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Rolls-Royce Accounts Adjustments – Were They Prudent?

Post Date: November 16, 2016

Rolls-Royce provided a trading update today, and covered the impact of IFRS 15 which is probably a lot more important. IFRS 15 is a new accounting standard concerning revenue recognition which will come into use in 2018. It will have a major impact on the figures reported by Rolls-Royce because of their past recognition of revenue and profits from long term maintenance contracts. For example, Rolls-Royce report that when looking at the 2015 accounts the "Changes result in adverse notional adjustments to ...

Trump Victory – What’s the Impact for Investors?

Post Date: November 9, 2016

With Donald Trump being elected President of the USA, what is the impact for investors? Will he create "high anxiety" as the unexpected head of that great democracy in the same way as the Brexit vote has in the UK? In other words, uncertainty about the future which tends to spook markets. But readers should bear in mind that the President has limited powers (much less than a UK Prime Minister). There are numerous checks and balances in the US constitution. Indeed ...

Red Faces at Redcentric

Post Date: November 8, 2016

Events As a (modest) shareholder in Redcentric, I was shocked by yesterday’s announcement: www.investegate.co.uk/redcentric-plc–rcn-/rns/accounting-misstatements/201611070700094407O/ Redcentric plc (AIM:RCN), a leading UK IT managed services provider, announces that an internal review...

Inquiry into FCA’s Future Mission

Post Date: November 1, 2016

The new head of the Financial Conduct Authority, Andrew Bailey, has announced a consultation into the "Future Mission" of the organisation. The FCA does of course regulate financial markets and should be protecting retail investors (or "consumers" as the consultation prefers to call them). However it has been repeatedly criticised in the past for the following failings: - Weak and ineffective regulation. - Not stopping new abuses soon enough. - Failing to look after the interests of retail investors but rather protecting those of ...

Do Active Funds Underperform? But Costs are the Real Problem

Post Date: October 31, 2016

On the 24 October the Financial Times FTfm supplement led with a front page article that was headlined "99% of Active US equity funds underperform". It also had a sub heading of "Almost all UK, global and EM funds have failed to outperform since 2006". So I sent a letter to the Editor which said the following, much of which they have published today (31/10/2016) plus letters from other writers making the same point. This is what my letter said: "Your headline in ...