OldBoyReturns wrote:air04 wrote:It is now at 558.50 to buy. I bought some at 560.95 this morning.
Remarkable price. By my maths, at that price, INVR is currently accumulating interest at 11.2% a day. This would rise to 11.6% if the BoE increases base to 5.5% next week as expected.
Being pedantic, it's 11.2% a year, not a day!! But yes, if the yield narrows relative to other preference shares there's also some capital growth to look forward to.
Surerera wrote:If there was a large seller of MBSR
Sorry for any confusion, I meant INVR of course, not MBSR (though the logic would equally apply).
Surerera wrote:As for smart/dumb money, I'm not sure there is such a thing. I've never heard of a trader who hasn't lost money so on something. Sometimes we've all been smart and we've all been dumb (I certainly have!).
Point taken, but I'd say they are smart/dumb by definition, no? Smart money buys low, sells high with dumb money the other way round. Of course everyone has disasters (multiple in my case: sold practically all AAPL shares in 2005, all ARM shares in 2007/8, bought AFREN bonds 3 months before bankruptcy, etc) but I think there are people who have the trading psychology basically right and those who consistently get it wrong.
BullDog wrote:What's the catch?
What was the catch with Costain, BullDog? You never did tell me...
The catch with INVR is fairly obvious: if interest rates fall then the coupon also falls (as it is tied to BoE base rate) so to maintain the same yield the price would also have to fall. So falling income and falling capital value simultaneously.
Bought a few below 560 today. Nice price and the spread is tight.
GS