With so little racing on I’ve been watching the financial markets again, and it’s still carnage. Our banks are slowly being nationalised, although in Barclays case they could end up being sold to Arab interests. The biggest casualty of all is sterling – close to parity against the Euro now and at a 23 year low agaist the dollar having lost almost a third of its value in six months.
It’s a terrible time for anyone with savings. If you’ve got money in a UK building society you are now getting very little interest and someone in the US who had the same amount as you six months ago is now considerably richer than you just for holding a different currency. The dollar has its own problems and has lost a load against the yen in the last six months – sterling has obviously been crucified against the yen. I bought three horses in Japan last year – fortunately I paid mostly up front, but some of the later bills have increased in dramatic fashion.
If you are invested in a UK fund you have been doubly hammered – the FTSE is down a stack and sterling has collapsed as well. Your investment may be worth around 40% of what it was six months ago in dollar terms. It’s all a bit crazy though – if the currency collapses the equity market becomes cheap to foreign investors and in relative terms should perform strongly.
Moreover many UK companies benefit from a weak currency and/or low interest rates. there are dull but safe investments out here that are suddenly looking very undervalued while others still look extremely precarious. If you have cash then it’s time to stand up and be counted.
In my opinion…
I’ve been busy with Swindon Town stuff lately. We had a big board meeting last week and I’m starting to understand the way the club works and their finances. We have a new manager – Danny Wilson – and I’ve had a good chat with him. He’s a very lively and interesting guy – I hope he turns out to be right for the club.
This is the time of the transfer window, and no doubt there’ll be activity. Swindon’s star striker is Simon Cox, and the chairman, Andrew Fitton, is trying to get him to sign a contract extension. It’s a Sun headline writer’s dream – “Swindon Fitton Cox extension…” etc.