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I would not day trade anything personally. Buy on the way down, buy at the bottom, buy as long as you're confident and think this is undervalued! I have no idea if this is the beginning of a rally or just some small respite from a further decline, and I personally don't care to put too much thought into it either way. I like my investing to be simple and boring as possible.
Nothing wrong with either methods. It's just the state of mind. a) crystalise loss and forget about it and look up from there or b) reduce average cost per share.
Anyways. I'm new to investing but came on to see what people were saying the increase overnight. I managed to buy at 300 and I'm thinking to jump out now and wait for the drop. what do you reckon?
You can buy more shares, yes. But your example assumes selling your original holding at a loss to buy more. I'm assuming that you simply remain confident in the company, and use more of your money to buy more shares. Your issue with averaging down is that you might look at spiralling losses if the price continues to drop. Yes, you're correct. But as we were saying originally, we remain confident in the company so don't need to worry about this. We are all operating under the view RDW is a fundamentally good business. The share price drop is merely due to sentiment and market panic.
Discounting all your worrying, you can see the point me and anon3 are trying to make. I understand your point, and if the price continues to drop, then it merely means we were wrong in making the investment we did. But I remain confident, and hope all other readers do too. Markets are looking up so far this morning, let's see what the rest of the day brings!
To clarify the below, If I hold 100 shares in a company at X price, instead of selling out, losing money on the sale, then using money to buy back into the company at Y price, I could simply keep hold of my original shares, and buy at the Y price as it continues to fall, which increases the amount of shares I have overall, averages down my purchase price, and still allows me to keep my original shares, so when the recovery comes, you enjoy a surge due to your original holding recovering, and the new shares you bought cheaply.
As Anon3 said, your approach only makes sense if you think the company will never recover.
The logic isn't flawed. "If I hold shares at £5 and I think they're going to £4 why would I not sell and buy back more cheaply?" Because if you sell shares for a lower price than you bought them, you've lost money. Your lower amount of money would not buy you back the same amount of shares you originally had. So the best course of action for investors confident in their company is to hold.
Nearer 4000, imo.
But my crystal ball's batteries are nearly always flat :-)
UK deaths are starting to accelerate and will do for a while.
You can imagine the major headlines if we hit 100 deaths a day, and then 200 a day etc.
The press just love it and all it does is create really poor sentiment.
Which is what dominates the markets, regardless of the fundamentals.
I'm sure you know what Buffet and Smith etc say;
Buy good companies and do nothing :-)
The government has committed to house building and while it's probably taking a back seat for now, I'd suggest this makes RDW a hold.
All in my opinion.
I'd have to sell my whole PF at a near 50% loss then and that isn't going to happen.
That only makes sense if you think the market isn't going to recover at all and will continue to fall.
The strange part is that I hardly had any losers a month ago, which emphasises how hard and fast and strong this fall has been.
Which is why I'm going to hold and indeed add. I've just bought Shell at just over a tenner, for example.
The market will recover over time and this includes Redrow, imo.
Yes, we all have different strategies and good luck with your holdings too :-)
"They do not have to increase in value at all, you just want them to rise in the medium/long term."
I've worded that incredibly badly.
What I mean is even if you think they're going to fall more, but will come back, you shouldn't sell.
Indeed, if you think they're going to fall in the short term, you'd probably be best to set up a CFD and go short.
I won't be doing that because I've had my fingers burnt before.
Filtertips, it's as has been said.
If you sell, you've lost money, simple.
They do not have to increase in value at all, you just want them to rise in the medium/long term.
Then your loss is reduced or even negated if they continue to rise.
It's an old saying, but "you've lost nothing until you sell".
And I'm not selling at this price.
FilterTips, you're certainly correct in saying you fail to see the logic. If you think the company is a good one, then why would you sell at a loss? If you bought shares at a higher price than currently, selling now simply crystallises your loss. However, if you think the price will recover, then the correct thing to do is keep your shares, and buy more as the price falls, thereby averaging down. Don't sell out if you've got the courage to stomach this downturn. If you're confident in the business, buy more, and when the recovery comes you'll enjoy a surge.
Totally agree anon3!
Good advice and I have shares in 10 different companies and looking at average losses of 30%, but some I have held for 15 yrs. just did a review of portfolio and decided to take the 55% loss on Redrow which I am obviously gutted about. They are a great company doing everything right but I just feel, like you, that this has further to fall. Will continue to monitor and may buy back but people are not going to be moving for 1-2 years and I do wonder what this will do to their cash flow. Hope I am wrong on this by bailing but sometimes you just have to do what you think is right at the time
My whole shares portfolio, which is anchored around Shares magazine's 10 recommendations for this year, is down around 40%.
There is no way I will take a 50% hit (and I have some doing worse than that!).
Indeed, when I think Corona is peaking, I'll buy more.
Tbf, I was around 35% invested at most, because I knew a big fall was due and have predicted it for a while.
Hence I have ammo, ready to fire.
The point is, as scary as it seems now (and it's going to get worse, way worse imo), it will come back, even if it takes a couple of years.
You only lose if you sell at this price is what you need to remember.
I'm seeing a current P/E of around 3.7 and an 8% divi.
These are crazy figures and of course, won't hold in the short term.
But let's say the divi gets halved and earnings fall 50%.
This is a stonking buy at this price.
Yet I don't believe it's bottomed yet, by a long chalk.
My opinion?
Do not sell!
And that's all it is.
An opinion. DYOR.
I remember being in a similar situation in 1991 when I moved into a new house on a large estate. All work on the site stopped for a couple of years and it was actually quite nice. It also meant that house prices, although they fell a bit, did not plummet. I am sure that redrow and others will have to do the same. Unfortunately I cannot see an end to the 15% a day falls. Wishing I had cashed out last week and now cannot decide if I should take the 50% hit or hope that I am wrong on the continuing decline
Sat in our new Redrow Newbuild with 250 houses built and 650 to be built over the next 6 years or so on their Flagship site......roof just going up on Pub..but guess not in hurry to finish that now.
Wheres this goin to ?
Does anyone know what the current cash/ debt is with this company? I have looked at recent accounts but these are a bit out of date. I know these are exceptional times but every time I look at the share price on this it is down 10-15% and just trying to work out why this is getting hit more than other shares. Appreciate that people will be delaying moves but they still have a lot of assets
I think it will easily get there. My original target was 904
Might have to revaluate my plan :-)
BDEV doing great as well.
JPMORGAN RAISES REDROW PRICE TARGET TO 950 (930) PENCE - 'OVERWEIGHT'
That would be nice.
Tavernham,
If you scroll back through a few of my posts, you should quickly form the view that I very much rely on the numbers...
And, for EPS, and resultant ROE (I don't use ROCE), I rely on working with balance sheet BVPS year to year and half year to half year, adjusting for dividends paid.
So far so not too controversial among the people I chat about this stuff with on our blog and by email as well as on here - for the most part this is Cyberduck and James188 - but they don't entirely agree with my numbers on Redrow for last year so they may comment here if they see this...?
Using balance sheet BVPS figures, Redrow made 47.99p EPS H1 and 29.61p EPS H2 year to June 2019 - so 77.6p EPS for the year against the 92.3p EPS they declared with an ROE of 19.3% for 2019 compared to 26.4% for 2018.
The contentious bit is that I consider the so-called 30p B share return of shareholder equity last year a successful smoke & mirrors job from a short term marketing perspective but I don't want to get into all that again here now except to say that, in the end, you can't dodge the numbers when it comes to remaining BVPS and resultant PBV.
H1 2020 EPS by my reckoning is 36.16p against the declared 37.2p.
A full year 2020 EPS of 82p would put them on an ROE for the year of 18.8% by my reckoning which seems to me about the right ball park so that's what I've penciled in for them for 2020...
I'm well out of shape with the scribblers on this as they are 10p more than me on EPS and that is particularly against the grain as their track record has been to seriously under-estimate Redrow's earnings, but there you go, that was while Steve Morgan was still at the helm...
Anyway, this year's H1 EPS is 25% down on last year's H1, and Redrow uncharacteristically morphing into Vicky Pollard about this isn't likely to cut it much with the market, I guess - hence the disappointing market response..
I may be well off the mark but, speaking as an individual market research sample of one, this is how I see it...
Strictly
anyone know why the sp fell away this afternoon?
not that great at ALL, should see a drop in the share price after such a strong run up...putting a brave face on it by increasing the divi. but with all the govt help with 'help to buy' and their revenues and cash are down, margins down..even with their weighting to second half they will still have whole year revenues less than previous year and the share price has nearly doubled in that time. rough seas ahead
very confident statement, good increase in divi although the first half was not great imv.
Hi Taverham
Hope No Worries about fires where you are. Talk about cancelling NY fireworks in Sydney.
Basically EU Deal nothing is settled until all is settled (Orig idea) which probably will take more than a year. BoJo trying to change the rules, and if we revoked Article 50 no negotiations needed, which gave Anti Cons a massive advantage, but Corbyn didn't know what to do and JS ignored by the Media.
Anyway, I think No Deal very possible now, but Imho better than a Deal (from Bldrs Sp point of view).
So we are left with another year of speculation based on Brexit and very low prices cos BoJo has Not got Brexit sorted!
Still think best out of LSE.
BoL
I know nothing about tef and am on holiday in aus at present. I actually think a deal with eu will happen and whatever it looks like in reality it will be presented as a huge success . Dare i say with a fanfare of Trump ets?
Ps
PreInt 09/01/20, sorry