At its most basic, arbitrage means little more than buying at one price in one market and then selling at a higher price in another. Sometimes that shift in market can be geographic, and at others – as is the case here – it can be a shift over time.

I just read an article about a guy called Bob Peterson in the United States who figured out that the market for college textbooks was unlikely to be stable. He did an analysis of online selling prices and found, sure enough, that prices swung widely through the year in line with the academic calendar. Prices were at their lowest in the summer and then went through the roof once the college year started. This was a discovery that enabled him to double his money each term by buying in summer.

Two things to take from this I think:

1.  Why not copy this simple arbitrage system in the UK?

2.  What other products display a similar demand cycle?

Maybe there’s a clue in the very last word I just typed!

It’s Been A Good Month For…

Publishers, with the news that Bloomsbury has reported that — thanks to lockdown and people have more time to read — it has had its best half-year profits since 2008. Earnings rose by 60% to £4m between February and August as book sales soared.

Kim Kardashian, who won $6.1m from her bodyguard and his company after she accused him of failing to protect her during and armed robbery in Paris where part of her extensive jewellery collection was stolen.

IT’S BEEN A BAD MONTH FOR …

James Dyson, who lost $11m on selling his property in Singapore. The arch Brexiteer announced his company’s headquarter’s move to the city shortly after Brexit. It is said to be Singapore’s largest apartment.

Gareth Gates, the pop singer, who reported that he trades currencies and once lost £250,000 investing with a shady “expert”

Today’s National Day

NATIONAL HAPPY HOUR DAY!

PUBLISHERS NOTICE

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Pension savers could be paying tens of thousands of pounds in unnecessary charges over the course of a lifetime. Life insurers, who have traditionally dominated the market for private pension plans, charge over the odds. A 38-year-old saver with a £100,000 pension plan today and investing £10,000 a year for the next 30 years could lose almost £100,000 owing to excess charges.

The data is based on the charges levied by pension providers for access to the same funds. Traditional life insurers fare very badly in such comparisons as they tend to have percentage-based administration fees, and as the savers’ funds appreciate, these become very costly. Flat fees, by contrast, are often much more affordable.

Broadly, criticism of the life insurers that account for a large part of the pension-fund market is accurate. Percentage-based fees do penalise savers with larger funds and several insurers charge uncompetitive percentages.

Money Statistics

$45 — the price of a single ounce of the world’s most precious brand of prime beefsteak: Japanese Ozaki.

One million — the number of shares Apple boss Tim Cook could receive in the business by 2025 if the tech titan continues to perform strongly. It would be his second stock grant, mirroring the one million shares he received on taking over from Apple co-founder Steve Jobs in 2011. The award is worth between $76m and $114m depending on Apple’s share price performance.

£7m — the price of a James Bond-like speedboat that can dive underwater. It is being developed for the British special forces.The Victa submersible is to undergo sea trials in early 2021.

£25.3m — how much the worlds’ youngest top birdwatcher (she has spotted half of the world’s 10,738 species), Mya-Rose Craig, 18, has sold the rights to her memoir for, following an auction involving 14 publishers.

€134,000 — the price for a tiny 6.51sm apartment at the top of a block of flats in Paris’ sought-after fourth arrondissement.

$383m — the amount Presidential candidate Joe Biden raised in September, breaking the $364.5m monthly record he set in August. It October his campaign said it had a $432m war chest at its disposal.

€500m — the value of benefit Italy receives from immigrants. In 2018, they paid €26.6bn in taxes, and received €26.1bn in state benefits.

£1.2bn — the annual earnings US rapper Dr Dre takes from his company.

$5.7bn — how much the eight films (plus spin offs) the petrol-fulled Fast & Furious franchise has made. There are plans for three more films before the old car is disassembled.

£1.2trn — the total value of assets so far that financial services firms operating in Britain have moved to the EU ahead of the end of the transition period on the 31st of December. That’s up from £1trn at the end of 2019.

Today’s National Day

NATIONAL SUNDAE DAY!

PUBLISHERS NOTICE

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What do you do with the ashes when a loved one or favourite pet dies? Well some people keep them in an urn, others scatter them in a place of significance, but a Missouri painter offers a different solution. Adam Brown offers clients one-of-a kind artwork made from the remains of their relatives or pets. 

He produces the art using cremated remnants sent in by relatives and mixing them with paint pigment to create a “lasting memory” composition. “Having ashes in an urn on a mantle somewhere is a good way to constantly remind yourself that person died, but when you use them in an artwork it’s a good way to remember someone lived, “Brown says. 

I don’t know anything about the process, but this seems like a nice way to use the remains to create a lasting memorial. If you’re an artist, perhaps this is an opportunity to investigate further.

Trapping A Customer 

One of the hassles of travelling is packing and transporting everything you need for the trip. For business travellers, this is even more of a problem. They travel more frequently and often find themselves hauling their luggage backwards and forwards to the same destination. The Grand Hyatt hotel in Melbourne, Australia decided to do something about it, and gave themselves a competitive advantage at the same time. 

The Grand Hyatt now offers storage facilities for regular travellers complete with full laundry facilities. The hotel effectively becomes a home from home and once you have your stuff there well, where else are you going to stay next time you’re in Melbourne?

There are obviously advantages for the guest, but also advantages for the hotel. So is this an idea you could adopt or adapt? Is there some way you could ethically ‘trap’ your customers? Perhaps there’s something you could ‘store’ for them, meaning they will have to return. This will mean different things to different businesses, but something to think about.

Today’s National Day

NATIONAL MEN MAKE DINNER DAY!

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Home brewing equipment can take up a lot of space. Not much good when you live in a tiny flat or apartment.  It was this fact that led New York based, The Brooklyn Brewery Shop to develop a range of miniature brewing kits which fit the needs of it’s main apartment-based client base.

I’m not suggesting you copy the idea but rather, that you consider the thinking behind it. Is there some way you could provide a smaller version of your product (or even someone else’s product), which would open it up to a whole new market of space-challenged consumers? 

It’s this sort of thinking that probably led to the development of Endless Pools, in which you swim against a current and don’t actually travel anywhere.  There have to be scores of other products which would benefit from a bit of positive downsizing.

Jeans Rental

I love the idea of rental businesses for a very simple reason people pay you to use something, but you get to keep it. It’s like selling the same thing over and over again but only having to buy it once. How far can you go with the rental model? Well how about renting jeans?

I just heard about a company in The Netherlands, Mud Jeans, which for around 6 Euro a month will rent you a pair of high end jeans for a year. At the end of the rental period the customer can then either return the jeans, buy them outright or replace them with a new pair.

To be perfectly honest, I’m not sure why you’d want to do this, but I’m the sort of person who thinks you should be able to buy a decent pair of jeans outright for less than £50. The market isn’t for old folk like me, that’s for sure.

I’m telling you about this because it opens up all sorts of possibilities. If you can make money renting like jeans, what other seemingly ‘un-rentable’ products could form the basis of a business?

Today’s National Day

NATIONAL SAXOPHONE DAY!

PUBLISHERS NOTICE

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Cluttons offer advice on selling your property. ‘Listen to your agent about pricing – there have been enough recent transactions for market experts to have a clear understanding of what price is achievable for your property. There is a fine line between what price will generate interest and what won’t, it’s all about footfall, price your property too high and you will not generate the necessary viewings to sell your property.’

‘Look forward to your onward purchase – this is an opportune market for upgrading and your priority should be to focus on your onward purchase, establish what it is going to cost you and then price your current property accordingly. Hopefully, this will mean you can market your property competitively which will speed up the chain.’

‘Treat every viewing as a second viewing – in this market you can’t afford to be complacent, ensure you have done everything to present your property in the best light possible e.g. replace or clean the carpets, touch up the paint work, re-grout the tiling, jet spray the patio. It’s these superficial improvements which can make the difference between selling your property right now and not.’

‘Outside space – lockdown has placed even more importance on outside space, so if you have a garden or roof terrace get a gardener/landscaper in and make a real feature of it. A well landscaped garden, which has been cleverly designed to feel like an extension of your home, can add 10 per cent to a property price in London and in some areas more.’

‘Get your property on the market ASAP and consider renting – if you are thinking of selling then you should do so rather than later since Cluttons predict that going into 2021 there is going to be more supply and sadly, from some, an increased urgency to sell, which is going to have a detrimental effect on capital values. If you are fortunate enough to secure a buyer at a price you are happy with, but have not found somewhere to buy yourself, then consider renting to keep the chain in place.’

‘Have all paperwork ready – instruct a good conveyancing solicitor, it’s often worth taking a referral from your agent. Ask the solicitor to prepare the contract and if there is a managing agent make sure they have the Seller’s Leasehold Information Pack ready, so everything is in place when you find a buyer.’ Food for thought.

The Transparent Fridge

I’m always getting an ear bashing for staring into the fridge several times an evening, looking for something unhealthy to eat. Maybe I’d get less flak if I had the fridge recently created by S home. It has a transparent door so you don’t need to open it, and let the cold out, to see what’s inside. Makes you wonder why nobody thought of it before.

I’m sure you don’t want to go into fridge manufacture, but it raises an interesting question – what other products would benefit from some transparency treatment? I own watches with display backs and I’ve had cars with transparent engine covers. So what else would people like to see working, or alternatively, what else would they like to be able to see the contents of without opening a lid, cover or door? Is there anything in the market or markets you know about?

Today’s National Day

CELEBRATING BONFIRE NIGHT!

PUBLISHERS NOTICE

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Of all the reasons I hear for people not following through with a business idea, a lack of funds comes right at the top of the list. There are always options though. Here are a few to consider:

Get a business partner with funds to invest. There are plenty of people out there with money but no ideas for investing it.

1. Investigate government initiatives. The government offer numerous financial incentives to entrepreneurs. There could very easily be something in your area, sector or situation.


2. Try Crowdfunding. Very easy to try out online and there have been some major success stories. Yours could be next.


3. Charge Up front. Insist on your customers paying in advance for your product or service. Not always possible, but it will depend on the market.


4. Keep your job. Working part time on your idea while retaining your job is tough, but it can provide funds for that difficult start up period.


5. Strike a deal with suppliers. If you can get your suppliers to give credit, it will help get over the initial cash-flow problem. They will only do this if they expect you to become a significant customer though.


6. Get a loan. Family is probably the best place to start with this.

It’s Been A Good Month For…

Tim Cook – The Apple boss has upped his net worth to $1bn. Although Cook did not found Apple, since 2011 he has helped grow the tech company to a market capitalisation of over $2trn.

MacKenzie Scott – Philanthropist, author, and ex-wife of Amazon boss Jeff Bezos, MacKenzie Scott became the wealthiest woman in the world last month. Her net worth rose to $68bn after she received a quarter of Bezos’s Amazon shares as part of their divorce settlement in 2019. Back then, they were worth a mere $35bn.

Diamonds Lovers – Petra Diamonds has unearthed five big high-quality blue diamonds from a South African mine that yielded two Crown Jewel sparklers a century ago. Finds of such top-notch blue diamonds are too rare for even statisticians to value.

IT’S BEEN A BAD MONTH FOR …

Art Forgers – Spanish police seized four fake Modigliani paintings that an auction house was trying to sell for £8m. The fakes disappeared 52 years ago, but resurfaced recently and were passed off as originals. Modigliani is deemed by experts to be among the most forged artists.

Wetherspoons – Brexit-loving pub brand Wetherspoons is ruing the government’s rules, with the Rule of Six and orders to close at ten pm hammering the cut prize boozer. Even before the new measures came into effect, sales were down a hefty 22.5 per cent on last year. Wetherspoons is likely to continue to underperform until the pandemic truly ends.

Novak Djokovic – The tennis player’s meltdown at the US Open — where he was disqualified and handed two fines after thwacking a ball at a line judge — cost him $17,500, plus technically a loss of $250,000 if he had won the game and advanced. Djokovic won’t be rueing his temper too much though, his career earnings top $143m, and he was the highest-paid athlete on Forbes 2020 rich list.

Yusaku Maezawa – The Japanese billionaire lost £32m attempting to day trade stocks. He later admitted that he hadn’t sufficiently familiarised himself with day trading.

Today’s National Day

NATIONAL JOB ACTION DAY!

PUBLISHERS NOTICE

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Global investors are showing greater interest in alternative proteins, such as plant-based substitutes and lab-grown meat, as the climate impact of agriculture and food production comes under the spotlight.

Environmental experts have started to highlight the impact of agriculture, especially the intensive livestock sector, on rising greenhouse gas emissions as well as land and water use and deforestation. The world’s food system, including agriculture and land use, accounted for 25 to 30 per cent of emissions from 2007 to 2016.

The good news is that new food technologies are emerging and becoming profitable. These disruptive technologies are starting to have an impact on the world and on portfolios, from meaty meat-free burgers to sustainable livestock management and organic growing.

The successful flotation of plant-based meat substitute group Beyond Meat earlier this year has also highlighted investment opportunities in alternative proteins as a way for food companies to be part of the solution. Plant-based proteins, including meat and dairy, are also seeing high demand from consumers, partly for health but also because many environmental specialists believe a change in diets can mitigate the effects of greenhouse gas emissions. Analysts forecast that alternative proteins are not just a fad.

Aquaculture, precision farming, and food-testing technologies are all areas to watch. Urban circular farms are sprouting up everywhere. The fresh-produce outputs of these industrial farms are expensive, but the technology used to produce them is hugely efficient, and valuable. Food flavouring — products mimicking the taste of harmful foodstuffs — is booming. Sustainable packaging is also touted as a growth sector. 

Various exchange traded funds invest in these areas, but angel investing in potentially lucrative start-ups in the sector could also mean big profits.

While investors have long included global agribusinesses or food manufacturers in their portfolios, their interest in the mucky business of farming is increasingly focused on assets that advance two critical global goals: increasing food security and tackling climate change. Last year, for example, the agri-food technology sector — whose innovations often contribute to more efficient and sustainable forms of food production — attracted almost $20bn in venture capital.

Venture capitalists and private equity firms see an opportunity to take a stake in enterprises that are not only increasing food security or tackling climate change but may also become highly profitable — benefitting from green government schemes. Investing in small and medium enterprises, not just big global companies, could mean big bucks in the long term.

Today’s National Day

NATIONAL FRANKENSTEIN FRIDAY DAY!

PUBLISHERS NOTICE

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Gold has been a shining star in a dazzling year for the exchange traded product industry. Record inflows into gold exchange traded funds propelled the price of the precious metal to an all-time high last month in a rally fuelled by concerns about the huge cost of emergency responses to the pandemic. What started as a flight to safety has evolved into the means by which investors are trying to salve their wounds with respect to potential future inflation.

Investors have spent $49.1bn buying gold ETFs so far this year, pushing the value of holdings in these vehicles to $239bn. There has been a 26 per cent rise in the gold price so far this year, as investors jump on the bandwagon in anticipation of further gains. Advocates of gold remind sceptical investors that it outperforms fiat currencies over time.

Warren Buffett always mocked those who invested in gold, calling it a way of going long on fear. This year, however, Buffett joined investors including the world’s largest hedge fund, Bridgewater Associates, by buying into the latest gold rush, which helped push prices to a record high this summer.

The pandemic has convinced investors that gold belongs in their portfolios as a hedge against frothy equity markets, rock bottom interest rates, and a fall in economic output. Some large investors want gold as protection against possible deflation caused by an economic slowdown or a converse rise in inflation as governments pump money into the system.

With the extremely messy-looking upcoming US presidential election and no current end in sight for the pandemic, Mr Buffett’s change of mind on gold may not be a bad bet in a world gone mad. Covid cases are on the rise, governments are starting to panic, and economies are facing down the barrel of second lockdowns. All in all, it signals a perfect storm for gold: there is just too much uncertainty in the world to ignore its benefits.   

Gold is always useful as a diversifier for your portfolio. It’s unusual in being an asset that goes up, or at least holds its value when bad things happen (and, if you hadn’t noticed, bad things are happening and more bad things are sharpening their claws just over the horizon), whilst most other assets go down. 

Early last month, a team at Bridgewater (the world’s biggest hedge fund group) put out a short and very bullish report on gold. They point out that we’re in a world where politicians and central bankers are under pressure to print and spend money. When this has happened in the past, gold has enjoyed massive rallies that dwarf its recent run.

Gold’s lack of yield (it pays no income) is less of a problem when financial assets are offering so little. You can’t complain about gold paying 0 per cent when a significant proportion of global bonds actually charge you to own them. It’s clear that there’s a desire to hedge against financial chaos and/or potential runaway inflation out there. And history shows that gold is one of the few assets that does an acceptable job of hedging against those things. At the moment, gold is shining like never before.

Today’s National Day

NATIONAL CAT DAY!

PUBLISHERS NOTICE

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If you want to avoid paying stamp duty on your next property purchase you need to get a move on: there has been a surge in people keen to move. Between 8 July and 8 August, the number of people registering to buy across the country was up by 38 percent on the same period last year, boosted by the stamp duty holiday.

Properties are going under offer faster than ever. Currently, one in seven homes are under offer within a week of listing. But things slow down after that. A conveyancing log-jam after lockdown means that even if a sale is agreed quickly, a transaction could take six months to complete, especially if it is in a chain.

People thinking of coming to market need to do so in by early December if they want to have a chance of completing within time to beat the stamp duty deadline. Stamp duty is currently suspended on properties worth up to £500,000, saving buyers as much as £15,000. However, the tax will be reinstated on 31 March 2021.

The stamp duty holiday has accelerated the moves of buyers who were looking for larger properties with gardens and space for home offices. But the surge is expected to subside as unemployment rises with the end of the furlough scheme and lenders wind down their forbearance policies this autumn.

With the housing market rising quickly post-lockdown wise buyers may opt not to rush to embrace the stamp-duty holiday. Racing simply to save 1 per cent to 3 per cent on the cost of your next home at a time when house prices are ludicrously high and are up 2 per cent on last month and 3.7 per cent on last year is futile.

Money Statistics

£5.25 was the average discount received by diners from the government Eat Out to Help Out scheme. In the first three weeks of the month-long scheme in August, 64 million discounted meals were served at 84,000 outlets, at a cost to taxpayers of £336m.

$56.14 is how much an American wearing a face mask for a day saves the US in lost GDP by helping obviate the need for more costly lockdown measures. Not bad for something you can buy for about 50 cents.

£7,000 is what it would cost to buy an original 2007 edition of the Star Wars Lego Millennium Falcon, which was available on Amazon this summer. Lego sets — especially Star Wars Lego sets — can become favourites of specialist collectors.

£260,000 is how much a pair of Mahatma Gandhi’s sunglasses sold for at auction last month.

£368,000 is what a sheep has been sold for in Scotland. It is a record sale, beating the previous sheep-record of £230,000 set in 2009. Bidding started at £10,000 for the Double Diamond, a six-month old Texel ram.

$1.1bn is the annual estimated value of seabird droppings worldwide. The unassuming lime can be used as fertiliser and to provide nutrients to coral reefs, to boost fish numbers.

Today’s National Day

NATIONAL CHOCOLATE DAY!

PUBLISHERS NOTICE

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Here are some totally legitimate tactics that can save you some tax. They are often purpose-made loopholes based on encouraging growth in sectors of the economy, so you can rest safe in the knowledge that you are helping your country too.

Buy An Electric Car

Small businesses that buy electric cars with CO2 emissions of less than 50g per kilometre have, since April 2018, been able to claim a capital allowance worth 100 per cent against the purchase — so the entire cost of the car can be deducted from company profits. Also, the cars can be used for personal journeys free of tax from April this year and incur a benefit-in-kind charge of 1 per cent the following year and 2 per cent the year after.

Max Out Your Allowances

Commonly available tax exemptions mean a couple can achieve a fairly sizeable income without paying tax. For example, the personal income tax allowance is £12,500, which, for two, makes £25,000. The annual CGT exemption for a couple is £24,000, the dividend allowance is £4,000 and savings allowances are £2,000 — although the last of these goes down to £500 for higher-rate taxpayers and is zero for those paying the additional rate. Put together, these make a joint potential tax saving of £55,000. Add the basic-rate bands for each spouse to this, which is two times £37,500, and they could have a combined income well over £130,000 before they start paying higher-rate tax.

Buy Wine And Classic Cars

Both wine and classic cars attract special tax status as “wasting assets” with a predictable life of less than 50 years. This makes them exempt from capital gains tax (CGT) on any profits. However, HMRC’s definition of a wasting asset is getting tougher. The taxman’s latest manual said the exemption would clearly apply to cheap table wine, which may turn to vinegar within a relatively short period, but it might not apply to fine wines, because some can stay drinkable for far longer than 50 years, and also, sadly, does not apply to port and other fortified wines.

Classic cars are wasting assets only if they are being used as private vehicles, as their value will depreciate as mileage increases. Over 10 years, fine wines have risen in value by 142 per cent — more than jewellery (100 per cent) and watches (63 per cent), and dwarfing the FTSE 100’s 36.2 per cent return. Classic cars — defined by HMRC as any vehicle more than 15 years old and worth more than £15,000 — grew by 334 per cent over the same period. Investors can also turn to furniture, paintings and antiques, known as chattels, which attract extra CGT exemption of £6,000 on top of the standard £12,000.

Today’s National Day

NATIONAL SPEAK YOUR MIND DAY!

PUBLISHERS NOTICE

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