The 'B' word

qwert_yuiop

Surely the belief is that Rees mogg will profit from a post brexit dive in the value of the pound? Yea, he’s only a back benched but he and his ERG pals have been trying to influence brexit, pushing for a ruinous crash out. Is that not where the conflict lies?

Steer the country towards a crash in the pound, reap the benefits?

Malthusian

Profit how? If his investments are GBP-denominated then the consequent rise in his investments is illusory because anything he buys with his investments will cost more if it involves any inputs from outside the UK (which nearly everything does). Other things being equal, his investments will be worth exactly what they were before. They will only be worth more in Sterling, which is not nearly the same thing.

And if they aren't he won't profit.

The funny thing is that if Rees-Mogg was confident that he could engineer a fall in Sterling through a disastrous no-deal, he could profit from that while simultaneously fulfilling his alleged patriotic duty to overweight UK equities by investing in UK companies that make lots of money overseas (preferably outside the EU), which lots if not most FTSE 100 firms do.

Their overseas earnings would be worth more in UK terms - and they would still be paying their UK-based staff in Sterling, so unlike someone using overseas assets to buy mostly-overseas-made goods, they materially benefit, and other things being equal their value would be expected to rise.

Which illustrates what an absolute bag of badgers' paws this is when you try to introduce tribal politics into an asset allocation decision.

qwert_yuiop

Malthusian wrote: »

Which illustrates what an absolute bag of badgers' paws this is when you try to introduce tribal politics into an asset allocation decision.

Fundamentally, brexit is a bag of badgers’ paws. (If this weird expression means what I think)
Nothing has been thought through.

Anyway, new vote coming up, new referendum, article 50 revoked? Prepared to eat my hat of course.

SG27

I reckon the reason he is shifting his wealth is not because of potential for a bad brexit but more likely the potential of a Corbyn led government in power. Which would mean anyone with a decent sum of money or assets will be heavily taxed...

jimi_man

qwert_yuiop wrote: »

Fundamentally, brexit is a bag of badgers’ paws. (If this weird expression means what I think)
Nothing has been thought through.

Anyway, new vote coming up, new referendum, article 50 revoked? Prepared to eat my hat of course.

Oh God, a new referendum. Exactly what this country doesn't need! Fingers crossed that it doesn't happen.

bowlhead99

jimi_man wrote: »

Oh God, a new referendum. Exactly what this country doesn't need! Fingers crossed that it doesn't happen.

Well, given about half the people who expressed a preference in the last referendum were disappointed with the outcome, it's reasonable to assume that a large chunk of those people would like a second opportunity to express their preference, so won't have their fingers crossed that the opportunity doesn't come up.

MK62

A little less than half were disappointed though to be fair, a little more than half were not - that's democracy at work....a majority!

MaxiRobriguez

qwert_yuiop wrote: »

Blimey.
It’s not a political or tribal prejudice. Is brexit a good idea that will lead to a boost in wealth, and if it is shouldn’t you be putting your money into British investments? Of course you should if you think brexit will make the U.K. richer.

I don’t think brexit will make britain richer. Evidently , neither do you.

You're incorrectly conflating the wider wealth of the UK with the investment performance of companies listed on the LSE.

Brexit could be bad, could be good, remains (no pun intended) to be seen.

Regardless, some companies will perform better than others in a remain/leave/everything in between scenario and vice versa. Fluctuating GBP benefits some elements of the FTSE whilst it impacts on others.

Diversifying your portfolio to match the economic weighting of geographic regions is a sensible and easy thing to do for those who don't have the inclination or cannot analyse micro and macroeconomics to such an extent to start placing eggs in fewer baskets. As such, most people around the globe will underweight the UK, just like they will underweight their own country. Only US investors have a genuine excuse not to underweight their home market because their home market makes up such a large proportion of the global %.

jimi_man

bowlhead99 wrote: »

Well, given about half the people who expressed a preference in the last referendum were disappointed with the outcome, it's reasonable to assume that a large chunk of those people would like a second opportunity to express their preference, so won't have their fingers crossed that the opportunity doesn't come up.

I'm sure they would, but it's not going to solve anything. If there is another vote and it's 48/52 the other way (Remain) then what? Do you stay in? Do you go out? Two votes, both of which have said the opposite, really does not help the situation.

Malthusian

jimi_man wrote: »

I'm sure they would, but it's not going to solve anything. If there is another vote and it's 48/52 the other way (Remain) then what? Do you stay in? Do you go out?

We stay in. And if Leavers don't like it they will have to shake their little fists and cry. Simple as that. It's the Ireland solution and has never failed yet.

Or leavers can always elect the Brexit Party FPTP in the next general election, with a mandate for a hard at-all-costs Brexit, and crucially the power to carry it out. As they keep saying, the referendum was advisory. Everything is advisory when you have the guns.

The only problem with the Ireland solution is you actually have to win the re-run. If, as some polls are predicting, the Brexit Party sweeps the Euro elections with a score in the 30s, there is more chance of Eurovision announcing there was a miscount and the UK actually won, than Remain calling and winning a second referendum. There is a reason Remain haven't called one already even though it's their call to make.