Ignore gearings, eschew P/E ratios: Toady has discovered an infallible indicator of the company performance, the Toady Index, algebraically: p = fy(+1)(super -1), where p is profitability and fy is the length of the chairman's yacht, expressed in feet. (Continental readers may use the metric integer "my" if they wish.). In mere layman's terms, the thesis behind the TIM (Toady Index Multiplier) is the existence of an inverse and exponential relationship between the length of the corporate gin palace and the company's performance in such less exalted indices as the Dow Jones and FT. In the argot of the common herd, the bigger the boat, the more likely the company is to sink.
If proof were needed of the TIM's efficacy, consider the case of the 180-ft craft now called (but not, one suspects, for much longer) the Lady Ghislaine, for sale at £15 million. All the world knows her role as the platform from which the late Captain Maxwell and his shares took their final dive: suffice to say that the latter seem unlikely to be tipped in the Telegraph's Best Buys for 92. Less known, is that the Lady Ghislaine was commissioned by arms dealer, Adnan Khashoggi, after which Khashoggi began to experience the odd financial problem. Queues for equity in Khashoggi Enterprises are understood to be short. Between times, the boat was sold to that prince of the vulgar, Donald Trump, and - well, let us not labour the point. But take note: unaware of the TIM's remorseless logic, Trump later commissioned an even bigger yacht, bashfully christened, the Trump Princess, also up for sale. You have been warned.
A fluke? Toady thinks not. Gerald Ronson lashes out on the 187-ft My Gail III and what happens? Guinness, Ford Open Prison and £1.2 billion's worth of debt for the Heron Group. Contrariwise, Peter de Savary wisely kept his Taramber to a mere 120 feet, and his liabilities to Blue Arrow are, as a result, a trifling £25 million. (As Mr de Savary, clearly an apologist for the TIM, recently told the Independent on Sunday, "I'm not going f????ing bust"). Similarly, Sir Nigel Broackes's Cardigrae VI (130 ft) resulted in a modest £29.1 million fall in profits at Trafalgar House. So who are the TISTAs (Toady's Index Shares To Avoid) for 92? It would be unprofessional to give the game away entirely, but here's a peep into Old Toady's Almanac. Tiny Rowland, NCP boss Don Gosling, "Bootiful" Bernard Matthews and Hanson henchman Lord White are all yacht-owners, though the lengths of their boats are unknown. Consult Lloyd's List, apply the TIM, and decide.