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Apols for the lack of punctuation and capitalisation in my post, my keyboard has gone rogue.....

hi folks, i got involved in a discussion on the psn board(where i hold)and have now popped over here to explain the logic behind my investment in a second builder. first off i'm pretty confident that whatever the short/medium term outlook, uk builders will benefit from the incoming government's attempts to stimulate the industry and the fact that most builder stocks are still more beaten down than is merited. population growth, an easing of financial pressures on households...etc etc. turning specifically to vistry, obviously , yesterday's rns has alarmed analysts and holders and it may be that the company is still not aware of the full extent of the screw up. it seems hard to understand why a ****-up in "nine developments" ie 3% of the whole, should lead to an adjustment of £80m ie almost 20% of ptp for this year and more in subsequent years, nevertheless the co. still says it expects to be net cash positive in dec and to complete 18k properties this year. if they achieve that or even moderately close the sp will imv, recover and if they don't then they are very much in play for another consolidation in the industry. additionally, as i have pointed out elsewhere, the recently announced share buyback will now reduce the shares in issue by a further 25% or so, unless the sp recovers sharply , either is a bonus. so, i have built up a holding yesterday and this am at around 950p and will retain for a year or two in expectation of recovery to recent levels or a bid .

Crossley and others , I've bought some VTY and will post there re logic (if any!!) behind it.

It's a down day for the market, a bad day for Vistry and a slight knock-on effect for other housebuilders.The first of these doesn't bother me specifically , tho' I am exiting some of my holdings in anticipation of a budget-related panic in a few weeks , further worrying news from the US (whatever the outcome of the election, the US's predilection for racking up Gov. debt has to stop somewhere- doesn't it?).

As for the Vistry news, taken at face value it seems to be a localised screwup either incompetence or corruption, which has been identified and is being remedied, tho' they have managed to avoid making profits for several years now , at the current MC Vistry become a takeover target and so I might buy a few, on the basis that, at these levels, they are now a takeover target in an industry which is emerging from the recent stresses.

That said I am happy to hold here, while I see the possibility of PSN becoming a bidder, any losses here might be offset by a profit on vistry!

Infor , i'll try to set out Blackrocks logic using much simplified numbers .

Lets say in a rising market

Blackrock hold 10k shares at 350 value £35k

they borrow 2k shares and sell for 350, revenue £7k liability £7k

share price rises to 400, assets value £40k , buy back short at 400 , cost £8k loss of £1k on short, net position up £4k

In a falling market

shares fall to 300, asset value £30k ie down £5k

they buy back 2k shares at 300 ie £6k, profit on short £1k ,net loss £4k

So while the shorts LOSE money in a rising market , they REDUCE LOSSES when the market falls.

Multiply my numbers by a factor of millions and you may understand Blackrocks logic.

Hope the arithmetic is right and the logic is clear.

SK...... the SP here has doubled in the last six years, passenger numbers have trebled in the last decade and revenues are up by 80% over the last five years, ALL during which we have had the single largest disruption to aviation in decades.

If you regard that performance as inadequate, you should probably look elsewhere for your investments. I am a content holder here and will remain so for some time, while as I often state I don't do specific SP estimates, I would not be surprised to see Peel Hunts figures met in the medium term.

I posted a review of Cityfibre's financial position on 21 Aug, then I said that they were at risk of their backers pulling the plug, each month that goes by increases that risk , they are currently spending £250m per annum to service debt and maybe £200 mill for build-out , revenues are only around £100m.and they can only drive up customer numbers by selling at wafer-thin margins or at a loss.

Approaching their backers for further funds is at best going to saddle them with even greater debt service costs(they will be paying way over bank rate 'cos of their financial position makes them a high-risk borrower),at worst they will have to stop/curtail build-out to reduce the only cost they actually control. I retain my view that they are very unlikely to survive as an independent entity.

For the umpteenth time, Blackrock use shorts to cover their enormous investment folio ( currently~$10.6 trillion). The risk of a serious market meltdown is enormous, so being sensible they hold shorts against much of that asset base as portfolio insurance. That DOESN'T mean they think their assets will fall sharply, it means that they plan, sensibly to ameliorate such a fall were it to happen. In OCDO's case over half of their stock is held by their top ten institutional holders and their customers (Kroger hold IIRC about 7%), so volatility is high and as all holders know(don't they?) the SP oscillates violently, which is why Blackrocks short position responds. It shouldn't surprise you to know that some really bright guys, aided by sophisticated software spend their entire working day managing those processes. NONE OF IT means that they have changed their view on OCDO , that will only happen if /when they exit their position.....

Sharply up today on a "things are not getting worse" RNS. Being interpreted by the market as the end of a downturn and a return to stability for a company with a large "moat", some worldwide brands and customer loyalty. I have built up a position here at below 2500p on the basis of a sound company,with decent, if not spectacular upside in a market which is changing but not declining . While the "west" is almost saturated , China, India and emerging economies and huge populations still aspire to consume well known brands as a measure of their status. I don't expect fireworks but I do expect a gradual recovery and will hold for , maybe 25 %+, over the next year or so.

DT...... OCDO's costs(primarily to build out CFCs) are around £450m pa, and that is the primary reason why they are not (yet) profitable. That may well remain true for some time, but at the end of that, they will have a significant number of revenue-earning CFCs in almost all of the world's heavily populated countries, providing a service that is never going to go away (everybody needs to eat!). I am happy to hold until the expenditure falls and the profits start to flow. Unless of course my personal profits arrive sooner!!

First cut extrapolation from today's RNS suggests OCDO will generate revenues well in excess of £3bill this year and will be EBITDA positive to comfortably above £100m.Still, a way to go before the co. becomes fully profitable BUT the direction of travel is there and the public acceptance of delivery is growing (albeit slowly) I am currently holding (again)and happy to wait for good news from OCDO tech solutions , which IMV is the jewel in the crown , resolution of the MKS tie up dispute, possible buy out of OCDO retail , or maybe even the whole company over the next year or two. For all current holders patience is a virtue(tho' as before I will sell when profit exceeds 100%)!

MS were /are part of the syndicate buying/holding BT stock on account for Drahi, so it's no surprise that they are trimming their position as a result of Drahis partial exit. They still hold/control a significant block of stock via options/CFD's. RNS has little or no significance.

No rumours in the media , nor my city contacts, other than general view that the West is losing commitment to Ukraine (see Germany and maybe a Trump-led US). I have added a few here bringing my average up a little, IMO today's slight SP fall is mere noise, the lead times for defence contracts are long and BAE has several years' worth ($75 BILL, ie 3 years of work) of high-value contracts in the pipeline. I'm not bothered by minor SP oscillations, other than as a chance to pick up shares at a short-term discount.

If the link offered by Fleccy is correct , BT's recoverable copper is worth £ 2 bill at current Cu prices.

Recent buys have reinforced the position whereby a very significant proportion of BT's shares(around 50%?) are "tightly held". This has two significant side effects, first, it is SP positive as these holders are well informed and well advised and thus provide reassurance as to the company's prospects and second it means that available stock is diminished and so the "Beta" increases, the SP will be more volatile and respond more to moves in the FTSE , this diminished stock availability will squeeze prices higher in the medium term.

Savage.... Blackrock hold assets worth $10.6 trillion , it is therefore a" NO brainer " for them to protect the downside with compensatory shorts. I know from my contacts that they do this as a matter of course.

I agree that AKO and probably Kintbury are net short, but even they will almost certainly have a compensatory long call option in place as protection against eg a takeover bid.

I have been making this point for years , this may be the last tie, 'cos I'm astonished at how little people understand about shorts.

1 Very few organisations hold "Naked shorts", it's just too risky unless they have some robust , negative info.....

2 The vast majority of short positions are held against companies in which the shorters hold a significant Long position in the stock, eg for BT both Canada PPI and Blackrock are NET LONG...If the SP rises they will INCREASE their short as the "Value at risk " has also risen.

Last time I promise, I won't bother responding to any more of the ill-informed "short" Chatter.

regards

Casa

Fair point , which I think illustrates how fragmented and disjointed the business had become, with too many ventures while failing to keep tight control of the core business. The recent presentation's emphasis on running the main strands of the business in a way that ensures profits, seems obvious but clearly hasn't been happening. The emphasis on revenue , NOT profit was patently flawed and management (at least in the finance div) seems to have got the message. I hold after selling out during the last takeover saga. I am willing to wait, maybe even a year or two to see if current management can make this technically competent business run profitably.

Most of the move was due to BOE updating the " benchmark" bonds, some of the newer ones having a higher coupon than the ones they replaced, it will be clear it's a "non-story" when the media's "economic commentators" have it gently explained to them........

Https://www.londonstockexchange.com/news-article/WG./sales-of-ethosenergy-and-cec-controls/16637209

Wood announces the disposal of a couple of components of the business for $165 in cash and loan notes, at a P/E of approx. 5 , which given that the whole co. is P/E negative at the moment is not bad. Another small step in the streamlining/rationalisation process. A small positive step, SP reaction likely to be muted but positive?