualified your rant by acknowledging your UK centric viewpoint. Here in Oz air travel is indispensable. I would have to drive for 3 days to get to work. 4 days to get to Sydney or Melbourne. Getting to my work which is in the same state is almost a 2 hour flight on a 737. The big cities over east are 5 hours. Anywhere in Asia is 3.5 hours plus and to visit my family in the UK is 22 hours. My situation is extreme but something similar would not be unusual for many people. Are lives are shaped by the technological norms around us. We cannot go back to noble savagery overnight. A cure worse than the disease is unwise!


  5. FI Warrior. RE your comment I largely agree depending on how much impact the economics have had on peoples ability to spend. You can be sure governments (particularly the UK) will be keen for people to keep the spending spigots on given how dependent our economy is on consumer spending. I personally think (but I really don’t know) the main shift out of this crisis will be govts (particularly the UK) approach to running fiscal deficits. Up until now, the Conservatives have at least pretending they are trying to balance budgets – and yet we’re going to have the biggest increase in deficits with probably no inflation given the amount of deflationary capacity in the system. I guess there will be a greater clamour for something similar to a minimum level of income for everyone, there will be greater demands for public spending with no electorate desire to pay for it and the natural answer is to run a fiscal deficit. Particularly when monetary tools are getting closer to their limits (note I see no reason why I/R cannot go below zero to some degree). But don’t listen to what anyone says look at what they do so the saying goes. I’ve done nothing asset wise – in-spite of more agreeing with Michael Lavelle above than not because I see no reason to believe the monetary and fiscal tools won’t push asset prices back up again. And medium / long term the value of cash is going down as more of it is printed. After all with US debt at $24 trillion no one can seriously expect they’re going to pay it back?! Maybe they’ll try to grow out of it as they did after WW2 but that feels a challenge from here. Equities / Hard assets for the medium / long term shielded from governments as best you can. As much liquidity as you need for the st /medium term.


    1. @Seeking Fire, I actually would love a humanitarian reset like @Magnus Muir and UBI would be my dream to be most immediately effective in that respect, but I have no faith in the majoritarian consensus, especially when the masses are scared sh*tless so effectively by the mainstream media channeling our billionaire over-class. Psychologically, people switch into survival mode when panicked enough and suspend the ability to think for themselves, so act short-term and that can be against their own best interests. They currently think 99% of them are going to die now and so being bankrupt via lockdown makes sense through that lens. Anyone daring to think differently to the groupthought of the moment (TINA to lockdown 4eva) is intimidated into silence by being labelled as antisocial and publically shamed/ostracised.

      Re: the global economy, the debt is indeed unpayable, even just the interest on it alone, (hence negative rates which until recently would have been considered insane and impossible) so we’ll see civilisational slow collapse, in stages. They’re only getting away with debasing their fiat currencies now because all significant countries are doing it at once, so what money will you move into if you don’t like it? Deciding a new global reserve currency will enable a reset via global debt jubilee, but that would take considerable cooperation between states without enough trust between them. When the Austro-Hungarian empire tanked, in the ensuing hyper-inflation, those with hard currency available snapped up any hard assets at fire-sale prices (land, property, viable businesses) while the 99% dialed back to serfdom. This looks the most likely outcome in the here and now, never let a good crisis go to waste and all that. History repeats only because we never learn the lessons, time after time.

      As for owning even good company shares, in an era of stagnation, when demand is sucked out by attritional poverty for most, where will the growth come from? Say you have Unilever in your pension, or healthcare companies, sure in a recession people still need soap, medication, food, but they’ll have to cut back to what they can afford no matter what they want, so I don’t see enough profit to live off even solid investments. Apparently there are something like 30 million newly unemployed in the US alone where lockdown isn’t over and those people now have no healthcare, coming as it does from jobs, so who will healthcare companies sell to? In vaguely social countries like the UK, the NHS has to be funded either by taxes (now nixed by collapsing employment) or by printing money, which defeats the object once those notes go past the value of toilet paper on their way down. I’m guessing the one thing that’s really changed from the current experience is that governments now know for sure how far they can push their people if necessary.


  6. Almost six weeks into half a job lockdown and the economy is in tatters. Every man and his dog are out and about. And now it seems that travelling half way across London is Okay for a bit of sexy time. The point is, that this exercise has been a complete waste of time and money. The Ro is still sufficiently high to spring a second wave. The reputation of my old College [Imperial] is toast.


    1. > The reputation of my old College [Imperial] is toast.

      I dunno. The Telegraph has an agenda driven by right wing old buffers who want to reopen the economy and are trying to discredit anything otherwise, a sort of mini-Trump. Sure, what he/she did was wrong, but I don’t begrudge a fellow who was under the sort of pressure he was under from wanting a shag. Sure, he was wrong and/or should have been more careful 😉 There’s all the moral horror in the Telegraph,

      Ms Staats, a Left-wing campaigner, made a second visit on April 8 despite telling friends she suspected her husband, an academic in his 30s, had Covid-19 symptoms. The couple and their children live in a £1.9 million home, and are understood to be in an open marriage. She has told friends about her relationship with Prof Ferguson, but does not believe their actions in meeting to be hypocritical as she considers the households to be one.
      Sir Iain Duncan Smith, the former Conservative leader, said: “Scientists like him have told us we should not be doing it, so surely in his case, it is a case of we have been doing as he says and he has been doing as he wants. He has peculiarly breached his own guidelines. For an intelligent man, I find that very hard to believe. It risks undermining the Government’s lockdown message.”

      what with the ‘open marriage’ and ‘left wing campaigner’ stuff. But it seems all between consenting adults, and unlike typical Tory sexual peccadilloes, doesn’t involve minors, rent boys or unusual circumstances with an orange stuffed in their mouth. Which I also don’t give a shit about except for the minors.

      Unlike priests, we don’t hire our scientists for their ability to be a great example of moral behaviour, though we are entitled to ask that they respect the law of the land. His work may still be right even though he screwed up in other areas of life. The whole right-wing smear campaign to open up the goddamned economy is getting louder and louder all the time. This is a straightforward balance of interests, risk of death against risk of losing money, but it is the uncertainty which is making the way forward unclear. I’d like to put spies on IDS and pretty much the entire Brexit crew, let’s splash their illegalities and indiscretions over the front pages too. FFS Bojo seems to be able to get away with fornication without the Torygraph coming out in a fit of the vapours.

      As so the slimy shit IDS “we have been doing as he says and he has been doing as he wants” yes, right that time. Let’s keep a very beady eye on you and yours because let him who is without sin cast the first stone, eh?


      1. It’s not a question of morals. It’s a question of science. A lockdown is a lockdown. Think of it as one deliberately fucking up their own experiment! And deliberately fucking up an experiment is unethical – so morals do come into it. 😉


      2. The boy done wrong. Sure. And apparently has paid the price. London has 9 million people. This was not a single event. I know of Londoners that have been meeting up – doing lockdown in London must be uniquely tough, particularly if you live alone. The experiment was fine.

        I do find it tremendously odd that Ferguson’s peccadilloes are on more front pages than the news that we have fucked up our coronavirus response so comprehensively that we have the highest death toll in Europe which is a Great British achievement that happened today.

        But FWIW everyone I have heard on the subject feels more like the Sun does, so I am the lone voice.


  7. One consequence of lockdown is I can catch up on reading. The Prince, Niccolo Machiavelli (1513) is an old favourite. Machiavelli states in Chapter 10, that a city state should be well fortified against attack with properly sized moats, walls and necessary artillery. Public warehouses should contain food, drink and firewood for a year; what’s more to keep people well fed without draining the public purse, they stock materials for a year’s worth of work in whatever trades are the lifeblood of the city.

    That definitely doesn’t sound like UK plc.


  8. Ermine – I totally agree with you – FTSE too much that falls into the ‘I’d rather not own that’ and not enough ‘I’d love to own that’ about it.

    I did a quick check this morning. Categorising >90% of the FTSE’s £1700bn market cap by eye, I saw
    – Resources (energy, mining) is the biggest sector – over 20% of market cap. Not having fun when GDP is down double digits, and oil price is negative in the US.
    – FMCG (Unilever, tobacco, diageo) is next biggest – almost 20% of market cap. This is a solid sector right now in particular.
    – Finance (banks, insurance, asset management) is third – about the same as FMCG. This has ‘watch carefully’ all over it; trading firms are making hay but debt exposure will be negative and asset values falling will hurt e.g. Prudential, Hargreaves.
    – Health/Pharma is fourth – at just over 10% of FTSE-100. Solid, undented I assume.
    – Retail is about 5% of FTSE-100. Badly damaged, but arguably small enough we can shrug.
    – Utilities – a solid sector I assume – is smaller even than Retail.
    – Travel – negligible exposure in FTSE, thank goodness.
    – Manufacturing (defence, melrose, etc) – <5% of FTSE – should be a 'gdp tracker' I assume.
    – Tech – negligible
    – 'funky growth stocks' – negligible – because the finance/resources/fmcg/health outfits crowd out the fever trees/etc

    So, half your FTSE index gives you Resources/energy, Finance and Retail – all of which are down a lot. And it doesn't give you NASDAQ / Fever Tree / A2 Milk.

    FTSE's going to stay down for a while, I reckon.

    Liked by 1 person

    1. If you squint a bit more travel (or possibly manufacturing) should/could be extended to include/highlight [civil] aerospace ie Rolls-Royce, Meggitt, & Melrose (via what was GKN), and they are all being hit very hard. BTW, nowadays BAe is mostly defence – so seems OK.

      Liked by 1 person

  9. Two things only
    1. Honoured that you would ever quote anything I’ve ever incoherently mumbled
    2. The Foundation Trilogy. Takes me back to my early teens. Asimov was a great science fiction author, plus an excellent popular science writer and a Prof. of Biochemistry. It was his writing, as much as anyones, who inspired me to aim and achieve a PhD in elementary particle theory … then I threw it all away and went into finance!

    Liked by 2 people

    1. It was a scary aha moment when I read your comment, which explained just why the FTSE100 went titsup as fast as it did, and arguably why it’s still largely down 😉

      Asimov was a great guy – I loved the Foundation trilogy, I read it before hearing the BBC radio adaptation of it many many years ago. How the heck I made any sense of what I read beats me since I would probably still have been at primary school, but I loved the narrative of the secular rise and fall, and in particular the concept that while the decline and fall could not be arrested, the intercession could be shortened.


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