In this weekend’s FT Magazine Gilliant Tett has written an excellent column on the precious metal. Perhaps one of the best ever written on the subject. Gold is, indeed, a “premier currency”: It possesses all the characteristics other ‘fiat’ or ‘virtual’ currencies lack: Historically ‘anchored’, finite supply, tangible and, last but not least, a beguilingly beautiful substance with an enigmatic appeal. This explains its enduring appeal, creating the illusion of permanent, intrinsic value.
However, it is a myth to believe gold is a constant store of value. Like anything else, the price of gold is created by supply and demand: Gold in need of a polish?
What a disappointment! Here we go again: The ‘safe pair of hands syndrome’! The last thing we want to see at Sainsbury’s is a Tesco repeat. Clarke turned out to be a genetically modified Leahy clone and now it appears Mike Coupe has been cast in the same role at Sainsbury’s.
Only a couple of weeks ago, Mr Coupe was unexpectedly handed an early Christmas present after Dave Lewis of Tesco announced that “[the company is] not currently working on a rights issue, but never say never”. He should have been ruthless and seized the opportunity to raid the markets first, delving as deeply as possible into investors’s pockets! It is hardly a secret that liquidity, artificially boosted by years of QE, is drying up fast and this was a golden opportunity not to be missed under any circumstances. To add insult to injury, not even an interim divi cut! Sainsbury’s is a vessel in distress and playing it safe will inevitably lead to yet another remake of ‘Titanic’. Dear Mr Coupe, just a little reminder: Titanic has already been digitally remastered in 3-D version. Investors want a different movie! Rights is right!
PS: Judging from a televised interview with CEO Mike Coupe, yesterday, there appears to be an admirable lack of panic within the Sainsbury’s camp. Mr Coupe as cool as a cucumber? Or perhaps just plain boring? The analysts verdict of the strategic review is unanimous and unambiguous: Distinctly unimpressed. It would be in nobody’s interest if Mr Coupe were to suffer a major panic attack, however… a sense of a little more urgency would have done no harm.