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That is human nature Falky. We are emotional and attach too much significance to arbitrary outcomes. People loose and say that they are not bothered because they averaged down. BS. The truth is Fiat is simply IOUs issued by bankrupt governments who have recourse to men with guns in extremis. We feel happy when the market gods smile on us and depressed when we loose. Reality is that the stock market is all just an enormous rigged game. That said I believe in GOLD absolutely and shall continue to buy shares in miners despite the slump because the media twaddle I read appeals to my confirmation bias. GLA and don't take it too seriously!
Re claim that all markets are self-correcting. That is simply not the case otherwise we would not require laws, professional oversight, Central Banks and competition authorities.
Re the property market. The current condition of the UK domestic market is strong, especially for houses with gardens rather than flats. The market favours areas with decent rail links to London. However, it has been grossly distorted by the availability of credit (25-30 years terms at 5-6 times salaries), government policy (Help to Buy votes and Stamp Duty holidays) and rock bottom interest rates. If the horizon changes eg a banking crisis or the introduction of a Land Valuation Tax, things may look different as per the Credit Crunch of 2007.
You also have to factor in the dearth of alternative investment opportunities. Bonds are negative in real terms as is cash and the FTSE 100 is marginally above where it was on the eve of the Millennium.
On balance buying when the market seizes up has been a very successful policy previously, particularly the early 1990s and post 2009. Competition now includes REITS and hedge funds such as Blackrock so has become financialized and prone to speculation and manipulation.
Falkie, re person to have lost money on their investment in SE England over the past 2000 years, William the Conqueror who would have offered the whole of the country as a ransom when captured.
GLA
Poof, and its gone. It was all looking so good. Ill settle for north of 46p by close.
Popeye, I am in all the shares you are considering and BHP. In a world of Crypto and alt coins not to mention NFTs, dividend stocks that produce tangible materials and profits are deeply unfashionable. Ill take substance over style. Last week I got £6.5K in dividends. These shares will rally when China starts to ramp up demand. It is just a matter of being patient in the meantime.
Hardup, in real terms we are deeply negative and have been for years. The ECB and BoS were both issuing negative government bonds previously. There are even negative yielding corporate bonds out there. At one point the figure globally reached $17 Tr I believe, a data point quoted bt Max Keiser frequently. Have your forgotten the Taper Tantrum? This globally connected financial system is chess not snap.
Hardup, your analysis assumes that interests are positively correlated with inflation. In 'normal times' I would agree but these are not normal times. When have negative interest rates persisted before? When was the last time Central Banks globally manipulated the borrowing data by effectively swallowing their own issuance? There is no alternative for governments but to let the economy run hot in order to inflate away the impact of over £2 TR acknowledged borrowing not to mention PFI, the Bank bailouts, unfunded obligations, defaulting student debt and divorce payments. The causal mechanism is more complex than the one you paint. If rates go up companies go bust, as indeed does every country in the G20.
The news feed is all negative at the moment. I can't conceive this being a blue day. Winter is coming literally and figuratively. We all knew there would be consequences to the enormous debt pile our over Lords have amassed and an end to subsidised inactivity, not to mention over complicated Just-in-Time supply chains circling the globe and stretched to their absolute limit. I am not even going to mention the B word. Perhaps this is the shock we need to rebuild our manufacturing sector. Regardless, we shall all have to pay more for the goods we buy in future. GLA.
I agree Cornsland that the route to salvation is yield via dividends on a regular and sustainable basis. I am not a fan of buy-backs which have been abused historically by directors to fleece the shareholders e.g. Boeing and American Airlines. I also resent the dilution of capital caused by massive issuance. It is rather like your neighbour encroaching upon your garden. Share divisions and new issuance suit meme tech stocks rather than a dyed in the wool UK high street bank. At least we are seeing blue this morning. Hopefully this will signal a good week! GLA.
Well said Wenglishboy. The system works when it protects the needy and provides an escape, not when it encourages abuse and malingering. However, to have silver spoon cretins pontificate about social justice, while setting their own pay and cosying up to finance and tech interests is beyond hypocritical. Increased NI, inflation, council tax, food scarcity, childcare costs, social care will squeeze the middle beyond their elastic limit. When are Amazon, Facebook and Google going to pay what is fair? Perhaps Nick Clegg can enlighten us.
Falky, I have some Evergrande options that might interest you, not to mention Lehman, Bear Stearns, Northern Rock, Enron, and all Icelandic Bank's bonds. Sometimes things continue going south for a very good reason causing market panic, which is simply a rational human reaction to acceptance of imminent demise. On other occasions it is excessive and illogical e.g. BATS 2003 share price and subsequent recovery. Telling the difference between the two in advance is the real skill. Ex post facto there are always dozens of pundits claiming they called it correctly, even with Black Swan events. GLA
Dis, you are discounting the third possibility, status quo.
Hightrack, I think a lot of us made similar calculations and have been confounded by the poor share price performance. Lloyds has a dominant position in the UK and great brand recognition. The drag of PPI is now behind us and cost savings in the form of fintech should boost the line yet still the price languishes. The only real downers are the size of the infrastructure, legacy pension obligations and rock bottom interest rates. These can be offset against greater savings boosting the ability to lend. Something does not add up. At this price the company should start to liquidate assets and return funds to shareholders.
Many landlords are so by accident having inherited, or been unable to sell previous homes. Others made a calculation based on the paucity of investable opportunities elsewhere, namely bonds and stocks. Here's a novel idea. Why don't we just force everybody to hold either digital cash which we will tax into oblivion via inflation, or shares which are taxed via income and corporation tax, not to mention capital gains. We can produce an environment with miniscule borrowing costs to increase net debt so that the banks create and profit from increased risk balanced on the shoulders of previously prudent savers. Finally we can convert the whole property market into a casinos of speculative excess encouraging everybody who can to put every last penny they have into their home which then allows a LVT to be levied and the utilities, which were sold off to our chums decades ago, to increase their bills every skyward. We can also pay for social care by council tax levies. Of course we shall have to exclude shooting estates, woodlands, agricultural land etc. from our legislation to avoid hurting the interests of the great and the good. We can manufacture a system where young people have no realistic hope of owning their own home then blame it on landlords rather than the bankers operating within the skewed system we birthed via illogical incentive structures and minimum oversight. We can produce the perfect motivation for people to opt out completely and live in a caravan on a remote Scottish island off-grid to escape the illegitimate and unjust intrusion of a government run by self-serving cretins in hock to the City of London.
Alternatively we could admit that the banks and the government are de facto bust and that current debt will never be repaid, default on our obligations, increase bank oversight and reserve ratios, increase interest rates, discourage speculation on residential property, make physical products, tax big tech, reduce the size of the financial sector, encourage prudence and self-sacrifice, build more social housing, penalise land-banking, reduce stamp duty and stop scapegoating people who made rational choices with very few alternatives.
A guillotine may indeed cure a headache, but it is not a remedy I would recommend. If we close reasonable opportunities for people to maintain and secure their wealth, what is left? Derivatives, PMs and crypto. God help us.
Conjecture is the process of convincing oneself that we have the ability to perceive patterns in random numbers. It is a species of the ludic fallacy according to Taleb. Pliny the Elder opined that, "the only certainty is uncertainty." Given the levels of complexity and the scale of manipulation, nobody on this board has the faintest idea how Lloyds shares will perform in the near future. If you factor in timing and macro economic/ geopolitical issues, the picture becomes even less distinct. Last night I watched a fantastic documentary on the 1987 crash detailing how a single trader, Blair Hull, reversed the rout of Back Monday by realising that the drop was amplified by computer trading and accelerated by fear. Hull bought futures call options on the floor of the CME at a huge discount and acted as buyer of last resort in the teeth of a bear sell-off, making millions in the process. Observers stopped and reflected. If he is willing to accept the risk of further falls in return for the asymmetric likelihood of substantial gains why am I selling at any price? Bingo the rout was reversed. Animal spirits prevail and we are in the tricky months of September and October.
Europe and the Euro are a basket case. Global debt is unpayable. Debt levels within the public sector are ludicrously high. Deficit spending is enormous. Supply chains are unravelling. Inflation is taking hold. Governments are seeking to increase the tax take. Covid continues to create havoc. Meanwhile, interest rate are nailed to the floor. Consequently there is no reliable metric to measure either risk or the time value of money.
I can predict with absolute certainty that the future will be uncertain. That is what makes this game of chance fun. My guess is that commodities will benefit at some point and that value stocks will recover for what it is worth. GLA don't take it too seriously.
SUFCESSEX, How dare you impugn the great county of Yorkshire by implying we are a bunch of bankers.
Balance in all things is desirable. Some who make it to British shores will be completely deserving while others will have economic motivations. It was ever thus. Labelling all immigrants as lazy, scrounging, councils house usurpers is so 1970s and indefensible. Speaking of free houses, I think you may have visited a few prior to your post. If we can't honour our commitments by showing hospitality and compassion to those who have risked their own lives to serve our military, and now face annihilation at the hands of our erstwhile enemies, then we have no national honour and decency. However, there are migrants from Africa whose principal purpose is economic and should be judged accordingly. Simple minds suggest simple solutions to complex problems. Dunning-Kruger.
Agree re the rising share price upping the odds for potential bidders. Also paying out a dividend reduces the attraction of the pot. Finally, share price rises crush short sellers who then have to buy shares to cover. All things considered it looks as though MKS will be encouraged to pay a dividend and the sp will rise towards Christmas. What a difference a year makes! I initially bought in at circa £2.20 chasing the dividend pre Covid. What a spectacularly short sighted move in retrospect. It looks as though I may yet see profit regardless. Luck trumps skill in this upside down world. GLA
Ruling in Cyprus, where all the Russians got scalped, established that deposits are investments in the bank rather than money held inviolate. I believe that that ruling has been held to hold in the UK also.
So if the market booms they sue and if it craps out they escape scot free. This is a similar situation to the endowment policy fiasco. If you put your money down on red, don't complain when it lands on black. How can the borrower claim naivety when their home is worth several million currently, and cost £750,000 in 1998. This smacks of opportunism. My instinct would be to say tough sh*t.
Plato, it is Sunday and you are preaching to the choir. I concur whole heartedly. The government should keep it's neb out of a great many things;
Manipulating interest rates
Supporting failing businesses
Bolstering the stock market
Encouraging reckless behaviour by favourable taxation towards options markets
Subsidising fraudulent companies with ministerial access
Borrowing money it will never repay other than by huge inflation
Attempting to generate inflation
Propping up the housing market through help to buy votes schemes
Financialising the health and education sectors
Entering foreign wars without an exit plan
Telling us which way to vote over Brexit
Deciding on their own pay and benefits
Planning house building
Running businesses eg rail and banking by default
Acting in loco parentis for abandoned children
The list is endless.
"That government is best which governs least" Jefferson, T. Our mob of self-serving nincompoops could not run a bath.