US shares

[TheMotorcycleBoy]

Unless DT gets impeached first ...that too might provide a good opportunity.

I suppose the markets will react, but I'm not sure what the effect would be on £/$ or MasterCard valuation to be honest.

Matt

[PrefInvestor]

Unless DT gets impeached first ...that too might provide a good opportunity.

I suppose the markets will react, but I'm not sure what the effect would be on £/$ ......

Matt

Hi Matt, I keep thinking about buying some Microsoft shares, but always find something to put me off TBH. I did a bit of analysis over the weekend to see what effect the recent rise in the GBP vs the USD has been, see spreadsheet extract below:-



So with the 1% currency charge on both buying and selling made by my broker that would have just about wiped out all my gains had I bought on 9th October. However with a further upward move of the GBP likely to perhaps 1.35-1.40 from the election from what I have read I am once again discouraged from acting now.

All that said the YTD figures clearly show that the investment would have been worthwhile.

ATB

Pref

PS Recently sold all my UKW close to 149 on the basis that I cant see it going much higher and the yield is now only ~4.5%. Am switching to one of the other renewables.

[TheMotorcycleBoy]

Unless DT gets impeached first ...that too might provide a good opportunity.

I suppose the markets will react, but I'm not sure what the effect would be on £/$ ......

Matt

Hi Matt, I keep thinking about buying some Microsoft shares, but always find something to put me off TBH. I did a bit of analysis over the weekend to see what effect the recent rise in the GBP vs the USD has been, see spreadsheet extract below:-



So with the 1% currency charge on both buying and selling made by my broker that would have just about wiped out all my gains had I bought on 9th October. However with a further upward move of the GBP likely to perhaps 1.35-1.40 from the election from what I have read I am once again discouraged from acting now.

All that said the YTD figures clearly show that the investment would have been worthwhile.

ATB

Pref

PS Recently sold all my UKW close to 149 on the basis that I cant see it going much higher and the yield is now only ~4.5%. Am switching to one of the other renewables.

Hi Pref,

Yes with the currency rate it's easy to put yourself off "forever". Interestingly when I took the plunge and bought MSFT we were only about £/$ = 1.2. And now we are 1.29. But my MSFT holding in my foli is already in +ve terrority. And DIS is picking up too.

My philosophy is that as long as I try my best to time my buys as to being in a slight dip in the local market of the share (US in this case), then over time things will even out regardless of the spot £/$.

Being a techie boy makes me very sure now that MSFT is a good one. I personally hate the Windows OS (I use linux whenever I can) but Windows is very small in M$'s entire portfolio now, and I can see immense interest in a lot of their other offerings.

Furthermore (the same case can be argued to some extent for DIS and MCD) as the developing world catches up with the developed world the markets of the likes of MSFT will continue to grow. But I find it very hard to predict similar levels of longevity in much that's domiciled over in the UK - obviously at the exclusion of ones like ULVR, DGE, REL that are already "multinational". That's why I decided to make the leap into US (foreign) stocks. I still haven't bought a FANNG mind you. I've considered Facebook (Instagram is probably the growth area there?) but I'd need to do much more research first.

Matt

[SalvorHardin]

This week's Economist has a good article about Disney's streaming service and how the entertainment industry is being changed by streaming.

It's not all a bed of roses; competition is heating up and a lot of money is being thrown at producing programmes. It's impossible to see most of what you would like to see nowadays because there are so many good series being made. Great for consumers, but not so good for investors. Apple in particular seems to have spent a huge amount for very little.

https://economist.com/briefing/2019/11/ ... ertainment

Disney's "The Mandalorian" is getting great reviews and consumer feedback. IMHO it's the best Star Wars made since Disney bought Lucasfilm. It's old school Star Wars with more than a touch of spaghetti western (and Samurai-Ronin films).

Disney has one huge advantage over Netflix. It can cross sell its other businesses using streaming customers' data. Especially toys; The Mandalorian has one character whose toy potential is phenomenal (any more information would be a spoiler, the UK won't get Disney+ until next March). Netflix doesn't have other businesses with which to cross sell.

One scenario that I don't think is too far fetched is that Apple buys Disney in a few years.

[TheMotorcycleBoy]

This week's Economist has a good article about Disney's streaming service and how the entertainment industry is being changed by streaming.

It's not all a bed of roses; competition is heating up and a lot of money is being thrown at producing programmes. It's impossible to see most of what you would like to see nowadays because there are so many good series being made. Great for consumers, but not so good for investors. Apple in particular seems to have spent a huge amount for very little.

Indeed, it seems nothing is perfect. I've read about sale of cheap hacked Disney+ accounts.

https://www.zdnet.com/article/thousands ... ng-forums/

Apparently this is not a sign of a shortcoming of Disney's service or implementation. It is "merely" another case of credential stuffing, this term is a new one on me:

https://www.wired.com/story/disney-plus ... -stuffing/

but after a very quick parse of the above article, I believe this practice (which could affect any service provided online I *think*) occurs like this

1. Lots of people use the same password for various logins
2. Some of those logins get compromised and the credentials (i.e. user name + password pair) are saved to a database
3. Presumably some of the owners of those hacked logins (i.e. the ones who use same password multilaterally) get a Disney+ account
4. I believe that act of "credential stuffing" would be that the criminal then sells "an account" to someone, gets them to set their user+password
5. But when this account sends a request to Disney+ some logic implemented by the hacker overwrites ("stuffs") the user+password with the ones which exist in the database of accounts which have previously been comprised....and also whose owner has just acquired a valid Disney+ account.

How much Disney+ revenue is lost this way is presumably quite low, however.

Matt

[TheMotorcycleBoy]

Wow.

Has anyone mentioned Coca cola (NYSE:KO) on this thread yet? Isn't that one of Buffett's faves? I don't own any but it's certainly on my radar to research and run the numbers.

I see it's running, according to google https://www.google.com/search?q=coca+co ... 8&oe=utf-8 at about 30x earnings, which just at my topmost buying range. But perhaps it's worth a punt.

Any opinions on this one, people?

Matt

[simoan]

Wow.

Has anyone mentioned Coca cola (NYSE:KO) on this thread yet? Isn't that one of Buffett's faves? I don't own any but it's certainly on my radar to research and run the numbers.

I see it's running, according to google https://www.google.com/search?q=coca+co ... 8&oe=utf-8 at about 30x earnings, which just at my topmost buying range. But perhaps it's worth a punt.

Any opinions on this one, people?

Matt

I don't know where you got that earnings multiple from? My data tells me the forward P/E is a smidge over 24 based on forecast 2020 EPS of $2.26 USD. I don't have a view on Coke because I already own PepsiCo which is slightly cheaper at 23x 2020 EPS.

All the best, Si

[TheMotorcycleBoy]

Wow.

Has anyone mentioned Coca cola (NYSE:KO) on this thread yet? Isn't that one of Buffett's faves? I don't own any but it's certainly on my radar to research and run the numbers.

I see it's running, according to google https://www.google.com/search?q=coca+co ... 8&oe=utf-8 at about 30x earnings, which just at my topmost buying range. But perhaps it's worth a punt.

Any opinions on this one, people?

Matt

I don't know where you got that earnings multiple from? My data tells me the forward P/E is a smidge over 24 based on forecast 2020 EPS of $2.26 USD. I don't have a view on Coke because I already own PepsiCo which is slightly cheaper at 23x 2020 EPS.

All the best, Si

Hi Si,

Sorry the multiple was from that google search link I attached in the earlier post. Yes it's probably wrong. I'm at work and in a hurry, and haven't researched them properly. But I was eager to kick off the question i.e. "What do people think of NYSE:KO as an investment, in general and as a current buy?".

I apologise if the earlier statement has mislead anyone.

Matt

[ADrunkenMarcus]

I don't know where you got that earnings multiple from? My data tells me the forward P/E is a smidge over 24 based on forecast 2020 EPS of $2.26 USD. I don't have a view on Coke because I already own PepsiCo which is slightly cheaper at 23x 2020 EPS.

Pepsi also has diversification from its snacks business. And it tastes better! Pepsi was winning the cola wars, but brand mismanagement did them in:

https://theconservativeincomeinvestor.c ... d-decline/

Even so, the company performed very well.

Best wishes

Mark.

[TheMotorcycleBoy]

My current angst re. buying anymore US shares, is that the SP500 is flying so high right now. I'm wondering if a small correction is in the post.

Matt

[simoan]

My current angst re. buying anymore US shares, is that the SP500 is flying so high right now. I'm wondering if a small correction is in the post.

Matt

If you're worried about a correction, you'd never have invested in the past few years and missed out on big gains in the S&P 500. I read a comment elsewhere today that on a forward PEG basis the S&P is slightly better value than the FTSE. I would just concentrate on finding individual companies on reasonable valuations and let the index look after itself. It would be a rare occurrence for the US market to go south in an election year and once all the posturing stops I would anticipate a post US-China trade war bounce.

All the best, Si

[TheMotorcycleBoy]

My current angst re. buying anymore US shares, is that the SP500 is flying so high right now. I'm wondering if a small correction is in the post.

Matt

If you're worried about a correction, you'd never have invested in the past few years and missed out on big gains in the S&P 500.

Don't forget Mel and I only started investing in shares in March 2018, and our first exposure to US shares was sometime this summer with Walt Disney.

I read a comment elsewhere today that on a forward PEG basis the S&P is slightly better value than the FTSE.

Ok. Thanks - that's interesting to know. I guess my Devil's Advocate remark would be presumably the Earnings jump was mostly due to the Tax cuts a la Trump. So it does not necessarily speak volumes about US-side efficiencies. And on that note, does the comment to which you refer (re. forward PEG) price in potential tax cuts in a future UK, out of interest?

I would just concentrate on finding individual companies on reasonable valuations and let the index look after itself.

I'm sure you're right Si. Hopefully that's what I've been doing so far. So far we have Walt Disney DIS, Microsoft MSFT, Macdonalds MCD and Intel INTC. I'm definitely sticking to big brands, which seem to be cash generative (in some cases have net cash on BSs).

It would be a rare occurrence for the US market to go south in an election year and once all the posturing stops I would anticipate a post US-China trade war bounce.

Well Coca-cola will be my next port of call - and possibly Facebook at sometime. In terms of your last remark, my concern isn't really if the market goes south in the next year or so, but really whether the US market pricing currently represents long term value - for example in a changed US, say in a few years time with a prudent Government with higher taxes and higher interest rates. I suppose in that case, by my best insurance against this, is when I run the numbers, for example on Coca-cola, I check that the ONs (e.g. PE, PEG, yield) are comparable with the historic figures if and when I choose to buy.

Another thing which is telling me to slow down on purchasing US stocks is that by and large I've purchased them with £ to $ ratio being not that much more than 1.21 - 1.28. IOW I could see capital deprecation in these if sterling grows markedly, post Brexit, as compared to the growth of the stocks. Of course these are all unknowns, which I can't change or predict, but presumably should be aware of?

Matt

[simoan]

My current angst re. buying anymore US shares, is that the SP500 is flying so high right now. I'm wondering if a small correction is in the post.

Matt

If you're worried about a correction, you'd never have invested in the past few years and missed out on big gains in the S&P 500.

Don't forget Mel and I only started investing in shares in March 2018, and our first exposure to US shares was sometime this summer with Walt Disney.

Yes, but that was 18 months ago. You could have made the exact same argument for not investing in the S&P 500 18 months ago, and look at the gains you missed out on - it's gone up over 20% despite the sell off this time last year.

I read a comment elsewhere today that on a forward PEG basis the S&P is slightly better value than the FTSE.

Ok. Thanks - that's interesting to know. I guess my Devil's Advocate remark would be presumably the Earnings jump was mostly due to the Tax cuts a la Trump. So it does not necessarily speak volumes about US-side efficiencies. And on that note, does the comment to which you refer (re. forward PEG) price in potential tax cuts in a future UK, out of interest?

I was referring to the forward PEG i.e. for FY 2020, so historic tax cuts have washed through and if anything they only make the forward picture for EPS growth look even more impressive.

I would just concentrate on finding individual companies on reasonable valuations and let the index look after itself.

I'm sure you're right Si. Hopefully that's what I've been doing so far. So far we have Walt Disney DIS, Microsoft MSFT, Macdonalds MCD and Intel INTC. I'm definitely sticking to big brands, which seem to be cash generative (in some cases have net cash on BSs).

It would be a rare occurrence for the US market to go south in an election year and once all the posturing stops I would anticipate a post US-China trade war bounce.

Well Coca-cola will be my next port of call - and possibly Facebook at sometime. In terms of your last remark, my concern isn't really if the market goes south in the next year or so, but really whether the US market pricing currently represents long term value - for example in a changed US, say in a few years time with a prudent Government with higher taxes and higher interest rates. I suppose in that case, by my best insurance against this, is when I run the numbers, for example on Coca-cola, I check that the ONs (e.g. PE, PEG, yield) are comparable with the historic figures if and when I choose to buy.

You're overthinking things. The future is always unknown and you have to invest on that basis. Concentrate on things you can control like picking good companies, holding them preferably forever but dumping them when something goes seriously wrong.

Another thing which is telling me to slow down on purchasing US stocks is that by and large I've purchased them with £ to $ ratio being not that much more than 1.21 - 1.28. IOW I could see capital deprecation in these if sterling grows markedly, post Brexit, as compared to the growth of the stocks. Of course these are all unknowns, which I can't change or predict, but presumably should be aware of?

Matt

Again, trying to predict currency fluctuations is a bit of a mugs game because they are a "known unknown". There are all kinds of "known unknowns" when you invest and exchange rates is just one of them. If it really matters to you, you can spend time making sure your portfolio is sort of currency neutral, if you want. Personally I don't have time to play on the swings and roundabouts...

All the best, Si

[JamesMuenchen]

I find it interesting that Apple has doubled this year ... 52 Week Range $142.00 - 281.90

So much for efficient markets.

[TheMotorcycleBoy]

I would just concentrate on finding individual companies on reasonable valuations and let the index look after itself.

I'm sure you're right Si. Hopefully that's what I've been doing so far. So far we have Walt Disney DIS, Microsoft MSFT, Macdonalds MCD and Intel INTC. I'm definitely sticking to big brands, which seem to be cash generative (in some cases have net cash on BSs).

It would be a rare occurrence for the US market to go south in an election year and once all the posturing stops I would anticipate a post US-China trade war bounce.

Well Coca-cola will be my next port of call - and possibly Facebook at sometime. In terms of your last remark, my concern isn't really if the market goes south in the next year or so, but really whether the US market pricing currently represents long term value - for example in a changed US, say in a few years time with a prudent Government with higher taxes and higher interest rates. I suppose in that case, by my best insurance against this, is when I run the numbers, for example on Coca-cola, I check that the ONs (e.g. PE, PEG, yield) are comparable with the historic figures if and when I choose to buy.

You're overthinking things.

You're not wrong there! It's a distinct character trait of mine.

The future is always unknown and you have to invest on that basis. Concentrate on things you can control like picking good companies, holding them preferably forever but dumping them when something goes seriously wrong.

Yes, you're right again, that is just focus on what I can.

Matt

[SalvorHardin]

1) Coca Cola. This used to be the textbook example of a strong moat company with a very simple product. Nowadays I don't think that its moat is anything like as strong. It's all to do with sugar consumption, particularly changing consumer tastes and governments increasing taxes on sugar.

A great place for information about Coca Cola the brand, rather than the numbers, is Mark Pendergrast's "For God, Country and Coca-Cola" , the best book I've ever read on a single company (yes, better IMHO than any of the Berkshire Hathaway and Union Pacific books).

2) US dollar vs Sterling. I've long held the view that over the long term sterling will decline against the dollar. America has a big advantage with the world using the dollar as it's reserve currency and safe haven, whilst Britain is addicted to devaluing its currency and running a current account deficit. I see nothing to change this. The rise of China will make more people nervous, favouring the dollar. Short term, I haven't a clue. I recently moved some dollars back into sterling at just below $1.20 to £1, but that was driven more by the need to raise cash to take a big punt on central London property.

3) Roku. This company has just appeared on my radar due to my buying one of their products (to replace an old Amazon Fire Stick). Roku makes streaming media players, selling to consumers and Smart TV manufacturers. In June 2019 it was reported that in the first quarter of 2019, some 89% of TVs sold in America were Smart TVs with Roku's technology being in 37% of them.

https://www.flatpanelshd.com/news.php?s ... 1564056000

https://deadline.com/2019/06/rokus-lead ... 202638383/

https://www.fool.com/investing/2019/10/ ... share.aspx

Roku is on the edge of my "circle of competence"; I'm happy to make a judgment on the media aspect of the company but less so with the technology. That's because all too often a seemingly dominant technology has been suddenly replaced by a competitor seemingly out of nowhere (at least to someone like me who doesn't follow the sector). That's why I generally avoid information technology focused companies. Streaming is clearly going to be the primary way of receiving video entertainment - the question is how much of this market can Roku take and can it become the dominant gateway?

[flyer61]

Point 2 of Salvor Hardin's post is my world view as well. I think it was Terry Smith who said currency only made up some 7% of his overall performance. It is the Companies you back that really matters. So no Centrica etc.

Facebook.....whilst the merits of it's use is debatable the financial machine is undoubted. Some of my friends must live on it, so every advertisers dream. Yes their are regulatory hurdles but it is not going to go away anytime soon. If it is ever able to fully monetise what it has built it will be a global financial juggernaut.

Matt - what about more Disney or a US REIT? I recently bought my wife some shares in Corecivic CVX (her SIPP is set up for maximum income).....or you could try something like APLE Reit.

[TheMotorcycleBoy]

1) Coca Cola. This used to be the textbook example of a strong moat company with a very simple product. Nowadays I don't think that its moat is anything like as strong. It's all to do with sugar consumption, particularly changing consumer tastes and governments increasing taxes on sugar.

A great place for information about Coca Cola the brand, rather than the numbers, is Mark Pendergrast's "For God, Country and Coca-Cola" , the best book I've ever read on a single company (yes, better IMHO than any of the Berkshire Hathaway and Union Pacific books).

You are quite probably right on that note Salvor. I lobbed the past 6 years of figures into the spreadsheet a few days back.

I've not had much time to really analyse. But my first impressions weren't grand. IIRC I saw a marked drop in sales and earnings over the last few years. If I get the time this weekend I'll quickly share what I've got over in the Company Analysis board.

I will take other look at the numbers, but I reckon I'll probably move on from them.

2) US dollar vs Sterling. I've long held the view that over the long term sterling will decline against the dollar. America has a big advantage with the world using the dollar as it's reserve currency and safe haven, whilst Britain is addicted to devaluing its currency and running a current account deficit. I see nothing to change this. The rise of China will make more people nervous, favouring the dollar. Short term, I haven't a clue. I recently moved some dollars back into sterling at just below $1.20 to £1, but that was driven more by the need to raise cash to take a big punt on central London property.

You certainly know more about this than me, Salvor. So I hold this point of your's in high regard. I guess I was overly worrying earlier on re. my $£ exposure, since I'm already playing the game from both sides, i.e. a weak pound is very nice whenever I sell my employee stock rewards, and to my multinational investments and a stronger pound is good for my pocket and any UK facing investments etc.

3) Roku. This company has just appeared on my radar due to my buying one of their products (to replace an old Amazon Fire Stick). Roku makes streaming media players, selling to consumers and Smart TV manufacturers. In June 2019 it was reported that in the first quarter of 2019, some 89% of TVs sold in America were Smart TVs with Roku's technology being in 37% of them.

https://www.flatpanelshd.com/news.php?s ... 1564056000

https://deadline.com/2019/06/rokus-lead ... 202638383/

https://www.fool.com/investing/2019/10/ ... share.aspx

Roku is on the edge of my "circle of competence"; I'm happy to make a judgment on the media aspect of the company but less so with the technology. That's because all too often a seemingly dominant technology has been suddenly replaced by a competitor seemingly out of nowhere (at least to someone like me who doesn't follow the sector). That's why I generally avoid information technology focused companies. Streaming is clearly going to be the primary way of receiving video entertainment - the question is how much of this market can Roku take and can it become the dominant gateway?

Thanks for sharing. Will try to take a look at this sometime.

Matt

[TheMotorcycleBoy]

Point 2 of Salvor Hardin's post is my world view as well. I think it was Terry Smith who said currency only made up some 7% of his overall performance. It is the Companies you back that really matters. So no Centrica etc.

Facebook.....whilst the merits of it's use is debatable the financial machine is undoubted. Some of my friends must live on it, so every advertisers dream. Yes their are regulatory hurdles but it is not going to go away anytime soon. If it is ever able to fully monetise what it has built it will be a global financial juggernaut.

Thanks for your remarks Flyer - you confirmation of Salvor's is good to know.

re. Facebook, no I'm not a big fan. In fact I have no such FB account. Wife and kids all do . But of course, it's not just about Facebook though is it?

FB own Whatsapp (my wife works at Screwfix, and her entire team use WA as an interteam comms. platform, e.g. "who can fill in on sunday morning" "which idiot has lost the 2nd scanner" etc. I guess that all SF use it). But much bigger, FB own Instagram. This along with Twitter, now seems to be the big gun, in social visibility. FB are also playing harder in the commerce domain, esp. international domestic, e.g. with Libra currency. This is clearly a high risk venture currently, since it pisses off banks no end, but if it does get going, then who knows?

Matt - what about more Disney or a US REIT? I recently bought my wife some shares in Corecivic CVX (her SIPP is set up for maximum income).....or you could try something like APLE Reit.

Thanks again - I already have DIS or one of my other ones as a top-up targets. Will check out your other tips soon.

Matt

[JamesMuenchen]

3) Roku. This company has just appeared on my radar due to my buying one of their products (to replace an old Amazon Fire Stick). Roku makes streaming media players, selling to consumers and Smart TV manufacturers. In June 2019 it was reported that in the first quarter of 2019, some 89% of TVs sold in America were Smart TVs with Roku's technology being in 37% of them.

https://www.flatpanelshd.com/news.php?s ... 1564056000

https://deadline.com/2019/06/rokus-lead ... 202638383/

https://www.fool.com/investing/2019/10/ ... share.aspx

Roku is on the edge of my "circle of competence"; I'm happy to make a judgment on the media aspect of the company but less so with the technology. That's because all too often a seemingly dominant technology has been suddenly replaced by a competitor seemingly out of nowhere (at least to someone like me who doesn't follow the sector). That's why I generally avoid information technology focused companies. Streaming is clearly going to be the primary way of receiving video entertainment - the question is how much of this market can Roku take and can it become the dominant gateway?

I've been in Roku for some time and even longer in The Trade Desk (TTD) which is a similar CTV advertising play. (and also seen as a play on channels like Disney to some extent)

Very risky and volatile.

Fool.com would be the best place to find discussion of them