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RR,
You’re very much right about FTSE100 UK companies ~ the index as a whole has only given about 7% growth in total for all of this century so far, plus dividends, so definitely no cigar for them as a collective entity….
I recall picking right through all the individual component companies in around 2002, crunched all the numbers, and could see, to paraphrase Kipling, that the entirety of it was “A trap set by knaves for fools” and thereafter avoided it like the plague ~ sticking instead to the one sector that made sense to me then and still does now…
And that is house builders…
However, if you have successfully chosen good companies from within the FTSE ~ and clearly there are some ~ then firstly well done for that and also this obviously then gives you more options, whereas I’m very much a one trick pony, just house builders, hence the moniker.
One thing my spreadsheet does do is track the progress of what £1k invested at the start, in March 2000, would be, at the end of each year & currently, based on compounding up (or down!) each year’s performance…
At the end of 2019, it was up to £40k but, as of now, it’s only £34k.
So, all I’ve done for the past three and a half years is go backwards….
But I’ve been at this game long enough to hopefully not let it knock my equanimity too much ~ to borrow from buddhism, that would just be dukkha ~ and especially having taken the mother of all stock market kickings in the credit crunch, which necessitated relocating to a somewhat smaller house, so that wasn’t so much fun…
So, anyway, I am looking for recovery once more, in due course, providing it doesn’t turn out that our wise & thoughtful leaders have pushed the nation permanently down the road to Hell in a hand cart…
Live in hope, eh..?
Strictly
SB
Of course - and my call is based on my own experience.
I consider myself to be a fairly cautious investor. I opened my position over 5 years ago, at what was then the 2 year average sp. I have invested all the dividends since then. I’m still 28% down on my original investment.
I’m only thankful that I’m invested mostly in FTSE 100 companies, with an international presence, because, with a few exceptions, anything I’ve bought that’s UK domestically focused has gone nowhere.
RR,
I'm not invested in Taylor Wimps currently, but it has made an underlying ROE of an average of 15.7% a year which, in my view, is far from shabby.
Furthermore, this is slightly ahead of my benchmark share, Bellway, which has averaged 14.5% a year ROE.
My issue with Wimps as an investment prospect is that, relatively, it is still too expensive ~ with a PBV of 0.90 against Bellway’s 0.68 and Redrow’s 0.73.
Of course, everyone has to call this for themselves…
Strictly
I've held this dog share for 5 years. Wimps is a basket case. It couldn't even rally during the HB boom of the last few years, so what chance has it now?
Perhaps hold for a decade and you might just get your money back, if you reinvest the divis.
Martin
RE: Ready to buy more25 Jun 2023 14:02
Https://www.independent.co.uk/news/uk/politics/rishi-sunak-wife-uk-taxes-b2054263.html
After reading your link I must say it feels like she’s admitted being caught out and saying I’ll pay a little more now I’ve been called out.
How many people who pay taxes have that privilege of deciding when to be a Non Dom and say to the tax man I’ll pay a little bit more to please the public.
It’s a comic story. Sat in 10 Downing Street with no mortgage, no rent to pay , loads of armed guards breaking lockdown rules at tax payers expense and then watch while interest rates go up, inflation rises because the party policies of mini budgets etc go wrong.
Then use the get out card”let’s blame it on Russia not our failed policies “
The government are killing the housing market. They’ve killed landlords, now killing first and all new and existing home owners with high interest rates.
I guess they will introduce a policy soon saying no need for repossessions because the bank no how much you owe so they’ll clear your debt and keep for themselves lol.
Legal criminals who make the rules up as they wish.
Happy Monday lol
FMF,
I’ve been at this investing malarkey for around twenty three years ~ the last twenty of which have been purely in house builder shares and overall I have averaged about seventeen percent a year gain which I’m satisfied with…
During that time, I’ve only called the market once, and that was end of February 2020, with the oncoming tsunami of covid…
To some extent, I have Ambrose Evans-Pritchard, of the Telegraph, to thank for that… he gets much stick from the readership there for his epic pronouncements but even a stopped clock is right twice a day ~ and I felt that St Valentine’s day that year was one of those moments…
But anyway, other than that, I have remained fully invested throughout and have continued to simply trade between different house builder shares as perceived gaps in value opened up…
Right now, I’m placed fairly evenly, about a third each in Bellway, Persimmon & Redrow.
So, yes, I took a kicking last year ~ along with all the others in my merry gang of investors ~ but we’ve been there before several times and, unless it’s different this time (and there’s always the chance of that one day, of course), then based on the various scribblers’, Bank of England’s & Office for Budget Responsibility’s projections we’ve likely got a couple of years of sh.t to get through before things start to come back on a more of an even keel and, as ever, it may well be that house builder share prices go all over the show in the meantime and though it does seem to get a tad heated here on that topic I personally have no view to share on timings…
As Clint Eastwood famously said “Opinions are like a.seholes… everyone’s got one”
But anyway, as ever, I am an investing wuss and I’m more fearful of being in cash when I should be in shares than I am of being in shares when I should be in cash.
Hence I remain fully invested.
Strictly
Thanks strictly, insightful as always. Having being burnt in the last crash, I’m intrigued to know, are you still invested in HB’s or sitting on the sidelines waiting to jump in at the bottom?
FMF,
Taylor Wimps had to undertake the mother of all rights issues back in the day....
Before the credit crunch, they got up to a BVPS of 352p.
I don’t have the details of the rights issue to hand, but soon after, in 2011, their BVPS was 56p.
So, existing shareholders who went into the abyss with them were all but wiped out...
Whereas, those more fortunate souls who happened to be drinking buddies with Captain Hindsight ~ and so held off buying until late 2008, when the price dropped, I think, to around 4p ~ would no doubt have ended up being somewhat happier bunnies…
My own folly through that tumultuous time was Barratt rather than Taylor Wimps…
I still bear the scars, though…
But, anyway ~ hope that answers it for you..?
Strictly
Mortgage rates are going to cause pain for those coming off fixed rate deals or those wanting to upsize or borrow to the limit..
If some one took out a 300k mortgage @ circa 1.5% a couple of years ago, they would be paying circa 4.5k a year interest, some of those people will not be able to remortgage onto another fixed rate due to failing the affordability test and will revert to standard variable rate circa 7.5% and will now pay circa 22.5k a year interest on a balance of 300k..
those wanting to upsize could have got a 300k mortgage @ 1.5% fixed rate a couple of year ago and payed 4.5k a year interest, now it circa 6.2% so around £18600 per year interest… (I’m in this situation) a lot are saying this is nothing compared to the 1980s etc.. what they a missing is house prices are so much more expensive in relation to earnings compared to the 1980s so it just as bad..
by the time one joint owner in a household who’s borrowed to the limit has paid tax etc on their earnings, the bank will swipe what’s left for interest. Then your left to live of what’s left of the other partners earnings again after HMRC has swiped their 1/3 of earnings.. on top of that everything else is costing more than before.. prices of food and products will not come back down as you need deflation to achieve that… government aiming for 2% per year, so what you pay now is hear to stay plus another 2% on top.. utility bills will not return to what they were, there’s been big inflation matching pay rises in the utility industry which now needs to be covered by consumers bills..
House prices need to be lower going forwards, some of these fictitious made up inflated house prices listed on rightmove take the p1ss.. estate agents have got greedy and need to get realistic. Unaffordable……
Other HB’s have seen major growth over the past 30 years but TW hasn’t. Anyone know why this is?
Https://www.independent.co.uk/news/uk/politics/rishi-sunak-wife-uk-taxes-b2054263.html
Jamrock
A few minutes effort would have soon given you the answer concerning her current uk tax status.
For this reason, I will no longer be claiming the remittance basis for tax. This means I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains, wherever in the world that income arises. I do this because I want to, not because the rules require me to.9 Apr 2022
Not working should say
Jamrock furlough cost this silly government loads. I know people who made more money work less because of furlough.Bank of England putting interest rates up must know by now its now working.. Im hoping it gets better before winter hits us
The last I heard she was a Non Dom so I guess pays tax elsewhere but I guess we pick up the security bill.
May be they should be made to pay rent for 19 Downing Street.
Anyway good luck to long term holders and I hope the Economy picks up soon as no one want a recession
£250m
The last time I looked Mrs Rishi was paying full UK tax, as no doubt is Mr Rishi.
On another matter, be interesting to see whether Wimps much publicised dividend policy stress test will to continue payouts at 20% price reductions and 30% volume reductions. IMHO any slow done in sales and pricing pressures won't get near these tough metrics, so the dividend should be at least £250 per annum, or ~7.5% of net assets whichever the greater. Of course, Wimps BoD reserves the right to choose distribution method, buybacks or cash, or mix.
At these prices some buybacks would be a good plan.
Its times like these that the best managed businesses prevail, and the best sales teams still sell through the slowdown. Wimps does rate highly on both these counts. Also, remember that every year more houses are sold for cash, as inheritance flows down the generations and finds its way into property. As usual the media and talking heads rush to attract attention with outlandish claims of disaster etc., yet in practice the housing market is still trucking along, albeit with lower overall sales and slightly longer time from order to delivery.
Build inflation is dropping fast, prices holding up and incentives are running at 2 - 4%, which will help maintain margins. At a pound per share, what's not to like. Wimps are one of the better placed builders to navigate the "Nimbies" who are relying planning at the moment, as their large landbank provides more flexibility than some of their competitors.
Back to the 80s
I don’t recall house price’s going up. I remember buying my first one at 20% cheaper than asking price.
Lets all the conservatives and Bank of England get inflation under control quickly.
All builders will prove to be cheap at some point but my guess is when interest rates stop rising.
Did we really need a lockdown!
Did we really need to give furlough money away to any and everyone!.
Did we all think the government weren’t going to make all working people pay a price
Good morning All
Interesting scenario this!
House builders are building less to keep the price up, so new homes are not going down in price ( is this what we are saying) ?
So then that leaves the old houses ( not enough already) to be done up ( lack of labour) !
So then that leaves the houses maintained well and already lived in ( probably will not move to new home at the moment) !
So this leaves what exactly ?
A perfect storm!
Nobody can move, nobody can buy, no houses being built, no repossessions for twelve months and a million houses behind schedule, oh and more people every year needing homes!
What a dilemma:)))
I wish I was a builder, oh I am!
Good luck all, this share long term is as safe as houses!
No debt, a starved market and a country that’s been in recession for a few years and everyone knows it comes in cycles so probably two to three years and we will be coming out!
All in my opinion of course
123
As I said it’s not investing anymore it gambling but good luck if your but more.
Who knows what happens but more rate rises expected so I’d guess it do t help house builders unless the government are going to buy the houses to house people they force out there homes with higher interest rates.
Rishi is in the best place
10 downing with a wife not paying tax and killing us all
Love it
I’ve not advised anyone to buy or not to buy but I think you’re clearly making your own call.
All the best but the situation with interest rates is what it is any hopefully any dividends will help you if there not cut
Jam, I think you should not be giving investing advice on this or any other board. If people listened to you you might cost them a lot of money.
Can never catch the bottom anyway so I am adding to my position now
It’s simple tactics to kill housing demand and prices fall.
Then supply outstrips demand and people get on the housing ladder with less deposits needed etc.
Builders build less to prevent erasing margins so demand for labour decreases.
Recession follows and inflation falls.
Then the government says
“We’ve gone to far and slashed rates”
The cycle starts again and most investors are shafted and on huge losses while fund managers buy distressed shares.
Best stick your money in a higher interest account because investing ain’t investing anymore it’s gambling
80p coming, accumulate then , will hit oct 22 lows, trussenomics !, avoid till then would not touch them any builder right now