≡ Menu

Weekend reading: Brexit enters the terrible twos

Weekend reading logo

My views on Brexit – which are personal and as partisan as yours, so feel free to skip them all – plus the week’s good reads.

Two years after that Referendum result, and according to a survey by the Share Centre, 5% of its customers who voted Remain would now vote Leave.

That is more than double the percentage surveyed who voted Leave but would now switch to Remain. This, despite the whole shebang continuing to be basically the laughing stock of the world (when it’s not showing shades of something much more sinister, such as a anti-democratic power grab disguised as re-enfranchisement).

Still, perhaps that’s not surprising. The Brexit debate has been great for most Briton’s portfolios – I pretty much bought my flat on the back of it – mainly due to the fall in the pound.

International holdings soared in the immediate aftermath of the result, and UK markets soon followed since the big UK listed companies earn the lion’s share of their income overseas.

Most people seemed surprised by this at the time but it was very predictable. Unfortunately (on many levels) I can’t haughtily point you to a Monevator article I wrote before the Referendum pointing that out, as I maintained a no-Brexit discussion policy before the vote.

(It’s truly a shame, because in a convoluted way I lost a friend arguing about the pound in a Brexit scenario in the week before the vote. This isn’t the place to go into why or how it came to that – or what an injustice it is to now be estranged, given that I was urging him not to short the market ahead of the Leave win that he very unusually foresaw – but it’d be nice to at least have a post here as consolation. He may still read the site. Hello S., if so!)

The truth is I believed not bothering to get bogged down in what were already toxic Brexit debates ahead of the vote would be best for this site overall, not least because I thought we’d stay in.

I did think the result would be closer than many of my London friends believed, mainly due to differences in our upbringing I suspect.

However I never really believed a majority of the population would support the asinine case to leave. So I judged it would blow over and we could all stay friends.

Of course that didn’t happen. The country voted Leave, and like most of my ilk I put my head in my hands. I ranted a bit, like everyone, and lost a big chunk of readers who were also Leave voters when we all took sides. In fact, I recently found myself being described on another forum on the Internet as having had a “breakdown” in my first Brexit responses in the weeks that followed, which was an interesting experience.

(Now I know how it feels to be a public figure like Kim Kardashian! Well, perhaps a bit.)

Maybe I did have a bit of a wobbly moment there. However the past two years has only reinforced my feeling that the entire thing is an enormous undertaking – and a colossal waste of time for all but constitutional sticklers – that from an economic perspective could only have negative results1, and that reality was either not understood or willfully ignored by a good cohort of its supporters.

True, the economy has only slowed, not tanked. But otherwise Brexit has dragged on because everyone wants a different Brexit, and any Brexit is a logistical nightmare, let alone one that doesn’t send us into an immediate multi-year recession. (i.e. No deal, hard Brexit, and we’d have been out by now after an immediate triggering of Article 50).

Some of those who don’t read Monevator anymore said in the days after the vote “Get over it, the vote has happened, we need to move on.” I shuddered, because again I saw that they didn’t realize what they’d voted for. Two years on and Brexit is still item one or two on every news broadcast. It will be that way for years more to come.

I’m late to go to one of the restaurants that hasn’t yet been squeezed out of business by the first effects of Brexit, so no time to spell check or sense check this post.

I wanted it to be a bit more diplomatic, but probably there’s still too much snark in it if you did vote Leave. Perhaps that can’t be helped, and I’d feel the same if I read a similar post on your own blog.

At a time when the global temperature is rising, bees are dying, the leader of the Western World has gone rogue, the robots are coming for our (current) jobs, people are 10 years away from fighting land wars for water, and the only people who’ve really got rich from the past 10 years are the richest, I still feel the whole thing is a massive distraction that will solve nothing that really matters.

But fair enough, your mileage may vary.

From Monevator

From the archive-ator: Seven habits of highly successful private investors – Monevator


Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.2

Builder Berkeley hits ‘peak profits’ as it warns of London house slump – Guardian

Trader sues broker after making £9m in a live ‘demo’ account – ThisIsMoney

Inside the bank branch that looks nothing like a bank branch [Search result]FT

St Albans commuters kick at gates amid Thameslink chaos – Guardian

‘No deal’ Brexit would cost UK households £1,000 a year [Search result]FT

Products and services

What makes the investment trust model a winner? [Search result]FT

Travel at peak times on luxury coaches with ‘Uber for coaches’ app Sn-ap – ThisIsMoney

How to unlock cash from your property in retirement – ThisIsMoney

Hedge fund fees fall to a record low [Hey, it’s all relative!]Institutional Investor

How to avoid the pitfalls when buying a home abroad – ThisIsMoney

Nottingham Building Society will be second cash lifetime ISA provider – MoneySavingExpert

Property peer-to-peer lending — is it ever a good idea? [Search result] – FT

Comment and opinion

The original ‘flash crash’ [Liquidity fears did not arrive with ETFs…]A.W.O.C.S.

Not every millennial wants to own their own home – Guardian

[De] material girl – Humble Dollar

Heigh ho, heigh ho – SexHealthMoneyDeath

How the YoungFIGuy invests his money – YoungFIGuy

Early financial freedom: An unobtainable chimera? – Simple Living in Suffolk

Reasons not to invest in the FTSE 100 – The FIREStarter

RIT has put his notice in [Congratulations!]Retirement Investing Today

How long can US stocks beat bonds by such a wide margin? – The Capital Spectator

It ain’t what you don’t know that gets you into trouble [Factors/return premiums]AQR

A real-life SIPP in drawdown: Year 6 update – DIY Investor

Inferring the statistics of Buffett’s alpha – Flirting with models

This is a Golden Age for anyone wanting to start a tech company – Fred Wilson

How active management survives: The conjunction fallacy [Research]SSRN

Kindle book bargains

Rivers of London by Ben Aaronovitch – £0.99 on Kindle

Eye of the storm: 25 years in action with the SAS by Peter Ratcliffe – £0.99 on Kindle

How To Be F*cking Awesome by Dan Meredith – £0.99 on Kindle

Off our beat

Smarter, not harder: How to succeed in work… – Farnham Street

…alternatively: Why you should slack off at work to get some work done – Wired

London is the AI capital of Europe [Puffy PDF, but interesting]London Mayor/CognitionX

Apple sees its future in augmented reality glasses, not iPhone – Above Avalon

UK summer BBQs threatened by a shortage of carbon dioxide – Guardian

And finally…

“Far too many people think that they have an edge, and far too few people have an incentive to tell them otherwise.”
– Lars Kroijer, Investing Demystified

Like these links? Subscribe to get them every Friday!

  1. Again, I reiterate they may only amount to say 0.25% off GDP annually in the long run, but that’s also huge in the long run. And for what? []
  2. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. []

Receive my articles for free in your inbox. Type your email and press submit:

{ 141 comments… add one }
  • 51 Gordon June 23, 2018, 7:05 pm


    So the point you’re making is that the BoE had the economic tools to smooth over any post referendum Brexit jitters? I think we can all agree with that. It’s just a pity that the BoE had to join in the hysterics with the BBC and George Osborne.

    With respect, bremoaners seem really rubbish at identifying with the concerns of the average voter. QE is of little interest to the average voter. Voters are more concerned about getting on the housing ladder/ getting well paid secure work/ getting NHS treatment/ getting their kids in the local school. All these things are made harder for Brits by millions of EU migrants moving to the UK….

    Anyway, you must excuse me. I’m going to take my shotgun out and look for some grey squirrels.

  • 52 Michael Leuty June 23, 2018, 9:51 pm

    Perhaps we can apply our investing acumen to analyse the situation?

    I don’t have an ‘edge’ to tell me what is going to happen, so I am investing passively by holding both UK and world stocks and both UK and an EU-27 nationality. 😉

    We know that people are biased in favour of decisions they have already made, so I expect few Remain and few Leave voters to have changed their minds yet. If the immediate prospects look less than rosy, Leave voters may ascribe this to the intransigence of the EU (which may further commend their decision), Government incompetence, or Remoaners ‘talking down’ the country. Alternatively they may see poor prospects as temporary difficulties before a bright future, or they may see them as sacrifices worth making to retain national autonomy and self-respect.

    I think a major shift in public opinion will only occur if and when things get significantly worse, such as major job losses that are incontrovertably linked to Brexit. Leave voters may say that an economic downturn would not make them change their minds, but that rather depends on how bad things get. An awful lot of people say they can tolerate investment risk but then sell when a bear market gets into its stride.

    One thing we can all agree on is that we live in interesting times and they are absolutely fascinating.

  • 53 Grislybear June 23, 2018, 10:00 pm

    Oh Gordon do be carefull its getting late and the light isnt too good try not to shoot any red squirrels or worse trip over and blow your own head off.

  • 54 Neverland June 23, 2018, 10:18 pm

    “Voters are more concerned about getting on the housing ladder/ getting well paid secure work/ getting NHS treatment/ getting their kids in the local school”
    Being poorer as a country helps with none of these things.

  • 55 Mr Optimistic June 24, 2018, 1:12 am

    @ Neverland. Please stop saying we make things up. We post what we believe and feel. We have just been through a banking crisis. Brexit is a side show. You may not agree but that is no reason to suspect fabrication.

  • 56 britinkiwi June 24, 2018, 2:24 am


    “The Nazi Party won the greatest share of the popular vote in the two Reichstag general elections of 1932, making them the largest party in the legislature by far, but still short of an outright majority. Because none of the parties were willing or able to put together a coalition government, in 1933 Hitler was appointed Chancellor of Germany by President Paul Von Hindenburg, through the support and connivance of traditional conservative nationalists who believed that they could control him and his party. Through the use of emergency presidential decrees by Hindenburg, and a change in the Weimar Constitution which allowed the Cabinet to rule by direct decree, bypassing both Hindenburg and the Reichstag, the Nazis had soon established a one-party state.

    The Sturmabteilung (SA) and the Schutzstaffel (SS) functioned as the paramilitary organizations of the Nazi Party. Using the SS for the task, Hitler purged the party’s more socially and economically radical factions in the mid-1934 Night of the Long Knives, including the leadership of the SA. After the death of President Hindenburg, political power was concentrated in Hitler’s hands and he became Germany’s head of state as well as the head of the government, with the title of Führer, meaning “leader”. From that point, Hitler was effectively the dictator of Nazi Germany, …….”
    From Wikipedia which I know can be somewhat unreliable.

    So, my reading suggests that Hitler was not elected in the sense that Trump was…. but I’d be interested in your thoughts?

    Now we’ve done it and invoked Godwins law!

  • 57 Matthew June 24, 2018, 6:31 am

    In the short term Brexit will let us escape a US-EU trade war. And in the short term there will be some pain in adjusting, more from impractical border checks etc rather than trade barriers I think (as currency swings can be bigger than trade barriers)

    Long term however we can deregulate and will have new trade deals. The EU isn’t that much of the world economy

  • 58 Brod June 24, 2018, 7:08 am


    Post-Brexit the UK will escape the fall-out of an EU-US trade war? Really?!? In the sense of being an irrelevance you mean?

    And “impractical border checks etc rather than trade barriers” – you have heard of just in time manufacturing, haven’t you?

    And you’ve seen how the EU gazumped the UK in a potential trade deal with Australia? Why have a trade deal with 60m people when you can have one with 300m people?

  • 59 The Borderer June 24, 2018, 7:26 am

    This splendid blog is normally enhanced by the high quality of comments.

    But I have to say that I’m terribly disappointed by the level of rancour and downright bad manners the topic of Brexit has brought out.

    Shame on you all.

  • 60 The Borderer June 24, 2018, 7:26 am

    This splendid blog is normally enhanced by the high quality of comments.

    But I have to say that I’m terribly disappointed by the level of rancour and downright bad manners the topic of Brexit has brought out.

    Shame on you.

  • 61 The Borderer June 24, 2018, 7:30 am

    Didn’t mean to post twice. Sorry.

  • 62 Gordon June 24, 2018, 8:25 am

    @neverland. Has the EU made us richer though? Ok, some things like being part of a free trade block are good. However, the EU also puts tariffs on goods like African fruit to support Spanish fruit growers. Does that make Brits “richer”? I’d suggest not…

    Anyway, why would the EU not want a free trade agreement with an independent UK?

    Has Freedom of Movement made Brits richer? Do you think East European “Big Issue” sellers make the UK a wealthier place? They clearly don’t….. The BBC repeatedly reports research from a certain Professor Dustman to prove that EU migrants contribute more than they take out. His research shows that EU migrants contribute £2billion a year more than they take out in benefits. So EU migrants make the average Brit £30 a year better off…. That’s not a lot of money….. However Dustman ignored the costs of the NHS and schooling…. So EU migration makes us poorer…..

    Lord Rose (leader of the remain campaign) even said Brexit would increase wages….

    With the greatest respect to remainers. It honestly seems like you let emotion cloud your judgement regarding the referendum.

  • 63 Malcolm Beaton June 24, 2018, 8:33 am

    Gentlemen-there is a storm coming whatever side you are on!
    As a financial blog we need to hear how to ride it out without being financially destroyed
    Can I ask that we get back to this idea
    I need ideas and thoughts from you all in order to survive
    Looking forward to them

  • 64 Neverland June 24, 2018, 8:43 am


    That’s the way governments typically get elected in democracies where no one has a majority of the seats, eg the recent Spanish and Italian elections

  • 65 Neverland June 24, 2018, 8:47 am


    In 1976 the uk needed to apply to the imf for an emergency loan so that’s how great things were

    Of course North Sea oil helped too

  • 66 ermine June 24, 2018, 9:24 am

    @Malcom Beaton I too would be interested in how to batten down the hatches. Some is probably general good sense, like shifting into foreign assets. But it’s probably not the only thing you can do, and it lacks detail. I’ve read a reasonable amount of Brexit-supporting material, and even these often expect serious adjustment pains.

    @Neverland > Being poorer as a country helps with none of these things.

    I am able to follow Gordon’s argument, which is that being poorer as a country is usually determined by GDP. If his case that you need to be earning £30k or more to be tax/benefit neutral, then it is perfectly possible that a country with a higher GDP (because of low-value-job immigration raising economic activity) may have a poorer lived experience for non-migrants, there isn’t the tax revenue to supply the extra hospitals, schools, jobs. The New Scientist gagdetmind posted very definitely supported his Remain thesis on migration, but the side effects are terrifying – to wit

    She blames an increasing loss of cohesion in society due to “individualising” forces from mass media to the structure of work. As people rely more on their own resources, they have a longing for community. The presence of foreigners appears to disrupt this, creating a “desire to control differences”

    I don’t want to live in a richer country which is at civil war. There are genuine problems with EU freedom of movement in some, possibly many communities. I haven’t lived in any, so I didn’t see that. It would be helpful if we’d tried to analyse this issue and address it instead of just calling it racism/xenophobia.

  • 67 Matthew June 24, 2018, 9:26 am


    Disruption to supply lines for just in time is part of that short term pain, although they have had 2 years to come up with a plan b – ie local suppliers, storage, etc.
    Long term deregulation should help

    And if we were tied with the eu we would then face trump’s tarrifs, alone we can be on good terms with everyone

    We won’t always be the first to make deals, it will take time, just give it time to happen

  • 68 Tony June 24, 2018, 9:31 am

    There hasn’t been a material shift in public opinion because as per posts 5 and 18, it was fundamentally about identity for many. For them being poorer is worth it or they believed/hope we’d be better off (despite the pound immediately tanked on holiday) or they didn’t follow the economics or considered it project Fear. I don’t blame such people. They were misled.
    In other EU countries, people see themselves as both a national of their state and an EU citizen. Not so in England. Theresa May gave a speech saying how Brits were never comfortable with being in the EU. Sadly, she was right. It’s the historical Island separation from the continent.
    Migration was linked to these identity issues. Free movement, fine for 40 years, became seen as uncontrolled migration from Eastern Europe. Even in Wales where there was little. And a belief this drove down wages. Fear of loss of and a lack of national identity, linked to immigration and increasing political correctness, led to a desire to assert “We’re British, not European.” Hence the huge proportion of pensioners voting leave. These are important issues. However, Brexit isn’t going to do anything to reduce net migration in practice nor to address the national identity issues in the UK.

  • 69 Neverland June 24, 2018, 10:15 am


    All of the individualising policies you are talking about are the subject of national government policy. Even immigration. There was even a five year migration brake on offer from the EU on the E8 accession. The UK government chose not to take it.

    Rich or poor the uk is still divided; Scotland; Northern Ireland; sooth vs north england

  • 70 zxspectrum48k June 24, 2018, 11:01 am

    The problem with the Brexiteer view is that it won’t deliver what they want. The idea that leaving the EU will mean you get on the housing ladder, find well paid secure work, get better NHS treatment, get your children into a good local school is just a fantasy.

    The basic problem is that the nation state, as it was formulated in the 20th century, is totally obsolete and unable to provide the above demands from the population. As obsolete as the state-nation became in the 19th century or feudal states became post the Treaty of Westphalia. Take “secure well paid jobs”. These are just a thing of the past for 99% of the population. The basic issue is that a homo sapien in the UK now has virtually zero competitive advantage over a homo sapien in India. You can cut migration but instead companies will simply offshore or automate. Given our demographics, the tax base will drop 25% over the next 15-20 years, so without migration, who is going to pay for the NHS or good schools? Our standard of living will simply need to drop (at least in relative terms, perhaps not in absolute terms).

    Worse, the Brexiteers seem to think “they are taking back control”. Well, somebody might be taking back control but it won’t be them. At the extremes, people were voting for choice between being ruled by a supranational bureaucratic machine or a bunch of Brexit ultras, sort of transatlantic Ayn Randian acolytes. Both see 99% of the population as cattle. It’s just that the EU bureaucrats are happy to simply milk you, while the Ayn Rand acolytes plan on slaughtering you.

  • 71 Andrew June 24, 2018, 11:36 am

    This is hysterical. You all need to get a grip.

  • 72 Factor June 24, 2018, 11:51 am

    Children please stop squabbling! Dad voted Remain but they lost – so he will adapt intelligently to whatever transpires, and right now he just wants to be able to enjoy (hopefully) watching England v Panama.

  • 73 Jim Brown June 24, 2018, 12:00 pm

    It would appear that the downside risks of leaving outweigh the upside risks.

    If we leave without a suitable deal or do deal ,these downside risks will be significantly greater than the upsides.

    We cannot afford to cut off our nose to spite our face. Yes there are issues with the EU, but from my vantage point brexit is more likely to make us worst off .

    I do hope we can leave with a good deal and without much disruption, Leave won and we have to respect that . Hopefully all political parties can work together in the best interest of the nation and ensure a success of brexit

  • 74 Gordon June 24, 2018, 12:03 pm


    “without migration, who is going to pay for the NHS or good schools? Our standard of living will simply need to drop”

    Remainers make this argument all the time. However I’ve not actually seen any evidence* that migrants are net contributors to the taxpayer. Do you have any peer reviewed research that shows migrants are net contributors to the taxpayer?

    I walk along my local high street. I see the East European “Big Issue” sellers, I see the numerous Turkish barber shops, I see the Thai nail bars, I see the Pakistani UBER drivers, I see the ethnic takeaway shops. I seriously doubt they pay more in tax than they contribute…..

    * Apart from the biased research the BBC cites.

  • 75 zxspectrum48k June 24, 2018, 2:14 pm

    Gordon. Nearly all research I’ve seen tends to imply that the average EU migrant (whether EU15 or A10) is a net contributor (see for example https://www.ft.com/content/c49043a8-6447-11e4-b219-00144feabdc0). They are also better qualified and more highly skilled than the average UK person. The UK, compared to the rest of the EU, has been very good at attracting the highly qualified. The evidence from non-EU migration is far less clear. It may well be this is a net cost in purely fiscal terms though it may be argued that in some areas we need those skills.

    Is a purely fiscal measure, however, the correct metric to understand someone’s value? Given that we tend to run a fiscal deficit then it follows that the average UK person is a net cost and that they take out more than they put in. Do we throw out all of those people aswell? The reality is that it is not immigration that is causing issues with wage levels or unemployment (http://cep.lse.ac.uk/pubs/download/EA019.pdf, page 8 and 9 show a zero correlation). Technology tends to commoditize and human labour is no different. We have entered a post-scarcity era for human labour and wage levels will continue to fall. Underemployment will be the norm. We need to stop thinking in terms of whether people are net contributors since the majority of the population will be net takers. Time for UBI, UBS etc and to stop seeing a job as the be all for human worth. It’s back to bread and circuses for most of the population (albeit virtual circuses probably).

  • 76 Jim Brown June 24, 2018, 4:19 pm


    Have you been to hospital lately , or in care home or in a lab doing research? You will find in all of those lots of migrants from EU and across the commonwealth.

    I know you are focusing on the low hanging fruits , taxi drivers, west indians barbers etc , you have been selectively disingenuous.

    The NHS would collapsed without migrants also lots of the biomedical research and engineering .

  • 77 Grislybear June 24, 2018, 5:59 pm

    @Gordon You walk along your high street and see Turkish barber shops, Thai nail bars, ethnic food takeaway shops and you wonder how much tax they pay and what their contribute.
    Im sure there is a Spanish citizen in one of the numerous Costas walking past mile after mile of “June and Georges takeway” , “British Bar showing faulty towers” etc. all staffed by UK migrants. I bet he is wondering after they pay for imported HP sauce and send their kids to the local school use subsidised local transport how much tax they really pay and what theu contribute to Spain.

    wondering the same thing ad he/she

  • 78 Gordon June 24, 2018, 9:38 pm


    OK, you cite research from Professor Dustmann that says EU migrants paid an extra £20 billion in tax than they received in benefits from 2000 to 2011. That’s £2billion a year… It’s not a lot…. £30 a year for each person in the UK….. It’s hardly gong to pay the pensions for Brits that Remainers repeatedly claim they will do….

    However I’ve already mentioned why Professor Dustmann’s research should be discounted in post 62…. He didn’t include the cost of the NHS and schools etc. He didn’t include the costs of Brits being put out of work by EU migrants. He didn’t include things like the cost of congestion. He didn’t include the cost of pensions as the migrants got older.

    During the Brexit debate I actually done my own research to see who I could trust. I find it exceedingly disappointing that Remainers still cite the same flawed research that I judged as being poor.

    Does anyone remember back in 2003 the newspapers quoted research saying that there would only be 13,000 EU migrants coming to the UK? The research was from Professor Dustmann….

  • 79 Scrooge June 25, 2018, 1:18 am

    We could rehash the referendum arguments ad infinitum, however unless the government falls or some mechanism is passed through Parliament for another referendum are we not wasting our breath?

    It seems parliament is as split and diverse as the body politic, so much for a “Brexit that works for everyone”.

    As someone who voted remain for economic reasons I hope some compromise is arrived at like Efta/EEA+, as a manufacturing business we carried out the risk assessment for our one UK site and it looks bleak for them if tarriffs apply, excepting non-trade barriers….we’re fortunate that we’re a low volume/high value OEM manufacturer in a niche market…..

    Personally? I am considering how best to arrange my portfolio to protect it from the risks of the various forms of brexit that might occur.

    All cash to be put into a usd nominated global short term bond fund, otherwise maintain the globally diversified funds Vanguard already provide (24% UK). I’m already heavily oriented to gbp through my day job (income) and home ownership (asset).

    I’m prepared to take a hit if things turn out better than the worse case scenario

    I’m waiting for Vanguard to open their pension platform later this year so we can move Mrs Scrooge’s crapita pension (would you believe the available equity fund is only UK!) into a globally diversified fund.

  • 80 Scrooge June 25, 2018, 2:42 am


    Btw I quite like my local Turkish Barbers, particularly the ear hair by meths removal they do – highlight of the experience!

    To paraphrase colonel Kilgore ‘I love the smell of burning ear hair in the morning’

    Last time I was there they informed me they were off to London to vote against Erdogan, unfortunately looks like they are to be disappointed.

    I expect you don’t know any foreigners who are living here, if you did you might not see them as mere £ signs in your fiscal balance sheet.


    Ps my cousin is married to a Romanian, she’s a finance director….I suspect she pays more tax than your sums suggest….

  • 81 Mathmo June 25, 2018, 9:22 am

    I was going to post about how fascinating it is to read YoungFIGuy’s post on asset and fund allocations (appreciate my views have not always been favourable of this particular blogger), but a dozen posts below the Godwin Line in the comments is never going to get a lot of traction.

    It’s quite similar to my allocations on two of the portfolios that I run, although more aggressive on the allocation and it raises many questions that I’ve been pondering about my portfolio:-
    — why not just lump-in on a balanced fund and have a quiet life (my answer so far is fees, but I suspect it is mostly to give Mr Tinker free reign)
    — why 10yr gilts and not a wider class of bonds? The role is to preserve wealth in an equity downturn, so why not international bonds if we are to buy international gilts? Or is “wealth” purely measured in GBP? How does inflation / interest / currency risk affect this. Hmmm. At 10%, it barely makes any difference, but I have more dry powder.
    — Why consider cash/property etc outside of investment portfolio rather than a total balance sheet approach? It’s part of FI. Separate because of liquidity? I have settled on a balance sheet view as well as a liquid rebalancable portfolio.
    — Home tilt. Never really got myself comfortable with my home tilt with the FTSE100 being what it is – and on the whole it’s been a bad bet, too. 250 and AIM are interesting (AIM doubly so for IHT hounds). But there’s some nagging reason that home markets might not do so well internationally over the next few years. Can’t remember what it is, though.
    — Will any of us who have lived through this last ridiculous period since 2008 have the nerve to buy? The returns graph looks remarkably like the S&P return graph because — well that’s a large chunk of the driver — and it’s been the golden decade of passive investing. Volitility and fees are dead. A remarkable 10 year bet. What’s next?

  • 82 AAJ June 25, 2018, 10:11 am

    If there is no great swing in prosperity, some remain voters may begin to think it’s OK and move to the leave camp and some of the leave voters will die off, leaving a pretty neutral position. Personally, I’d expect a similar result if there was a fresh vote.

    My personal regrets are not keeping my eye on the ball and investing for a leave vote. The leave vote cost me money, simply because I thought the polls were correct and people would be too scared to vote leave.

    I need to be more focused on how the politics will affect my money/investments. Right now, I’m wondering how interest rates (US and UK) will affect the markets. This is a long term theme change. Brexit may cause short term volatility, but I’m not very good as short term decisions, only long term trends.

  • 83 Fremantle June 25, 2018, 10:40 am

    Leave, Remain, I don’t care, but for the love of God, please spell “asinine” correctly…

    /pedant off

  • 84 Matthew June 25, 2018, 11:14 am

    Aaj – you can’t second guess things unless you have insider knowledge, just buy & hold and index through it all

  • 85 AAJ June 25, 2018, 12:21 pm

    Matthew – I don’t invest in index trackers, due to (maybe laziness) not being able to find trackers that track any index that I want in invest in. I am happy with that decision. However, I feel uncomfortable investing at a set time each month, investing a set amount into sectors I have a good degree of faith will not perform over the short timeframe.

    Investing is all about making an estimate that markets will rise over the long term. There always a degree of choice if you want it. Markets are changing and are always changing. I didn’t need insider knowledge to realise the Trump trade spat with China would have a short term effect on China stocks. I don’t need insider knowledge to know raising interest rate will put pressure on bond yields. Maybe people here realised Brexit would affect the price of the £ and the stock market and maybe these people made money from it. I did nothing (I was busy with other things) and lost out.

  • 86 Fremantle June 25, 2018, 12:27 pm


    Most people who benefited from the Brexit £ slide and Trump shenanigans were also busy off doing other things and simply following some version of modern portfolio theory, diversified asset allocation, allocating their monthly pension contributions to a mixture of bonds and equity. Even the most expensive managed fund benefited from these events.

  • 87 ermine June 25, 2018, 12:38 pm

    @AAJ what were you invested in? I did nothing too, other than buy a hunk of gold ETFs a bit before the vote, and while I can grouse about the way the Brexit vote damaged the future value of my DB pension and cash I have absolutely no complaints about its effect on my equity portfolio, other than that the nominal increase isn’t real, it reflects the fall in the £. But as a way of sheltering from the localised storm and the economic nonchalance of my fellow citizens, a roughly MCSI World portfolio did pretty much what Lars Kroijer said it would do

  • 88 Matthew June 25, 2018, 2:01 pm

    Aaj – the perceived probabilities of those things happening is already priced in, such that it’s hard to find a mispriced probability that you can trade on, so hard in fact that you’re more likely to miss out over fear.

    I.e . Bonds might not make sense at that price for you (or me) but they have underlying demand from institutional investors who are forced to buy them, so although they might suffer in a rate rise they won’t fall off a cliff completely

  • 89 The Investor June 25, 2018, 2:29 pm

    Just quickly before I get buried in the Brexit mire, re: Hans Rosling etc, I do agree the world is getting better for more humans across the world in most ways EXCEPT environmental. I see little evidence for that except some minor landmark extinction avoidance (the odd New Zealand parrot, blue wales etc). Reforestation is happening too slowly and it’s anyway typically the wrong kind of forest from a biodiversity point of view, certainly not sufficient to replace primary rainforest in Brazil or Tasmanian ancient hardwood stands.

    I fear what we’re seeing environmentally (bees, plastics, temperature, ocean acidification, a massive biodiversity extinction) is probably the tip of the diminishing iceberg, and that this will become ever more apparent in ways that affect our lives, and certainly our enjoyment of life on Earth in the West (a subsistence farmer in a super-poor country lifted out of poverty by getting a job at a miner or a petrochemical company may understandably have a different view on the utility of a world with environmental abundance).

    It’s hard to hedge against, too, which is why I think it’s one of the greatest threats to your personal wealth:


    Moving on to the B-word, two years in and having read around, and I now believe Brexit was voted for primarily as the wrong solution to some real and some other imagined problems.

    It’s true it’s highlighted emerging social divisions that were perhaps ignored before, as well as economic frailties and insecurities. But Brexit won’t help most of them.

    I see no economic case for Brexit on a national level. The economics of free trade are pretty well-established over the past 500 years. That’s why I guess Remain voters of my ilk focused on the economy.

    The other side of this argument — we’ll build our own cars again, we’ll have proper English barbers instead of foreigners, and fewer Big Issue sales people will be draining the NHS — are akin to active managers saying trackers are all very well for lazy/stupid people, but smart funds can beat the market because they work harder, and by the way you deserve one because you’re special, too.

    There’s no data or evidence or theory that can support it, but it appeals to a certain way of thinking so people vote for it.

    I actually find anyone who says “I voted Brexit because I want fewer foreign accents on my High Street” or worse actually a lot easier to understand and have intellectual sympathy for (not agree with/side with!) than superstitious arguments about economics. Although as has again been pointed out a thousand times, we had ways to restrict the big wave of EU migration (c.2003/2004) that we didn’t take, and we had (/have) ways to curb ex-EU migration that we didn’t take (and presumably won’t after Brexit, too).

    I did think the economy would slow pretty hard on a Leave win — much more than it did at first — and while that was wrong for a bit, it now looks like it was directionally right. It seems to have taken triggering Article 50 to, well, trigger it. Uncertainty is one reason I expected a short-term hit, which is now playing out.

    I think there was also a bit of disbelief among the infamous metropolitan elite / higher echelons of business that they’d ever have to go through with coping with the reality of Brexit — that it would be reversed. As reality has sunk in they’ve started to make the decisions or halt the projects, which at the margin is having an impact. But anyway my economic fears about Brexit wasn’t for a short hit, it’s the IMHO absolute certainty long-term drag of less favourable terms of trade forever. Compound that for 20 years and we may be able to estimate what impact it’s had in GDP terms.

    GDP isn’t everything, but I’m not holding my breath on the grievances of many Leave voters being addressed — because many of their beefs (pretty much all except the sovereignty argument) are evident in countries as far apart in every sense as the US, Brazil, and China.

    (As ever it’s hard to talk about Leave voters when one is an unemployed 60 year old ex-miner in the North and the other is a ultra-free-trade supporting hedge fund manager in London and the third is a racist housewife and they all get offended if you allude to the fact that not everyone Leave voted Leave the way they did.)

    Similarly, I’m sure it felt great to “thumb your nose” (or worse! 😉 ) at the establishment in late June 2016, but as an amateur student of history I’ve seen that happen many times in the past. While people probably won’t wake up to see their homes burned to the ground, the Earth salted, and their leaders paraded through the streets in manacles, the metaphorical chickens will come home to roost I fear, in lower national wealth, more economic insecurity, worse health outcomes than we would otherwise have seen, and so on.

    What about the “they came over here and took our democracy” argument?

    Well I don’t think in pure terms of being responsible for a nation’s political decisions one can credibly argue that you have more power when you need to win a coalition decision with a couple of dozen states rather than less, so even though the EU is democratically elected and accountable, I understand the sovereignty argument.

    But real democratic power — especially for the average voter — is about more than that. The EU was a bulkwark against anti-democratic forces, as well as arguably a contributor to them. When we’re *taking* rules from the EU to continue trading whilst seeing our national politics oscillating between a more big business / fewer regulations Tory party and a more trade union and over-tax-and-spend Labour party whilst scrabbling around trying to make up the difference from the extra costs of trading with our largest market, we’ll have plenty of time to reflect on how much more in-control we each feel individually. Let alone if we fancy living or working abroad for a bit in Europe and find we’re back to second-class status with fewer rights and certainties.

    I still see few Leave voters grasping why Free Movement exists, incidentally. It’s in large part to avoid a race-to-the-bottom scramble where a country exploits some of the benefits of EU membership for its own populace while denying it to others.

    I concede the refugee crisis has made this a more difficult issue. Brexit isn’t a solution to that really, certainly not any wide sense than pure self-interest and possibly not even there. (Are we going to sink boats and children if the next step is a hop from France to Brexit Britain for mass migrants? Some would support it but good luck getting 52% on your side. Clearly we need pan-national solutions.)

    The timing of Peak Refugee Crisis was certainly diabolical from a Remain supporter’s perspective. (I notice we rarely hear about it now? I wonder why…)

    In a similar concession, I personally regret the “ever closer political union” line from the EU. And I’m not a great fan of the Euro, which is really the flipside of the same coin (they drive each other). But we weren’t in the Euro so had a glorious immunity to most of those issues. (If the Euro collapses the UK will still be massively hit by the fall out, Brexit or no Brexit).

    These as I’ve said many times before would get me to about 30% support for Leave, 70% for Remain, when I sum up the ledger.

    It’s true the Remain argument is technocratic. But I pretty much see the Leave argument as faith-based. Half the world believes in unseen higher forces without any evidence at all and they believe in a thousand versions of those deities so perhaps I shouldn’t have been so surprised when regional voters directly assisted by the EU are told a Polish plumber has made them poorer despite almost all evidence, and by the way we can Take Back Control in a way that will see them personally only further disenfranchised as far as I can tell.

    If the Leave case was “Vote out of Europe — we’ll be poorer as a nation forever and we’ll be less powerful on the global stage, more vulnerable to economic forces, and have less money to spend on state services, but at least our MPs will be the only ones who decide where the money is spent” then at least that would have been honest.

    In terms of what to do about it personally, as most of our portfolios have demonstrated over the past couple of years being globally diversified covers most of the bases. (The snag being it’s hard to globally diversify your house or your job).

    Discussing it specifically here more than that, as some have suggested, would in practice mean continual Brexit debates, which I prefer to quarantine into quarterly/six-monthly opinion purges like this one. 🙂

    Taking specific steps because you think you know better than the market’s current best pricing is also much more active than this blog’s core message.

    For instance, continually taking a view (/having a wild guess on the pound) as Brexit milestones pass is easy to shout about in hindsight, but difficult and counter-intuitive in practice. As an active investor I’ve been thinking with the £ at the back of my head for 30 months now having never previously thought about it much at all as a stock picker. It’s extra tiring, and I doubt it has added any value beyond some windfall luck (I mean compared to just accepting what the market gives and takes away on the currency side of a globally diversified portfolio. Obviously as I said above I like nearly everyone else around here benefited massively from the £’s fall in investment terms measured in Sterling).

    Using more hedged equity share classes and accepting you won’t be totally right but not totally wrong either is a saner way to go about life:


    (Re: @Mathmo’s international bonds, incidentally, the trouble there is low returns being outweighed by currency risk (which isn’t such a big deal with equities over a long enough time horizon) so you need to hedge, which may bring in other problems, such as costs and tracking error.)

    Finally, I think having a hard Plan B is worth citizens of almost any nation considering in these anti-intellectual and increasingly belligerent political times we live in and are the vanguard of as a nation. Even though I think (hope?) it won’t come to that.

    I have one, but it’s outside of the remit of this blog and will be personal to each reader.

  • 90 The Investor June 25, 2018, 2:36 pm

    p.s. Sorry, I messed up the migrant bit in all the wordage. Fixed now! 🙂

  • 91 The Investor June 25, 2018, 4:03 pm

    p.p.s. I also just realized that most of my comment — like most of the others in this thread — could have been written two years ago. Which, as some alluded to here, isn’t encouraging or particularly constructive.

    That said it’s also where as I Remain voter feel no need to concede an inch. The implementation/vision of Brexit post the Referendum has been a shambles, revealing what many of us suspected about the project.

    Inevitable then, perhaps, but it does mean there’s almost nothing substantive to discuss unless we get into the realms of the woeful machinations at Westminister (“Taking back control” indeed), the fantasy flip-flop rhetoric, or the populism and the papers, which is even further from the subjective of this website.

    Perhaps the next time to post on the subject is when we have something concrete to assess.

  • 92 Gordon June 25, 2018, 5:41 pm


    It’s the remain side of the argument that have again and again and again said that we need migrants to pay for the NHS and pensions. Before the Brexit referendum it was the Remainers that dehumanised migrants and talked as if they were cash cows for the taxpayer….

    I’m just pointing out that there is no evidence that shows migrants make any more than a tiny net contribution to the taxpayer (obviously they are negative contributors by the time you include the NHS etc).

    I don’t understand what point you’re making about your Romanian sister in law being a finance director. Is it some kind of ironic joke? Or do you really think millions of migrants are OK because you know one that is a net tax contributor?

    I could argue that active funds are worth the management fees because some beat the index 😉

    PS I work in an office full of EU nationals. Just because I don’t think EU immigration has been good for Brits it doesn’t mean I don’t like Europeans…

  • 93 PF June 25, 2018, 6:18 pm

    “I work in an office full of EU nationals. Just because I don’t think EU immigration has been good for Brits it doesn’t mean I don’t like Europeans…”

    Well, you can test that theory by asking your colleagues how your point of view comes across to them.

  • 94 Matthew June 25, 2018, 7:22 pm

    It’s just a case of wanting to eliminate competition in the labour market, it’s respecting that EU nationals generally are good workers who have to slave away to pay rent, and it’s also protectionism for your kids jobs – globalisation can feel a very one way thing when labour flows one way for such a long time

  • 95 Gordon June 25, 2018, 8:13 pm


    “Well you can test that theory by asking your colleagues how your point of view comes across to them.”

    I could do that. I could maybe also ask them why many EU countries don’t want migrants? Maybe you should do some research on President Orban?

    I’ve got an interesting fact for all you Remainers. Each MEP represents a different number of people. In the UK an MEP represents circa 800,000 people. A MEP in Malta represents about 50,000 people. How is that democratic or fair? The population of the U.K. Is about 15 times bigger than Ireland’s. Yet we only have 6 times as many MEPs. Is that fair?

    However before the referendum we all did our research and found these things out? Surely we didn’t solely believe the propaganda pushed out by the BBC?

  • 96 Neverland June 25, 2018, 9:31 pm


    “PS I work in an office full of EU nationals.’

    …and there was me thinking Russian troll-farms just employed Russians o.O

    Any more random statistics you care to make up?

  • 97 The Investor June 25, 2018, 10:20 pm

    Can we please (all sides) keep this civil. Cheers!

  • 98 Gordon June 25, 2018, 10:32 pm


    You think I’m a “Russian Troll”? Seriously?

    I feel sorry that this is the level of debate from the remain side of the argument.

    Cost of NHS per year is £130 billion.
    Cost of welfare state per year £260 billion.

    Net contribution from EU migrants (from 2001 to 2011) £2 billion a year.

    Even using your wildly optimistic figures shows that EU migrants make virtually no real contribution for paying our pensions and for the NHS….

    Remember folks, one of the main arguments from Remainers is that we need to stay in the EU because “EU migrants pay our pensions”!!!!!!! The facts just don’t support that fairy tale!

    I think a lot of Remainers should be contacting their old schools/ universities and asking for a refund.

  • 99 S June 25, 2018, 10:43 pm

    Thanks. I’m one of these EU Nationals (probably not in Gordon’s office).
    You’re obviously entitled to your opinion. Which differs from mine and that’s OK. But you can probably agree that your European colleagues might not be that happy about being used to somehow make your point against the very arrangement that allowed them to come to the UK. I don’t know. Maybe they don’t mind. But that’s the point – no need assuming they would really want to be mentioned here. I certainly wouldn’t.

    Also, I find that calling people Russian trolls is not really helping the discussion. The term is by now evolving into somewhat of a second Godwin’s law.

  • 100 Wephway June 25, 2018, 11:09 pm

    Gordon, I don’t think there are many Remainers saying we need to stay in the EU so immigrants can pay our pensions, that is a straw man argument if ever I heard one.

    I also think you’re misreading the statistics. Immigrants make a net fiscal contribution, that means they pay more in taxes than they receive in services, and those services include their use of the NHS, schools, etc. Generally speaking, the working age population (British and non-British) makes a positive fiscal contribution, while the very young and the very old make a negative fiscal contribution, because obviously they receive a lot more in services than they pay in tax. The immigrant population is largely of working age, hence the positive contribution.

    In any case, it’s a bit of a moot argument. EU immigration could have been massively reduced by successive governments before the referendum and it wasn’t. You can hardly blame the EU for UK govt policy.

Leave a Comment