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That’s spelling check 4u. Lesson, look first post second, milky milky...
That’s wot u get with Tesco two strip broadband on the cheap.. spend some money and get a proper one, not the value brand.. All said LT think you have a fault on your line the number of problems you report.. Did you keep a dairy as I suggested?...
You buy a stock and either sell it at a gain, loss, or break even, as i previously said everything in between is just noise. To those that say the money could be put to better use, that depends on your next investment, there are plenty of day traders that lose money into the void, never to be seen again. A paper loss is variable that changes with sentiment and there's nothing to say that BT wont suddenly take off again as seen lots of times with individual stocks.
It might not be a strictly mathmatic calculation, but it is a perfectly justifiable observation. Vod chart over 5 years £2.5 to £1.40. BT £4.5 -£1.38. So despite their acquisitions to no doubt 'increase shareholder value, ' they continue to run a very poorly managed business. Be that as it may they are cash generative and value does arise, but not for reasons that most investors look for in a company. This is a crap company that even by their standards is getting stupidly cheap and may continue to do so. Like any share though it can be a good trade.
I've seen numerous posts now, numerous - each deriding the fact that BT's current SP is barely equivalent to what was paid for EE and therefore BT (not EE) is valued by the market almost approaching practically for free, zero valuation, and held my tongue.
Well, I can remain silent on that issue, no longer!
Whilst I empathise with the sentiments expressed, I do wish those comparisons would refrain from choosing an immovable date, and an immovable valuation of that date paid for EE, and then compare it to a highly moveable SP that is BT.
Just how much do you think EE is worth right now, today?
It sure as hell can't be worth the same amount as BT paid/exchanged shares for back in 2015/2016?
The two iconic stocks of UK telecoms are BT and the market leader - Vodafone. Both are but a shadow of their former SP's when the EE acquisition was done.
Are people saying that EE has remained immobile in valuation by the market since 2016?
So EE has a better future and is more stable than say Vodafone is?
Because since 2016 era VOD has had its SP downgraded in valuation by the market from circa £2 area to today's 134p.
And everyone expects EE to be so strong, so magnificent, that the market has not devalued it by one single penny? Not a single penny downgade by the market? Huh?
Judging by both BT, VOD and a handful of other telecoms company's, you'd be lucky to get half price for what BT paid for EE back in the day. And that's no reflection on EE. That would be the market's valuation, not based on fundamentals - but what the market has been doing to most telecom stocks.
I do empathise with the destructive fall in BT's SP.
But please, comparing it to the bought price of EE back in the day, when common sense dictates that if it was floated off as a separate company today, no way in hell would you get today what BT paid for it back then.
The EE TO BT share price market valuation comparison is erroneous and void. Find like v like to compare and contrast.
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' Buffett puts it more prosaically, citing fear & greed; you know how that one goes. '
"Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
No . Bt is definitely one of the worst examples of an ex British conglomerate. The rudest, most incompetent customer service and as you say DOFE managed by the clueless class. They have had so many advantages over competition and yet here we are at an sp of less than they paid for EE. In fact if they hadn't bought EE the sp would be a minus figure. Astounding, no doubt the CO will be another one in line for a knighthood for lack of achievement and enterprise. Great to trade though.
Nice post there Dofe (the flared jeans post :) Reasoned and balanced (as were Fleccy's too).
Your contributions are informed and enjoyable to read. And I sincerely hope you continue to contribute, and not do a runner again (for which I think I might have played a part in that, as Fleccy's short, dour 'slightly biased' rejoinder post, reminded me, and want to pick up on, to explain the misunderstanding).
Was it 2 years ago? No quite; November 2018 and your first ever post opened with a defensive:
" My first post here but I have been following the BT share board for a while now. I currently hold no BT Shares and have ZERO INVESTMENT KNOWLEDGE but ..."
And then proceeded with a masterful, and very well argued case against investing in BT, even throwing in the phrase:
"I cannot see any logic in ‘averaging down’ as some people appear to do..."
Which I found simply astonishing for someone of 'zero investment knowledge'. On the contrary I found your post displayed admirable investing knowledge - had you left out the I-know-nothing clause. In fact you concluded your post with a final sentence of:
" As I say, I know nothing about investing, so perhaps someone can put me straight. "
A couple did, but not sure if you liked their responses. But I hold my hand up here; I saw your post and was fresh from reading an infamous poster 'Last Call' on VOD and posted a one-liner post calling you a fake poster (or some such) and then asked you to reveal your previous identity, as I was convinced you were no 'new to investing' poster.
That post of mine opened up a barrage of 'responses' to you by others on this board, which I don't blame you for taking offence to, as that was the last you have been seen here until early February this year 2020, and still after that time, you opened again, with:
" I know nothing about investing, but ...."
I assume that's what's ruffled Fleccy's feathers. You are not new to investing and you do have some experience in investing. You mentioned a commodities trading friend, advice from your late father on investing, so you do have experience of investing and I think I would get 100% support here that it shows in your posts. So no need for the deference or self denigrating I-know-nothing, if that's all it was (and misinterpreted by myself and others)
- Yes you do!
If my years-old post, calling you a fake caused offence, and the barrage by others that followed on from that, then I sincerely apologise here and now, and look forward to further posts from you - from whatever objective opinion you hold. Bearish, bullish, or whatever, as you see things.
PS. £5 for a pair of flared jeans? - I'm always up for a bargain, but what could you do me for 2 pairs?
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'Buffett puts it more prosaically, citing fear & greed; you know how that one goes'.
"Our goal is more modest: We simply attempt to be fearful when others are greedy and and to be greedy only when
Bobetts
A long time ago in a temporary advisory role.
What were my impression she of BT then?
The technicians that I had dealings with seemed very knowledgable about their own specialisms and were, in general, very committed, even if they did play the system a bit.
However, my impression of the middle and junior management was dire. They appeared not only completely clueless as to their own role but also seemed to have no real understanding of the business in general. I got the impression of an inward looking company more interested in its own statistics and propaganda than what was going on in the world outside. A bit like a religious cult. lol
Unfortunately, if a business seems clueless from the top down is it any wonder that the market questions every move it makes.
But that was a long time ago and things may well now be different.
"Dofe, skimmed through your posts. Can see you used to work for BT"
Thought i'd read through them and his style appears slightly biased, subtly like a watered down Lamtree, if i'm reading it correctly.
The contrarian view would be to back China. If anyone knows how to rig a market then the Chinese are past masters. They also have deep enough pockets.
"If you buy BT now you are possibly buying in at a price that will realise a profit in the not too distant future based on that price. However, if by buying it has merely taken your average down to £2.50 + then you still have to reached that target to break even"
We do have a lot of BT shares already, the biggest chunk is in my wife's share dealing account which provides her with a tax free income, as it's below the income tax threshold. We also have ISA's with investments held in them, which tend to get reinvested. We are at the stage now where the plan is to top up the ISA's and at some point reduce her share dealing account.
The investment i'm talking about now is purely a short term play, with a view to selling out as soon as we turn a reasonable capital profit and then top up the ISA's in the new tax year.
I've thought about HSBA and Standard chartered, but China is a grey area and Growth there is likely to be significantly impacted due to the Corona Virus, in fact NASA are publishing pictures showing the decrease in pollution due to reduced activity. I like National Grid, but it's seen a significant rise in the last 6 months and doesn't look good value to me.
UK focused stocks and especially telecom have been showing steep declines based on sentiment unrelated to the Virus and have taken a significant hit with the market, putting them at extremely attractive valuations in my view. I do like Telecom stocks, which is currently a contrarian view, but that isn't why i'm considering them in this instance.
Dofe
That would be 'vintage clothing' and marked up 200% lol Paul McCartney would tour China for a % of the merchandising
lol. This has strayed so far from the reason for my initial post that I have lost the plot entirely. It had nothing to do with BT per se, but was to do with the logic of averaging down on the price of a product which was being dumped by buying more stock in the belief that the more stock you held at a lower average price the bigger the potential profit if the market turned. Possibly, but that depends on how far your average price is from the bottom and whether the buyers themselves can also see a profit at that price.
It started with an off the cuff remark I made to a friend when the price was about £2.50. I said that looking at its trajectory to date it was more likely to reach £1.70 before it went back up to £2.70. This raised a laugh and I was bet a bottle of the finest malt that it would never go that low. The rest is history and I won the bet.
However, I wouldn’t buy a warehouse full of flared trousers, say, just because the price had fallen from £6 to £3. And if there was no market for them I wouldn’t buy another warehouse full just because the price has now fallen to £1.50 in order to lower my average buying in price. If I can’t see a return I would just cut my losses and move on to pastures new in order to recoup the loss elsewhere.
If you buy BT now you are possibly buying in at a price that will realise a profit in the not too distant future based on that price. However, if by buying it has merely taken your average down to £2.50 + then you still have to reached that target to break even. If you sell the £1.40 shares when they are in profit then all that happens is your average buying in price for the other shares goes back up.
Anyone want to buy some flared trousers? Top quality going cheap £5 a pair.
"Basically because there is better opportunity. Why invest in a FTSE dinosaur which is waiting for a 5 year investment plan to pay off when you can buy into to Tesla and Disney"
Tesla is a company i would avoid, it's not for me. The problem with Tesla is the competition and the fact they're mobilising to compete. The market is viewing Tesla as a disruptor in the car market, like Apple was in the mobile phone market, but will they be able to beat the German, French and Italian manufacturers. Even Chinese car manufacturers are getting in on the act. Tesla has been built from scratch on the back of debt and their cars are expensive, so unless they're aiming to remain a niche player, they wont be able to compete at the value end of the market. I've seen a few Tesla's about, but not many. What i do see a lot of are Dacia's funnily enough, probably because they're at the budget end of the market. Dacia is part of the Renault group, so have a large dealership franchise under Renault/Nissan, so it's easy to get your car serviced and maintained. Tesla is a risky bet in my view, but each to their own. I don't really know much about Disney, i know they've been on an acquisition spree and purchased media assets, but there's a lot of competition in that space too, as in everything else.
FruitSalad. i agree with your second paragraph about Growth stocks going out favour and value dividend paying stocks being once again attractive, it's just part of the cyclic nature of markets and after a time Growth will be seen as the primary investment aim, then back to value Ad infinitum.
Basically because there is better opportunity. Why invest in a FTSE dinosaur which is waiting for a 5 year investment plan to pay off when you can buy into to Tesla and Disney and get paid today. However when these growth stocks burst because market corrections raise big flags over their future earnings which is what was fueling theirs share price the market can move back to the boring, safe 2 billion net profit producing company.
"It would seem that the market just doesn’t have the same confidence in the share that you have and I would question the logic of using a depressed share in order to park cash in the event of a serious downturn."
My reasoning is that BT is a Bear stock within a Bull market and is probably close to its bottom. The market appears to be in the midst of a Black Swan event and suffering a correction. Because BT has been hammered down so much, it's unlikely to drop much further, similarly Vodafone and Lloyds. They're obvious choices to park money and will likely see a good rise, with the market, once the market recovers, but with limited downside from here. Telecom and UK focused stocks are out of favour, but it wont always be that way. HSBC was under 420p in April 2016, by Jan 2018 it was over 790p, granted it's dropped since then, but it makes my point. National Grid was under 740p in March 2018 and recently touched 1063p this month. Stocks go out of favour and all of a sudden they're not, i'll just wait for my investments to do the same.
Oh well, good luck. I don’t understand your investment logic, but then I don’t suppose you would understand mine.
However, In your position, I would be asking myself:
why, in a stock market that has been rising on the back of virtually 0% interest rates and billions of pounds in QE pumped into the market since 2009 in order to stimulate the economy, which it has done, with the resultant rise in the ftse and share prices in general - why has BT been effectively slowly dumped by the market since 2015/16 when the ftse in general has held up?
It would seem that the market just doesn’t have the same confidence in the share that you have and I would question the logic of using a depressed share in order to park cash in the event of a serious downturn.
Anyway, let’s hope you make the right call.
"You're already locked in why make it worse?"
Because its not something i worry about, i'll just wait as long as it takes.
"However, is BT really recession proof? Look what happened to its share price during the last recession from late 2007-2009. And have we been in a recession for the last 5 years?"
The fear around the Coronavirus is that it will start choking supply lines and affecting business that relies on import/export and just in time delivery, i don't see Telecoms being impacted by that. My guess is that the market will look for places to park money and Telecoms might be one of those places, we'll have to see what happens next week. If i do jump in, it's not really a bet against recession, it would be a bet against the virus. If i get locked in, then so be it.
You might be right in that this crisis is being overblown, and that prices will be driven down to the benefit of the big players who will be positioning themselves for any eventual rebound.
However, is BT really recession proof? Look what happened to its share price during the last recession from late 2007-2009. And have we been in a recession for the last 5 years?
The first lesson my late father taught me was that you make your profit when you buy, not when you sell and not to get suckered in by the big boys temporarily driving prices up or down to either offload unwanted stock by creating a false demand, or, conversely, causing panic selling in order to drive prices down and pick up stock on the cheap.
And yes, I am a trader, but not in this market.
I was going to wait until April for topping up the ISA's, but I'm thinking this is overblown and certain stocks are immune from a Global recession. I think i'll be keeping a close eye next week and looking at buying some stocks for the short term. Vodafone, BT have been hammered and i just don't see how their underlying businesses will be affected, so those two are on my list. I like Lloyds and i will probably add some too, but i'm not sure how the price will fare if a global recession kicks off. I see Telecoms as a safe bet in these circumstances.