by Nick Louth
Wednesday 26th December: The Day After
This morning I caught the Antichrist trying to wheedle money out of my mother. “Great Granny, I really wanted a bike this year, and Mum and Dad only got me some X-Box games.”
“But you might fall off and hurt yourself, poppet,” she responded, unaware of the sophisticated scheming taking place.
“But these have stabilisers.” At which point Digby slipped on to her lap a quad bike brochure. “Look, these are really safe.”
Dot of course, can’t tell the difference between a quad bike and a child’s tricycle and looked quite ready to break out the cash until I intercepted the malevolent mite. He’s still only nine, but destined to become the dictator of some impoverished country. I just hope he’ll remember his grandad when he’s rich.
Thursday 27th December: Perfect Peter Boasts
Peter Edgington rings. As usual, he beat the market in 2007, having taken gains in May and stayed largely in cash for the rest of the year. This year, he tells me, he is tempted by gold and soft commodities, though he’s steering clear of base metals and oils.
“My main conundrum is this,” he tells me. “I am principally attracted to yield, whose reinvestment plays such a large part in historic returns. Yet the traditional income plays, such as banks and property, are either distressed or depressed so I’m not ready to buy yet. By contrast pure commodities or funds offer good price action, but little income. I’m just not comfortable relying on purely gainsaying the market for my return. It’s too easy to be wrong.”
What Olympian detachment Peter manages. I seem to spend most of the year trying to scramble out of various fixes that the market has dragged me into. Bovis, Domino’s Pizza and QinetiQ come to mind. I never seem to find time to make a top-down asset or sectoral allocation. Maybe that’s my problem. Plus having no money of course. Only £138 in the current account, and the inevitable mountainous Christmas credit card bill of Eunice’s, due in a day or two. Time to work on my mother again, perhaps. If Digby can almost manage to wring some out of her for a damned quad bike, I should be able to.
Friday 28th December: Crossed Wires
Mightily relieved to take my mother back to Isleworth, to be rid of the vague smell of world war two cabbage that seems to surround her, and her continuing search for the clothing coupons she lost in 1947. My grievous grandchild didn’t help, having dragged in Maurice, Dot’s mobility vehicle, from the porch and raced up and down the hall doing Murray Walker voiceovers and making skidding noises. There is now a suspiciously large dent in the base of the grandfather clock.
So, finally on the M25 and with a captive audience, Dot regales me with the latest local scandal from the McCarthy & Stone sheltered housing complex opposite.
“Ida Tidworth’s got a toyboy!”
“Oh, come on, she’s older than you, isn’t she?”
“Yes, 94 next birthday. She’s always been a one, has Ida. She was the first in our street to sleep with a Yank, and that was before we couldn’t get stockings. It was an investment, she said. And she was the first to have a hysterectomy, before they became all the rage.”
“So how old is the toyboy?” I asked, my nausea at the idea not quite strong enough to overcome my curiosity.
“Young Jimmy? Not yet 76. Ida was head bridesmaid at his mother’s wedding in 1929. Ooh, she’s a dirty beggar. Still, he’s only after her widow’s pension. Ida’s Percy was big in offal, you know, and they always had a good pension in offal. Plus all the kidney you could eat.”
Saturday 29th December: Credit Crisis
Eunice’s credit card bill duly arrives, ominously by parcel post. She’s out shopping, would you believe, so I sit down pour myself a large Talisker, and break open this millstone of misery. Page after page. Wyevale £23.17, Argos £123.16, Debenhams £106.67, and Waitrose after Waitrose after Waitrose. The grand total, which doesn’t yet include any of December, is a staggering £917.43. Really, it’s time for a decision. Eunice arrives in time to find me with an air of purpose, loading the Volvo’s roof rack.
“Bernard, what are you doing? Isn’t that Brian’s old canoe you have on top there?”
“That’s right.”
“If you’re going to the hospice shop, I’ve got lots of other thing to take. Just give me a few minutes.”
“I’m not going to the hospice shop. I’m off to Hartlepool, to do some coastal canoeing.”
“What on earth are you talking about?”
“This is what I’m talking about,” I say, brandishing the credit card bill. “You’re living beyond my means, and I’ve exhausted every possibility to keep up. We’re soon going to be up debt creek without a paddle. So I’m going to fake my own death and start a new life in Panama, or Xanadu or perhaps Kettering. You can claim on the life insurance, which should keep you in organic pulses, elasticated trousers and bunion protectors for a month or two. When the form comes write ‘Cause of death: a broken wallet’.”
“Bernard, don’t be ridiculous. We’re comfortably off, surely?”
“If you look at what we have in the house, it appears so, but scratch the surface and we’re distinctly sub-prime. I mean, how is it that banks which have been so reluctant to lend to each other are happy to lend you £18.16 to spend at ‘Just Candleholders’ or £58.19 for an aromatherapy massage at Sensual Softies? That’s reckless lending by any standard.”
New Year’s Eve: Treasure Trove
Well good riddance to 2007. Miserable market performance, no progress on getting my mother to begin some estate planning, and almost entirely deprived of spare cash by Eunice. If I were a share, I’d certainly suffer from a demanding spouse-to-earning ratio. My attempt on Saturday to canoe myself into a different life (off sunny Hartlepool) was stymied by a bout of wifely tears. I was dragged inside, fed a placatory Malteser, and given a promise of more thoughtful spending in 2008. I’ll believe that when it happens.
However, I then suffered the indignity of a let’s-make-it-up hippopotamus manoeuvre on our poor sofa, which protested more loudly than a short-changed London cabbie, before finally breaking a spring. Still, in the ensuing repair mission I did find down the back a yellowed £10 Timothy Whites gift voucher (will Boots still honour it?) a collection of Portuguese escudos, and a half-eaten Penguin, which I will put aside for emergencies.
7.30pm. In a few minutes the harridans from Eunice’s basket-weaving classes and the old girls of St Cecilia’s will be arriving for an evening of post-menopausal mayhem to see the New Year in. I will, if possible, attempt to hide in the attic and install the new double ‘O’ points I received at Christmas. Certainly there is nothing in Eunice’s planned buffet to tempt me to leave aside the painting of my signal box. I can do without wild mushroom pate, fennel flan and six bean casserole, thank you very much. Besides, in the layout’s big tunnel I have secreted a box of Netto fig rolls, half a tin of Scottish shortbread and a Flake.
New Year’s Day: Not The Party Type
What a performance! Last night’s witches’ party started raucous and got worse. Eunice, Chilean wine box in one hand and G&T in the other, made several intoxicated attempts to cajole me down to watch a video called Hot Fuzz with the assembled multitude. However, having overheard Angharad’s voice booming from the kitchen for the last 15 minutes, I’m quite sure I know more than enough about bikini waxing as it is.
Back in the loft, I tuned-in on the portable black-and-white to see the New Year in, only to find a two-headed Geordie creature called Anton Deck was hogging the show, so instead went to bed by 12.05am with a small single malt. Sleep was impossible, and earplugs proved ineffective. Out in the garden, I could see drunken matrons cavorting around, with wine glasses in each hand while the hi-fi belted out “Women are doing it for themselves.”
Well, I wish they bloody would and leave me alone.
Chapter Seven: New Year Resolutions
Wednesday 9th January 2008: Cosmetic Surgery
A bleary-eyed meeting at the Ring o’Bells. K.P. Sharma, the
first to arrive, is in a bad mood. He shows me on his laptop the spreadsheets he has constructed for bank shareholdings.
“You know,” he says. “I have laboriously entered all the assets and liabilities from the annual reports of four banks I own shares in. It took hours, but I wanted to be confident that I understood how the capital was deployed. But now I discover that conduits, SIVs and other whatnots are lurking outside. Contingent liabilities, you know, are the hardest of all threats to predict. Especially if you don’t know the contingencies they relate to.”
“But isn’t there a proposal to create a secondary balance sheet to bring these liabilities into the light?” I responded.
“Look, Bernard. Regulators obviously want to unearth banking assets that they can then regulate and harness into capital ratios. Naturally, bankers want to hide assets where they can generate more profit on less capital. It doesn’t matter what they call a secondary balance sheet, the urge to hide will remain.”
Harry Staines lifts his eye from the pages of The Daily Sport. “Blimey, what are you two on about?” He tuts and points to the paper. “Look, here’s a real investment theme for you. It says here that private medical spending has fallen so sharply that breast enlargement clinics in Harley Street have started doing special three for the price of two offers.”
Unfortunately, K.P. falls for this anatomical impossibility, and leafs through in a vain quest for the article in question.
“Okay,” says Harry. “Here’s a real idea. We should short-sell every company the moment the boss gets a gong.”
“Yeah,” says Chantelle. “Sir Stuart Rose should be called Sir Stuart Fell after his effect on my M&S shares yesterday.”
“I made this list,” Harry says. “Sir Adrian Montagu at British Energy, and Sir John Ritblat of British Land got on their knees at the start of 2006 and the shares were on their knees within a year.”
“What about Sir Philip Green?” Martin says.
“Except you can’t get the shares,” K.P. noted.
The afternoon brightens up considerably as we amass as many share charts as we can and match them to honours for a contrarian strategy. Perhaps pride comes before a share price fall?
Thursday 10th January: No Gain Without Pain
Miserable start to 2008. I think I have to make some new year resolutions and this time keep to them. First, I’m going to have to get to grips with stop-losses. Anything that falls 15% from today’s price, I’m going to sell. Having seen the misery over house prices I’ll start with Bovis. I bought this benighted investment for 660p in December 2005, after which it soared to 1200p in March. Why didn’t I sell then? I have no idea. Everyone’s been crying wolf about house price crashes for years, so that you just shrug it off. After all, house prices were still rising in the summer, so instead of selling when Bovis fell, I bought more at 920p instead of following a stop-loss. So now, shame-facedly, I really am going to sell, and I’m not going to wait for tomorrow’s trading statement. What riches do I get for these shares? Just 490p. Appalling. Less than I began with, and little more than half what I paid for the latest tranche. What an exercise in self-flagellation!
Elevenses: Misery loves company, so they say. That, I believe, was a mistranslation from the ancient Welsh. Misery is Celtic shorthand for Llanelli-Job-Centre-on-a-rainy-Monday-morning-in-November. What misery actually loves is confectionery. Find the fattest, most washed-out and most dejected face on any platform in the Southern Region, and you won’t have to wait long before seeing a Mars Bar pushed into it. It is a well-known medical fact that you can’t smile and consume chocolate simultaneously. Anyway, in honour of my own membership of the financial Hara Kiri brigade, I’m re-opening the Hornby drawer as of today, with a two-for-one packet of jaffa cakes, a mint chocolate Aero and enough shortbread to build a bailey bridge for the model railway. I shall defend it to the last from foreign spies.
Friday 11th January: Brake With Tradition
Recession looms in the U.S., sub-prime worries hitting big banks, shares falling, debt rising. Everyone, everywhere is putting the brakes on. Except Eunice.
For most of her driving life I’ve had to remind her to release the handbrake before driving off (anything to help fuel consumption). This time it appears she deigned not to use it at all. She was queuing up the hill to turn right out of Horsham Drive yesterday and let the car roll backwards into a brand new Saab. She’s only had the new Clio six weeks, and now the limited edition back is stoved in, which makes it an even more limited edition, and there is an irate Saab-driving barrister threatening to have her banned. The damage to the Clio is at least £2000. Yet the only thing Eunice seems bothered about is the bruise on her eyelid.
“I can’t believe it,” Eunice said, looking in the mirror as I drove her home. “I’m beginning to look like Joe Bugner.”
“Beginning?”
One stinging slap later, I admitted that there were significant differences between the two. One, Eunice had rarely been more than a welterweight. Two, she was much the better fighter.
“Bernard, you don’t possess a scintilla of human sympathy.”
“Look. If you hadn’t been applying mascara at a junction you wouldn’t have got the brush in your eye, would you?
“I could have the lost sight in one eye!”
“Well, that would be one eye’s improvement on how you currently drive.”
Sunday 13th January: Money Laundering
Round to see my lunatic mother. Her washing machine is playing up. She says the clothes are coming out dirty. She is correct in this, but that is not the whole truth. In fact they are coming out exactly the way they went in, unwashed and dry. The inlet hose is blocked with lint. While I sort this out, I can’t help noticing a pile of letters on top of the fridge. Included among them is a year-end statement from her stockbroker, which I quickly stuff into my overalls. At least I can see how my inheritance is performing.
Monday 14th January: Bailiff Time
Disturbed by a hammering on the door at 8.45am. Go down in my dressing gown to see a large and unapologetic Scottish woman who claims to be from Wormald and Scrivens, the bailiff.
“Is your wife in?” she says, waving a piece of pink paper.
Across the road I could see Daphne Hanson-Hart watching closely, having seen the van. The Jones stock is clearly falling in Endsleigh Gardens.
“It’s not about her credit card, is it?” I ask.
“Aye. And the Barclayloan, the secured loan, the unapproved overdraft and the failure to stick to the previous agreement to repay £26,000 in arrears that we agreed with her two years ago.”
Suddenly I felt my world begin to fall apart. I know Eunice had been a little free and easy with my money, but this was just a shock greater than anything I had ever experienced. I couldn’t believe that Eunice had got us into enough debt to require a bailiff. How had she done it without me noticing?
“So anyway,” said the female bailiff. “Your wife has seven days to make a substantial cash payment on these accounts or we get a warrant from the court, Mr O’Riordan.”
O’Riordan? Aha! O’Riordan!
“I think you have the wrong address. The O’Riordan’s live there,” I said, pointing to the lime green front door just visible behind the giant camper van parked on the grass verge. “We are Mr and Mrs Bernard Jones.”
The bailiff apologised profusely. Much relieved, I walked upstairs, and encountered Eunice drying herself after a shower.
“What was all that?” she said.
“Nothing to worry your pretty head about,” I said kissing her on the tip of the nose. “Would you like to go out to dinner tonight? I’m paying.”
The look she gave me was of extreme shock.
Wednesday 16th January: Trauma At The Bar
The scheduled share club meeting turns out to be inquorate. K.P. Sharma gave his apologies, according to a message from Chantelle, who today is on kitchen duty. No Martin Gale, no Mike Delaney. Harry Staines, though present, is in no condition
to invest in anything more complex than a fifth pint of Hambledon Nightmare. It seems to be one of the immutable laws of investing that when the markets are miserable, you can’t get anyone interested. Yet surely we should either be bargain hunting or selling losers. I’m not sure which, but at least I’m here to discuss it. While I’m considering what to do Mr Abrasive himself, Russell Traugh, sidles up to me at the bar.
“How much has your share club lost this year then?” he asks, with a carious grin. “‘Cos I’m still in the money.”
“Oh yes?” I say, trying not to encourage him.
He leans over conspiratorially, and I get a whiff of pickled onion tainted BO. “That Ukrainian farm company, Landkom, is up 15% from where I bought it in November. They’ve already got their first crop planted, ready to harvest in July. I’m going to make a fortune from that one, you mark my words. I’m doing well with Corin, Dignity and Genus too.
“Very good. Well done,” I say, trying to get away.
“Your share club will never make a bean if they don’t take it seriously,” he says. “I mean, look at him.” He points to Harry’s recumbent form, propped in front of the pub TV where Wallace and Gromit is showing. “How’s he ever going to make a penny? Any profits he has he drinks,” Russell whispers.
“Well there’s no danger of you spending yours at the bar,” is there Russ?” Harry growls. “You’re tighter than Elvis’s Y-fronts.”
Thursday 17th January: Retail Therapy Needed
Under a heap of papers in the den I rediscover my mother’s 2007 portfolio summary, which I snitched earlier this week. This account looked clever enough in the summer, when Mary Asterby at the Women’s Institute helped her reshape it. The £150,000 that Dot gave to my errant daughter Jemima in August seemed to come from the sale of gilts, which looks wholly the wrong decision because it left the rest of the portfolio, almost solely retailers, looking very shabby indeed. The latest prices make grim reading: Laura Ashley, down 17% since July; Marks & Spencer and British Airways, each down 40%, Carnival Cruise Line, down 27%, Care UK down 48%. Even artificial hip joint maker Smith & Nephew is down 5%. Only funeral directors Dignity is up. What was a £690,000 portfolio in July is now worth just £410,000, little short of a disaster. I ring my mother, and ask her what she plans to do about her investments.
