VALUE INVESTING
No Value Here

By Stephen Bland (TMFPyad)
December 23, 2005

Christmas is traditionally about spending time with one's family. But having said that there are some good things about it too. One of them, you may not agree, consists of diverting my attention away from the usual stuff about shares and boring readers with completely unrelated material. This year it's going to be a couple of tales drawn from my accountancy practice days from which I retired a few years ago.

One of the earliest incidents which sticks in my mind was when I was an articled clerk, as they used to call those studying for the accountancy exams whilst being employed by a firm of chartered accountants on some pittance wage. We had a client in the funeral business. I'd been to their premises before in the process of preparing their annual audit and accounts but on one occasion, having a bit of experience by then, I was put in charge of the job. I'd gotten friendly with the manager, a decent sort, so I decided to ask him to show me, purely out of morbid curiosity combined with a requirement of audit work, what they actually did with bodies brought in, prior to the funeral.

So he takes me into the rooms where they carried out the process. I hadn't seen a dead body before then so I was taken aback at the sight of several stiffs laid out on slabs. Of course to him it was as routine as bricks to a brickie but it was a bit of a shock to me. He then took me round to explain a few things. Carrying some account book with him, he casually laid it on top of some dead old woman as though she, it, was a convenient desk, while he pointed out various things. I was becoming accustomed to the sight of all this by now and found his nonchalance hilarious. As a result I was tempted to start cracking a few funnies for which obvious opportunities were rife, but though better of it. Not because I didn't want to give offence, but because I figured he'd probably heard it all a million times before anyway. Cracking unoriginal jokes is very bad for one's street cred.

Then we come to one body of a man where he points out some stitching in a circle round the top of the head. What had happened was that permission had been given for the body to be used for teaching medical students. So the students had sawn off the top of his head like a boiled egg to take out the brain. Having stitched it back on, the undertakers would cover the area with some make-up stuff so that you'd never know. There was only one problem, sort of. The brain hadn't been replaced so this chap was lying there with no brain. I don't know how much brains he had in this life, but he sure didn't go on to the next with much.

Years later I started my own firm and one day a lady phones to make an appointment, introduced by an acquaintance of mine. She turns up with a mate. Two fit Australian girls, qualified physiotherapists, with tax problems, sort of.

"We're making £1,000 per week each in cash, we're not paying tax on it and we want to buy a house here, how can we do that without the tax man finding out?"

Now bear in mind that this is a long time ago. You could buy a decent house for about a fiver so a thousand week was deadly serious money.

My initial reaction, internal and unvoiced to these ladies, is that I'm going to chuck in accountancy, go to Australia, become a physio, return home and score that kind of dough. That much just for rubbing people up the wrong way? Jeez am I in the wrong prof or what?

I come out with the milder "Physiotherapy pays that well?"

"Physiotherapy?, we're escorts"

The penny, or the £1,000, drops. I abandon my plans to switch professions.

Always one to call a spade a JCB, I said "You mean you're prostitutes" Two sheepish nods. They really were qualified physios but found "escorting" infinitely more profitable and were willing to accept the various risks that go with that in return for the cash.

I would never permit my firm to become involved with tax evasion so I explained to them that my advice was to go legit and declare their income as self employed, then they could buy their properties openly. It would though cost them a hell of a lot of tax on that kind of income despite us doing all that could be done to mitigate it.

They couldn't face that so thanked me and paid for my time and advice and I never saw them again. Upon departing though, they did request that I never told my acquaintance the truth about them. Apparently he was friendly with a sister of one and believed that they really were working in London as physios.

I wish all my readers a good Christmas and New Year.