Do politicians, particularly those who become government ministers, learn nothing? One feels that all MPs should be made to sit an examination in modern history before they are allowed to take their seats, with an advanced level paper for those who become ministers.
Investors should consider whether this is a good chance to cash in profits or cut losses
Even people like me who went along with the invasion of Iraq, albeit with misgivings, started to baulk by the time we got to Afghanistan. No doubt many who reluctantly went along with Afghanistan have finally seen the light when it comes to Syria. Yet here we are again contemplating barging into another conflict where we are likely to do more harm than good.
Tony Blair asked on TV: “Does anyone doubt that the world is a better place without Saddam?” to which one might reasonably ask: “Is Iraq a better place, let alone the world?”
It appears that some MPs have learnt the lessons of modern history, 285 of them to be precise, for which we must be grateful.
We have improved a bit over Iraq in one other respect. Then we were ten years too late. In Syria we are only two years too late, so I suppose we are catching up. Heaven knows what sort of a country we would create if we intervened now. Would Syria be a better place?
It seems unfeeling to talk about how investments are affected when people are being killed and the UK and US are threatening to throw more lives away but this is an investment column and major conflicts affect the value of assets, so having made my plea against making a bad job worse I must leave the moralising to others and concentrate on what investors should do now.
The UK has raised the issue of attacking Syria in the United Nations in the hope that some legitimacy can be given to bombing the hell out of Syrian president Bashar al-Assad and his supporters. I think that there is little likelihood of success at the UN, mainly because Russia remains a supporter of the Assad regime and will surely use a veto if necessary. Russia has had no compunction in defying Western opinion so far.
The US and UK may have already produced too much rhetoric to back down now altogether but we can perhaps hope for limited intervention, a rerun of Libya rather than Iraq. With opposition in Syria divided and crumbling, we could see the conflict ending sooner rather than later, possibly before there is time to intervene.
If that is so, then the sharp rise in the price of gold will peter out. Holders should consider whether this is a good chance to cash in profits or cut losses, depending on when they bought. In my view it is.
Conversely, share prices have fallen and with the FTSE 100 dipping below 6,400 points at one stage this week, it is time to start thinking of buying in. Don’t leave it too long. If the conflict in Syria comes to a rapid end, shares will bounce back rapidly.
This week we had yet another positive economic pointer with GDP growth in the US revised upwards. That brings the end of quantitative easing distinctly closer, which is excellent news.
Mark Carney: less is more
A minor media frenzy blew up over Bank of England Governor Mark Carney’s first major speech but don’t be disappointed that he said very little. He was never likely to come out with some major pronouncement so soon after giving his forward guidance on interest rates.
Carney has not gone back to the enigmatic days of his predecessors. Don’t look for hidden meanings in his speech. When he has anything to say, you will know what he is on about.
What next for Vodafone shareholders?
Vodafone shares have risen this week on hopes that a deal will finally be struck with US partner Verizon Communications over the long rumoured sale of Vodafone’s 45% stake in their joint venture Verizon Wireless.
As a Vodafone shareholder – it is a major constituent of my portfolio – I have previously recorded reservations on this deal, which provides a cash windfall now but removes a substantial and reliable source of revenue for the foreseeable future. Vodafone will be left hoping for a massive revival in Europe.
The immediate question is whether to cash in and sell Vodafone above 200p a share. I will not do so and feel that the overwhelming argument is in favour of holding on to see what develops. Both sides want this deal and the only issue is price. It is going to happen sooner or later.
Shareholders should watch the situation as it develops. If the offer is part cash, part Verizon shares, Vodafone holders who want to stick to UK listed stocks will need to consider whether it is better to sell in the market rather than end up with shares in an American company.
That is for the future, when a deal is confirmed and details are known. For now, hold on.
Rodney Hobson is a long-term investor commenting on his own portfolio; his comments are for informational purposes only and should not be construed as investment advice.
