Hariseldon58 wrote:The dangers of capturing a falling knife ?
It has only been a month, but this is already an eye opener for me around dangers of single stock picking, to have 3 absolute stinkers in a fairly flat market is somewhat sobering.
Hariseldon58 wrote:The dangers of capturing a falling knife ?
At the level of single stocks, past performance can be a guide to the future. Obvious enough why, economic conditions, trading environments, management performance etc. should correlate from one measurement period to the next.Walrus wrote: It has only been a month, but this is already an eye opener for me around dangers of single stock picking,
Did you ever consider that April 1 might not be the best day to kick off?Walrus wrote:Well one month in and the Dog Conviction Fund has had a shocking start.
Three double digit losers and a chunky loss in BT.
Petrofac -18%
Centrica -15%
Imperial - 13%
BT -6%
This fund has been seriously bad for your health if you are chaser of dogs.
Bright spots are Apple up 3%, GVC up 2 percent and marginal gains on GE.
Hmmmm, Average down on Petrofac perhaps.....
Huge capital investment program to stay in the game for Fibre to the premises.Walrus wrote: BT PE 8 Yield 7.8
Owns EE a quality outfit in my view, in a sector which is here to stay. Huge barriers to entry in terms of investment outlay. Bombed out share price, can't really see you much downside here.
Why would you consider topping up in view of what you (correctly) said? My view is that I'll hold in the hope that things buck up, in which case I'll benefit, but I'm not prepared to risk any more money because I can't really see it happening to any degree. The pension fund in particular is a nightmare which I don't see abating. Needless to say, I'd be delighted to be proved wrong.TUK020 wrote:Huge capital investment program to stay in the game for Fibre to the premises.Walrus wrote: BT PE 8 Yield 7.8
Owns EE a quality outfit in my view, in a sector which is here to stay. Huge barriers to entry in terms of investment outlay. Bombed out share price, can't really see you much downside here.
Massive pension liability & shortfall.
May not leave much for dividends.............
I hold, toying with the idea of topping up, but nervous about this as a selection
Has there been talk of spinning off Openreach as a separately quoted entity?TUK020 wrote: Huge capital investment program to stay in the game for Fibre to the premises.
Please explain. I must have missed something.dealtn wrote:Actually the pension issue is one of the reasons I am attracted to the BT, and currently long.
Guess that's what makes a market, differences of opinion.
There has been quite a lot of talk about it and a number of demands for that to happen but so far as I am aware, it's no nearer happening. I could be wrong but I think the pension fund may play a part in this, i.e. make it difficult.Alaric wrote:Has there been talk of spinning off Openreach as a separately quoted entity?TUK020 wrote: Huge capital investment program to stay in the game for Fibre to the premises.
I await dealtn's perspective, but my answer would be liabilities would be marked down in the event of interest rate rises, so buying BT ahead of a rising rate ramp could be quite smartBouleversee wrote:Please explain. I must have missed something.dealtn wrote:Actually the pension issue is one of the reasons I am attracted to the BT, and currently long.
Guess that's what makes a market, differences of opinion.
I am a contrarian by nature. I look for asymmetries as a start point. The "pension issue" is an extremely interesting example, where the (vast?) majority of investors, commentators etc. take its existence as a "known" negative. The vast majority of those will do no research into what is priced, and whether it makes sense or not. So much so I reckon many would still be negative, or reluctant to investigate it, should a company have large liabilities with a P/E of 2 or 3, or a share price in this case sub-50p. That makes no sense.TUK020 wrote:I await dealtn's perspective, but my answer would be liabilities would be marked down in the event of interest rate rises, so buying BT ahead of a rising rate ramp could be quite smartBouleversee wrote: Please explain. I must have missed something.
That might depend where they've invested the assets. Increasingly sponsors of defined benefit schemes have felt obliged to hold either indexed government securities at a negative real rate of return, or fixed income government securities at rate between 1% and 2%. Either way it may reduce risk in the form of asset collapse or volatility by reduces returns as well.dealtn wrote: Eventually you could have a transformation where a situation of assets at £52bn and liabilities of £59bn could become, say, assets £65bn liabilities £45bn.
Bouleversee wrote:Did you ever consider that April 1 might not be the best day to kick off?Walrus wrote:Well one month in and the Dog Conviction Fund has had a shocking start.
Three double digit losers and a chunky loss in BT.
Petrofac -18%
Centrica -15%
Imperial - 13%
BT -6%
This fund has been seriously bad for your health if you are chaser of dogs.
Bright spots are Apple up 3%, GVC up 2 percent and marginal gains on GE.
Hmmmm, Average down on Petrofac perhaps.....
I have held those 4 for some time (BT since it was a dear little puppy) and have also been badly bitten by them all. What I want to know is when are you going to have them put down or do you think they can still improve with training? Maybe you are thinking of switching to a different type of pet? How about a few chickens which can be relied on to lay you a regular supply of eggs, albeit not golden, and make a nice roast at the end of the day; or cats which sleep much of the time but bring in the odd mouse and now and again present you with a litter of kittens which you can sell to pay the vets bills and catfood? Or you could just take a nice stroll round a zoo from time to time; much less work and worry! Dogs are not the only creatures and their tail wagging can be deceptive.
Yes, that's true.Alaric wrote:That might depend where they've invested the assets. Increasingly sponsors of defined benefit schemes have felt obliged to hold either indexed government securities at a negative real rate of return, or fixed income government securities at rate between 1% and 2%. Either way it may reduce risk in the form of asset collapse or volatility by reduces returns as well.dealtn wrote: Eventually you could have a transformation where a situation of assets at £52bn and liabilities of £59bn could become, say, assets £65bn liabilities £45bn.
Would you go so far as to suggest that such 'high-pension-deficit' companies might even act as a bit of an investment hedge if rate-rises were seen faster than might be 'generally palatable'?dealtn wrote:
Eventually you could have a transformation where a situation of assets at £52bn and liabilities of £59bn could become, say, assets £65bn liabilities £45bn. It will be interesting to hear commentators concerns about significant pension surpluses in due course. Before that you will have the situation where the £2bn funding into such schemes will be stopped, which becomes available for either capital investment or debt repayment or dividend payments.
I think the words "might" and "possible" are appropriate. I would think that companies whose demand for their product is dependent on the disposable income of their customers will be less forgiven by the market in that situation of rates rising, and available cash (and credit) to spend reducing.Itsallaguess wrote:Would you go so far as to suggest that such 'high-pension-deficit' companies might even act as a bit of an investment hedge if rate-rises were seen faster than might be 'generally palatable'?dealtn wrote:
Eventually you could have a transformation where a situation of assets at £52bn and liabilities of £59bn could become, say, assets £65bn liabilities £45bn. It will be interesting to hear commentators concerns about significant pension surpluses in due course. Before that you will have the situation where the £2bn funding into such schemes will be stopped, which becomes available for either capital investment or debt repayment or dividend payments.
I wouldn't have too much conviction that this might be the case, but it's one of the little things that's stopping me exiting a couple of companies in similar situations....
Cheers,
Itsallaguess