February 2018 – FIRE v London

Who was the borrower?

The loan was to a small private company doing real estate development. Basically they buy buildings in London where they believe they can get planning permission to increase the number of dwellings; they then maximise the planning potential of the buildings, do the work themselves, and sell on the units. They’ve got a few years’ successful track record.

I have known the three principals for over twenty years; one of them is a very close friend of mine, admittedly one who has radically different approaches to FIRE/money/investing.

So, my normal blogging rhythm has been slowing down a bit. Time for a quick catch-up.

January’s come and gone, and I haven’t even written up my investing goals for the year.

First of all, what’s been going on in January?

The Trump tax cuts may have technically been passed in December but it feels as if markets in January have been dominated by them. I confess to being surprised, and pleased, to see a variety of US businesses committing to pass through some of the tax cuts to their employees – e.g. Walmart, Boeing, JP Morgan, AT&T, Disney, Home Depot and others. This all looks quite positive for US stocks, the US economy, and probably thus world trade.

It is thus not too surprising that world equities are up, and the US dollar has fallen over 5% vs the pound. Surely a good month to be in the UK? Alas not, as FTSE has fallen over 2% while S&P is up over 5%. Brits have been better holding S&P than FTSE, not for the first time.

2018 01 FvL markets