This week it occurred to me that the UK capital market's level of paralysis seems to be directly proportional to the scale of the Eurozone crisis. By paralysis I mean the failure to support the development of businesses which will result in the UK emerging from the current economic crisis with a stronger economy rather than a weaker one. Having watched the City in action for some forty years, I note that it has a great propensity to jump aboard bandwagons without thinking whether the bandwagon makes sense. For example, the Slater Walker satellite companies in the 1960s/70s and the dotcom boom of the late 1990s.
The City’s track record does not get high marks for providing intellectual leadership which increases the wealth of investors. Failure to achieve the latter objective is caused in many instances by the City making fee driven decisions in regard to which companies to work with. Instead, the decisions should be made through a realistic assessment of the selected company’s ability to provide attractive returns to investors.
In my opinion the UK is now making positive progress on the journey out of the economic crisis. My reason for this optimism is that influential people from outside the City are advocating a bandwagon which makes sense to me from the standpoint of harnessing the UK's inherent strengths in order to improve the strategic positioning of the economy. Last week the FT hosted a conference, The Future of UK Manufacturing - Making things work in the new economy. A conference overview can be seen by on the FT conference site. Speakers included:
a) Ron Dennis, executive chairman of McLaren Automotive and McLaren Group. A copy of his speech can be accessed by clicking on the McLaren site.
b) Will Hutton, inter alia, Principal of Hertford College Oxford and chairman of the Commission on Ownership. Click on the Commission on Ownership to read an article on his views on contemporary British capitalism.
The City will eventually take up the themes espoused by Messrs Dennis and Hutton. LCFR's stance is to help accelerate the process of take up.
On a different tack, Stockopedia has just published an article, Geraldine Weiss-Lite Screen: Three dividend darlings for scrupulous investors, which can be accessed by clicking on Stockopedia. Much to my delight, one of the three companies selected was AIM listed Albemarle & Bond, a company which was…
