MoneyMaker October/November 2012

ISSUE THREE | OCTOBER/NOVEMBER 2012

www.moneymakermagazine.co.uk

MAKE IT • SPEND IT • LIVE IT

kiss &tell Rock and Roll Royalty Gene Simmons on Life, the American Dream and becoming a Business God

PLUS Making Your Business More Creative • Breaking into the World of Classic Cars • Your Guide to the New Premier League Season

editor’s letter DEAR Reader,

ISSUE THREE | OCTOBER 2012

www.moneymakermagazine.co.uk

MAKE IT • SPEND IT • LIVE IT

Traditionally the summer is a quiet time for the financial markets, as City big boys and girls opt to forgo the sweatridden commute and instead head for the sandier shores of their island getaways for a month or two. And, as I’m mailing this letter in from a boat in the middle of the Agean, it would be more than a little hypocritical for me to pass judgement on the extended vacation David Cameron, Bob Diamond (extremely extended in Bob’s case) et al. are enjoying whilst the markets stagnate in the summer sun.

That doesn’t mean we haven’t been busy here at MoneyMaker though, and this month’s issue is the fruits of our labour. We’ve been out and about to spoil a good walk with Sophie Horn again, up to Le Manoir aux Quat’Saisons for a chin-wag with our favourite chef Raymond Blanc, and hanging out with rock star royalty Gene Simmons.

Gene is a crazy guy to be around. His magnetic personality is completely overwhelming, and he’s got enough anecdotes to fill a magazine several times over (note to self – pitch idea of KISS: The Magazine to Gene Simmons next time he stops by. No, wait, Gene’s already thought of that). He’s also a fantastic businessman, with a unique and inspiring take on the American dream. He really does give you the impression he could solve all the world’s problems and then some given the chance and, with a billion dollar empire built from nothing on his resumé, you’d be hard-pressed to argue against him.

Our interview with Gene is a revelatory article, and the highlight of a great issue - essential reading if you have even the slightest ambition to make money from the arts.

We’ve also got some exciting ideas in the pipeline for the issues leading up to Christmas, but we’re keeping those to ourselves for now. As a teaser though let’s just say that it’s going to be MoneyMaker’s mission to have your mind, body and soul prepped to make 2013 the best year you’ve ever had, both in and away from the office.

Anyway that’s enough from me for now, I’ve got to get back to my blow up dolphin to ride into the sunset.

I hope you enjoy the issue.

Best wishes Alex Hammond Editor in Chief, MoneyMaker Magazine

kiss &tell Rock and Roll Royalty Gene Simmons on Life, the American Dream and becoming a Business God

PLUS Making Your Business More Creative • Breaking into the World of Classic Cars Your Guide to the New Premier League Season

Editor in Chief Alex Hammond Features Editor Mark Southern Web Editor Lisa Curtiss Features Writers Eve Hartridge Phil Green Jo Franks Natasha Heard Alessio Rastani Chris Powell Tony Drury Contributors Louise Hinchen Simon Smith Michael Derks Lisa Best Chris Smith Quintessentially Wine Michael Hewson Colin Cieszynski Estella Shardlow Art Director IF Design & Art Direction Videography Adrian Butterworth Photography Simon Jessop Head of Sales Kyle Haddon 01162 605 665 sales@moneymakermagazine.co.uk Marketing & PR Polygon PR Research Analysis Simon Wiltshire

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contents OCT/NOV 2012 UPFRONT 8 10

News In Brief Book Club

12

Entrepreneur 12 18 20

Gene Simmons Getting Creative Raymond Blanc

Trading 22 24 26 30 32 34 36 38

Shifting FX Effects European Markets Binary Trading Alessio Rastani World Markets - India World Markets - Japan Tony Drury Business Focus - Brazil

Assets 42 46 48 52

Wine Markets & Exchange Rates Sassacaia Classic Cars Books

18

Lifestyle 54 58 60 62

Italy Golfer’s Guide Watches Cars

38

26

Sport 66 72 74

Football Punter’s Post Diary of a Sports Bettor

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Send in your stories: Got a story MoneyMaker should be reporting on?

Contact us at www.moneymaker magazine.co.uk

News in Brief what we’re talking about right now

New Baume & Mercier collections surpass exceeding expectations Baume & Mercier have unveiled their 2012 collection, and unsurprisingly quality and style are laced throughout the immaculate array of watches on offer.

Since its founding in 1830, Baume & Mercier has been dedicated to innovation and watchmaking excellence, and today continues with its design creed, artfully rising to the challenge of creating affordable luxury timepieces that are inherently powerful and enticing – inside and out.

The newest watches released for 2012 contains these factors, incorporating key design elements and reflecting the

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brand’s prolific abilities in product development and execution.

Baume & Mercier’s unique style is evident in many important signature watch details of the 2012 collection, including ergonomic lines, and warm, earthy tones.

Technical excellence reigns in the new additions to the adventurous, sporty-chic Capeland series and in the Classima lines, with precision and quality at the forefront of the collections innovations of the new series. Top-quality automatic calibers and flyback chronographs are just some of the desirable additions to the

line which will no doubt be a hit with watch connoisseurs and amateur collectors alike.

Perhaps the most desirable of Baume & Mercier’s collections is the Capeland series, which deftly blends historical tradition with contemporary style and elegant appeal. Inspired by a 1948 single-push piece chronograph vintage model, the generous round case of Capeland is classic yet relaxed, and offers a distinctive look for any wearer.

The charismatic series epitomizes a relaxed lifestyle and strength of character.

Indeed, in the true scope of

Baume & Mercier’s DNA, the Capeland resolutely embodies shapes, colors and authentic functions that uniquely represent the brand’s universe of seaside living at its best.

The Capeland’s offerings have been extended for 2012, retaining many of its distinctive attributes (including Arabic numerals, tachymeter and telemeter scales, and retro-styled short horns), but adding a larger case size and new complementary two-tone colors for the dial in the core range.

A fantastic addition to any watch enthusiast’s collection.

Christie’s First Online-Only Auction A Success Christie’s successfully held an online auction this month and sold a case of 1982 Chateau Lafite-Rothschild for approximately £26,750 after a two week long bidding war, marking the first ever online-only fine wine auction.

Further online auctions are planned to be held, running alongside the auction house’s established salesroom auctions.

Online bidding has been implemented within the saleroom since 2006, where salesrooms were streamed live to remotebidders and paddles could be raised to make a bet.

Signature Cellars sales totalled £517,950, with 88% of lots sold. Over 440 registrants from around the world took part in the bidding process, with bids reaching ‘a frenzied pace’ as alerts by email and phone were sent to bidders to notify of being outbid or a lot ending.

Buyers of the top ten lots were either

Asian or American private buyers.

More than 25% of registrants in the sale were ‘completely new to Christie’s’, according to Christie’s International CEO Steven P Murphy.

This indicates that “wine collectors around the world appreciate… the accessibility of the online-only sales model. E-commerce is a key part of our growth strategy as a company, and we look forward to expanding this exciting new model even further this Fall.”

The top ten lots over the course of the auction included Château Lafite, MoutonRothschild, Petrus, Latour and Margaux wines, with most exceeding or meeting pre-auction estimates.

A 6-bottle case of Petrus 2000 fetched approximately £16,420; a case of Latour 1982 fetched £13,760, and two cases of Mouton 2000 fetched around £10,700 each.

UK’s most expensive house goes on sale The UK most exclusive street – The Bishop’s Avenue in Hampstead – became a little a little more exclusive this month as one of its illustrious properties became the most expensive house on the open market.

Heath Hall, built for sugar magnate William Park Lyle in 1910, has been restored to its former glory and can be yours for a cool £100m. Don’t request a brochure if you’re not seriously interested though, as that alone will set you back £2,000.

Property developer Andreas Panayiotou bought the property, which fell into disrepair in the 1950s, in 2006 and has spent £40m rebuilding London’s now most desirable abode.

Panayiotou was ranked 200th in last year’s UK Rich List, having amassed a £400m property empire.

The house, which already stood at an impressive 19,000sq/ft, has been extended by a further 8,000sq/ft to complete one of the most notable properties in the road dubbed ‘billionaires row’ due to its impressive lists of residents.

The buyer of Heath Hall will not only be able to brag about owning perhaps the finest house in London set into the ‘Beverly Hills’ of the capital, but also having one of the few nine figure valued residential properties in the UK. And that’s something all MoneyMaker’s can aspire to.

Apple awarded $1bn damages from Samsung in patent court case US Court rules in favour of iPhone producer in intellectual property dispute A court in the USA has ordered Korean technology manufacturer Samsung to pay injury rivals Apple Inc. over $1bn in damages in the continued dispute of intellectual property rights infringements.

On the weight of the evidence a jury of nine determined that Samsung had copied fundamental design aspects of the iPhone and iPad manufacturer’s technology.

Apple had sought over $2.5bn of damages from the courts, whilst Samasung had counter-sued to the tune of $519m, claiming that it was their designs that had been copied.

Samasung has already said it will appeal the decision, but Apple will immediately seek an injunction to prevent Samsung products being sold in the US. Technology experts are calling the verdict between the two smartphone giants a landmark decision for the world of patents intellectual property. Previously a court in Samsung’s country of origin of South Korea had ruled that the two companies had infringed on each other’s intellectual property rights, whilst cases for both sides had been thrown out by courts in the UK. The case in the US, however, involved the largest claims for damages, and could shape the way international patent cases are handled by the courts in future.

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The Traders

Book Club

All three books from featured in this month’s Traders Book Club can be found at www.harrimanhouse.com

MoneyMaker’s answer to Oprah

The Essential P/E: Understanding the stock market through the priceearnings ratio

By Keith Anderson

n In recent decades P/E has been the most important and well-known investment ratio. Apart from share price, it is the only investment statistic that is published in print every day. But what does it actually mean? For most people it’s a shorthand way of deciding how highly the market regards a company. It tells you how many years’ worth of future earnings you’ll pay in order to buy the share.

In The Essential P/E, Keith Anderson starts with the basics: the fundamentals of prices and how earnings and P/Es are calculated in the UK. He then goes on to look at the value premium, which is the whole basis of using the P/E as an investment tool: low P/E shares, on average, outperform the market.

The second half of the book gets into the details of the P/E: developments that have tried to improve it, and how famous value investors have combined it with other measures. The P/E can be made into a powerful tool, but as with most powerful tools it can run amok if you don’t control it properly, check it against other statistics, and apply a liberal amount of common sense.

While the value to investors of being familiar with this widely used statistic is clear, professionals in financial markets may find it a more surprising subject, possibly never having stopped to think how or why it is calculated that way. Such professionals may well be surprised by how easily the P/E could be improved if things were managed slightly differently.

The Essential P/E is primarily aimed at investors who already know something about investing in shares, but is also suitable for professionals. Quite simply, it is a practical and worthwhile read for anyone wanting to boost their stock returns.

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“The p/e can be made into a powerful tool, but as with most powerful tools it can run amok if you don’t control it”

How to Build a Share Portfolio: A practical guide to selecting and monitoring a portfolio of shares

By Rodney Hobson

n Running an efficient portfolio means buying and selling the shares that make the most sense for you. How to Build a Share Portfolio by bestselling author and financial journalist Rodney Hobson shows how you can do this without being an expert or a full-time investor.

Many investors pick shares that take their fancy, or ones that have been recommended in the financial press, but this is often done without any thought for whether these selections create a balanced and suitable portfolio. These are investing mistakes and the author sets out to address these in this book.

Part One – The Choice of Assets looks at exactly what a portfolio is and how the total value of a portfolio is of prime importance. A portfolio

investor thinks about the total value of his portfolio rather than the success or failure of the individual stocks within it and, as such, he approaches investing in a very different way than just being concerned with picking a winner every time.

Part Two – Building a Portfolio goes on to look at exactly how you begin building this structured portfolio.

Hobson begins by taking a look at the basics, and after showing you how to decide how much you want to invest and when, Hobson then moves on to how you go about selecting the stocks that you wish to invest in.

How to Build a Share Portfolio is a practical guide to building and looking after your investment portfolio. Anyone who is interested in investing would benefit from its honesty and wisdom.

Spread Betting the Forex Markets: An expert guide to spread betting the foreign exchange markets

By David Jones

n Spread betting and the foreign exchange markets are areas of finance that have increasingly piqued the interest of traders in recent years. They have both been around for some time, but developments in technology and the improved access private traders have gained to the financial markets in the past decade have made spread betting and forex extremely hot topics right now.

Forex is attractive to traders because it is a large, liquid market. The costs of trading are low, the huge size of the market makes it difficult for it to be affected much by single trades or isolated pieces of news, making trends more durable, and the volatility in forex provides the opportunity for traders to make significant profits. The advantages of spread betting are many, including that it allows traders to get involved in markets at a very low exposure.

In this lucid and instructive practical guide, IG Index’s David Jones explains the basics of spread betting, outlines the essentials you need to know to trade the forex exchange market, and shows how you can use spread betting to trade forex. The topic of risk is also covered extensively; Jones explains that it is critical to take risk seriously from the off if you are to trade this market successfully.

In the latter section of the book Jones provides real value for readers as he develops trading strategies for use in the forex markets. These are approaches that you can put into practice using spread betting at a level of risk that suits your own circumstance..

If you are a beginner to forex trading this book will provide you with an expert introduction – helping you to succeed by avoiding the common pitfalls of this volatile market.

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E n t r ep r e n eu r

gene simmons

KISS &tell Gene Simmons and his band KISS revolutionised the music industry, applying an entrepreneurial flair to rock stardom that has earned them international fame and fortune beyond every other artist ever to pick up a guitar.

Mark Southern caught up with the billion dollar business brain of rock to discover the secret of making music millions.

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gene simmons

P

op quiz, hotshot. What links golf courses, coffee shops, comic books, coffee brands, real estate and action figures? Oh, and bestselling Visa cards, custom coffins, board games and Zippo lighters?

And don’t forget Pepsi, Coke and Dr Pepper, alongside a host of other international brands?

If you guessed it’s a Tory MP’s expense claim then you’d have been under-estimating the scale of ambition of the correct answer, as we could have listed over three thousand products and services to go alongside the above, although there aren’t any duck islands just yet.

No, putting Westminster firmly in the shade alongside the industry into the record industry is the KISS bassist and hardest working rockstar on planet Earth, Gene Simmons.

As founder and musical inspiration behind the band that pioneered enterprise in entertainment, Simmons knows a thing or two about how to make a living and then some from the music industry.

KISS was formed in 1973, and nearly forty years later is showing no signs of slowing down. Made up primarily of Simmons and singer Paul Stanley, alongside a lineup that has changed over the years, the band realised quickly that to conform was to blend into the rock scene, and not standing out from the crowd was a one way ticket to failure.

It’s a scenario that entrepreneurs the world over face when launching into new ventures and so, like Jobs, Branson and Zuckerberg after them, KISS adopted a deliberately different style from the rest, culminating in their on-stage metamorphoses into seven foot tall, comic-book inspired rock and roll superheroes. A legend was born.

But, what came next was truly remarkable.

Simmons, sensing opportunity like the very best entrepreneurs, realised the scale of potential enterprise bubbling under the rock and roll scene, like an untapped source of near limitless oil. Sure, 100 million album sales, including 28 gold albums, will pay the bills, but what if you’ve got a burning ambition to conquer capitalism through music? What if you’re prepared to go further than any other music mogul had gone before to make music pay?

Simmons had an audience that every other brand would dream of; they loved him, his band, and got a rush from being affiliated to it. With the loyal and passionate fan base in place, and the fantastical concept so powerful and inclusive in its appeal, Simmons sought

“In America you can come from anywhere and be anyone and make it big. entrepreneur may be a french word but it’s alive and well in the usa.” to give his fans a chance to experience KISS in a huge multitude of ways via licensing the band’s image rights to thousands of eclectic products and services.

Fans were soon able to bring a little KISS magic into their daily lives in a way that music artists had never before managed.

They’d be able to shower with KISS branded shampoo, whilst listening to their KISS radio, and play KISS pinball, all bought with their KISS Visa card. Fans could even buy KISS condoms and be buried in a KISS Kasket - a luxury coffin with Simmons’ face emblazoned across it.

Like sharp businesspeople across the world, ‘normal’ was the only enemy, and they constantly adapted to secure column inches, including a smart PR device which saw the four band members drop some

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of their own blood into the red ink at the factory that printed their comic book, thus giving their rockstar DNA to the pages.

Through this ceaseless promotion, an unrelenting commitment to touring worldwide, and a steady stream of album and single releases, Simmons pioneered the role of rockstar businessman, jettisoning the expensive hangers-on who burdened so many of his contemporaries, and very much doing it his own way.

Today, the KISS brand is estimated to be worth more than $1 billion, which accountants believe makes the band the most profitable in the world, with The Beatles as the only genuine rival for the crown.

Simmons has certainly come a long way.

When we meet the ‘Demon’ himself, he and his band mates are in London for, surprisingly enough, promotion of another first; the world’s only coffee tabled sized coffee table book. The KISS Monster book costs $4,250 and stands at three foot tall and nearly three feet wide, with just 1,000 copies available. All are personally signed by the band, and are hand-made in Italy. Like the band, it’s anything but subtle, but it’s undeniably striking, and a sound investment for music memorabilia MoneyMakers.

Simmons is not a conventional man, and when we sit down to talk his rockstar aura is subtly different from most you’ll encounter in the flesh. He possesses that charismatic confidence that only fronting a rock and roll band can provide, but lacks the inherent shirking of responsibility that so many creative people in music and other industries suffer from.

When he starts speaking he cuts through the ice with short, humble sentences, designed to charm and draw attention. “Can you understand my colonial brogue?” he asks in his mellifluously dulcet drawl, before checking both I and the Queen are well.

Simmons asks questions and engages with his audience, whether it be a solitary British journalist with no real idea of the Queen’s well-being, or 100,000 screaming rock and roll fans in a stadium. However, when he gets going, there’s no stopping him. He riffs like there’s no tomorrow, sharing his very own version of the American dream, and how Britain can follow in his considerable footsteps.

“The ethos of MoneyMaker Magazine of living your own life and choosing your own path is intrinsically not very British, unfortunately. Take the class system, or class warfare, as I see it. You’ve got your old money, and your new money, and the new

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gene simmons

money doesn’t have the respect as it doesn’t have lineage, and it all comes down to the blue-bloods, and the serfs, and the fiefdoms, and all those other big words. We don’t have that class burden in the United States. Back home, ‘who the fuck do you think you are?’ is actually a positive greeting!

“When you think about America, this is the country that invented jeans. After the war with the Native American Indians, Levi Strauss bought up all of the US military’s blue tents, and used the material to make clothes for the workers. Strauss found that the clothes lasted literally for a lifetime, and ever since then they’ve been a fundamental part of American culture.

“To this day, the richest people in the United States wear jeans every day to form a link with the working man, with Warren Buffett, for example, getting up early every morning to put on his jeans and go to work.

He’s worth $50 billion now, but he still lives in the same house he bought when he made his first million thirty years ago.

“Part and parcel of that is that, in America, you can come from anywhere or be anyone and make it big. Entrepreneur may be a French word that we can’t pronounce or spell but, let me tell you something, it is alive and well in America. Facebook, Google, they’re the products of inspired entrepreneurialism.

Take a look at Zuckerberg and the rest. They played the system, and this system doesn’t look at you and ask who your mother or father is. It asks just one question - ‘what’ve you got?’

So Simmons still believes the American Dream is alive and well?

“Bigger and better than ever. Brits have to forget about the past, and look to the future.

You’ve got a Royal Family, and in America we think they look cool, and they live in a castle and all, but it means fuck all in the US - they’ve done nothing to earn their position. In America, kids look to Zuckerberg as royalty, as he created his empire himself.

Why did the world’s most important inventions happen in America? It’s because it allows people to become whatever they want to be and to scale the heights, despite the fact that you came from the Bronx.”

When we speak, the newspapers are full of Olympic positivity, with young people being celebrated in the British media. However, it was only a year ago when fires burned in the streets of London as a disaffected youth rebelled against widespread unemployment and a perceived lack of opportunity.

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Does he see a difference between young Americans’ entrepreneurial spirit and that of their European counterparts?

“Yes, there’s a big divide between the two. American unemployment is about 8% against the Spanish rate of nearly 25%. It’s over 50% in Greece. And it’s simple, capitalism isn’t being allowed to work there. The social welfare system does not work. People forget, countries are businesses, and if you treat them that way everyone will benefit. It’s wonderful to be altruistic and take care of the population, but if you can’t afford it everything gets flushed down the toilet.

“When government becomes mom and dad, the country stops becoming a business and transforms into a charity, and then you have a horrific business model that hurts everybody, poor and rich alike. So you end up with a dependent population that passes the buck at every turn, finding other people to blame rather than take responsibility for themselves.

“And that’s how so many countries in Europe, including Britain to some extent, have failed, and if you’ve got a young generation suckling on the breast of the state, how are they going to develop their entrepreneurial instinct?”

So where does the rock star businessman stand on entrepreneurialism?

“People need to be more entrepreneurial across the world, and they’ve got to treat their entrepreneurship with personal responsibility. You have an inferred fiduciary duty to your own fucking self to take care of business. And if we all take this personal responsibility for increasing our own wealth, we’ll all benefit.”

But does he feel 2012 is a good time for entrepreneurs?

“Ever since time began, commerce has worked best when cultures collide and new ideas are smashed into each other, with people of different background, colour and creed bartering and moving capitalism on. Whenever I go anywhere I meet new people, and every new person represents a new business opportunity in some

“when elvis presley died his entire net worth was $3.5 million. it’s pathetic, he should have been worth 100 times that. he didn’t take care of business” way. It’s a fundamental corner stone of entrepreneurialism, and if you’re not doing it, then start fucking doing it today.

“You’ve got to keep your money moving, because money that doesn’t is like still water, full of disease. The healthiest water is water that runs, and the healthiest money ping pongs back and forth to one another.

So, old money is dangerous, boring and bad for people. Take your money, throw it around, invest, build, gamble, do whatever you want, but don’t let it stand still.”

Simmons has made himself and his band mates very rich men thanks to his business smarts, but how does he feel about those who question the role of the businesspeople in music?

“When Elvis Presley died, the most iconic figure in all of music history, his entire net worth was $3.5 million. It’s pathetic. He should have been worth a hundred times that. And that’s because he didn’t take care of business - there was no business model. For one thing he allowed Colonel Tom Parker to own 51% of Elvis Presley Incorporated. Elvis himself only got 49%, out of which he had to pay all the expenses for both himself and Parker. He didn’t take care of business.”

“Most people think what we do is called music, but if you believe in truth of advertising it wasn’t then, it isn’t now, and it won’t be in the future called music. It has always been the music business. If you’re in a show, you’re in show business. It’s right up there in flashing lights, can’t you read, you idiot? Everything in life is business - even God passes the hat around the congregation in church.”

As another British Olympian secures Gold, conversation moves onto how young people can achieve their own dreams, with a little help from the Simmons school of how-to get rich.

“I mean this in the most sincere way, kids of all ages must honour thy mother and father. They know far more than your friends do, so listen to them. I was not born rich, I came from a ghetto, but everyone in this world can become rich if they put the hours in when they are young.

“Everything is connected in this world, your lifestyle, what you put in your body, this all affects everything you do, including how you make money. Kids should learn to love labour at the earliest age, washing cars, whatever, but just learn to enjoy the art of working at the earliest age possible, rather than just looking for a job.”

And for those a little older who want to break into a new way of life?

“Work six days a week, and be the absolute best you can be. You can sleep at night, one day of rest is more than enough.

Dress British, act Yiddish, learn to speak the right language, and learn to appreciate the axis of power, which is language skills, people skills, or in the old vernacular, when in Rome do as the Romans do. “ As the successful Olympian is interviewed on the television before us we hear them humbly playing down their success, a trait we can all acknowledge in the more docile

British psyche. Simmons didn’t get where he is by not understanding his own worth.

“When I was a kid, I heard Cassius Clay state that he was the greatest. Whether it was true or not to other people is irrelevant, it was to him. Self-aggrandisement isn’t a crime, and there is no-one stopping you from achieving your dreams apart from you.

“Treat success in business like you would if you won the lottery. If your numbers came up, you’d be running down the street waving that ticket in the air. But when you make it on your own the sensation should be even greater. You’ve worked hard for it, you’ve sweated for it, so why wouldn’t you stand up proudly, stick your chest out and be happy with yourself, man? Shout out loud, ‘I’m successful, I deserve this!’

As our time approaches an end, it’s clear that Gene Simmons could win Olympic Gold himself in the business advice stakes, although he might argue platinum would be more appropriate. As the driving force behind one of entertainment’s most powerful brands he is supremely placed to be a guiding light for artists of every nature to make exceptional livings from their gifts, if only they’d understand his modus operandi. As a closing question I ask him if he still has the stomach for the fight with KISS? “Are you kidding?” he replies, with a steel running through his trademark charm.

“Everything is a business, and everything is about money. There’s an old adage that says that money is the root of all evil. Bullshit.

Lack of money is the root of all evil. KISS has a golf course in Vegas, KISS has coffee houses, KISS has a tie-in with Hello Kitty, which just rolled out in ninety countries, KISS will never end. This is Planet KISS, and you’re just living on it.”

The KISS Monster Book is available now at www.kissmonsterbook.com

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E n t r ep r e n eu r

Strategy

lets get

creative

Is your nickname ‘Ideas Factory‘ or ‘No Idea’? If the latter, don’t panic - we caught up with the talented folk at Xpono to find out how entrepreneurs of all shapes and sizes can unleash their creative potential

E

ntrepreneurs are a different breed. They have to be in order to turn problems into opportunities, to find new business in a dark market, and create and engineer the ‘new’ when the old won’t work. They are the future of this economy, tirelessly seeking new ways to keep the old archaic tectonic plates of industry moving.

And these noble men and women run on a fuel that many believe to be in short supply; creativity. However, the good news for the world is that the wonders of the human mind and spirit mean that this quality is no finite resource, and can be encouraged out of each and every one of us. It’s just a question of knowing how to unlock that creative potential inside.

Get down to the pub You’re an entrepreneur, so realistically you’re always working. You don’t have to be in an office though. In fact, the best ideas are often formed in environments that allow the mind to roam free from the four walls imprisioning your thinking when you’re chained to the desk. When in the office, all you can really think about is your ‘to do’ list. So why not knock off early, get a casual pint in with a colleague, partner or friend and freestyle it, without the psychological obstacles that clutter your desk space. Collaborating with a

well-selected group will often throw up great ideas. You might need to sanity check them in the morning though!

Get out of jail A man who genuinely thought outside of the box was Harry Houdini. In his words, ‘my brain is the key that sets me free’.

Houdini would look at an impossible problem, and work out a way to solve it.

In the same way, entrepreneurs need to force themselves to solve the many obscure challenges that face them on a daily basis.

Clinging on to the hope that a “eureka” moment will happen is simply not an option. In the same way that you need to forecast financially, allocate some time to challenge and inspire the grey matter.

Literally, it’s just a case of thinking laterally.

freely. The more you know about a subject, the more likely you are to solve problems around it. Discover inspiration online, listen to influential people, and don’t restrict yourself to the specific nature of your industry. There is plenty to be gained from creative thinkers, entrepreneurs and innovators across other industries. With a few tweaks, their successful formulas and solutions can often work in your own field. And why not use your ideas and discoveries to bolster the creative visibility of your business. Tweet them. Pin them. Blog them. It all helps to build genuine character, credibility and following for your company.

Take a punt The greatest thing about being an entrepreneur is that you are the master of your decisions. There is no need to seek approval from fifteen superiors, or suffer the sack if you make a bad call. You also tend to have the benefit of being flexible and swiftly adaptable should things not turn out as planned. Never gamble more than you can afford to lose, but do try things out. It only takes one ground-breaking idea to stick and you could find yourself with a straight flush.

Get active Healthy body - healthy mind, or so they say. There is truth in this. I would argue however that the creative benefit to an entrepreneur is not necessarily down to sweating out the daily stresses.

It’s more the positive effect of giving yourself space to think, time to breath, and room to reflect. Whether it’s walking to work, a lunchtime run or a weekend bike ride, there is a lot to be said for the combination of fresh air and solitude. It may sound obvious, but it’s easier to think clearly if you can de-clutter your noggin.

Geek up Become an expert, and ideas will flow

To find out more about Xpono, visit www. xponogroup.com

“The wonders of the human mind and spirit mean that quality creativity is no finite resource” 18 | MONEYMAKER MAGAZINE

MONEYMAKER MAGAZINE | 19

E n t r ep r e n eu r

raymond blanc

tricolour treat Up close and personal with celebrity masterchef, Raymond Blanc

B

ritish cuisine, whilst still the butt of many a joke, is enjoying a global interest not witnessed since Roman legionnaires first tried haggis (probably). Just as London has transformed itself into the most metropolitan metropolis on Earth, with a cavalcade of cultures gloriously clashing in bright technicolour, so Gruel Britannia has been replaced with the new look United Kingdom of Cooking, showcasing a range of global flavours like no other place on the planet.

Chief amongst the architects of this culinary conquest is French Masterchef Raymond Blanc, who has combined a career of international restaurant renown with a lifetime in front of the television cameras. We caught up with the Gallic great at his two Michelin starred Le Manoir aux Quat’Saisons hotel/restaurant to find out what entrepreneurs need to do to make it as restaurateurs.

What’s the secret of a wonderful restaurant?

Dedication, relentless hard work and commitment and a fantastic team! It’s about having the ability to engage yourself in what you’re doing. I cannot say that I’m more of a genius than anybody else, but I can say, I worked a little bit harder than most people. I knew enough to surround myself with excellent people, a great team.

Has Britain lost its reputation now as a culinary vacuum?

There are so many fantastic chefs and restaurants in Britain now – large well known places such as The Fat Duck, and fantastic smaller hidden gems in local villages that bring so much to their community and teach us all new tricks!

We must not forget that we are always learning from each other and we must not be too proud to learn from one another.

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Which other restaurateur was your biggest influence before you set up on your own?

It was no one famous, but a great little woman called Maman Blanc, an amazing cook. Although we were poor, we ate like kings. She taught me so much about food.

When I was about seven, my father taught me about earth, he had me taste it. Have you ever tasted good earth? You should try it. By looking at earth, I can determine the quality of the soil. While my friends were playing football, we did the hoeing, watering the plants, and when you thought it was all over, you had to harvest the plants. Peas and beans, along with fresh eggs — it was a cottage industry.

In cookery terms, what part chef to what part astute entrepreneur should a successful restaurateur be?

Is this a good time for a firsttime entrepreneur to become a restaurateur?

I always believe you must follow your heart – but these days it is of course so important to have a thorough business plan and be realistic. Times are not easy – we know that.

I am completely self-taught. My wife and I mortgaged my little house and opened our first restaurant without ever having cooked before, and with no knowledge of the restaurant business. All the rewards which we have at Le Manoir aux Quat’ Saisons were earned in a tiny, humble place [the previous incarnation of Le Manoir, simply called Les Quat’ Saisons]. In the winter, there was no insulation, in the summer it was 50 or 60 degrees Celsius. Cooking and working in a restaurant isn’t all fun, it takes work and dedication.

What tips would you give entrepreneurs starting out as a restaurateur?

I have two. First, be prepared. Work in a restaurant, work in a kitchen. Learn about the complexity of running a business. It’s

not about just ideals, and painting a very nice picture on the plate. It’s a business. If you don’t know the rules, you’ll be out in 10 minutes. This is why 50 percent of new restaurants close within a year. They didn’t do their homework. Secondly, you must love people. If you don’t love people, you won’t stand a chance. This industry is a people industry.

What are the biggest challenges facing restaurant owners in the current climate?

Apart from the fact that times are hard, there is also a lot of great competition. We must ensure we remain creative and be utterly determined. I love the people I work with, it’s not just about the food, it’s about creating the experience. Creating memories from the moment a guest drives in the car park to them communicating their experience to their friends and family. A determination to exceed expectations – never resting, but not trying to be too clever. It is challenging, but it is worth it to create happy memories and fantastic food.

And what are the biggest opportunities for restaurant owners in 2012?

There is so much choice these days and so many opportunities. It is a big, daunting world – but hugely exciting and a time to reach out and follow your heart but making sure you are listening to your head.

Creating new experiences all the time is something we must offer our guests – using what we have and what we do well – our new Wine & Dine experience for example.

We are using our fantastic Sommeliers to tutor and allow guests to taste new wimes, then invite them to the RB Cookery School to take part in preparing their dinner – an intimate evening but using what we have to offer something new and exciting.

Raymond Blanc is the Chef Patron at Le Manoir aux Quat’Saisons (www.manoir.com).

“it’s not just about painting a nice picture on a plate. it’s a business. that’s why 50% of restaurants close in a year”

shifting fx effects The Rules of the Forex Game are about to change n Simon Smith - Head of Research, FxPro

22 | MONEYMAKER MAGAZINE

T H E TRAD E

FOrex

T

here’s a real dichotomy in foreign exchange markets. In theory, the multitude of factors that impact on the price of one currency in relation to another is vast, complex and changes over time. But it’s also the case that FX markets can be very narrow-minded, often seemingly focusing just on one factor.

So the Australian dollar may be strongly correlated to commodities’ prices, the euro to bond yields in troubled eurozone nations or the Russian rouble to oil prices. The one rule that remains true is that nothing lasts forever and there are signs we are reaching one of those tipping points now, which could mean that many conventions are turned upside down in the second half of this year and beyond.

Let’s take the Australian dollar (the Aussie) as an example. Since global central banks really went to town with their quantitative easing strategy back in early 2009, the Aussie dollar has powered ahead, from buying 0.62 US dollars to 1.10 at its peak (a 75% increase). Remember that a single exchange rate between two countries says just as much about one country as the other. Even against a basket of currencies however, the Aussie is up 46% over the same period (Deutsche Bank AUD tradeweighted index).

During this period, the Aussie was considered the FX barometer for the risk-on/risk-off phenomenon that came to pervade markets. The high level of interest rates also helped. So, as well as the currency gain, investors were receiving up to 4.75% at the peak of the central bank’s tightening cycle - a total return on AUD/USD of 91%. China’s insatiable appetite for raw materials, combined with Australia’s abundance of them, was seen as the ultimate marriage of convenience by Aussie bulls.

The correlation between the Aussie and the raw materials sector on the ASX (Australian Stock Exchange) was very strong through this period. More recently, we’ve seen a reversal of tack. As the perceived fortunes of raw materials producers have fallen, the Aussie has risen.

There’s a similar pattern being seen when comparing the Aussie against actual raw material prices rather than a basket of share prices of commodities companies.

“The rule that remains true is that nothing lasts forever and there are signs we are reaching a tipping point right now” The reversal is not just confined to the Aussie. Perhaps not surprisingly we see the same phenomenon with the Canadian dollar, with the tight correlation to commodity prices declining in recent months, although not as extreme as for Australia given Canada’s dominant trading relationship with the US. For both these countries it’s also worth noting that the OECD sees their public debt (as proportion of GDP) either falling already (Canada) or due to fall from next year (Australia). In contrast, for developed economies taken as a whole, the OECD forecasts debt rising (on the same measure) in the coming three years and, in the case of Japan and the US at least, for the next five years.

This situation represents the other end of the sovereign debt spectrum. Whilst Australia and Canada retain their triple-A credit ratings, the US has partially lost its (from just one agency so far - S&P).

Germany’s is under review and the UK’s looks increasingly under threat as the economy struggles under the burden of spending cuts and tax increases. But there have been few, if any, signs that the US downgrade last year has undermined demand for either US government debt or the dollar. Furthermore, Japan is the best example of a nation which has seen a strong currency despite its high debt/

GDP ratio – with the largest proportion of government debt (in relation to the economy) of any developed nation.

This doesn’t fit well with the theory that currency investors are becoming more sensitive to the underlying balance sheets of governments. There are reasons for both Japan and America’s relatively unique situations. In the US, the dollar’s status as the primary global reserve currency creates a false comfort as investors flock to the dollar for safety and liquidity during times of financial stress. For the yen, Japan’s high level of domestic savings means the country does not have to rely on the kindness of strangers to finance its deficit.

At least not yet.

But we should not ignore the warnings signs evident in the way other currencies are trading. It’s no coincidence that the proportion of central banks’ reserves allocated to the likes of the Canadian and Australian dollars has more than doubled over the last three years. These currencies could well trade with less volatility, aided by longer-term capital flows seeking safety from growing government debt elsewhere.

At the same time, the safe-haven status of the dollar and yen will be undermined, but this could well be a more gradual process.

What’s clear though is that, once again, the FX rules are changing.

MONEYMAKER MAGAZINE | 23

T H E TRAD E

EUROPE

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spain and italy drag on europe Another summer of discontent continues to rage across the Mediterranean n Michael Hewson, Senior Market Analyst, CMC Markets

I

n December last year the ECB embarked on the first of its long term refinancing operations (LTRO’s) in an attempt to encourage European banks to lend more money to the real economy. The aim was to kick start economic growth after the German economy contracted 0.2% in Q4, the Italian economy shrank by 0.7% and the Spanish economy by 0.3%.

The worry amongst policymakers was that, even back at the end of last year, economic activity was slowing down sharply across Europe. This was due to concerns about the sustainability of finances in countries like Italy and Spain as bond yields rose sharply.

The ECB embarked on another LTRO at the end of February bringing the total money lent to banks over the course of the three month period to about €1trn. This form of liquidity, in exchange for various forms of collateral, was intended by the ECB to filter down into the real economy in an attempt to promote economic growth and stimulate demand.

Unfortunately the money was used by banks in an attempt to bolster their balance sheets and buy government debt, thus driving government bond yields in Spain and Italy back down again. At the same time, equity markets enjoyed somewhat of a rebound as the remainder of the cash got parked overnight on deposit at the ECB. Very little of the money created by the ECB found its way back into the European economy, even if Germany and France’s growth numbers did enjoy a bit of a pick-up in the first quarter of this year.

The underlying problems remained unresolved, namely a banking sector particularly exposed to bad loans across the Eurozone. German and French banks remain massively exposed to Spanish and Italian

“Very little of the money created by the ecb has found its way back into the European economy, even if germany and france’s number did enjoy a pick-up” banks even after the Greece bailout and PSI program was dealt with, imposing 75% haircuts on private sector bondholders.

The EU’s primary focus on cutting deficits, while laudable, doesn’t focus on the real problem, which lies at the heart of the European project, namely structural reform in certain EU countries like Italy and Spain.

Understandably Germany, as the paymaster, has grown frustrated as money has gone into various European countries but the necessary reform hasn’t taken place, with Greece being a case in point.

This has resulted in a polarisation between the more efficient ‘haves’ in the North and the ‘have-nots’ in the South. This is reflected in the bond markets where German, Finnish, Dutch and Austrian yields have gone negative. This is because investors had fled bond markets of peripheral nations like Spain and Italy where yields, particularly in Spain, are close to becoming unsustainable at 7% on 2, 5 and 10 year time frames.

As growth continues to fall and unemployment continues to rise with expectations of a rise near to 25% in late July

the Spanish IBEX35 touched its lowest levels since 2003.

The complete lack of transparency of Spanish banks with respect to their capital losses on property loans and the inadequate response of the incumbent Spanish government has left their credibility shredded. The result is that investors have piled out of Spanish assets over concerns that the whole financial system could well unravel.

German and French markets, on the other hand, have managed to hold up much better largely as a result that they remain much more resilient to outside shocks and are much more able to adapt to changing economic conditions.

Economic data in both countries has also been a little better with Q1 growth in Germany coming in at 0.5%, and Q1 growth in France coming on at 0%, down slightly from a 0.2% gain in Q4.

There is evidence that the ongoing slowdown in economic activity, however, is now starting to drag the two biggest European economies down, as the third and fourth largest economies attempt to pull themselves out of the debt spiral.

Unfortunately the problems in Europe come from the fact that the banking system is broken and essentially insolvent.

Until that is dealt with the risk is that the resilience so far shown in the German DAX and French CAC40 could well unwind rapidly.

The German DAX is still in the uptrend seen since the lows last year, however any further weakness below the support trend line from the November lows could well see recent declines extend further.

The 200 day MA is currently acting as some support, along support from the June lows at around the 6,400 level.

MONEYMAKER MAGAZINE | 25

T H E TRAD E

Chris Powell

Binary Betting and the 20 Percent Club In the second of his three article series, Chris Powell explains how to use binary betting strategies to break into the magical “20 Percent Club” of profitable traders

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MONEYMAKER MAGAZINE | 27

T H E TRAD E

Chris Powell

I

t is a well-known statistic that approximately 80% of traders and spread betters will lose money over time. What I have learnt over a number of years from performing autopsies on my own PnL, and from reading about other traders’ misadventures, is that a subset of profitable traders also get it very wrong and get stopped out of losing trades more frequently than you might imagine.

So how do they make a profit over time and earn their membership in the ‘twenty percent club’? Without going too much into the psychology of successful trading, which will be explored by MoneyMaker colleagues in other articles, the key is to always stay focused and stick to your plan. Never ever succumb to the constant menace of entering into the lazy trades, which do not satisfy all the criteria of your particular trading system.

Overtrading equals death.

When it comes to binary betting and waiting for compelling volatility trades to set up ‘less is more’ should be the principle that guides everything.

In the extreme case, where you don’t find any trades worth entering in a given week or month, you won’t have lost a penny of your valuable trading fund and you will find yourself in the top twenty percent of traders by virtue of sitting on your hands.

This in itself should not be dismissed as a trivial achievement, because markets are dangerous places, and hedge funds full of ‘star traders’ blow up every month.

There are a bewildering (and growing) array of binary bets that you can enter into - just check out the IG Index product range to see what markets you are allowed to bet on and the various timescales from 5 minutes to 1 week. The author prefers to use just a few of those markets available to take positions on volatility: namely intra-day ‘close up’ bets on the FTSE 100 and DJIA, and intra-day ‘tunnel’ bets on the same

two indices. Let’s start by illustrating the tunnel bet and how it can typically be used a few times a month if the markets set up properly. Then this will naturally lead into using the ‘close up’ bet. a) Trading the big announcement - why we should all love ‘Black-Scholes’ The idea with this strategy is to identify key catalysts which are very likely to make the market move. This could typically be an FOMC rate setting decision or a Quantitative Easing announcement, which both usually occur mid-afternoon NYSE time, thus just after 7pm UK time. Hence we would use a binary bet on the Dow Jones since the FTSE is closed, and spreads will have widened on any open UK binary markets.

The macho position traders will usually be long or short prior to this announcement, based on their research, economist chatter, the word on the street, or a particular pattern in the entrails of a freshly slaughtered chicken (less common these days - due to the inexorable march of Health and Safety regulations).

However, ‘Wisest is he/she who knows they do not know’ was our starting point in the last article; so whilst we strongly suspect

“It’s a well known fact that 80 percent of traders will lose money over an extended period of time. profitable traders also get it wrong more than you would imagine” 28 | MONEYMAKER MAGAZINE

that the announcement will move the markets, we honestly cannot decide whether it will lead to a rally or a sell-off. In fact, if asked, we could put forward equally sound and reasoned arguments for each scenario.

What usually happens in the run up to the announcement is the Dow goes eerily quiet and trades in a narrowing range near to the previous close - almost as if the market is waiting and winding itself up for a sudden gap. Thus the daily Dow ‘up bet’ is probably somewhere around the 40 to 60 range, which doesn’t offer particularly good value for either short or long bets, as we haven’t got a clue what mood the market will be in after Bernanke says very little in a very grave fashion at 7pm GMT. Now because there are only a couple of hours

“when it comes to binary betting less is more should be the principle that guides everything”

left in the trading session (the Dow closes at 9pm UK time), and because the binary pricing model is designed to primarily reflect what it can see, and the dwindling time left to close - rather than the strong likelihood of a sudden future move - we have an opportunity to bet on sharply increasing volatility.

The daily Dow tunnel bet will hopefully be offering something like ‘DJIA to remain in the range -120 to +120 -> 44-50’ In other words if the Dow stays within 120 points either side of the last session’s close the bet will settle at 100, whereas if it falls or rises just once outside this range before the close, then the bet will immediately settle at 0. Based on our expectation of a significant market reaction

post-announcement, we sell this bet at 44.

So our bet is not much worse than ‘evens’ in traditional odds (we win 44 points x stake or lose 56 points x stake), but we actually have got a much better chance than this, as all that has to happen is the market rallies or falls around one percent and it doesn’t even have to close by this amount. b) UK swing earlier the same day - the ‘temporary amnesia trade’ The ‘tunnel’ scenario described above doesn’t always set up as favourably as we would like, but happily that in itself can open up a mispriced volatility opportunity.

It is 7 30am in England, and we know from our economic calendar that the same big FOMC statement is due at 7pm. Often the FTSE temporarily ‘forgets’ this is scheduled, and it will trade up or down over a percent based on other overnight news out of China, or Blue Chip results for example.

Say the market rallies when it opens at 8am, then it could be that by 9am GMT the daily FTSE binary bet will be showing something like ‘FTSE to close up -> 87-91’ Here our key insight is that as the day progresses, we expect the FTSE to remember that there is a potentially ‘game-changing’ statement coming after the close.

If we are right, then no one will want

to get their open positions screwed up by Bernanke after they’ve left the office to watch the latest episode of Man Vs Food. It follows that we can expect things to calm down, and the FTSE rally to fade somewhat.

Thus we sell the bet at 87 (ie we are placing a bet at around 7/1 in traditional odds).

In the tunnel example, we usually leave the bet to profitable zero expiry - which should happen very quickly post-conference. But with the ‘temporary amnesia bet’ it is often safer to close the bet around the 55-65 level, because we don’t really know whether the FTSE will ultimately hold onto some of its rally by 4 30pm.

Either way, we should make a good profit on the fade as long as we have the initial confidence to spot what the FTSE binary pricing model struggles to price in - namely an expected corrective short-term drop in volatility as the day progresses.

Next time, we will look at some of the other binary bets available, and discuss their relative merits for capitalising on mispriced volatility.

The author is an experienced derivatives trader. You should always take financial advice before entering into any financial spread bet, binary or derivative bet.

MONEYMAKER MAGAZINE | 29

T H E TRAD E

AlessiO rastani

the trade of the decade Get ready for what traders are referring to as the “Trade of the Last Ten Years”! n By Alessio Rastani

I

n case you’re wondering, it isn’t another gold bubble. Nor is it catching a “bottom” on the Athens Stock Market (God help them). And it certainly isn’t the reincarnation of Facebook back from the dead.

But before we reveal what it is, let’s delve into a little history. Every decade seems to be marked by a specific boom and bust phase: In the late 1990s we saw the dot-com Tech stocks bubble which burst in the year 2000.

Then, when stocks went out of favour, the housing bubble emerged, and ultimately crashed in 2007. This started the Gold rush at the start of 2009, which “fizzled out” in 2011.

The global meltdown in 2008, coupled with the uncertainties of a deteriorating Europe, also started another less well-known bubble...

I am referring to the parabolic demand for US Treasury bonds (see chart 1).

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One of the reasons for this parabolic rise in bond prices is due to the fact that whenever bond prices rise, pension funds are obliged by law to buy more to balance their books. This creates almost a self-fulfilling nature which guarantees the bond market to rise even higher.

But there are signs now that bonds could be about to implode.

In fact, the trade of the decade is shorting the US Treasury bond market (or buying TBT).

US Treasury bonds pay a fixed rate of interest every six months until they mature.

They are issued in a term of 30 years.

US bonds are also seen as one of the most liquid safe havens in the world. This is particularly important to understand in the context of how people think about “safety”.

For example, a commonly held assumption is that when markets get jittery, such as in a time of economic crisis, money

Alessio Rastani Alessio Rastani is a 10 year financial markets trading veteran, and at the age of 34 has become a widely followed and respected trading mentor.

In 2011 he gained fame and caused controversy when he stated on live TV news that he “dreams of another recession” and that Goldman Sachs, not governments, run the world.

The YouTube clip has since been watched over 2 million times, and Alessio has since been interviewed by figures such as Sir David Frost.

Alessio hosts free online training sessions where he gives the most up-to-date information on trading to professionals and newbies at www.LeadingTrader.com

“Every decade is marked by a specific boom and bust phase. this will be no exception” goes into gold and silver. This is simply not true.

Although gold and silver are safe havens as a hedge against a devaluing US Dollar, they are not “liquid”. When hedge funds are looking for safety, they are looking for liquid safety and precious metals are not liquid.

Gold and Silver may be liquid for us, but a billion dollar hedge fund cannot just move money into precious metals without incurring losses. Therefore they move money in to the greatest liquidity – US Treasury bonds.

So is this bond bubble about to finally burst?

Take a look at this weekly chart of the US Treasury bond futures. Underneath the price is an indicator called MACD (moving average convergence divergence). MACD is a momentum indicator which measures the force of the trend.

When bond prices make new highs, you want to see the MACD to also make new highs to confirm the strength of the trend.

This is demonstrated in the period between July to October 2011 (see chart 2).

However, you will notice that when bonds made new highs this year in 2012, the MACD failed to make new highs. This is known by chartists as negative divergence. It indicates weakness in a market and the potential for a “bearish” reversal in price.

There is also a topping pattern known as a “double top” which also indicates a reversal in price.

Now let’s zoom in and take a look at a daily chart of the US bonds (see chart 3).

Notice that in July 2012, bonds made a false breakout, one of the strongest signals in technical analysis.

A false breakout is when prices breach previous levels but immediately retreat and close below those levels. As you can see, in July bonds took out the June highs and then immediately “changed their mind” and closed below those highs.

This false breakout, coupled with divergence on the MACD, and the heavy sell-off on Friday 27th July (as shown by big

1 2 3 negative candle) could be an ominous signal for the US bonds. It is the first indication that money is ready to come out of safety and that hedge funds are putting risk back on (i.e. moving money back into stocks).

But if this is the start of the bond bubble implosion then how does one profit from it?

The most obvious tactic would be to short the bond futures or the ETF known as TLT – the iShares 20+ Year Treasury Bond Fund.

However, those who do not like shorting

can buy TBT – the ultrashort ETF for 20+ Year Treasuries. This is the inverse of the bond market – as bonds fall in value, TBT will rise in value.

Some will say that it may be too early to call an end to the bond bubble because of the relative safety it gives investors in light of the Euro-zone turmoil. My answer is that we have to trade what we see – and what we see right now does not bode well for bonds.

Let the slide begin…

MONEYMAKER MAGAZINE | 31

World Markets T H E TRAD E

n Colin Cieszynski, CMC Markets

<a href=”http://www.shutterstock.com/gallery-446113p1.html?cr=00&pl=edit-00”>M.R.</a> / <a href=”http://www.shutterstock.com/?cr=00&pl=edit-00”>Shutterstock.com</a>

indian summer brings heat back to nifty fifty

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India’s Nifty Fifty Index fell through the back half of 2011 and the first part of this year. In recent months, however, it has finally started to trend higher, maintaining its recovery course despite a normal trading correction in July. What’s most interesting is that seasonal and interest rate trends suggest that the index could start to attract even more attention in the coming months (see chart below).

(end of summer) and October (end of monsoon) which obviously coincide with the changing of seasons.

The strongest period of the year is the winter, running from November to February, which coincides with ‘wedding season’ in India. Interestingly, seasonal trading in India is most similar to gold which is also influenced by Indian seasons due to high consumer demand for precious metals.

The first three months of monsoon season have also generally been positive for the Nifty. This year, the index has been trending higher since late May and kicked off July with a breakout from a long-term downtrend suggesting that after a year of slowdown fears in emerging markets dragging on the Index, normal seasonal trends may be reasserting themselves.

Source: CMC Markets

2. Sector Weighting (see fig 2) Relative to other major indices around the world, India’s Nifty Fifty tends to be more heavily weighted in the energy, information technology and financial sectors. In comparison with other Asian economies, the technology sector is more focused on IT services than semi-conductors or software. The index could benefit from a rebound in energy prices, and improved sentiment toward banks and the more steady IT service sector not being impacted by the economic slowdown in the same way that chipmakers could be.

The Reserve Bank of India’s interest rate has been left unchanged since June in an effort to temper inflationary impulses. After two years of tightening, the RBI had previously cut interest rates in April this year.

It had been expected to announce another 25 basis point interest rate cut in June but held off as did many other central banks around the world pending the Greek election and EU summit. The economic growth outlook for the fiscal year has also been revised down to 6.5% from the initial 7.3% assumed in April.

Ultimately, there are three key areas that should be considered when looking to gauge the future performance of the Nifty Fifty: the positive seasonal trends that have emerged, the sector weighting that is unique to India’s stock market and finally, its recent recovery trend.

1. Positive seasonal trends emerging (see fig 1) Seasonal trends in India are quite different from other stock markets around the world. The three weakest months of the year for trading in the Nifty have traditionally been March (start of summer), June

3. Recent gains and the RBI rate decision Through the first half of this year, export sensitive emerging economies such as China, India and Brazil have been losing steam with key customers in Europe and to a lesser extent in the US struggling. Recognising the need to stimulate internal demand, central banks in China and Brazil have already lowered interest rates this month.

After two years of monetary tightening, the RBI cut interest rates in April. The central bank has held interest steady at its last two meetings in order to contain inflation pressures. The RBI did, however, cut its statutory liquidity ratio to 23% to 24% to help encourage increased bank lending. Holding the course when so many other central banks have been easing in order to stimulate their stagnant economies is a sign of strength and has given an early boost to traders’ confidence.

fig 2 Market Cap Weighting By Country May 2012

fig 1 Average Monthly Return 1987-present Month

Dow

India

Gold

January

0.37%

1.01%

0.12%

February

0.38%

5.53%

0.28%

March

1.13%

(0.48%)

(0.15%)

April

2.39%

0.47%

1.04%

May

1.16%

4.62%

0.11%

June

(0.64%)

(1.05%)

(0.06%)

July

1.70%

2.24%

0.09%

August

(1.02%)

2.98%

0.68%

(0.97%)

2.10%

1.72%

Asia

India

Australia Europe Latin Am

World

100%

100%

100% 100%

China

100%

100%

99%

100%

Energy

11%

8%

13%

8%

7%

12%

11%

11%

Materials

3%

6%

8%

13%

23%

10%

19%

7%

Industrials

10%

5%

7%

17%

7%

10%

5%

10%

Consumer Discretionary

11%

9%

9%

9%

3%

9%

5%

10%

Consumer Staples

11%

2%

11%

8%

8%

15%

18%

11%

Health Care

12%

0%

4%

5%

4%

12%

0%

10%

Financials

15%

30%

27%

33%

40%

18%

20%

19%

Information Technology

20%

28%

13%

3%

1%

3%

0%

13%

October

0.52%

(2.41%)

(0.01%)

8%

2%

1%

5%

6%

16%

5%

1.29%

1.14%

2.15%

Telecom Services

3%

November December

2.02%

3.62%

0.69%

Utilities

4%

4%

4%

3%

2%

5%

6%

4%

MONEYMAKER MAGAZINE | 33

Source: CMC Markets

Source: CMC Markets

September

US Total

T H E TRAD E

World Markets

Japan ministers move quickly to dispel false economic outlook after yet more currency movement n By Michael Derks, Chief Strategist, FxPro

The MOF’s yen discomfort

N

ot surprisingly, the flood of safe-haven demand for the Japanese yen over recent weeks has triggered more heightened rhetoric from Tokyo. Finance Minister Azumi chimed in with a declaration that the “recent one-sided moves in the yen fail to reflect the real state of the Japanese economy”, and that he stood “ready to act decisively if needed”.

EUR/JPY has fallen to a new 11yr low - over the past four years, the yen has

34 | MONEYMAKER MAGAZINE

appreciated by more than 80%. Since the end of the first quarter, the Japanese currency has risen by around 7% against a basket of the major Asian currencies.

At the same time, it is worth recalling that the first quarter was a poor one for the yen. Indeed, for the year to date it has depreciated against the major currencies with the exception of the euro and the Swiss franc.

No doubt Azumi recognises the very limited options at his disposal for preventing further yen strengthening.

For one thing, interest rates in the rest

of the world are rapidly converging on Japan’s near zero levels, diminishing the attraction of currency trades based on interest rate carry. Secondly, at a time when wealth managers are attempting to reduce their exposure to the single currency and its assets, the Japanese yen continues to appeal because banks are reasonably well-capitalised and the country remains the world’s largest net creditor. In June, overseas purchases of JGBs totalled USD 22bn, the highest level for 13 months. As such, if the MoF decided to employ some of its

considerable FX-intervention war-chest, it would recognise the substantial capital inflows that it would effectively be absorbing.

In addition, the political dimension cannot be underestimated. The US Treasury singled out Japan for criticism at the end of last year because of its yen intervention. Notwithstanding the industrial-scale intervention regularly undertaken by the likes of the SNB, the PBOC and other Asian central banks, Japan is still very sensitive to these types of charges.

Finally, despite significant concern amongst local policy officials regarding the strength of the currency and the slower growth being recorded across the Sea of Japan in China, the Japanese economy is coping with the global downswing better than most. Helped by robust consumer spending and reconstruction demand, the economy is enjoying a moderate recovery. However, with global demand weakening, some warning signs are emerging, the pace of growth in industrial production slowing markedly over recent months.

As a result, the BoJ may just decide to expand its asset-purchase program when it next meets on August 8th-9th. Back in February, the BoJ implemented a 1% inflation target in a bold move designed to try and remove the long-standing spectre of deflation. Quite rightly, the BoJ continues to run an ultra-loose monetary policy although this, coupled with the government’s huge debt mountain, is not remotely thwarting demand for the Japanese currency.

With the Japanese economy still recording positive growth and with risk-revulsion still very much the main impulse, the MoF will recognise that upward pressure on the yen is set to continue. It is probably not yet ready to intervene, although it is clearly warming to the task.

If USD/JPY fell to 75, that would surely test the MoF’s resolve.

“Azumi recognises the very limited options at his disposal for further yen strengthening”

MONEYMAKER MAGAZINE | 35

S H AR E S

tonY drury

“Sid please come back, we’ve something to tell you” As the Chancellor struggles to ignite the UK economy a recall of Sid, the hero of the British Gas government privatisation, might provide an unexpected stimulus, says Tony Drury

A

s Party strategist George Osborne MP is pinning all his hopes on an uplift in the British economy round about the end of 2014 in time for the May 2015 General Election. The words of US President Bill Clinton, “it’s the economy stupid”, may well be tattooed somewhere on his person. He knows that he has time on his side.

In his day job as Chancellor of the Exchequer he is nearing the half way stage in the life of the Coalition, and the poor economy data continues to pile up on his desk. Whilst inflation is falling, and subject to the oil price remaining stable, should continue to do so, retail sales are moribund, banks are refusing to lend to small businesses, unemployment (leaving aside the Olympic blip) is awful, growth according to the latest IMF forecast is likely to be 1.4% in 2013, the Eurozone is a worry and even the Chinese economy is needing some quantitative easing. The latest ‘funding for lending’ scheme whereby the banks can borrow up to 5% of their loan book

36 | MONEYMAKER MAGAZINE

at very low rates providing the money goes to businesses is almost certain to end up as ineffective as most other similar initiatives.

Perhaps the Chancellor should read the ‘Ridley Report’. Written in the 1970s for the Conservative shadow cabinet, it suggested breaking up the public sector and dismembering the unions. After Mrs Thatcher became Prime Minister several public offerings took place, including British Aerospace and Cable & Wireless.

The then Chancellor Geoffrey Howe preached the mantra of ‘the marketplace’.

The selling off of Jaguar, British Telecom and Britoil followed.

“If you see Sid tell him” The event that caught the public imagination took place in 1986, encouraged by television adverts featuring the public being urged to tell Sid to buy British Gas shares. Four million investors applied for shares priced at 135p with a minimum purchased of 100 shares. Many of the 1.5 million people allocated stock sold and made a quick profit. 100 shares purchased in 1986 for £135 would now be worth around £1,700. If the dividends

had been reinvested the value would be nearer to £2,000.

Mrs. Thatcher remained focused on her wish to “roll back the frontiers of the state” and to create a shareowning democracy. After her third election victory in 1987 there were public offerings in British Steel, British Petroleum, Rolls Royce and British Airways.

The two events which highlighted the thinking of the era were the 1989 privatisation of the ten regional water authorities and in 1990 the regional electricity companies. At its peak privatisation is thought to the have created a nation of around twelve million private shareholders.

Twenty years later the Coalition

“perhaps it’s time to think about the blindingly obvious. in simple terms, there was too much loose money ”

Government is facing an economic challenge as dire as that faced by the Conservatives in 1979. The Prime Minister has decided that it’s not all Gordon Brown’s fault (his mantra 2010 – 2012) but it is, in fact, those reckless spendthrifts in Europe and the Eurozone crisis that’s to blame. The most worrying aspect of the mid-term blues is that the Coalition is bereft of ideas.

Perhaps it is time to think about the blindingly obvious. During the Blair years from his second election victory in 2001 to the collapse of Lehman Bros. in 2008, there was a global credit spree (how did Iceland fund the purchase of much of Oxford Street?) the likes of which the world has never seen before. In simple terms there was too much loose

money. The inevitable collapse occurred and now what’s left is years of austerity as money re-finds its true worth as an exchange of value.

Money has disappeared. The Government is broke and is still trying to cut back, the FTSE 100 companies are holding on to billions and the private investor is scared. If you speak to any IFA they will tell you that their biggest headache is in trying to advise their cash rich clients what to do with their money in the light of virtually nil (allowing for inflation) deposit rates.

The simple solution is to increase the money supply. That was, of course, the objective of QE1, QE2 and now QE3. The problem has been that the banks have held on to all to the printed money. So let’s ask Sid. In July 2011 the Deputy PM began to think the unthinkable. Nick Clegg suggested handing out some shares in Lloyds and RBS banking groups (which we own anyway) to the public.

Sid has billions under his bed, in the bank and building society accounts and in corporate bonds. Let’s back Britain’s SME’s and give them access to equity

funds.

But what’s needed for it to succeed? a) Courage. The Coalition need to get on their bikes and get the British economy growing again. b) A massive advertising campaign. Let Bell Pottinger loose and tell Sid. c) Release the private client stockbroking community from the headlock being maintained by the regulators (actually the FSA in its Twin Peaks guise) d) Re-introduce taper relief so reducing capital gains tax from 28% to 10% over four years e) Ask me to create some small cap equity markets (I built the most successful PLUS Markets advisory company 1998 – 2006) f) Shout from the roof tops about the Enterprise Investment Scheme (“EIS”) where the Treasury has done some good work in improving its terms (SEED/EIS also has potential).

Most of all, tell Sid to back Britain.

Our SME’s can pull us out of this economic malaise. They need funding by Britain’s private investors.

Please tell Sid.

MONEYMAKER MAGAZINE | 37

B U S IN E S S

brazil

why business is still blooming in brazil Over the past year the remarkable economic growth of Brazil, one of the worldâ&#x20AC;&#x2122;s largest economies, has dramatically slowed, prompting speculation that this emerging market has had its day. But despite this economic slowdown Lisa Best, Project Manager of ethical investment company, Global Forestry Investments, explains why business is still booming in Brazil and why it should not be overlooked as an investment opportunity.

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MONEYMAKER MAGAZINE | 39

B U S IN E S S

South America

B

razil is an extremely attractive country to do business in. It has achieved political stability over the last thirty years, shaking off the associations with its former military dictatorship and settling into a system of democracy. This has enabled the Brazilian economy to thrive and the government is fully committed to the economic and social improvement of the country, creating a business environment that encourages investment and start-ups by employing a wide range of business incentives to attract investors. These measures have sent out a clear message to the world ahead of the 2014 World Cup and 2016 Olympics that Brazil is very much open for business. These incentives are also operating at a local level, with Rio de Janeiro’s Mayor Eduardo Paes introducing a business-development agency to market the city and capitalise on foreign business opportunities.

This agency helps businesspeople find investment opportunities, and advises on paper work and tax breaks, essentially rolling out the red carpet for business.

Coupled with these strong governmental incentives, another reason why business is doing so well in Brazil is the country’s diverse economy which has provided plenty of investment opportunities for both Brazilian and overseas investors. This economy is characterised by strong agricultural, mining, manufacturing and service sectors. In particular, Brazil is very rich in natural resources like diamonds, gold and oil, recently discovering new oil supplies in the Tupi field, off the coast of Rio de Janeiro. This could yield up to eight billion barrels of oil and has launched Brazil as one of the major international players in the oil and gas sector, with many CEOs and business leaders visiting the country to attend the Unconventional Gas Summit this year.

Brazil has also been flourishing in the technology sector, with an increasing number of broadband users, mobile phone owners and social media sign ups. This has in part been due to Brazil’s rising middle classes, known as “C-ers”.

Over the past three years 45 million Brazilians have moved into the middle class which has opened up a world of consumer opportunity. This ascent has

40 | MONEYMAKER MAGAZINE

led to rapid consumption, with C-ers buying everything from cell phones to refrigerators, and for the first time in their lives a home. Brazil has also seemingly become the place to go to when it comes to manufacturing technology, and it is rumoured that Apple are developing the new iPad Mini in Brazil, which could result in other global brand names taking to the Latin American shores to do the same for future releases.

One of the most attractive investment opportunities for overseas investors is in Brazil’s forestry and renewable energy sectors. Brazil currently derives around 85 percent of its energy from clean energy sources such as water, wind and ethanol, and the government plans to develop this further to meet greenhouse gas emission commitments. The Brazilian government is investing heavily in these sustainable sectors, encouraging institutions to incorporate sustainability into their dayto-day activities making forestry and clean energy key investment opportunities. The government has also vowed to reduce deforestation by 80 percent by 2020 and reforest 3 million hectares of land. Even without such a large governmental focus

on forestry, timber is a strong investment choice as growth is driven by the world’s requirement for energy and housing.

So as the world’s population continues to grow and the overall standard of living increases, there will be a greater demand for timber to build the relevant infrastructure to support the population.

This demand will also be felt from Brazil’s growing middle classes who will want better houses and furniture as their disposable income grows.

Within our organisation, we offer

“45 million brazilians have moved into the middle classes, opening up a wealth of consumer opportunity”

investors the chance to invest in both teak and eucalyptus. Our Belem Sky plantation in Para, Brazil consisting of 300,000 teak trees provides investors with an immediate dividend because the teak trees are 8 years old and ready for the first thinning cycle. Unsurprisingly this has been a hugely popular plantation to invest in and availability is rapidly reducing.

We are committed to sustainability and reforesting the Amazon.

Of course, like all countries Brazil has its weaknesses and its sparse infrastructure

is one of them. The government has recognised this and is undertaking a variety of measures to ensure that Brazil is ready to host the 2014 World Cup and 2016 Olympics. Indeed, work has already begun to ensure that Brazil will be able to support the influx of visitors; construction has begun on a new, high-speed train route linking Sao Paulo and Rio de Janeiro, subways are being overhauled, and highways are being repaved. It is estimated that the World Cup and Olympics will drive

more than $131 billion into the Brazilian economy, leaving behind a lasting legacy of improved infrastructure, tourism and foreign investment.

Another important driver for the government’s investment in infrastructure is the already mentioned rise of the middle class. This has provided real opportunities for UK businesses to expand into Brazil due to the real needs that emerge when an economy grows at great speed, such as an increase in domestic demand for basic infrastructure needs like energy production, distribution and transportation.

Brazilian tax and legal systems are complex and difficult to navigate. I would strongly recommend that investors seek advice from legal professionals in order to identify any issues that could arise as a consequence of an infrastructure deal.

Investors unfamiliar with the region should take extra care and take time to speak to local lawyers and businessmen to build up a network of people that they trust. As long as investors tap into the local expertise and plan for potential pitfalls, they can be confident that infrastructure in Brazil should provide a reliable, long-term source of returns.

Ultimately business is still booming in Brazil; absolute and relative poverty have declined, unemployment is at a historic low and infrastructure is rapidly improving. Coupled with the world sporting events that Brazil is due to host, this growth does not look like it’s going to stop anytime soon.

Lisa Best works for GFI Consultants Ltd, trading as Global Forestry Investments. www.globalforestryinvestments.com

MONEYMAKER MAGAZINE | 41

i n v es t

wine

smarter wine investment Exchange Rates and the Fine Wine Market

As the wine market spreads across the world the volatility of global currencies inevitably becomes an important factor in determining a sound investment

T

he fine wine market is very much global with China, Japan, the United States, Canada, South Korea and Russia joining the traditional European wine consuming nations amongst the top fifteen consumers of fine Bordeaux wine.

Increasing levels of international interest, and therefore trade, mean that exchange rate movements take on a greater significance.

But in which countries – and therefore which exchange rates – should market watchers be most interested?

Much of the talk in recent years has been of the growth of the fine wine market in China, and with good reason – most of the large UK merchants report between a third and a half of their business originating there. However China is not the whole story, and exchange

rate data may be used to make the case that Japan is still a – if not the – key player.

The fine wine market is predominantly sterling-based. This may seem counterintuitive since the vast majority (probably 95%) of what constitutes ‘investment grade’ wine is French – and predominantly Bordeaux wine; including other euro-area countries that figure probably rises above 99%. There are, however, sound historical reasons for this, deriving from the very close links between Bordeaux and England, beginning with the English ownership of the region from 11541453: in 1307 King Edward celebrated his wedding by ordering 1.15 million bottles of Claret. When Bordeaux undertook the 17th century equivalent of a marketing campaign, it was towards England that it was directed.

Nowadays, when Bordeaux is first sold,

“Much of the talk in recent years has been of the growth of the fine wine market in china, but that isn’t the whole story” 42 | MONEYMAKER MAGAZINE

MONEYMAKER MAGAZINE | 43

i n v es t

wine

1

the transaction is in euros, but a large proportion of production then promptly makes its way into the UK bonded warehouse system. This system allows wine to be bought and sold without attracting taxes until it is withdrawn to be drunk or re-exported. Such trades constitute the bulk of the secondary market and the largest proportion of them takes place in sterling, even if one or both parties involved is not based in the UK. That is why the main ‘stock exchange’ for wine, Liv-ex, is based in the UK and its trades are in sterling – even though its membership is spread around the world.

Liv-ex produces indices - also priced in sterling - which are the recognised benchmarks for fine wine prices. We can use these indices to make comparisons (e.g. of performance, volatility and correlation) with other asset classes.

Comparisons are straightforward in the case of other sterling-denominated assets such as the FTSE 100, but for assets denominated elsewhere, fluctuating exchange rates need to be taken into account. the exchange rate factor This can have interesting and dramatic effects. For example, in the bull market of 2005-2008, wine prices rose by 164% in sterling terms, but 196% in dollar terms as the US dollar weakened at the same time. At the height of the credit crisis wine prices fell, but the dollar rose: thus the correction of 2008 saw dollaradjusted wine prices fall by 44%, even though the actual (sterling based) indices fell by ‘only’ 22%. With the Dow at that time falling around 38%, wine prices appeared to an American observer much

44 | MONEYMAKER MAGAZINE

2

“Liv-ex produces indicies - also priced in sterling - which are the recognised benchmarks for fine wines” more correlated to equities than their underlying performance merited.

Figure 1 illustrates these effects. The blue line is the original (sterling) Liv-ex 100 index, while the red line is the same index expressed in US dollar terms.

Overlaid in green is the Dow Jones index.

With the exchange rate adjustment, the wine index shows more volatility and a slightly higher correlation to the stock market, particularly in the later part of the period. on closer inspection We can calculate the degree of correlation between the wine index and the Dow Jones, and see how this changes when an exchange-rate adjusted index is used. From mid-2005 onwards the correlation rises from 27% before the adjustment, to 38% afterwards; i.e. a US dollar-based investor would have seen an apparently higher (although still not high) degree of correlation purely as a result of exchange rate movements.

The same analysis can be used as a simple test for how influential consumers are in any country on the wine market (bearing in mind, however, that correlation does not imply causation). The most obvious country to explore is China. From 2001, the correlation between the Chinese

stock market index and the sterling wine index is 21%, rising to 34% when the exchange rate adjustment is introduced – suggesting a lower degree of influence than the USA (the exchange rate effect for the two countries is, of course, similar because of the close links between the renminbi and the dollar).

Perhaps surprisingly these numbers do not change much for later subsets of the data, despite the very rapid rise in demand kick-started by Hong Kong’s withdrawal of import duties on wine in 2008.

The most interesting example though is Japan. Here the correlation between the Nikkei and the Liv-ex is not obvious until the exchange rate adjustment is introduced. Figure 2 illustrates the period from 2008 and appears to show a relatively close link between Tokyo stock prices and those of fine wines, but only once the £/¥ exchange rate is taken into account.

Anyone interested in the future direction of fine wine prices could therefore do well to pay heed to developments in the Land of the Rising Sun – and particularly to the future direction of the Yen. All series expressed as indices with January 2008=100.

i n v es t

wine

A New Italian Master: Sassicaia

I

n the 1920s whilst still a student at Pisa University, Marquis Mario Incisa Della Rocchetta dreamed of creating a quality wine capable of rivalling the very best of Bordeaux.

After a number of experiments with different vine cuttings, the decision to plant Cabernet Sauvignon on the estate of San Guido was mostly in part to the similarities between the terrain in that part of Tuscany – Maremma, on the coast of the region due West of Siena – and that of Graves in Bordeaux.

Mario Incisa’s first vineyard is now considered to be the cradle of Italian Cabernet. Not only did he pioneer this movement, but he also committed sacrilege by introducing French oak barriques for the maturation process.

46 | MONEYMAKER MAGAZINE

Before long, Sassicaia became the first Italian wine to be successfully sold abroad and is almost universally recognised as the father of the new family of Italian wines – “The Super Tuscans”.

Marquis Mario Incisa Della Rocchetta died in 1983 and passed the reins onto his son Niccolo, who has been running San Guido and the winemaking since.

The most famous and finest vintage of Sassicaia is undoubtedly the 1985, one of the very few wines to have been scored a perfect 100pts consistently over the last 20 years by Robert Parker, and more recently by Antonio Galloni. In the last 5 years the value of this vintage has jumped from £800 to £1400 per bottle, and with another two decades of life in it, could see

this move up exponentially as the stock becomes more and more scarce.

The last 5 vintages have seen a consistent increase in quality and some of the finest vintages have been produced in this time. This has not gone unnoticed and we are seeing a growing confidence in this estate from the market.

Using the 2006 vintage as an example, since July 2009 there has been a steady increase in price during two years and then has levelled out through a period that has seen Bordeaux wines drop 17% (according to Liv-ex Bordeaux 500).

With 2009 Sassicaia being hailed in some quarters as the new 1985, we are tipping top Italian Super Tuscans to become increasingly big players in the wine futures market.

MONEYMAKER MAGAZINE | 37

i n v es t

classic cars

“The collectors’ motor car market is witnessing value and volume growth at levels not seen since the late 1980’s”

48 | MONEYMAKER MAGAZINE

a classic investment Fancy owning a garage full of exquisite profit?

Well, for the knowledgeable investor, the classic car market can be a fast lane to financial success

MONEYMAKER MAGAZINE | 49

i n v es t

classic cars

B

onhams smashed world record prices for both a Bentley and a Rolls Royce at a recent sale at Goodwood, which realised a staggering £22 million in just a few hours.

Coming in at a colossal £5 million, the ‘Birkin’ Bentley at became the most expensive British car ever sold at auction, and ‘The Corgi’ Rolls-Royce broke records too by fetching £4.7 million.

However, although the classic car market is currently very strong, Bonhams’ Motoring Department International Managing Director James Knight still urges caution to those considering classics as a sure fire way of making a profit.

He explains the market is prone to fluctuate – cooling in the late 80’s and early 90’s, and it takes serious skill in choosing the right vehicles to buy, and a rare luck of timing to often even recoup purchase and restoration funds. Not maybe a prudent investment choice for the enthusiastic amateur – regardless of their passion for cars.

The collectors’ motor car market is witnessing value and volume growth at levels not seen since the late 1980s.

But, whereas the market cooled in the early 1990s, costing many investors dear, Knight does not predict a similar fate now.

“Today’s dynamics are very different from those in the late 1980s and early ‘90s. One can draw comparisons with the housing market rise and increasing interest rates, most interesting motor cars sold today are acquired with liquid funds, not borrowed money as was the case in the ‘80s/’90s boom then bust period.

People then were buying cars with borrowed money they soon found they could not afford, and it burned them.”

It is this specific aspect that encourages Knight to believe that when the market adjusts - as it surely will - it will this time provide a soft landing, unlike the early 1990s.

Knight continues, “In the early 1990s the whole supply and demand equation went out of kilter - perceived value inflation brought too much product onto the market, offered with very few buyers.

This suddenly accelerated the downward trend. We suddenly had finance houses

50 | MONEYMAKER MAGAZINE

wanting to sell re-possessed cars. Even when we advised the price would be much lower than the outstanding debt, they still insisted we sold the car just to clear their books.

The interest rate spike of 16-17% in the UK also played havoc with private sector mortgage repayments resulting in some collectors having to sell their cars just to keep the roof over their heads.

Today, although interest rates have risen, they are still bearable in the UK. I am aware of the housing market downturn in the USA and the ‘credit crunch’ that has impacted across the world. But I still feel it is not as much an issue today, simply because so many people have bought with saved money - not borrowings.”

“I predict, going forward, that when demand softens - and not necessarily prices - we’ll see less volume coming to

“most interesting motor cars sold today are acquired with liquid funds, not borrowed money, as was the case in the 80s and 90s” market. This should maintain the supply/ demand equation at satisfactory levels thus keeping values steady. “ We talked with Tim Schofield, Director of the Bonhams’ Motor Car Department on car choice and any additional points to consider.

Choosing the right car isn’t as easy as just opting for the obvious luxury marques: “Certain manufacturers, certain periods and types, and certain provenance of cars have performed very well. Exclusive and luxurious marques such as Ferrari and Aston Martin and sports racing cars from the 1950s are also in demand, and any car that can be regarded as a prime example is also

coveted. By prime example I mean a motor car that’s superbly restored or has tremendous history.”

“Another sector of the market that has performed well is veteran / Edwardian motor cars (dawn of motoring up to 1919), especially those cars eligible for the annual and prestigious London to Brighton veteran car run, which is open to cars manufactured pre-1905.”

“It’s also not as simple as saying the top end of the market is doing very well and the lower end of the market isn’t doing well. A compromised Ferrari is a difficult car to sell, whereas a superbly restored Austin Healey will pleasantly surprise when offered for sale.”

www.bonhams.com

Top lots at the Bonhams Goodwood In terms of what be in fashion Festival ofwill Speed sale: classics-wise next, Schofield say it’s frustratingly to predict what l Lot 204 –difficult Ex-Sir Henry ‘Tim’ Birkin, Thewill be sought after next.

Hon. Dorothy Paget-owned, Brooklands “AsOuter every day Lap goes past,Breaking a used car Circuit Record becomes a classic.

In the 1980s‘ no one 1929-31 4 ½ litre supercharged Blower’ would have single thought a Golf GTI MkI or Bentley seater £5,041,500 a Renault Spyder, or a BMW M3 Saloon l Lot 272 – “The Corgi” 1912 Rolls-Royce would become a classic, but now they 40/50hp Silver Ghost Double Pullman are. Five years£4,705,500 ago they were regarded Limousine as used today they 24-hour are seen as l Lot cars, 206 – and Ex-works Le Mans emerging classics.” race, Sir Henry ‘Tim’ Birkin / Earl Howe, Bear inBalbo, mindJohnny too, that the purchase Italo Wakefield 1932 cost is just the first of many Alfa Romeo 8C-2300 Spiderpotential Lungo drains£2,689,500 on your financial resources. If bought it’s unlikely you’llex-Wilwant l Lotto 202sell, – ‘Floretta’ – ex-works, to riskde-Gose, actually enjoy car/as John Pole,using ‘Sam’the Clutton Dr the costs of maintenance and/specialist Bob Ewen / Jack Williamson George labour can be extremely And Daniels 1908 Itala Grandhigh.

Prix Car sourcing spare parts a real challenge, £1,737,500

should you need to replace any through driving damage, wear and tear.

Schofield adds “What is an anomaly is that to sell well some models, marques or types need to be as original a specification as possible (e.g. Ferraris with their Classiche certification need to be stock standard as they left the factory), whereas – for example – a UK Aston Martin buyer is very happy to pay a premium for an up-rated, enhanced or modified DB4, 5 or 6, over and above the standard, as-left-the-factory example.”

As to a winning formula for investment success, Schofield says “If there were an easy answer to this question I wouldn’t be in this business. There is no formula to making money out of classic cars.

There are plenty of dealers out there who are successful, but also plenty who are struggling – and they do it for a living.”

“People should view collecting as a hobby, and if they end up making some

money out of it then that’s a great bonus.

There is not a good or bad time to sell either. Rather, it’s a case of selling when you want to or need to.”

In terms of whether to build a portfolio of classics yourself, or join one of the car investment groups Schofield concludes “It is hard for me to see the fun in having a share in something but not being able to use it. The attraction in collecting motor cars lies in everything that comes with owning them: driving them, being seen in them, polishing them, posing with them, racing them, and even just having them in the garage. We always advise when buying a car, that you buy with your heart – because it may be an investment you have to live with for some time.”

Bonham has upcoming sales at The National Motor Museum in Beaulieu on 8 September, and at Goodwood Revival in Chichester on 15 September, plus others later in the year.

MONEYMAKER MAGAZINE | 51

i n v es t

books

Making Words Worth For bookworms who love their literature, investing in rare books means indulging their passion for a certain author or genre, making it the ultimate MoneyMaking pursuit for many. We caught up with Estella Shardlow on how to make dusty book stores a potential goldmine

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c

ontemporary literature and modern classics have been the biggest growth area of collecting and dealing in the investible book trade over the last decade.

While connoisseurs have for centuries sought older manuscripts and the more traditional classics, over the past 10 years prices have rocketed for 20th century literature at auction.

This summer saw a rare Agatha Christie, featuring an early dust-jacket drawing of Hercule Poirot, which originally retailed at 37p, auctioned for a record £40,630, Meanwhile, Christie’s sold a first edition of Ian Fleming’s Live and Let Die for £13,750 – not bad for a book you could once pick up for 10s 6d.

It’s a growing area of investment, with celebrity collectors including Johnny Depp, Brad Pitt and Nicholas Cage already in on the secret, each owning a covetable book collection of their own.

1. Condition is paramount The same book could vary in value by thousands of pounds if the pages are torn or the book has extensive ‘foxing’ (meaning brown spots on the pages).

Copies in exceptional condition are at a premium, and the oft-repeated adage is that a collector should buy the best possible copy that he or she can afford.

Look out for those labelled as ‘fine’ condition, which in book collecting terminology means virtually flawless.

But be realistic about the quality you can expect to find – a signed first edition of an iconic 1980s novel might be obtainable in mint condition, whereas for some very scarce, older books a ‘very good’ copy may be you’ll find.

By far the most significant component is the presence and condition of the dust-jacket. As this is naturally the part of a book most likely to become worn or have been discarded – the book’s first defense against sunlight, humidity and dust – a well-preserved dust-jacket will significantly increase value.

2. Concentrate on authors with a cult following It’s no surprise that culturally popular authors continually claim the highest prices at auction. With a higher turnover of copies in the market and lots of people scrambling to own them, this generates an allure around such editions from serious collectors and non-specialists alike.

A rare first edition of The Great Gatsby by F Scott Fitzgerald was sold at a Christie’s New York auction for £100,000 in October 2002, doubling its estimate. Ernest Hemingway, Roald Dahl, J R R Tolkien and George Orwell are among the most coveted names. As part of such an iconic franchise, Ian Fleming’s James Bond stories continually make headlines when they go up for auction.

3. Shop online for more choice Fuelled by the internet, the market for collecting rare books is growing rapidly. Shopping online is ideal for rare books as, rather than waiting months for an appropriate auction or book fair, buyers can track down their desired title within minutes.

Sourcing rare copies that may be on the other side of the world and comparing prices instantaneously makes the industry more competitive and makes it easier to find your literary heart’s desire.

4. Seek out first editions Always look for first editions if you want to buy as an investment.

Signed copies of later books can have some value, but in terms of value a book from the first time it came off the printing press can rarely be rivaled.

Since publishers are unsure whether the book will be critically acclaimed or sell well, the first print run is typically very short. Compare the £50,000 price tag of Casino Royale, which had a sell-out first print run of 4,728, versus £2,000 for From Russia With Love of which 15,000 were printed initially.

Similarly, only 500 first edition copies of Harry Potter and the

Philosopher’s Stone were printed in 1997 and now each can fetch £3,000 even though the book is far relatively very young. Also, do bear in mind whether your ‘first edition’ is a US or UK copy as one may supersede the other – for example, the UK first edition of 1984 by George Orwell published by Secker & Warberg in 1949 is the ‘true’ first, even though the US version came out the very same year.

5. Signatures add value – but only if the author rarely did so An autograph from your favorite author can turn a book into a collectible item and increase its value and desirability, and consequently many collectors choose to concentrate on signed editions only.

James Joyce signed just two copies of Ulysses’ first edition, one of which was inscribed with a message to the publisher: “To Henry Kaeser James Joyce Dijon 12 October 1922”. The copy sold for a staggering $460,000 at Christie’s in 2002, trouncing its $200,000-300,000 listing, because that dedication made it truly unique.

Conversely, latter day authors including Salman Rushdie and Ken Follett are known to do lots of signings, so an autograph does little to increase the worth of their books.

Novels that have been turned into films can become more valuable if members of the cast sign, as they become rare pieces of memorabilia.

A Truman Capote first edition coming up for auction in Seattle this August is drumming up a lot of publicity because it is signed by the cast of In Cold Blood, as well as the author himself.

Note that in ‘book speak’ the term ‘inscribed’ means that the author has written a short note in addition to their signature; ‘flat signed’ means the they’ve just written their name on the page.

Check out the range of classic books and collectibles at: www.vintageseekers.com.

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Travel

“Val Gardena, and the adjoining Val Badia are high altitude picturesque valleys fringed by spectacular peaks”

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stressed in the city?

Then it’s time to take a luxe wellbeing break in Northern Italy says Lisa Curtiss

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oardroom burnout? Stressed in the City? A week in St Barts may the perfect remedy for many, but if you find the idea of a beach break rather a boring prospect, an ideal alternative could be a luxe, wellbeing-orientated long weekend in Italy.

Avoiding the wine-quaffing tourist hoards in Tuscany and Umbria and coach-choked Amalfi coast is a smart move this time of year. Head north instead, past the Lakes, high into the pristine Alpine meadows and snowtipped mountains of the Dolomites, a

Unesco World Heritage Centre that takes relaxation rather seriously, and is the place Italy’s corporate elite head to, to recharge, re-balance, rest and recuperate.

Val Gardena, and the adjoining Val Badia are high altitude picturesque valleys fringed by spectacular peaks, burnished blood red and gold in the rising and setting sun. Only a small proportion of their visitors are British, a refreshing change from the busier of the Swiss and Austrian alpine resorts.

One of the first things you’ll notice is the emphasis on living a healthy, holistic lifestyle here. All quality hotels boast a

‘Wellness Centre’, essentially a spa usually offering a pool, saunas, steam rooms plus a wide range of holistic treatments, often with a local twist. There’s also an enormous array of activities on tap to take your mind off endless presentations, power-play and portfolio perfecting.

Relaxing doesn’t necessarily mean sedentary here, so do what the glowingly-healthy locals and visiting Italians do – couple a morning’s mountain hiking, biking or paragliding, with cocktails at sunset with fabulous views, Michelin star dining, enjoying amazing spas, offering everything from vigorous

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TRAVEL

knot unravelling sports massages to unique pain relief techniques. No doubt you’ll end up returning to work refreshed and revived – and probably several kilos lighter.

Where to Stay Stay at Val Badia’s luxe Hotel LaPerla in Corvara (www.hotel-laperla.it). It is charmingly traditional yet indisputably chic, with a 1 Michelin star restaurant La Stüa de Michil, under chef Arturo Spicocchi. There’s an attractive piano bar, and super spa offering a wide range of treatments, including the locally loved hay or apple baths, and massages using fragrant local mountain flower oil and honey. And for those who love to relax and unwind with a glass or two of fine wine, the hotel has an acclaimed wine cellar housing over 27,000 bottles, including the famous Sassicaia.

Hotel LaPerla is perfectly placed just a five minute walk to a cable car, taking you high up onto a stunning Alpine plateau to Col Alt at 1980m, where you can walk, cycle, mediate and then enjoy a well deserved lunch in one of the precariously perched mountain huts known for their innovative use of local and wild ingredients.

From Corvara, you can also walk through the pretty river valley to Colfosco, and take the long Plans and Frara cable car high up to Jimmy’s Hut at 2222m, for a gourmet lunch with superb views.

La Badia has two 2000m “Movimënt” areas reached by cable car from San Cassiano or La Villa. Here there are purpose built platforms forming what have to be the ultimate in gyms. Each

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has incredible views and you can take yoga or meditation classes, or work out on the range of sports equipment there.

You can also pre-book personal trainers or guides to walk you through streams for natural reflexology treatments.

If stress has left you with perennial aches and pains, visit the excellent spa in the Posta Zirm Hotel, Corvara for a session or two of a pioneering new pain relief therapy called LnB. The hotel is one of only a handful of places in the world that offers this technique, that’s now being used by a number of top international football clubs and famous athletes. l www.postazirm.com An alternative luxe place to stay in Alta Badia is the Hotel Rosa Alpina, with its St. Hubertus restaurant hosted by 2 Michelin

star chef Norbert Niederkofler. l www.rosalpina.it Split your stay to experience the best of what neighbouring Alta Gardena has to offer. There are three high-end hotels, the Hotel Adler (www.adler-resorts.com/ en/), Hotel Grödnerhof in Ortisei (www. gardena.it), and the Alpenroyal Grand Hotel Gourmet & Spa in Selva (www. alpenroyal.com).

Alternatively, to really get away from

Wines Alta Badia and Alta Gardena do not produce wine due the altitude and climate, but the South Tyrol region is home to some good wines as a whole.

Aperitif: l The Arunda rosè is a dry sparkling rosè wine from winery Reiterer (Meltina) in South Tyrol Whites: l The South Tyrol Sauvignon blanc “Quarz” from winery “Terlano” l The South Tyrol Gewürztraminer “St. Valentin” from winery “St. MichaelEppan” Red: l The South Tyrolean Lagrein Abtei Riserva from winery “Monaster Muri Gries” in Bolzano l The South Tyrolean Merlot Riserva “Kastelanz” from winery Elena Walch Dessert: l The South Tyrolean white dessert wine Goldmuskateller Passito from the little winery Obermoser close to Bolzano

it all, try a mountain chalet available only by cable car or chair lift. Alpenhotel Col Raiser (www.colraiser.com) and Almhotel Piz Seteur (www.pizseteur.com) are the MoneyMaker chalets of choice here, in the most part due to their spectacular views and seclusion.

Col Raiser, reached by cable car from St Christina, is a Mecca for gourmets, walkers and nature lovers alike. There are mountain huts serving excellent local dishes, tiny artisan cheese producers open for tastings, and meadows carpeted with a rainbow of wild flowers, where a pre-booked personal guide can show you culinary and healing herbs to use.

Whilst up in the mountains, seek out what’s said to be the very best hut in the whole Dolomite region to eat, the Rifugio Emilio Comici (www.rifugiocomici.com),

Traditional Regional (Ladin) Cuisine l Bales (ladin for dumplings) - bales da spinot (spinach); l Bales da ciajuel (with cheese); l Bales da ciociul (smoked ham) l Crafuncins da ula vërda (ladin for pasta parcels & spinach) – in other regions they mix with ricotta too l Carfons da Pavé (cake with poppy seed & honey paste) – traditional Ladin cake baked for festivals l Kaiserschmarren (sweet pancake with bilberry jam) l Speck (cured ham); l Polenta with mushrooms (porcini); l Ziger is the most famous Grey cheese l Spritz is the name of the red drink (aperol, prosecco, sparkling water) l Hugo is the name of the sweet white drink (elderflower, prosecco, mint leaf)

“Col Raiser, reached by cable car from St Christina, is a mecca for gourmets, wAlkers and nature lovers alike” surprisingly specialising in fresh fish, and fresh picked herbs from its own garden.

And for a dining experience with a difference, www.skydinner.it in Ortisei enables you to enjoy your first course actually in a cable car pod as it climbs slowly to 2000m, where you complete your meal in the comfort of the elegant Mont Seuc restaurant with breathtaking panoramic mountain peak views, watching the sun set.

Heading back to the villages, a restaurant offering delicious and particularly innovative elegant cuisine is Gourmet Restaurant Nives based in Selva. It’s hotly tipped for a Michelin star and worth booking. l www.hotel-nives.com The Italian Dolomites are reachable from many UK airports and airlines, Innsbruck being the nearest destination, 150km away from Alt Badia and Alt Gardena, or Verona, from Gatwick, a three-hour transfer away. For further info visit Alta Badia Tourism Consortium – www.altabadia.org and Alta Gardena Tourism - www.valgardena.it

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golfer’s guide

GOLFER’S GUIDE MoneyMaker’s golf expert Sophie Horn takes us around some of her favourite courses in the world Barefoot Resort l Designed by Davis Love III, Tom Fazio, Greg Norman and Pete Dye

I

had the privilege of being in the US at that well-known golfer’s paradise, Myrtle Beach, just after the Masters this year.

Unfortunately it wasn’t because I had been invited back to defend the Green Jacket, but to attend ‘Monday after the Masters’ (an annual celebrity pro bash) which made up for it…just!

I’ve been to America a few times now but have only really sampled the very commercial parts such as Orlando.

Myrtle Beach is much the same, and the amount of golf courses per square foot is quite astonishing!

Having had a taster of Barefoot on the Monday, I was itching to get back and sample the track for myself, it’s a hard job but I feel I have a duty to take one for the team and check it out for all you MoneyMakers! The resort boasts not one but four courses designed by Davis Love, Tom Fazio, Greg Norman and Pete Dye. Not a bad set of designers!! So not only did I have a tough decision deciding which resort to head to in the first place, I was then faced with a choice of courses. This was a good time to sample the club sandwich and beer for the HORNdex score whilst I compared each man….I mean course!

I decided to play the Fazio and Norman courses, and if the other

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courses are as attractive and interesting as these two, then you need go nowhere else for a long weekend golfing holiday of a lifetime!

As with all things American, there is great emphasis on customer service.

From your clubs being taken from the boot of your car and cleaned, to the friendly pro shop staff, there is always a smile to greet you. Plus the sun shining, another benefit often missing from our UK courses, always helps as well.

Both courses have water featuring heavily throughout which makes for many interesting and challenging tee shots, this failing it also provides a nice way to cool off if things don’t exactly go to plan.

Although, that said both courses were fair. The greens, surprise surprise,

were BIG. Get onto the wrong part on some of them and you can watch your ball disappear quite merrily into an area where a 3-putt would be a good result. The fairways were immaculate, like carpet. They don’t cram the course full of players either so I had a really nice relaxing round…exactly how golf should be.

Even if you’re not playing well, the beer cart and the spectacular setting, especially on the Norman course that’s known for its seven holes situated along the Intracoastal Waterway, will help put a smile back on your face.

Try it!! Don’t forget to take advantage of the 35,000-square-foot Barefoot Clubhouse and The Range at Barefoot, a lighted facility with more than 30 acres of manicured grass.

SOPHIE’s VIEW The HORNdex takes into account aspects of the golf course and facilities itself, alongside such things as the Club Sandwich and the local beers on offer.

Barefoot really was treat from first to last. The courses are stunning to both play and take in, and the fascilities and staff won’t be matched by many courses around the world.

COURSE:

FACILITIES:

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watches

clockwork claret in conversation with the master watchmaker 60 | MONEYMAKER MAGAZINE

The watchmaker’s watchmaker, Christophe Claret has created a home of horology in the Neuchâtel region of Switzerland, where his Manoir du Soleil d’Or stands as a beacon of modernism and traditionalism amongst the titans of fine watches. Like an alchemist creating magic in a castle in the sky, Claret has developed a world of wonder, producing watches like no other brand in the world. We met up with the man who banished the word ‘impossible’ from his headquarters, and replaced it with ‘challenge’.

What first attracted you to watchmaking?

I first became enthralled by the idea of horology as a ten year old child. Even at that age I was busy dismantling mechanical components to examine how they worked and what they contained. From the age of fourteen, I spent every Friday afternoon with a watchmaker in Lyon, where I was allowed to dismantle, clean and assemble a variety of clock movements.

The mechanical ingenuity of these movements instantly fascinated me.

Where there any particular watches you fell in love with when you were that age?

My first love was a Charles X period watch, it was my first pocket watch and had a silver case. I bought it with my pocket money when I had just turned fourteen, so it was incredible special to me then and still is now.

Is watch-making a career you would recommend to young people?

Of course, and especially these days because there are so many different professions housed under the umbrella of the watchmaking profession due to new products now available on the market.

Your watches are exceptionally unique. How important is design to you?

Design has always been incredibly important to me, and remains so today.

I am personally involved in the design of the entire product, whether it be the case, the dial or the hands, but especially the movement and each of its components.

What are your thoughts on the debate over modern vs traditional methods of making luxury watches?

For me personally, I appreciate more the skill involved in constructing watch movements with traditional finishes and aesthetics. Modern machines are also very important too though. Most of the machines we use have been created by our Christophe Claret Engineering

Department in collaboration with manufacturers of machines, and these are key in ensuring we produce watches with ever more efficient methods of construction, whether that be through the level of complexity of the movement or, especially, the stability of accuracy and quality of manufactured components.

Explain why the X-Trem-1 is so unique This watch is extremely innovative as it is the first wristwatch equipped with a retrograde hours and minutes display system where two small steel spheres – hollowed to make them lighter – encased within two sapphire tubes placed to the right and left of the caseband, are controlled by precision magnetic fields generated by two miniature magnets.

These are then moved by cables with no mechanical connection with the movement, with each one floating inside the two tubes and creating outstanding horological magic. We worked over a year with a professor at the University of Yverdon in order to have the control of magnetism for this purpose.

What is your favourite watch you have ever made?

That’s an impossible question to answer, it’s like asking a father which child he prefers.

Are there too many luxuries watch brands out there crowding the market?

Clearly, if there were less high end watchmakers in the market it would be easier to acquire a greater market share.

Nevertheless, I think thanks our innovative products and product consistency, we have more chance of success in the market these days than others.

In the current difficult financial climate, do you still regard watches as a good financial investment?

I think as long as the product is rare, exceptional and limited by its quality and innovation, it will always be a good financial investment. This has always been the case and will continue to be.

So that being said, what is the future of high-end watch-making?

Fine Watchmaking will always continue to have a prosperous future, as long as we are capable of coming up with interesting or innovative products that will correspond to future markets and attitudes. l www.christopheclaret.com

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cars

best of british As the UK celebrates the ultimate in sporting achievement as Olympic hosts, Britain’s car makers are perfecting their game too, launching some of the most advanced, high performance, and luxurious models to date. We’ve selected four of the most anticipated and highly acclaimed new British cars for your consideration. The best of the bunch? It’s a tough call… we’ll let you decide.

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Aston Martin Vanquish Designed and hand-built at Aston Martin’s global headquarters at Gaydon in Warwickshire the new Vanquish, available as a 2.2 or 2.0, flagships an acclaimed line-up of world-class sports cars including the exquisite DB9, sporty V8 Vantage and luxurious four-door Rapide.

Performance, presence, style and great British craftsmanship – the new Vanquish has all these traits in abundance. This serious piece of motoring eye-candy sits proudly at the pinnacle of the luxury British car maker’s sports car line-up.

Sharing styling cues with the incredible, but strictly limited edition, £1.2m One-77 supercar, it clearly shows this coolest of brands continued quest and dedication to produce the most beautiful sports cars in the world.

Aston’s most potent production model to date, its naturally aspirated 6.0-litre V12 petrol engine delivered 565bhp at 6,750 rpm, 620 Nm of torque at 5,500 rpm, 0-62 mph in 4.1 seconds and a top speed of 183 mph firmly places the Vanquish into true super car territory. Yet the brand’s team of engineers have been working towards economy and emissions improvements too.

Priced from £189,995, first deliveries of the new sports car are expected to begin in late 2012.

Aston Martin C.E.O. Dr Ulrich Bez said: “As Aston Martin is in its 100th year and prepares for the 100th birthday of the brand in January next year, the debut of this new super grand tourer means we can look forward to the next century with confidence and real excitement.”

“I’m very proud of the new Vanquish, and my team that have worked tirelessly to perfect it, and I’m convinced that it will quickly become one of the most sought-after and admired cars on the road.”

Viewed in the metal for the first time at its A-list, starstudded London launch party, it’s hard to disagree.

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cars

Land Rover Range Rover No Best of British car round up would be complete without the iconic Range Rover. The smaller, less expensive Evoque may be stealing the limelight at the moment, notching up a treasure trove of awards in the process, but the likes of the range-topping epitome of luxury 5.0-litre, supercharged V8 Autobiography more than holds its own as the British car many still aspire to grace their driveway with.

At £86,925, it’s considerably cheaper than the Bentley and Aston offerings, but for versatility, genuine capability whatever the weather or surface conditions, and space and comfort for rear passengers, it firmly trounces the two. Its supercharged 5.0-litre V8, coupled with a silk smooth auto box, delivers a powerhouse of performance

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and the flexibility to waft gracefully through the countryside, or effortlessly punch past irritating lane hoggers on the motorways.

A handsome car, with timeless aesthetic appeal, Land Rover’s boldly taken the decision not to over-tinker with a design that clearly works, other than up the ante luxe-wise throughout, and execute minor external tweaks.

This model is already fully loaded to the hilt, and includes the exterior design pack and other features including real wood veneers and butter-soft leather, Style 18 alloy wheels, rear seat recline and winged rear headrests. There are also premium carpet mats with leather trim edging and many other unique finishes and touches creating the epitome of

cocooned opulence.

And, there are still a raft of options to choose from to personalise your car just the way you want – and it’s easy to spend significantly more than the sub £90,000 asking price.

Bentley Continental GTC V8 Convertible Unveiled at the Geneva Motor Show in the Spring to a super-enthusiastic crowd, this powerful, ultra-luxurious, substantial yet elegant drop top has to be among the ultimate of summer cruisers for those who can afford the rather hefty circa £124,000 price tag.

Not the ideal car for shy and retiring types, it’s unmistakably loud and rasping engine growl fanfares your impending arrival from some distance away, and its distinguished yet modern looks attract admirers every time it’s parked up on public display.

Inside it’s a cosseting haven for its privileged passengers, as Bentley never shies away from fitting its models with the most luxurious of materials and state of the art gadgetry, and also offering an enormous array of options for you to personalise your car exactly to your taste.

Out on the road, sporting Bentleys are remarkably spirited, agile and engaging. This GTC V8 delivers 500 bhp at 6000 rpm, together with a hefty peak torque of 660 Nm (487 lb ft) available across virtually the entire rev range from 1700 to 5000 rev/min. Combined with its new close-ratio 8-speed automatic transmission, this translates into a 0-60 mph sprint time of 4.7 seconds and a top speed of 187 mph, providing exhilarating performance and effortless power delivery to delight the most ardent of drivers.

At the same time, the new V8 Continental models achieve excellent levels of fuel efficiency and CO2 emissions for the luxury performance sector and are capable of travelling over 500 miles (800 km) on a single tank of fuel. In addition both Continental V8 models feature a state-of-the-art, all-wheel drive system employing an advanced Torsen differential and a 40:60 rear biased power split to ensure safe yet dynamic sports car handling in all road conditions.

Jaguar F-Type The high octane, stunning XKR-S is an incredible car that gives many an Aston a genuine run for its money, but maybe it’s time to consider an alternative Jaguar – one that promises to take the iconic British marque back to its true sporting roots – the F-Type, set for launch next year.

The two-seater sports car wowed crowds, tearing up the hallowed ‘Hill’ at the recent Goodwood Festival of Speed, and was met with enormous anticipation at its debut at the New York Auto Show earlier this year.

Such is the excitement and clear demand surrounding the F-type that Adrian Hallmark, Global Brand Director of Jaguar Cars has stated the company has been forced to respond by accelerating its development.

Hallmark added “The core appeal of Jaguar’s cars is their sporting heart, and that heart will beat stronger than ever before in the F-TYPE. Its development is a vivid representation of the confidence and ambition of the Jaguar brand.”

Launched at first as a two-seater convertible, its lightweight all-aluminium construction and powerful new engine lineup promises to deliver true sports car performance and a thrilling driving experience. Full technical and range details will be announced later this year, with Jaguar confirming the F-type will go on sale by mid 2013.

Ian Callum, Director of Design, said: “A true sports car needs to be pure in both its purpose and its form; to have the opportunity to produce such a car for Jaguar has been a privilege both for

myself and for my team. The C-type, D-type and E-type Jaguars were all sports cars that held true to this principle in their era, and the F-TYPE will hold true to that same principle.”

Prices, spec details and engine line-ups will be announced soon, and its expected order books will open later this year.

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football

NETTING

big the

one The Barclays Premier League is back, and bigger than ever. Great games, fantastic goals and shocking upsets are guaranteed, so with that in mind we take a look at what the best club football competition in the world has in store for 2012/13.

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sp o r t

FOOTBALL

here isn’t a single drum that beats at the heart of the British public, one central thread that unites the corners of the country in unison. The closest thing to it, though, is football.

You might have thought that after the disappointments of the European Championships and the Olympics the Great British public would have tired of its national sporting pastime, but you would be sorely mistaken. The Premier League is the most watched football competition in the world, and with good reason. From now until May punters from the UK and across the globe will be glued to one of the most enthralling soap operas to be found anywhere, one that will certainly be filled with twists and turns, high and lows, surprises and scandals.

So sit back and relax as we predict the next nine months of your footballing life, and let you know what to expect from this year’s Premiership season.

At the Top

Historically things don’t tend to change much in the Premier League penthouse, and once again punters hoping to see a team emerge from the middle of the pack to challenge established elite are going to be disappointed.

Last season’s title race was the closest since its inception, with Sergio Agüero’s 95th minute winner on the last day of the season sending the trophy to Manchester City for the first time. The Citizens took the title away from cross-town rivals Manchester United on goal difference in 2012, and once again it looks like the North West rivalry will dominate the back pages all the way through to May. Despite the seemingly endless pool of wealth at Man City’s disposal it’s United who have strengthened over the summer, adding last season’s Premier League top scorer Robin Van Persie from Arsenal to partner Wayne Rooney in what may turn out to be themost potent strike force the Premier League has ever seen. Signing Shinji Kagawa from Borussia Dortmund is another shrewd piece of business from Sir Alex Ferguson, but it could be players returning from injury that make the biggest difference to the Championship race this time around.

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To Win the Premier League Manchester City – 6/5 Manchester United – 9/4 Chelsea – 5/1 Arsenal – 20/1 Liverpool – 40/1 Tottenham – 40/1 Newcastle – 125/1 Everton – 250/1

Top Four Finish Arsenal – 8/11 Tottenham – 13/5 Liverpool – 3/1 Everton – 12/1 Newcastle – 12/1

To be Relegated Norwich – Evens Reading – 11/8 Southampton – 6/4 Wigan – 13/8 Swansea – 5/2 West Ham – 3/1 QPR – 7/2

To Finish Bottom Norwich – 4/1 Reading – 5/1 Southampton – 11/2 Wigan – 6/1 QPR – 11/1 Swansea – 12/1 West Ham – 14/1

Captain Nemanja Vidic is back after an eight month layoff to solidify a defence that looked shaky at time in 2012, and the return of Tom Cleverely, Darren Fletcher and Anderson will provide more options in a midfield that became too reliant on an aging Paul Scholes at the back end of last season.

City have only added holding midfielder Jack Rodwell, Javi Garcia, Maicon and squad players, but will be buoyed by having a focused Carlos Tevez in the starting line-up from the opening day of the season. The

“the experience of getting over the line last year should also give roberto mancini’s men added confidence coming into the new campaign” experience of getting over the line last year should also give Roberto Mancini’s men added confidence coming into the new campaign, and with the option to bring in more players in January if things don’t initially go their way City will surely start the season as favourites for the title.

Champions League winners Chelsea have been the biggest spenders of the offseason, adding mercurial talents Eden Hazard and Oscar to bring more creativity to a midfield that looked too one dimensional at times last season. The moves should see Chelsea leapfrog Arsenal as the primary challengers to the Manchester clubs, but whether it is enough to close the 25 point gap forged at the end of the 2012 campaign is more doubtful. Even with an improvement of squad depth questions still remain unanswered, the most pertinent of which is whether Fernando Torres can finally live up to his £50m price tag and fill the shoes of China-bound Didier Drogba. Roberto Di Matteo is yet to strengthen his front line this summer, and with Romulu Lukaku heading on loan to West Brom options are limited if Torres can’t find the back of the net with more regularity than he has done since making the move to West London eighteen months ago.

And then there are question marks concerning Di Matteo himself. The Italian has already written his name into the Chelsea history books as a manager as

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FOOTBALL

well as a player by overseeing the club’s first successful Champions League campaign, but his record as a Premier League manager is not so impressive. Navigating a team through a nine month league assault is a different challenge to knockout football, and Chelsea will only be able to contend if Di Matteo can jump successfully graduate from being a mediocre mid-table manager to the class of the League’s elite bosses.

The title looks set to be a close run affair between the top three all season, with another last day decider a strong possibility.

If the competition is increasing between the top three, however, then the same cannot be said for other teams with purported title aspirations.

The chasm between the best and the rest has certainly widened since the end of the 2011/12 season, with both Arsenal and Tottenham losing key players rather than strengthening during the transfer period. It will be a case of looking down the table, not up, for the North London rivals as they fight it out with Everton, Liverpool and Newcastle for the lucrative fourth Champions League spot.

Arsenal finished above the other “second tier” teams last season and will be favourites to do so again despite losing top scorer Robin Van Persie and influential midfielder Alex Song to Manchester United and Barcelona respectively. The return of Jack Wilshere after an absence of over a year through injury will be a huge boost to Arsene Wenger’s men, and with new signings Olivier Giroud and Lukas Podolski in to take up some of the slack left by Van Perise’s departure fans of the Gunners will be confident of retaining that Champions League place.

Liverpool have been the most active team in the chase for fourth place, bringing in Joe Allen amongst others as Brendon Rodgers attempts to impart his particular brand of football philosophy onto the Merseysiders.

Rodgers’ Swansea were a sensation in their first year in the Premiership last season, and the Northern Irishman will be successful at Anfield, but the transformation from a team built to service Andy Carroll to “total football” will take too long to return past glories to Liverpool this year.

Our Prediction 1st – Manchester United 2nd – Manchester City 3rd – Chelsea 4th - Arsenal

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Relegation

Conventional wisdom dictates that it’s the teams coming up from the Championship that will be the most likely to struggle, but if last season has taught us anything it is that the established Premier League clubs have plenty to fear from this term’s crop of new boys. All three promoted teams avoided relegation in 2012, with Swansea and Norwich in particular playing some superb football against the league’s biggest clubs.

Southampton, Reading and West Ham come into the fold this time around, and once again there doesn’t seem to be a dead cert for relegation in the group.

Southampton are a young and talented team who should score plenty of goals, and West Ham have the finance and experience to tough out a gritty, if unspectacular campaign. Reading will have the toughest task of avoiding a bottom three finish, and without the experience of an end of season run-in under their belt it will be imperative they start the season well. If they are hovering around the relegation zone

at Christmas then staying up will be very difficult.

Despite such strong showings last season, the departures of managers Brendan Rogers and Paul Lambert could spell for very different campaigns this time round for Swansea and Norwich. If more players, including Norwich top goal scorer Grant Holt and Swansea winger Scott Sinclair, also find their way through the exit doors then 2011/12 could quickly become a distant memory for fans at Carrow Road and the Liberty Stadium.

New Swansea manager Michael Laudrup looks set to stick with the footballing philosophy that made the Welsh side so attractive to watch last season, and with solid crop of young players the most well represented team in the GB Olympic squad should cope with the loss of Rogers and midfielder Joe Allen.

Norwich, however, look much more vulnerable. After overachieving last year a serious dose of second season blues could be on the cards, and if the Canaries can’t rely on Holt to get them the goals he did last season then relegation could quickly become a serious concern for the East Anglican club.

Top Premier League Goal Scorer Carlos Tevez – 9/1 Fernando Torres – 9/1 Robin Van Persie – 9/1 Wayne Rooney – 9/1 Sergio Agüero – 12/1 Luis Suarez – 20/1 Mario Balotelli – 20/1 Papiss Cissé – 25/1 Darren Bent – 33/1 Nikica Jelavić – 33/1

First Manager to Leave their Post Nigel Adkins – 4/1 Mark Hughes – 10/1 Sam Allardyce – 12/1 Tony Pulis – 12/1 Brendan Rodgers – 16/1 Chris Hughton – 16/1 Roberto Di Matteo – 16/1 No Manager to leave during the season – 100/1

Two of the established Premier League mainstays, Blackburn Rovers and Bolton, dropped out of the top flight last season, which will have a number of clubs worried for their own futures this time around. Aston Villa had an extremely poor campaign under Alex McLeish last season but survived, and with new man Paul Lambert at the helm this year should pull away from the relegation scrappers more convincingly in 2013.

West Brom also have a new manager in Steve Clarke following Roy Hodgson’s exit

to oversee the national team. Clarke has a long and successful career as an assistant manager at various top Premiership clubs, but the West Brom gig will be his first as the main man in charge, so how he copes with that pressure will go a long way to determining how well West Brom go this season. Wolves’ experiment promoting long-time assistant Terry Connor to oversee the club’s run-in last season ended in abject failure, but Clarke has a better squad and has been tipped to be a good boss for years.

So long as they start the season well West

“the chasm between the best and the rest has certainly widened since the end of the 2011/12 season, with five teams vying for the lucrative fourth place” Brom fans shouldn’t be sweating on the fate of their team come May time.

Wigan have forged a reputation the league’s perennial underdogs, buried at the foot of the table at Christmas only to rise again triumphant by Easter. Coach Roberto Martinez has garnered a reputation as a footballing saviour in the North West, and fans will again be confident he can pull off the improbable by steering the Latics clear of the drop zone in 2013. There is no doubt Martinez’s brand of football is an attractive one, but just how Wigan intend to score goals or prevent conceding them are major questions to which there are few answers.

Wigan fans may believe in miracles, but another great escape in 2013 is just one step too have us be believers.

But hey, what do we know? So sit back and enjoy every breath-taking moment.

That’s what we’ll be doing. See you in June!

Our Prediction 18th – Wigan 19th – Norwich 20th – Reading

MONEYMAKER MAGAZINE | 71

Punter’s Post MoneyMaker and Sportingbet team up to bring you this month’s hot tickets

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ere’s a scenario for you.

You’re sat in front of the television watching your favourite team in action and as soon as the half time whistle blows the adverts come rolling on. First up comes the chubby Italian opera singer charging about the screen while singing the delightfully irritating Go Compare tune. What is your initial response? A) Change the channel, B) sing along like a madman, or C) compare car insurance options?

Presumably most of you answered A or B, with only the true motoring bargain hunters going for C. Yet when it comes to betting, option C is also the one that often gets ignored; not in terms of comparing car insurance mind you, but in asking yourself why it is that you bet with a particular bookmaker.

In the age of online and mobile betting, there’ll be very few punters who only ever bet in a high street shop and there’ll be very few punters who only bet with one online bookmaker. But why is that?

Obvious reasons for siding with one bookie over another will include the number of markets that firm offers, the range of sports it covers, better pricing compared to rivals or a more user friendly website. But in such a crowded marketplace another string to a bookies’ bow is its promotions. And it’s here where online firms tend to wipe the floor clean against the old school outfits and even the exchanges.

Take the Grand National for example.

Deemed as the race which stops the world – presumably because they’re all in betting shops - it’s actually the race which the most punters lose out on.

High street bookies, trackside bookies and exchanges tend to only ever pay out on the first four horses in the race.

Yet those who search out a promotion will get more bang for their buck and could have been paid out on the first six this year. So while a £10 each way bet in a typical high street shop on In Compliance would have resulted in a £20 loss, the same stake with Sportingbet would have resulted in a £240 profit thanks to the 100/1 shot finishing 5th.

The National is obviously an event that only comes round once a year but regardless of what sports you tend to bet

H

“in such a crowded marketplace online firms wipe the floor with their old school rivals with promotions” on there’ll almost always be a promotion that’ll suit you. Whether it’s extra places in racing, refunds if certain players score in football, bonus winnings on accumulators or even receiving free bets for betting on in:play markets, the next time you fancy having a bet be sure to seek out the fat man and compare the promotions!

What’s Hot in August?

Sportingbet have got several promotions lined up in September, here’s how you can get the extra online value: £50 Risk Free Bet. If you don’t have an account with Sportingbet then for goodness sake open one because your first bet is risk free up to £50. This means that if your first bet loses they‘ll give you another crack by returning your money as a free bet.

Multi 100. Let’s face it; no one really works on a Friday. Half the day is spent trying to get your body back up to speed from its Thursday evening exploits and the other half is spent looking at the

weekend football fixtures. So in that case place your weekend 5-fold football accumulator on a Friday because if it wins, Sportingbet will give you a free bet on top of your winnings, up to £100.

Big 4 Bankers and Double Chance. If you’d placed a bet on Rafa Nadal to win Wimbledon with Sportingbet you’d have got your money back. This was thanks to the Big 4 Banker promotion where they offered refunds on losing outright winner bets on Murray, Federer, Nadal and Djokovic if they failed to make the semi finals. They also refunded losing Doubles if either match went to a fifth set.

Well with the US Open on us at the end of the month, Sportingbet will be rolling out the refund carpet again with some huge offers at Flushing Meadows; keep an eye on the site for news of what they are and when you can qualify for them.

To claim your risk free bet and for the latest promotions, open an account at www.sportingbet.com and enter Promo code MONEYMAKER.

MONEYMAKER MAGAZINE | 73

sp o r t

DIARY

secret diary of a sports bettOr We’ve given our secret sports bettor £1,000 and twelve months to lay down a marker for all MoneyMakers to beat. Each month we’ll be tracking his progress, and he’ll be giving his top tips for making a healthy profit in the month ahead.

This month has a distinctively State-side feel, with both the US Open and Ryder Cup taking placing on American soil. Don’t worry though, because the secret sports bettor says the value is in sticking with patriotism, rather than home town heros.

The Ryder Cup The Ryder Cup is one of the best events on the sporting calendar, if only because it’s one of the only team sports where the US and UK (well Europe, but you know what I mean) are competing on an even footing. That in itself makes for a great spectacle, especially when the fight is on US soil, because when it comes to team sports the U-S-A, U-S-A is usually either uncompetitively good (see basketball), or uncompetitively bad (see rugby). Neither leave the US public with much to shout about.

And on paper this year the US will be bringing a line up to Medinah as impressive as its European rivals, but after a closer inspection it’s clear there are more than a few cracks lying just below the surface.

Tiger Woods is still the outfit’s standout, but Tiger 2.0 is not the Tiger of old. He may have more wins than anyone else on the PGA Tour this season, but Tiger has bombed on the weekend of all four majors after putting himself in a good position at the cut. It’s almost sacrilege to even whisper that Tiger might not have the heart, or bottle, for the big occasion anymore, but the truth is until he proves otherwise the doubts will always be there. Throw in the fact that Phil Mickelson has barely played a decent round of golf for six months, and all of a sudden the head of the beast doesn’t seem anywhere near as intimidating as it has done for the past decade.

The second unit, including Masters champion Bubba Watson, Matt Kuchar, Jason Dufner and Kegan Bradley, is a talented one, but lacking much vital Ryder Cup matchplay experience.

Europe, on the other hand, is stacked with Ryder Cup old-timers who will know

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just can’t see it being much of a factor.

The Europeans will know that if they can start fast the US team could crumble quickly. I’m putting my money on a big win for Europe.

Bet: £50 Europe to win by 6 points or better

how to turn the screw if they jump out to an early lead on the first day. Sergio Garcia, Graeme McDowell, Ian Poulter and Justin Rose all have fantastic records in the Ryder Cup and will provide a formidable foil alongside the world number one, two and three of Rory McIlroy, Luke Donald and Lee Westwood.

History suggests that home advantage will play its part, but with such an experienced team so used to playing on American soil I

US Open Later than usual (thanks to the Olympics) the tennis world will descend on Flushing Meadows for the final major of the season, the US Open.

One man who won’t be in attendance is Rafa Nadal, after the Spaniard withdrew suffering with the injury that prevented him from competing in the Olympics.

The man that benefitted from Nadal’s absence that time was Andy Murray, and the Scot has a great chance to emulate that success in New York.

Murray ran through Novak Djokovic before dismantling Roger Federer without losing a set in London, a performance that could springboard his career from being a nearly-man to one of the sport’s elite.

Murray did crash out of the Cincinnati Masters event early last month which may leave cause for concern (and a lengthening of his price), but let’s not forget the same thing happened before Wimbledon (a first round exit at Queens) and he still made the final. His record at Flushing Meadows is also good, most commentators agree hard courts are his best surface, so lack of form before the tournament shouldn’t be a worry.

Nadal not being there is inevitably going to drag Murray’s price down, but I still think there’s plenty of value to be had in backing the Scotsman.

Bet: £40 E/W Murray to win the Mens Singles

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