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People see what they want to see. The bears see all the bad news. The bulls see all the good news. The media reports what it wants to report. Bad news sells. Murders, wars, catastrophes, government ministers caught with their hands in the trough. This is news.

Just now there is some bad news coming out of the economy. Editors are rubbing their hands at the prospect of indebted householders being dragged from their homes by thuggish bailiffs. They want to hear of empty restaurants, of shop-owners scouring the street for customers, of bankrupt buy-to-let landlords jumping from the balcony of one of their bijou fifth floor apartments.

Good news does not make headlines. So, when last week one company came up with excellent results and said that, so far as it was concerned, there is not a cloud in the sky the amount of column inches it received was precisely none ... Read More

Now that you and I own Northern Rock it is time to draw a few conclusions and apportion a bit of blame. It is also time to raise a cheer for at least one reason. Funds managed by hedge fund geniuses Jon Wood and Philip Richards will probably lose about £200m. I am not sure that investors in their funds deserve to be victims but the reputations of Wood and Richards will take a well-earned plunge.

These guys jumped aboard Northern Rock once the crisis broke. Exactly what prompted them to invest £200m in a bank that clearly had no future and was to all intents and purposes bust is not exactly clear. But apart from a desire to grab headlines and pose as serious financial players they presumably thought that either Northern Rock would be taken over or that some sort of financial rescue package would be stitched together from which Northern Rock, and its share price, could stage a miraculous recovery. But actually I suspect that they saw their investment as just the sort of super-contrarian bet that hedge fund mangers love, safe in the knowledge that if it comes right they will score a massive bonus. And if it goes wrong – it will cost them personally not a penny ... Read More

As you know those who make the case for "Peak Oil" are all constantly shouting that the end of the black stuff is nigh!

I’ve discussed this idea several times with Matt, and would like to refresh some points we came up with.

When good ol’ Henry Hubbert predicted the peak production of his oil fields in the 1970s, he did so based on "recoverable" oil ... Read More

The Russian Academy of Medical Sciences are developing a biological microchip that will detect a very early – and treatable - stage of diabetes.

They have created a preliminary version of ‘biochip’, and hope to have the real thing in production soon.

But implanting microprocessors into the human body won’t end at medical science ... Read More

If you know anyone who’s had a heart by-pass operation, you’ve probably been shown the scar on their leg where surgeons removed a vein to use in the operation.

But soon these scars could be extinct. Last week US scientists announced they can ‘grow’ blood vessels from skin cells in a laboratory.

Apparently, the blood vessels are made by taking a half-centimetre square sliver of skin from the back of patients’ hands. Nice ... Read More

Imagine this is 1990 and you’re receiving Profit Watch by the medium of fax...

That’s more difficult than it sounds. Actually, it’s a horrible thought...

Anyway, let’s go with it.

I’ve sent a fax to you revealing that in just a few years, you’ll be receiving this missive via a new medium called “the Internet” ... Read More

Some years ago, I had lunch with one of the best Lloyd’s underwriters, a gentleman who retains an enviable track record of successfully weathering the rigours of the insurance cycle. In the highly cyclical industry of internationally traded insurance this is some achievement.

As we ate in the modest surroundings of the Lloyd’s dining room — the luxury of the Captain’s Room was even then long gone — he explained the key to successful underwriting: patience. This was the virtue, prized above all others, which allowed him to stand aside while other underwriters were filling their boots with unprofitable business.

I was reminded of this lesson by what I found in this year’s letter from Warren Buffett ... Read More

Since January 2006, major indexes like the Dow have gone nowhere. Inflation fears still abound in the U.S. and Europe. And many economists have warned about the property bubble bursting. Some have gone as far as predicting a recession in the U.S.

In such a market environment, an investor should consider owning stocks in the “recession-proof” sectors. One area that is historically very “recession- proof” is that of ‘sin’ or vice. We think it’s worth venturing off the moral high ground every once in a while in the search of good profits... and we’re exploring this now.

Don’t be too alarmed. We’re not about to start suggesting you invest your money in pornography or prostitution – although, in fact, I believe there are actually some listed companies in both of those businesses ... Read More