Merryn Talks Money

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The Collapse of the UK Housing Market May Be Coming Feb 17, 2023

Show notes

The UK housing market is not in a good place. Mortgage rates are up, buyers are disappearing and so are sellers. The former don’t want to dump money in a falling market, and they can’t afford mortgages at current prices anyway. The latter don’t want to accept that prices are falling in the first place.

The result? A standoff. And that means the number of transactions are dropping. And while prices aren’t sinking very fast right now, what happens when sellers can’t hold out any longer? If the past is any guide, prices will fall very fast indeed—just like they did in the early 1990s.

How far and how fast? In this week’s episode of the podcast Merryn Talks Money, Senior Editor Neil Callanan and Senior Reporter John Stepek join Merryn Somerset Webb to discuss the scope of the potential implosion. There are an awful lot of vested interests out there insisting that prices won’t fall more than 10%, but without government intervention, they warn prices may drop as much as 40%.

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The Year of the Value Hunter Has Arrived Feb 10, 2023

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For a fund manager with a belief in value, 2021 was as discombobulating a year as they come, says Ben Inker, co-head of GMO’s asset allocation team. Valuations went to insane levels across all markets, and there was nothing you could buy or hold that was cheap enough to offer real long-term returns. But the good news according to Inker is that an awful lot of froth came out of the market last year. Prices went down and inflation went up. Add those together and a lot of markets were down 25% plus in real terms, he says.
Inker joins Merryn Somerset Webb on this week’s Merryn Talks Money to explain that, for the first time in several years, it’s possible to find assets with “compelling valuations.” There could be more nastiness to come in the most expensive markets, he warns, but the opportunity set going into 2023 is far better than it was a year ago.
Plus, John Stepek and Merryn discuss was she calls one of the best books she's ever read.
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Why Governments Won’t Let Inflation Go Away Feb 03, 2023

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Inflation isn’t going away. Why? Because governments can’t let it. So says market historian Russell Napier, who on this episode of Merryn Talks Money tells host Merryn Somerset Webb that, with the global debt-to-GDP ratio at an historic high, using inflation to eat away at the real value of debt is the only escape route. What that means, Napier says, is that for the first time in a long time politics will matter most to markets.

Napier also shares his ideas on how investors can navigate this new environment. He says market indices may fall, but mentions some equities that he says will still make investors real money. Which ones? Tune in to find out.
And Money Distilled's finest John Stepek joins to talk about why dividends are due a comeback. Check out his daily newsletter here:
https://www.bloomberg.com/account/newsletters/uk-wealth

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Deflation May Be Coming Sooner Than You Think Jan 27, 2023

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James Ferguson, founder of MacroStrategy Partners, isn’t worried about inflation this year. Instead, he sees the beginnings of deflation. On this week’s Merryn Talks Money, he tells host Merryn Somerset Webb that it’s purely a matter of remembering what the monetarists said: Print money and (with a long and variable lag) you will get inflation; Yank money out of the economy (as the US Federal Reserve is doing) and you will get the opposite. According to Ferguson, there will be deflation by April.
Plus, John Stepek joins Merryn for a passionate chat about pensions. Yes, it can be done. An extended version of that chat can be heard here:
https://twitter.com/i/spaces/1PlJQpeNWZqGE?s=20
And of course, sign up for John Stepek's daily newsletter: https://www.bloomberg.com/account/newsletters/uk-wealth

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The Case For Buying Emerging Markets, Bonds and Gold in 2023 Jan 20, 2023

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Pictet Chief Strategist Luca Paolini says that while there’s a lot to be negative about these days, things aren’t as bad as they seem—even in the UK. He joins Merryn Somerset Webb on this week’s Merryn Talks Money to explain why things are looking up there and elsewhere. There’s also a chance there could be more happy surprises in 2023. According to Paolini, a ceasefire in Russia’s war on Ukraine would be a massive positive economically—one that could see commodity prices and interest rates fall, as well as a European boom. And when it comes to other investments, Paolini says avoid crypto but move some money into bonds. As for stocks, he advises think emerging markets—and don’t forget gold.

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How the Global Economy Has Been 'Rewired' and What That Means for Your Portfolio Jan 13, 2023

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Not many investment trusts made a positive return last year. The Ruffer Investment Company did -- partly by using strategies not open to the retail investor but also using ones that are. In this week’s Merryn Talks Money, the firm’s Investment Director Alexander Chartres talks host Merryn Somerset Webb through what worked for Ruffer in 2022 and what might work in 2023.

Chartres’s key point is the world has changed. He says the global economy is in the process of being “fully rewired,” which means investors must reconsider the fundamentals behind all of their investments. He also says China is changing; there are hot and cold wars on the go all over the world: big BIG government is back; and there is financial repression ahead — so maybe buy some gold.
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The bad news may soon be over for UK small caps Jan 06, 2023

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Smaller UK companies were among the worst performing assets in the world last year. That made 2022 a tough time for small cap fund managers. But small caps very rarely see two down years in a row, says Anna Macdonald, fund manager at Amati. She joins host Merryn Somerset Webb on this week’s Merryn Talks Money. Macdonald shares her suggestions for the stocks to buy in this kind of environment—think trains, hospital software and specialty lenders.
Plus, senior reporter John Stepek joins to discuss Rishi Sunak's five pledges for British voters to hold him to.
Sign up for John's newsletter Money Distilled here.

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Why the best small UK companies have a global niche Dec 23, 2022

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Harry Nimmo, one of the most successful investors in smaller UK companies over the past three decades, is retiring from asset manager Abrdn at the end of this month. But that didn’t stop him from predicting a recovery for the sector within six months. In this week’s episode of Merryn Talks Money, Nimmo reflects on his life in investing and how it has informed his outlook for the future.

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Losing money is the price of making money Dec 16, 2022

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Tom Slater, co-manager of the UK’s most popular investment trust, Scottish Mortgage, joins this week's episode of Merryn Talks Money. Shares in the trust are down 40% year-to-date. What went wrong? Maybe nothing, says Slater. If you want to get real growth, you need to be prepared to pay an “unreasonable price” to get it, and then you need to be prepared for a lot of volatility before any fortunes are made. Plus, senior reporter John Stepek is back -- this time to talk about the British property market.
Sign up for John's daily newsletter Money Distilled: https://www.bloomberg.com/account/newsletters/uk-wealth

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Saxo’s ‘Outrageous’ Prediction? Gold Will Top $3,000 in 2023 Dec 09, 2022

Show notes

Holding gold? Better load up since it may jump to $3,000 soon. Work in private equity? Maybe get out now: there could be a new tax regime on the way. As for 2% inflation? Not in this "war economy."
These are among Saxo Bank’s self-described "outrageous" predictions for the year ahead, which the Danish bank says will see policymakers shift fully into defensive mode. Chief Investment Officer Steen Jakobsen joins Merryn Somerset Webb to discuss projections he says are far less outlandish than the moniker suggests. Plus, senior reporter and Money Distilled author John Stepek is back to share his own prediction for 2023 and rant about crypto.

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