Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Lorenzo, House prices will always rise and a correction wont happen without a war, an amreican living solution will be heading to the UK and it will be the rise os people living in caravans that cant afford houses!
Labour are getting in next and they are talking about 1.5m homes being built on brown and some greenbelt. There is no way thats possible without the big builders pumping out houses and the only way that happens is with some kind of help2buy scheme of some sort. It might be a bit stricter than previously but builders build to demand and the demand is there but in order to hit 1.5m there needs to be incentives for buying and building. There is not a single thing a labour government can do to force companies to build more and charge less. That would require law changes to ownership and free markets that even labour couldnt pass so the only way is incentives and lower interest rates.
There is either a big sell or a big buy as it’s went to negotiated trades and the the spread is £14.58- £10.48. I hope it’s not the lower one
I was listening to the most recent Bellway investor presentation over the weekend, and I was taken aback by their forecasts.
For transparency purposes, I sold my Bellway shares a couple of months ago (or so) at £28 per share. Why did I sell? Because I believed that the risk outweighed the potential reward (and I still do). House prices in the U.K. are simply far too high in relation to income imo. Yes, there is latent demand for homes (much like there’s latent demand for Ferraris), but I don’t see how further house price growth is sustainable.
We’re long overdue a serious correction, in my opinion. That said, with the ‘house prices only go up’ rhetoric from those who fail to understand the debasement of the GBP, we might not see a collapse in confidence in the housing market anytime soon.
Anyway, the presentation contained some fairly alarming forecasts, as follows:
In FY23 and FY22, Bellway completed c.11,000 homes. During the Q & A of the presentation, the top brass explained that they believe it will take Bellway 2-3 years to complete 10,000 homes in a financial year (still 1,000 less than FY23!). They elaborated on this by stating that they believe their output will increase by c.5% per annum. If correct, they won’t return to a FY23 level of output for 4-5 years! As an aggressive investor (I target 30% CAGR per annum), I don’t see there being enough upside in the housebuilders over the coming years, although the market could easily get carried away, as it often does. I’m an earnings man, however.
Bellway’s top boy could be wrong, and I could be wrong, but I think a rapid recovery is far from a foregone conclusion. All it takes is another black swan event or some further inflationary pressure, and things will start looking very bleak.
I’m also concerned by the volume of redundancies (I’m often reading about them in interim and annual reports). The increase in the minimum wage adds fuel to this fire imo.
As for PSN, I find it alarming how they’re prepared to increase debt in order to maintain a healthy dividend… what could possibly go wrong there? I hear 2008 was eventful in this sector due to housebuilders having poor balance sheets (I was only 15 at the time)?
FWIW, I wouldn’t be surprised if we see interest rates fall and strong housing market rebound (in FY25 or FY26), but given the circumstances, I’m happy to sit on the sidelines for a bit. Albeit, a continuation in the SP decline may cause me to reconsider.
To conclude, I like a sure bet, and I don’t see that in housebuilders at the moment. I don’t feel like I (or anybody else) can confidently predict when they will recover.
I always slip up when I try and pick a trading time so I just hold, I would love to sell £50k to put in card factory for its prelim results in two weeks but my luck will be Psn will rise loads and card will be under expectations even though I’m pretty sure it won’t!
Stevebt , Shell didn’t look it was doing anything for a while and now look , my timing is terrible , I’m telling myself that this ( Psn) is a sleeping giant that is going to explode into an upward trajectory this year just shell did around late 2022 , of course Psn is tiny compared to them but , if we get some rate cuts then it could follow their upward trend, or am I kidding myself ….? Anyway , no way out for me at this price , I’m stuck until we get over £14 and hopefully £15
Lucky I sold @£14.74, then traded a few times making a few extra quids. Just bought back again a couple days ago, but slightly overpaid @£1275.4. Probably unable to get out with profit this time. If it continues to drift lower.😂😂
Its a shame you didn;t buy back into shell when you sold as you could of sold shell now and taken two dividends and of bought thousands more psn shares with your profits.
Blimey , is this ever going to get going again ,the longer it goes on the more sceptical I become . Shoot me now please , should of escaped when we nearly hit £15 before but there we go , greed got the better of me again ffs
Back onboard once again, let's see if there will be a bounce after yet another dip. GLA😊 😊
Perhaps I can buy my shares back tomorrow at lower than 1260? Or will the Middle East tension send it even lower, I wonder?
Biggest mistake BoE made and possibly nearly every monetary controller, has been in 2009 when they lowered interest rates down to zero.
This just restarted the same trend of making a quick buck for the Feds and governing bodies on them buying bonds and holdings in banks etc.
If they had left at 1-2% rather than increasing lower rates so aggressively
Then again I’m not working for BoE, but look what they got do so wrong
I only hold US real estate SPG in property, but PSN on my watchlist this year along with Volvo trucks.
'Once in a generation' review reveals why Bank of England has made major forecasting errors https://news.sky.com/story/once-in-a-generation-review-reveals-why-bank-of-england-keeps-getting-its-forecasts-wrong-13113162
Interest rates going nowhere anytime soon.
It'll go down again
I sold again at 1303.5. Will wait for it to fall back once more, as it always does, lol. 😂😂😂
A bit disappointed today, no big swings.😌😌
Back on board, but missed the low. It was up to 1315, then dropped to 1258, what a big swing!! 😱😱
Lets hope the market picks up and we go to where we should be1450 and over
THE government should get their house in order cut down on their expensive s and do their jobs + the legal system should start doing their jobs properly and consider properly what they try to rule on (consider all the evidence .
Just following USA, UK should of started cutting already our economy is not performing on a scale any thing like USA
B of E HAVE HELD INTEREST RATES ON HOLD why cant they be pro active ???
“Could it be the looming tax year…”
I suspect that it’s also that the end of the tax year has coincided with Easter. Half the City is on holiday, so trading volumes are down and people are selling into a thin market.
Inflation down to 2.4 % :-)
Jcb208 this is trading at about 42%
Doubled my holding, looks like the bottom for today anyway.As soon as interest rates fall this will go back over 1400