Isle of Man based businessman Jim Mellon has revealed his top seven tips for making money in 2018.

Jim, who the Sunday Times Rich List estimates as being worth £920m, is one of the largest employers in the island.

He is the owner of the Claremont Hotel and executive chairman of Manx Financial Group PLC which includes Conister Bank and Edgewater Associates.

Jim looks to the year ahead in an article for the online business magazine Master Investor.

He asks readers: ’How can we make money in 2018?

’Here are a few observations. These are not of the famous ilk of the ’’outrageous" predictions, which are from time to time promulgated as festive crackers by a friend of mine, but rather practical ones to advise what one can do in a (mostly) low return world.’

BONDS

He says bonds, with the possible exception of index linked UK gilts, remain a near universal sell.

He argues there is no upside in lending to governments or corporations ’at a time of increased debt loads, insidious and mounting wage pressures (which are bound to be inflationary) and increased credit risks.’

He adds: ’If I were the UK government, I would (well done, Jeremy Corbyn) borrow vast amounts of money to invest in infrastructure, education and science - money repayable at the longest possible duration.

’It is most unlikely that the return on the debt would be less than the cost of the borrowing.

’Even the dumbest government officials - and there are plenty of those - must be thinking along these lines. I expect that the Germans and others are also so ruminating.’

Eurozone

Mr Mellon argues that the eurozone, fuelled by massive but decreasing money printing, will not remain the momentum machine it is now hyped up to be.

He writes: ’It still has vast problems, and my best guess is that the euro falls against the dollar and the pound in the next year, by as much as 10%.

’The combination of turbulent political issues, most notably the German coalition of the unwilling - which is being tortuously stitched together - as well as a probable slowdown in export growth, will put the euro under pressure.

’Certainly, some European stocks, notably Unibail Rodamco (UL:NA) (the company buying Westfield at the moment), Total (LON:TTA)(the French oil company), and the British firm GlaxoSmithKline (LON:GSK) (which has got an excellent new drug prospect in Multiple Myeloma, as well as a 6% plus yield) are all interesting in Europe/UK.

’I also continue to favour Novartis (VTX:NOVN), the Swiss drug behemoth which boasts a reasonable yield and is the most advanced major in terms of pro-longevity science.’

FANG (Acronym for Facebook, Amazon, Netflix and Google)

Mr Mellon believes: ’This will be the year of the FANG denouement.

’Ian Bremmer of Eurasia, a very respected commentator, believes that Facebook, Google et al’s lawyers can outsmart any government lawyers - and anywhere - but I am not so sure.

’I think the weight of public opinion against these companies is becoming heavier and heavier.

’This is because of their low tax loving cultures (in the past 10 years Amazon has paid less than $2 billion in taxes, whereas for Walmart, its major competitor in the US, it has been over $64 billion!).

’The FANGs are not deliberately doing bad stuff; they are just being given the opportunity to give capitalism a bad name.

’They are carefully avoiding the label of being media companies, claiming to be technology platforms, when in fact they are the principal source of "news" for many, many people.

’The rectification of this clear anomaly, plus fines for monopolistic behaviour, and the imposition of normalised taxes - as well as questioning as to whether they are beginning to saturate their markets - make them the clearest fundamental sells I have ever seen.’

JAPAN

He writes of Japan that it ’remains a buy, and my target is now 30,000 for the Nikkei in 2018, up from my previous target of 25,000, which is now close to being achieved.

’The PE of the Japanese market is about 14x forward, balance sheets and corporate governance are improving, and the yen is undervalued.

’If you want to hold a major market (and cash is not a bad alternative to any market) consider Japan.

’The banks there look particularly attractive, as there is a vague hint of rising interest rates in the air.’

Gold and silver

Mr Mellon notes that gold and silver are up by about 8% in 2017.

’Normally, that would have been a lot more, but I feel that bitcoin has diverted a lot of speculative activity away from the precious metals complex.

’I am pretty sure that the yellow metal will regain lustre in the coming year, and I make a bold forecast of at least $1,600 on gold by year end 2018.’

US stocks to buy.

Jim says he remains ’committed to Gilead (NASDAQ:GILD) - cash rich, innovative, aggressive and cheap US leader in biotech - and I also think that Editas (NASDAQ:EDIT) in the gene editing space and Adaptimmune (NASDAQ:ADAP) in the cancer immune therapy area look interesting.’

Mining area

’In the mining area, among the smaller companies I follow/and or invest in, I like the look of Zenith Minerals (ASX:ZNC) in Australia, with interesting upside in lithium and gold assets.

’Recall that previous Master Investor winners from this same stable have included Syrah (ASX:SYR), Triton (ASX:TON), and Critical Elements (CVE:CRE), all of which have provided more than 10x returns.’

lThe full article canbe seen at Master Investor magazine.

Jim Mellon