GDPR – sorry, you can’t read it, it’s GDPR chum
by Claire McDonnell
/1. GDPR – sorry, you can’t read it, it’s GDPR chum
While none of us want our personal details being handed out to all and sundry, GDPR can sometimes feel like the new “computer says no”. You try to do something perfectly reasonable, like asking for your own medical notes, and suddenly everyone is shrieking “GDPR” like an air raid siren.
What is GDPR?
The UK GDPR (United Kingdom General Data Protection Regulation) is a law that governs how companies use your personal data. It’s basically a rulebook for information. It covers:
What companies can collect about you
How they store it
How long they keep it for
How they let you know they’ve got it
It works alongside the Data Protection Act 2018 and is overseen by the Information Commissioner’s Office (ICO).
In simple terms, GDPR exists to protect you. Companies can’t just hoard everything they find out about you. They need a clear reason to have your data, and if they don’t, they must delete it properly - not shove it in a forgotten folder or leave it on a train!
Organisations must:
Be transparent re what they hold on you
Have a specific purpose for holding it
Keep it accurate and up to date
Only hold what’s necessary
Get rid of it securely when it’s no longer needed (or when the law says they must)
Keep it safe
Prove they have all the above covered
And the important part is you also have rights. You can:
Ask what data a company has on you
Get errors corrected
Ask for your data to be deleted entirely (the “right to be forgotten”)
And remember, this applies to all companies - your employer, your gym, the school uniform shop you opened an account with, anyone who holds your data.
What GDPR Isn’t
It’s not meant to feel like a giant brick wall. GDPR isn’t an excuse for refusing to use common sense, nor is it designed to stop you seeing information that’s rightfully yours. It also doesn’t mean companies can’t contact you at all - it just means they need your permission, and they must be clear about what they’re doing with your details.
How does this actually help us?
It might sound like a lot of legalese, but there are real-world benefits for you:
Less junk mail: companies can’t just buy and sell your details without your permission
Fewer nasty surprises: if your doctor or bank has your information, you know exactly what they’ve got and why
More control: you can shut down those pesky databases that insist on spelling your name wrong or keeping your details forever
Better security: organisations are legally obliged to keep your data safe — so if they get hacked, they’re the ones in trouble, not you
When GDPR Gets Blamed (Unfairly)
Let’s face it, often GDPR is waved around like a magic “no can do” wand (and said in a tone to enrage you). For example:
Family photos at school plays: “Sorry, you can’t take pictures because of GDPR.” Not true. (Although don’t take pictures of other people’s kids without permission - that might be seen as weird!) Schools simply need a sensible safeguarding policy - but this isn’t GDPR.
Phone bills or bank details: “We can’t tell you that because of GDPR.” Actually, they can tell you your own information - that’s the whole point!
Community groups refusing to share a contact list: Again, GDPR doesn’t ban sharing - it just means you need consent.
Basically, GDPR isn’t the villain. It’s just often misunderstood - or used as a convenient excuse to avoid doing something.
The Net-Net of It All
GDPR isn’t perfect, and yes, it can feel like red tape. But in essence, it’s about putting you in charge of your own information. The next time someone blames GDPR for not giving you access to your own data, you’ll know the law is on your side, not theirs.
And yet, we all merrily hand over our lives to LinkedIn, Facebook and Instagram with one upload of a photo or click of a “sign me up.” Funny old world, isn’t it?!
/2. Buy low sell high: current underlying index criteria that should make any investor think.
How do you identify a successful investment? Naturally it’s one that has gone up in value relative to whatever else you were considering. The trouble is that means it is not hitting your radar until it has gone up, and surely that’s a signal to sell not buy?
Don’t forget ‘relative’; for a high volume derivatives trading fund the difference in price of just 1 cent can be a massive rise in a price, if they have a multi $ billion highly leveraged position, whereas you and I would not even notice such a rise. So, price is relative, and retail investors chiefly use cash interest rates as the benchmark, the rationale being that if you can get 4% on cash in the bank, why apply risk to the capital. (There’s lots of reasons actually, but that’s another story…)
If you sold Apple when its share price doubled after IPO, from $22 to $44, you’d be happy; if you compared that to its current price at $253 you’ll be annoyed that you could have multiplied your money x10. However, what other people do with their investments is up to them – remember the only reason Apple’s price today is $253 is because someone is selling their shares at that price. The person who is buying obviously sees future in that price continuing to rise, otherwise they wouldn’t be paying $253 today.
There are lots of different valuation methods for investment stocks, the most common being the p/e ratio, or the share price as a multiple of the amount of income earned by that share. Another is the share price relative to the book value (the net asset value of the company after debt is removed), commonly written as P/B.
What the P/B Ratio Means
P/B ratio of less than 1.0: Investors may consider the stock undervalued.
P/B ratio of 1.0: The market price is equal to the company's book value.
P/B ratio of more than 1.0: The market is valuing the company's stock higher than its accounting value, suggesting it may be overvalued.
The P/B ratio allows us to compare one company against another to see which one is priced more for its assets than another. It’s just one element of valuation, but it’s an important one.
By comparison we take into account the following P/B ratios:
FTSE All Share 1.9 P/B
MSCI World 3.75 P/B
S&P 500 5.57 P/B
Nasdaq 4.25 P/B
So it’s not just tech that’s highly priced as the S&P beats the Nasdaq. If you’ve ever read about discounts and premiums in investment trust share prices then the index P/Bs are not dissimilar, however we have never seen an investment trust share price at twice the net asset value!
What the figures tell us is that the S&P is much higher priced than every other key index, however is that higher relative to history?
Yes, it is. In 1999, just before the dotcom crash, the S&P P/B ratio averaged 2.9.
The p/e ratio basically tells you how many years you need to wait for the earnings to pay back that cost to you; the mean average p/e ratio for the S&P in 1999 was 31.69 and today it is 30.97, so on a measure of earnings perhaps the S&P is not so different from dotcom territory, however that is still a very uncomfortable place to be. The FTSE All Share p/e was around 27 at its height in 1999 and is currently around 18.
If p/e is a proxy for profitability, and p/b is a proxy for balance sheet, then we are comfortable holding UK listed assets whilst we wait for the US market to correct – it will do, no one knows when because that that is the inbuilt uncertainty needed to make markets function.