GoSeigen wrote:Starting to deploy the proceeds of the Liverpool Corp bonds that were redeemed recently, yesterday I bought 3200 Marstons shares close to their lows at 34.324p
Cash balance is £2,901.07 after the purchase.
I've now carried out two more trades to invest the remainder of Liverpool corp proceeds.
Normally I'd buy gilts, given their collapse in price, but I think apart from the short end a gilts purchase i premature. The market is still full of pessimism, interests rates still in their rising phase and the pound has had a good run. As a result I still like UK shares and especially banks so have made two purchases accordingly.
INVR is a preference share but with the unconventional feature that its coupon payments track the UK BoE base rate directly. Thus I think mortgage payers' loss is this security's gain, and we all know how mortgage payers are feeling at the moment. Interest rates are back where they were before the GFC, but INVR share price is only about 60% of its 2007 issue price. That gives room for appreciation, with about 11% running yield while holders wait. A big risk of course is that the rise doesn't come and then rates collapse. I am happy to take the risk of that scenario with a modest holding, as this will represent a cash-like component of the portfolio albeit with super-charged interest payments for the time being. Sorry, made this trade in early Aug but only reporting now.
The other purchase is Barclays which is already a component of this account. Barclays has been trading sideways for years and in a tight range for the past six months. Previous purchase was in March at the bottom of that range. With the price having ticked up a bit I'm ready to add more. I still believe banks are going to receive a wall of cash from their customers, resulting in excess capital will either be returned to share holders or be used to lend at the new juicy margins available today. Add in the effect on top line of inflation and I still think the future is rosy for the banks. I love that most people are not interested in them or moan about everything they do. One day everyone will love bank shares and then hopefully we'll be sensible enough to be selling down this holding to them.
It's worth noting that BARC has been a rotten investment so far for this account, I clearly started buying way too early in 2016 but fortunately have added gradually with only a further £2800-worth added to the holding before this year. In that time the dividends have risen from 3p per share to 7p per share with an additional capital return via buyback of roughly a further 5p per share, so it's not all bad.
Here are the purchase details:
Date Trade Symbol Unit Price Quantity Fees Value
07 Aug 2023 BUY INVR 555 320 £20.83 -£1,796.83
15 Sep 2023 BUY BARC 155.26 780 £18.01 -£1,229.04