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No deal, investment opportunities

The Big Picture Place
odysseus2000
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No deal, investment opportunities

#348263

Postby odysseus2000 » October 16th, 2020, 1:55 pm

The PM has indicated a 'no deal' is most probable. This could all be some kind of negotiation, but if not are there any investment opportunities?:

https://youtu.be/BOtHlDnyHqo

Short term the FTSE has rallied and is currently well above yesterdays low. This could of course change.

There are 10 weeks before the 'no deal' but many business will have already prepared, so investment opportunities are likely about who has prepared well and has new profitable opportunities to exploit.

It is highly probable that some business will do very well and some will do badly giving opportunities for long and short plays.

What opportunities do poster see?

Regards,

Adamski
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Re: No deal, investment opportunities

#348269

Postby Adamski » October 16th, 2020, 2:26 pm

No deal is the worst outcome as would put up impediments to trade, sorry if sounds unpatriotic, but would be a time to divest of any uk stocks. I think buying opportunities would be smaller growth companies like YouGov and Boohoo, which do not depend on brexit.

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Re: No deal, investment opportunities

#348270

Postby richfool » October 16th, 2020, 2:31 pm

I was more concerned about my European IT holdings and might this be the beginning of the demise of the EU.

Currently, I hold: BGEU, BRGE and some JETI.

PeterGray
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Re: No deal, investment opportunities

#348348

Postby PeterGray » October 16th, 2020, 6:49 pm

richfool wrote:I was more concerned about my European IT holdings and might this be the beginning of the demise of the EU.

That was widely assumed by the Leave campaign pre ref, but all recent polls show anti EU feeling in Europe, (including the UK!) is well down. I'm not sure I can see any clear reasons why it should happen. There seem to be some move towards further federalisation which are likely to make it more robust rather than the reverse.

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Re: No deal, investment opportunities

#348349

Postby PeterGray » October 16th, 2020, 6:51 pm

Adamski wrote:No deal is the worst outcome as would put up impediments to trade, sorry if sounds unpatriotic, but would be a time to divest of any uk stocks. I think buying opportunities would be smaller growth companies like YouGov and Boohoo, which do not depend on brexit.


There's certainly nothing patriotic about Brexit, but it might pay to be more selective - stocks hoghly dependent on the UK economy are likely to suffer. Many UK companies make a lot of revenue in Europe and elsewhere globally, those that do not depend on free movement of parts for manufacturing, such as autos and planes, may do OK.

odysseus2000
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Re: No deal, investment opportunities

#348383

Postby odysseus2000 » October 16th, 2020, 9:26 pm

PeterGray wrote:
richfool wrote:I was more concerned about my European IT holdings and might this be the beginning of the demise of the EU.

That was widely assumed by the Leave campaign pre ref, but all recent polls show anti EU feeling in Europe, (including the UK!) is well down. I'm not sure I can see any clear reasons why it should happen. There seem to be some move towards further federalisation which are likely to make it more robust rather than the reverse.

The primary fault line for the EU is the North/South divide.

Current EU policy favours Northern nations over Southern ones.

Greece has been brought to its knees by not being in a free floating exchange rate as happened before the Euro and Italy has suffered too.

Some other unexpected fault line might appear, but as things are the most likely fault line that could break the EU will be this North/South split.

Regards,

gryffron
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Re: No deal, investment opportunities

#348546

Postby gryffron » October 17th, 2020, 10:24 pm

odysseus2000 wrote:Short term the FTSE has rallied and is currently well above yesterdays low. This could of course change.

Be careful. The most likely effect of a "bad" brexit, is a sell off of Sterling. Perversely, this is good for the FTSE. Since many FTSE companies earn in forex but report in Sterling. 75% of FTSE100 earnings are overseas. And over half of the FTSE250.

Regardless of where you stand on the politics of brexit, there is little reason why NoDeal should be bad for the FTSE.

Of course, if Sterling falls, individuals would likely do even better holding foreign quoted stocks. That way you get all the benefits of falling local currency without the disruption or sentiment.

Gryff

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Re: No deal, investment opportunities

#349194

Postby SalvorHardin » October 20th, 2020, 1:16 pm

gryffron wrote:Be careful. The most likely effect of a "bad" brexit, is a sell off of Sterling. Perversely, this is good for the FTSE. Since many FTSE companies earn in forex but report in Sterling. 75% of FTSE100 earnings are overseas. And over half of the FTSE250.

Regardless of where you stand on the politics of brexit, there is little reason why NoDeal should be bad for the FTSE.

Of course, if Sterling falls, individuals would likely do even better holding foreign quoted stocks. That way you get all the benefits of falling local currency without the disruption or sentiment.

My thoughts exactly. If I wanted to buy or avoid British shares which were heavily exposed to the UK economy, the FTSE100 wouldn't be the first place I'd look. Unfortunately the media persists in portraying the FTSE100 as being representative of the UK domestic economy.

Falling sterling means rising overseas earnings when converted into sterling, which means rising FTSE100 share prices. Now from the viewpoint of a foreign investor looking at the UK, there's the expectation that a rising FTSE100 might be mostly (if not completely) offset by falls in sterling. But the UK investor in the FTSE100 will see rising share prices in sterling if the pound falls out of bed in 2021 because of no trade deal. Harold Wilson's quote about "the pound in your pocket" (not changing in value after devaluation) springs to mind. Unfortunately the pound when buying imports will buy less.

Sterling-based investors who fear the economic downside of a no trade deal should move more of their money overseas. International investment trusts, tracker funds, purchasing shares in foreign companies (something that's a lot easier to do nowadays than it was in the day of Doris and her no funds, no foreigners HYP). In my case I don't have much in the UK anyway and most of that is in FTSE100 multinationals which do the vast majority of their business outside the UK. My UK focused companies are largely limited to Central London property companies and indirectly in the portfolios of several investment trusts.

Some things to bear in mind. Some of the big American and Canadian private equity specialists (KKR, Brookfield) have recently been reasonably big buyers of British property (especially in Central London). Now Central London is also a bet on coronavirus but if they thought that our relationship with the EU was going to be a disaster they would currently be avoiding the UK. Now consider that Unilever, arguably the most pro-EU company in the FTSE100, is consolidating its Dutch headquarters with its existing UK headquarters, becoming a British company rather than Anglo-Dutch.

These are decisions made with actual money, by people with skin in the game, rather than the forecasts of political and economic pundits who will suffer no adverse consequences if their forecasts turn out to be badly wrong. Too many people in the trade deal debate don't have any serious money at stake, yet we're meant to treat their forecasts as gospel.

AsleepInYorkshire
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Re: No deal, investment opportunities

#349209

Postby AsleepInYorkshire » October 20th, 2020, 2:01 pm

I think it's vital to remind ourselves that no deal will be as much a problem to the EU as it will the UK.

No deal is possible. But it's not probable in my opinion.

AiY

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Re: No deal, investment opportunities

#349219

Postby kempiejon » October 20th, 2020, 2:34 pm

AsleepInYorkshire wrote:I think it's vital to remind ourselves that no deal will be as much a problem to the EU as it will the UK.

No deal is possible. But it's not probable in my opinion.

AiY


Europe including UK is say around 20% global stock markets? So a bias towards USA, Pacific and emerging markets might ignore any local hysteria. Unless I think I have an idea I can do better I often default to a global tracker like Vanguard all-world accumulating VWRP for wrapped funds or distributing VWRL un-wrapped this is $ underlying currency again exempting one from Euro or Sterling .

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Re: No deal, investment opportunities

#349269

Postby Avantegarde » October 20th, 2020, 5:44 pm

My not-so-humble opinion is that the UK and the rest of the world faces at least three disastrous threats (political, economic and social) in the next year, all three of which are very obvious but which most people are in fact ignoring or pretending just don't exist. The three are: 1) a no-deal Brexit, leading to trade chaos. 2) no vaccine for Covid-19 (at least for quite along time). 3) re-election of Trump as US President: on so many levels he is easily the worst person ever to be elected as head of an "advanced" democratic state. My conclusion? Sell some of my shares (held in investment trusts) and keep as cash to reinvest if and when shares crash again. Stock market investors are currently like those old fashioned cartoon characters who rush off a cliff in chase of a cat or a mouse, legs whirring like car wheels, who only realise there is nothing beneath them when they look down. That is where many stock market investors and pundits are at right now.

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Re: No deal, investment opportunities

#349289

Postby SalvorHardin » October 20th, 2020, 6:51 pm

Avantegarde wrote:My not-so-humble opinion is that the UK and the rest of the world faces at least three disastrous threats (political, economic and social) in the next year, all three of which are very obvious but which most people are in fact ignoring or pretending just don't exist. The three are: 1) a no-deal Brexit, leading to trade chaos. 2) no vaccine for Covid-19 (at least for quite along time). 3) re-election of Trump as US President: on so many levels he is easily the worst person ever to be elected as head of an "advanced" democratic state.

1) The chaos of no-deal will be sorted out fairly quickly and a deal will be thrashed out. Consumer and producer pressure will see to that (food riots, French farmers blockading ports and motorways, etc.). Many political sacred cows on all sides will be slaughtered in the process.

2) No vaccine. Societies are learning to live with it and the coronavirus is nowhere near as lethal as originally feared. It's likely that there will be something reasonably effective, but if not it's probably going to evolve to ultimately be similar in overall effect on society to a bad flu virus. Which societies cope with.

3) Trump. Not even close to being the worst. e.g. Berlusconi was far worse, but because Brits don't speak Italian the media largely ignored it. Most French Presidents have been fairly dodgy, some should have been jailed, but again language influences how much it gets covered.

Trump hasn't started any wars, unlike Obama (Libya) and has facilitated three Middle East peace deals (Obama none).

Biden has mental issues, corruption and connections to hostile regimes. Many Democrat mayors and congressmen have openly supported riots and applauded the criminal destruction of private property, whilst stopping the police from dealing with rioters. Property rights and the rule of law, things prized by many investors, are going to be weakened under a Biden administration.

Gilt yields of 0.2% provide a lot of support to shares.

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Re: No deal, investment opportunities

#349312

Postby GoSeigen » October 20th, 2020, 8:11 pm

SalvorHardin wrote:Trump hasn't started any wars,


Funny! Is that some kind of achievement?

GS

odysseus2000
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Re: No deal, investment opportunities

#349319

Postby odysseus2000 » October 20th, 2020, 8:21 pm

GoSeigen wrote:
SalvorHardin wrote:Trump hasn't started any wars,


Funny! Is that some kind of achievement?

GS


The people who would have been killed in any wars maybe think so.

Regards,

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Re: No deal, investment opportunities

#349377

Postby tjh290633 » October 20th, 2020, 11:15 pm

GoSeigen wrote:
SalvorHardin wrote:Trump hasn't started any wars,


Funny! Is that some kind of achievement?

GS

Some have considered his bringing together of the UAE and Israel to be a feat of peacemaking.

TJH

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Re: No deal, investment opportunities

#349408

Postby GoSeigen » October 21st, 2020, 7:19 am

odysseus2000 wrote:
The people who would have been killed in any wars maybe think so.


Wooosh! Over his head...


Last time I counted Trump-led forces had killed people in 7 countries apart from his own. Probably more now. But let's be cute and say he hasn't started any wars. Then we can spend a few days arguing about the meaning.

GS

odysseus2000
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Re: No deal, investment opportunities

#349438

Postby odysseus2000 » October 21st, 2020, 8:59 am

GoSeigen wrote:
odysseus2000 wrote:
The people who would have been killed in any wars maybe think so.


Wooosh! Over his head...


Last time I counted Trump-led forces had killed people in 7 countries apart from his own. Probably more now. But let's be cute and say he hasn't started any wars. Then we can spend a few days arguing about the meaning.

GS


There has long been a debate in the foreign and military departments of the US, UK and others as to whether it is appropriate to kill specific individuals who are believed to be threats or take out entire nation.

There were those who argued that killing Saddam Hussein was all that was needed to fix Iraq, but it was decided that the only way was to remove the entire Iraq regime and this lead to war with lots of deaths.

There were similar arguments over Libya and Obama decided to take out the entire country rather than just take out the dictator.

The same questions were posed over Iran and Syria. Trump shied away from full on wars and took out the Iranian who was allegedly organising the terrorist operations and in Syria Trump sent them a lot of cruise missiles but did not assassinate their leader or declare war.

With North Korea Trump steered a policy of diplomacy rather that either a war or targeted assassinations.

If one was to tally the number killed in the Bush and Obama administrations and then compare them to the Trump administration I don't believe that you would find Trump had killed many more than these did although he seems to have made ISIS very much weaker in a long military campaign and has been criticised for bringing US troops home.

Whether Trump targeting of individuals was a good idea, history may tell us. Some in the UK have argued that assassinations are dangerous in that you don't know who you will then get whereas a full scale invasion allows you to have much more control.

There are pros and cons with all of these things and one can deplore them all, but they are the things that have been done, often sanctified by arguing that such operations are about protecting God's kingdom on earth.

Regards,

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Re: No deal, investment opportunities

#349455

Postby richfool » October 21st, 2020, 9:53 am

Is the current discussion recommending companies making military equipment as "No deal investment opportunities"?

If so, I wonder who makes fishing protection and Border Force vessels?

odysseus2000
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Re: No deal, investment opportunities

#349504

Postby odysseus2000 » October 21st, 2020, 11:32 am

richfool wrote:Is the current discussion recommending companies making military equipment as "No deal investment opportunities"?

If so, I wonder who makes fishing protection and Border Force vessels?


I have wondered about this but I can't find anyone who will benefit.

The makers of inflatables and outboard motors have had a bonanza with all the boats coming across the channel, but not enough to be investible.

With regard to fishing protection and border force they seem to have vessels already. In the Cod war with Iceland the Iceland operation was to use mine cable cutters to severe fishing nets, but I doubt there will be huge demand for such ships.

There are already all manner of drones being used, some of which probably come from British Aerospace but its again just a tiny part of the business.

Maybe I am missing something obvious but as of now I can't see an obvious beneficiary of a no deal and troubles with fishing boats.

Regards,

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Re: No deal, investment opportunities

#349623

Postby tjh290633 » October 21st, 2020, 5:54 pm

Moderator Message:
Thanks for bringing the thread back on topic. Let's keep it that way.

TJH


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