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Very very strange times, billions paid out in furlough. Government using inflation to get the money back from covid. Maybe individual tax codes would have been better but lets face it we can even renew passports. Sat at home getting paid and businesses paid for not operating has to be paid for. Don't get me wrong what was done had to be done but the way they are getting the money back is disgraceful and killing pensioners, the vunerable etc. Best they can come up with is windfall on energy, in the meantime they collect the vat on increasing prices
Have just bailed myself after 5 years from initial 1st buy. Have exited flat taking into account divis over the years. I feel I can re enter ex divi a lot lower. Personally I think only way central banks can curb inflation is with inflation if you get what I mean. Also I believe they all needed inflation to rectify all the QE we have had for years
Looks like it the usual claw its way back up then drop right back down again - lets hope America doesnt get clattered again at 2.30
It’s incredibly resilient
Doing much better than ftse100
Hopefully will stay that way
You're right Fleccy - telecom stocks don't tend to get hit anywhere near as hard as financials and basic resources in a recession, and if that's where we are heading then VOD probably will hold up better, but that doesn't mean it doesn't have further to fall.
It will be interesting to see what actually happens to prices in the telecoms sector if we do into recession. I wouldn't be surprised to see the ones with the deepest pockets drive down prices to obtain market share both organically and by acquisition by driving profits/valuations into the ground and picking up distressed competitors on the cheap.
Selling, holding and/or topping up are very personal decisions that need to be based on when you need your money and what risks you want to take. Always a risk that when you sell you don't buy back at a lower price, either because it doesn't go lower, or it does and you don't pull the trigger thinking it will go lower.
Making binary decisions like buy everything now or sell everything exposes you to quite a lot of risk, as does having too many eggs in one basket.
With a 5 year plus time horizon, being diversified and riding out the bumps has always had the highest chance of success.
"That can very quickly lead to a recession, which in itself is bad for company profits and share prices as gross revenues decline, but a recession with high inflation is even worse as that puts pressure on company margins so profits take a hit from both the top and bottom line."
"VOD could also face very similar problems. Yes they have something everyone 'needs' and they might be increasing existing customers contracts by CPI+3.9%, but in their forecasts they weren't predicting gross revenue to increase by anywhere near that amount."
Don't disagree with you about the risk of recession, but Telecom stocks are among the best recession proof sectors. As far as the UK Telecom price rises, all providers are increasing their prices by CPI+3.9%, but Openreach wholesale prices are regulated to CPI increase only, so the CP's using Openreach infrastructure should benefit by 3.9% above inflation. Consumers can only switch at the the end of their contracts, as the current price rises are written into contracts. Consumers may switch at the end of their contracts, to take advantage of new customer teaser offers, but that's the only risk since all providers are raising their prices.
I wonder about the new UK Altnets, since they're are building their networks from investment, with an uncertain customer takeup. The Altnets can try and undercut Openreach, on wholesale, but offers like Equinox make that difficult. CityFibre have taken OFCOM to court, to fight the decision allowing Openreach to offer the Equinox deal, with the Judgement pending.
https://www.catribunal.org.uk/cases/14263321-cityfibre-limited
It’s the great unknown. Personally not selling, but looking at bringing new cash in to buy up at lower prices. Whether this period goes on for 2 weeks or 2 years, nobody knows.
So i expect the best way to deal with it is to hold money back in cash until it appears to have bottomed out, it's always tempting to sell off stock, poss not a good thing
In summary, we are all doomed, temporarily.
Always painful to be in a market reset.
Fleccy - no he said 10% + so I’ll admit the use of the word hyperinflation wasn’t appropriate - my apologies but I was a bit narked last night.
If you look at the numbers, changes to the base rate don’t have as much impact as you think. Around a third of homes are owned outright, another third have very low mortgages and of the third left a substantial number these days are on fixed rates so it takes a while for increases in interest rates to filter through to reduce inflation - much longer than it did previously when we had double digit inflation.
What was very worrying about what he said is that we are heading into a period of pretty severe stagflation. Wage growth is forecast to be substantially below inflation and even though interest rates are rising, the differential between interest rates and inflation will be the largest it’s ever been in history. That means there is going to be a substantial cut in real incomes both for savers and workers. That means there’s less money to spend which in turn will mean that consumers have less money to spend. That can very quickly lead to a recession, which in itself is bad for company profits and share prices as gross revenues decline, but a recession with high inflation is even worse as that puts pressure on company margins so profits take a hit from both the top and bottom line.
All of that wasn’t being priced in a couple of weeks ago as everyone was thinking that company profits would be fine as companies would just pass on the cost increases to the consumer and maintain their margins, but that’s not feasible when real incomes aren’t keeping pace with inflation.
I think the penny finally started to drop yesterday which is why we are seeing such big falls.
It was probably the combination of the delayed reaction to Powell’s comments about the Fed won’t hesitate to increase rates past neutral. In plain English that means they are going to increases rates at a pace which makes a recession almost inevitable. The rally that followed those comments was market nonsense that was just setting us up for a bigger fall.
The final trigger were the results from Walmart and Target, both of which beat gross revenue estimates (revenue increases of 3-4%) but both were major misses on profitability as the increases in revenue weren't big enough to match the increases in costs. That's why I said the yanks were going to wet the bed, and when they finally digested all of that they have, and are dropping like a stone.
VOD could also face very similar problems. Yes they have something everyone 'needs' and they might be increasing existing customers contracts by CPI+3.9%, but in their forecasts they weren't predicting gross revenue to increase by anywhere near that amount. They know they'll end up with more churn, as when money is tight people shop around for the best deal, and the telecoms sector has been a notorious race to the bottom on pricing. Even if that doesn't happen, people will trim their exis
Don't think he used the words hyper inflation. He did use the word apocalyptic...
"The governor of the Bank of England said almost 2 weeks ago that we are facing hyper inflation we can’t do much about"
Compound, did the BOE governor actually use the word hyperinflation? Since, in my book, hyperinflation suggests out of control inflation where price rises occur on an almost daily basis. All I've heard is 10% inflation, which is high, but not out of control. As far as interest rates are concerned, the BOE doesn't need to raise UK interest rates as high as the US, as even small increases reduce disposable incomes for variable rate mortgage holders, which is a substantial percentage of UK householders; I think the BOE have only been raising in 0.25 increments, for that reason.
Oh, by the way compound I meant to ask you your predictions for the vod sp over the next few weeks? Let's see if you can get it right? If you can then that would be good. Should be easy for you, so I am all ears? Thank you.
Mikey. You just can't leave it alone can you? Time to put it to rest, as Gary said?
Compound. Well I can honestly say I have never come across such a pompous Know it all as you. If you really are that clever, you must be very rich? As for you Knowing more than me? I have never pretended to know anything, just being honest & modest about my investment. You clearly have neither of those qualities. This is not the vod know it all share forum, & as such I think losers like me should be be able to post as well as Know it all (according to you) winners like you. Try & stop being so much up your arse? that might help? You say most of the stuff in the financial press is just garbage, so we just dismiss everything in the press & believe you instead shall we? & you say you can't put up with my nonsense?
Compound - excellent posts and I thankyou for your work . As I have said numerous times danielh insults anybody who does not say a good thing about his beloved Vodafone . I hope Vodafone turns around for his sake but I cant see it happening anytime soon - and sorry I cannot see it happening at all with Read at thw helm , but thats just my opinion ( which we are all entitled to ) - Rocky times ahead I feel .
You really are some kind of special aren’t you Daniel?
Just because you haven’t got a clue what you are doing it doesn’t mean other people don’t.
You’ve invested in a single share that has destroyed your capital and you think that’s normal and unavoidable. The only thing you can do is hope, pray and insult other people.
Well I can tell you from professional experience that your investment decisions (guesses) and performance (losses) stink worse than your attitude.
I know a hell of a lot more about this stuff than you do and if you had an ounce of common sense you would have realised that by now. If you’re in any doubt about that then re-read my posts.
I told you back in Dec/Jan that someone was accumulating and they were.
I said the SP would get to 140p by May and it did.
I said 2 weeks ago that markets were about to tank and they have, and this morning I told you the yanks were going to wet the bed today and US indexes closed between 4-5% down.
None of that was luck or lifting from other people - it was hard work and analysis of a multitude of different data.
Why on earth would I want to lift stuff when I can do my own analysis?
Most of the stuff you read in the financial press or wider media is complete garbage either written by someone who doesn’t know what they are talking about or who have a vested interest in what they are writing - often both. I know because I work in this industry and I frequently tear to shreds the dodgy analysis and actions of others and have to dumb down comments to financial journalists who don’t have a clue what they are writing about.
I’ve tried to help other people out by offering genuine analysis and opinions, as I can remember what it was like when I didn’t have a clue what was going on. Ive moved on from that but you clearly haven’t and never will.
I can’t put up with your nonsense anymore.
GLA whatever you decide to.
Pretty much the same dan unless we go out for a meal or when on holiday
Rob. We sound like a right couple of boozers don't we? I am actually tea total, don't touch a drop??
no prob Dan , nothing a few pints of San Miguel can't sort
good night
Good night Rob, It's only money, so your round then? Next Friday perhaps?
Thanks guys for all your thoughts on vod's current direction, looks like some tough times ahead with no easy solution, so will have to find ways to make the best of it
some general advice from the likes of Hargreaves, when investing in a fund share etc, be prepared to invest for around 5 years, what they won't tell you is which 5 years, blimey we must be well overdue for those 5 good years now ?
Have been loading up with dividend shares as much as funds will allow, i guess the next year will sort out the men from the boys, by that i mean which ones will continue paying the full dividends and not lose too much on the capital, I would never wish a share to drop down as it can be a long journey back up, but might be worth a top up here at a bargain price should it keep dropping that is, let's hope things get a lot better as soon as possible
but on the bright side it's only money so enjoy the summer and have a good holiday guys
Thank you for that compound?? So is this all about you doing it properly & writing detailed post's just your way of paying forward, plus it can help you clarify your own thoughts? (all your quotes) Are you serious?? Is this forum a joke? Come on compound please don't just reprint stuff, that, as you say, we can all just read for ourselves?
Thanks fleccy. I thought the whole point of your support of vod was it's div'i ? So I am puzzled by your comment which suggest's vod should reduce it's deb't by reducing it's divi? I am trying very hard to believe in your positive stance here? But I am having a struggle with that at the moment? We all know vod's deb't is a problem? If vod reduces it's divi, then all you have said in the past goes straight out of the window surely? I think it is fair to say though that anybody who posts anything on here against the sheep like, go with flow,sack Nick Read attitude is not going to get many recommends?
All original content Dan. The numbers and information are all out there in the public domain, you just need to find it. If you tune into Bloomberg or CNBC you can listen to what the policy makers are actually saying, which is usually the biggest driver in the markets, although the reaction can often be delayed.
Financial ‘experts’ invariably have a hidden agenda and financial journalists are far more clueless than you could possibly imagine, so I wouldn’t dream of cutting and pasting any of their work.
Just trying to help people put things into context. Many moons ago I frequented boards like this and got sucked into the euphoria on various boards instead of learning and ended up losing money. I then learned how to do it properly and spending time writing detailed posts is just my way of paying forward, plus it can help me clarify my own thoughts.