Presenting an ignorant buffoon to tell you about pensions

A retired accountant already known to may of us in fact. Telling us about pensions. And how FTSE just isn\’t the right thing.

Which is why what I wrote on pensions in 2003 and in 2010 continues to make sense. We have to invest pension funds in the assets that people want, can see and can ebenfit from and that deny the City the chance to fleece tose assets of value on the way. Those things are called schools, hospitals, transport infrastructure, housing and the green economy. These give rewards now and pay dividends until most people will be of retirement age – unlike most investment in equities or second hand shopping centres, which is the other great pension favourite, or even corporate bonds.

You might recall his plans for those very different pension investments some years back. What was to happen was that all the pensions should be invested in those schools\’n\’ospitals via the medium of bonds. Bonds which would pay 3% interest.

All of which makes it very interesting indeed that in his talking about the FTSE 100 he doesn\’t manage to mention the dividend yield. Which is, near enough, around 4% at present isn\’t it?

Rather reminds me of the time he proved, PROVED I TELL YOU!, that his bonds would produce better returns than the stock market. By leaving out of the stock market returns that very dividend yield.

13 comments on “Presenting an ignorant buffoon to tell you about pensions

  1. I read that link. It is the most deluded idiocy I have ever seen. Almost exactly 2 years later those newly issued bonds were in default.

    I think you should screenshot it for posterity. Before Murph deletes it.

  2. He hates freedom, I think. His way or the highway. He wouldn’t care if we were all starving, he’d just tell us, candidly, that we weren’t.

  3. FTSE Return March 2003 to date + 82%
    Dividends of approx. 3% Per annum +30%

    Total Return 132 % (Avg 13.2% per annum)

    FTSE Return March 2010 to date + 19.55%
    Dividends of approx 3% per annum + 9%

    Total Return +28.55% (Avg 9.52% Per annum)

    Don’t seem like bad returns to me, given the economic problems we’ve been through. If I was an investor who’d taken Ritchie’s advice (which I don’t believe he is authorised to give), I’d at least chance my arm with my brief.

  4. I think he may be, in Paul Samuelson’s words, not even wrong.

    He talks about things that produce a reward now…like schools? Now it may well be a good idea for the nation to invest in schools, but they don’t produce a dividend or reward for investors now.

    And given that investors such as pension funds, sovereign wealth funds etc are prepared to invest in gilts at negative real rates, there is an argument for Gideon O to take their money and spend it on schools, roads whatever ‘cos he won’t get such a good deal again.

    But that’s not what he is saying. So even from a vaguely lefty Keynsian view, he’s beyond wrong.

  5. “Those things are called schools, hospitals, transport infrastructure, housing and the green economy. ”

    I’m unclear on how *any* of those things pay dividends – at least the sort of dividends that you can use to buy food vice the sort of feel-good while you starve sort of dividend.

  6. Luke

    Wasn’t that Wolfgang Pauli? My favourite of his was “How can one be happy when one is considering the anomalous Zeeman effect?”

    How indeed?

  7. He wants to make people invest in things they want to by, er, stopping them from investing in things they want to.

    If investing in schoolznospitals generated a sufficient return then it would already be happening. Murphy must think that because people think skoolznospitals are a good thing (well, duh) then they should be ‘investing’ in them. This is, however, an excellent exams of revealed preferences.

    As for. Forcing investment in the ‘green economy’, just fuck off and fuck off now. I don’t want my savings and pension looted and given to an upper class rent seeker who happens to own about a tenth of Scotland.

  8. And:

    Everything else you say must be taken as gibberish.

    Ah, the veritable guru of gibberish, the UTDftDoN himself, has spoken. Bow before his brilliance ye peons of the non-LHTD persuasion …

  9. Oh dear – in comments on the article it would appear our retired accountant considers gilts to be “secure” – because they are guaranteed to lose out to inflation(!).

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