Its Not Harry

Comment and opinion for retail investors in the UK

Mark Potter

Snippets – a foggy Autumn

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All quiet on the Notharry front?

My readers may have noticed less blog posts recently. This had been deliberate on my part, for several reasons:

  • I had a few conversations with subscribers in which they confessed to not having time to read a few of my recent scribblings, sometimes I suspect for quite a few weeks. That means one of two things: I am posting too often or what I post is not useful or interesting. Now I am fairly sure that aside from the odd rant or attempt at dry humour, what I write IS useful to retail investors, so with that possibly conceited analysis, I have decided to reduce my frequency of posting to an average one longer read at the start of each month and one or two topical pieces in between.

  • Secondly, there are not many fundamental topics that I have not covered already in several ways: maybe a permanent long technical article, some reminder posts with cross references and now even maybe a video. I am therefore reluctant to write or record a piece that is just an unwanted repetition. On the other hand, as you know, I am very willing to write a piece on a subject that a particular subscriber wants explained or for me to comment on. Just tell me what you need!

  • Finally, current market conditions are so weird, so febrile and so full of risk (which last point I have made repeatedly already), that it is difficult to offer any intelligent guidance on portfolio servicing or reshaping over and above the usual basic essentials of being diversified, managing cash flows and taking the long view.

Nonetheless, I have collected quite a few thoughts on what are relevant factors that you might benefit from thinking about, or trends that need keeping an eye on, enough to make up one of my occasional ‘mish-mash’ lists of unconnected (or are they?) subjects that now follows.

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Deep Dive – October 2025

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When a cult rules millions

For most of my working life, I have been able to tell those who asked me that politics made not much immediate difference to investment markets.  Of course, where politicians make significant changes to macro-economic conditions (say Reagan and Thatcher in the ‘80s under the influence of the monetarists and market liberalists), there will be impacts over the medium to long term. 

However, as a rule markets have always taken the view that in the democratic ‘free’ world, politicians come and go and policies oscillate from a bit leftish to a bit rightish with the odd major annoying upset, like Brexit.

It is also widely understood that the most important capitalist economy, the USA, is really under the control of two main groups – a loose collective of shadowy billionaire oligarchs and the lobbying firms employed by the mega corporations.  This was explained to me when I was a teenager attending college to study business and as a Brit, I struggled to believe it, but now there is some evidence (especially during the Boris Johnson period) that the same sort of democratic corrosion is occurring in the UK.

Are politics really relevant for investors?

The people with the real power in the USA welcomed Trump’s re-election and the US equity market performed accordingly early this year.  Here was a man who was not very bright, had only made money with the help of Russian property developers or by blatantly disreputable behaviour, when left to his own devices went bankrupt over and over again, had an ego that forever needed massaging, and was utterly free of the ethics that most people think define Christian societies. 

In essence, they thought that they knew, as the KGB had discovered much earlier, that this was a man whom you could easily manipulate with a little forethought.

That was however their mistake. 

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YAP – late post, sorry!

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With Donald Trump and his Republican loyalists continuing to swing a wrecking ball at the US economy, of course with implications for the rest of the world, the UK struggling with inflation and a public debt crisis, France being France when it comes to worker behaviour and very little good news elsewhere in Europe, unless you make military equipment, It is astonishing that global equity markets are riding high. The Far East maybe has no new problems but the medium term implications of Trump tariffs and some major repositioning of supply chain policy by really big industrial nations are not yet fully understood

Of course, the markets are not the economy and vice versa and it looks like bond markets are expecting interest rate cuts in the USA, plus Gold is valued very highly, suggesting that at least some market participants are exiting equities, or more generally, people with money are very nervous. Indeed, I read that there is evidence of retail investor selling at noticeably higher than usual levels. I have personally made my own microscopic contribution to that trend.

I’ve been here there and everywhere this week!

This market context is very hazardous with a systemic correction being very likely, as I have written before. It just needs a trigger that creates an instantaneous inflexion point and Trump and his team of economic half-wits seem to be trying hard to find that trigger.

Against this background, I planned to write useful checklist, cross-referencing selected guidance I have written previously, so that readers can make sure they are as prepared as possible for any eventually. I had even written some notes with the basic content.

However, on October 1st, I moved to new flat and ahead of that relocated my ‘office’ (really just the place my PC, printer and supporting tools live). The move has taken up all my time and also resulted in my, temporarily (I hope), misplacing a few things, including my October Deep Dive notes!

I must therefore apologise and ask you to wait a few days until I get properly organised again and can write and publish the full piece. Please email me if you have any burning questions!

It would be hilarious, except..

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I see that hot on the heels of the OpenAI/Oracle/Nvidia deal that I wrote about yesterday, Nvidia has demonstrated that it already knows that there is no money to pay Oracle to build data centres with its GPUs, so it taking a stake in OpenAI, reported at ‘up to’ $100B.

An approach along the lines of – ‘you’re ordering our stuff through a third party. but we know you won’t be able to pay for it, so here’s enough dosh to get the process rolling. Some of your fancifully valued stock in return would be nice!’

The problem with that is Nvidia will presumably build equipment worth the money, but the shares it is getting in return (‘a major stake’) are based on a valuation of OpenAI at this rather fairy tale moment in the market concept of accurate pricing. This deal is probably made of necessity (if the whole mega project is to move forward) but looks like a potential disaster for Nvidia to me.

An aside and something not explained in the press release is that OpenAI is not currently a public company as I understand it, so I am not sure of the corporate governance implications.

Nvidia’s much smaller but likely more accurately valued investment in Intel looks a lot more prudent. At least they are diversifying while splashing the cash.

However, I will be nervous about funds that have Nvidia well up in their top 10 holdings from this point onwards. The puff of fresh air into the bubble at this stage might be close to bursting it. In fact, this whole deal is in my opinion best described as ‘bonkers’. But what would I know?

Then and now

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150 years ago

In his most satirical book, ‘The Way We Live Now’ (1875), Anthony Trollope outlines in some detail, showing his personal expertise in matters of business, the working of the financial markets in Victorian London and the personal characters of his model participants. The book is far from flattering, any more than his portrayal of the church was in The Barchester Chronicles.

Early on in the book, a rather innocent English businessman, whom one might today call a venture capitalist, is suddenly called upon by his American partner to come up with a few wealthy investors to finance the launch of a company that will ostensibly fund a new railway across a large swathe of the still undeveloped USA. The young Englishman naturally makes logical enquiries about the likely success of the project, what stage the planning is at, risks and so on.

These enquiries are brushed aside by the American (co-incidentally called Fisker – a more recent Fisker has managed to lose around $0.5 Billion of US tax payers money), who states that the present objective is not to build a railway, but to promote and float a company. Building the railway will be someone else’s problem.

If they can raise £3 million (a pretty massive sum at the time, of course) and promote the project with glossy literature touting the support of the government and the massive potential in a new untapped market, they ought to be able to get the share price up 10% in short order after ‘subscription’ (no listing rules then) and the initial investors can sell out and bank £300,000 (around £40 million today) between them for very little work!

Best not to get too wound up at my age…

Apart from highlighting the point that trading in shares is often very little to do with actual capitalism, the account highlights that those who are already rich can usually get richer without having to undertake anything more than some promotional activity that pulls in the naive, usually using the psychological trick of what we now call the ‘fear of missing out..

Now

Very recently, Open AI, a company that has no money from retained profits, has never even made a profit and which expects to burn through billions of dollars over the next few years, placed an order with Oracle, the data handling business, that was so large, the Oracle share price was pushed up over 45%, making its principle share holder even richer than Elon Musk.

Musk was obviously peeved by this, so he bought a large block of Tesla shares, causing the ‘Teslarati’ (not the brightest investors in the world) to pile in too and thereby boost the Tesla share price and put Musk ahead again. The very fact that Musk needed to do that tells you so much about his character.

It is said that Oracle has an advantage in that it can gets its hands on a larger share of the critical Nvidia GPU chips than some competitors in the AI supercomputer space. However, Oracle would of course have to pay for these processors and build the datacenters/supercomputers for OpenAI to be able to play with them. Who fronts up money first is an open question.

In essence the valuation of Oracle went up billions (and Nvidias share price was helped too) because an order was placed for services that some believe may never even be required (one survey shows that 95% of AI projects to date are not traditionally profitable) by a company that has no money until the market chooses to suppy it.

Many business writers and media content makers have pointed out that this is serious evidence of an AI sector bubble. That is hardly an intellectual stretch. My observation is at a more ethical level – two of the richest men in the world can get to be billions of dollars richer without any actual work being done, no improvement in the human condition, no employment opportunities created, in fact no enterprise and arguably not even any capitalism!

To repeat Trollope: it’s the way we live now. Or, as was recorded by the scribe of the Old Testament – there is nothing new under the sun.