It seems likely that Britain will stay in the European Union but the uncertainty is depressing the stock market. We could see a surge of confidence once the referendum is over with. The big loser if Britain does leave the EU would be the City of London because they make huge amounts of money from Europe.
Monopolies and cartels
If you want to make huge amounts of money, then create a monopoly or create a cartel. Amazon, Facebook, Microsoft and Intel are all hugely successful because they don’t have any real competition. The City of London is hugely successful because it has little competition. The stock market is a monopoly and the banks that support it are all members of a cartel. The variety of charges made by banks and the stock market get passed down one way or another to me and you. They are passed down to the people and the people pay for this inefficiency with an economy in recession or economic growth at a snail’s pace.
Subsidiarity may have originated with the Catholic church but it is now part of the foundation of the EU. If they can’t stick to their principles of government they are doomed. The principle of subsidiarity is defined in Article 5 of the Treaty of The European Union. It basically means that decisions affecting us the people should be taken close to the people at regional or local level. I see local slumlords turning old pubs and houses into HMOs (Home of multiple occupation) that need a licence and local councils seem to be allowing HMOs to house migrants from the EU. They come here not just to take jobs in the health service as the Stay Campaign would have us believe but many migrants are involved in car washes and basic unskilled work that locals could do. Some are also petty criminals that find rich pickings in a wealthier economy. These problems should be dealt with at local and national level according to the principles of subsidiarity, not at European Commission level. There is no need for Britain to leave, we just have to remind the bureaucrats of the principles of subsidiarity.
The uncertainty caused by the mindless rhetoric on both sides of the in/out debate is uncertainty and so investments are suffering. Much of that investment comes from pension funds that are already struggling and can’t meet their obligations. Most of the assets of the British people are tied up in pension funds so we should be concerned about what happens to them. It is all very well having a ‘pension pot’ on paper but will it pay out when you retire?
My investments were up again for the third week running and so I have great expectations and I might even sell one or two soon. I haven’t sold anything for a while so it will make a change to actually bank some of those returns. Lloyds Banking Group is actually making me a decent paper profit for the second time around. The question is, do I take the money now or wait for the referendum result when the price could go as high as a pound? I could make a return of over 10% now and I only bought them at the end of January. 10% over 4 months is a good return by any standard.
I have high expectations of Premier Foods too who turned down a bid of 65p. The price today is just 41p. That has to be a bargain price. I bought at 46.15 and the directors at 81p so as they increase revenue, some value is being stored there. The price could easily soar suddenly when the value is suddenly realised by potential bidders and the city alike.
Solo Oil is another share with hidden value. The first revenue from gas sales in Tanzania is due soon and I hope that will get me at least breaking even. The oil at Horse Hill is another asset that could see that price soar. The rising oil price is another positive factor for Solo.
Despite all the uncertainty, I feel fairly confident and feel positive about the referendum. The leave campaign is about 4 to 1 on Betfair and the stay campaign is odds on to win. That is a good indication of the risk.