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5 points from Gillen Markets Talk

I just listened to a very informative webinar which Gillen Markets ran earlier. Here are 5 points i got from it. Please note i was just taking some quick notes and therefore NOT everything will be 100% accurate but just to give you the general gist of what they were saying.

1. Gold - they are not as keen on gold as some of our smart money series webinar speakers are. They believe that it’s expensive in relation to inflation. They said that if hedging against inflation it’s already well ahead of inflation and don’t recommend going in big. They said it’s an expensive non yield hedge but they still suggests a small allocation.

2. Currencies - they cited in terms of euro versus sterling and euro versus dollar, there’s no particularly exciting news here and they believe they’ll stay broadly the same. The US has endured similar circumstances and monetary policies to Europe. In terms of sterling versus the euro, they believe Brexit is already fairly well priced in and that the bulk of weakening happened in weeks after Brexit vote. They think further of negative news regarding Brexit would have a fairly subdued impact on the currency.

3. Investment trusts versus ETF’s: Investment trust are taxed like a share, you can avail of capital losses under CGT. If they pay a dividend it’ll be paid under your existing tax rate. ETF’s are taxed either after 8 years or when you sell the fund. They are 41% tax and not applicable to CGT. If you happen to have large capital losses i.e if like a family member you bought into One51 or bought into the basket case that Aryzta turned into, investment trusts could be beneficial to offset these losses against any gains you may have from the investment trust. Whereas with the ETF if you made a big gain you wouldn’t be able to offset it against a previous loss.

4. Buffett - like me (which doesn’t really mean anything as i’m very much a novice!) if you still believe in the sage of Omaha, Gillen Markets suggest that there are a number of factors which have led to him getting a hard time recently. However they believe Buffet’s Berkshire have a strong management team and balance sheet and that you can’t ignore their previous sustained exceptionally strong growth. Their decline (if you’d call it that) has only really been over the last 18-24 months. Insurance is an industry in which he has a reasonably large portion of investment in and it hasn’t had the share price growth of the tech growth stocks of recent times. Some people were alarmed that he had cited that he didn’t know in answer to a lot of questions at the recent AGM, however they wisely suggest that it was a very uncertain time and no-one really knew what was happening at this time. In terms of his sell off of US Airline stocks, they suggest that doesn’t necessarily mean one must be alarmed re: all euro airline stocks as they US is quite a different set-up with heavy consolidation.

5. US Stocks: It’s all about technology, FAAAMN ( I may have butchered the abbreviation, apologies) have massively outperformed the rest of the US stock market. When you strip out these stocks the US stock market hasn’t really outperformed the rest of the market. The large US tech stocks P/E while high are for the most part, not in bubble territory they believe.

Just to reiterate, they had a large disclaimer at the start and wisely recommend you to do your own research as well, these are not recommendations and i was typing furiously so it doesn’t mean i got it all down 100%! Worth checking out some of their articles on site here or their founder Rory Gillen regularly writes in the Sunday Times Business section.

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