Tesco Live Discussion

fynne 11 Jan 2019

British High Street "crisis" due to debt not brexit! It’s not debt … it’s borrowing against our future? But, If people can’t afford the goods that they produce (low wages) then the factories will close (unemployment) You are right btw … it is just a giant bubble The gap between the super rich has never been so wide. Some say cheap labour has benefited business… My “opinion” fwiw is that it has only benefited the rich. The high street crisis is not new and I’ve witnessed the slow decay over 20/30 years From the Saturday markets to local butcher, veg or even fashion shop. Everything is now in Tesco or Asda. Go into any retail park in the UK and you’ll find the same brands in every town … so why even go there? It’s all online anyway !!

SaraRacano 11 Jan 2019

British High Street "crisis" due debt not brexit! newstatesman.com The British high street crisis is due to debt, not Brexit Wage stagnation and austerity have left consumers too poor and indebted to allow stores to generate profits. 

SaraRacano 11 Jan 2019

The law of probability for small numbers (& big) OK since this board has become intersted in statistics (like for like sales) why don´t we all start to discuss statistics & what they really mean. The law of probability for small numbers & big would be of great interest to charists. These are just sales figures & probably don´t mean that much per sé. Understanding & correctly interpreting statistics is probably one of the key areas with “investing” in stock markets that will decide whether you´re a success or failure.

picstIoup 11 Jan 2019

Long at 198.50 Tenobras seems to be being unduly pessimistic, as Dregor points out. Lfl sales across the group were up a tasty 2.6%, comfortably above food inflation. It’s fatuous to exclude Booker’s contribution to that, as they are part of the group. (and by the way, 1.7% compounded over 10 years is 18.4%, not 16%). I think Dave may finally be turning the supertanker, although it’s still almost inevitable it’ll hit more rough seas

dregor 10 Jan 2019

Long at 198.50 Well Tenobas, yours are the first negative comments I have so far read on the Tesco update. Almost without exception, the comments from analysts et al have been pretty positive. I continue to hold and have done pretty well under Drastic Dave and his crew. Good luck with whatever you invest in.

Tenobas 10 Jan 2019

Long at 198.50 These results are poor. Excluding Booker , in the third quarter UK and ROI volumes at actual prices in the third quarter were 0.6% higher. In that period food inflation was 2.3%. 1.7% compounded over 10 years is a 16% decline in supermarket market share. I understand that they are trying to move up the quality curve in order to improve margins but that argument cuts both ways as it means that the underlying loss of market share was higher offsetting the improvement in margins. If the move up the quality curve is the reason for this decline things are even worse. Buying Booker was just an expensive way to protect market share.

jackdawsson 09 Jan 2019

Long at 198.50 SaraRacano: I doubt very much whether Amazon, would get involved in food retail. The start up costs would be incredible for very little return. Sara, Well Amazon are focused on their food retail business in US. They purchased Whole Food Stores in 2017 for $13.7 billion. About 479 stores. However, they already have a deal in UK with MRW. They also sell food online to Prime members via Amazon Fresh to a still limited number of UK postal code regions. Including same day delivery. Hence my point re possible expansion in this sector across UK. SaraRacano: I wonder what the statistical favourable probabilty is: For a person that trades on leverage? & the statistical favourable probability of just an ordinary person being successful in the stock market? I doubt the numbers are that great. Basically due to the traits of envy & greed. The only thing you need to know about stock markets, is chasing share-holder value at all costs normally ends pretty badly. Just remember, when stock markets ride a wave there are many con(fidence) men out there waiting to take money off the gulliable. Bernie Mandoff, was never a one off, Wall Street is full of these people. Max Keiser, & his crypto, just another never ending example of a con(fidence) man! IG recently said 79% of their clients were losers. It may be higher in general for SBs. Wouldn’t surprise me as both profits & losses snowball alarmingly. Usually because people over-stake relative to their resources. Indeed “greed” & any ill-discipline is soon found out. Sadly false ideas of get-rich-quick lure in a steady supply of the greedy or inexperienced. For most it’s just a costly mirage. I do fine with real shares for not chasing anything. That’s evident from my main account, despite mistimed errors. So I could always do much better. By comparison leverage has been costly so far. As any user of the latter tool knows, errors tend to be punished. Sometimes severely. Re UK exports to Germany being “roughly €35bn”. My point about the mutual damage of a no-deal Brexit is more pertinent to our overall trade with the EU, not just Germany. Including UK’s financial services, in 2017 UK’s exports to EU reached £274 billion. Not sure what the figure was in Euros.

SaraRacano 09 Jan 2019

Long at 198.50 Germany’s exports to the UK are roughly €85bn where as the UK´s exports to Germany are roughly €35bn, Germany could certainly be a big loser. Didn´t Trump, put the real figure about U.S. unemployment when he was going for President back in 2016 at roughly 40%? “Don’t believe these phony numbers when you hear 4.9 and 5 percent unemployment,” Mr. Trump said in his victory speech after the New Hampshire primary Tuesday night. “The number’s probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.” I doubt very much whether Amazon, would get involved in food retail. The start up costs would be incredible for very little return. I wonder what the statistical favourable probabilty is: For a person that trades on leverage? & the statistical favourable probability of just an ordinary person being successful in the stock market? I doubt the numbers are that great. Basically due to the traits of envy & greed. The only thing you need to know about stock markets, is chasing share-holder value at all costs normally ends pretty badly. Just remember, when stock markets ride a wave there are many con(fidence) men out there waiting to take money off the gulliable. Bernie Mandoff, was never a one off, Wall Street is full of these people. Max Keiser, & his crypto, just another never ending example of a con(fidence) man! nytimes.com The Real Jobless Rate Is 42 Percent? Donald Trump Has a Point, Sort Of That number works, but only if you count retirees, college students and stay-at-home parents.

jackdawsson 09 Jan 2019

Long at 198.50 SaraRacano: Germany heads for a technical recession. This is embarrassing in the land of super-stimulus via the ECB’s negative-interest-rate policy and years of QE. How does the ECB pull Germany out of recession? There are no more tricks. I don´t blame you for taking profit but it appears the risk taking that worries me. You cite QE, but look at the historic p/e´s that QE has created. look at Tesco, this summer, the highest in 13 years (that´s as far as I can get) my memory doesn´t go that far back to the 1990´s. But does Tesco really desrve a 20+ p/e? Surely, a half decent chartist would do some historical p/e research & profit growth & then equate it to today´s SP. I am sure many would turn away. Basically in the headonistic days, Tesco never yielded 20+ p/e. Sara, It’s one of a number of developing situations we shouldn’t ignore in globally-interconnected economies & markets. Mindful that we’ve read of similar warnings about Germany a few years ago. But all the more reason to hope we’ll avoid a no-deal Brexit which will hit UK, Germany & rest of the EU. Degrees of risk are ever in flux. That’s accepted. Hence importance of weighing up the bigger picture. As for TSCO & that 20+ P/E you keep citing: it’s also out-of-date as it was set when TSCO’s SP was much higher. That doesn’t dismiss that risk exists here too & across the sector. One elephant in the room is Amazon. If ever they announced major expansions to its UK food retail operations, all UK competitors would see sharp falls in SP. It seems only a matter of time. It takes a few highly negative macro-factors coming together to cause protracted bear markets, as opposed to markets temporarily falling into bear territory. We’d be foolish to rule out the former. However, a lot of global data remains broadly mixed. Many economies are still seeing decent growth. For eg. health of US economy is key &, for now at least, that remains buoyant. Priority for me is what I control 100% , ie. when to buy or sell. But I also keep an open-mind about all eventualities by ensuring ample margin in my leveraged account. My real share account remains profitable. If, however, I blow it with SBs, I’ll exit latter for good much poorer & that’ll be just deserts Nothing is easy about this game. But for you at least, harking back to my previous post, your next trades seem logical enough. Presumably you’ll open or add more short positions according to your reading of markets. That’s all that you or any of us need concern ourselves with. How we manage our own trades or investments. - GL.

Ripley94 08 Jan 2019

Long at 198.50 Hi Sara If you are short might be wise to consider you might be swimming against tide.

SaraRacano 08 Jan 2019

Long at 198.50 Germany heads for a technical recession. This is embarrassing in the land of super-stimulus via the ECB’s negative-interest-rate policy and years of QE. How does the ECB pull Germany out of recession? There are no more tricks. I don´t blame you for taking profit but it appears the risk taking that worries me. You cite QE, but look at the historic p/e´s that QE has created. look at Tesco, this summer, the highest in 13 years (that´s as far as I can get) my memory doesn´t go that far back to the 1990´s. But does Tesco really desrve a 20+ p/e? Surely, a half decent chartist would do some historical p/e research & profit growth & then equate it to today´s SP. I am sure many would turn away. Basically in the headonistic days, Tesco never yielded 20+ p/e. I hold seeing favourable longer-term outcomes Jesus, that is some confident belief. The trouble is you have never lived through a real bear market, you have to go back to the late 70´s early 80´s. Trouble is this one could be bigger as 90% of trades are done by computers. You could be stuck in serious loss making positions for days if the system shuts. Remember, once buyers go (2008) the system becomes almost impossible to get out of positions. You would rather be 1/2/3 years early than 1 minute late.

jackdawsson 08 Jan 2019

Long at 198.50 SaraRacano: Since when is the truth some thing “devoid of objectivity, to no useful purpose”? The market is eventually going to seriously blow you away . Buy, hold, exit at profit, this is just day/day trading. When discussing with compulsive gamblers, it becomes very difficult, this is the real reason why you see no useful purpose to my posts. There is no real belief, with such quick trading. Basically a fake recovery. Judged by economic growth in the 00´s over the 10´s going on Keyne´s interpretation we´re still in depression. There is one market maker in this market that is the Fed, this is not healthy. Printing money, has never solutioned a previous monetry crisis. All signs point to major world conflicts in 2019/20. I wouldn´t mind betting a major bank failure too! Sara, Sometimes some people can’t see the wood for the trees. But assuming you strongly believe all that you post, you’ll trade it accordingly via shorting those sectors liable to be most sensitive to more bearish projections. After all, that’s why most of us are here. To profit as best we can from the market’s ever-recurring undulations & cycles as we read them. I don’t dismiss all you say. I refer to the sheer extent of negativity. In fact, some things I agree with, though it won’t rattle my certitude about the stocks I hold seeing favourable longer-term outcomes. But mindful of increasing market risk ahead, I’ve made my broader approach clear elsewhere: book gains, build a bigger cash position, trade far less. Whilst timing is in doubt, no surprise if we do indeed hit the buffers on a few macro-fronts, including domestically. For eg. spiralling debt, over-inflated housing markets, increasing use of AI supplanting many menial & semi-skilled jobs, weakness of government, et al. Stock markets are inevitably a gamble to some degree as they’re globally interconnected. A number of potential flashpoints can escalate & occasionally they will do. Hence my booking gains rather than only L/T holding. Re QE: you’ll appreciate this isn’t the same as hyper-inflationary money-printing seen in Zimbabwe or 1920s Weimar Republic. QE is electronic. It bolsters lending between banks, indirectly increasing liquidity in markets, rather than filtering into the wider economy. Hence economies in general see less direct benefits from QE than do financial markets. - GL.

SaraRacano 08 Jan 2019

Long at 198.50 Since when is the truth some thing “devoid of objectivity, to no useful purpose”? The market is eventually going to seriously blow you away . Buy, hold, exit at profit, this is just day/day trading. When discussing with compulsive gamblers, it becomes very difficult, this is the real reason why you see no useful purpose to my posts. There is no real belief, with such quick trading. Basically a fake recovery. Judged by economic growth in the 00´s over the 10´s going on Keyne´s interpretation we´re still in depression. There is one market maker in this market that is the Fed, this is not healthy. Printing money, has never solutioned a previous monetry crisis. All signs point to major world conflicts in 2019/20. I wouldn´t mind betting a major bank failure too!

jackdawsson 08 Jan 2019

Long at 198.50 SaraRacano: This is where you really lose the plot, this is just stocking the fires! Sara, My plot is straightforward, be its implementation less so, inevitably hitting temporary hurdles. Buy, hold, exit at profit, as here. That’ll continue, with inevitable setbacks. This contrasts with endless negative chattering from some quarters, devoid of objectivity, to no useful purpose as far as I can see. The significance about QE versus 2008’s situation stands factually. Globally it’s reached trillions &, however we feel about its potential longer-term negatives, it’s helped stimulate markets via substantially increased cash flows & that continues. - GL.

SaraRacano 08 Jan 2019

Long at 198.50 This is a market rally after a very bad December, there were signs that the hedgers would come in. Nothing goes down in a straight line. The market is giving you another chance to exit, take it. I have a good feeling that the downward trend is going to continue. These markets have a way of fooling. Huge differences from 2008. The only difference is that we are much higher to where we were in 2008! financial sector is far better capitalised That´s the official line, they all appear to pass the stress tests about from Deutsche Bank, if one goes they all go! It´s all about confidence, one you get another Northern Rock scenario, the bank is finished. We have trillions of dollars in QE This is where you really lose the plot, this is just stocking the fires!