Evil Knievil: Knievil Engineering to the rescue

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Evil Knievil: Knievil Engineering to the rescue
Master Investor Magazine

Master Investor Magazine Issue 57

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It is commonly believed among the coterie of prunes that make up society that illiquidity in securities markets is a condition that can be foreseen and avoided. Therefore, the FCA is looking at putting further restrictions on the management of unit trusts. For this the FCA gets paid to render the prunes poorer.

Of course, this costly (to the prunes) exercise is pointless since it is a fact of life that markets can go illiquid. By way of illustration I recall the tale of a young stockbroker at Cazenove in 1931 being depressed when he learnt that there was no sort of respectable bid in War Loan, then one of the major savings instruments quoted on the London Stock Exchange. Such is life.

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In the same vein M&G, lately of Prudential, have frozen their £2.5bn property unit trust since requests for redemption of units outweigh the portfolio’s capacity to liquidate itself in an orderly manner. This means that savers have no means to raise the cash upon which they thought they could rely. Well I never. Whatever next!

However, help is at hand by courtesy of Knievil Engineering (a newly formed enterprise blessed with no capital other than access to my brain). For, surely, there is an opportunity for M&G to establish a forum centrally occupied by at least two firms of market makers who will deal competitively in these units.

This is not as easy as it looks since, quite understandably, the market makers will wish to be confident that they are taking delivery of stock that belongs to the seller. However, I am sure that, somehow, this happy condition can be achieved. If there are any difficulties, I confirm that Knievil Engineering will devise a solution.

Naturally, the FCA will want at our expense to be involved, though its intervention is totally unnecessary and bound to prove ineffectual. But that is how we have sort of chosen to govern ourselves. And how we wonder why there is a shortage of money.

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The NHS asserts that “half the population are gamblers pursuant to the aggressive promotion of online betting”. Of course, I remember my dear old dad doing the pools which, were he alive today, would categorise him in the NHS’s eyes as a gambler. Readers, he was the last man on earth who could be described as a gambler. He just could not take the stress.

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Comments (4)

  • Deek says:

    Yet again trivialise gambling does it really need to be advertised constantly, it produces nothing of value and causes addiction and harm.

  • Juian says:

    “And how we wonder why there is a shortage of money.” Excuse me, have you not heard of QE

  • Mark Lyndon says:

    Dare I suggest that a more apposite collective noun for prunes would be a regularity of prunes. A coterie is defined by dictionaries as a small and exclusive group of persons, as opposed to society in general.

  • philip baker says:

    crude palm oil at 10 year highs, over a month above $600 and now almost $700, though REA have passed their preference dividend again perhaps they will make good come the 30th June.
    13.5p on the 30th June would give a yield of 15.8% as a 1 off. Then a 10% yield going forward.
    We just need the price of palm oil to stay high. How high do REA need is the question and for how long.
    What next after that if REA can not make a 10% ROCE do they start buying back the preference shares in the market?
    Now they have passed 2 preference payments, do they see this as an amazingly cheap loan and keep passing the preference dividend? That would be a jolly good wheeze for the company it has been done before, not by REA but by others, i just can not recall the name of the stock, but i held it many moons ago.

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