The South African rand is falling in value, the euro is doing well against the dollar, US car makers announcing poor sales results have seen their shares wobble, and the price of some quoted tech companies continues to rise despite their inability to make a profit. Across the world, investors are wondering when rational value fundamentals will return to the markets. Now at last, royalty, technology and geopolitics have come together in a bid to make things clearer for us all. The Slog investigates.
This probably passed you by until now, but Pippa Middleton isn’t a lady. It’s official: she’s not a lady yet, but she will be once she’s snared her banker fiancé James Mathews…he being the heir to a vast tract of beautiful land in Scotland. Yes Hello! readers, once the knot has been tied and the bedclothes inspected, her official title shall be Lady Glen Affric.
I am to Society journalism what David Cameron is to football, and thus it is my duty this morning to fess up to the fact that I had not even realised Pippa The Bum was engaged to be married until yesterday afternoon, when the subed free zone Daily Telegraph sent an email alerting me to the fact. Worse still, I had no idea that Pippa is not a socialite. This must be true, because it’s what she told the Daily Express.
So if she’s not a socialite and not a lady, what is she? Is she a gold-digger? Well, the Middleton family has form in that area…and she is going to luck into 10,000 Scottish acres. Or is she merely a girl blessed with perfectly formed buttocks, using the leverage of these twin backsides to help her climb the North Face of social demography?
As of May 20th, the question will be relegated to the past tense. But in the meantime, it seems only fair to point out that her future father-in-law the Laird started out his working life as….a car mechanic.
Perhaps the playing field is levelling out after all. Or is it. Read on…..
The Tesla car company has a very odd valuation on the New York Stock Exchange. It’s odd in the sense of being even more ludicrously high than all the other shares: based on today’s share price, the markets value every last Tesla that might be sold over the next year at $620,000. GM is valued at $5,000 per vehicle.
Now you could argue that the GM valuation is low; but in the contemporary global car market, it’s far easier to argue that the Tesla valuation is just plain daft. This is especially true in the light ofyesterday’s US car company sales and results, which show pretty much everyone underperforming against expectations.
We have yet another data mismatch here, in that despite all the PMI and consumer confidence indices rocketing to new highs, out there in sales behaviourland, consumers are buying on very sound bases. The average age of a car in the US is now eleven years – and with second-hand sales in the doldrums, the view will surely be, “Why buy new, when I can trade in my old car for something only two years old at almost zero cost of credit?”
Chickens are coming home to roost here…and aggressive Fed rate rises will only accelerate their return. For the life of me, I still cannot discern the basis of Yellen’s confidence…..indeed her own relative values put on various data strike me as eccentric in the extreme.
However, what she’d value Gibraltar at is anyone’s guess…
Despite the jingoism of Michael Howard last weekend, I doubt very much if any Brits under 50 think the Rock of Gibraltar is worth going to war about. Most of them, I’d imagine, are clueless as to what the strategic worth of the Island is – if any – to Britain in the twenty-first century.
It all comes back, yet again, to the principle of self-determination….and whether we should give in to the rather blatant Brexit opportunism of Spain. What we need is for Sir Francis Drake to come back and singe the royal Spanish beard. But as that’s unlikely to happen, probably the best policy is to invite the Spaniards to have a crack at it. You know, do the unexpected: take the wind out of their sails, and all that.
And so let us try to conclude on the relative values involved here. Matthews the younger will probably inherit cash and lands worth in the region of £100m when the oily rag pops his overalls. So assuming the marriage collapses in the usual heap of recrimination and there are children involved, lunatic divorce law being what it is, Pippa could expect to walk away with roughly £30 million.
Tesla cars is one of those shares that something in the bladder tells you has launched into the wrong environment with the wrong distribution model and – given the price of its cars – some naive ideas about what upmarket car owners want. It is, in a nutshell, ahead of its time – but with nowhere near enough time to wait for rigid consumer attitudes to change. I worked on five car marques in my advertising career, and while I find Tesla’s success to date remarkable, the next 12-18 months will be critical.
Either way, ignoring the ridiculous share price and gearing ratios ( the cars don’t have gears anyway) Tesla will have revenues of $10.5 billion by March 2018 if nothing goes wrong. If their sales fall badly short or some serious glitches come to light, it could be worthless. That’s quite a possibility range from which to draw a valuation estimate.
As for the Rock of Gibraltar, ignoring my own feeling that we should have calmly have told Spain to fuck off, as a market advisor on value, I would suggest we get on with selling it to Madrid, on the basis that (a) within a few years Spain will be bankrupt, and (b) once Britain goes bankrupt, Gibraltar will merely be part of a fire sale. It’s probably also true to say that, if by some miracle Labour is elected to power at the next General Election, Jeremy Corbyn will give it away anyway.
That said, why sell it to Spain? Open markets are, after all, the order of the day now. The total surface area of Gibraltar is about 6.8kms², and the average property price there is £40 per m². It makes no contribution at all to the UK Exchequer, and so on paper, Gibraltar is worth a mere £240 million. But while Spain would probably try to chisel us at even that price, Donald Trump’s company would pay a hundred times that to turn it into a gigantic hotel and theme park.
So summing up, Pippa’s bum is worth £30 million, eight times less than Gibraltar at £240 million, and 528 times less than Tesla cars. Or in quotient terms, Tesla 528, Gibraltar 46, and Pippa 1 (one).
However, on a kilo basis the Pippa Bum is by far the most expensive item for sale here. With a zero cost of sales and a total weight of shall we say three kilos, her exquisite posterior works out at ten million big ones a kilo.
So bottoming it all out, the obvious advice of any merchant bank that might be approached by the future Lady Glen Affric would be, “Don’t arse about girl, float your backside on the stock exchange, as we can’t see any downside. It’ll be a bum deal for investors of course, but an anus mirabilis for you, duckie”.