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DAVID BUIK: Investors’ love of technology is here to stay

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david buik investors love of technology is here to stay
Technology has come a long way and returns have stacked up for investors in recent years, but the story of tech is littered with losses too

Technology has come a long way and returns have stacked up for investors in recent years, but the story of tech is littered with losses too

It seems as if investors’ love of technology has been with us almost since Noah left the Ark. Of course, this is not quite the case.

I remember my first employer, Philip, Hill, Higginson, Erlangers buying a De La Rue ‘Bull’ computer in 1962 that took up an entire room.

All it seemed to do was spew out endless reams of paper that would have sorted out any unemployment issues in forestry.

I suspect the world at large really started to pay attention to technology, when challenged by five issues.

Firstly, there was the invention of the world wide web, to be known as the internet, by Sir Tim Berners-Lee in 1983.

Secondly, at about that time Shiva Ayyadurai’s place in history was guaranteed as the inventor of the email system, though some still believe that Ray Tomlinson was the originator back in 1971.

Then, thirdly, the first mobile phone was invented by Motorola back in 1973. Even when Nokia, Ericsson and others developed their popularity, they were heinously expensive. I remember having one installed in my car in 1986. It was a proverbial brick, costing £1,000!

Then there was the most influential contributor in Microsoft, the software titan formed by Bill Gates and others in 1975.

Finally, the Blackberry, patented by Research in Motion in 1984 triggered the eventual expansion of the smartphone as we know it today, with Apple very much in the vanguard and Samsung and Google providing aggressive competition.

This also fuelled the value of mobile phone operators around the world.

Tim Berners-Lee, the inventor of the world wide web

Tim Berners-Lee, the inventor of the world wide web

In the run-up to the turn of the 20th century, tech stocks of all shapes and sizes built around laptops, chips, software, security, defense and mobile operators started to make gargantuan gains.

It was the vogue sector. Companies came to the NASDAQ in the US on a wing and a prayer, with valuations bearing little resemblance to reality.

These tech stocks headed off into the stratosphere, between 1997 and 2000. Valuations could not be sustained and by the end of September 2002, the NASDAQ had surrendered 75 per cent of its value since the turn of the century.

Companies in the US including Worldcom, NorthPoint Communications and Global Crossing bit the dust, losing shareholders billions of dollars.

Remember Bernie Ebbers the founder of Worldcom, found guilty of fraudulent behaviour? He was sentenced to 25 years in 2005 and died in the penitentiary after 13 years in 2018.

Denis Kozlowski of Tyco was imprisoned for nine years until 2014 for taking an unauthorised bonus of $81 million.

The likes of Apple, Amazon, and Cisco racked up huge losses at the turn of the century. How spectacularly they have recovered their poise in the past 20 years beggar belief.

Steve Jobs presents the iPhone to the world

The iPhone 11 puts huge computing power in people's pockets

When Steve Jobs presented the iPhone to the world (left) people did not quite comprehend how transformative smartphones would be, or how powerful as with the iPhone 11 (right)

We have recently seen quite a marked sell-off of the NASDAQ during September 2020. From its 2 September peak to the wobble’s low three weeks later, this tech index shed almost 12 per cent before regaining some ground. 

However, for as long as ‘semi-lockdown’ continues to leave its global footprint, demand for technology may well gather even more momentum.

Many investors believe that there is unlikely to be a similar sell-off to that that took place in 2000/02, but that is not to say there will not be corrections.

Regulatory controls and corporate governance have significantly improved in recent years, which should help to prevent market disarray.

The fact that Amazon, Alphabet, Facebook, Microsoft, and Apple all lost a chunk of value last month will not have escaped investors’ notice.

The Nasdaq has posted string gains this year, rebounding from the coronavirus crash - but it had a September wobble

The Nasdaq has posted string gains this year, rebounding from the coronavirus crash – but it had a September wobble

Investors continue to pay a disproportionate premium for tech stocks, which led to an all-time record for the NASDAQ being achieved at the beginning of September. 

While technology continues to play an increasingly important role in everyday life, which has been highlighted through the pandemic lockdown, ludicrous P/E ratios of up to 75x earnings in places, which look too rich for many peoples’ blood, may continue to be tolerated.

Just look at the performance of Snowflake’s phenomenal IPO, which saw its shares more than double in value on its first day of trading, bringing the company’s valuation to $65billion. The appetite for the right stocks is still there.

Here in the UK, the arrival, demise or acquisition of the likes of Durlacher, Freeserve, Bookham Technology, Psion, Baltimore, Thus, Logica, Kingston Communications, Kewell Systems, Invensys snd Autonomy at the turn of the last century really only goes to show how relatively unsuccessful the UK was in this field at the time. 

Just 15 years, the Blackberry was considered indispensable cutting edge technology

Just 15 years, the Blackberry was considered indispensable cutting edge technology

Even the mighty ARM was eventually bought out.

Set out below are a few of the British TMT (telecom, media and technology) companies, plus Deutsche Telekom & France Telecom that fell from grace in terms of valuation; the only exception being Sky, that went on the greater things, eventually being bought by Comcast for $55billion last year.

BSKYB fell from 1,700p to 505p between 2000 and 2002, but eventually reached 1,728p. 

Of course, Autonomy was controversially sold to Hewlett-Packard for $11billion in 2011. Invensys was sold to Schneider Electric for £3.4billion.

The brilliant ARM Holding was sold to Softbank for £24billion and may become part of Nvidia’s portfolio for $30billion. It is hoped employment will be maintained for the 3,000 in Cambridge.

But, surprisingly in the wake of this, London is the leading European centre for tech finance. Technology is a lot smaller than that old Bull computer but will continue to dominate business and leisure – that’s a fact of life.

This post first appeared on dailymail.co.uk

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Top shareholder backs Boohoo chiefs amid call for founder to quit

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top shareholder backs boohoo chiefs amid call for founder to quit

Boohoo’s billionaire founder has been backed by his largest independent investor.

MPs called for Mahmud Kamani to step down as an executive director after an explosive report found illegally low pay and life-threatening conditions for workers in its Leicester clothes factories.

Shadow health minister Liz Kendall wrote to major shareholders – Jupiter, Invesco and Baillie Gifford – saying they must remove Kamani and chief executive John Lyttle.

MPs called for Boohoo's founder Mahmud Kamani to step down as an executive director after an explosive report found illegally low pay and life-threatening conditions for workers

MPs called for Boohoo's founder Mahmud Kamani to step down as an executive director after an explosive report found illegally low pay and life-threatening conditions for workers

MPs called for Boohoo’s founder Mahmud Kamani to step down as an executive director after an explosive report found illegally low pay and life-threatening conditions for workers

Jupiter, which owns a 9.6 per cent stake, rejected her call, but warned bosses to improve governance. 

In a letter seen by the Mail, Jupiter chief Nichola Pease said Jupiter expects problems to be fully addressed with ‘meaningful and permanent’ measures.

In August Kamani dismissed some of the allegations against it as ‘another lot of b******s’.

An independent probe found Kamani ‘covertly owns or controls many of the factories [in Leicester]’.

The Kamani family’s 18.6 per cent stake was worth £655million last night after the shares rose 5.5 per cent.

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Lexus on the charge: RAY MASSEY tests the new UX 300-e electric SUV

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lexus on the charge ray massey tests the new ux 300 e electric suv

The first Lexus battery-powered SUV is raring to go – with order books opening up at the start of the month.

Named the UX 300-e, the family- oriented off-roader comes in three grades: the standard UX priced from £40,900, Premium Plus Pack from £44,400 and the top-end Takumi Pack (which I tried) from £50,500.

Prices are after the Government’s £3,000 plug-in vehicle grant is taken off. One trick worth knowing is that the taxpayer-funded grant is normally capped at £50,000. 

Family friendly: The new Lexus UX 300-e - seen here in Celestial Blue - is the company's first fully electric vehicle

Family friendly: The new Lexus UX 300-e - seen here in Celestial Blue - is the company's first fully electric vehicle

Family friendly: The new Lexus UX 300-e – seen here in Celestial Blue – is the company’s first fully electric vehicle

But, as the standard UX 300-e costs less than that, customers are not penalised for adding the Takumi Pack (which bumps the gross pre-grant price up to £53,500).

So what’s it like to drive? Though technically it is a compact urban SUV, it feels roomy and high-riding. 

It’s sprightly enough and smooth, refined and well-balanced to drive. It whizzes along dual-carriageways and A-roads, and has a bit of poke thanks to its friction-free early electric acceleration. 

It’s quiet most of the time but with some road noise on uneven surfaces – maybe enhanced by the 18in wheels on my car’s trim level (17in is standard). 

Test run: Ray poses with the new Lexus which can be ordered from November 1 for deliveries in March

Test run: Ray poses with the new Lexus which can be ordered from November 1 for deliveries in March

Test run: Ray poses with the new Lexus which can be ordered from November 1 for deliveries in March

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34767314 8873267 image a 11 1603486073698

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34767310 8873267 image a 12 1603486077072

Plug in: The Lexus has two charging ports - one for a domestic wall-box, the other for a fast DC version. Charging to 80 per cent takes 50 minutes on a rapid charger or eight hours at home

Plug in: The Lexus has two charging ports - one for a domestic wall-box, the other for a fast DC version. Charging to 80 per cent takes 50 minutes on a rapid charger or eight hours at home

Plug in: The Lexus has two charging ports – one for a domestic wall-box, the other for a fast DC version. Charging to 80 per cent takes 50 minutes on a rapid charger or eight hours at home

Powered by a 150kW/204hp motor and 54.3kW battery, it goes from rest to 62mph in 7.5 seconds to a 100mph top speed. Total range is 196 miles, which is fine for commuters.

It has two charging ports – one for a domestic wall-box, the other for a fast DC commercial version. Charging to 80 per cent takes 50 minutes on a rapid charger or eight hours at home. 

People will love or hate the quirky infotainment touch-pad in the centre console, which gives a reassuring clunk when activated. 

People will love or hate the quirky infotainment touch-pad in the centre console, which gives a reassuring clunk when activated.

People will love or hate the quirky infotainment touch-pad in the centre console, which gives a reassuring clunk when activated.

People will love or hate the quirky infotainment touch-pad in the centre console, which gives a reassuring clunk when activated.

The boot is roomy enough for a small family’s luggage, with 367 litres of space before the rear seats are put down. 

Hi-tech kit includes a pre-collision system with night-time pedestrian protection.

First orders on November 1 will be delivered in March. By 2025, Lexus will have electric versions of all of its models.

Ex Morgan man’s one to watch 

There’s long been a close relationship between motor cars and watches.

Now car designer-turned- watchmaker Matthew Humphries – former chief designer at British sports car firm Morgan – is setting the pace with a new limited-edition £745 MHD Type 1 wristwatch, inspired by a 1920s Bugatti.

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34760968 8873267 image a 2 1603471778922

Classic lines: The £745 MHD Type 1 wristwatch is inspired by a 1920s Bugatti racing car

Classic lines: The £745 MHD Type 1 wristwatch is inspired by a 1920s Bugatti racing car

Classic lines: The £745 MHD Type 1 wristwatch is inspired by a 1920s Bugatti racing car

Former Morgan designer Matthew Humphries

Former Morgan designer Matthew Humphries

Former Morgan designer Matthew Humphries

Humphries became a designer for Morgan aged 21 and his credits include the AeroMax and Supersport cars.

He got into timepieces almost by accident when a Swiss firm asked him to design a watch. 

He enjoyed it so much he set up his own business in 2014.

Cars such as the Bugatti, three-litre Bentley and Zagato-bodied Alfa Romeo 8C have all been influences. 

He says: ‘I take my sketch pad with me everywhere, because you never know when something will inspire you.’

That includes often using seatbelt material for watch straps.

Veterans’ Brighton run cancelled

Unfortunately, the Royal Automobile Club has had to cancel the annual London to Brighton Veteran Car Run on Sunday, November 1, because of Covid-19. 

Chug-a-bug rally: The Royal Automobile Club has had to cancel the annual London to Brighton Veteran Car Run on Sunday, November 1

Chug-a-bug rally: The Royal Automobile Club has had to cancel the annual London to Brighton Veteran Car Run on Sunday, November 1

Chug-a-bug rally: The Royal Automobile Club has had to cancel the annual London to Brighton Veteran Car Run on Sunday, November 1

The event has run, uninterrupted, since 1947.

A little bit of me hopes that, in the never-give-up spirit of Genevieve, the 1953 film of the run, the club secretly sends a car out early – when no one’s awake – to maintain the unbroken thread.

Skoda sweeps the board 

Plaudits: Skoda's Octavia clinched best compact family car and best estate in the annual Auto Express Awards

Plaudits: Skoda's Octavia clinched best compact family car and best estate in the annual Auto Express Awards

Plaudits: Skoda’s Octavia clinched best compact family car and best estate in the annual Auto Express Awards

Skoda’s Octavia has been crowned Car of the Year in the annual motor industry ‘Oscars’. 

It also clinched best compact family car and best estate in the annual Auto Express Awards.

The Skoda Octavia Estate was also named Best Family Car in the rival Autocar awards.

SAVE MONEY ON MOTORING

This post first appeared on dailymail.co.uk

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London Stock Exchange’s £20bn merger with Refinitiv delayed to 2021

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london stock exchanges 20bn merger with refinitiv delayed to 2021

The London Stock Exchange has admitted that its long-anticipated deal with Refinitiv will be delayed into the new year.

It had hoped to complete the £20billion merger this year, as soon as it got the green light from European competition regulators.

But in a third-quarter update, the LSE said it was now expecting approvals to be delayed until the first quarter of next year.

Delayed: The London Stock Exchange had hoped to complete its £20bn merger with Refinitiv this year, as soon as it got the green light from European competition regulators

Delayed: The London Stock Exchange had hoped to complete its £20bn merger with Refinitiv this year, as soon as it got the green light from European competition regulators

Delayed: The London Stock Exchange had hoped to complete its £20bn merger with Refinitiv this year, as soon as it got the green light from European competition regulators

It comes just weeks after the LSE agreed to sell Italian stock exchange, Borsa Italiana, to its rival Euronext for £3.9billion, to appease regulators at the European Commission. 

They are worried that a merger of the LSE and Refinitiv will reduce competition and push up prices of the critical data used by global markets.

LSE chief executive David Schwimmer said: ‘We continue to engage constructively with the European Commission and believe the potential divestment of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns.’

LSE reported strong numbers for the third quarter. Income rose 2 per cent to £600million, and so far this year is up 6 per cent to £1.8billion.

It has benefited from market volatility as the pandemic has boosted trading activity.

Russell Quelch, an analyst at Redburn, said: ‘LSE has some large client contracts up for renewal before the year-end and it will be important that it is able to continue to show underlying business can grow revenues in advance of the Refinitiv transaction.’

The acquisition of Refinitiv would boost LSE’s position as one of the world’s most influential financial institutions, expanding its reach into data provision. 

Shares in LSE slipped 0.9 per cent, or 78p, to 8438p.

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