The value of the pound
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No doubt they have to hedge to some degree, so the profit multiplier is not a direct reflection of the difference in value between the pound and the other various currencies they operate in. However, they'd be a pretty poor investment firm if they weren't using it to their advantage one way or another.
You're right, that's completely irrelevant in regards to JRM.
No, it's an argument that states he has personally profited from a devaluation of the pound since 2016.
That was what, two and a half weeks ago? He continued to be paid a salary for his advisory role while being an MP. He continued to receive dividends while being an MP. He was paid £1m when he stepped down for his cabinet role. Therefore he has personally profited from a devaluation of the pound since 2016.
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This
Global warming for us is very very bad. Worse than a lot will get it (obviously except for the countries that will literally disappear)
This brexit thing is really starting to bite now
Cost of fuel is going to be a big one
He might have, with whatever portion of his wealth is invested there, but that is rather irrelevant, so has potentially anyone with overseas investments. You don’t know he has, what % of his assets are in the UK for example? Are you arguing that his entire wealth is invested in emerging markets?
Either way it still isn’t an argument that he wants the economy to crash and burn.
Don't forget that the currency traders are looking at the future, so the post-Brexit weakness is already factored in.
I've no idea what's going to happen - Brexit is such a clusterf*** - if I did I'd be very wealthy.
The post brexit weakness hasn't been factored in yet, it's factoring in a statistical chance of it not occurring still, so it's still too high.
He has.
You're right, it is completely irrelevant to the point I'm making.
Firstly, he doesn't have to have all of his wealth invested in emerging markets to make a considerable amount of money out of the situation that he has (in part) helped to enable.
Secondly, not everyone with overseas investments will have been an advocate for Brexit and, if they were, won't have been in the same position of power and influence as JRM to facilitate it.
It's false equivalence unless they actually were in a similar position of power and influence e.g. most of the ERG, Aaron Banks, Crispin Odey etc.
Not the whole economy necessarily but the value of the pound falling is certainly very beneficial to him and his associates. Given that he is meant to be so clever and such a shrewd investor, it would be a bit short-sighted of him to not have predicted this as a potential outcome of the Brexit vote — you know, the one he's so in favour of — so is it merely a coincidence?
It's really very simple:
- This is a man who is in a position of direct power and influence.
- This is a man who is supposed to be acting in the best interests of his constituency and his country.
- Through his words and actions, he has promoted and helped to facilitate a course of action that is detrimental to the majority of the rest of the country.
- That same course of action has been incredibly profitable (to the tune of millions of pounds) for both him and his associates.
- His wealth will shield him from any major downsides that arise from Brexit and may even allow him to capitalise further in the future.
As you are defending him, I assume you must either:
- Believe that it's a complete coincidence (but I don't think you're that naïve).
- Feel that it's not an issue (which of course is your prerogative but I would wholeheartedly disagree).
- Have some other reason for turning a blind eye or explaining away the above (but I'm not prepared to speculate on this point).
You don't know that. All you can say is that some portion of his wealth is invested overseas, you don't know how much and you don't know how recent events have affected the rest of his portfolio.
Sure but if the argument was to be made that his investments in EM funds were the reason for his apparent profits then it would need a significant amount of his wealth if not the majority to be there if he's going to offset and eclipse any losses elsewhere.
Anyone can invest in emerging markets, plenty of people in the UK will hold various funds including some invested in emerging markets, in most cases they're a small part of someone's portfolio and to extend an argument that therefore they stand to profit from the UK crashing and burning is rather silly and their UK funds will perhaps take a dive themselves not to mention are overall worth less due to GBP falling anyway.
If he could accurately predict currency movements to the point where he was betting substantial portions of his wealth on them then he'd likely be even richer that he is now... there are very few people who can do that and they're into billionaire territory. He's no George Soros, Joe Lewis etc... He's someone that used to invest in equities in emerging markets mostly based on the fundamentals of the companies themselves and perhaps with some general macro view with regards to the country/region, that doesn't imply he's some financial oracle who's expert at market timing. There is no evidence to suggest that he makes big macro bets with a serious chunk of his wealth like those guys. I'd suspect a substantial portion of his wealth is in UK assets.
Essentially that is what it tends to boil down to, this vague argument that JRM does *something* financial, therefore he's an expert and an evil capitalist and therefore he somehow engineered all this... oh and his dad wrote a book etc..etc..
What exactly am I supposed to be defending here? I'm just pointing out facts and highlighting that some of this narrative is highly dubious/offering IMO more realistic views. This is getting too similar to the Trump derangement syndrome that some seem to suffer from - say something that isn't in line with Trump is to blame for everything = you must be a Trump supporter, why are you defending Trump etc...
I was simply replying to a nonsense argument by another poster that the likes of JRM want to see the economy crash and burn and that his firm has relocated to Ireland. His firm hasn't relocated to Ireland, he doesn't even work there anymore and having some investments in emerging markets funds doesn't imply that he's either profiting overall from any falls in GBP post Brexit or that he wants the UK economy to crash and burn.
I don't doubt that he's a very well informed investor however he's got substantial illiquid UK assets (obviously property for a start) and no one has shown anything to demonstrate that he's made some big macro bet and either shorted the pound or sold all liquid GBP based assets and allocated it all overseas.
The argument that he wants to see the UK crash and burn is currently unfounded and relies on some very dubious speculation.
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Just because someone doesn't work with someone temporarily, doesn't make them distant from it. It's also not so much that he want's the country to crash, it's that he want's it to be vulnerable while profiting with his chums, to the usual vultures looking to pick away at the welfare state, for some that may as well be destruction.
I'd love for there to be an Etonian that finds themselves in Westminster, that isn't out to ideologically destroy the state in some manner, and defending them isn't derangement, it's simply connecting the dots, it's happened too often for decades to have any other opinion of the sort of person exiting that school.
His father's book is merely context, it doesn't necessarily mean he's a follower, but i'd find it difficult to just ignore it.
https://life.spectator.co.uk/articles/many-many-millions-mogg/
He's the sort of person that would have been behind sub-prime loans, it's simply a means to profit at any cost.
I'd say it's his imperative frankly.
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Depends what you mean by distant from it, he's not been involved in the day to day management for some time now and he's now stepped down from the part time advisory role. He's obviously still got an interest in any funds he's still invested in and knows the management. That in itself doesn't provide for a conflict of interest, I'm pretty sure plenty of MPs have investments in funds, stock portfolios (some of which might be invested overseas).
As for his views on the welfare state, I don't see the relevance here.
Ignore what though? No one has actually provided any evidence or a credible argument for this idea that JRM wants to see the UK economy crash and burn in order to personally profit from it.
In short JRM being an ex-fund manager and having (some) investments in EM funds doesn't imply JRM wants to conspire to see the UK economy crash and burn nor does it mean he's necessarily profited overall by whatever market moves occurred after Brexit. Pointing this out doesn't make someone a JRM fan or defender of him nor does it imply agreement with his political stances on abortion, the welfare state etc..etc.. it is simply a point being made in relation to a very dubious claim about him.
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One man's crashing country is another mans opportunity, someone with such wealth as JRM and financial acumen is shielded from the effects of most domestic problems, not so much for the average pleb however who is always at risk of falling off the edge of whatever financial nightmare they're in. JRM has supported policies that constantly undermine the safety blanket, so clearly their's little if any empathy for people poorer than him, it may be ideology first, but there's no way he doesn't coincidentally make him and his friends richer at the expense of the commons.
Just because he hasn't literally said "i want to the country to crash and burn", doesn't mean his actions/statements haven't elicited a particular position.
We've quite literally had 9 years of pointless ideological austerity, increasing inequality due to his party and his votes.
It would take a massive leap of rationality to continue to be skeptical about his intentions as being neutral, as you seem to be purporting. And yes his views on welfare are very relevant as the profit off of a private healthcare system, in particular, is a path many Tories are on.
The fact that they (ERG and ergo JRM) reiterated Minfords "work", is perhaps evidence to his goals of not caring about the little people, for personal gain, while scratching an ideological and not reasonable itch.
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His support or lack of it for the welfare state is utterly irrelevant here. You're just rehashing the argument that he's an evil capitalist and because he worked as a fund manager he could somehow forecast the future and predicted various market moves in order to profit regardless of any effects on the poor... who he has no empathy for.
It relies on a somewhat delusional view of fund managers (perhaps not helped by the fact a few of them also indulge in this view of themselves as people who can predict the future though generally are constrained from doing too much harm by their employers/risk managers). Most of them aren't George Soros types, most are doing things rather more mundane and are simply looking to find value from among the various companies (or whatever other assets) their fund invests in.
The successful hedge fund types generally aren't trying to be forecasters either, big trend following funds that do place big macro bets tend to be, well, simply following the trend not forecasting what might happen in future (beyond simply having a belief that trends will persist and they they have a system that can profit from them). Other hedge fund types look to exploit statistical relationships between assets and again are not looking to predict the future.
There are very people out there who will actually take a big chunk of their wealth an make a big bet on say a currency etc... the few that are (apparently) able to do that successfully are incredibly wealthy and might well be the result of survivorship bias anyway. Most people who attempt things like that a few times will end up rather poor.
It relies on a somewhat delusional view of fund managers (perhaps not helped by the fact a few of them also indulge in this view of themselves as people who can predict the future though generally are constrained from doing too much harm by their employers/risk managers). Most of them aren't George Soros types, most are doing things rather more mundane and are simply looking to find value from among the various companies (or whatever other assets) their fund invests in.
The successful hedge fund types generally aren't trying to be forecasters either, big trend following funds that do place big macro bets tend to be, well, simply following the trend not forecasting what might happen in future (beyond simply having a belief that trends will persist and they they have a system that can profit from them). Other hedge fund types look to exploit statistical relationships between assets and again are not looking to predict the future.
There are very people out there who will actually take a big chunk of their wealth an make a big bet on say a currency etc... the few that are (apparently) able to do that successfully are incredibly wealthy and might well be the result of survivorship bias anyway. Most people who attempt things like that a few times will end up rather poor.
Of course, it's inevitable. Just not today.
Look how that turned out for Greece.
True, but we do know that Somerset Capital has posted record profits since 2016. Given that they invest in emerging markets, it’s not a huge leap to conclude that the weakened pound has added to those profits. As I said earlier, it would be surprising if they weren’t taking advantage of this situation. I’m just repeating myself now.
Well this line of reasoning requires even more speculation that a) he has other investments and b) they are all loss-making. Without knowing his entire portfolio we can’t make that assumption.
What we do know is that (as above) Somerset Capital has posted record profits since the referendum. Until recently he had a 15% stake in the company along with any investments in the actual funds themselves (which he doesn’t have to disclose). We know that he was paid for his advisory role at SC along with dividends. We also know he received £1m when he left a couple of weeks ago. Non of the above is speculation.
He literally co-founded a company that specialises in emerging markets. He’s not some hobby-investor with a few grand in a couple of Vanguard tracker funds.
That’s not what I’m suggesting. He doesn’t have to be a currency speculator extraordinaire, nor does there have to be some massive conspiracy in order to point out that he’s duplicitous in this regard.
I think I’ve been pretty specific so far. I haven’t called him an evil capitalist and (in another thread) I made the point that I don’t believe he ‘engineered’ all this.
It comes back to the fact that someone in a position of power and responsibility promoted and is now facilitating a course of action that is beneficial to him personally and detrimental to the majority of the rest of the country.
You appear to be going out of your way to make excuses for or explaining away something that appears to be very simple and obvious to me.
If you don’t mean that as a defence of JRM then fair enough.
@Destinstion certainly made some hyperbolic statements and was incorrect about the company relocating to Dublin but that’s not what I’ve been arguing.
I imagine that directly shorting the pound (or UK businesses) would be frowned upon for a sitting MP. Much better to let your associate and donor Crispin Odey do it.
Which is not an argument I have made.
So, a simple question:
Is it merely a coincidence that JRM was a strong advocate for Brexit and, since the referendum, the company he co-founded has seen record profits (in part) thanks to the weaker pound that has resulted from the result of the referendum?
A simple yes or no will do.
You're seemingly conflating profits from the management company here I think. Regardless it isn't really in dispute that JRM might well have made some money both from investments in funds and any ownership stake he might have in that company so I'm not sure why you need to repeat anything along those lines...
That wasn't speculation, note the word "if". Though if you're claiming he has all or most of his assets tied up in emerging markets then what is the basis for this claim? It would be unusual at the least.
None of it supports the argument either, nor is that in dispute.
No one claimed he was a hobby investor - that point still remains though. Again what is the basis for assuming almost all his net worth is tied up there?
What are you suggesting then? I mean in order for him to supposedly be profiting overall from a falling GBP then he'd be doing something along the lines of tying up the majority of his wealth overseas or he'd be taking a big currency bet.
If you're just pointing out that he's got some funds invested in emerging markets then so what? He had funds invested in emerging markets before he even became an MP... plenty of investors both wealthy and rather ordinary have funds invested in emerging markets and that portion of their portfolio might well have become more valuable in GBP terms simply through the pend devaluing.
How is it beneficial to him? That is the point.
Simplistic, sure. The premise seems to be previous involvement in EM fund management = all or most wealth tied up in EM funds. It seems a bit presumptious to say the least... to then extend that to being the basis for them wanting to see the UK economy crash (which is what prompted my comment on this) seems very dubious indeed. Certainly no one seems to have presented any basis for holding that belief... beyond pointing out that he used to be a fund manager.
Just to re-iterate - may arguments here are that he didn't relocate the office and he's not conspiring to crash the UK economy on the basis that he's going to massively profit from it. I'd also question anyone claiming to know for sure that he has profited from Brexit as no one has presented evidence of that so far.
It is the position I was arguing against when you quoted me.
It is rather loaded and also flawed question - firstly I think you're basing this on some tabloid headlines comparing 2015 to 2016 or something? Guess what - their profits increased year on year prior to that too... kind of happens when a firm grows and AUM increase! There was a much bigger increase from 2014 to 2015 but I guess Brexit didn't happen then so we'll just
also:
https://www.investmentweek.co.uk/in...al-management-profits-dip-under-em-volatility
Secondly, again, it isn't in dispute that he owns a stake in that company and that like other companies they make money... ergo he's getting paid some dividends.
It is the silly argument or implication that his stance on Brexit is because of that that has no basis - isn't he worth over 100million? Do really believe that his stake in this firm and whatever investment he has in the funds managed by them is the driver for his political views?
You don't need to make a lengthly reply telling me that he's been involved in an investment firm in the past I'm interested in both how he's supposedly profiting overall from Brexit, highlighting that he's got some dividends from an investment firm doesn't answer that.
This seems to be the argument, profits have increased in his firm, he gets a dividend from this therefore he's profited from Brexit... that requires the assumption that these profits and those from any other investments eclipse any losses elsewhere. Also the idea put forth by some tabloids seems dubious:
https://www.mirror.co.uk/news/politics/profits-jacob-rees-moggs-investment-14114954
lets take a look, sure there was an increase 2015 to 2016 and so on (which is claimed to be in anticipation of Brexit... so before the vote even occurred)... but there was also an increase 2013 to 2014, 2014 to 2015...
While a GBP investor investing in emerging markets might well have done rather well in recent years it doesn't necessarily mean the management company (with clients from around the world, who might be investing in EUR or USD denominated funds) necessarily will btw... that still depends on their performance.
https://www.mirror.co.uk/news/politics/profits-jacob-rees-moggs-investment-14114954
lets take a look, sure there was an increase 2015 to 2016 and so on (which is claimed to be in anticipation of Brexit... so before the vote even occurred)... but there was also an increase 2013 to 2014, 2014 to 2015...
While a GBP investor investing in emerging markets might well have done rather well in recent years it doesn't necessarily mean the management company (with clients from around the world, who might be investing in EUR or USD denominated funds) necessarily will btw... that still depends on their performance.
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I really don't know what you mean by "elsewhere"
That's the profits and losses for the entire company, where else are you suggesting there are losses?
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Good God, you lot must be real fun to work with
Had a drink with one of my nieces Friday night, I asked her if she was going to Malaga in September, as she normally does.
She said that her husband had vetoed anywhere in Europe, due to the collapsing £, and that they were researching pool homes in and around Montevideo, Uruguay in October, as he’d said that he’d rather spend 8 or £900 on plane fare, and 5 or £600 a week house rental, then have three weeks spending peanuts on good steaks and wine, rather than resent it every time he put his hand in his pocket anywhere in Europe.
I said that maybe that would cost him more, she said, “Won’t bother him, you know what he’s like, stubborn as a mule.”
By elsewhere I mean literally anywhere else he's allocated some of his portfolio. i.e. anything not invested there but, elsewhere.
Do you suppose almost his entire net worth is tied up in emerging market funds? Do we know how he's allocated all his liquid assets - it would seem unlikely that the entire lot is invested in some EM funds he no longer manages.
Not to mention his illiquid assets - he's got a farm in Somerset, a house in London and through his wife being heir to a pretty large estate he also has substantially more UK property interests... well into several tens of millions in terms of UK property alone. But apparently he wants the UK economy to crash/wants GBP to fall because of his stake in an fund management firm from which he earns some dividends and probably has some of his portfolio invested with?
It is a conspiracy theory essentially.