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Hi Nige,
There is no cure for coronavirus Covid-19 - a vaccine provides immunity.
https://time.com/5790545/first-covid-19-vaccine/
81,0002 confirmed cases and 2,762 dead to date and rising
https://www.theguardian.com/world/live/2020/feb/26/coronavirus-latest-updates-who-mission-director-warns-world-is-simply-not-ready
Don't panic ... Don't panic !!!
Hi Troubles
Think 18 months is traditional time including trials on mice, monkeys... Expect it will be fast tracked (if you are dying no doubt you will be happy to give the cure a chance). See:
https://en.wikipedia.org/wiki/Pandemic#Influenza
Terrible affects on populations many years ago, but I think we are far better prepared for this now (and particularly the Chinese).
My 5 builders down about 5.5% this week, probably about the same as ftse 100 loss, yet in US Real Estate down far less than other shares. Don't know how coronavirus will progress but suspect another overreaction by our market as usual.
BoL
Damn virus seems to be spreading further today.
Don't think the masks offer much protection either and give a false sense of security ( should be changed 4 times a day apparently and need associated washing of hands etc.. with alcohol based detergents, soap and water etc....)
Ironically, Chinese companies are working 24 hours non-stop producing them.
Heard somewhere, it may take at least 18 months to develop an effective vaccine.
GLA
His this the start of a fts and Dow correction?
Hi TMT
I missed your point that you were only explaining the possible Sp movement rather than the value. As you say a buying opportunity, but as usual I'm all in. Been planning on creating a held float for a long time, but hate selling when thigs going well, and obviously won't sell when things not going well.
Hi Troubles
I was also planning to use funds from nano sale to set up held float, but think I need to forget about nano, cos no way of knowing when this will happen. So need a new plan. You were right, certainly no bounce today.
BoL
Hi, Nige. I'm not being pessimistic at all. I don't think coronavirus >should< affect builders. I just think we need to recognise that the market is going to ding builders' share prices because of it, and understand what's going on. Just because the SP drops doesn't mean it is really going to affect builders. As you said, it primarily just means we have a buying opportunity.
Hi Nige,
Some bargain buying helped some Asian markets to recover overnight but don't see a rapid 2% rebound here myself today.
Average gain 1.02% next day, 2% possibly after a week according to marketwatch figures.
Any kind of recovery, no matter how small today may give a good indication of TW's and the sectors resilience.
BoL
Hi TMT
Think you are being over pessimistic. The reason for my optimism is that I believe Builders are worth far more than the current valuations, and if they go even further down in price they become even more undervalued - the difference is the important thing.
My last post explained why I thought coronavirus will have almost no affect on Builders (like Politics and Brexit), so creating the sector as a safe haven when things are going badly (like gold or Utes in olden days).
3 of the points you made are assuming a pandemic which I don't think will happen. Temperatures are improving and drugs being tested (on there way).
Two of the other 3 points refer to market sentiment, which is usually wrong anyway.
Leaves Yield competition. If any sector should be hit by coronavirus (and decreased global trade) it will be Banks, not Builders. Incidentally bkgh giving back £1 Bn to shareholders over next 2 years and tw and psn FinRes due later this week. Could have the same idea!
Drop in Builders today totally unjustified Imho, and think Sp improvement tomorrow.
Hi Troubles
From your message (marketwatch) did you notice the least affected Utilities - 1.16% and Real Estate - 1.34%. So hoping for about a 2% bounce tomorrow. Maybe the cloud has a golden lining - think ggp on a roll again.
BoL
https://www.marketwatch.com/story/the-dow-is-off-by-more-than-a-1000-points-and-heading-for-its-second-worst-point-drop-in-its-history-heres-how-the-stock-market-tends-to-perform-afterward-2020-02-24
Some comfort - Stock s tend to rebound after a hit at least 2%.
However every cloud has a gold lining.
GLA
I think there are several reasons this is hitting builders.
1. Some builders are using non-UK labour. If it is hitting Italy, it might hit other places from which builders are sourcing labour. This is unlikely to be significant enough to actually impact builders but it's an excuse to follow the market sentiment and cut prices on builders' shares.
2. Fears that a pandemic could hit the UK hard enough to force lockdown / quarantine of entire communities and so could stop some building activities and sales.
3. Fears that a pandemic could mean loss of jobs and income for enough people to hit demand for housing.
4. Fears that a pandemic could hit economic activity so badly that some lenders may be hampered in mortgage lending.
5. Yield competition -- one of the appeals to housebuilders' shares is the good dividend yield. But if you want to chase yield now, you have other options -- RDSB is over 8%, BP almost 7.5%, HSBA over 7%, etc. There are a lot of shares yielding over 6% with these price drops. So some people who are chasing dividends are looking elsewhere besides the housebuilding sector.
6. Pure sentiment. When the entire market starts to drop, usually even those unaffected by the news that triggered the drop fall, too.
No one of those things tells the whole story but they all probably contribute to it.