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In this regular slot Ash Mehta provides an inside view of what’s happening in the City and how it affects you the private investor.

Tales from within the City walls

Greed, mistakes and hope - just another year in the City

This month I thought I’d share some holiday miscellany of conversations inspired by real events during this tumultuous year in the City. My thanks to everyone in the City who has contributed thoughts and ideas to this column during the year. All the best for a happy, healthy and prosperous 2010.

Here are my three tales:

1. Relocation, no relocation, divorce

Charlie, a 30-something hedge fund manager based in Mayfair, comes home from work at 10pm with some good news for his wife.

With the City’s reputation tainted and tax rises imminent, many people are threatening to leave the UK to work in other countries. So far, though, I haven’t come across any examples where anyone has actually done so. Collins Stewart has gained publicity for its scheme offering relocation to its staff but it will be interesting to see how many people actually take this up, especially as they won’t be able to escape the tax on their 2009 bonus even if they relocate tomorrow. The press likes to hype up the impact but overlooks the fact that tax rates aren’t the only factor affecting where people decide to live.

Recession has always been a factor raising divorce rates and studies show that couples who experience any sudden significant and unexpected change in income--positive or negative--are at risk of divorce.

Ash Mehta                        

All the best for a happy, healthy and prosperous 2010

2. Coins for sale

Mr Brown, a gentlemen in his late 50’s, calls his broker (in a gruff Scottish accent) to sell some gold coins.

Mr Tracey presses the mute button on his phone whilst chortling and making faces to his colleagues in the office.

Gordon Brown, when chancellor, initiated the sale of 415 tonnes of Britain's gold reserves of 715 tonnes when the gold price was at a 20 year low. The auctions between 1999 and 2002 were at an average price of around $280 an ounce. This coincided with the start of the new bull market in gold which led to the gold price hitting a new high of over $1,200 in early December 2009. The notional loss to the country totals around US$ 10 billion.

3. Charity begins at the Portesbury

David, late 40’s, is a director in BSBS Bank and having been stuck in a taxi in traffic is running late for his works annual party at the Portesbury Hotel. He rushes past some BSBS posters into the ballroom where grace is about to be said.

Last autumn, a guest at a black tie dinner arrived a week early for his intended event. He ended up meeting people he probably wouldn’t otherwise meet. In the insular, homogenous microclimate of the City that could have been the most stimulating thing he did all year. Perhaps he also considered whether his job is socially useful.

ash@orchardgrowth.com

Ash Mehta is Chief Executive of Orchard Growth Partners which provides Finance Director consultancy services. He is also part-time Finance Director of Northbridge Industrial Services plc, an AIM-quoted hire company, and he sits on the Executive Committee of the Quoted Companies Alliance, the representative body for smaller quoted companies. The views expressed are his own and do not necessarily represent the views of those organisations or of Aimzine Ltd.

 © Ash Mehta

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