Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Some Fools are more equal than others. Or rather, some shareholders are more equal than others
Last Monday, shares in Great Universal Stores fell 28p to close at 690p. News reports said this followed private meetings the company had with two brokers, CSFB and Cazenove, whom they informed of a deterioration in the mail order side of the business. The two brokers cut their profit forecasts as a result.
On Tuesday, shares in Emap fell 62p to 1,220p. This reportedly followed private discussions it had with a series of brokers - including BT Alex Brown, Merrill Lynch, Morgan Stanley and SBC Warburg - which resulted in the brokers trimming profit forecasts.
On Wednesday, Compass Group closed up 19p at 717p. Again, this reportedly followed a series of private discussions with brokers in which Compass was upbeat about its like-for-like sales and profits.
The unifying factor in all these instances is that brokers may have received price-sensitive information that allowed them to make trades to benefit their clients before that information was widely known. This means that the clients of these brokers - no doubt mostly large institutions - had the advantage over private investors.
The private investor, who is as much a part owner of the company as the institutional shareholder, is getting a raw deal here. In fact, in our view (although we don't know what information has been disclosed) this kind of thing could be getting close to insider dealing. It seems particularly serious when the calls take place while, or right before, the market is open. We don't know the details in the examples above since all reports of them are based on hearsay.
A similar thing takes place in the US when companies give conference calls to update brokers and analysts but don't allow private investors to participate. Xilinx, a manufacturer of computer chips, gave Motley Fool Global HQ in the US the phone number to participate in one such call in 1996 but retracted the offer, saying it had "made a mistake". The news was published on the Motley Fool website and was online for only 45 minutes before Xilinx reversed its decision; its fax machines and phone lines had been jammed with irate investors.
In the US, companies have argued that price-sensitive information is not disclosed in these calls. So why have them? In addition, Arthur Levitt, chairman of the SEC, the US investment regulatory body, has criticised the practice of closed calls.
In the long run, this approach will only hurt their standing in the wider investment community. Information is becoming more available all the time, via the internet, and trying to hoard it only creates ill feeling, especially when it is information that should be in the public domain.
n Visit Motley Fool at www.fool.co.uk
SMARTEST INVESTMENT
Send us your smartest or dumbest investment story. If we publish it, you'll get a free copy of the `Motley Fool UK Investment Guide'. E-mail to UKColumn @fool.com or snail mail to Motley Fool, The Independent on Sunday, 1 Canada Square, London E14 5DL.
I bought shares in Apple Computer at $14 in December 1997, as it turned from loss-making to profit. Today, their price is around $36, as they bring out ever-newer versions of their new product, the iMac.
It was a recovery buy and a buy-what-you-know buy. It had had two years of (huge) loss, but I have always liked its products - Apple has always enjoyed great customer loyalty. I bought the shares just after a management reorganisation, a company restructuring and a whole new product line .
GR, Derry
Most of us have some kind of specialised knowledge from our daily lives which we could use to our advantage. Look at products you use in your work or leisure time and see if any of the companies providing them are ones you might like to invest in.
ASK THE FOOL
I recently won pounds 8,381,230.97p on the National Lottery. The question I have is this: where do I invest the 97p?
"Bananaman" (posted on the Motley Fool website)
Oh dear. Here we are saying that the chances of winning the Lottery jackpot are more than 10 million to one against and that there are far more Foolish places to invest your money and then along you come and blow apart our entire argument! Thanks a lot. In your case, we'd suggest you stump up another 3p and buy another Lottery ticket. It's hard to argue with your success.
Send us your question and if we publish it, you'll win a Fool baseball cap. E-mail to UKColumn@fool.com or post to Motley Fool, The Independent On Sunday, 1 Canada Square, London E14 5DL.
NAME THAT COMPANY
The first five correct answers out of the hat win a super de luxe black Fool baseball cap.
This company was started by a couple of US college students in the mid- 1990s. It is now one of the big names on the internet. Many think it is over-valued, while others see it as one of the leading companies of the next decade. What is it called?
n Answers to UKColumn@ fool.com or snail mail to Foolish Trivia Quiz, Independent on Sunday, 1 Canada Square, London E14 5DL.
n Last week's answer: Wembley.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments