Still don’t understand this bloke’s money

Trading in gold bullion is usually seen as a licence to print money but, curiously, Formula One billionaire Bernie Ecclestone’s son-in-law has managed to post a loss.
I can disclose that James Stunt, who is married to Bernie’s 28-year-old daughter Petra, right, achieved an impressive turnover of £43.5 million with his business Stunt & Co.
However, newly published accounts at Companies House report that it made a loss of £842,000.

Trading in gold bullion isn’t in fact a licence to print money at all. It’s a very low margin business. Would be really rather astonished to find out that gross margins were over 1% to be honest.

It always strikes me as more the sort of business that people think should make you rich rather than one which does.

26 comments on “Still don’t understand this bloke’s money

  1. If you really want to make money you should go into the dry cleaning business. There isn’t a good dry cleaner near us, and the population of our travel-to-work area must approach a couple of hundred thousand.

  2. You need a unique selling point. You need some sort of value adding. You need some form of restricted competition.

    Gold can be bought and sold by anyone. Selling gold adds little of value except perhaps bringing buyers and sellers together – which is probably why minorities do quite well at it. In the London Orthodox community for instance, it is likely that if anyone wants to buy they know someone who knows someone who wants to sell. Anyone can do it. Anyone can do it anywhere in the world.

    There is no way margins are high.

  3. “There isn’t a good dry cleaner near us”

    That’ll be because they’re all rubbish now, all the good chemicals having been banned by the EU. Dry cleaning is a waste of money now sadly.

  4. Who knows what he has been putting through that business… it looked a little bit like it might just be a front, to project an image, fund an office, and a place to bung your brother and a couple of mates. Just my opinion.

    You have to wonder what he got mixed up in if his brother killed himself, the police raided his business, and his house got firebombed by parties unknown. Shades of Scot Young and his crew…

    I think you’re right; there’s probably an interesting and tragicomic story behind the whole set-up, but who knows what it is?

    The bit I find weird is why conduct yourself the way he does in the public eye

  5. Oblong – “Who knows what he has been putting through that business… it looked a little bit like it might just be a front, to project an image, fund an office, and a place to bung your brother and a couple of mates. Just my opinion.”

    I think I said before, there has been a big VAT fraud recently involving the selling of gold. Not that I am alleging anything. I am sure Bernie’s son-in-law’s business is at least as upstanding as Ecclestone’s himself.

  6. Does he run a second hand car parts yard on the side with more really beefy labourers than strictly necessary?

  7. “despite his business turning over £43.5 million”

    Is it really that hard for some people to understand that it’s possible to have a large turnover and make a loss? That, just cos the money is passing through your fingers that it’s not necessarily the case that some of it sticks to them?

    Is this really that difficult?

  8. The reasoning (if one can call it that) seems to be that gold is expensive so anyone selling it must be rich, forgetting that it therefore also costs a lot of money to buy.

    The same sort of logic (if one can call them that) as complaining about companies only paying a low percentage of their turnover in corporation tax.

  9. It’s possible that the business is more about face than money. Stunt has married into an immensely rich family so he doesn’t really need to work. But running a business, even an unsuccessful one, allows him to maintain the appearance of not being wholly dependent on his wife for his lifestyle. The fact that the Daily Mail describes trading in gold bullion as “a licence to print money” suggests that it’s a good choice for someone who wants to project an image of independent wealth and success.

  10. abacab,

    “Is this really that difficult?”

    Yes, it really is. And it’s not just poorly educated people. Look at this:

    https://www.bloomberg.com/gadfly/articles/2016-10-07/snapchat-ipo-5-charts-explaining-why-it-s-worth-25-billion

    “And yet Snapchat could be a very rich stock for a market debutante. When Facebook went public in 2012, its shares were priced at more than 19 times its estimated revenue for the following 12 months, according to Bloomberg Intellience analysis. Snapchat at a $25 billion valuation would have a multiple of 25 times times or more its 2017 revenue revenue. “.

    Snapchat are losing money right now. OK, maybe the cost of cloud computing will fall and they’ll cut that giant cost and start making a profit, but that’s a decade away at least.

  11. If you had bought Brown’s gold and were selling now then you would have made a pretty penny. Had him covert it to sovereigns first, even better. But would you call that trading!

  12. Wow, it’s so easy to make money trading gold bullion. Sure, it’s a highly liquid market, but you make it up on arbitrage.

    Of course, the notion that simply moving gold or money around creates inevitable, guaranteed returns is not uncommon. I’m reminded of Keynes’ averral that the capture of the Golden Hind treasure in 1580 had generated, through the nearly-magical action of “compound interest”, a real return of 10 000 000% over 350 years! A deeply stupid idea, but when your entire economic worldview is based on “capital accumulation”, such things seem sensible.

  13. Might be legit, but more probabaly something mildly or possibly even deeply bent behind it.

    Certainly wouldn’t by a used car orf the bastard, if you know what I mean.

  14. Wasn’t there some mystery around how Bernie himself made his money, originally? I mean, he managed to multiply it many times over via F1, but the money he used to buy it originally.

  15. @Oblong

    He hired the get away driver form the Great Train Robbery.

    He was a silver smith and created a couple of the F1 trophies.

    Lots of rumours he was somewhat more involved.

  16. Hhmmm. As the saying goes “If you want to make a small fortune racing in Formula 1; start off with a big fortune.”
    May be a similar idea???

  17. Does anyone serious think this operation is anything more than a front for someone who is all about projecting an image of ‘flash’? It exists only to allow him to go to expensive London nightclubs and chat up dim daughters of billionaires, and seems to have worked quite well.

    The tricky part of the business is now extracting the cash out of the daddy-in-law before the roof falls in.

  18. Agreed that for you or me 19x or 25x turnover is too high. However value is what someone is willing to pay for it.

    Will share prices change? Yes. Will they go down? Yes. Will they go up? Yes.

  19. David – you could be right. A guy with a business turning over tens of millions in the gold market sounds impressive to someone who does not understand gold and will occasionally allow him to rub shoulders with the rich, the famous and his betters.

  20. If a company made £1m profit before directors’ salaries and paid £2m salaries the company would make a loss of £1m. If they paid £1m in salaries the company would break even and if they paid no salaries they would make a profit of £1m. The likes of Murphy could make each scenario sound suspicious.

    (I’m ignoring ers’ NIC for simplicity)

  21. I think gold dealing is probably a bit like gold mining, you make more money selling picks and shovels to the gold miners.

  22. Let’s take $40k/kg as a rough ballpark figure. That’s about £32k at today’s rate (do you think journos don’t just use google to do such calculations based on the current rate?)

    £43.5M in turnover, if 100% trades, no fees etc. means that they traded maximum 1350kg of gold in a year. Say 6kg per working day (assuming 220 days), or about one 400oz bar every 2 working days.

    That does not, to me, seem to be a massive amount for a brokerage.

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