by Nick Louth
“Martin,” K.P. said. “It’s got two billion quid’s worth of debt. It might break its banking covenants and have to go into administration. And let’s face it, house price falls have barely begun. I don’t believe in taking risks...”
“Ahem, Northern Rock?” muttered Harry, barely looking up from his copy of the Racing Post. At this point K.P. throws up his hands in disgust, and goes off to the bar to order a sandwich.
Chantelle, taking the order, is baffled. “I didn’t think Hindus could eat beef and horseradish sarnies.”
“Since when has any item on the Ring o’Bells’ menu ever been made from anything that ever lived?” he responded.
“Fair point,” she conceded. “But if Quorn or monosodium glutamate were ever to become sacred you’d be in big trouble.”
Tuesday 10th June: Dunces With Wolves
Unexpected phone call at quarter past eight. Summoned by the dulcet klaxon of my beloved, I emerge dripping from the shower to be handed the cordless handset. It’s K.P. Sharma in a state of some anxiety. Apparently Fairpoint, the former Debt Free Direct, has issued a major profit warning and is taking a pasting in the market. K.P. reads me out the first part of the statement, and it does seem pretty bad.
“The shares are already down at 45p from 77p yesterday. I’m trying to get a majority for an immediate sale for all 2000 of the club’s holding,” he says. “Mike Delaney agrees with me on it, Chantelle’s not at home, Martin wants to hold and so does Harry.”
“What baffles me,” I say, as I trail drips across the bedroom floor. “Is how can a company specialising in dealing with debt problems get it so wrong just when half the country is up to their eyeballs in it?”
“Bernard, let’s have the inquest later. Yours is the casting vote, and we’ve lost another 2p while you were talking!”
However, before I accede, I ask what the club paid for its biggest investment. The answer, horrifically, is 300p. While K.P. rushes off to make the sale, I muse over the fact that the club has lost over £5300 on one company. While we may not have anticipated today’s profit warning, that is only going to lose us £700. The real crime is clear once I pull up the share price graph. While we’ve been supping Spitfire and munching pork scratchings at the Ring o’Bells in the last 12 months, we’ve casually lost a few pence every day on Fairpoint shares with no one motivated to do a damn thing about it. What a bunch of investment dunces we are, perfect fodder for the wolves of the wider financial markets.
Wednesday 11th June: Barratt Barracking
Tense times at the share club meeting. Martin Gale, having advocated Barratt shares at 140p, is now gagging with bargain-hunter’s lust as they plummet to 50p. We thought he had no money left to invest, as no doubt did his IVA creditors, but apparently he’s got a spread-betting account and just placed a £10 per penny up bet at 52p, hoping for the shares to recover.
“Are you out of your mind?” says Chantelle. “You can’t afford to lose that kind of money can you? If it goes bankrupt you’ll lose at least £500.”
Martin ignores her. Staring over K.P. Sharma’s shoulder at the price screen on his laptop, he only has eyes for the blue of the rising price. He’s cheering it on as if it was Desert Orchid in the Two Thousand Guineas. He seems to have forgotten that Barratt isn’t a gambling chip, but an employer of thousands, and a vital part of government plans to build millions of affordable homes.
Not that I can talk. My mobile rings, and it’s my own spread-bet broker. My short-selling position on Rentokil is still losing money, and I’ll have to stump up more margin to keep my position open. I reluctantly agree to close the position, with a loss of £108.
Close of play: While I lost money, Martin made over £200 when Barratt closed at 75p. He’s cock-a-hoop, but I just fear this one success will spur him to make more such bets which cannot afford to go wrong.
Friday 13th June: Irish Stew
Had to have a good chuckle over the news this morning. The Irish have stuck two fingers up to the new EU constitution, a.k.a the Lisbon treaty. The Eurocrats, in typical high-handed fashion, refuse to concede the process is dead even though the rules require unanimity. “How could they?” they seem to be saying. “The greatest beneficiaries in the EU’s history, biting the hand that fed them.” What these officials don’t understand is that anyone who is repeatedly lectured that something is good for them, especially if they don’t understand it, is going to get bloody-minded.
Speaking of which, Eunice switched my usual breakfast of Frank Cooper’s marmalade and toast for half a grapefruit, dotted with nuts and other cereal-like sweepings. I didn’t even get a referendum vote.
“What’s this?” I asked, prodding the offending item with a teaspoon, and getting a jet of juice in the eye.
“We talked about this, Bernard, don’t you remember? When your last cholesterol test was too high, you agreed that you’d try a change of diet. Remember the saying: no to saturates, yes to polyunsaturates and monosaturates.”
“I haven’t the faintest idea what you’re on about. Can’t a poor man have a slice of toast and marmalade in peace?”
“If you want to rest in peace, certainly. This and your other meals help prolong active life,” she said.
“No doubt it will give me a glossy coat and a cold wet nose too!” I retorted. “Well, I’m not a bloody dog. And I’m not eating it.”
“But it’s for your own good!” Eunice said gently.
“Look. I don’t want a long life, because I can’t afford one. I want a short life, lived the way I want, without lectures.”
Saturday 14th June: Soft, Long And Very Strong
Escaped from the dietary madhouse of Endsleigh Gardens to spend the morning with my mother. Of course, in terms of lunacy that’s like jumping from a lukewarm frying pan into the steel furnaces of Lakshmi Mittal. The daft bat is continuing to hoard groceries in fear of inflation, the Luftwaffe and something I hadn’t even considered, a one-party state run by Alastair Darling. She’s built a Wendy house entirely out of 12-packs of Andrex in the back bedroom, and is now living inside, with a sleeping bag, a gas mask, her old wireless, and seventeen out-of-date chocolate button Easter eggs. I also spied a battered tin of Minced Morsels.
“What’s this for Mum?” I say, pointing at the 1970s dog food. “Is Clement Freud coming to tea?”
“Pardon?” she says. “No, I’ll need that in case they use bloodhounds to try to find me. They won’t attack if I feed them.”
“Who’s looking for you?” I ask, in wonderment at the new paranoia that is compounding her other confusions.
“Alastair Darling. He knows I didn’t vote for him. I voted for the other one. His war veterans are attacking everyone, and pinching their farms, it said so on the telly. Well, every time I hear the jangle of medals I look over me shoulder and I’m giving the British Legion a very wide berth at the moment, I can tell you.”
I just gape at her for a moment, until the penny drops. “Dot, that isn’t about Britain or Alastair Darling. It’s Zimbabwe and Robert Mugabe. You’re quite safe from them in Isleworth.”
Monday 15th June: Default Spreads
What a miserable start to the day. Pouring with rain from the off. Hermès screams to be let in before 6am, and I prepare to wipe her paws. She abhors having this done, and usually tries to scratch me, or at the very least hiss. This time she takes one look at the moggy towel, and races upstairs. Just as I expected, I find her sprawled next to her sleeping mistress on the £79.99 swan-patterned Egyptian cotton bedspread we bought from Debenhams two days ago. She has left an elaborate trail of filthy paw marks all over it, and now lies on her side, blinking lazily at me and yawning as if to say: “When the tyrant queen awakes it is you and not I who will be blamed for this. For I am feline royalty, to be pampered and petted. You are a mere serf in my court.”
Eunice is deep in the land of nod, making a noise like a gargling wolverine. I consider the possibility of trying to ease the bedspread from beneath the cat and my wife’s
outstretched hand for some pre-emptive laundering. If those stains dry and can’t be shifted, I know what will happen. I just can’t afford to give Eunice an excuse to buy yet more linen, even if it is to help one of private equity’s greatest buyout failures. If Debenhams doesn’t own its own stores and is up to its eyeballs in debt, I don’t want the Jones family to be involved in a bailout.
Gently, I roll up all the spare material from the bottom of the bed. The cat eyes me suspiciously, and her ears prick up as the bedspread slides around her. Finally, she digs in her claws, stopping all movement. Eunice smacks her lips and rolls over, flinging a mottled arm, with its incipient bingo-wing, over the bedspread. Without heavy lifting gear, all is lost. I grimace at the cat, which yawns dismissively at me. Yes, we both know I am for it.
For solace I pad into Lemon Curdistan and watch as the stock market opens. This is truly depressing. Prices of almost everything I own are down. Even the DotCom fund with my mother is making heavy weather of the current malaise, with Billiton and BG Group both below my purchase price. The nearest to a buoyant stock I own is Domino’s Pizza. Oh well, small mercies.
I wander into the kitchen and put on the kettle. On a whim I have a quick peek in Eunice’s purse. Well, it’s never that quick. You could actually run two hour guided double-decker bus tours around the thing, with explanatory notes in every European language, and still not have seen all the evidence of spending contained therein. However, I do find the Debenhams store card. I then contrive to ‘accidentally lose it’, snipping it into fifty pieces, insert it into an empty Yakult yoghurt pot and drop it into the recycling bin. With the rate they charge on purchases, that act is probably my best investment in months.
Friday 20th June: Gates Departure
So Bill Gates is stepping down from Microsoft to spend more time with his charitable activities. His objective wasn’t just to put a personal computer on every desktop. It was to make us dependent upon the damn thing, and drive us slowly mad with its irritating demands. For example, my own computer has spent the last three days demanding that I download it some security updates. Bugger off, was my reply, do it in your own time. But it kept on, and on, and on, with a pester power that most tots can’t match. Throwing up insistent ‘dialogue boxes’ with choices that would confound Einstein. “The system has encountered a problem. Would you like to close it down immediately and lose every piece of data you have ever inputted? Or would you like to do so tomorrow, with the same result? Or would you prefer to let every cyber-criminal in the former Soviet Union pillage your online banking details?” I chose the fourth alternative. I unplugged the damn thing. I wonder if Gates himself ever had these problems?
Elevenses: Sought solace in the Hornby drawer and discovered my eccles cakes had been removed. In their place was one of those awful green corduroy hand grenades.
“What’s this, then?” I said, taking the offending item out to the Oberkitchenführer. “Where are my cakes?”
“A kiwi is far better for you,” Eunice said flatly. “I put those dreadful sugary heart-stoppers out for the birds.”
“Sod that,” I yelled, and ran into the garden where five sparrows, two blackbirds and a one-eyed crow were squawking on the bird table. In its last moment before take-off, the carrion thief snatched the last half eccles cake in its beak, and fled to the ridge of the O’Riordan’s conservatory. Safely away from me, it cawed in triumph as it gobbled the last of my elevenses. Furious beyond words, I picked up a ceramic garden pixie which some addled aunt bought Eunice in the 1980s, and hurled it at the crow. The crash of glass and some O’Riordan swearing suddenly made me realise something profound. In one creative burst of energy I’d achieved a number of long-term objectives. I’d frightened a crow, got rid of a piece of hideous kitsch and enraged our selfish neighbours.
Chapter Eighteen: Fingers In The Drawer
Tuesday 1st July: Tanfield Plunge
How glad I am that I sold my shares in Tanfield last year, when they were at 120p. I may have missed out at the 200p top (and got lectured by Perfect Peter for not seeing that the trend was my friend) but at least I made a good profit. If I’d stayed with the company after this, relatively mild, profit warning, I’d have lost it all. An 83% fall in one day seems a bit harsh, considering the company has no debt. The company is making more money now than it was when I sold, but supposedly only worth 5p a share. Perhaps it is worth a gamble?
Elevenses: This possibility consumes my thoughts as I gobble a fresh cream slice in the den. Unfortunately, I am caught in a surprise raid on Lemon Curdistan by Special Branch (Confectionary Division). While I try to stuff the evidence back into the Hornby drawer, Eunice leans with surprising speed against the desk, slamming shut the drawer with my fingers trapped agonisingly within.
“Aaargghhh! You’re amputating them, you witch!”
“Then we can pretend we’re in Saudi Arabia, Bernard, can’t we?” she said, only releasing them after a good ten seconds.
“I’ll never type again,” I moaned, holding up my throbbing digits. “Look at them, just look.”
“You’ll live,” she said. “Besides, if I had amputated them you have a good career in shorthand, wouldn’t you?” she tittered. Inside the drawer she found the remains of the fresh cream slice. “Well, well, well. A cardiac arrest in every bite,” she said, prodding the item with a suspicious digit.
“Look, there’s a strawberry slice in it. And a slice of kiwi. That’s one of my five a day.”
“You never give up, do you Bernard?” she said. “Never.”
Wednesday 2nd July: K.P.’s Gamble
Everyone at share club is feeling utterly miserable at share markets that just seem to fall day after day, week after week. However, K.P. Sharma is convinced that we are due a rally.
“You’ve been saying that for weeks,” says Harry Staines. “It’s the middle of the summer, and all the toffs are at Henley or Wimbledon. What makes you think that the markets will bounce? Is that the same insight that brought us that incredible bargain Northern Rock?”
K.P. looks heavenwards. “Are you never going to let go of that, Harry? Don’t you remember all the market knowledge I have brought to this club? Not to mention the use of my laptop.”
“That’s true,” says Martin Gale. “You’re being a bit harsh.”
“Anyway,” says K.P. “Look at these charts. The FTSE 100, and indeed the S&P 500 have bounced off key chart support levels. The stochastics are oversold, and after so many sequential falls prices are due a week or two’s rebound.”
“Okay Mystic Meg, what’s in your crystal ball say about the 4.20pm at Kempton Park? Will it be the favourite, Downtown Boy or should I go with the 50-1 outsider Just Three Legs?” Harry asked.
“This isn’t clairvoyance, it’s about common sense. If buyers came in when the FTSE 100 was at about 5450 on two previous occasions, why won’t they now?”
“Because everything is worse now,” said Chantelle. “House prices are down, no-one can get a mortgage, and the interest rate weapon is paralysed by inflation. Even my dad’s noticed some falling off in scrap metal demand.”
“That may be true, but that expectation was already tied up in prices when we hit this low last time too,” K.P. said. “Anyway, I’m going to be putting my money where my mouth is by buying into the HBOS rights issue.”
“Here we go,” said Harry. “Northern Rock II: Just when you thought it was safe to trust a bank again.”
“No, Harry,” K.P. said. “I’m entitled to about 1500 new shares in the rights issue with my existing holding...”
“Which you must have lost a packet on,” Harry retorted.
“Yes, yes. But these shares are trading in nil paid form now. They’re just tickets of entitlement to a 275p share. If the value of HBOS shares rises, which I think they will, then the nil-paid shares will soar much faster. They’re only trading at 7.5p.”
“Hang on a minute,” I said, looking through the FT. “The HBOS ordinary shares closed last night at 269
p, which is below the price you have to stump up for the new ones. That means the nil paid shares are worthless.”
“Ah, they may be intrinsically worthless, but they do have time value. Like a warrant or call option,” K.P. said. The rest of us looked around in disbelief, and however many times he tried to explain it, we were still baffled.
Thursday 3rd July: Sparks At Marks
Excellent breakfast, reading about Marks & Spencer’s disappointing sales figures. I’ve always thought St Michael over-priced and the quality over-hyped. If I’d timed my attempts at short-selling the shares a little better I’d have made a bit of cash too.
“You seem cheerful, Bernard.” Eunice says, holding down the Telegraph so she can see me over the breakfast table. “Has Alastair Darling introduced tax breaks for model railways?”
“Unfortunately, no. Sir Stuart Rose is getting a good pasting. He saw off a 400p bid offer from Philip Green exactly four years ago, and now the shares are down at 250p. Shareholders must be kicking themselves for not getting the BHS makeover.”
“Oh no, Bernard. British Home Stores is such a dreary store. Besides, I don’t like that Green fellow. He looks so common.”
“Ah yes, just a common billionaire,” I replied.
“Well, it’s common if you’re that rich to go and live in a tax haven like Monaco.”
“Common obviously means sensible then. If I had a billion pounds, I’d live in Antarctica if it meant Gordon Brown couldn’t get his paws on it.”
“Well judging by the state of those BHS slippers you’d not last ten minutes. There’s a hole in the toe and you’d get frostbite. At least with M&S goods you can rely on quality and service.”