It is widely believed that financial education in this country is dismal.
This manifests itself in many ways, from the fact that many people leave large cash deposits in banks that earn next to nothing, to the large number of people choosing Cash Isas.
To this is unfortunately added the very large number of young people attracted by risky “day trading” or the temptation of crypto-currencies.
I find it extraordinary that in an era of near zero interest rates, a company of the quality and strength of Legal & General – which is so strong that its shares are, in my opinion, virtually equivalent to the gilts in the industry. private – offers a dividend yield as high as 6.5 percent. Yet this financial services group is apparently rejected by all those savers sitting on bank deposits.
Yes, of course, schools need to do more, but I have long believed that television’s utter failure to focus its programming on stock investment is a national tragedy.
For years I have been insisting on this, including writing to the CEO of the BBC, but unfortunately I got nowhere. The programmers don’t seem convinced that there would be much appetite from viewers. And if they take a look at the current financial program regulations imposed by regulators – the Financial Conduct Authority and Ofcom – they are running a mile!
So, frustrated, I urge the government to meet with representatives of major TV channels and regulators to discuss encouraging the development of programs that encourage equity investment in UK listed companies.
ShareSoc, the first representative body for private shareholders, of which I am a sponsor, strongly supports this initiative. I believe that the whole relationship – or lack thereof – between television and our extremely important savings and investment industry needs to be totally rethought.
How is it fair that betting and gaming advertisements are allowed on television, when financial advertising is effectively prohibited because the conditions are too onerous? It may well be that this was not the original intention of FCA and Ofcom, but there is no denying the result.
How does that fit in with all the financial advertisements allowed in newspapers, on tubes and at sports facilities? The lack of television advertising is wasting a great opportunity to increase the number of private investors and to publicize our many great and small businesses in which ordinary savers can invest. How can anyone complain about the undervaluation of UK companies if their merits are hidden from so many?
Of course, you can’t just blame the undervaluation on television. Business management must also be looked at. For example, has the board of directors of the Wm Morrison’s supermarket chain drawn enough attention to the value of its properties, or the strength of its business, in its proposition to sell to private money buyers?
Admittedly, executives should have taken measures a long time ago to increase market value, for example with a shareholder reduction card. Investors can’t be faulted for focusing on the money on the table if boards don’t do much to build bridges with their shareholder base. It is not enough to meet the minimum legal requirements.
When it comes to my own portfolio, the last quarter saw my top favorites – Anpario, Natural Stimulants for Animal Growth, Cerillion, Telecom Billing Services, Lok’nStore, Storage, and Treatt, Flavors and Fragrances, perform well. Unfortunately, I moved from Legal & General to Aviva and M&G, seeing them as having greater capital potential. My only real ‘dog’ has been Appreciate PLC, the UK’s leading multi-retail repurchase product provider, where the jury is out as shares are down 15 percent this year. Institutional investors seem to have given up on the business, but I’ll give them the benefit of the doubt, waiting to see a full year of normal trading.
In managing my portfolio, I spend a considerable amount of time studying the precise words and underlying tone of statements by business leaders and carefully noting any new hand on the bar.
For a while I had a useful stake in Vitec, a hardware / software equipment provider for the creative content industry, adding last year at a very attractive price of £ 6.40 per share.
However, I became even more excited about its positioning and potential. Recent interim shows a strong recovery in earnings, with Managing Director Stephen Bird saying, “The content creation market is a great place. The pandemic has accelerated the democratization and digitization of the media, leading to a permanent structural change in the market. There has been a dramatic increase in the capture, consumption and sharing of scripted video and television content, and Vitec is at the heart of this large and growing market. ”
Bird added: “The group is well positioned for long-term sustainable growth and value creation for all of our stakeholders”. I added considerably between £ 13.39 and £ 14.70 – they are now growing on £ 16, but I think they still have a great opportunity to grow further.
To fund these purchases, I reluctantly sold a number of small holdings, making good profits from Kooth, STV and Tatton Asset Management. Following the arrival of new CEO Miles Adcock, with a background in large-cap defense, I keep a close eye on Concurrent Technologies – a niche supplier of heavy-duty specialized computer cards, where I first invested. times in 2009. This little gem with its very solid balance sheet and entry into the defense sectors – 75 percent of turnover – with 40 percent of business carried out in the United States – is already on board several of the most advanced defense / space programs in this country. Competitor clearly provides a great platform for the new CEO to promote their program and ambitions. Very good to watch.
Finally, a mention of a new holding – the Merchant Builders and Plumbers Lords Trading Group – from which I hear good reports. I bought at 100p on flotation in July. They are already traveling well at 120p, and with material shortages and product price hikes, dynamic DIY and supplies running out, I hope a happy future is in sight.
Lord Lee of Trafford is a private investor and author of “Yummi Yoghurt – A First Taste of Stock Market Investment”. He is a shareholder of the companies indicated