Skinflint's City Diary
From a hotel room in Rome I have been watching the coming of the new Dark Age for the last few days. What a mess the Italians seem to be in — no cars on Sundays or holidays; cycling in the streets; rollerskating children and young people wandering around.
That is what I thought until I got back here. Have our leaders taken leave of their senses? No let-up for private motoring, but a three-day week for offices and factories, which presumably means that we'll be able to take a drive in the country on the days we're not allowed to work!
How can such a policy work? How do these silly men who rule us persuade themselves that it can? Clarity of obiective is supposed to be a useful guideline. Are we damping inflation? Are we trying to break the strikers? Are we trying to conserve domestic fuel for an icy winter? I should have thought that if you produced half as much, things would quickly cost twice what they did before. The order should go out to ration domestic fuel and petrol ruthlessly, if the Oil Industry Emergency Committee says so, but let industry rip. We should pay the Arabs more for their oil and reduce the excise. We should let the miners have their money as soon as it is decently possible. But let's get on with things, and not collapse like blubbering old queens when voices are raised.
Since we are unlikely to get anything but the leadership we deserve for a long while I am terribly gloomy, and suggest that there is little to be done except to take personal investment stock. Keep clear of property shares — they're nearly all over-valued. Not only due to sentiment — taxplanning, politics and so on — but on fundamentals. Underlying valuations are highly dubious. The valuer picks a rent out of the air — say £10 a square foot. He picks a'yield out of his hat — say 5 per cent. A room 40 feet by 25 feet is not a misprint: £200,000. Worse still, these values are included in the balance-sheet totals, but since no valuers think alike, inter-firm comparisons are useless. It's not surprising to find that in well regulated countries like Canada property firms are compelled to keep to original cost. Properties still have a place in portfolios, if fully let with rent-revision clauses and with yields close to those of gilt-edged in two figures, say. You cannot get many so cheap at the moment, but you will.
I'm writing thiS before Mr Barber's budget, which I expect will put up the value of my whisky. (Teacher's, bought for £2.41). Whatever he says, keep warm, your head well down, and stay spread — really well spread. You're on your own.
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