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Couple of one time heavyweights

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Dod101
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Couple of one time heavyweights

#341341

Postby Dod101 » September 19th, 2020, 11:02 am

I am bemused to note that Shell London shares have now fallen below £10, closing on Friday at £9.905, and HSBC is now just above £3 at £3.03. How have the mighty fallen.

At these prices it is too late to sell so I will just need to hang on but what a change in fortunes in the last few years. If I were a business I would be showing those two holdings together with Imperial Brands if not exactly discontinued businesses (not yet anyway), then certainly as businesses held for sale, which I intend to do over the longer term.

Do not know if this is the right Board or not.

Dod

dspp
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Re: Couple of one time heavyweights

#341387

Postby dspp » September 19th, 2020, 3:24 pm

I moved this from share news to share ideas. Regards, dspp

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Re: Couple of one time heavyweights

#341390

Postby AlumniLawn » September 19th, 2020, 3:53 pm

Dod101 wrote:I am bemused to note that Shell London shares have now fallen below £10, closing on Friday at £9.905, and HSBC is now just above £3 at £3.03. How have the mighty fallen.

At these prices it is too late to sell so I will just need to hang on but what a change in fortunes in the last few years. If I were a business I would be showing those two holdings together with Imperial Brands if not exactly discontinued businesses (not yet anyway), then certainly as businesses held for sale, which I intend to do over the longer term.

Do not know if this is the right Board or not.

Dod


But is it "too late to sell"?

Lets say that the shares were worth £1,000 and now imagine that you had that £1,000 available as cash for investment. Would you buy Shell/HSBC or some other share that has a far better chance of growing your money to (say) £1,500? The question surely is "which share has the best chance of faster returns"? And if it isn't Shell/HSBC then redeploy the money somewhere else.

I don't think that it's ever too late to sell but one must struggle against the emotive side of selling at a loss which is notoriously difficult I know.

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Re: Couple of one time heavyweights

#341397

Postby Adamski » September 19th, 2020, 4:58 pm

I'd hold rdsb and sell hsbc then go back in in 8 months before it pays its next dividend. Using my simplistic logic that I wouldn't want to hold a uk stock which didn't pay a dividend.

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Re: Couple of one time heavyweights

#341407

Postby dealtn » September 19th, 2020, 6:25 pm

Happy holding IMB, offside but still the investing logic holds. Possibly tempted to add more but would need to sell something else first. Nothing immediately says disinvest though.

Other than a share suspension it is only "emotion" that prevents one from selling.

Dod101
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Re: Couple of one time heavyweights

#341414

Postby Dod101 » September 19th, 2020, 8:22 pm

I certainly do not disagree with any of the recent comments. I am not emotionally attached to any of these shares but I think that HSBC for instance is very oversold and having held on for as long as I have I might just as well retain it until it announces a resumption of dividends when I expect that the share price will rebound. That is why I say it is too late to sell. As for Shell, it is going to be a long haul for it to move into the new age and get rid of fossil fuels but at least it is still paying some dividend so again I will hang in there for the time being.

For Imperial Brands I have concluded that I will probably be happy enough to keep but one tobacco investment. These businesses are in long term decline so one is enough and BAT has the better record. There will be a trading statement from Imps in early October, the first I think since the new CEO was in situ so it will be interesting to see if he makes any announcement about future plans for the business. I will sell my remaining holding though if the price seems right.

That is my current thinking anyway and an explanation for my earlier post.

Dod

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Re: Couple of one time heavyweights

#341420

Postby Itsallaguess » September 19th, 2020, 9:12 pm

AlumniLawn wrote:
I don't think that it's ever too late to sell but one must struggle against the emotive side of selling at a loss which is notoriously difficult I know.


I found it terribly difficult, in fact almost impossible to be honest, but for the first sale only....

After that, I found that the huge emotional hurdle almost disappeared overnight, and now when the inevitable sour notes appear on the song sheet (there really is no avoiding them over a long investment lifetime...), I am actually now quite happy to see the back of investments that go so wrong that there's never a chance of getting the original stake back, and I now find that there is a huge sense of relief when such relatively small holdings disappear completely from my on-line portfolios or tracking spreadsheets.

I now look back and consider how I used to hang on to relatively tiny legacy holdings in abject horror, and can only advise anyone that finds themselves staring at those huge red losses, unable to press that 'Sell' button for the first time, to just get over that first hurdle and walk away...

It almost instantly feels better, and it almost instantly gets easier after that first time...

If a loss is so great that a doubling or even a trebling of a holding from it's current lowly position would still only cause a slight ripple at overall portfolio level, then the persistent pain from continuing to carry such holdings will never make sense to me again...

Pull stumps and move on. It's the hope that kills you...

Cheers,

Itsallaguess

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Re: Couple of one time heavyweights

#341434

Postby monabri » September 20th, 2020, 1:22 am

The Telegraph is carrying a few articles on HSBC ( and Standard Chartered). They might be paywalled?

https://www.telegraph.co.uk/business/20 ... cal-truth/

https://www.telegraph.co.uk/business/20 ... ons-could/

Not pleasant reading.

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Re: Couple of one time heavyweights

#341464

Postby jackdaww » September 20th, 2020, 9:50 am

sell -- and smile.

:) :)

Dod101
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Re: Couple of one time heavyweights

#341466

Postby Dod101 » September 20th, 2020, 10:00 am

I honestly do not think that it takes an article in the Telegraph to tell us that HSBC and Standard Chartered are poor investments at the moment, but I expect them to improve as time goes by. As it happens I am probably still on the positive side with HSBC as I have held them for a very long time but that is to me completely irrelevant at the moment. I just think that I will be able to get a better price in the longer run so will just leave them for now.

Dod

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Re: Couple of one time heavyweights

#341469

Postby Itsallaguess » September 20th, 2020, 10:06 am

monabri wrote:
The Telegraph is carrying a few articles on HSBC ( and Standard Chartered). They might be paywalled?

https://www.telegraph.co.uk/business/20 ... cal-truth/

https://www.telegraph.co.uk/business/20 ... ons-could/


Just a quick note about Telegraph articles generally - if read on a PC browser, a refresh of the page followed by a quick and well-timed press of the 'ESC' button will often give good results...

Cheers,

Itsallaguess

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Re: Couple of one time heavyweights

#341873

Postby jackdaww » September 22nd, 2020, 9:32 am

are there any thoughts on lgen legal and general - now at 180p ?

:o

Dod101
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Re: Couple of one time heavyweights

#341887

Postby Dod101 » September 22nd, 2020, 10:22 am

jackdaww wrote:are there any thoughts on lgen legal and general - now at 180p ?

:o


I would certainly buy them at that price but I have enough. They have maintained/increased their dividend since the Covid struck in March. Like most financials you may not get too much capital growth but they seem quite dependable but who knows?

Dod

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Re: Couple of one time heavyweights

#341934

Postby UncleEbenezer » September 22nd, 2020, 12:41 pm

Adamski wrote:I'd hold rdsb and sell hsbc then go back in in 8 months before it pays its next dividend. Using my simplistic logic that I wouldn't want to hold a uk stock which didn't pay a dividend.


I'd use the opposite logic. When the dividend is suspended (but expected to return), the price gets depressed by the suspension, making it the worst time to sell.

Longer-term trends fall outside the scope of that logic. Hence it applies to (acute) Covid damage, but not to long-term brexit damage.

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Re: Couple of one time heavyweights

#343067

Postby Pete675 » September 26th, 2020, 6:27 pm

As said before hold RDSB and sell HSBC. Banking shares in general are a dreadful investment and look likely to remain so for the foreseeable. Possible exceptions for some overseas banking shares eg Bank of America or - in this country - for a challenger bank with apparently sound fundamentals like PAG.

ADrunkenMarcus
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Re: Couple of one time heavyweights

#343095

Postby ADrunkenMarcus » September 26th, 2020, 9:44 pm

jackdaww wrote:are there any thoughts on lgen legal and general - now at 180p ? :o


If they maintain and then, over the coming years, modestly grow the dividend, then the current dividend yield should come down significantly IMHO, so you should benefit from a 'double whammy' with a rising share price as the current dividend yield comes down and your dividend yield on cost rises.

Best wishes

Mark.

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Re: Couple of one time heavyweights

#343166

Postby dealtn » September 27th, 2020, 11:32 am

ADrunkenMarcus wrote:
jackdaww wrote:are there any thoughts on lgen legal and general - now at 180p ? :o


If they maintain and then, over the coming years, modestly grow the dividend, then the current dividend yield should come down significantly IMHO, so you should benefit from a 'double whammy' with a rising share price as the current dividend yield comes down and your dividend yield on cost rises.

Best wishes

Mark.


I think you look at this the wrong way.

It isn't the paying of the dividend that will drive the share price, it is the underlying business success and the cash flows that determine the value of the company. The success, or otherwise, of the underlying business, is the driver and derives the ability to pay the dividend. If they are modestly growing the dividend it will be because of the success of the business.

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Re: Couple of one time heavyweights

#343170

Postby ADrunkenMarcus » September 27th, 2020, 11:47 am

dealtn wrote:It isn't the paying of the dividend that will drive the share price, it is the underlying business success and the cash flows that determine the value of the company. The success, or otherwise, of the underlying business, is the driver and derives the ability to pay the dividend. If they are modestly growing the dividend it will be because of the success of the business.


Exactly, a growing dividend comes from fundamental growth in the business and generation of free cash flow. I've not argued otherwise! A growing business and rising free cash flow generation underpinning a growing dividend is therefore likely to increase the share price over time and bring down the current dividend yield.

Best wishes

Mark.

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Re: Couple of one time heavyweights

#343172

Postby dealtn » September 27th, 2020, 11:58 am

ADrunkenMarcus wrote:
dealtn wrote:It isn't the paying of the dividend that will drive the share price, it is the underlying business success and the cash flows that determine the value of the company. The success, or otherwise, of the underlying business, is the driver and derives the ability to pay the dividend. If they are modestly growing the dividend it will be because of the success of the business.


Exactly, a growing dividend comes from fundamental growth in the business and generation of free cash flow. I've not argued otherwise! A growing business and rising free cash flow generation underpinning a growing dividend is therefore likely to increase the share price over time and bring down the current dividend yield.

Best wishes

Mark.


Apologies then, in that case. I interpreted, incorrectly it seems, that you were arguing the dividend was the driver, not the ability (based on the underlying business) to deliver the dividend(s).

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Re: Couple of one time heavyweights

#343175

Postby ADrunkenMarcus » September 27th, 2020, 12:10 pm

dealtn wrote:Apologies then, in that case. I interpreted, incorrectly it seems, that you were arguing the dividend was the driver, not the ability (based on the underlying business) to deliver the dividend(s).


Maybe I could have been clearer. The market is obviously sceptical to a degree because the dividend yield is so high, however there does seem to be a disconnect between LGEN's reported results and ability to pay the dividend (which they are doing) and the market's scepticism. If LGEN continues to do well and pay a dividend accordingly then 'Mr. Market' may then re-assess and re-rate upwards.

Best wishes

Mark.


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