Any other business

Saturday

Paul Johnson

A wood is the one fixed point in a changing world

‘Can’t see the wood for the trees’ is an old saying and a true one, not only metaphorically but literally. Nature students often look carefully at trees and know a lot about them. But they don’t notice the wood, and know nothing about its life and history. Since I began drawing trees with close attention I have tried not to fall into this error and have begun to study individual woods. In west Somerset, I have three particular favourites. One, near the sea at West Quantoxhead, is creepily dark and spooky, ogreish, though you sometimes see a superb red deer peering at you through the gloom. This is a babes-in-the-wood place, fertile in fairytale material, and you can imagine bears and wolves living there (there are certainly plenty of foxes).

Saturday

Cosmo Lush

The promise of real profits from a weird virtual world

My name is Cosmic Finucane. I have lots of money, a body to die for and I’m building my dream house on an island with an ocean view. At least, that’s my alternative persona — sadly, a far stretch from the real me. He inhabits the internet’s hottest new phenomenon, the virtual world of Second Life. Cosmic is an ‘avatar’ — a computer-generated 3D human lookalike who makes friends, throws parties, goes shopping and has the potential to help me earn real money. Launched by San Francisco-based Linden Labs in 2000 with backing from the founders of eBay and Amazon, Second Life is now hitting the big time. Its population has just exceeded the million mark and it is receiving increasing real-world media attention.

Joanna Pitman

Flawless, timeless, almost priceless

White diamonds are the world’s most expensive gems. White diamonds are the world’s most expensive gems. The ideal stone is like a piece of ice, whiter than white, graded ‘D’, the purest possible grading, and cut with exquisite precision. Only a handful exist. Ten years ago a pure white, pear-shaped 100.10 carat diamond (pictured here), classified as ‘D’ and internally flawless, was sold by Sotheby’s in Geneva for $16,548,750. Named ‘The Star of the Season’, it is still the most expensive precious stone ever sold at auction. Today its whereabouts are a closely guarded secret, but it is likely that it sits contentedly, if a little unloved, in a secure bank vault, handled on rare occasions by white-gloved admirers.

Richard Orange

A year in exile, but still in the game

Bill Browder is strangely apologetic for the grandeur of his offices in Hudson House, a Lutyens mansion off Covent Garden. ‘I like the high ceilings,’ he says, scanning the room with a nervous smile, ‘It’s easier to work with some space around me.

Martin Vander Weyer

What makes a great businessman: a silver tongue or a killer instinct?

‘Who’s the most impressive business leader you’ve ever met?’ ‘Who’s the most impressive business leader you’ve ever met?’ I asked a group of senior executives the other night. I confess I interjected the question (as I do here) to enable me to mention that I have just edited a book of business obituaries. But it provoked a lively debate about the qualities that make great entrepreneurs and industrialists. Among living candidates, no one voted for any of the current crop of buccaneers: Sir Philip Green in retailing, Michael O’Leary in the air, Michael Spencer in the City.

Saturday

Matthew Lynn

Men with guns are the new dotcoms

Matthew Lynn finds private military contractors such as Colonel Tim Spicer — formerly known as mercenaries — responding to demand in a high-growth business sector Sitting behind his smartly fashioned desk in one of the new, antiseptic office blocks that line London’s Victoria Street, Tim Spicer looks the very model of the modern entrepreneur. He talks smoothly about service delivery, market share and profit margins. If he were running a hedge fund or a new media company, you wouldn’t be in the least surprised. In fact, his business supplies tough blokes with guns. And a very lucrative trade it has recently become.

Robert Beaumont

A post-industrial revolution on the banks of the river that has seen everything

The relationship between Newcastle and Gateshead, proud communities separated by a majestic stretch of the River Tyne, has never been harmonious. J.B. Priestley may have come from Bradford, but he spoke for most of Newcastle when he remarked that Gateshead ‘appeared to have been invented by an enemy of the human race’. Until recently Gateshead’s major tourist attraction was the dingy multistorey car park that featured in the 1971 cult gangster film Get Carter and still towers over the town like a malignant ghost. One Newcastle grandee contemptuously referred to Gateshead as ‘that heap of rubble across the water’. So can we assume that the rebranding of the city as NewcastleGateshead has gone down like the proverbial lead balloon on the north side of the Tyne?

Saturday

Paul Johnson

As Tom Paine wrote, ‘Every nickname is a title’

A recent movie suggests that the Duke of Edinburgh’s nickname for the Queen is ‘Cabbage’. His experience dates back to the day when this delicious vegetable was overboiled into tastelessness. But now that most people cook it very lightly and so preserve its fine flavour and crispiness, the term is one of endearment, as (no doubt) he intends. The nickname is originally French, ‘mon petit chou’, and I know at least one other wife who is called cabbage by her spouse, though as an alternative to ‘Old Bag’. Royal nicknames are not as common as you might think. Edward VII was ‘Tum Tum’ (not to his face). The Prince Regent was ‘Prinny’, which let him off lightly considering how awful he was.

George Trefgarne

How the first multinational was hijacked by greed

In June 1773 Adam Smith was at home in Kirkaldy, Fife, hard at work on his Wealth of Nations, when an excited letter arrived from his fellow philosopher David Hume. ‘Do these events affect your theory?’ wrote Hume. ‘What say you?’ Smith was caught up in perhaps the third or fourth most serious stock market crash of all time. Shares in the East India Company — which, along with government stock, made up most of the market — had collapsed, bringing about 30 banks down with them. Smith had deposited his savings in the Ayr Bank and one of its customers who had borrowed to speculate on the market had disappeared. It was as if shares in BP, Shell, HSBC, Vodafone and GlaxoSmithKline had all dived at once, leaving Barclays and Lloyds TSB imperilled.

Allister Heath

The City’s surprise success story

Once synonymous with men in red braces peddling junk bonds, the leveraged buy-out industry has become almost respectable. This is in large part thanks to some clever rebranding that would make even David Cameron blush; now invariably described as ‘private equity’, which sounds a lot cuddlier, the industry has even enticed that holier-than-thou old rock star Bono to hop on to its gravy train. Private equity companies, such as the former U2 star’s $1.9 billion Elevation Partners, are investment funds that borrow money to buy companies, manage them for a few years and then sell them on, ideally at a huge profit.

Jonathan Davis

Amaranth: how to lose $6 billion in a fortnight

Hedge funds, you read here in June, are often riskier than they are made out to be. Putting your money into ‘a fund that blows up, closes down or disappears with all your money’, I suggested, is a real risk for the unwary investor. The danger, I could have written, is that you will find your money being looked after by Brian Hunter, a 32-year-old energy trader from Calgary who last month single-handedly accounted for the largest hedge-fund meltdown since records began. In the space of two short weeks, Mr Hunter worked his way through some $6.5 billion when his complex strategy of forward bets on the price of natural gas went badly wrong, wiping out 70 per cent of the capital deployed by his hedge fund employers, Amaranth Advisors.

Martin Vander Weyer

Time to invest in Korean reunification? I know a man who did

As the absurdly coiffed and probably deranged Kim Jong-Il fingers his nuclear button, not even the ballsiest hedge fund manager would contemplate investing in the prospect of Korean reunification. But I could name one secretive London investor who took a big punt back in the 1980s, buying a bundle of North Korean government debt at a tiny percentage of its nominal value on the off-chance that it will one day be redeemed at par by a united Korean treasury. I guess he’s going to have to hold on for a few years yet. It wasn’t such a mad idea, though. In the days when I was a regular visitor to Seoul, everyone I met there believed as an article of faith that the heavily militarised border along the 38th parallel would one day melt away.

Saturday

Martin Jacomb

The day the City entered the modern world

It was a day to remember: 20 years ago, on 27 October 1986, Big Bang caused a revolution in the securities market which turned the whole financial sector upside down. The early 1980s was a time of change. The Thatcher government’s thirst for deregulation was at its height. Exchange controls had been lifted, capital could be invested anywhere, nationalised industries were being privatised and restrictive practices were being crushed. Meanwhile, information technology was beginning its hugely influential growth. In fact Big Bang, which had at its heart the abolition of fixed minimum stock exchange commissions, was overdue. Fixed commissions had been abolished in New York more than ten years before.

Christopher Fildes

Before and after the Bang

25 October 1986 My friend the stockjobber closed his book, turned his back on his pitch, and walked with me off the Stock Exchange floor, down Throgmorton Street and into Bill Bentley’s fish house. We raised our glasses of Montrachet to the last of the good old days. On Monday he must quit the floor and settle down at his work-station, one of hundreds in a huge carpeted financial factory arranged, like all smart City factories, round an atrium. A deputy will man his pitch, empowered to deal on a modest scale, but not, like my friend, to make or lose on his own book a million pounds in a day. The big deals will come upstairs, to be made over the telephone and the screen, from atrium to atrium.

Ross Clark

Monetary genius? I beg to differ

Amid the growing mutterings over his suitability to be prime minister, Gordon Brown has managed to preserve his reputation in at least one quarter. It has become received wisdom that the Chancellor played a blinder on his first day in the job in 1997 by making the Bank of England independent, giving us perpetually low interest rates and bringing an end to boom and bust. Indeed, this is one Labour ‘success’ that David Cameron has promised to leave intact. It is not hard to see why Gordon Brown has managed to portray himself as the genius who brought low, stable interest rates to Britain. To anyone over 40, the Brown years must seem a golden age of stable money.

Lucy Beresford

The gateway to African economic revival in a place once famous only for a hijacking

‘We men don’t want to wear condoms, we want the West to find a cure.’ This dilemma, faced by HIV counsellors at the Mildmay Centre near Entebbe, mirrors that experienced by those hoping to help Uganda financially. Mukasa, a handler at the chimpanzee sanctuary on Ngamba Island, 45 minutes from Entebbe by speedboat, gives me the analogy: the chimps there are hand-reared orphans. Five times a day food for them is tossed over the fence. A Pavlovian response has developed: they come whooping through the undergrowth at set times — and can never be released into the wild, as they would not survive. They are literally sustained by handouts.

Paul Johnson

Making jokes is hard, and is certainly no laughing matter

The most valuable people on earth are those who can make you laugh. Laughter is the great restorative and rejuvenator. I’m surprised more philosophers have not written about it: only boring Bergson. In recent years the people who have made me laugh most — ‘shriek’, as Nancy Mitford called it — are Carla, Leonie and Taki. Nothing can beat the running gags of life with intimate friends. But I like the professionals, too, who sweat at it, and whose only object is, as they say in Leeds, to ‘prise open them grim jaws of yours with a crowbar’. Query: why are Yorkshiremen so reluctant to laugh? Eric Morecambe from North Lancs used to tell jokes on the point, such as ‘Ee, lad, thou wert so funny I almost laffed.

Saturday

Judi Bevan

Leadership, clarity and a very thick skin

If you get up early enough you might spy the solid frame of Allan Leighton running round one of the London parks before he pays a surprise visit to a Royal Mail delivery office. The reaction of the postmen and women is usually the same. ‘They always say, “Oh s***, it’s the chairman”,’ Leighton laughs. He then gathers them round and asks them how it’s going and how they feel. ‘Those visits at half past five in the morning are the most important part of a recovery like this,’ he says firmly. ‘Going to the board meetings is the least important part.

Matthew Vincent

Switching channels

‘Have you had an accident at work that’s led to a loss of income?’ ‘Would you like to consolidate your debt?’ ‘Do you want to release equity from your property?’ If you’ve ever had the misfortune to find yourself watching ITV1 during the daytime (according to the British Market Research Bureau, not a single Spectator reader admits to doing so, so take my word for this), you’ll recognise those questions from the relentlessly downmarket ads that the channel now carries. But — in an irony apparent to industry watchers, if not to daytime couch potatoes — those same questions can just as easily be asked of the company itself.

John Andrews

Every home should have a hedge fund

John Andrews says investing is like motoring: it’s not the vehicle that’s dangerous but the way it’s driven Dave wins millions on the lottery, and the first thing he does is sprint down to the nearest Ferrari showroom and jump into the latest model with extra-deep bass woofers and a little fold-down table for his can of Red Bull. His mother spits out her tea with fright. ‘You’ll kill yourself!’, she screams. ‘Why don’t you buy something safer, like a Vauxhall?’ ‘Mam’, he says, ‘if I drive the Ferrari at 200 mph down the wrong side of the M1, blindfold...’ his mother starts to hyperventilate, ‘...you’re right, I’ll kill myself.