IS IT ACCURATE TO LABEL COMMUNISTS AS "FASCIST"?

But you see, Communists *are* fascist. Communism is the dictatorship of the proletariat, it is where the State is more important than the individual, it is intolerant of opposition, it employs violence on its own people.

We say that Nazis were National Socialists and then Fascists, true, so nation is important, aswhere Communism is international.

But that's what we are getting at - denial of free speech is unscientific, against the spirit of rational open-minded inquiry, it is unenlightened ...well, that is true of all utopianists, religious or political, communist or fascist, same same.

The roots of the fascist personality might be in a fear of not having enough control.

And it's sometimes quite rational and even justified, to want to seize control and hold.

Even old Bojo Boris didn't have much alternative if he was to get on top of the pandemic.

But a true fascist is a bit of a control freak and once taken, won't give back, won't let go, not voluntarily anyway.

But we know that letting go, opening up, exposing ourself to reality, is where we will find the truth, we will understand, and we will make progress. What kind of progress towards the things that matter does a fascist make? 

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ANOTHER ESSAY ON "HOW TO PICK LONGER TERM STOCK MARKET WINNERS"

Cape 28 September 2021

If we do decide to allocate our capital to stocks, this then raises some follow-on questions: What stocks should we buy? How can we assess their strength? Do they have any weaknesses? What are their future prospects like? Will they be able to handle an inflationary environment? You might know that our philosophy at Simply Wall St is to not try to predict where the market is going or what will happen next in the macro environment. Instead we’d do well to continue following some core investment principles that have stood the test of time. One of them is:  Buy high-quality businesses with good long term prospects at a price below their intrinsic value. Here’s some questions, a checklist of sorts, that can be useful to ask ourselves when looking at a stock (and how Simply Wall St can help in some areas): 1. Is the company a high-quality business that generates high returns on capital? “Quality” businesses are those that have a sustainable competitive advantage over their competitors. Think of things like brand power (Apple NASDAQ:AAPL), economies of scale (Costco - NASDAQ:COST), or network effects (Facebook - NASDAQ:FB).   In terms of determining the company’s return on capital (how much it makes per dollar invested), you can check out the Simply Wall St Past Performance section within each company’s report to see how well the company allocates money. Here’s an example of Apple’s returns. 2. Does the company have good future prospects? As mentioned in Part 2, it’s much easier to invest in industries with tailwinds rather than headwinds. If the company has good growth prospects with more room left in its Total Addressable Market (TAM) to serve, then it’s got room to grow. On Simply Wall St you can check out the Future Growth section, here’s Amazon (NASDAQ:AMZN) for example. 3. Is the business capital intensive? If the business requires a lot of upfront capital invested to generate its product or service (think manufacturing or construction), then it can be vulnerable to inflation pressures if the cost of its inputs increase. However if it’s a capital light business model (think software), then it’s less vulnerable to having its margins eaten away by inflation (that is if its costs increase but it can’t increase its prices equally). Here again, for example, we can see Apple’s operating expenses remaining flat while revenues have increased, which have helped drive profit margins higher. 4. Can the business raise its prices at or above the rate of inflation? Think about it this way, does the business provide enough value to customers where they are happy to pay up if prices increase? Or would they go to the cheaper alternatives? Is the business in a market where consumers are simply looking for the cheapest product, or does the company have a business or status where it can afford to raise its prices and not lose any customers?  5. Is the business able to afford its debt? (if it has any)  Given the current low interest rate and inflationary environment, taking on debt is actually quite an appealing source of capital. So utilizing debt effectively can help a company increase its profitability. The key here is to assess if the debt is affordable, especially if interest rates were to rise.  Within the Financial Health section, we run checks on the affordability and absolute level of debt, so you can get a quick understanding of both how leveraged a company is, and how affordable that debt is. 6. Is the business in a growing industry? As mentioned before, investing with tailwinds is easier than investing in an industry facing headwinds. You may know of industries that are growing and that you want to invest in, but not be aware of the particular companies within it. We’ve got a screener to help with that. If you want to look at the Renewable energy sector for example, which we know is growing, you can start by checking out the Global Renewable energy screener we’ve developed, then drilling down from there depending on what country you want to look at. 6. Is the company trading at a discount or premium to its intrinsic value? We could do a whole email series on the nuances of valuation, so we won’t go into depth here but just keep this in mind. A high quality business can become a bad investment if you pay too much. If now isn’t the right time to buy, be patient. If the company still ticks all the other boxes for you, it’s worth putting it on your Watchlist within SWS because the market can fluctuate and give you an opportunity to buy at a better price. From there, you can monitor all its developments, set your own fair value and we’ll keep you up to date on all the important updates. This list is by no means all-encompassing, but by simply following this short checklist and other timeless investment principles (which we’ve covered in our 3-part election series last year), we can position ourselves to: Better withstand whatever macro-environment we face Make more informed investment decisions Avoid succumbing to FOMO Be confident in the portfolio of high-quality stocks that we own Take advantage of structural growth opportunities Not overpay for businesses, no matter how good they are Wrapping up So that brings us to the end of our 3-part series! We’ve covered 3 global issues that are causing structural multi-year changes and how to navigate or take advantage of them, with some help from the Simply Wall St platform. We hope you’ve enjoyed this series and got some value out of the content covered! Invest Well, Michael Paige Simply Wall St Download the app This email is from Simply Wall Street Pty Ltd, 17-21 Bellevue Street, Surry Hills, NSW, Australia. Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this email is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us. Privacy Policy Terms and Conditions Unsubscribe - Unsubscribe Preferences

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MAPS OF MEANING : THE ARCHITECTURE OF BELIEF

Cape 27 September - Jordan Peterson 'Maps of Meaning"

Why have people from different cultures and eras formulated myths and stories with similar structures? What does this similarity tell us about the mind, morality, and structure of the world itself? Jordan Peterson offers a provocative new hypothesis that explores the connection between what modern neuropsychology tells us about the brain and what rituals, myths, and religious stories have long narrated. A cutting-edge work that brings together neuropsychology, cognitive science, and Freudian and Jungian approaches to mythology and narrative, Maps of Meaning presents a rich theory that makes the wisdom and meaning of myth accessible to the critical modern mind.

Review

"The book reflects its author's profound moral sense and vast erudition in areas ranging from clinical psychology to scripture and a good deal of personal soul-searching and experience...with patients who include prisoners, alcoholics and the mentally ill." -- Montreal Gazette
"This is not a book to be abstracted and summarized. Rather it should be read at leisure...and employed as a stimulus and reference to expand one's own maps of meaning. I plan to return to Peterson's musings and mapping many times over the next few years." -- Am J Psychiatry
"...a brilliant enlargement of our understanding of human motivation...a beautiful work." -- Sheldon H. White, Harvard University
"...unique...a brilliant new synthesis of the meaning of mythologies and our human need to relate in story form the deep structure of our experiences." -- Keith Oatley, University of Toronto

From the Back Cover

Jordan Peterson's book is a brilliant enlargement of our understanding of human motivation. He follows a path that has been recommended by many scientist-scholars in the past - but one that is, in practice, so extraordinarily demanding that it is hardly ever done well. Peterson synthesizes research and scholarly literatures ranging from neuroscience to archaeology. He aligns the finds of those literatures with the writings of such authors as Jung, Nietzsche, Dostoevsky, and Solzhenitsyn. There is loving detail in this book - reflection, thoughtfulness, careful study, a passionate desire to understand. This is a beautiful work. (Sheldon H. White, Chair, Department of Psychology, Harvard University).

About the Author

Jordan B. Peterson is a clinical psychologist and Professor at the University of Toronto and was formerly at Harvard University. He has published numerous articles on drug abuse, alcoholism and aggression.

Excerpt. © Reprinted by permission. All rights reserved.

Self-consciousness means knowledge of individual vulnerability. The process by which this knowledge comes to be can destroy faith in individual worth. This means - in concrete terms - that an individual may come to sacrifice his own experience, in the course of development, because its pursuit creates social conflict, or exposes individual inadequacy. However, it is only through such conflict that change takes place, and weakness must be recognized, before it can be transformed into strength. This means that the sacrifice of individuality eliminates any possibility that individual strength can be discovered or developed, and that the world itself might progress.

Individuals whose life is without meaning hate themselves, for their weakness, and hate life, for making them weak. This hatred manifests itself in absolute identification with destructive power, in its mythological, historical and biological manifestations; manifests itself in the desire for the absolute extinction of existence. Such identification leads man to poison whatever he touches, to generate unnecessary misery in the face of inevitable suffering, to turn his fellows against themselves, to intermingle earth with hell - merely to attain vengeance upon God and his creation.

The human purpose, if such a thing can be considered, is to pursue meaning - to extend the domain of light, of consciousness - in spite of limitation. A meaningful event exists on the boundary between order and chaos. The pursuit of meaning exposes the individual to the unknown in gradual fashion, allowing him to develop strength and adaptive ability in proportion to the seriousness of his pursuit. It is during contact with the unknown that human power grows, individually and then historically. Meaning is the subjective experience associated with that contact, in sufficient proportion. The great religious myths state that continued pursuit of meaning, adopted voluntarily and without self-deception, will lead the individual to discover his identity with God. This "revealed identity" will make him capable of withstanding the tragedy of life. Abandonment of meaning, by contrast, reduces man to his mortal weaknesses. This makes him hate life, and work towards its elimination.

Meaning is the most profound manifestation of instinct. Man is a creature attracted by the unknown; a creature adapted for its conquest. The subjective sense of meaning is the instinct governing rate of contact with the unknown. Too much exposure turns change to chaos; too little promotes stagnation and degeneration. The appropriate balance produces a powerful individual, confident in the ability to withstand life, ever more able to deal with nature and society, ever closer to the heroic ideal. Each individual, constitutionally unique, finds meaning in different pursuits, if he has the courage to maintain his difference. Manifestation of individual diversity, transformed into knowledge that can be transferred socially, changes the face of history itself, and moves each generation of man farther into the unknown.

Social and biological conditions define the boundaries of individual existence. The unfailing pursuit of interest provides the subjective means by which these conditions can be met, and their boundaries transcended. Meaning is the instinct that makes life possible. When it is abandoned, individuality loses its redeeming power. The great lie is that meaning does not exist, or that it is not important. When meaning is denied, hatred for life and the wish for its destruction inevitably rules:

"If you bring forth what is within you, what you bring forth will save you. If you do not bring forth what is within you, what you do not bring forth will destroy you."

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A VINDY DAY - ALL ABOUT VINDALOO

Cape 27 September 2021

Here is a little peek into the history of Vindaloo - a classic dish that has strong European influence. 

It took elements from the Portuguese and English cuisine to create something uniquely Indian. It is an Indianised version of a popular Portuguese dish Carne de vinha d'alhos (the Portuguese version of Boeuf Bourguignon or Irish Stew with Guinness if you prefer) in which meat is marinated in wine vinegar and garlic. 

It made its way to India in the 15th century along with Portuguese explorers. Carne de vinha d'alhos was a dish that was usually carried by travelers and sailors. It had liberal use of vinegar and garlic and can be preserved. Indian cooks of Goa used local ingredients like palm vinegar, tamarind, black pepper, and spices. With the introduction of chilly to the Indian cuisine by the Portuguese, it adapted itself to a fiery rich curry. The British took up Vindaloo and made it their own and it became an integral part of Indian cuisine.

Kerala Style Beef Vindaloo

Vindaloo became popular in Goa, Konkan, and Kerala because of the Portuguese and Anglo Indian community. Cochin was a one-time Portuguese stronghold and their influence can be seen in the local cuisine. This dish is a must among Christians and the Anglo Indian community of the region, for special occasions and celebrations. 

Vinagiri irachi has the spicy kick of black pepper and the earthy flavor of mustard, fennel, fenugreek, and cumin. Chilly powder like kashmiri is preferred for the colour rather than heat. Black pepper was the spice of choice for generations in Kerala cooking. 

Goan Vindaloo uses the pungent liquor feni but the Cochin recipe uses a milder local coconut vinegar. A small piece of drumstick or Muringa trees bark is also added as meat tenderizer. 

There is no tamarind, tomatoes or vegetables in vinagiri curry and can be made with both beef and pork. There is also liberal use of coconut oil and curry leaves.

http://kichencorner.blogspot.com/2019/10/kerala-beef-vindaloo-anglo-indian-recipe.html

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WOULD THE PEOPLE OF NORTHERN IRELAND VOTE TO STAY IN THE UNION?

Cape 25 Sep 2021

Of the 18 MPs elected in 2019 in Northern Ireland to the UK Parliament, 9 nine are Irish Nationalists, 8 eight are Unionist and 1 one is unaligned.

7 Seven of the Nationalists won't take up their seats at Westminster as they don't acknowledge the legitimacy of British rule.

All 5 five of the border constituencies returned Irish Nationalist MPs. 3 Three of the 4 four Belfast constituencies elected Irish Nationalists.

But is the union is on the way out?

Those 9 nine nationalist MPs got 37.7% of the vote and the 8 eight unionists 42.3%. With the unaligned with 16.8%, reckon 65% of their supporters would vote to stay in the U.K. and even 9% of Sinn Fein Fein voters and 35% of SDLP voters would vote to remain in the U.K. i.e. there has been no change in the percentage of NI voters who would opt for a united Ireland in the past 40 years. 

Seems it's not going to happen anytime soon.

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THAILAND : IDEAL ENTRY REQUIREMENTS

1. Lateral flow is sufficient for fully vaccinated visitors. Why? Testing is not really needed once the population is vaccinated, but until then a pre-flight LFT is sufficient.

2. No quarantine for fully vaccinated. Why? Because any positives are eliminated at pre-flight test.

3. No covid insurance. Why? They are never hospitalised for covid (if comorbidities, it can be a different story).

4. Many changes can be made to simplify the permission to stay.

5. A credible plan to restore and enhance the tourist sector, "build back better" applies to infrastructure and staff.

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STOCK MARKETS MELTING?

Yes, there's 

1. this Chinese property collapse 300billion$ 

- lots of Chinese bought off-plan and will be really angry, 

-then there's the supply chain all those companies working for Evergrande who could go bust,

-then there's all the debt and interest that banks might not get back so they won't have money to lend (this is called a "credit crunch") and so many companies will not be able to borrow, no start up, no grow.

Will the Chinese govt step in? They've said no in general, but ...who knows? 

-Pull any investments in China.

2. an energy crisis - the UK govt may help peoole pay a hugely inflated gas bill

3.  Fed tapering of the 160b they buy in the bond markets every month

4. A rate Fed interest rate hike next year and 

5. inflationary pressures are they temporary or are they building?

But we are so very conditioned to "buy on the dips" that maybe this will be jyst another opportunity....

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AUKUS. THIS IS THE DEAL AND THE FRENCH ARE TOAST

Of course the French reaction can be the result of jealousy: fear of loss. Except here, the loss has materialised. 

In fact, we see the authentic hurt pride of the French: they thought they had something to be proud of, but their subs were rejected. And we see the hubristic hurt pride of Macron: his sense of his self-importance is punctured.

Reality is, the Astralians asked for nuclear subs from the UK and US because the French subs were not up to the mark: the requirement is for a force to counter the rise of China. The French could not be let in on the change of plan and only learnt what was going on when they read the newspapers. This is normal as they could not be trusted with this information any earlier.

The French hurt is understandable. As is the UK's relishing this plate of cold revenge for French continual nuisance tactics over Brexit.

We can expect retaliation and some sulking too from the French. Also attemps to console her from the Americans. Macron has met his Waterloo.

The real importance should not be lost in this moment of high drama. This is the moment the fight-back against the Rise of China truly began. We do not imagine it will concern only submarines! It is a new military alliance with a common enemy: China. Further members may be added: Japan, India, Malaysia, Taiwan...

Nato will need reform. The inclusion of Russia could be contemplated on strategic grounds, given its growing closeness to China.

This alliance could also mature into a new free trade area, and one the EU could in time apply to join, offering hope for the survival of their own free trade area, the Single Market and Customs Union.

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OUR FREEDOMS

In case we forget, our freedoms are longstanding and many, notably 

freedom from false arrest

the right to an unbiased jury trial in serious cases

freedom of speech, the press and media

freedom of religious worship or to dissent

freedom to give the government the boot every 4-5 years, Brexit as reassuring proof of that even when the establishment spent four years opposing the popular vote and the losers leave with good grace, and do not call in the military to overturn a democratically determined result.  

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FRENCH SUBS, WOUNDED PRIDE

 The French reaction is one of wounded pride. 

It could be that they thought they had something of worth (the subs), but no, the subs were found to be inadequate, not up to the mark. That would be an authentic pride, wounded.

But it could a hubristic pride. This would be from narcissistic arrogance and self-importance (a known French character weakness) which often precedes disaster.

After all, it has been well known for the last six to 12 months that the order would be cancelled. The wait was while a more suitable product could be found. AUKUS was the moment.

Justified pride is from one's accomplishments. But the French reduced the spec, lengthened delivery time and almost doubled the cost. Of a product that became dated. Where they could have upgraded to nuclear and made realistic commitments.

So, was it wounded authentic pride? Or wounded hubristic pride? And how to stop the French retaliating or going into a big sulk? After all, they are an important member of the club of democracies; and we all have weaknesses and make mistakes.

19 September 2021

Australia canned the contract legally and pay a compensation.

The diesel subs are no longer fit for purpose.

More broadly, something has to be done about China and this is the start.

The French suffer from wounded pride - they thought they had a world class product, source of national pride, they don't. Their narcissistic, self-important leader takes it as a personal affront.

The French are excluded, presumably because cannot be trusted, but something will be done to dress up that wounded pride.

After all, they are a G7 democracy and  with Germany, lead the EU.

My advice would be for the French to consider their place and role on the global stage, what their best long-term loyalties demand of them, and be sure to pay their way in future, and be serious humble and respectful and not snap at the heels of the leadership for reasons related to ego.

20 Sep

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IS IT TIME TO REFORM DEMOCRACY?

Actually, it is time to requalify voters. Democracy is broke.

Try : property owners, over 26 years of age, under 26 BMI.

14 Sep 2021 

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THE ROLE OF THE FATHER (IT IS SELFLESS & GIVING)

You can say that God has given us each a role or roles, as well as special gifts, to use for the benefit of others.

Now you mentioned the Greek myths. They teach us the importance of bravery, intelligence, and tell us about right and wrong. They show that we can be rewarded or punished for our good actions or our missteps.

You also mentioned "love". The father loves his wife and his children. But love is not so much a condition (I am loved by my father, I love you), it is an action. I lavish you with love. I do things for you. Not for me, but for you and for us.

And if the father loves, he can expect to receive respect and admiration, for his actions.

That is how it works. The wheel of love goes one way from father to wife and children; and back comes respect, admiration, awe, maybe a little fear.

And remember that this is all happening now, in the real world, in real time. It is not so much a promise about à theoretical future - that a man who lavishes love on his family will be praised and respected - it is something the father must catch up with, and do right away, starting from now.

For me, things get a bit dangerous because as part of this paradigm, when the father loves his wife, she, in return, must obey him. Love demands obedience. No! It is not a hierarchy or pyramid like that!!! It is a circle. Love and respect flow both ways, these days.

14 September 2021

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CHIANG MAI BACK IN WORLD'S TOP TEN HOLIDAY DESTINATIONS

https://www.tatnews.org/2021/09/worlds-best-awards-2021-names-bangkok-and-chiang-mai-among-the-globes-top-10-destinations/

• ‘World’s Best Awards 2021’ names Bangkok and Chiang Mai among the globe’s top 10 destinations

Bangkok, 13 September, 2021 – The Tourism Authority of Thailand (TAT) is pleased to report that Thailand has performed well in the ‘World’s Best Awards 2021’ survey by Travel + Leisure, with destinations and hotels being voted among the top worldwide.

Bangkok and Chiang Mai both featured in the top 10 of the World’s Best Cities category, with Chiang Mai in 9^th spot with a score of 90.06 and Bangkok in 10^th with a score of 89.81.

Ko Samui secured 2^nd place in the Top 5 Islands in Asia category with a score of 90.34, and also came in at 7^th in the Top 25 Islands in the World category.

Four Bangkok hotels made their way into the Top 100 Hotels in the World category, with Capella Bangkok situated on the east bank of the Chao Phraya River occupying 4^th place on the list with a score of 99.38.

Mandarin Oriental, Bangkok came in at 41^st with a score of 97.87, tied with Katikies Mykonos in Greece’s Mykonos, The Lanesborough in London, and The Roundtree, Amagansett in New York. The Four Seasons Hotel Bangkok at Chao Phraya River earned 55^th place with a score of 97.59, and The Sukhothai Bangkok was named in 73^rd with a score of 97.25.

The Mandarin Oriental, Bangkok also received a Hall of Fame designation, indicating it had been voted into the Top 100 Hotels in the World list for the past 10 consecutive years.

The World’s Best Awards is based on an annual reader survey, and for the 2021 edition voting was carried out from 11 January-10 May, 2021. 

There are categories for airlines, airports, car rental, cities, cruise ships, destination spas, hotels, hotel brands, islands, tour operators and safari outfitters, and national parks in the USA.

See also:

Thailand Trusted Report EP 28: City of Clean Air

Thailand moves further up the ‘Best Countries Heritage’ top 10 rankings

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THE NEED FOR FURTHER REFORM OF THE NHS

Many of us remember the restructuring that created a new body, NHS England, to run the health service, set up new regulators, to replace primary care trusts with clinical commissioning groups (CCGs) led by GPS, to organise local services, and which handed responsibility for citizens' healthy lifestyles  over to the town halls. 

Then in 2015, health visitors moved into local government as well, to complete the transfer of public health from the NHS to local authorities.

That was the change program legislated for in 2012 and implemented over four years to 2016.

 

 The vision was of a health service fit for the 21st Century. The key belief behind these root and branch changes was that greater competition in the NHS would make it more efficient and responsive. 

 But by 2019, competition as a driver of improvement was being rethought. The NHS' Long Term Plan argued that cooperation was now key. We needed a joined-up NHS.

Thus was born the integrated care systems (ICSs), created over the next two years, to 2021. An Integrated Care System. ICS is - as the name suggests - a partnership bringing together hospitals, CCGs (the GP-led clinical commissioning groups that organise local services), local authority community services, and the charities, to all work together. 

For example, after a fall, an elderly person might be hospitalised; then on leaving hospital there will be a four or six week program of home care organised by the LA social services; possibly physio; and a charity might be requested to provide some social life until the person can out and back into the community.

 This integration is necessary because an ageing population requires multiple different and coordinated services to work together, sharing staff, skills and records. Such are the complications brought on by aging compared to simple health issues faced by youth. 

 Evidently, the initial funding provided is no longer sufficient.

 The job now is to further join up and share the back office support services across regions and with office automation making managers more productive, many senior and middle positions can be "cancelled" for real.

And when we remember back to the beginning of the NHS after the last war. It was originally thought that once everyone was through the new cattle dip, once everyone's health had been fixed, there'd be little need for an NHS. It would all just be low-maintenance.

Little had we imagined how the demographics would change; nor could we conceive of the advances in medical science and possibilities for re-engineering the human body.

End

14 Sep 2021

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BORIS, THE WACAMOLE POLITICIAN

Boris is a wacamole politician. No strategy, all expediency and tactics.

"There, that'll sort you out once and for all. Now don't come back and annoy us again."

"Next please!".

The same collectivist policies are being applied across democracies worldwide. It is not just "Bunter", as people here like to call him, it's everywhere. 

The problem is somewhere halfway between democracy and Liberal internationalism, with the power hungry never letting a good crisis go to waste to grab some more, and an abscence of alternative leadership.

But voters get what they vote for - and on my reckoning so far, Boris Bunter will be back after the next election.

Maybe if the vote could be restricted to property owners aged over 25 with BMIs under 25.

 What is the attraction of collectivism to a Conservative? None, you'd think.

Yet here is the state encroaching again, as it always does after a crisis, taking away another big chunk of family and personal responsibility ; and asking people to pay in higher taxes and loss of freedom.

Maybe it's a cover to pay for Brexit?

.End

12 Sep 2021

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WOULD YOUR HARD-EARNED FARE BETTER IN PROPERTY OR STOCKS?

https://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-property-vs-stocks-shares-best-invest-50k/?li_source=LI&li_medium=liftigniter-rhr

Invest in property or shares?

Buy-to-let property vs stocks and shares: where is best to invest £50k?

Would your cash fare better in the property or stock market?
By Rachel Mortimer 8 September 2021 • 6:00am
illo

In the not-too-distant past, regulatory red tape and punishing tax changes sounded the death knell for the buy-to-let market as landlords sold up and left.

But the sector has enjoyed an unexpected recent revival, however, thanks to savings made under the stamp duty holiday and rising rents bolstering investor returns.

This has coincided with increasingly attractive income prospects. In July 2021, the North, East of England, South West and South East all recorded double-digit growth in rents. Nationally, rents rose by 6.2pc compared to the same month last year, according to Hamptons estate agents. 

But buying and renting a property can be a complicated process that involves a lot of management and high costs such as stamp duty and legal fees. Would it be easier and more lucrative to invest in the stock market?

Telegraph Money has crunched the numbers to see whether £50,000 would perform better invested in properties or companies over a typical 10-year period.
Property

Soaring house prices mean landlords with a £50,000 budget would need to be savvy when choosing where to buy. Investors will be priced out of the likes of London and the South East, for example.
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Private Finance, a mortgage broker, analysed the potential returns in the best and worst scenarios for a buy-to-let property. It considered a home in Sheffield, a popular location for investors because of its modest house prices, large student population and strong employment prospects for workers.

Using their £50,000, a landlord would need to set aside £2,500 for fees and would then need to borrow £147,500 in order to purchase a four-bedroom property worth £190,000.

In a best-case scenario, the property would be let for £850 a month, rising with inflation, for the full 10-year investment period. Mortgage costs would be £297 a month, which we have assumed would stay the same for the full decade as long-term fixed deals are available at 2.5pc.

In this example first-year profit would be £4,638, rising to £6,225 in the final year. The overall profit would be £54,106.

However, renting a property is rarely that easy. Most landlords have void periods – the time between one tenant leaving and the next arriving – when they do not have rental income.
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If the property in our example was left empty for two months each year, the returns would be more than a third lower. Profits would be £2,938 in the first year, reaching a total of £35,406 at the end of the decade.

However, these profits could be enhanced by underlying growth in the value of the property. The house price boom of the past year has resulted in exceptional growth, but even in more normal times property values tend to increase over the long term.

Working on an assumption of house prices growing by 2.1pc each year, in a decade the example property would be worth £229,079 - a rise of £39,079. When this is factored in it leaves the best-case scenario landlord with £93,185 back on their £50,000 initial stake.

In our less successful scenario, the landlord would have made £74,485.
Taking stock

Would landlords be better served by investing in the stock market instead? Here you eliminate the risk of void periods of problem tenants, but returns depend on how much risk you are willing to take.
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AJ Bell, a fund shop, analysed two potential outcomes. In the first scenario, our investor placed their cash in company stocks, which have historically returned 5.3pc per year, based on data from the past six decades.

A £50,000 sum invested in this way would return £2,525 in the first year. By the end of the decade, thanks to compounded growth, our investor would have a pot worth £81,833.

But many people would shy away from investing directly in companies. More cautious investors may prefer gilts and bonds. AJ Bell said these investments had typically returned 2.7pc over the past six decades. If this were to continue for 10 more years the investor would have £63,693.

Both scenarios assume stockbroker charges of 0.25pc are applied. In this example the case study had invested directly in companies; if they were to invest in funds then management charges would also have to be deducted.

Those looking to avoid risk altogether can keep their money in cash, but even the best savings accounts struggle to beat inflation. An account paying 0.6pc interest would grow £50,000 into just £53,082 over the 10 years, AJ Bell said.
Which is best?

The buy-to-let property offers the best returns overall in this analysis. The landlord would have made a profit of £54,106 from rent, plus a further £39,079 from the growth in the value of the property. This brings the total profit to £93,185.
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By contrast, the best stock market scenario would return a profit of just £31,833.

Each of these scenarios looks at profits before tax. Both types of investor will potentially have to pay capital gains tax, as their assets will have risen in value. They will also be liable for income tax on their income, and dividend tax if the shares have paid out to investors.

The stock market investor could protect themselves from the taxman by using an Isa, but the investment would have to be spread over a number of years given the annual allowance is currently £20,000.

Landlords will also be forced to pay stamp duty at three percentage points above the standard rates, should they already own another home. For a property purchase of £190,000 this would mean a £7,000 bill, another cost for landlords to consider.

The best option depends on an individual's approach to investment. Maintaining a buy-to-let property requires significant amounts of time and effort: if something breaks it is the landlord’s responsibility to fix it and the standard of tenant can often be luck of the draw.
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Investing in the stock market is a much more hands-off affair, but average returns are subsequently lower.
Related Topics

    Buy to let, Shares

84
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84 comments
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Jimi Hendrix
8 Sep 2021 6:33PM

Don't 'invest' in property. Property is a liability. Invest in shares. As a country we over invest in property. Enough. Buy shares and help boost the real economy.
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Stuart Davies
8 Sep 2021 6:08PM

BTL expenses soon and regularly gobble up your gross profit.
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Jonathan Collard
8 Sep 2021 6:06PM

I’ve been an accidental landlord for 25 years…albeit I’ve intentionally added extra properties. To be honest it’s not a money making endeavour at all… more of a safe harbour in a mixed portfolio of investments. Tenants genuinely are a pain in the backside irrespective if they are professionals like accountants and lawyers or blue collar workers like hair dressers or mechanics. ( I’m no snob; left school at 16 as an apprentice). Unless you are doing this on an industrial scale with 30 or 50 plus properties then best avoid rentals. New tax rules are a killer and when you have your hand down a toilet retrieving yet another causally discarded tampon you’ll rue the day….. 🙄
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Cavan Davidson
8 Sep 2021 5:54PM

Bad tenants, boiler replacements, agency fees, maintenance..... loads of extra costs in owning property.


Also, some very studenty towns and cities have areas where multi bedroom houses cannot simply be turned into homes in multiple occupation (HMOs)


Also, the house buyer in this instance is leveraged to nearly 3x equity.



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Ford Prefect
8 Sep 2021 5:31PM

If you get a buy to let in a university town, you could collect on a uni student let, a rent of around £2,500 per month for ten months. I know that uni students trash the place, Been there, done that, but the parents will pay for damages. Uni students are often hard work but give tremendous returns.

Cash invested should be in an ISA and would be free of  tax. Now that I have retreated from property ( I am 83), my money is in funds and showing a tax free return in excess of 20% so someone, possibly the columnist, needs to do more sums.
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St John Quintrell
8 Sep 2021 5:15PM

What about maintenance costs and taxation?

And if comparing like with like, you would employ a property manager to deal with the ongoing letting and maintenance issues.
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Big Mac
8 Sep 2021 5:13PM

The BTL also assumes someone won't trash the place or need to be evicted via the courts.
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Steve Don
8 Sep 2021 5:32PM

Exactly, most landlords have at least one horror story if been doing it for 10 years.

Stocks and shares, comparatively are so much less hassle and stress.
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Anthony Chambers
8 Sep 2021 4:57PM

Also, I cannot remember the last time HSBC called me up to ask for a new shower head because the other one is broken. No, they just happily credit my index tracker with a dividend.
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Anthony Chambers
8 Sep 2021 4:51PM

This is a completely unfair comparison. You cannot compare a leveraged property with an unleveraged share. If you want a fair comparison, try comparing NASDAQ x3 index tracker with a 65% buy-to-let property. You will soon see that shares vastly outperform the housing market.
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krys hazel
8 Sep 2021 4:18PM

Look at what paintings are going for at Sotheby's auctions. Buy something by an established artist (no need to actually like the work) and keep it for a few years.
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Richard Burlton
8 Sep 2021 3:54PM

I expect better from the Telegraph; the BTL figures made no allowance for management fees, letting fees, property maintenance and regulatory compliance costs. There is also no warning that investing in a single property comes with the risk of a bad tenant who fails to pay the rent and costs a small fortune to evict.


Investing in the stock market is far more secure if you go for a diversified portfolio and the investment is far more liquid
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Anthony Chambers
8 Sep 2021 4:52PM

@Richard Burlton And they are comparing an investment with leverage against one without.
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William Rusbridge
8 Sep 2021 3:36PM

Think long and hard about a BTL.  It can work if you have good tenants but the gearing is fairly horrendous.

If you have to put in a new bathroom or kitchen every few years then the 10% yield is soon reduced.

At least with a ftse company you can trade in seconds, its cheap and absolutely no hassle.
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Anthony Chambers
8 Sep 2021 4:53PM

@William Rusbridge If you want a better return based on leverage, there are FTSE x3 index trackers too.
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roger white
8 Sep 2021 3:22PM

BTL is - despite all the taxes & crackdowns - far the superior investment..& if invested in the best locations virtually guaranteed - while stocks & shares are far more liable to fluctuations in performance & ups as well as downs.

Faang stocks might be comparable.

The article is spot on.
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Paul Wilson
8 Sep 2021 4:48PM

@roger white Stocks, while volatile in the short term, ALWAYS rise in the long term. That is, as long as you invest in index-linked funds. You are on your own if you invest in individual shares.
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N Tobin
8 Sep 2021 3:01PM

Give me shares any day.

I can   dump them tomorrow and move the money anywhere In the world if an idiot like  Corbyn or Starmer were foolishly elected.

They can  also be protected in ISAs
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Steve Willis
8 Sep 2021 2:58PM

Equities win hands down. No work. Ignoring the idiocy of comparing leverage
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Norman Brown
8 Sep 2021 2:22PM

This analysis is deeply flawed.  You compare a leverage investment in property with an unleveraged investment in shares.  Leverage hugely increases risk.  Like for like will show the stockmarket investment offers a far higher return - and, if you wish to avoid leverage, you can't do the property with only £50k.


Plus the journalist doesn't mention tax.  There's no tax relief available on your property investment, whereas you should, within 3 or so years, get your shares into an ISA, giving you tax free returns.
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Mike Isaacs
8 Sep 2021 1:41PM

If you’ve only got 50k to spare, I wouldn’t bother. You could easily lose the lot if it’s used as front money.
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john brown
8 Sep 2021 1:21PM

property is a good bet but so often the bet is hampered by unforeseen issues-

No mention of all the regulation checks required..HMO licence, if it’s more than 2 people, smoke alarms and PAT equipment checks.

Then there is the likely changes in tenants protections- possibly the worst being rent controls and sitting tenants.
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Nigel Masters
8 Sep 2021 12:48PM

If the investment is made into equities then a small amount, possibly within the tax free exemptions may be sold every year, also a transfer could be made to a spouse utilising their yearly exemption, again avoiding tax.


If the investment is a buy to let everything has to be sold at once thereby ensuring that most of the capital profit is taxable.


It should also be remembered that disposing of property can take some time unlike equities which have a known value on sale date with proceeds due on a set date.
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Geoff Willis
8 Sep 2021 12:15PM

The example uses leverage on the BTL side. A fair comparison would use margin to buy the stocks, although you can't borrow as much as with a mortgage.
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J Clark
8 Sep 2021 12:12PM

Unclear why buy-to-rob was exempted from the new social care 'levy' of 1.25%.

If it's good enough for dividend income, it's good enough for parasitic intermediaries tying up scare property that would be better occupied by owners.
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Joseph Ridout
8 Sep 2021 12:31PM

It's already taxed at very high levels.
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Steven Rose
8 Sep 2021 2:38PM

@J Clark

Income from btl is taxed, including NI, so it will be covered.

Besides, who wants to live in "scare property"? It sounds frightful!
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Stuart Davies
8 Sep 2021 6:15PM

@J Clark  I think BTL profits fall into income tax category & rates.
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Russell Thornley
8 Sep 2021 11:46AM

You can of course minimize your involvement in managing/maintaining a BTL by getting an agent to manage the property, but that eats into your profit (choose your agent carefully - they are often in cahoots with their panel of electricians/plumbers/plasterers etc) so a simple job to replace a faulty lightswitch/socket can cost you significantly more.  If you manage your properties yourself, you need at least a tame electrician, plumber and/or heating engineer/gas man who is reliable and doesn't charge the earth

Another thing to consider with BTL is the ever changing regulation environment - and this is going to get worse over the next few years.  Energy performance of properties is going to get much tougher and it is proposed that all BTLs will need to have an EPC of a 'B' or higher by 2028/2030.  This is going to impose big costs of insulation, heat pumps, glazing replacements etc on landlords.  We will see even more small LLs exit the BTL market as these changes begin to bite.  Rents are going to go UP.

One thing I will say after being a BTL landlord for 24 years, if you want an easy/less stressful life - BTL is Not for you.  10/15 years ago it was, but not any more.



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John Cutmore
8 Sep 2021 12:12PM

Yes agree with all of this above. I used to be Hands on but have now moved away so my properties are with an agent which is cutting around 20% off profit even with a commission rate at 8.5%.

I generally decorated properties myself as would generally cost 2k a pop for 2 coats in a 2 bed property. I could knock this out in a week or so myself.

I have certainly considered selling all and reinvesting into property let’s or something else.

Answering someone else’s comment about not using finance. With credit so cheap in the last 10 years it would have been silly not to use it even with the tax changes to interest. This can be negated by maxing pension contributions.
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ross denholm
8 Sep 2021 11:45AM

The property example ignores the cost of maintenance, roof repairs, boilers, garden maintenance etc.
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Gary Cole
8 Sep 2021 1:05PM

@ross denholm And needing to reach EPC C by 2027...
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Runtime VIA
8 Sep 2021 11:45AM

Tell me where I can buy a flat for £50k that will see a 8%+ return and I'll get in touch with the local agents now.
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Ned Ryerson
8 Sep 2021 11:53AM

@Runtime VIA

You didn’t read the article properly.
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Runtime VIA
8 Sep 2021 11:55AM

@Ned Ryerson 0/10 for that godawful reply. Explain why, in an article that talks about buy-to-let, did I misunderstand the central point that investing £50k means I need to acquire a property to let that will make a profit???
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Joseph Ridout
8 Sep 2021 12:32PM

Heard of a mortgage?
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Ben Chater
8 Sep 2021 11:34AM

I’d agree with this article. Returns in B2L mentioned here mirror the returns I have made over the past 5 years on 3 flats I have purchased. This article doesn’t factor in maintenance costs. I’d allow 10-15% per year
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robert storey
8 Sep 2021 11:19AM

Stocks. The UK stock market is undervalued. Hardly risen at all in 20 years so plenty of upside but with a rising yield. The ftse100 is big safe global mega corps.

Property is incredibly vunerable to any kind of economic shock especially interest rate rises. Bank of England thinks 1% rise in rates would cause 20% fall in value.
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Joseph Ridout
8 Sep 2021 11:32AM

Whilst I agree with your headline answer of "stocks", the FTSE100" is full of junk.

There's what ... 5 investable companies in it
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JP Law
8 Sep 2021 3:14PM

@Joseph Ridout

There are the FTSE 250 plus AIM plus there are 20,000 retail investment funds, investing in a huge range of assets, available in the UK. Plus overseas shares.

Plenty of options.
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Anne Burke
8 Sep 2021 11:12AM

Thé major différence is in the assets liquidity. If you need the money for an unexpected crisis or similar then stocks are easily sold, with property you cannot sell off the back bedroom. The whole investment needs to be sold with the consequent costs.
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Comment Now
8 Sep 2021 11:12AM

In the UK we seem to prefer investing in anything rather than in the stock market. In the US, it seems that the stock market is the default place to go. The US approach makes more sense in the long term.
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Philip Cook
8 Sep 2021 11:08AM

If you’d invested 50000 in quant back in February this year, your portfolio would be roughly 375000
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David Glover
8 Sep 2021 10:57AM

A house purchase is a leveraged bet.  You put 50k down and take on 200k of asset.

Unless selecting less common financial instruments, the stock market is not.

If both  markets drop 50% you lose 25k if in stocks and 100k if in housing.  I.e you have 25k left if in stocks and you own nothing and owe someone 50k if in housing.

The risk factors between the two are clouded by recent history.
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robert storey
8 Sep 2021 11:24AM

@David Glover people think property only goes up in value because they think government policy deliberately makes that the case. In fact the policies that have kept house prices high were to stop unemployment rising and to help banks recover from 2008.
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Steven Rose
8 Sep 2021 11:56AM

@David Glover

"A house purchase is a leveraged bet."

It is in the example chosen, but not if you had £100,000 and chose property in a cheaper location.

But as an example of how leveraging can work to your advantage, 10 years ago we borrowed £50k against our own house and bought a dilapidated place as a btl outright. We paid off the loan, from the rent, after 8 years so now the majority of the rent is profit. Meanwhile the property has trebled in value.

Our initial investment? Zero.

Now that's what I call a return!

Finally, shares halved briefly in the 2007 crash, but when has property ever done the same? Especially over a ten year period.
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Hugo Davies
8 Sep 2021 10:52AM

Passive tracker funds?
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Oliver Murphy
8 Sep 2021 10:42AM

Interest only mortgage for 10 years?
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Mark Vaughan
8 Sep 2021 10:31AM

No allowance is mentioned for the expenses incurred on rentals, landlord insurance, annual gas safety checks if applicable, repairs etc which can eat into overall annual income
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Nick Smith
8 Sep 2021 10:23AM

Talk about apples and pears.

How about subtracting a notional annual salary from the time and effort needed to look after the properties?

You know, the one you could actually be earning elsewhere while your stock market investments look after themselves?
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9 Sep 2021

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