‘Feed the ducks when they’re quacking’ sounds like advice from a foie gras farmer — but let’s leave gastronomy till last and focus first on stock market activity. The saying actually comes from Wall Street and means that if investor demand is strong, it’s best satisfied with ample supplies of new stock. What’s wrong with that? Nothing, if the investors understand risk and the offerings are sound. But is that what’s happening in the current retail investment craze on both sides of the Atlantic? Probably not.
From its low in March last year, the FTSE 100 index has risen 40 per cent. A hectic London market in new issues since the autumn has offered novelties ranging from the Dr Martens boot brand to Darktrace in cybersecurity, with most debutants outperforming the wider market and only Deliveroo an outright flop. Reasons enough to attract new investors who are bored by lockdown and have easy access to low-cost trading technology. Interactive Investor, ‘the UK’s no. 1 flat-fee investment platform’, reported a 370 per cent increase in new account openings this January compared with a year earlier. Its rival Hargreaves Lansdown said in February it was handling £121 billion of investment assets, up 16 per cent on 2020, on behalf of 1.5 million customers.
All of which is fine if it converts long-term savings into equity capital that allows good businesses to invest for growth. More tenuously, by diverting surplus cash, it may ease the current inflation spike caused by too much money chasing physical goods in short supply. But the problem, as identified by wise heads ranging from Warren Buffett and our own veteran investor Robin Andrews to the Financial Conduct Authority, is the mentality of the new market players.
‘Thrill-seeking day traders’ from the video--game generation, as the FT characterised them this week, they tend to rely on tips from social media ‘influencers’ rather than boring analysis of earnings potential and balance-sheet strength. Volatility is a buzz for a crowd who regard hot stocks, crowdfundings, sports betting and cryptocurrencies all of a piece: the recent bitcoin crash may have shaken latecomers, but the rest wait excitedly for the bounce.
Or perhaps I’m missing the point and what we’re witnessing really is a revolution in popular capitalism. That’s how the Gamestop episode was described in Jan-uary,when online investors chased shares in an obscure US video-games retailer, forcing losses on short-selling hedge-fund giants. But Gamestop’s price fell back by more than half, nothing else changed, and the financial sector continued its quest for new ways to part gullible punters from cash. Like the industry that produces that famous delicacy, the ducks always get stuffed.
Poisoned public chalices
‘The great and the good’ is old-fashioned journalese for business chiefs and Whitehall worthies who cap their careers by taking prestigious unpaid public appointments. They used to be safe hands who could be relied upon to exercise wise governance and clubland contacts without attracting controversy. Ex-BBC chairman Sir David Clementi, a veteran City financier unknown to the wider public, may have been the last of that ilk. But nowadays they tend to be racier and more political — and the posts they accept, often on the ‘culture war’ front line, carry higher risk of conflict or embarrassment.
Clementi’s successor, former Goldman Sachs partner Richard Sharp, was drawn straight into the furore about Martin Bashir’s Diana interview. Tim Parker — once a job-slashing private-equity player and briefly deputy to Boris Johnson as London mayor — was ousted as chairman of the National Trust after a backlash from members angered by excessive wokeness. Carphone Warehouse founder Sir Charles Dunstone quit as chair of Royal Museums Greenwich after the Culture Secretary refused to reappoint a trustee who advocated ‘decolonising’ academic curricula. Dunstone’s ex-business partner David Ross (a favourite tabloid target who ‘facilitated’ Boris and Carrie’s 2019 holiday in Mustique) left the Royal Opera House to focus on chairing the National Portrait Gallery, where arguments over who deserves hanging must be especially hot. And Lord Hall resigned from the National Gallery after the revelation that he had reappointed Bashir.
Why volunteer for such poisoned chalices and painful exposure? The urge to serve is admirable, but even being a parish councillor (as that viral video from Handforth in Cheshire showed) can make you a national joke. To secure a place among the great and good, it’s a lot easier these days just to write cheques. Apropos of which, I have to admit that I had never heard of Lord Brownlow of Shurlock Row — a former policeman who founded a recruitment business called Huntsworth — before he was named as the donor of Downing Street’s wallpaper.
Speaking of foie gras, a day trip across the Channel would have been an option for a spring holiday weekend in happier times. But not this year, when the French government website says I need ‘pressing grounds’ to enter their territory. I’d argue a decent lunch meets that description but even if the border police accepted my plea, a grande bouffe at Wimereux’s Hotel Atlantic or the Château de Montreuil, both a short hop from the Eurotunnel, would currently incur 17 days of two-way quarantine and at least four Covid tests. I can only hope that by high summer a cost-benefit analysis on the spending power of double--vaccinated British gourmands will have persuaded Macron’s ministers to remove the barriers. Meanwhile, my appetite for authentic Frenchness has led me to a less likely destination: La Table d’Alix at the Plough in the south Oxfordshire village of Great Haseley. Thursday’s offering is a Soirée Normande with moules marinière at just £17 a head. Vaut le detour!