Alan Miller's Blog


Uber & Tech investors beware – Greater Fool Theory is not a good way to invest

Date Published: 20 May 2019

Category: Uncategorized

In our last blog, published on 1st May, entitled “Complacency Rules OK”, we said that investors appeared to be complacent that markets would be subdued and volatility remain at very low levels.  That was two weeks ago, and as the chart below shows, volatility as measured by the CBOE Volatility Index, known by its ticker

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In the World of Investing Complacency Rules OK

Date Published: 1 May 2019

Category: Uncategorized

In investment, when everyone is pointing in the same direction, like sheep, it is normally the wrong direction. So, when I read a few days ago that “Hedge Funds are shorting the VIX at a rate never seen before”[1], I was incredulous. The CBOE Volatility Index, known by its ticker symbol VIX, is a popular

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See no evil icon

FCA turning a blind eye

Date Published: 6 February 2019

Category: Uncategorized

Despite complaints to the FCA by SCM Direct, Charles Stanley Direct continues to show every new client, a ‘generic’ illustration of the costs and charges rather than showing the actual costs pertaining to the investment they’ve chosen.  SCM Direct’s view is that Charles Stanley’s illustrations of costs and charges flagrantly breaks the rules and is

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Woman putting finger to mouth

Technology Stocks – The Truth Some Active Managers Try to Hide

Date Published: 1 August 2018

Category: Investment

Index investing has grown enormously as the public becomes increasingly aware that most active funds simply do not deliver over time, and that paying less in fees and charges tends to produce higher returns over the long term.  In desperation, the endangered dinosaur traditional fund managers have resorted to fake news to try and arrest

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Image Alice and wonderland

Glossing Over – the Standard Life Aberdeen Way.

Date Published: 18 July 2018

Category: Investment

The Financial Reporting Council (FRC) allows companies to report the Key Performance Indicator (KPI) of investment performance in a way that befits the Mad Hatter. How on earth can Mr. Skeoch, the joint CEO of Standard Life Aberdeen justify this? How can he also choose to sit on the FRC Board who just laughs in the face of hard-working investors?   We at SCM Direct have been complaining about the way various public companies have been reporting

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Dont panic Mr Mainwaring

Emerging Markets – Don’t Panic Captain Mainwaring

Date Published: 3 July 2018

Category: Investment

In this blog, I’m writing about Emerging Markets – shares and bonds, but before you decide it’s all doom and gloom – 3 thoughts to consider when reading my full blog:   As Warren Buffett said, it is wise to be “Fearful when others are greedy and greedy when others are fearful.”  When EM equities have been as cheap as this vs

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Image showing rounder numbers

The World of Bonds – Do ‘Experts’ Suffer From “Round Number Bias”?

Date Published: 14 May 2018

Category: Investment

  After the falls in some bond categories, are there some interesting opportunities?        Alan Miller – Chief Investment Officer, SCM Direct, 14th May 2018   Recently, the JP Morgan CEO, Jamie Dimon predicted a rise in US Treasury yields from 3% to 4% pa.  I regard this as a classic example of “round number bias”

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Sometimes the best value is right on your doorstep – Invest in the UK

Date Published: 18 March 2018

Category: Uncategorized

Since SCM started, we have found considerable opportunities outside the UK by investing in stocks with either lower valuations or higher growth potential, or ideally a combination of the two; rather than in their UK alternative. Since SCM started investing for clients on 8th June 2009, investors would have received 92% extra return in £

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Dream and reality performance

Should the Absolute Return Sector be renamed the Absolutely Dire Sector?

Date Published: 13 November 2017

Category: Investment

For years, we have been astonished at how much money goes into the Targeted Absolute Return sector which has been perennially characterised by woeful performance and ridiculously high fees.  Is it because they are often sold on totally unrealistic expectations to clients, or is it that many Absolute return funds include significant performance fees and

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Why Are Supposedly Smart Financiers Flushing Their Money Down the Fintech Toilet?

Fintech Financial Fantasy

Date Published: 2 October 2017

Category: Robo-advice

Fintech Financial Fantasy Last year we wrote a report on the folly of the UK Robo Adviser fintechs [1] showing how ‘UK Robo Advisers are ‘wired’ to lose money, and most will go bust before acquiring the sizeable assets under management to ensure their sustainability.’ Unfortunately, the UK Treasury seems to either have not read the

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Image of a coin being tossed

Hargreaves Wealth 150 Best Buy Fund List – A Different View

Date Published: 12 September 2017

Category: Investment

Hargreaves (HL) recently announced how well their Wealth 150 list, used by many of its clients to choose investments, has performed since it started in November 2003.  But our SCM Direct (SCM) analysis of more recent performance gives a very different view. The HL View HL say[1] ‘We are proud of the performance of our

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Image of a bubble

Junk Bonds Becoming True To Their Name

Date Published: 15 August 2017

Category: Investment

At SCM Direct, we are not complacent and are diligent in terms of constantly evaluating our asset allocation. One area of hot debate in our office at present is emerging market debt, with investors withdrawing $680 million from the iShares JPMorgan USD Emerging Markets Bond ETF last month; the biggest-ever flows reversal.  As the chart

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Actively Passive

Date Published: 24 July 2017

Category: Investment

Critics say we are not active by ‘just’ investing in ETF index funds, and that index funds buy the most expensive stocks, as the stocks that go up the most become the largest index constituents.  This is false – a stock can go up whilst its fundamentals may rise at an even faster pace, making

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A young child who can't add up using an abacus

Adding Up Should Be Child’s Play for Fund Managers.

Date Published: 26 May 2017

Category: Investment

According to the Cambridge dictionary, the word ‘aggregate’ means ‘something formed by adding together several amounts or things’.  Not complicated for fund managers you might have thought, but it would seem to have totally outwitted their UK trade body, the Investment Association (IA). They are seeking to avoid important legislation that is due to come

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Coins stacked upon one another

The UK Fund Management Pricing Cartel

Date Published: 8 March 2017

Category: Investment

We recently published new research, backing up the recent FCA Asset Management Study findings regarding price clustering (i.e. cartel like pricing) within the UK fund management industry. SCM Direct analysed the non-index or tracker clean share classes of 683 funds with a combined Assets Under Management of £320.5 billion. We found that 70% by number

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beta symbol

Smart Beta

Date Published: 17 January 2017

Category: Investment

Smart Beta Blog As the investment environment evolved and we entered a world of lower returns and uncertain global economic outlooks, professional investors have begun to move away from traditional active investing to alternative strategies, known as smart beta.  How are proponents of smart beta faring in terms of returns and costs, against traditional investment

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SCM Direct Property versus Pension report

Property versus Pension

Date Published: 1 September 2016

Category: Pension

Bank of England Chief Economist, Andy Haldane stated in his latest interview, that property is a better investment for retirement than a pension.  But what are the facts? Is this view misguided? Since Andy Haldane’s comment last Sunday, I have read self-interested nonsense from a pensions expert claiming that Haldane was wrong because pensions were

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Investment Association's left and right Brain

The IA’s ‘C’ Conundrum – SCM investigates

Date Published: 19 August 2016

Category: Investment

For years we have suspected that the Investment Association (IA) has been bereft of what we call the 3 C’s — Common sense, Clarity and being Consumer Centric; particularly in the darkest days of the IMA when it found it impossible to logically analyse any set of data, unless it was seriously biased and therefore portrayed their members in a good light.

Snow flakes representing absolute zero. The return made by absolute funds in 2016

Absolute Return Funds Return Absolutely Zero in 2016

Date Published: 4 August 2016

Category: Investment

As you might naturally expect, we keep a close eye on our competitors and funds that are similar to our various portfolio strategies. For many years, I have been cynical of the performance of many Absolute Return Funds that produce precious little returns for investors.  What is also mystifying is why advisers are sending clients

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Brexit Property

Brexit Hits Property Funds — Compensation Could Hit £140 Million

Date Published: 8 July 2016

Category: Brexit

SCM Direct warned the FCA, post-Brexit, on Monday 27th June that large UK physical property funds needed to be urgently re-priced or suspended to protect investors.  Yet the majority of these funds took up to nearly two weeks to materially re-price or suspend dealing. The question is who is culpable for the c. £140m of

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