Sainsbury (J) Live Discussion

SaraRacano 10 May 2019

Putting it another way, Jackdawson OK loverboy, Sainsbury´s / Tesco´s credit rating in 1990, to tpoday´s??? Basically the whole sector is drowing in absolute debt from two/three decades of over´leverage. The only way supermarkets can grow is by debt but Sainsbury´s cannot afford to pay off loans & pay dividends so it has to sell property increasing the debt. Look what happened to Tesco when it slashed its payments. Where would the floor be for the Sainsbury´s SP, should it be forced to slash dividend?

SaraRacano 10 May 2019

Where´s the mathematics, Jackdawson? to better understand markets & to what degree sentiment & irrational emotions (like fear, panic, greed, euphoria) drives them, one also needs to understand people. Yes! & the only way to do this scientifically is to have a mathematical algorithms. This could be calculated using a lot of different variables!

jackdawsson 10 May 2019

Where´s the mathematics, Jackdawson? SaraRacano: This is why the probabilty of failure is statistically high. What you´re saying is that you haven´t a clue whether your current statergy is correct on not. You don´t have any way of calculating true risk which is dangerous in itself. Sara, A very predicable reply. Again a highly selective reading & interpretation of my wider comment. You extract what suits your views, ignore the rest. Very convenient. Even though I was plain enough about how I evaluate crystallised profit. I know exactly the 5-figure sum I deposited into my real share account in February 2009 when I started. This remains a long-term project for me with no strict deadlines as time is still on my side. A last comment on this, be it at a tangent: to better understand markets & to what degree sentiment & irrational emotions (like fear, panic, greed, euphoria) drives them, one also needs to understand people. You patently seem to struggle with that aspect. You appear to hold many presumptions & pass judgements from mostly sheer inherent bias. - GL.

SaraRacano 10 May 2019

Where´s the mathematics, Jackdawson? The aim of the game is to discover a trading strategy that has a 51% or above win rate using the laws of chance & probabilty this is how many if not all of the profesional algorithmic trading platforms are written. Frankly, I’ve never done annual stats about success rates, let alone regarding high yielding FTSE shares. Never felt the need to. This is why the probabilty of failure is statistically high. What you´re saying is that you haven´t a clue whether your current statergy is correct on not. You don´t have any way of calculating true risk which is dangerous in itself.

jackdawsson 10 May 2019

Where´s the mathematics, Jackdawson? SaraRacano: What is the past success rate of high yielding FTSE shares? Added to other variables such as 10 year+ lows? Say the figure bought you out at a 7/10 failure rate at negative performance over the next 5 years (your starting to calculate risk) then the risk is just not worth it. You need to discover a methodology where it´s 51% positive. Many of your posts appear emotion driven. There is nothing technical (in terms of using any statistical data to validate your points). “All the bad news is out the way”, now how would you know that? It´s what you want to think, if it´s not your in serious trouble. Sara, Some of this seems to be disagreeing for its own sake. I accept Zanshin’s VG points (& I’ve said similar elsewhere) that looking much further ahead, we can expect unforeseen fresh bad news to occasionally hit certain sectors or stocks. That can be cyclical or long-term. History confirms as much many times over. Hence I trade on the understanding that little is 100% guaranteed over any timeframe. That even happens to the best investment fund managers & top traders. However, let’s be real with SBRY. Yes, more more surprise bad news can occur here as anywhere else. But their comprehensive final results, including future guidance, were released only as recently as 1st May. Those have since undergone intense market scrutiny. Hence my comment. It pertains to data recently released & digested. My market performance of course varies as for anyone else. I’ve had very bad years amid average & VG ones. I also hold paper losses which, despite collect twice annual yield, are another temporary drawback. Frankly, I’ve never done annual stats about success rates, let alone regarding high yielding FTSE shares. Never felt the need to. I measure my success from the crystallised growth in the total value of my real share account since I started in 2009. That tells me all I need to know. I don’t get hung up on reaching certain profit percentages every year as I’m experienced enough to know that’s unlikely to be met consistently. There’d be under-achievement over some years. That includes periods of holding paper losses for far longer than desired. I’ve also previously said that with leverage, which I started 2 years later in 2011, I still hold net losses. The leveraged side is altogether far more challenging for a few reasons that I’ve expanded on elsewhere. But as for SBRY where I hold real shares, my target remains flexible if I don’t get 230+ to 235 again. If I’m in profit before the ex-date on 6th June, I may well settle for a lower target & forgo the yield. Flexibility is key to this game for said reasons: little is a given for very long. - GL.

zanshin 10 May 2019

Where´s the mathematics, Jackdawson? Sara, Your doom and gloom scenarios have some merit, since a significant portion of the present crop of FTSE companies will be gone in a decade. The maths is on the record. Since the inceptiion of the FTSE in 1984, only 30 of its then constituents are still around. This is the nature of market change, as old business models become redundent, to be replaced by the latest young thing. In my opinion, that is not a reason to avoid investment in older companies with a historical valuation cycle visible to all, in favour of new startups that might achieve meteoric success, or, more likely, crash and burn without trace. Better to back the favourites who have made the big time rather than the up and coming, IMO. It keeps the emotions in check and allows me to sleep at night. If one decides to be involved directly with share trading there are many ways to become involved. Some chose buy and hold, where fundamentals is key, and your mathematical model is prime. Others chose spread betting, sometimes with minutes only in possession of an interest in a stock. Not much fundamental interpretation required here, just a high dose of emotion and “feel” for market movement. In between are short to medium term traders, those who like to know that there is no known reason for a company to crash (not always easy to know e.g. Carrillion etc) and showing some promise of improvement in the coming years. There’s the maths in the background. The timing of the purchase is a mix of maths and emotion, where a statistical analysis (TA) of the buy price offers a short to medium term gain, timescale and amount to suit each individual, and a feel for the prevailing market mood with all its moments of elation and depression. There is never any way to know if all the bad news is out of the way, and most of us active traders have probably been caught out in recent years by any of the several disappointments that litter the way. One just has to keep a wary eye out for what’s going on in the world and react accordingly. More emotion than maths here.

SaraRacano 10 May 2019

Where´s the mathematics, Jackdawson? What is the past success rate of high yielding FTSE shares? Added to other variables such as 10 year+ lows? Say the figure bought you out at a 7/10 failure rate at negative performance over the next 5 years (your starting to calculate risk) then the risk is just not worth it. You need to discover a methodology where it´s 51% positive. Many of your posts appear emotion driven. There is nothing technical (in terms of using any statistical data to validate your points). “All the bad news is out the way”, now how would you know that? It´s what you want to think, if it´s not your in serious trouble.

SaraRacano 09 May 2019

Where´s the mathematics, Jackdawson? I would have thought incredibly low solely going on from the first results, they all had equal chance of meeting each other in the semi finals!. Sometimes you wonder whether it is all just fixed for TV! The probabilty odds of such a thing occouring are incredibly low. When was the last time Barcelona lost 4-0 in any comp?

Ripley94 09 May 2019

Where´s the mathematics, Jackdawson? Mathematical merit. Got to give it to Liverpool and then Spurs what was the odds on that lol

jackdawsson 09 May 2019

Where´s the mathematics, Jackdawson? SaraRacano: You´re a person who likes to make big sweeping statements that often lack mathematical merit. OK, let´s take your theory of buying stocks that are currently trading at 10+ year historical lows. Using a number of 5 companies every year (preferably in the 250) going back to 2000, what is the chance of success, each year? Such statistics would give you a decent outcome probabilty of success or failure. Let´s not forget the chartism is the interpretation of historical statistics, yet to all intents & purposes mathematical theory is missing from your posts which makes me highly skeptical of yourself. I am certainly not convinced that buying a “out of favour”, “historical lows” will increases your chanes of success. Sara, That’s your interpretation, but maybe others would phrase it differently. My views reflect my trading actions. Reasons are added largely for my own later reflections & reminders of any flawed logic. One accepts errors as inevitable. I also often acknowledge other approaches are no less valid & some may be more so. TA figures hugely, but it’s never gospel. I also glance at fundamentals, update myself about any relative sector, what’s likely to be priced in for any stock, etc. But all that really counts is the trade & its outcome over time. The rest is mostly intellectual jousting. I readily concede that many people know more than me, yet most of them have also made huge investment or trading errors. The overall results matter more. FWIW, on the TA side here, I looked at SBRY’s 5-year chart (linked) & where support levels were often found. The frequent bounces from near current levels, indicated by sharper zig-zags, indicated this stock often finds support near these levels. Then over varying timeframes it rallies. SBRY’s longer-term chart going back a lot further shows similar areas of support. That was good enough for me to buy back here, regardless of any recent scaremongering & hysteria over the failed ASDA merger in the press. Screen Shot 2019-05-09 at 16.23.54.png820x872 53.9 KB SaraRacano: Your showing emotion, your last post has nothing but positives. The higher the emotion levels with any sort of gambling the higher your chances are of failure! My last post here was to Zanshin. That acknowledged the constant presence of risk & that little is entirely risk-free. That’s hardly being only positive. My last post to you was a counter-balance to your invariably unbridled bearishness. Not that I disagreed with all that you said. Some changes in certain sectors are indeed fairly permanent, not cyclical & for the worse. Higher SP levels previously seen in some sectors will most probably never return. Your example of banks in said previous thread is one that no rational person would disagree with. I’ve said similar elsewhere. At least SBRY closed 210.60 from yesterday’s poor 209. Hardly convincing & nothing is confirmed, but as I said to Zanshin, no surprise if a support level here was found fairly soon. - GL.

SaraRacano 09 May 2019

Where´s the mathematics, Jackdawson? You´re a person who likes to make big sweeping statements that often lack mathematical merit. OK, let´s take your theory of buying stocks that are currently trading at 10+ year historical lows. Using a number of 5 companies every year (preferably in the 250) going back to 2000, what is the chance of success, each year? Such statistics would give you a decent outcome probabilty of success or failure. Let´s not forget the chartism is the interpretation of historical statistics, yet to all intents & purposes mathematical theory is missing from your posts which makes me highly skeptical of yourself. I am certainly not convinced that buying a “out of favour”, “historical lows” will increases your chanes of success. Your showing emotion, your last post has nothing but positives. The higher the emotion levels with any sort of gambling the higher your chances are of failure!

jackdawsson 09 May 2019

Hasn´t done you any favours jackdawson zanshin: It’s unlikely that anyone who is holding shares has not suffered at least a paper hit to their portfolio this week. It’s probable that the only winners are those who followed the “Sell in May” mantra and are sitting on a pile of cash and wondering what to do with it. But therein lies some of the problem; with returns from the “safe” havens abysmally low, it doesn’t take much of a rise from current market levels to improve on those “safe” returns. In order to achieve those better returns, one has to be invested, and timing, as ever, is the tricky point. Regarding SBRY, being now at record lows as previously acknowledged, unless one believes there is an imminent collapse of the company, when exactly would be a better time to invest? Hi Zanshin, Thanks. Much agree with the above & the rest. As usual, a balanced post from you regarding merits of buying certain quality stocks near L/T or even record lows, especially during general downturns, even though I bought anticipating support might hold just above those levels. That it didn’t hasn’t fazed me in the slightest. When TSCO was badly sold down last year & MRW’s in circa 2016, both got well oversold mostly on sentiment, followed by fairly rapid recovery. Unless there’s a further significant loss of customers & falls in revenue ahead, or some other fresh bad news specific to SBRY, none of which is in evidence at this time, I’m quite prepared to ride out further dips. As you note, some degree of risk is ever-present due to uncontrollable macro-factors. This time of year can also see much lower volumes adding to volatility as many professional investors take longer breaks. So even if they don’t follow the adage of “sell in May”, which many in fact don’t, they may still do less buying. Whilst I’ll make no cast-iron predictions here as is my way, it won’t surprise me to see this find support fairly soon as most of the major bad news is already out. - Regards.

zanshin 09 May 2019

Hasn´t done you any favours jackdawson Hi JD, It’s unlikely that anyone who is holding shares has not suffered at least a paper hit to their portfolio this week. It’s probable that the only winners are those who followed the “Sell in May” mantra and are sitting on a pile of cash and wondering what to do with it. But therein lies some of the problem; with returns from the “safe” havens abysmally low, it doesn’t take much of a rise from current market levels to improve on those “safe” returns. In order to achieve those better returns, one has to be invested, and timing, as ever, is the tricky point. Regarding SBRY, being now at record lows as previously acknowledged, unless one believes there is an imminent collapse of the company, when exactly would be a better time to invest? Although your entry point could, with hindsight, have been bettered (as indeed my own), it can hardly be considered a poor one, given that subsequent market downgrading is of a general rather than a specific nature. One never expects to enter at best price; it’s a bonus if it can be achieved. GL

jackdawsson 09 May 2019

Hasn´t done you any favours jackdawson Sara, It’s not about whether it makes “great reading”. It’s merely a reflection of an approach that with real shares at least has proven very successful for me over time, despite a fair number of badly mistimed entries. Latter par for the course. That’s not taking anything away from other trading approaches, some of which can be more successful. I stick by what’s proven to work for me. In SBRY’s case, if this time I need to sit for the 7.9p yield, ex-date 6th June, that’s okay. Some buys take longer to see profits. By the by, we could just as well focus on your endless dreary reiterations on these BBs. Most are laden with predictable doom ’n’ gloom & poor attempts at seeming scaremongering. Frankly, you appear to do nothing else, whilst others like me are at least making money occasionally. SaraRacano: Sainsbury´s shares are not at 16 year lows but record, I don´t recall them in 2000 being as low as this. Re my “16 year low” comment for SBRY. I didn’t feel it was important enough to go further back. You’re right that it’s now at record lows. But SBRY did hit levels as low as 216+ in 2003. So I was right enough & anything else seems academic. Anyway, for now I’ve far better things to do than engage with those who increasingly seem to be embittered ankle-biters. GL as usual, but with what I don’t know. You never seem to trade or do much else on these BBs, bar endlessly nitpicking.

SaraRacano 09 May 2019

Hasn´t done you any favours jackdawson You appear to follow the “out of favour” rule with banks, “over-sold” philiosophy with banks, it hardly makes for great reading, you appear to keep coming out with the same words. The whole banking sector is in a 12 year low. Basically with banking as well as supermarkets there appears a lot of zombie companies hanging to dear life with ultra low rates. You haven´t really caught on to banking business models. They never have historically made much money in a climate of low % rates. Look at Deutsche Bank & it´s SP. Just look 2007-08, low SP´s may be a warning sign of what is to come. Sainsbury´s shares are not at 16 year lows but record, I don´t recall them in 2000 being as low as this. You have to look at the role Argos has left on the group, they are losing market share. It´s how safe that dividend is (cashflow) You have events unfolding with Iran. South Korea & Hong Kong are potential hot points for financial collapse in Asia. You need to watch these bond markets & yields to see further direction either way within these markets