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As the increasing dominance of passive investing demonstrates, share tipping is a mostly a mug’s game.
Just ask the former Labour MP Adrian Bailey, who as chairman of the business select committee in 2014 published a scathing report on the privatisation of Royal Mail. According to Bailey and his colleagues, increases in the price of the shares in the aftermath of the sale meant the taxpayer had been ripped off to the tune of £1bn.
Today their conclusions, questionable at the time, signal the same sort of insight into the prospects of shares that has left Neil Woodford seeking Chinese capital for his next fund.
Royal Mail shares are bouncing around at less than half the £3.30 float price and two thirds below the peaks that so angered Bailey.
For Rico Back, the 504-year-old operation’s German chief executive, there is no comfort in the fact that investors overpaid the Exchequer. He has his back to the wall in a fight to impose change before it is too late.
The problem is quite simple.
The Royal Mail is Britain’s most extensive and reliable delivery network, but it is set up for letters and we aren’t sending them any more. Consumers and businesses sent 5pc fewer letters in the first half of the company’s current financial year.
