Portfolio
Avuncular advice
Nephew Wilde
I find it intriguing — let alone disconcerting — that my losses on stock market dealing over recent weeks have amounted to £531. And I am tempted to ponder if there has been some conspiracy afoot, instigated by my stockbroker, Wotherspool, to con me into thinking share prices would go up, for this is the only reason that I decided to put my Aunt Maud's legacy into equities. I contemplated whether other innocent members of the public have been similarly caught and by looking at unit trust prices I am sure they have been. Thinking that what I needed was a good second opinion on these matters I rang my Uncle George on Friday. He's the non-executive director of a small Ceylon tea company and as he had a board meeting that day I arranged to meet him in the City. Good to see you, my boy,' he greeted me, 'looking more like that debauched father of yours every day.' His beaming countenance made me suspicious; was this the mean and nasty Uncle George who, on my twenty-first, sent me a cheque pay eighty-nine years of happiness, etc' in the place of money? It was, and I soon learned why he was in such a benevolent mood. Some City sharks (as he called them) wanted his Ceylon tea company as a ' shell ' (a quoted company into which could be injected other interests). The price they were willing to pay was in excess of £100,000 and by chance Uncle George had picked up most of the stock when prices drifted around the Id mark. When I asked Uncle George about stock market trends, he first launched a villainous attack on stockbrokers. 'parasites of the first water and now look at them worried out of their tiny minds about VAT.
As it is, their charges are about the highest in the world and as for that nonsense about research, it frankly leaves me cold. I get countless " buy " recommendations but my little ploy over the last eighteen months has been not to look at the giants they suggested but at the companies which have had poor earnings growth and look ripe as takeover specs: I picked three such situations and then withdrew all my equity funds. Now this latest deal has really set me up.'
'But Uncle George,' I pleaded, what about me?' Well,' he said, 'whatever you do don't panic and if you persist in investing your old Aunt Maud's legacy, just give me a buzz before you do, eh?' It's my guess you want a tip now, so I'll tell you one — S. Hoffnung. My reason: well, if I were Chancellor — which thank God I'm not — I'd devalue sterling. Hoffnung is a store company in Australia and that's where a lot of institutional money is going.'
Barely had I time to thank Uncle George for his sage guidance than he was away, grunting something to the effect that 'there's no fee for my advice — seeing you're one of the family.'
I then rang Wotherspool and bought Hoffnung.
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