As another week ends, we round up seven days of the curious, controversial and bizarre.
We Should Give Credit Where It's Due
As we noted last week, things seem to be getting extremely perilous for the prime minister. But as events on Monday reminded us, Boris Johnson is not the only public figure facing allegations of serious lockdown rule breaches. Credit Suisse chairman António Horta-Osório appears to be quite a big fan of sports, and attended at least one major sporting event when he should have been in quarantine at the time. His resulting resignation arguably puts politicians to shame, so credit where credit's due.
London is no Longer Driving House Prices
Everyone knows that house prices are through the ceiling in the UK, and in this explainer I attempted to explain why. Key points to note are that the periodic easing of restrictions has not halted the exodus from London. In fact, having for years been the factor driving up nationwide average house prices, London is now trailing the national average price growth rate. As demand for family homes with green space and more bedrooms has increased, so too have prices.
Booze Faces Serious Headwinds
When was the last time you had a drink? I couldn’t tell you the last time I was properly hungover, but it appears many more people are now in the same camp. Alcohol consumption is decreasing dramatically among specific groups of people (the young), presenting drinks companies with a sales and marketing challenge. Luckily, low-to-no alcohol products are selling like wildfire. In this piece, Morningstar data journalist Sunniva Kolostyak examines the reasons for this change, and asks whether alcohol may truly be considered a “sin stock”.
The Zoom Firing Boss is Back
Remember the boss who fired hundreds of his staff on a Zoom call last year? Well, he’s back in charge after some time away for reflection. Better Group’s CEO Vishal Garg sparked outrage in December when he dispensed of around 900 employees at once on a Zoom call. Now he’s back at the helm, the company’s board says it is “confident” he will deliver the type of “leadership” the company needs “at this pivotal time”. Something tells me this Succession-style story may have another chapter in it yet.
It’s Snowing in the Sahara
Snow falling on a desert like the Sahara is not completely impossible but it is unusual. This week, beautiful patterns of the white stuff landed on Sahara’s sands in a weather event that was as beautiful as it was bizarre. It is as yet unclear what the relationship is between the snow and climate change, though what we do know is that “desertification” is causing the Sahara to get larger. Some experts believe there is a verifiable link between the climate crisis and such weather events, but scientific studies of the phenomenon have been few and far between.
Nobody’s in a Good Mood with Jerome
Our look at inflation – and specifically which experts still believe it is a short-term “transitory” phenomenon – yielded one firm conclusion in particular: that a lot of people are very angry with Federal Reserve chairman Jerome Powell. Having initially declared himself that inflation was indeed a short-term phenomenon, Powell decided to “retire” the T-word at the end of last year. But not before (experts argue) western governments lost multiple opportunities to get ahead of the issue.
Financials Might Help You Survive Inflation
And speaking of inflation, the UK’s own inflation figures this week showed the kinds of price rises not seen in the UK since John Major was prime minister and the Ford Escort was the country’s best-selling car. As senior editor James Gard argued, there is a strong case for holding financials in your portfolio in a bid to survive a sustained period of inflation. All eyes are now on February, when the Bank of England’s monetary policy committee will meet to decide on a possible rate rise.
People Think Fink is “Woke”
Last week we described some of the predictions made on a media conference call by BlackRock CEO and chairman Larry Fink. Fink has spent the beginning of the year in the headlines, and has since been forced to defend his annual letter to CEOs against accusations that it was “woke”. If shareholders, investors and entrepreneurs think Fink is woke, they are going to have a very big shock indeed when they read what some people have to say about stakeholder capitalism…
I Didn't Buy Activision and Need Consoling
Microsoft’s decision to buy gaming giant Activision Blizzard creates the biggest gaming company in the world, and could be the first of several major mergers and acquisitions this year. Morningstar senior equity analyst Dan Romanoff does not view this deal as transformative though, especially since stand-alone Microsoft was already a key player in video games. He continues to maintain his $345 fair value estimate for Microsoft.
The “Canadian Curse” is a Thing
Ever heard of something called The Canadian Curse? No? Well, any company that dethrones a Canadian bank to become the largest Canadian company by market capitalisation usually hits a major rough patch soon after. Cursed names include Nortel, BlackBerry, Potash, and Valeant Pharma. In this piece, Morningstar Canada editor Ruth Saldanha examined whether Shopify’s ascent to that throne (and its subsequent volatility) was an example of the phenomenon.
