Member Info for cefncribwr

The performance of the 6 top shares over the last year in the above fund is staggering. Taking LSE, Sage Group, Experian, Relx, Unilever and Diageo in turn, they are as follows:

-33

-37

-36

-46

+4

-24

Meanwhile, the FTSE 100 has appreciated by 22 pc in that time, minus dividends.

Lindsell Train UK Equity Fund's top 6 holdings according to Fidelity are LSE, Sage Group, Experian, Relx, Unilever and Diageo. He has been a superb investor over the years but his recent decline has been nothing short of spectacular........almost as spectacular as Woodford's but not quite. Yet another advert for investing in ETFs rather than individual shares and funds.

Https://www.bbc.co.uk/news/articles/c1dk2xp137zo

This could be another reason for today's fall.

I think Brewdog's announcement that it is getting out of the spirits business has probably spooked the market. It is a reminder that there are deep seated issues in the industry.

scottish brewer brewdog will close down its distilling arm after 10 years in operation, and stop production of its spirits brands.

the uk’s leading independent brewer built a distillery in ellon, aberdeenshire, in 2015 and founded its spirits business a year later.

the company will cease production of its spirits brands, including lonewolf gin, abstrakt vodka, duo rum, casa rayos tequila and ron bodega rum, over the coming months.

brewdog did not confirm how many jobs will be impacted by the closure, or what will happen to the distillery, when asked by the spirits business.

canned ****tail brand wonderland will continue to be produced by a third party.

"bought.....ahead of the interim 26/02 dividend which pays a good yield..."

There's no guarantee of course that a dividend will be announced at the interim results. Indeed, it would surely make sound financial sense not to pay a dividend for a few years while the huge debt is slowly paid off.

Ha ha - yes, the Director is now up about £8700 on his recently acquired holding! A rise in share price is of course to be expected where a director buys a decent holding, as it's seen as a vote of confidence from someone who should be 'in the know'. However, I feel that any turnaround will take years and that there'll be plenty more news on sales, overcapacity, drinking trends etc that will drag the shares lower. And paying off some of the over $20bn debt when the market for spirits brands is weak may prove difficult. The sale of East African interests is a start, but I'm not sure that selling beer interests ( beer is surely a better market than spirits at the moment) is a good idea.

Incidentally, I believe that Guinness is more popular and sells better in cold weather or cooler months. The drink is traditionally associated with autumn and winter, and I feel that any boost from the World Cup will therefore be limited.

Nervousness at the axing of the dividend could weigh on the shares once the director buying rally ends. A price of 1300p would equate to an yield of about 6pc which I think may be needed to prop up the price.

I've actually never shorted a share in my life and have never owned Diageo shares. I suppose my interest is academic.

Good luck all. I'll keep quiet for a while.

Director buying at that level is positive, although the chart is unrelenting on the downside. He is down about £4300 already by my reckoning......

I've watched the many "Just bought at under £20/19/18/17/16" posts here over the last few months. They don't end well. People just don't seem to realise that the chart falls are continuing and relentless and show no sign of abating. Some, including naive business journalists, seem to think that a share like this may be worth buying because it has fallen so far. There's no logic at all about that. These shares are cheap for a reason......many reasons, which have been rehearsed here previously.

I'm forecasting 1300 at the year end but they may go lower in the meantime. The World Cup will be good for beer / lager more than spirits, and that's surely all priced in anyway.

This is the latest article I've read this morning:

One of America’s most storied whiskey makers is going silent — at least for a year.

Jim Beam, the 230-year-old Kentucky bourbon icon, will halt production at its main Clermont distillery for all of 2026, marking the first pause in modern history at the flagship site. The move sends shockwaves through Kentucky’s $9 billion bourbon economy — and signals deeper cracks spreading through the global alcohol industry.

I'm going for 1300. I think that any resumed growth is maybe 5 years away and that there will be a continuation of bad news before things get better (profit warnings often come in threes). The new CEO has a habit of bringing in drastic measures. I therefore think that a dividend cut is more likely than not - to pay off some of the massive debt- and that there will be asset sales which will be at realistic prices which will result in a downward revaluation of Diageo's brands.

I may of course be hugely wrong. Any other thoughts?

It's interesting that there was a profits downgrade a week before Dave Lewis started at Tesco. So he started with a lower share price base than would have been the case if the announcement had been delayed. Just a thought......

....stop loss....

"Bought 26k earlier today for a quick trade".

I hope you've set a stop lo

Yes, they have made a strong recovery but they are still almost 25 pc off their 2016 peak.

".....it may take 1-2 years, but I'm patient....."

I think more patience than that is needed. It took 3 years before Dave Lewis started successfully turning Tesco around and another 3 years before he finished doing the job.

Please check my figures, but Diageo comes with net debt of about £22bn from what I can see. Cancel the dividend and that only pays £1.76bn off the debt. Asset sales are possible, but I suspect that they would be in a depressed market. And the market trends and demographic changes are not on the side of alcohol sales.

One broker recently was bullish on beer but not on liquors. Unfortunately, Diageo may be selling a product that is simply going out of fashion, just like the tobacco companies of old.

Tesco cut their dividend by 75 pc when Dave Lewis took charge in 2014, so here is an extract of a report from the BBC at the time, just out of interest:

Shares in Tesco reached an 11-year low after the firm cut its full-year profit forecast to £2.4bn from £2.8bn.

In a statement, the supermarket said the "challenging trading conditions" would affect the group's financial performance. Sales have been sliding and it has been losing market share.

The start date for the new chief executive Dave Lewis has been brought forward to Monday.

The half-year dividend has also been slashed by 75% compared with last year.

Tesco said it anticipated a dividend of 1.16p per share. This represents a saving to the company of about £600m.

In addition, Tesco said it would cut costs. Spending on the business for the current financial year will be no more than £2.1bn, which is £400m less than planned and £600m less than last year. IT will be affected and plans to refurbish its stores will be slowed.

Market share

"The Board's priority is to improve the performance of the Group. We have taken prudent and decisive action solely to that end," said chairman Sir Richard Broadbent.

"The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position," he added.

Tesco shares plunged 7.2% to close at 228.70p. Other supermarkets - Sainsbury's and Morrisons - also fell sharply as investors feared an industry-wide price war.

I take the point about weakening fundamentals but more generally I don't trust the market in AIM stocks. Sorry to be a cynic but steady selling is often by those in the know, often prior to the announcement to unsuspecting private investors of some bad news. I'm not saying that that is the case here but I'm not taking any risks on individual shares any more. If most fund managers cannot beat an indexed fund, what hope is there for DIY chancers?

I'm not sure what's happening here, but I sold this morning at 1211, even though I saw them reach over 2000 at one point. But I've made a gain of 45pc, so in the end I panicked and felt that I could make a loss if I held on. My portfolio is now nearly 100 pc in funds and ETFs, so I feel I can relax a bit now. I just dont trust individual shares any more.

I said a while ago that the yield prop could be about 6pc, implying a price of just over 1300 p. I didn't expect it to go south quite so fast though. If Dave's medicine is the sale of lots of brands at distressed levels and the axing of the dividend, surely £10 is possible. Seems best to steer well clear.

If there's a dividend cut and/or further profit warnings (the old adage is that they come in threes), I wonder whether we could be seeing the Battle of Crecy or even the Battle of Hastings here? We are surely in falling knife territory.