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Contrarian Chat
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- Lemon Quarter
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Re: Contrarian Chat
I am considering buying LSE. A certain each-way bet.
I bought some when they were circa £2.40 but as usual sold too soon long ago. Now the sp is circa £64.00, it becomes a question of whether they reach £100.
I bought some when they were circa £2.40 but as usual sold too soon long ago. Now the sp is circa £64.00, it becomes a question of whether they reach £100.
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- Lemon Pip
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Re: Contrarian Chat
Is anyone watching US Reits? There are some very good yields out there and they have stronger balance sheets than in 2008.
Longer leases 6+y
Longer debt maturities
Interest low for longer
The etf is down 20%
https://api.wsj.net/api/kaavio/charts/big.chart?nosettings=1&symb=iyr&uf=0&type=2&size=2&sid=180557&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=234977883&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1
Opportunities for capital gain and income; what could be better?
Longer leases 6+y
Longer debt maturities
Interest low for longer
The etf is down 20%
https://api.wsj.net/api/kaavio/charts/big.chart?nosettings=1&symb=iyr&uf=0&type=2&size=2&sid=180557&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=234977883&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1
Opportunities for capital gain and income; what could be better?
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- Lemon Quarter
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Re: Contrarian Chat
I have just finished buying ETFs to bring my global equity portfolio back up to weight. I hold geographical ETFs and trackers divided across USA, Canada, Europe ex UK, UK, Japan, Asia/pacific ex Japan and Global emerging markets. What became evident when I started working out how much to put in each market was that the biggest faller has been the UK market, with the FTSE 100 and 250 both down about 29% YTD. Here are rough YTD figures in GBP:
The Vanguard all world ETF is down about 19%, but (unsurpisingly) global small caps have suffered more. For example The iShares global small cap ETF WLDS is down about 27% YTD, so the FTSE 250 is not too far wide of the global average for small caps. The stand out figure is the -29% for the FTSE 100, probably yet again down to the overweight holding of banks and resource stocks.
FTSE 100 -29%
FTSE 250 -29%
Canada -26%
Europe ex UK -23%
Japan -20%
Global EM -19%
Asia pacific -18%
US -17%
The Vanguard all world ETF is down about 19%, but (unsurpisingly) global small caps have suffered more. For example The iShares global small cap ETF WLDS is down about 27% YTD, so the FTSE 250 is not too far wide of the global average for small caps. The stand out figure is the -29% for the FTSE 100, probably yet again down to the overweight holding of banks and resource stocks.
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- Lemon Quarter
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Re: Contrarian Chat
schober wrote:Is anyone watching US Reits? There are some very good yields out there and they have stronger balance sheets than in 2008.
Longer leases 6+y
Longer debt maturities
Interest low for longer
The etf is down 20%
https://api.wsj.net/api/kaavio/charts/big.chart?nosettings=1&symb=iyr&uf=0&type=2&size=2&sid=180557&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=234977883&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1
Opportunities for capital gain and income; what could be better?
I hold a US listed REITs ETF in my SIPP, Vanguard VNQ. I have just checked and it is down about 20% YTD, but that is in dollar terms. The pound is down around 6% this year, so overall VNQ is only down about 15% in GBP terms.
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- 2 Lemon pips
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Re: Contrarian Chat
Hi,
I bought Thursday afternoon and decided to add again Friday morning. The specifics of any company’s ability to weather the virus impact is beyond me so I bought VEUR and VWRL. The reasons I decided to are:
1. I don’t know anyone who doesn’t think that it will get worse before it gets better. I agree the virus infection numbers and sadly deaths etc will go higher but the sell off has been dramatic so I feel some of this further negative news is in the price.
2. I believe the peak to trough declines in ‘08 and dotcom crash were approx 50% in the equity indices. We were getting to the mid 20% declines which triggered me to react.
3. I’m in my early 30s; so can take a very long term view on these purchases and continue to look to add. A V-shaped recovery is actually not in my long term interests as I am still in the asset acquisition stage of my life.
4. Unlike recent market corrections - there isn’t a direct business sector to blame such as the bankers for ‘08 and the tech companies for the 2000 (I would blame bankers for dotcom too). As such I don’t foresee huge changes to the business environment or anti-wealth / business policies. If anything I think the opposite - the public will have sympathy for help for some firms in trouble if required due to the virus.
5. I watch the CNN greed index as I find it a fun tool. Since late 19 it has been flashing extreme greed even posting 98 (the measure goes from 0-100). On Thursday afternoon it was showing 1 for an hour which made me smile and think I had to add some stocks.
https://money.cnn.com/data/fear-and-greed/
6. Lastly, and I feel most importantly, is the policies taken by central banks and Western Governments. Listening to the ECB Thursday - they are the last major CB to react and it’s the same across the board. Interest rates are going negative or close to zero in the EU, US and U.K. and QE is increased in the EU and arguably started yesterday in the US (1.5 trillion of operations to help the functioning of the market). The CB policies are creating the groundwork for governments to spend and finally we’re seeing some reaction. Netherlands said yesterday has capacity to spend up to 90bn, Italy 25bn, US, UK, Germany, France, Spain etc all coming. This is near term - but monetary policy impacts over an 9-18 month period so if the virus passes by Autumn - will see the U.K. and US reversing their interest rate cuts? I think not as hikes have been much harder and slower since the GFC.
So my view is I don’t know the winners or losers from this and I don’t know how long it’s going to last. When the virus passes, and it will, what I feel I can say with more confidence is assets with positive real returns such as equities, housing and REITs with inflation linked contracts can do very well due to the policies taken in the past month. The alternative is to suffer a real loss holding cash in the bank with no prospect of better interest rates for years.
Greed will come back; it always does.... according to CNN it already has by 4 points
All the best,
I bought Thursday afternoon and decided to add again Friday morning. The specifics of any company’s ability to weather the virus impact is beyond me so I bought VEUR and VWRL. The reasons I decided to are:
1. I don’t know anyone who doesn’t think that it will get worse before it gets better. I agree the virus infection numbers and sadly deaths etc will go higher but the sell off has been dramatic so I feel some of this further negative news is in the price.
2. I believe the peak to trough declines in ‘08 and dotcom crash were approx 50% in the equity indices. We were getting to the mid 20% declines which triggered me to react.
3. I’m in my early 30s; so can take a very long term view on these purchases and continue to look to add. A V-shaped recovery is actually not in my long term interests as I am still in the asset acquisition stage of my life.
4. Unlike recent market corrections - there isn’t a direct business sector to blame such as the bankers for ‘08 and the tech companies for the 2000 (I would blame bankers for dotcom too). As such I don’t foresee huge changes to the business environment or anti-wealth / business policies. If anything I think the opposite - the public will have sympathy for help for some firms in trouble if required due to the virus.
5. I watch the CNN greed index as I find it a fun tool. Since late 19 it has been flashing extreme greed even posting 98 (the measure goes from 0-100). On Thursday afternoon it was showing 1 for an hour which made me smile and think I had to add some stocks.
https://money.cnn.com/data/fear-and-greed/
6. Lastly, and I feel most importantly, is the policies taken by central banks and Western Governments. Listening to the ECB Thursday - they are the last major CB to react and it’s the same across the board. Interest rates are going negative or close to zero in the EU, US and U.K. and QE is increased in the EU and arguably started yesterday in the US (1.5 trillion of operations to help the functioning of the market). The CB policies are creating the groundwork for governments to spend and finally we’re seeing some reaction. Netherlands said yesterday has capacity to spend up to 90bn, Italy 25bn, US, UK, Germany, France, Spain etc all coming. This is near term - but monetary policy impacts over an 9-18 month period so if the virus passes by Autumn - will see the U.K. and US reversing their interest rate cuts? I think not as hikes have been much harder and slower since the GFC.
So my view is I don’t know the winners or losers from this and I don’t know how long it’s going to last. When the virus passes, and it will, what I feel I can say with more confidence is assets with positive real returns such as equities, housing and REITs with inflation linked contracts can do very well due to the policies taken in the past month. The alternative is to suffer a real loss holding cash in the bank with no prospect of better interest rates for years.
Greed will come back; it always does.... according to CNN it already has by 4 points
All the best,
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- Lemon Quarter
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Re: Contrarian Chat
I regret to say that it is quite possible that markets will not only stay low/fall for a long time but also change dramatically.
Surely any travel or leisure company less significant than IAG/British Airways is threatened? We can't predict society's behaviour change at the moment. Leisure companies with pre-paid customers are seeing them failing to turn up. And bookings are dropping rapidly.
A lot of "vanity" business flights are being cancelled, with countries closing their borders. And virtually every major sporting event is either cancelled or threatened across the world.
In this situation (mirrored in many other business activities) it might be too soon to predict winners as even well-capitalised business will be threatened.
So it may be worth waiting before deciding on investing cash? Assuming we think that the pound will continue to be a strong currency?
regards
Howard
Surely any travel or leisure company less significant than IAG/British Airways is threatened? We can't predict society's behaviour change at the moment. Leisure companies with pre-paid customers are seeing them failing to turn up. And bookings are dropping rapidly.
A lot of "vanity" business flights are being cancelled, with countries closing their borders. And virtually every major sporting event is either cancelled or threatened across the world.
In this situation (mirrored in many other business activities) it might be too soon to predict winners as even well-capitalised business will be threatened.
So it may be worth waiting before deciding on investing cash? Assuming we think that the pound will continue to be a strong currency?
regards
Howard
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- Lemon Half
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Re: Contrarian Chat
Howard wrote:
A lot of "vanity" business flights are being cancelled, with countries closing their borders. And virtually every major sporting event is either cancelled or threatened across the world.
In this situation (mirrored in many other business activities) it might be too soon to predict winners as even well-capitalised business will be threatened.
Whilst I agree that the above would be one of the reasons I would choose not to perhaps invest fresh capital into many 'single-stock' purchases at the current time, I think that where many of the collectives are seeing similar price drops, then the above risks are mitigated somewhat, and it's things like Investment Trusts that are likely to get the vast majority of my attention when I come to start deploying some new capital into the market in the coming weeks and months.
But single-company stocks at this time? Not for me, thanks....
Cheers,
Itsallaguess
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- Lemon Quarter
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Re: Contrarian Chat
Itsallaguess wrote:Howard wrote:
A lot of "vanity" business flights are being cancelled, with countries closing their borders. And virtually every major sporting event is either cancelled or threatened across the world.
In this situation (mirrored in many other business activities) it might be too soon to predict winners as even well-capitalised business will be threatened.
Whilst I agree that the above would be one of the reasons I would choose not to perhaps invest fresh capital into many 'single-stock' purchases at the current time, I think that where many of the collectives are seeing similar price drops, then the above risks are mitigated somewhat, and it's things like Investment Trusts that are likely to get the vast majority of my attention when I come to start deploying some new capital into the market in the coming weeks and months.
But single-company stocks at this time? Not for me, thanks....
Cheers,
Itsallaguess
I'm suggesting perhaps that it may be a year or more before its worth considering investing in anything? We know that expert investors haven't predicted the fall. Why should IT managers suddenly get things right?
regards
Howard
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- Lemon Half
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Re: Contrarian Chat
Howard wrote:
I'm suggesting perhaps that it may be a year or more before its worth considering investing in anything?
We know that expert investors haven't predicted the fall. Why should IT managers suddenly get things right?
I'm not suggesting that IT managers might 'get things right'- I'm trying to suggest that collective investments remove at least *some* of the risk of 'getting it wrong', when compared to *single-stock* investment in this particular type of market...
Many collectives also have income-reserves to draw upon for investors who may be looking for income from their portfolio. This type of systemic shock might perhaps be a time to take advantage of those safety nets...
Cheers,
Itsallaguess
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- Lemon Quarter
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Re: Contrarian Chat
Howard wrote:Surely any travel or leisure company less significant than IAG/British Airways is threatened?
This will be a niche issue. I think the threats of IAG are potentially greater than more niche providers. A lot of BA's income has just stopped.
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- Lemon Quarter
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Re: Contrarian Chat
johnhemming wrote:Howard wrote:Surely any travel or leisure company less significant than IAG/British Airways is threatened?
This will be a niche issue. I think the threats of IAG are potentially greater than more niche providers. A lot of BA's income has just stopped.
If you read all of my post, I was using the leisure/airline industry as an example of a much more general situation. I'd rather you didn't quote just a bit of it. The UK economy is heavily biased towards the service sector and so I fear that the slowdown will be huge. From hairdressers to architects and from car showrooms to health spas; across the UK we can expect huge downturns. I'm not forecasting winners, but I guess food retailers, utilities and alcohol companies might be ok. I imagine BA will be propped up by the government by passing the buck to our grandchildren .
This isn't a niche issue, it could be the start of a recession or worse.
It wouldn't surprise me if markets take a year or three to recover.
regards
Howard
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- Lemon Quarter
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Re: Contrarian Chat
johnhemming wrote:I had my post as to the stocks I bought today viz TLW@10 BILB@16 and DGOC@64.5 deleted from HYP practical because two of the stocks are not HYP.
DGOC go into the main market next week (from AIM) which will be part of their recent increase in price. They have recently confirmed their dividend and that they are profitable (they do gas rather than oil).
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- Lemon Half
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Re: Contrarian Chat
johnhemming wrote:DGOC go into the main market next week (from AIM) which will be part of their recent increase in price. ...
Who?
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- Lemon Half
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Re: Contrarian Chat
PinkDalek wrote:johnhemming wrote:DGOC go into the main market next week (from AIM) which will be part of their recent increase in price. ...
Who?
Okay so I've looked them up but not next week:
The Company expects to publish a prospectus on 13 May 2020 to support a transition of its Ordinary Shares from the AIM Market to the Official List and commence trading on the Main Market on 18 May 2020
RNS Number : 7859L
Diversified Gas & Oil PLC
04 May 2020
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/DGOC/14526446.html
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- Lemon Quarter
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Re: Contrarian Chat
I went in to Sylvania SLP earlier this year and then out when I thought platinum prices would go down, but back in now as I think the platinum price is probably reasonably stable and they seem quite good on forecast PE.
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- Lemon Quarter
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Re: Contrarian Chat
The contrarian view has worked well so far. Is it now time to take some risk off the table?
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- Lemon Quarter
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Re: Contrarian Chat
I think DGOC could go further post FTSE250 entry. BILB has also further to go. SLP similarly. I swapped into TLW debt a bit ago.
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- Lemon Quarter
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Re: Contrarian Chat
hiriskpaul wrote:I have just finished buying ETFs to bring my global equity portfolio back up to weight. I hold geographical ETFs and trackers divided across USA, Canada, Europe ex UK, UK, Japan, Asia/pacific ex Japan and Global emerging markets. What became evident when I started working out how much to put in each market was that the biggest faller has been the UK market, with the FTSE 100 and 250 both down about 29% YTD. Here are rough YTD figures in GBP:FTSE 100 -29%
FTSE 250 -29%
Canada -26%
Europe ex UK -23%
Japan -20%
Global EM -19%
Asia pacific -18%
US -17%
The Vanguard all world ETF is down about 19%, but (unsurpisingly) global small caps have suffered more. For example The iShares global small cap ETF WLDS is down about 27% YTD, so the FTSE 250 is not too far wide of the global average for small caps. The stand out figure is the -29% for the FTSE 100, probably yet again down to the overweight holding of banks and resource stocks.
It is interesting to see how the markets have recovered since I made this comment:
FTSE 100 -20%
FTSE 250 -22%
Canada -2%
Europe ex UK -3%
Japan -8%
Global EM -1%
Asia pacific -10%
US +3%
All-world -1%
world small -4%
UK market still significantly trailing the pack, but fortunately only represents 4% of the global market. As I mentioned earlier, perhaps the contrarian thing to do now would be to reverse the trades I did in March! (I am not going to). Or pile into the UK market? (Not doing that either.)
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- Lemon Quarter
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Re: Contrarian Chat
On this thread in mid March I referenced the CNN Greed indicator which had touched 1 intra-day. At the bottom of the page (linked below) you can see the past three years history. Currently 78.
https://money.cnn.com/data/fear-and-greed/
Equities valuations feel more exposed to a pull back; and I gradient my weekly equity index purchases lower as this indicator rises. Keeping the excess money as dry powder for a. equity weakness b. reduction of leverage or c. picking up an investment property to take advantage of the stamp duty relief.
Undecided at the moment - leaning towards an investment property as houses prices, in my view, seem poised to do very well in a low mortgage rate + high money supply world - resulting in real-asset price inflation.
https://money.cnn.com/data/fear-and-greed/
Equities valuations feel more exposed to a pull back; and I gradient my weekly equity index purchases lower as this indicator rises. Keeping the excess money as dry powder for a. equity weakness b. reduction of leverage or c. picking up an investment property to take advantage of the stamp duty relief.
Undecided at the moment - leaning towards an investment property as houses prices, in my view, seem poised to do very well in a low mortgage rate + high money supply world - resulting in real-asset price inflation.
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