The power of cash
Your gmail account is for sale at $65
Security in retirement isn’t just about income, we show you why.
by Doug Brodie
News
Berkshire Hathaway has recently bought $4.1 billion of Taiwan SemiConductor (TSMC). We know about this firm because Murray International has had it as their largest holding for many years, and Bruce Stout, MInt’s manager, has taught us well. TSMC is the largest manufacturer of advanced processor chips in the world - think iPhones etc. Bruce has been selling down his holding for the last two years, and we think that’s right – if there’s anything China wants to steal from Taiwan’s economy its TSMC, and if it kicks off in Taiwan the share price will collapse.
Buffet’s single biggest holding is Apple – so there is contagion risk if Taiwan get nobbled. His current holding $126.5 billion, and the company itself is $2.2 trillion in market cap. Those are just numbers, so to put it into perspective that you and I can understand, Visual Capitalist puts it this way:
Stats
How much do you know about the Dark Web? Probably not a lot, as you and I probably couldn’t think of anything we would need / want to but that can only be found at a hidden, anonymous online shopping mall.
Our chums at Visual Capital (see there great stuff here: https://www.visualcapitalist.com) have been doing some research into the Dark web’s distant regions and pulled up a list of some of the things for sale. Prices cover things like a hacked gmail account for $65 to a hookie Netflix subscription for $4. You can even buy hacked credit card details filtered by the amount of available credit on the account – for $5,000 credit it’s $120, down to $80 for $1,000 credit. Or how about a cloned US Amex card for $25 complete with the CVV number.
This is relevant to you and I because here we can see how we get those calls / emails telling us our security is at risk or that our account is being compromised: to have 1,000 high quality installs of malware in fresh, up to date European computers costs $1,800. If you want the highest possible quality you pay $5,500 per 1,000 installs. That’s the scale of business trying to hack / defraud you and me.
Last comments here, regarding the much-trumpeted security of the cryptosphere, for $120 you can buy a hacked Coinbase account – as they say… go figure.
If you own a business (we do obviously) they are after your website - $450 buys 10 – 50,000 web requests per second for one whole week.
Oddly they (someone) also offer Russian passports at $100, alongside a New South Wales driver’s license at $150. The Lithuanian passports are up to $3,800 and that’s surely due to the demand from their eastern border.
That darknet area needs a special browser to access it, known as TOR (stands for The Onion Router). Here’s the diagram that Visual Capitalist have posted showing the route, how it works.
Comment
As we run through our annual updates with clients in these troubled months we are very, very reassured about the income strategy we follow. We have just published the 2022 update to our White Paper that compares methods of generating income from investments.
The engine that drives the income you receive is not the underlying companies in a trust, but the balance sheet of that trust: dividends are paid from the reserve accounts – only. The investee companies that the trust holds (like TSMC) pay their dividends into the revenue reserve, and the board of directors then decide how much of that can be prudently paid as pence per share dividends. We do a lot of work in this area – not all balance sheets are the same, and it’s not a simple question of looking at dividend cover as different trusts handle reserves in different ways.
A quick fag packet look at the balance sheet is to see what those reserves are, the dividend cover – i.e. how much years’ worth of the annual dividend does the trust hold? Over one is generally great, that means it holds a whole year’s worth of dividend as ‘spare’ safety money, a reserve account. This table is a summary of what those engines look like over the last five years, for two sample trusts.
A table like this shows it is unlikely that either of these trusts will cut their dividend in 2022 unless they have an extreme need to protect cash (the Armageddon scenario, think covid x 2), and it is even more remote that they would make no payment at all. As it says in the White Paper, in trusts we trust.