SKINFLINT'S CITY DIARY

You may not be interested, but I have suffered since last week from a condition relieved only by opium and chalk.

It was probably something I ate, though a diminutive gypsy-like woman crossed my path muttering "Donald Duck, Donald Duck" when I refused to fall in with what she wanted. The way I've been feeling since, I think she was up to no good and the words were more likely—" Double up."

Added to my suffering was a television series The Guardians, apparently about a weak well-meaning prime minister being manipulated by Securicor drop-outs and Hampstead intellectuals. What interested me was a show within a show when one of the characters watched a prop television. All I remember, clear and dead-centre, was the word SONY. Good work by their PR men in getting a set into the production. This is a most effective method of advertising cheaply — and in this case „allowed them to get around the Trade Description Act, since this particular NY was remote-controlled without a wire by the actress playing the part. Which isn't avatlable on similar sets on sale.

Trafalgar lost

Sir Basil Smallpiece has, I am able to reveal, had important documents stolen from his car. Surely not industrial espionage? If it is, I hope that the miscreant is brought to book and that nothing will be allowed to stand in the way of Trafalgar House succeeding in its bid — especially for those friends who are long on Cunard and have sold Trafalgar short.

Taking the bait

A reader, Mr GV Crine of Weston-superMare, wrote the following letter to me recently : Dear Mr ' Skinflint ',

It is only in the last few months that I have returned to The Spectator's fokl ( and very glad I am that I have done so ) — it may well be that I have therefore missed out.

I fully appreciate that you are unable to give individual advice and I do not expect it — neither do I expect a personal reply to this letter: You have plenty else to do, I am offering thoughts.

I gather that you are, — er— unconvinced of the benefits of unit trusts as media for savings. I think that I am sceptical about them. I divide my savings into three parts equally:

1) Bank Deposit — as a source for income tax 2) Building Society — security

3) Unit trusts — hopefully.

That is not to say that large sums are involved; There must be an awful lot of people around in this situation — perhaps the unit trusts are out to get us '.

One's accountant (and I do not denigrate him) says "Save EX and then put it in blue chips in a lump" — This is fine, but it takes some of us a long time to save each EX. Brokers, I understand, don't really like us small fry (though, as I inferred, the aggregate cash must be enormous ), we are a nuisance. If we invest as above, in particular shares, I, at /east • have neither the time nor inclination to follow progress daily. I don't want to be thinking money all the time, I'm not that altruistic, but money is not my business,' I've got other things to think about.

So, I've taken the unit trust bait! I suppose one could buy gold now that rule has gone — but then we will probably get another government who'll want it all called in — or President Pompidou Will direct it all to Paris — or something.

Question: What do we do?

P.S. Perhaps my criticism is reinforced by the fact that when my father died intestate

twenty-five years ago and I was a minor, the solicitor put my share in War Loan . .

He was kind enought to thank me for this reply which he told me had helped him to • clarify his thoughts :

Thank you for your letter of July 13. As you have appreciated I have a cynical dislike of the unit trust movement as well as for a lot of other institutions in the City who pretend to have a sacred regard for their depositors' interest, whereas they are, in fact, seeking control of deployable funds which they use for risky underwriting and from which they borrow, quite legally, by means of back to back loans through fringe merchant banks.

You have not asked for my advice but here it is for free. Put some of your money where you can see it and where it will benefit from inflation, and such entrepreneurial effort as you can spare. For instance it may be the re-renting of a furnished flat or the; ownership of a commercial property, however small, on lease with frequent rent revision clauses.

It took me many years to uncover the myth put about by the City that rich selfmade men invest in a portfolio of stocks and shares—though their less wise heirs usually do. My experience is that they only hold shares for specific reasons derived from direct inside knowledge of a rise in the share price, seldom due to better prospects but more likely in anticipation of a bid or because through these shares they have strategic influence on the company's activities.

If the Skinflint column has a purpose it is to disillusion the small investor who is week by week swamped with information from the financial columns of the press who have an advertising interest in attracting readers to great risk on the stock market.

There is an aphorism that more money has been lost on the Stock Exchange through a long pocket and inside information than with a pin.

Yours sincerely, Giles Overreach Skinflint.

Postscript

Since writing this I see I didn't mention the gearing element in property investment not easily obtainable in investment in equity. It us also a truism that most property fortunes have been made by borrowing money for fixed interest for long periods rather than just by the appreciation of the property itself.

One other piece of old hat advice — hard to follow in one's early lonely days — don't take a partner.

Perfect answer

To those of his numerous (rich?) left wing party-going friends who have been querying his typically bold decision to fire Will Camp, Lord Melchett has what he no doubt considers the perfect answer (as, for example, delivered at a Woodrow Wyatt party, more than once):." These Tories," he has been saying, "are absolute s—s. It's had enough with Heath the way he is, hut when pipsqueak junior ministers start behaving in the same high-handed manner, what on earth is a loyal subject to do?"