The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
No.1 High leverage landlords who own multiple houses on buy-to-let mortgage. Mortgage payments go up with mortgage rates, but rental incomes tend to go down instead when renters cannot get enough incomes in a hard time. When landlords cannot need their ends, they will be forced to sell low.
No.2 Single homeowner with a large mortgage and happens to lose job in a hard time, the bank lender doesn't care how much the mortgage default property can be sold on.
No.3 Small builders are forced to sell low to keep cash flow running.
No.4 Big builders with high debts, low cash reserves and low land banks. Low cash flow happens when housing market crashes.
At present, new mortgage rates are from 3.6% to 5.9%, standard mortgage rate from Nationwide is 5.24%, so it is quite a big jump from the current term of rate which is about 2%.
Next two years will see mortgage rate up to near or exceed previous crashing rate of 6%, mortgage default will increase, house price will be at all-time high, cost of house improvement at all-time high, and affordability at all-time low as salary and employment opportunity do not keep up with. Housing market correction is unavoidable.
To make it worse, when housing market does crash, mortgage lending becomes extremely tight, so that only those buy with cash only can get bargain price.
Be prepared.
I am not sure it is the same church as I attended 10 years ago, that one started at 11am. Couldn't get in, it was too late and gate was closed, so couldn't pray.
God don't help everyone, and stock markets are still falling.
The most and first expenditure are foods. Imported foods mainly come from Africa and Europe. Weak pound doesn't matter that much, strong dollar is irrelevant. Weak pound can attract injections of strong dollar capital.
High inflation and high interest rate cause destructions in every aspect in every walk of life. FED has been repeating this disaster so far and can get away with it.
I feel the need to pray for God's help after 10 years of not touching the Bible, the local church opens on Sunday morning. Stock markets shouldn't be places people visit so much in the next few years.
Max is controlling the SP, living in a mighty castle with a big shark in the pond.
Trade index if you cannot go to bed with Max in that place.
I almost forgot there was a lovely writing letter posted to me by Marvis a few weeks ago. Thanks for that. Who could it be?
Do not forget barbes, bots and bails from the Pooo-liteee, they are around detecting. They certainly like to eat big meals, or small snaps. They like to being landlords, the best way to make money with an over-paid job. Nothing is secure on line, they certainly can know who is the poster.
Some shares suck like black holes. How to recognize them? It certainly takes time, but time will tell. The tell-tale sign is, if too many fat ladies sing on the same day, that share will behave like a black hole. Another tell-tale sign is, if too many shorts are accumulated over years, that share will behave like a black hole as well. What is more? Let me think hard and tell you later.
Avoid them and escape as soon as possible. How much value have been sucked by black holes, no one can know. Stock markets are full of these black-hole -like shares. Better off to trade index.
Property Market in China is reverting to bull run, which is a good time to invest or upsize accommodation, increase land reserves. Construction material producers will be busy again. I will invest RIO from now on.
Whilst the property market in the UK is on the last impulse, time to prepare for the tough time ahead. Unless there is a real demand for first own house, or upsize own house, buy to let is a high-risk investment now. Landlords might be better off to considering reduce their portfolio rather than to increase.
Passive house is a trend, so as electric heating. Central heating should be abandoned. Fireplaces should be kept in the traditional houses. New energy and renewable energy will be mostly well-come in the future.
I feel no difference after Brexit. Those live in big cities may feel the difference that much less European citizens are able to come to the UK without a work visa, to compete with them with job positions, school placements and free accommodation from the local councils.
Energy bills go up or not depend on the contracts you signed up for, many households are already on a capped price which are not affected by the fluctuation of energy prices.
Who want to buy a super in Greggs? I don't really care, never enter Greggs before, just wondering why some people like to buy a sausage roll and then have to eat on a busy high street with people walk passing by you. The same feeling goes to why big hedge fund cares about the positions of small gambling money, unless share price is manipulated for the pleasure of horses.
The effect of Brexit is slowly showing up, like a crawling turtle. I feel the UK is better off without those come, get and go European citizens, shouldn't make it so easy for them to enter the UK as they are less beneficial than those qualified a working visa.
I may go to a church to bless for the Queen later, but not this weekend.
BKG has a high share price, but its market capital is about the same as other builders.
Share price is not just a face value of a listed company, but it is certainly a face value, and it is certainly better to have a face value than none.
There are certainly investors who don't care face values, ending up with loser stocks. If an Aim share failed one investor and you knew it, why were you so foolish to touch it as well? I do give sympathy to those who can not afford to keep chicken and eggs, and have to cope with the neighbour's cat in the garden. You work 16 hours a day, certainly not for a cat.
Liz Truss became PM recently, but does she matter to us? Not at all. I already lost truss on governments, polices and NHS. We pay them tax, they do not actually care about us, and we do not really care about their policy. We are all muppets or puppets.
Shall we resource to the Bible? It is a famous book, like many books, you only take on what you believe. You try to be kind , be helpful, be generous, but you should not expect others doing the same to you. Again, the only person you should truss is yourself, nobody else.
What I do care is why the Queen, MPs and PMs are all landlords? And even Mr Thomas wants to be my landlord. Obviously, they know rent eats up a third of a decent salary. So why pay them rent if you can afford a mortgage?
UK homebuilder stocks slump as HSBC warns sector on cusp of downturn today.
There might be a few good years left for builders, but will certainly following years of not making profits, years of making a loss, and years of banks not lending. There are already 10 years of bull run so far, so warning signs ahead will not surprise. Those builders with low debts, high cash flow and land reserves will survive in a downturn.
I have spent a fortune on airlines over the last 20 years in order to cross half of the earth to see my parents. The airlines must have made loads of money from constant travellers, the flight prices remain flat in the last 20 years despite the fluctuation of fuel price, there must be some other reasons why the airlines made a lost in recent years. I think it is due to the aftermath of the Pandemic that will fade out in history.
Apart from accommodation and food, transport is the third expense for most people. Consumer stocks like house builders, energy suppliers and airlines are safe investments when buying in right time.
Cinemas mostly located in big city centre. The one in Chichester, Cine, has a huge car park next to it. Car park charge is calculated by hourly rate. To see a film, it ends up that you will pay more on a car park ticket than a cinema ticket. Should cinema ticket price be so cheap?
Cinema is specially designed by specially trained architects in the this area, and it is purposed built for its special requirements. I think proper big cinemas are owned by local councils who are unlikely to alter their function as being a cinema, who are more than happy to let them out with flat rent or even waive some rents, who decide to close them will have to wait for years for a property developer to take it for its land value because cinema buildings worth nothing in a developer's book. There are small cinemas using old buildings not originally designed for a cinema, which are not suitable for its function and the landlords can alter them easily to get other business tenants.
Cinema can be used for live shows, music concerts and sonic celebrations, with small alterations and negotiated terms with the councils. I don't think cinema as part of a day out will disappear soon on city high streets, as long as music and film will last so as cinema.
A relatively high inflation is good for consumer stocks, employers and employees in these sectors are better off as well. I think it is a better time to get a job in these sectors, such as construction industry. Cheap labours from European countries are no longer available after Brexit, so also add up to job demanding in the sectors and higher salary is seemingly achievable.