PIE-EATER
02 Nov 2016
Re: Times Article Eadwig, you say you hope article 50 being triggered in the spring will be the bottom for the pound. It would be nice to think so, but I suspect it may stay at those levels (or even lower) for a further 12 months as the "leaks" about a hard Brexit continue to come from the EU. Only when the light is at the end of the tunnel (late18 / early 19) do I see any possible respite. It's always darkest until just before dawn. GLAPE
Eadwig
01 Nov 2016
Re: Times Article Eadwig, " the pound has been on a downward trajectory since the Napoleonic Wars. "Bowman, Forget the above quote, on reflection I was getting carried away with the 'historical' context, which becomes pretty meaningless the further back you go.But if you go back to the end of WWII, a far more sensible place to measure from, given the abandonment of the gold standard by all countries in the 30s, then even those extreme movements you point out - which are absolute bottoms to absolute tops - are still just fluctuations within a downward trend from 1 GBP = 4 USD.Arguably you can only really measure from around 1970, because the GBP was 'pegged' to the USD at an official rate that was devalued from time to time before being allowed to float free.For almost 20 years I sold services abroad, mostly to Americans, and experienced some of the fluctuations you referred to. I was always pretty confident that the 'real' rate was around 1 GBP to 1.63 USD and over that period, it pretty much always came back to around that level.In all that time I never experienced a rate of below $1.38 or over about $2.10, and both of those were extremes that lasted a few days only 0 and eventually settled around 1.63 again.I can't imagine us seeing 1 GBP = 2 USD again (not in the foreseeable future). In fact, I'm doubtful we'll even see 1.63 again for at least a decade. I take it you're more optimistic? If you've got any arguments for why, other than historical fluctuations, I'd value hearing them. I've been caught out badly and unavoidably on the wrong side of this devaluation, so I'm aware I might be stuck in a downward spiral of over-pessimism.
Eadwig
01 Nov 2016
Re: Times Article [link] Carney halved the bank rate on August 4th. Take a look at the graph above, pick out August the 4th, and then ask yourself if Carney is responsible for this devaluation.Its quite ridiculous the way people (not necessarily you, hanser) have been trying to blame this mess on Carney. I do think if he returned the rate to 0.5% it wouldn't have a big impact but would at least send a message that this is as far as we go, no negative rates in the UK. It would prop the pound up far more that the cent or two drop it caused, I'm sure of that, and maybe give a little hope to savers. A little...
Eadwig
01 Nov 2016
Re: Times Article Lets put it another way Bowman, in a trip around the world, would your pound have bought more goods and services (in a variety of different countries, not just America, and allowing for inflation in some imaginary way) now or in 2007, 1987, 1967, 1927, 1907, 1857, 1807?Smooth out the snapshots against individual currencies and the pound has been on a downward trajectory since the Napoleonic Wars. However, if you truly believe the GBP is going to recover then you are free to invest in it as a currency. I'm sure there is an appropriate ETF. As I think I said, I don't believe we've hit the bottom of this devaluation yet, so don't be in too much of a hurry. If we're lucky, article 50 being triggered in the Spring will be the bottom.
hanser
01 Nov 2016
Re: Times Article Now if Carney hadn't dropped the bank rate in early August there may have already been some recovery.....IMHO
Bowman
31 Oct 2016
Re: Times Article "Never in history has the GBP recovered that much from this size of devaluation"Eh!I looked up a GBP:USD chart and found that between Dec 2007 and Dec 2008 the GBP:USD rate dropped from ~2 to ~1.4, a drop of ~30%, which was followed by a slow climb to 1.71 by July 2014; a climb of 22%.The rate was ~1.45 in June 2016, so the current level (~1.22) represents a drop of only about 16%, and it would require a rise of 19% to get back to the June level. As you can see the rate has managed a climb greater than that required to get back to June's level before, so it can do again.[link] of the charts I found online (although I did not spend too much time looking) only go back about 10 years. However, I do have data going back to 1990.The GBP:USD rate was ~2 in early 1991, followed by a drop to ~1.6 (-20%) by mid 1991, and a rise back to ~2 (+25%) by mid 1992. It then slumped to ~1.40 (-30%) by early 1993 before climbing back to ~1.7 (+21%) by 1998. This was followed by another drop to ~1.4 (-18%) by mid 2001 and a recovery by late 2007 to >2 (+43%). Going further back the rate dropped from ~2.4 in late 1980 to ~1.05 by early 1985, a drop of 56%, which was followed by a recovery to ~2 (several times) - a rise of 90%!!So you can see that your statement is unsupported by the facts. GBP has previously been able to recover from drops of the size we have seen this year, in fact it has been able to recover from far greater drops. If it has done so in the past it can do so again in the future.
divvent argie
31 Oct 2016
Re: Times Article Certainly some good points there Eadwig and many questions to which we don't know the answers. There wont be another Brexit vote as the Tory party would enter a civil war that would make the arrival of Corbynism look like a tea-party. What about a surprise general election that the Tories loose and a Labour government calling a second referendum? Possible but unlikely. Too many unknowns but these are the sort of things those with deep pockets full of dollars will be considering. Not a gambling man myself but a bit of M&A speculation never did much harm.
Eadwig
31 Oct 2016
Re: Times Article divvent argie, "don't need the GBP now for other reasons then holding on to the profit for a better rate"As I said, this would take a very long term view - not least because the GBP is likely to drop further yet which means any foreign purchaser would be wise to wait a little yet. Plus, it also takes a sanguine view that GBP will recover to previous levels. Why further drops? a) Bank of England has talked about dropping rates to 0.1%. I think they'll step back from that, personally, but it makes ir more difficult for them to actually reverse their stance. Even if they did reverse and go back to 0.5%, the effect would be small. The actual drop of the rates did almost nothing to weaken the GBP further.b) the slow decline against the dollar for a couple of years (mainly due to a stronger dollar), continues as the FED looks likely to raise rates again soon. c) The Tory party conference, which appeared to be mainly motivated by undermining the GBP via suggestions and hints of a way forward that would vastly weaken the economy has largely stunned the rest of the world - many of whom, even after that, still think we have a second vote on the way which will reverse the Brexit decision. If you read foreign business sites and talk to people across the world including Europe, they can't believe the UK voted for a large pay cut and assume we have some fantastic plan up our sleeves.d) the triggering of article 50 will put most doubts about us actually going ahead with Brexit finally out of the minds of the rest of the world. I would expect another 5% or more devaluation on the back of that. Possibly to parity with the Euro which is beginning to gain strength on the back of strong recent economic figures which have gone largely unreported in the UK, although they might easily become derailed yet its about time Europe actually started to shows some growth as a whole. A better rate further down the line?Yes, I imagine at some point the drop in the pound will overshoot and then come back post Brexit as things settle down, probably after the 2020 general election. Will we ever get back to the rate we were at before the vote date was announced? Never in history has the GBP recovered that much from this size of devaluation, so I'm personally not very sanguine.If the GBP manages to get through this and hold onto its major currency status (I.e. sometimes used as a safe haven when things go awry elsewhere in the world, along with Swiss Francs, Euro, USD, Yen ), I think is about as much as we can hope for. Probably more realistic is a currency more in line with strong and stable economies with smaller populations, such as Australian and Canadian dollars.So, to get back to your original argument, yes, if they take a long term view they could wait for the rate to come back a little and make profit repatriating profits at that point. But, given the potential upside compared to the length of time and the risk, I can't see that as their motivation. (You can see I've been giving this some thought during my delayed flight back to the UK).I think their must be some other motivation involved if and when it comes to foreign take overs of UK housebuilders. I haven't immediately been able to think of one, especially specific high-end properties 'across the UK'. London properties will remain an asset class in their own right, no matter what, I have very little doubt about that. London is seen as a cool and sophisticated place to live or own a property across the whole world, from USA to China, from India to Australia. Probably only New York can really match it for status, with even Paris, Dubai and Hong Kong lagging behind, in my view anyway.Long may that remain the case, no matter the short term travails of the UK economy as a whole.
dazedandconfused
31 Oct 2016
Re: Times Article Tony would probably never sell/transfer his proportion that easily, but you never know what family shareholders might do in the future...
divvent argie
31 Oct 2016
Re: Times Article A longer term view of sterling would be wise as post Brexit its value should come back at bit if not a lot. If they don't need the GBP now for other reasons then holding on to the profit for a better rate could be very profitable.
Eadwig
30 Oct 2016
Re: Times Article I speculated on bids for UK housebuilders when both the pound and the sector was hammered in the immediate wake of the Brexit vote, making builders very cheap to foreign buyers. The discussion might have been on the BDEV or PSN board, possibly.There wasn't a big discussion, but at the time most people who commented thought it was unlikely and I remember being largely persuaded by the responses that foreign buyers wouldn't be interested. Basically, even if there was still both growth and good returns to be had in the sector, the argument went, why would a foreign buyer want to earn GBP? Its not like taking over ARM Holdings, for example, whose products are used in every country across the world. I.e. If you buy a UK housebuilder, you can't export the product and the profits will be much diminished by FX ir taken abroad.I suppose a very wide-ranging consortium, with fingers in many pies, might be happy to earn GBP pounds if they had other sectors in which to spend them. Otherwise I think the same arguments largely still stand (I haven't read the article, I'd be interested to her what it says their motivations might be).If its correct and there is a serious bid (and being a private company we may never know the particulars) I'm sure you are right to say that there would be an impact across the sector.One of the characteristics of this latest UK house building cycle, despite three or four years of fantastic growth, was that there was almost no M&A activity. Very unusual in a sector with such high growth and high margins with relatively low P/E values.If someone wants the GB pounds generated, and perhaps a chance to build assets in London where high end property is a world asset class in its own right, then this would surely be a reasonable time to move - although the uncertainty surrounding Brexit would mean taking a pretty long term view. But then, that's what the Chinese are famous for doing, and we already know that many London-builders especially are increasingly selling properties to Chinese nationals. So, from that point of view, a bid for a UK housebuilder from outside the UK is more likely to come from China than anywhere else. Whether they'd be interested in building high end homes 'across the UK' seems doubtful, with London homes the obvious prize for any foreign interest. It will be interesting to see how it plays out.
divvent argie
29 Oct 2016
Times Article The Times today, on page 52, reports a £600M bid by a Chinese consortium for Cala Homes builders of high end homes across the UK and owned by L&G and Patron Capital. Cala are said to be the UK's largest private house builder. Given the drop in the value of Sterling we should expect some takeover activity and this may spread to other players. Next week could be interesting.
IOMINVESTCOM
12 Oct 2016
Re: Added Today @2400 Spread 23.82 / 2383 at the moment - I have supports of 23.55 and then 22.7107 Oct 16 Credit Suisse Underperform 2,397.00 2162.00 2162.00 ReiteratesOddly the broker above stands out low at 21.62 or more current.
Eadwig
12 Oct 2016
Re: Added Today @2400 handoverfist,Difficult times and markets, and especially central London, on a bit of a knife edge some might say. Actually, a lot of that uncertainty has already depressed BKG's share price, so while I wouldn't be happily buying @3000p to sell @3300p as several of us were before Brexit, if you can pick a new price range and trade that you can soon average down your holding's book cost. (I subtract the profits from my holding's book cost to average down in that sense - or add losses when it goes wrong and I have to bail ...)It does look better on your accounts as you say - and there's no need at all to do it in the same company or sector. But sticking with what you know and have a feel for is a good rule when looking to trade and make just a few percent in short order, and if you can get a holding price down where you are more comfortable, its one less worry when managing a portfolio.Obviously I chose @2400p - but to be perfectly honest I set the range trade ages ago and it expired two days after executing. I had actually forgotten it was set. I vaguely remember when I did set it that if the price got down there again I might not want it to execute because we might be in some sort of post-Brexit nightmare free-fall. As it turns out, I'm pretty happy with it, but need to set some kind of alarm to warn me for these long term active orders as the price draws near. I often set them for 3 months at a time, sometimes at silly low prices in the hope of getting lucky with a flash crash (topical - but true). It hasn't happened yet. But if I'd had one on Apple in May 2010, I'd have hung up my investing boots by now (drop was well over 90% from memory).Back to BKG, H1 report out in about 6 or 7 weeks. I guess we'll find out a lot about the central London housing scene then, and the probable direction or trading range of BKG (2400-2550?), at least until article 50 is declared open - or whatever one does with such a thing. Then it may well be all change again as people realise there's no turning back - for those who still think there is.Good luck!
flipdalid
12 Oct 2016
Re: Added Today @2400 Seaweed Yo Mr Seaweed!
