Record S&P 500
This week the saga of who killed the stock market and what to do with it continues, if only as the S&P reached another record high. Of course, we are nowhere near a record high, and a FTSE 100 record high would only be some 10% higher than the record of 1999. Indeed, the problem may not be so much what is wrong with the UK stock market now, but why we are only realising the underperformance now when the disparity between here and other countries is so great? This month a twist in the debate came from self-righteous shorter Carson Block.
Bears are normally holier than thou, so that even if their accusations are wrong, they still scare shareholders out of their positions. Block suggested in the Telegraph that the City should focus on being “clean.” The retort came via a CityAM article suggesting that the Muddy Waters supremo’s focus on morality is misguided. Mark Austin of Latham & Watkins said that there is no point an exchange being clean, if n one is using it. This is precisely where we are now. Even worse, we still have the embarrassing small cap failures and the “frauds” even with all the red tape.
Alas, I would have to say that given it is the regulators who have got us to where we are, to imagine they would or could do anything to make things better is fantasy. Too little, too late is where we are now. In fact, we are at the point of the door having been closed after the horse has bolted. During the week I was with two people from private equity / venture capital who reminded me that what ever quantum of cash a listed company raises, an equivalent private company can raise five times the amount, an all without Stasi type interventions from regulators et al.
Speaking of raising money on the market, during the week I attended a First Equity lunch presentation by Golden Metal Resources (GMET), the Nevada based tungsten play. They were a few highlights here. The first was the way that rather than say steak and ale pie, mashed potatoes and a thick gravy accompanied by a decent claret, lunch was some take away M&S sandwiches and a diet coke. The second was that rather than CEO Oliver Friesen being some 5’ 6” as he appears to be on screen, he is actually 6’ 6”. The final point is that the presentation was one of the best I have attended – Oliver knows his stuff, is totally focused, and is sitting on a fantastic resource which has even more strategic value. It is understandable that the shares, even in this market are trading around 20% up on their IPO price last year.
A Bit Of Politics
Although I have a tendency to be somewhat disrespectful to the mainstream media, this is largely as I know I would never be asked to be a part of it. This is even if I called the FTSE 100 correctly every day for a year. In the 20th century this would of course not have happened for diversity reasons. In the 20th century I presume it is because I am certainly not of the woke crowd. In fact, I was mildly heckled on Twitter for commenting on the FTSE 100 being up on the day, despite attempts by protesters to disrupt it. The heckler said that I should keep my “political comments” to myself. It is unclear how commenting factually on the FTSE 100 being up on the day is political, but hey. I think I can guess the politics of the heckler, and everyone is entitled to their opinion.
As the Evening Standard has commented, the LSE is more than capable of disrupting itself, and as I was going to say in the Bulletin Board Heroes video, on many days it would take quite a lot to spot whether AIM / Aquis et al were actually open for business due to the woeful liquidity levels in certain stocks. Indeed, I think that there should be a free LSE trading day: no commission, no stamp duty, no CGT, just to see how much extra business would be done.
Leading on from the musings on the mainstream media, is the way that Hydrogen Utopia (HUI) managed to get itself in CityAM on Friday, and the Daily Mail on Saturday. The Mail was an extended piece, using the firepower of the waste plastic to hydrogen group’s move to finance its strategy via growing medicinal cannabis in Northern Macedonia. It is also using the firepower of former mercenary Simon Mann to get the message across in the press, and this looks like it is working well. We look forward to the first income moving HUI’s way in the spring.