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Four weeks until the Budget. The ideas being floated are now coming thick and fast, with Cash ISAs now back on the menu and even the idea of forcing people to invest in UK stocks.

This is dumb for two reasons.

The vast majority of the FTSE 100 operates outside of the UK so it can hardly be called ‘British’.

And people can just reduce UK exposure in their ISAs/pensions and take advantage of any extra allocation for the UK. Easy peasy.

But forcing people to invest treats the symptom and not the cause.

The root cause of people not investing in UK capital markets is because of generational failures by governments to promote the merits of investing.

When most Brits think Cash ISAs give better returns than stocks, the problem is clearly a lack of education.

It would be far better to start there.

Scrap the 0.5% Stamp Duty, start educating, and let’s make it easier for companies to list here.

A vibrant stock market attracts entrepreneurs. When companies IPO, profits are released as well as capital from previous investors who may then invest elsewhere.

And if companies grow then they create more jobs and pay more taxes.

When IPOs falter, investment falters across the board.

So when the average person thinks the stock market doesn’t really matter…

It does.

Maybe not directly. But it definitely has an impact on their lives overall.

And this idea of reducing the Cash ISA is equally as dumb, because anyone wanting to hold cash could just open a Stocks & Shares ISA with our partner XTB who is currently offering 4.25% interest with no penalties for withdrawal.

The workaround is so simple it’s hard to believe the government would propose such an idea.

Will the government then prevent people from holding cash in their Stocks & Shares ISAs to get around this?

In my opinion, people should be investing.. but only after they’ve got 6 months’ worth of savings should they lose their job tomorrow.

But given that most Brits can’t afford an unexpected bill of £300, it would suggest that investment is far from peoples’ minds.

We’re in for a choppy few weeks as rumours swirl and ideas are tested in the press.

However, do not panic. Making decisions trying to pre-empt regulation may be a bad idea.

It could work, but always consider how you would feel if you acted trying to pre-empt something that didn’t come to pass.

In other news, last year I did a video how Argo Blockchain (ARB) and Petrofac (PFC) would collapse ‘this year’ [2024].

Turns out I was wrong.

They collapsed this year instead!

Argo Blockchain announced a debt for equity swap last week that wiped out shareholders.

Petrofac announced it had appointed administrators yesterday morning.

I only ever get abuse when I talk negatively about stocks, but I’d rather speak up and try and stop at least one person from losing everything if I can.

I have not been short either of these stocks in a long time, as it’s far better to close out before the collapse and rather than hold for 0p.

At one one, borrowing costs on Argo Blockchain were over 100% per year.

That means if I’d held the position open for a year, I would’ve lost money, because the max you can make on a short is 100%.

There are still a few stocks on my death list, Revolution Bars being one.

Anglo-Eastern Plantations

As always, everything I write and say is my own personal opinion only. It is NOT financial advice.

I don’t accept money from listed companies to talk about them unlike other market commentators, so whilst this is independent nothing is a stock recommendation to buy or sell.

These are ideas only, and whilst I try to be balanced, sometimes I will be wrong.

Anglo-Eastern Plantations owns and runs oil palm and rubber plantations in Indonesia and Malaysia.

It cultivates fresh fruit bunches (FFB) from oil-palm trees, processes them into crude palm oil (CPO) and palm kernels.

It also has rubber production operations and generates biogas from plantation by-products (approximate).

Palm oil is widely used in food, cosmetics, industrial applications, and so the business is thus exposed to global commodity markets. The plantations model means large upfront investments but potentially steady cash flows when production and pricing are favourable.

However, this also means the business can be cyclical. Recently prices have been high but that may not always be the case.

Here’s the chart.

The shares started rallying back on the interim results in August.

However, despite the rally, the shares look relatively cheap on a PE basis.

There are zero forecasts for this company, but given that it had a profit of $44.6 million, it doesn’t seem unreasonable for the business to be able to get back to $100 million given that it did more in 2021 and 2022.

That would put the business currently on a PE of less than 6 as the market cap is currently £500 million.

As of the interims, the business had $244.6 million in cash on the balance sheet and was buying £8 million worth of shares back.

I’m looking for the price to tighten up and potentially break 1400p.

There’s clear momentum here, and the stock is backed by strong profits and cash flows, as well as a low valuation and share buyback underpinning this.

If I can get a tight stop on this, then it could be a nice short term trade.

One of the downsides here though is that the stock has a big majority shareholder.

Genton International Ltd is the holding company of the late Chair Lim Siew Kim, the youngest daughter of Tan Sri Lim Goh Tong, founder of the Genting group of companies.

Her will is in dispute:

There was also a big Genting feud between two factions in 2019, too.

I would need to look into this more, but this would stop me from taking too large a position at the moment.

This next stock is looking more and more like a turnaround.

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