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The Financial Ironmonger Blog No 34/2017

The Financial Ironmonger Blog No 34/2017

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.


The father of a very longstanding friend reckoned that holidays were the most stressful occupation known to mankind, (if we are still able to call it that). It is probably true when you are young with children in tow; imagine taking a zoo on a road trip, with a limited budget. Now that the “children” are no longer so, the issues are different, not least because they insist on paying their way, which is counterintuitive.

The next problem is what books to take, and they have to be so, rather than the wretched Kindle. I spend far too much of my life staring at screens, as it is. The Bad Boys of Brexit is a hilarious account of how Arron Banks, and his team, spends £8mn of his fortune on the Leave.EU ticket, largely fronted by Nigel Farage. It is written as a diary, so if you get called away for an unexpected beer, and these things do happen, it is easy to pick up again. And then having won, they got involved with the Trump campaign.

Devil’s Bargain is a must read if you want to understand the Donald, or so it was billed. It is the story of Steve Bannon, boss of the right wing site Breitbart News, who was brought in to rescue the ship, which was in danger of sinking six weeks before the election. It turns out that he had been on a multi-year mission to destroy the Clintons, which came in useful, obviously.

Much of his efforts were funded by Robert Mercer, a reclusive hedge fund manager, who would appear to have stumped up $75mn for various different organisations, but allied to the same cause. One is a company called Cambridge Analytica, used in both campaigns, although not much detail is given in either book. They seem to have found a way of targeting undecided voters and getting key messages to each one, thus bringing victory in both cases. Hopefully, we will learn more of this.

Remarkably, the Bannon book was only completed on June 5th, but between getting it from the bookshop, and turning to the introduction, Trump fired his chief strategist; it is still worth a read. Bannon was described as his brain, so with him gone, and the break with the mainstream Republicans, one is left wondering which direction this is heading in. As I type, he seems to have returned to his favourite topic of building a wall across the Mexican border, for which there is massive popular support. He needs a win.

I am writing this from Croatia, a country I last visited nine years ago. The economy is dominated by tourism, with some light manufacturing, and agriculture. Clearly, it has had a bad time; half-completed houses dot the landscape, and as befits any emerging economy, vehicles that have exceeded their lifespan have been left pretty much where they expired. Given that it is so dry, they are preserved just as they were, a good trip down memory lane.

They have built a pristine dual carriageway from the airport to Split, a mile in from the old coast road, which is the standard hallmark of any new EU country. They joined in 2013, and whilst they retain their own currency, it is pegged to the Euro. Over the last two thousand years, Croatia has been invaded by pretty much everyone, and since WW2, it fell under communist rule as part of Yugoslavia, until the violent wars of the early 1990’s. They should fit in well with the EU’s unitary ambitions.

However, they are not about to be invaded again. You would think this a natural route for immigrants heading north from Greece towards Italy, or further afield, but no. The population of just over 4mn is 94% Croat, and predominantly Catholic, and that is the way that it is staying. How they achieve this, I know not, and nor am I asking.

Per capita income is $12,400 per head, which would explain why the shinny car showrooms that line the new road only have one or two vehicles in them. Long way to go, not helped by the country’s largest company, Agrokor, sliding in to administration last April. With 700 supermarkets in the country, it geared up in 2014 to buy a Slovenian rival, just as the market opened up, having joined the EU. Lidl stores abound.

The government has effectively nationalised it, given that its turnover represents 10% of Croatian GDP, and it is thought that the outstanding obligations could be as much as 15% of the same measure, according to the Economist. The people are kind and friendly, and deserve a better outcome than a recession that would surely follow if this goes wrong.


David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.