Market Update – Week ending 7 August 2026
PRIVATE OFFICE ASSET MANAGEMENT’S 20TH ANNIVERSARY
TRUMP CONTINUES TO TRY TO RUN THE WORLD LIKE A PRIVATE ENTERPRISE FOR SELF-ENRICHMENT
CALM HEADS REQUIRED IN THESE UNCERTAIN TIMES – ONE SIZE FITS ALL INVESTMENT MANAGEMENT NO LONGER GOOD ENOUGH
This month Private Office Asset Management celebrates its 20th Anniversary since being incorporated as a member firm of Philip Simmonds Private Office Limited.
Having held senior positions in the financial services industry for 22 years prior to founding Private Office Asset Management Limited in August 2006, which included starting and developing 7 offices across the South of England for a National firm of independent financial advisers from 1984 to 1995, where I was responsible for more than 200 people including 150 advisers and 50 support staff, and having then set up and run my own company in Hong Kong in 1996 for 25 years through to the Covid pandemic, and having held senior executive positions in the City, London’s Square Mile, for 14 years including being Head of Charities & Head of Business Development in the UK, Channel Islands & Isle of Man for Collins Stewart Wealth Management / Canaccord Genuity Wealth Management, a Director at Brewin Dolphin Securities, Senior Investment Consultant at Close Brothers Merchant Bank, and having been the expert adviser / guest on many TV programs during the 90’s and early 2000’s appearing with David Frost, Angela Rippon, Carol Barnes, Jan Harvey, Tanya Beckett and Marcia Hughes, and whilst completing my articles to qualify as a solicitor, I set up Private Office Asset Management Limited in August 2006, as part of the Philip Simmonds Private Office Group of companies, to provide bespoke wealth management services to private client families.
The significant experience I gained at top investment houses in the UK and working in the industry across many jurisdictions of the world convinced me that there was a significant gap between what companies said they would provide in terms of investment services to clients and what they were actually able to provide due to company culture, corporate greed, profitability targets and self-serving short term interests including satisfying demanding shareholders and analysts’ thirst for profit at any cost. Above all, I learned that the big investment institutions engender a surprising bad (and lazy) habit of hiding their investment performance squarely behind “benchmarks” by choosing to track (copy) the benchmarks’ asset allocation despite allegedly spending £millions’ on investment research across international direct equities, sovereign debt instruments, corporate debt instruments, alternative strategies, total return securities, property investments and tax-led investments, structured securities, etc..
Much of their rhetoric is smoke and mirrors and when it comes down to it, they copy their chosen benchmark’s asset allocation to hide behind poor performance as relative to benchmark when things go poorly, which they could very well do sometime soon with the exorbitant valuations across US stocks in particular. If you then bring in to focus the mind-boggling amount of debt that the US Government has, along with Japan, the UK, European nations and others, there could well be a storm brewing in the not-too-distant future which could be truly game-changing. Our objective and company mission statement was to create and build a firm that puts clients’ interests first and foremost in a very real sense, as opposed to the interests of the large corporations who have a plethora of evidently more important stakeholders in those businesses. We wanted to develop a firm, to pay our staff well, have them as highly qualified as possible and to nurture a culture where our highly qualified and experienced team could genuinely develop to be the best they could possibly be, always with the main goal being to provide our clients’ with the absolute best service possible, first and foremost to protect their capital from market shocks and any geopolitical environment that we may find ourselves in, and that includes having to deal with the present lunatic leaders of the supposed free world, as well as the extremists on all other sides.
Private Office Asset Management Limited was therefore formed in 2026, 20 years ago, with the benefit of my independent thinking, independent analysis of what I had seen where the big firms actually all appear to do the same thing which brought into focus my extensive investment management and life experiences over the previous 22 years in the financial services industry. I could see that the same old familiar words trotted out to investors by the biggest and wealthiest City firms, were, by and large, just a quote taught to everyone in the City and indeed across Wall Street, but really, these firms in the main just track industry or their own synthetic (synthetic read made up by themselves so they can beat them) benchmarks, they almost without exception keep investors fully invested at all times, and they are fiercely ambitious, ambitious to make as much bottom line corporate profit as they can and to walk over whoever they have to in order to get more, and more, and more for themselves and their firms. Basic honesty, integrity and loyalty just seem to disappear as greed flourishes. We now see this all the way up to the White House do we not?
DON’T BELIEVE EVERYTHING YOU HEAR!
As with any company, or any person for that matter, and indeed similar to any country or even super-power – over these 20 years we have faced many challenges, some more fundamentally threatening than others, we have embraced many opportunities, and crucially we have learned a great deal including how to do things better, how to attract and keep the right people, and perhaps even more important than that we have learned how to discard the wrong people – and like many businesses, and even major government powers, we learned the hard way how absolutely crucial it is, for the well-being of our firm and our clients, to keep the wrong people out of our company in order to best successfully negotiate for our clients, the best way through the evolving world within which we find ourselves living, working in, and having to deal with.
The changing world means with its new, almost science-fiction-fantastic development of AI which is a potential threat to everyone except the multi-billionaires behind it, brings its own challenges and much uncertainty, which translates that the old ways simply will not do, we must evolve in the right way, progressively and with independent thinking, in order to meet the new challenges that face us if we are to enjoy the successful outcomes that we as a business crave for our cherished clients, for ourselves as aspirational human beings, for our families futures which are probably the most important thing to us all and indeed our world.
We mention this because half a decade ago we learned the hard way just what unexpected problems the wrong people with their secretly planned, deceitful, self-indulgent, greedy and frankly dishonest covert agendas can bring both to your business and to the clients they manage to dupe by luring and stealing them away by peddling their rehearsed and co-ordinated lies which, of course, ultimately result in them being unable to keep the false promises that they made. It was hard to imagine the level of dishonesty and deceit that plotting individuals within our own firm could stoop to, ripping clients away who we had done an excellent job for, with plain lies that would soon be proven to be the case when the clients who followed them learned that their so-called advisers “new ventures” which were held out to be through significantly larger firms than our own, were ultimately closed down by Court Order, and then lawyers who we had entrusted in senior positions within our own law firm were formally rebuked and fined by the Solicitors Regulation Authority. Many apologised and wanted to return, but once bitten hard, twice very shy. If you cannot learn from your over-trusting nature, and financial generosity, being repaid with plain treachery and lies to lure your clients away to a firm which is then closed down by Court Order due simply to the deceitful nature and greed of those involved then you should not be in business.
This is relevant at this point in time, because paradoxically the world is also learning the hard way, just what a mess of everything the wrong people in the wrong positions (I am referring to the Trump administration here) bearing the power of ultimate influence by exaggerating their executive power, and essentially riding roughshod over the US Constitution which is based upon a “Separation of Powers” where the law makers in Congress (2 separate chambers (i) The Senate being the Upper House and (ii) The House of Representatives being the Lower House) enact the law, and vote on significant issues to separate the power from the Executive (the President and their Administration) with the Judiciary remaining independent of both the law makers and the President. These checks and balances are there to thwart authoritarian dictators like Trump, who many in The Senate and The House of Representatives have called out as the most corrupt President of all time, and it is hard to argue listening to Senator Adam Shiff and Bernie Sanders, the latter who previously ran as an Independent Candidate for the Presidency.
What makes it very interesting is that the main media everywhere tends to ignore Trump’s alleged blatant corruption through fear of being sued and made bankrupt, it is barely reported on, but we invite you to have a look at Senator Adam Shiff’s recent speech in the Senate. It really is eye-opening. You may also want to Google Bernie Sanders speeches on President Donald Trump’s corruption. It is never enough for Trump and his billionaire oligarch mates……
On May 14, 2025, Senator Adam Schiff took to the Senate floor to deliver a detailed, ten‑point exposé of President Trump’s “most corrupt deals,” framing them as examples of self‑dealing that enrich the Trump family at the expense of American taxpayers and national interests Senator Schiff. Across 114 days in office, Schiff argued, Trump has traded on the power of his presidency to line private pockets—from luxury gifts by foreign governments to a personal cryptocurrency scheme—while everyday Americans face higher costs and eroded public services. If you Google Adam Schiff, he has updated these acts of corruption and the numbers are eye-watering…..
SENATOR ADAM SCHIFF’S SENATE ROLE & RECORD
WATCH: Sen. Schiff Breaks Down Trump’s Self-Enrichment Schemes in …
23 Jul 2026 · Washington, D.C. — Today, U.S. Senator Adam Schiff (D-Calif.) broke down just some of the ways President Donald Trump is committing corruption on an ever-increasing self-enrichment basis…
Adam Schiff, sworn into the Senate earlier this year to fill the late Senator Dianne Feinstein’s seat, has quickly become a leading voice on accountability, carrying over his oversight work from the House and his role in two impeachment proceedings against Trump AP News. In January, he accused Trump of illegally firing 18 federal inspectors general without required notice, warning that such actions undermine critical watchdog functions and enable further corruption POLITICO.
Context of the Speech
Delivering these remarks recently, Schiff emphasized Trump’s pattern of leveraging the presidency for personal gain rather than pursuing legislation to lower costs for American families, such as reducing grocery prices or protecting Social Security. A video of the full floor speech garnered widespread attention online, highlighting key soundbites that have since circulated on YouTube and social platforms YouTube.
The Top Ten Corrupt Acts of President Donald Trump
Below is Schiff’s ranking of the administration’s most egregious acts of corruption, organized from #10 (least corrupt of the ten) to #1 (the most corrupt), based on his floor speech transcript and accompanying materials Senator Schiff.
- #10: White House ‘Tesla Showroom’ Deal
On the South Lawn, Trump invited Elon Musk to showcase a Tesla, boosting Musk’s plummeting stock and subsequently receiving a $100 million campaign contribution—a payoff arranged almost immediately after the live stream ended. - #9: Golfing Vacations on Taxpayer Dime
In his first 100 days, Trump spent over 25% of days golfing, costing U.S. taxpayers more than $30 million in Secret Service and support expenses—funds directly paid to Trump’s own golf courses and hotels. - #8: Launching a Private Documentary with Corporate Sponsorships
The administration pitched $10 million sponsorships for Melania Trump’s Amazon documentary, offering credits and premiere invitations in return—a clear quid pro quo of influence through entertainment> Melania Trump pocketed US$40Million for the poorly received documentary about her life, and Amazon reportedly won contracts with the US Government totalling more than 10 times that amount, despite not having to compete with other companies who may have been able to do a better job for the tax-payers money - #7: ‘The Executive Branch’ Private Club
The Trump family proposed a $500 000 membership fee for a D.C. private club named “The Executive Branch,” designed as an insider gathering spot for foreign investors and billionaires to directly funnel money into Trump businesses. - #6: Trump International Hotel & Tower Dubai
An 80‑floor, luxury hotel project in the UAE—with apartments starting at $2 million—furthers a foreign‑government partnership that directs profits into Trump’s pocket. - #5: $5.5 Billion Qatar Golf Course Deal
A new Trump International golf course in Doha, backed by state‑owned Qatari Diar, is set to net the Trump family hundreds of millions in partnership profits, raising questions about policy influence in the region. - #4: Saudi Real Estate Projects
Two new Trump Towers—one in Jeddah and projects in Riyadh—follow a $2 billion investment from the Saudi crown prince into Kushner’s firm, illustrating a pattern of Gulf wealth funneled to Trump interests. - #3: Starlink ‘Pay‑for‑Play’ Satellite Deals
Elon Musk leveraged his proximity to the President to secure Starlink distribution agreements in countries like Lesotho and India, allegedly as a way for those nations to curry U.S. trade favor—a structure Schiff calls “obvious, egregious, and dangerous” Dailymotion. - #2: $400 Million Qatar ‘Sky Palace’ Gift
Qatar’s offer of a customized palace‑in‑the‑sky jet violates the Emoluments Clause and poses national‑security risks, as counterintelligence experts warn of the cost and complexity of retrofitting foreign electronics for secure presidential use Blue Delaware. - #1: Presidential Meme Coin Scheme
Launching his own cryptocurrency, Trump stands to earn trading fees and sponsorships—already netting billions—while foreign investors bid for private dinners and White House tours, turning the presidency into a direct pay‑to‑play enterprise.
CONSTITUTIONAL AND SECURITY CONCERNS FOR THE USA
Schiff underscored that many of these deals potentially breach Article I, Section 9 of the Constitution (the Emoluments Clause), designed to prevent presidents from accepting gifts or titles from foreign entities without congressional approval. National‑security experts, like Garrett Graff and officials cited in the Daily Beast and Washington Post, warn that accepting a $400 million plane from Qatar could introduce vulnerabilities in secure communications and surveillance countermeasures.
LOOKING AHEAD
Schiff concluded by calling for bipartisan investigations and stronger enforcement of ethics laws to prevent a presidency “where Trump gets rich, and you get screwed—over and over.” As these revelations spread across media platforms, Congress faces mounting pressure to probe each deal’s legality and hold the administration accountable. If ignored, Schiff warned, the “art of the deal” for one family could set a perilous precedent that undermines democratic norms and public trust for generations to come. Do feel free to Google Adam Schiff’s speech in the Senate when he cogently details an up-to-date list of the many $Billions the Trump family have gained from President Trump’s alleged corrupt acts
We must just point out that we are only the messenger’s here and not the accusers!
So, very experienced investors and clients of small business, of large multi-national corporations, and voters of Sovereign Nation Superpowers can be duped with lies so please do not assume that big is best and that just because belief in a very old system worked for a period of time, that it will carry on working as the world changes. You should question everything and everyone.
It is usually those businesses with the most money, and those Presidential candidates with the most campaign “donations” (which always come with strings attached) that have the most sway over their audiences thinking, and this can have a seriously bad impact on unsuspecting innocent people who take them at their word, only for the personal greed and hidden, covert, deceitful agendas to produce outcomes that were never contemplated when listening to the falsely positive spin and lies put forward to try to win their business or vote. Ultimately the mist will disappear and reality sets in and it becomes clear to see that these liars are only interested in self-enrichment at the expense of the many they purported to be wanting to help when spinning their lies which unfortunately for their unsuspecting, trusting listeners, won them their business or vote at the time, – a decision which later turned out to be the very worst decision that they could have made at that time.
THERE IS ALWAYS HOPE, IF PEOPLE WITH HONEST VALUES WORK TOGTHER THINGS WILL COME GOOD
As a firm, over the past 5 years, we hunkered down, adopted a more family business model because we all trust each other, we all love each other, and we are all exceptionally highly qualified in our chosen fields which includes the investment management and wealth management industry, the legal industry and the IT and compliance industries. Around the core family business model, we have some excellent staff who support the business, mainly working remotely, but each with their unique specialisation which adds to the excellent synergy our company now enjoys which we put to the best effect possible for our clients, who are really the only people who matter in all of this.
We moved to a centralised office in West Sussex and cut our cost-base significantly. We believed in our core values, and having had two-thirds of the business that we had built up stolen from under us 6 years ago by the very people we supported and trusted in senior positions within our Group of companies, we have built Private Office Asset Management Limited back up to almost double the amount of clients and funds under management & advice that we had at our former peak, and we are earning sustainable and growing revenues far in excess of the revenues we generated when we had all of those supposed big names employed on what I can safely confirm to be the best employment conditions and the biggest salaries they had ever enjoyed. We are now lean and mean, and have the huge benefit of that experience to draw on.
The process to redemption was not without its challenges, but in the end, karma wins out, people and businesses, and nations get what they deserve. The liars and cheats, and the self-important greedy fly-by-nights do not last, and their lies will be found out. – they are always brought back down to earth with a bang. If you keep doing the right thing, you will prosper. You (and by “you” I mean people, businesses sovereign nations with regard to their Governments) will get what you want by honestly, and with the highest integrity, helping other people get what they want for themselves and for their families, and for their electorate. You have to keep believing, and you have to keep working toward the goal of being the best you can be as an individual and as a collective, and you have to be fully informed of the news flow and the ever-evolving world and how that affects what we do and how we do it.
UPDATED WEBSITE – www.private-office.co.uk
We have been busy developing strategic relationships with accountancy practices, and of course with AFC Wimbledon, and you can see our updated website at www.private-office.co.uk which has new links including under “About US” to our Private Office Asset Management (POAM) Podcasts, it has a new “Partnerships & Events” section which details the Business Expos, the ongoing client Golfing Days and the growing strategic partnership with AFC Wimbledon which has been immensely successful for us, and to AFC Wimbledon as well with the expertise we are able to share with all associated with that iconic football club.
In our updated website you will find our updated “Meet the Team”. Of note:
Tristan Simmonds, our Head of IT, keeps all of our data safe and carries out regular presentations to the team, is now working on our own Private Office Asset Management APP (POAM MAPP). This will have links to your (our clients) overall wealth in a snapshot, not just the investments that we look after / manage / advise upon, but everything including property, cash, other assets held by third party organisations etc. We are also upgrading our cashflow forecast modelling tool which will allow us to help us plan our clients retirement strategies and feed in various scenarios to assist them in deciding how they wish to plan their future years which they have worked so hard to be able to have the choice in choosing to do what they wish in a manner and on a timeline that they ultimately prefer. Our APP will also have incentives for our clients to qualify for such annual subscriptions all paid for by the firm including English Heritage and the National Trust, amongst other things.
Michelle Simmonds, our Chief Operations Officer, looks after all matters “compliance”, our staff’s annual performance appraisals, our company private medical scheme and pension scheme, our corporation tax, PII annual insurance renewals and she also negotiates the most competitive fees with our providers for our clients.
Sebastian Simmonds has been promoted to the position of Managing Director. He has a famously ‘calm head’ in all situations. He is a qualified client adviser, portfolio manager and wealth manager and is a key contributor to our regular Investment Committee meetings with his excellent fund analysis skills across all of the asset classes.
Imogen Simmonds is our Head of Private Client. A practising in-house solicitor, she produces simple Wills and LPAs free of charge for our clients, and she also assists our clients when they need to apply for a Grant of Probate. Imogen also sits on our Investment Committee.
Mark Beard is our Head of Sports Affiliations. He is a former professional footballer, who played for Millwall, Sheffield United, Southend United and AFC Wimbledon. He liaises with, and introduces professional sports people to our firm, and is a key contributor in our Partnership with AFC Wimbledon. Mark has also taken his UEFA coaching badges and is the current Under-18’s Coach at the Hull City Football Club Academy.
Abbie Ashbee is our Head of Digital Marketing and Social Media, and she is the person who is tasked with filming most of our Podcasts and videos, and uploading them onto our Instagram, and website via our company YouTube channel. A former England International Athlete and winner of the prestigious Freshman of the Year at Murray State University where she won her Athletics Scholarship, and competed for Murray State Racers.
Dunstan Harris is our Head of Marketing and works closely with Abbie and Imogen in sorting out other marketing opportunities such as with cricket clubs, other sports clubs, schools and organising our partnership with Pinnacle where we have ongoing access for corporate Golf days for our clients. If you are interested in attending just email us and we will provide you with the upcoming choices of Golf Days at various Golf Clubs around the (mainly) South and Southeast.
Private Office Asset Management Limited’s Partnership with AFC Wimbledon – now main sponsor of AFC Wimbledon’s top corporate hospitality venue, the Legends Lounge. The launch by AFC Wimbledon can be seen in the link below, and the short video showing our team’s recent training ground visit when we presented to the men’s first team and management & coaching staff is attached.
https://www.afcwimbledon.co.uk/news/2026/july/24/private-office-sponsor-wimbledon-s-legends–lounge-/
POTENTIAL ACQUISITIONS FOR PRIVATE OFFICE ASSET MANAGEMENT LIMITED
I am also pleased to announce that we are in discussions with 2 very good firms who are potential acquisitions for us, and I am particularly delighted to be able to report that we are close to completing the first of those 2 potential acquisitions with a target date to complete on 5th October 2026. This deal would see us grow towards £100Million under management and advice, and it would also bring some excellent accounting services and expertise to our overall offering, to complement our existing wealth management and in-house legal services. We expect to make a positive announcement very soon.
One of our goals is to buck the trend of rising fees within our industry, and to be able to reduce fees with economies of scale, and by keeping our cost-base as low as possible. We live in an age where independent wealth managers / financial advisers are disappearing due to rising compliance and regulatory costs, and of course our present government’s high taxation and exorbitant Employer’s National Insurance policies are also something all business have to contend with. According to our outsourced Compliance Team, who we have visit us at least twice a year to carry out independent file checks, and to ensure that we are doing everything precisely as we should be, 15% of independent practices like our own are disappearing each year, year on year. They are either closing down or being gobbled up by larger firms. We ourselves are subject to offers probably 7 or 8 times a year by larger institutions, who will take away the personal service and the unique nature of our offering and we have absolutely no interest in that.
The average age of an independent financial adviser in the UK, we are told by our compliance team, is 66. Amongst our older generation, including myself, we also have Sebastian (29) (qualified financial adviser and investment portfolio manager) and Imogen (27) qualified and practising solicitor, and looking to be signed off as a qualified financial adviser and portfolio manager by the end of 2026. We have succession planning in place and our goal as a firm is to remain fiercely independent and to resist all attempts to purchase our firm.
PLANNED ANNUAL FEE REDUCTIONS VIA ECONOMIES OF SCALE POST ACQUISITION & SUCCESSFUL INTEGRATION
We believe, having done the sums, that once we acquire the first target firm and bed them into our way of servicing our clients, we will be able to reduce fees to our existing clients by approximately one third of existing annual fees through economies of scale, in some cases for our larger clients possibly up to a 50% reduction of current annual fees.
Why will the old way’s simply not do?
I have been steadfast for a long time, that the old ways will simply not do moving forwards. I have mentioned the rapidly changing landscape for the world, including AI, and previously we have explained in great detail the effects of the Financial Crisis (credit crunch) in 2008 / 2009, after which, assets which previously had a negative correlation during normal cycles, such as equities and bonds, began to often move in the same direction. It is also a fact as interest rates rise, that bonds yields will rise and the underlying value of the bond will fall. We work in an industry where most investment managers are still slave’s to “Modern Portfolio Theory” By definition, it can by no stretch of the imagination be considered “Modern” because it was formed in the 1950’s by Harry Markovitz……
As a seasoned investment professional with over 42 years in the industry, I’ve witnessed countless market transformations. From fundamental analysis to technical analysis, and now to AI-driven investing, each technological revolution has redefined what “optimal investment strategy” means. Today’s NFP report — with its contradictory signals of strong job growth, rising unemployment, and hot wage inflation — perfectly illustrates why we need this paradigm shift.
The Limitations of Modern Portfolio Theory – Markowitz’s MPT laid the foundation for diversification-based investing, but when facing today’s complex and volatile market environment, it’s static model reveals obvious shortcomings.
Limited Data Processing Capacity: Traditional models cannot process massive amounts of market data, news sentiment, macroeconomic indicators, and other multi-dimensional information in real-time.
Overly Idealistic Assumptions: Markets are not always efficient, and investors are not completely rational. These real-world deviations require dynamic adjustments.
At Private Office Asset Management, we combine real time data fusion and outcome processing efficiently but manually, to ensure that algorithms don’t go berserk and to ensure that AI doesn’t take over the control of important decisions. We use:
- Technical indicator data
- Fundamental financial data
- News sentiment analysis
- Macroeconomic indicators
- Geopolitical risk factors
- Social media sentiment
As a seasoned investment professional with over 42 years in the industry, I have witnessed countless market transformations. From fundamental analysis to technical analysis, and now to AI driven investing, each technological revolution has redefined what “optimal investment strategy” means. Multi-dimensional data fusion has multi-dimensional data fusion provides a more comprehensive market picture for investment decisions. Key to our philosophy, and we have noticed some competitors now trying to copy our system having seen its relative success, is that we focus on keeping volatility (inherent portfolio risk) as low as possible, and we pay as much attention to that as we do to producing performance numbers for our clients. Currently, having taken some good profits recently, we are holding an average of almost 40% in cash across client portfolios which reflects our nervousness about the AI bubble and the phenomenon which is SpaceX and its massively over valued stock and potential influence on the AI sector.
US VALUATIONS VERY HIGH, UNCOMFORTABLY HIGH AND SPACEX – JUST NUTS!
With the world as it is at the moment, and with US Stocks trading at record high valuations on a price to earnings ratio (company share prices being valued at a multiple of its latest annual earnings), the US Tech Heavy NASDAQ trades at 33.96 x earnings, the S&P500 trades at 29 x earnings and the Japanese Nikei225 trades at 22.21 x earnings.
These valuations, especially US valuations are exceptionally high, many might argue massively overvalued with unsustainable expectations of growth. Contrast these valuations to the UK’s FTSE 100 which trades at 15.9 x earnings and the FTSE 250 which trades at 15.27 x earnings the European Bourses, where the German DAX trades at 18.66 x earnings and the Pan-European EuroStoxx50 trades at 19.2 x earnings, then it is easy to conclude that any serious correction would be felt hardest, and probably first, in the US. We are therefore quite cautious at the moment, and whilst we do dip in and out of the NASDAQ and the S&P500, and indeed the Nikkei225, we seek to take profits and then buy back in when the markets pull back (to buy the dips). Our Core Holdings which make up around two-thirds of the portfolio, are well diversified (according to client-specific risk profile), but the balance one-third is invested via our chosen 7 indices, and we tend to view these as more short term, buying and selling them to secure profits and then happy to sit on cash, earning decent bank rates whilst doing so, and maintaining lower risk & volatility within our client portfolios. Interestingly, and significantly, we are out-performing the benchmarks on a performance basis, but crucially for us in-house, we are doing so by maintaining a lower volatility.
SPACE X – is it good value? (lol)
We were asked about SpaceX as the IPO date approached. “Are we buying in?” Our response, “Absolutely not” Why? Well, their last financial year saw them make a loss of almost US$5Billion. Their anticipated IPO price, was US$160 per share which valued the company at US$2.1Trillion. Let’s write that down for you US$2,100,000,000,000.00. We consider the NASDAQ hugely expensive and driven by the anticipated / expected huge profits and growth prospects of its top 10 constituent companies, not growth achieved with it trading at 34 x earnings. SpaceX valuation had this loss-making AI focused corporation trading at 104 x earnings. It’s first quarterly results showed it’s revenue rising by +92% to US$7.8Billion. But is also showed it’s expenditure ballooning to an eye-watering and almost incomprehensible +550% to US$19Billion over the quarter, to add to it’s US$2Billion loss already on the balance sheet. Where did the funds go? – along with investors losing more than 50% of their hard earned money that they invested in SpaceX from the top of it’s post IP price, where one Canadian investor was crying into her PC sharing her screen shot saying SpaceX had cost her everything and she had already lost CAN$544,000 before the stock carried on plummeting downwards for most of the remainder of that week? The answer is a very vague “AI Infrastructure”. I am not an AI infrastructure expert, but just where do you lose $18,400,000,000.00 in just 12 weeks of investor money? That is $18 thousand and four hundred million just gone!
The analysts consensus is that SpaceX will gain 100% on its stock valuation over the next 12 months with some (probably interested parties) suggesting by 2030 (in just three and a half short years) it would have exploded (excuse the pun) to 800% of its present value!! I do not believe this nonsense. Just like Crypto-currency, it has the feel of a scam, with very little intrinsic value. I would ask all you homeowners, would you expect to get £10Million for your property at the moment if it had a present value of £100,000 on the basis that the buyer understands that the price of it might go up? I know it is not comparing like for like, but seriously, these valuations in US tech companies are just getting ridiculous, and the most frightening things is that some investors blindly plough their money in because Elon Musk is the richest man on the planet and that’s all they need to know. Let me tell you, he is getting richer still with his investors’ money. We recently saw a bit of a sell-off in tech / AI stocks, which did cause a few ripples of concern. They have since recovered somewhat, but my fear is that the AI bubble could blow up and when it does it will be far worse than when the dot.com bubble burst in the early 2,000’s.
Our philosophy therefore is that we would rather miss a bit of upside potential, than risk a lot of downside potential. We will continue to have a ‘cautious first’ attitude unless specifically instructed otherwise by our clients. That said, we are still mindful of our clients risk-profiles, perhaps now more than ever, and we are achieving the results we would hope for according to risk profile, it is just that we are adding the benefit of doing this with less risk / volatility than the multi-asset benchmarks which we measure our performance against, as is our duty under the FCA rules and regulations (to measure our performance against benchmarks, not to carry less risk, that’s out optional extra we include for our clients!).
WHAT ELSE COULD POSSIBLY GO WRONG?
As many of you will be very well aware, I have been banging on about the level of debt, and government debt in particular for more than a decade. Many in the US Congress are now suggesting, as Trump continues to be humiliated by Iran in his stupid war, that the real threat to the US is not North Korea, it is not Russia and it is certainly not Iran, it is the US debt mountain.
Despite record tax receipts, and major cuts in their Social Welfare annual bill, the huge cuts to Medicare and Medicaid which has left millions of Americans without any readily available healthare, despite the huge cuts to Government departments overseen by Musk and Trump who continue to get richer by the second, the US debt level has somehow ballooned to $40 Million x million (£40,000,000,000,000.00) or ($40Trillion). The graph below shows the rapidly increasing level of debt that the US is now exposed to. It has almost doubled just in the last 5 years despite all of the cuts. Question, where is it going to? The US Treasury gives more funding to Elon Musk’s Space X than it does to NASA. Why? Nobody will say, but a lot of very rich white men are getting incalculably richer by the hour in the US, including Trump’s family.
This is not just the US, the UK now spends vastly more money in servicing it’s debt interest payments than it spends on it’s defence budget. Similarly crippling debt across Europe, and the highest debt per capita is in Japan, where the US and Japan just agreed to prop up the YEN.
Debt matters because the government (the hard working taxpayers who are being asked to pay more and more each year) has to fund this colossal and rising debt, and if the debt is ballooning by double every 5 years despite record tax receipts coupled with falling social standards for those who work hard and pay tax (not for those who do not of course!), then how long can this go on for? Elon Musk was recently quoted, when discussing AI, that people shouldn’t worry because money will not be relevant in 10 years’ time. Really Mr Musk? Then why is everything you do, and everything you stand for, entirely focused on having as much of it as you can get your hands on?
US Debt Chart
Conclusion
We at Private Office Asset Management remain vigilant of global trade and market volatility, and the potential for significant market pullbacks, and remain nimble to be able to act in order to protect our clients’ capital should it be necessary, although it is not exact science, our philosophy and present positioning provides us with a good base to achieve this
First World Sovereign Debt is at an unsustainable high level, with the UK Government paying £1 of every £9.75 it spends on debt interest alone.
Troubles and hostilities in the volatile Middle East has escalated and the Iranians are making Trump and the US look as if they will have to accept defeat, even though Trump will doubtless absurdly try to dress it up as some sort of victory for the US which it certainly is not. The region is showing signs of the potential for the conflict to escalate wider
The Russian invasion of Ukraine continues with go badly for Putin with Ukraine successfully attacking infrastructure 1,000KM into Russian territory.
Trump himself continues to confuse the markets, and the world, and may be heading for heavy defeats in the Mid-term elections where he may lose control of both the Senate and the house of Representatives
Please note that the opinions expressed in this newsletter are those of the author, or as reported on by third parties in the case of President Donald Trump’s alleged corruption,
and they do not purport to reflect the opinions or views of Private Office Asset Management and should not be construed as advice. This is not a financial promotion.
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Phil Simmonds
Philip A. Simmonds MBA, LL.B(Hons), FPFS, Chartered MCSI
Chief Investment Officer | Solicitor (in-house Legal Counsel)
Chartered Wealth Manager | Chartered Financial Planner