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Independent View

I have been suffering from an enforced absence from the office due to the

unwarranted attentions of a man with a knife. A surgeon to be precise.

Being confined to the house for a few weeks gives plenty of time for

contemplation and tends to allow the mind to focus on both the future and

the past.

What it also allows is the freedom for a reassessment of the way in which

my business operates. Like many IFAs, I have a few audio cassettes and

video tapes which I have gradually accumulated over the last three decades.

Apart from the FPC tapes by Tony Wickenden, which are, of course, my

constant companions at home and in the car, I rarely listen to the others.

Some of the tapes are motivational and others simply recordings by various

names from the industry in full voice on one subject or another.

Because I had the time, I decided to review them to see if I should throw

away those that had become too dated or irrelevant and which might help my


Much to my surprise, they were all, without exception, still valid. In

spite of all the changes over the years, both technological and structural,

the basic messages still held true. The principles of behaviour and good

business practice have not altered. They still have relevance. It is true

that some of the style and language has altered but not much.

One of the other delights is reliving some of the anecdotes recounted by

these old tapes. Not quite as entertaining as watching Eddie Izzard miming

the actions of Achilles with a concrete block on his vulnerable heel for

the umpteenth time but nevertheless useful. The messages and stories still

convey their central points.

We are being told that the world is changing faster than ever before. Of

course, many aspects of our daily lives are and will continue to alter but

fundamental business rules have not changed. This is important when

considering some of the new companies we are being asked to support through

our clients&#39 investments.

How many have their own unique selling proposition which will stand the

test of the marketplace? How easy would it be for a competitor to copy or

usurp the product or service being offered and does it have intrinsic value

that can be measured?

Do customers have a positive view? It is important for investors to remain

detached from the hype and current headlines and concentrate on the broader

questions, the answers to which will det-ermine the future, whatever the

outcome of the Amazon. com lack of cash story and others like it.

The problem with headline cases is they become accepted as representing

the norm. It is the nature of such issues that language distorts facts. It

is common to read that a fall of 25 per cent in a share price demonstrates

the volatility in a sector.

However, a rise of 25 per cent is never described in the same way. The

problem is that volatility is generally considered to mean going down very

fast rather than a measure of changing prices both up and down. While

negative movement is regularly highlighted, positive results rarely demand

the same response.

There is no doubt some of the new arrivals will fail or be sold. The

constituents of all the indices will continue to change. If investments

are sufficiently well spread, the effect is minimised if not minimal.

The new economy sector will flourish without a doubt. I do not mean just

the internet companies because, given another few years, all companies will

have an internet presence and strategy. Those that do not will be at a

distinct disadvantage, whatever their area of activity.

As usual, hindsight is a wonderful asset. A bit like retaliation, it pays

to get it in first. Unfortunately, no one has the formula but our task has

always been to try and anticipate the changes that are likely to effect a

client&#39s investment strategy.

What my tapes told me is that methods of communication may alter and the

availability of information may spread but offering clients advice and help

will continue to fill a need for the investing public. The same tapes also

tell me to measure the effectiveness of my own business in the same way.


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