Our content this month are as follows:-

• Northern Rock and Deposit Guarantees
• Quote of the Month
• Markets, Déjà Vu and Some Interesting Facts
• Books We Have Read
• Boxes of Photographs, Films, Videos, DVDs? - Sorted!

The Northern Rock run was a most unwelcome return to the economics of the 19th century. In the absence of real reassurance from the institution itself and ultimately the Government nobody could blame their customers for removing their cash and spreading it around other banks. The Chancellor did not distinguish himself in his pronouncements on the crisis and the Prime Minister was notable for his absence.

Because protection for deposits is limited to the first £2000 and 90% of the next £33,000 this whole debacle is a sobering reminder that each one of us should keep no more than £35,000 on deposit in any one institution in order to be completely safe. Whilst one institution may have a rate slightly better than another, it is not worth the sleepless nights that may result if that one institution runs into trouble. When BCCI bank went bust in the 1980s a lot of people lost a lot of money. It would appear that the government will limit any new guarantee scheme to deposits of £100,000 - if and when they do limit your deposits to £100,000 per institution, until then you might sleep more soundly if you limit each institution to £35,000.

Being the students of markets that we are, we tend to hang on to stuff that interests us for a long time. One of the things we came across recently was the front page of the Daily Telegraph from Friday, September 21, 1990. Here are the headlines: -

• Panic Hits City As Top Company Shares Collapse
• Index at Lowest for 18 Months
• Bank Prices Slide on Rumours
• Property Stocks Devastated

How familiar some of this sounds! It couldn’t get any worse could it? Well, 11 months later, on Tuesday 20 August 1991 here are the headlines from the Telegraph business news: -

• London Plunges 80 on Kremlin Coup
• Frankfurt Plummets As "Fear" Takes Hold
• Tokyo Sent Reeling

Between those two dates the Financial Times All Share Index rose by more than 29%! We make no comment other than to say that newspapers will often make a drama out of a crisis in the short-term and we all are (or should be) long-term investors.

This month’s book recommendation is "The Billionaire Who Wasn’t" by Conor O'Clery.

The book is about a gentleman called Chuck Feeney (no, we had never heard of him either), who quietly made billions of dollars from his privately held business "Duty Free Shoppers" and then even more quietly gave it away and continues to do so. Duty Free Shoppers was a business that grew out of shipping duty-free liquor to American servicemen after the war and eventually sold astonishing quantities of tax-free goods mainly to Japanese tourists in places like Hawaii and Hong Kong. Even the junior partners became billionaires.

Apart from a settlement to his ex-wife he seems to have kept only $2 million or $3 million for his own purposes - the balance is held in a trust which supports various causes on a completely anonymous basis. It is estimated that he has given away more than any individual who has ever lived, although he will undoubtedly be overtaken by Bill Gates and Warren Buffet in the fullness of time.

The book is available at bookstores in the UK and is on Amazon’s list; as usual if you have any difficulty finding it please contact jayne@indexfundadvisors.co.uk.

Some years ago, at a conference in the US, Les and Noel came across a concept that they got very excited about. It was the opportunity to make a "legacy" record, usually for the elder statesman or stateswoman of the family, which would provide a permanent record of their life, usually on video. At the time they looked for a possible UK supplier but without success and trying to put it together on a contract basis just proved outrageously expensive.

Happily a company called EDV UK Ltd is now offering this service, plus many others that we feel clients will be interested in. In fact we believe their best service is to take away all of your old photographs, videos, DVDs, slides and cine films and edit them into chronological order, pulling out the highlights and storing them digitally for you. They can also pull out the highlights for one particular family member and can record events such as weddings and birthdays extremely professionally.

Noel comments, "I have asked EDV to sort my collection of photographs and videos, which comprise over 10,000 photographs and tens of hours of video into a coherent record. I am ashamed to say that most of the photographs were languishing in boxes in a cupboard under the stairs. Having seen some samples of their work I am really excited about the final result and can see lots of ways the company can help me in the future to make a meaningful digital record of all those things we photographed and filmed and then forgot about. This exercise has also created a great deal of additional space in the under stairs cupboard!"
Joel Newland is their representative in the Midlands and you can contact him on 07779 109394 or at his office number 0208 968 7000.

"True friendship is like sound health; the value of it is seldom known until it be lost."

Caleb Colton: Cleric and Writer