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LSE

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Dod101
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LSE

#446734

Postby Dod101 » September 30th, 2021, 8:09 pm

No idea if this is the right place to discuss this but if not, a mod might be kind enough to move it to a more appropriate spot.

The Economist is bewailing the more or less demise of the LSE, in its latest edition. London's stockmarket it says has spent the last decade tumbling back to earth. In 2006 shares listed in London were worth 10.4% of the global equity market. Today, that figure is 3.6%. Those left look geriatric.

Don't we know that? It quotes James Anderson of Scottish Mortgage as recently telling the FT that Britain has a 19th century stockmarket.

The Economist tells us that they think the problem is the 'chronic British disease of poor management'. British pension schemes have spent years loading upon bonds and selling shares in a myopic quest to eliminate risk. They now have too little economic exposure to growth or wealth creation and so on.

Cites the recent example of the Pru raising capital in Hong Kong and BHP deciding that its primary listing will be in Australia. We can argue about both of these issues but at the same time the dearth of start ups in London has got to be worrying.

Most of us here probably mostly invest in London. Lessons for all of us I think.

Dod

Alaric
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Re: LSE

#446739

Postby Alaric » September 30th, 2021, 8:19 pm

Dod101 wrote: British pension schemes have spent years loading upon bonds and selling shares in a myopic quest to eliminate risk. They now have too little economic exposure to growth or wealth creation and so on.


Surely that's only the defined benefit ones, which have also eliminated risk by closing themselves down wholly or partially? If replacement retirement saving is going into defined contribution schemes as well as SIPPs, aren't their assets equities? Perhaps they aren't necessarily UK equities.

Lootman
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Re: LSE

#446740

Postby Lootman » September 30th, 2021, 8:20 pm

I have been divesting from the UK for at least 20 years now. I still have more UK shares than I should, but potential CGT liabilities prevent me from allocating more appropriately. Meanwhile sterling has declined by a third over the same time period, which should be neutral for equities but somehow is not.

The UK market is narrow. There are all kinds of important sectors that the UK no longer meaningfully participates in. The FTSE-100 is dominated by energy (a horrible under-performer in recent years), pharma (where Glaxo is a dinosaur compared with some of the biotech names), finance (awful since 2007) and so on. Plus an obsession with dividend yield that inevitably crimps growth.

If you have not been invested in AAPL, MSFT, AMZN, GOOG and FB for the last 10-20 years then you have almost definitely under-performed the global index. It is inconceivable that the UK could ever produce a company or share with the pedigree of those.

If you were to ask me which UK companies were world-beating I would struggle to cite even a handful. BHP and Rio for mining, maybe, although almost all their business is overseas so it hardly matters where the domicile is. Diageo, I guess. Unilever although Nestles and P$G has that covered. Any other suggestions?

fisher
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Re: LSE

#446748

Postby fisher » September 30th, 2021, 8:43 pm

Lootman wrote:If you were to ask me which UK companies were world-beating I would struggle to cite even a handful. BHP and Rio for mining, maybe, although almost all their business is overseas so it hardly matters where the domicile is. Diageo, I guess. Unilever although Nestles and P$G has that covered. Any other suggestions?


Halma (HLMA) would be my suggestion. I've held it for 15 years or so and it has performed admirably. I topped it up further in 2008 as it paid a good dividend and had an enviable record of above average annual dividend increases. I bought it in my HYP at the time!

It looks like it has out performed AAPL if I got the chart comparison right looking since the 1990s.

I also hold Renishaw (RSW) and Croda (CRDA) who have done very well for me. Also SmithDS (SMDS) who have returned me an IRR of over 20% (a good part of which has been dividends) for well over a decade.

Lootman
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Re: LSE

#446752

Postby Lootman » September 30th, 2021, 8:51 pm

fisher wrote:
Lootman wrote:If you were to ask me which UK companies were world-beating I would struggle to cite even a handful. BHP and Rio for mining, maybe, although almost all their business is overseas so it hardly matters where the domicile is. Diageo, I guess. Unilever although Nestles and P$G has that covered. Any other suggestions?

Halma (HLMA) would be my suggestion. I've held it for 15 years or so and it has performed admirably. I topped it up further in 2008 as it paid a good dividend and had an enviable record of above average annual dividend increases. I bought it in my HYP at the time!

It looks like it has out performed AAPL if I got the chart comparison right looking since the 1990s.

I also hold Renishaw (RSW) and Croda (CRDA) who have done very well for me. Also SmithDS (SMDS) who have returned me an IRR of over 20% (a good part of which has been dividends) for well over a decade.

Funnily enough I held all four of those for a good number of years, but offloaded them earlier this year as part of my exit from the UK. They did do well, I will concede, along with a whole bunch of UK names that did not do well of course.

murraypaul
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Re: LSE

#446756

Postby murraypaul » September 30th, 2021, 9:30 pm

Lootman wrote:If you have not been invested in AAPL, MSFT, AMZN, GOOG and FB for the last 10-20 years then you have almost definitely under-performed the global index. It is inconceivable that the UK could ever produce a company or share with the pedigree of those.

If you were to ask me which UK companies were world-beating I would struggle to cite even a handful. BHP and Rio for mining, maybe, although almost all their business is overseas so it hardly matters where the domicile is. Diageo, I guess. Unilever although Nestles and P$G has that covered. Any other suggestions?


I think ARM would be a contender for both paragraphs.
They absolutely dominate their space (sub-PC computing), and are moving into PC and server.
(No longer listed on LSE, but was prior to being bought out)

Dod101
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Re: LSE

#446760

Postby Dod101 » September 30th, 2021, 9:47 pm

Alaric wrote:
Dod101 wrote: British pension schemes have spent years loading upon bonds and selling shares in a myopic quest to eliminate risk. They now have too little economic exposure to growth or wealth creation and so on.


Surely that's only the defined benefit ones, which have also eliminated risk by closing themselves down wholly or partially? If replacement retirement saving is going into defined contribution schemes as well as SIPPs, aren't their assets equities? Perhaps they aren't necessarily UK equities.


I am only quoting the article but I guess it is only the DB ones that they are referencing. But Dc schemes are not necessarily all in equities of course. They could even be simply in cash.

Dod

SalvorHardin
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Re: LSE

#446769

Postby SalvorHardin » September 30th, 2021, 10:14 pm

The London Stock Exchange itself. Nick Train is a huge fan.

Relx, what used to be called Reed Elsevier. Huge in information analytics. Another Nick Train favourite.

Yes, London is stuffed full of old tech companies, many of which are badly run (e.g. the banks) or are price takers (oils, miners).

There are plenty of good smaller companies, but British anti-success culture and punitive regulation makes it very difficult to scale up to anything like the sort of company we'd see in America. Selling up is much easier than trying to fight that.

Nowadays my first choice for new money is anywhere outside the FTSE100. If a share qualifies for a classic TLF HYP I wouldn't touch it

odysseus2000
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Re: LSE

#446810

Postby odysseus2000 » October 1st, 2021, 12:32 am

The lamentable performance of the UK stock market is mirrored all across Europe where there is little growth and very few 21st century business. If you think about all the growth business: Apple, Amazon, Facebook, Google, Tesla,... on and on with new ones emerging all the time, they are nearly all based in the US.

The renewables industry is a good example of a new industry that could have been financed by new companies selling shares and raising capital, the sort of stuff stock markets are for, but instead the renewables industry has been created by transferring wealth from all UK energy consumers and giving it to foreign companies with various politicians and their families repeatedly scooping out big shovels full of cash for themselves.

Most UK investment funds have a statutory mandate to invest a significant portion of their clients funds in bonds. There are obvious reasons why this could be a good idea at some time, but with bonds having minimal and sometimes negative yields it is not appropriate for current conditions.

This situation has been easy to see for the last 30+ years. I recall when Fool uk started, suggesting that they needed to have US equities in their various portfolio, such as what was called the Quality portfolio, run by Bruce. He was however, focused on UK stocks of yesteryear like Marks and Spencer. One of his arguments was that nearly everyone in the UK wore underwear sold by M&S. I remember discussing M&S with my mother and being told that M&S was nothing like it used to be, but Bruce knew best from his accountant study of the accounts. His investment in that and the QP didn't end well!

Regards,

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Re: LSE

#446848

Postby tjh290633 » October 1st, 2021, 8:45 am

odysseus2000 wrote:This situation has been easy to see for the last 30+ years. I recall when Fool uk started, suggesting that they needed to have US equities in their various portfolio, such as what was called the Quality portfolio, run by Bruce. He was however, focused on UK stocks of yesteryear like Marks and Spencer. One of his arguments was that nearly everyone in the UK wore underwear sold by M&S. I remember discussing M&S with my mother and being told that M&S was nothing like it used to be, but Bruce knew best from his accountant study of the accounts. His investment in that and the QP didn't end well!

Regards,

The first share my mother bought in the 1960s, when she sold her house, was M&S because she got many of her clothes from them. She also bought Brooke Bond Liebig because she drank their tea. M&S was a particularly good investment as they grew rapidly, with successive scrip issues, turning her original 50 shares into many more. I still have them in the expectation that they will revive.

TJH

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Re: LSE

#446892

Postby odysseus2000 » October 1st, 2021, 10:39 am

The first share my mother bought in the 1960s, when she sold her house, was M&S because she got many of her clothes from them. She also bought Brooke Bond Liebig because she drank their tea. M&S was a particularly good investment as they grew rapidly, with successive scrip issues, turning her original 50 shares into many more. I still have them in the expectation that they will revive.

TJH


I know several people who cling on to M&S shares. One of these investors told me how vexed she was during the period before M&S accepted cards as way of payment and yet she kept her shares. Nothing would shake her from the belief that they would do well.

Mks over near 20 years has gone from 146 to 182 having peaked at 467 in 2015, i.e 1.2x:

https://twitter.com/0_ody/status/144386 ... 01833?s=20

Boo hoo has gone from 85 to 213 having peaked at 433, i.e. 2.5x:

https://twitter.com/0_ody/status/144387 ... 10528?s=20

Apple has gone from 0.23 to 141, i.e 613x

https://twitter.com/0_ody/status/144387 ... 16320?s=20

M&S did not pay a dividend this year, Apple paid about 80 cents, payments every quarter.

This leads me to conclude that consumer electronics is an altogether better business than the rag trade.

Regards,

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Re: LSE

#447052

Postby GrahamPlatt » October 1st, 2021, 5:59 pm


odysseus2000
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Re: LSE

#447081

Postby odysseus2000 » October 1st, 2021, 8:08 pm

GrahamPlatt wrote:https://www.theguardian.com/business/2021/oct/01/welsh-scientist-makes-potential-539m-fortune-from-biotech-flotation-in-us


Good finds, but these are early stage startups with potential rather than products at least as I understand it and these two bright sparks don't make up for 30+ years of very little.

Regards,


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