Congrats to all longs! I've been invested here for most of the last 2.5 years. It's been a bumpy ride but managed to buy quite a few cheaply over the last 1 year and now have my reward. I hope others have as well, especially those of you with whom we had a nice chat on this board. I've sold my position now and probably won't be posting much on here anymore. Good luck to whoever decides to hold this till the acquisition is complete!
Completely agree. People that pick bottoms, get smelly fingers!
On a more serious note, I don't get the concern with core inflation. Of course, it's high. It includes housing costs. The short-term rise in rents and mortgage costs have been well documented. So by raising rates the BoE has increased the core inflation!
However, that's only short term as there's an 18 month delay before a rise in interest rates is fully reflected in the economy. This is not rocket science, and while I don't expect BBC's business reporters to write about this, I'm sure the folks at BoE are well aware of this. They'll either ignore core inflation or will use it as an excuse in order to raise for other reasons. Personaly, I feel they'll ignore it, as they're already coming under a lot of pressure.
An interesting thing has happened to US house builders - they have risen a lot despite the stagnation in the property market across the pond. Why? Several reasons.
One is that people have 30 year fixed mortgages at very low rates. With the rates much higher now that doesn't affect current home owners, however it means that they can't move and are stuck in their houses. As a result, if you want to buy anything over there you have to go for a new build, as there's nothing else on the market. This has benefited house-builders.
Another reason is that the price of lumber has collapsed and that's a major cost for US house building.
Both obviously not that relevant for the UK market, as the max fixed mortgages here are 10 years and most folks have 2 or 5 year fixed. However, I can see UK house-builders getting a small boost from this. No one on a 5 year fixed is going to move in the next 2, 3, 4 years. That's 45% of the market so a lot less properties on a market that was already lacking supply!
That said, "building material supplies suffer shortages in key products such as bricks, blocks and cement, causing year-on-year rises" of 1.5% this month I think:
https://www.homebuilding.co.uk/news/construction-materials-shortage
So unfortunately, no boost there for UK house-builders compared to the US. However, I think the reason is that bricks, etc. have 6 months price delay. They are very dependent on the price of energy:
https://think.ing.com/articles/concrete-prices-wont-go-down-before-spring-2023-despite-the-lower-energy-prices/
So I do expect those materials prices to fall over the next 6 months, as energy prices have descreased quite a bit, and then will see an improvement on this front as well for UK house-builders.
In case you haven't watched the 20th Anniversary video yet, it's worth the time. A lot of it is marketing of course but they presented some new products that they are working on - new apple pie choc for the velvetiser, compote fruit dark chocs and a new crunchy type of chocolate bar. All looking really good. Also it was a chance to hear from another memeber of senior management and not just Angus.
Tbh nothing unexpected. Show me one UK focused business that isn't expecting worse results now that 2-3 months ago?! I think we've reached max bearishness for the UK market, time to buy some UK shares IMO.
Inflation elsewhere is going down, the S&P is in a bull market, not sure I share the pesimism about the British economy. Yes, we have 2-3% higher inflation than our neighbours probably due to higher wages caused by Brexit (that was one of the main motivations for the vote, wasn't it?) but that's about it. The rise in core inflation is mostly caused by higher housing costs, which is a short term side effect of rising rates. Once the effect of the rate rises kicks in (18 months), inflation will be gone. Whether the most predicted recession in history will actually happen or not is anybody's guess but my thinking is that we've seen the worst of it. Germany is in a recession, the UK officially avoided it and the US had 2 negative quarters last year so up to debate whether they haven't already been through it or not.
I think HOTC is down because people don't want to wait 1 year for results to improve. If we're patient we should do very well here!
Any thoughts on the similarities and differences between See's Candies and Hotel Chocolat both as a business and as an investment?
https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-dream-business-is-sees-candies-2019-7-1029916323#a-return-of-8000-1
I agree, all of this is short term noise. Debt ceiling blah blah. Nothing burger, but the BBC and CNBC and all those folks need to have some breaking news to talk about each day.
cocoacocoa, not sure how you knew that on Monday when the post-Easter sales actually started on Tuesday, 11th April. I was at one of their shops on Monday and it was packed, people still buying full-priced Easter chocs!
And actually the sales were pretty good. I've managed to spend 50 quid on Tuesday and I really had to restrain myself lol
Interest rates are unlikely to stay high like in the 70s because our government has about 100% debt to gdp. They will simply go bust.
IMO we'll have medium rates and higher inflation that will inflate debts away, those of our government but also of homeowners. And I expect house prices to track inflation and go higher after a period of stagnation. That's what happened to prices in the 70s even with the sky high rates.
Up 12% and shares are halted!
Rogue, for me house building is a cyclical sector just like automotive or commodities. A quick look at the long term chart confirms that. Not a sector to pick buy and hold investments IMO unless you just need the dividends for retirement.
Has anyone tried to email or call IR?
I wouldn't say Persimmon's divi is very well covered - very high payout ratio of 150% (not sure if that includes the special). Compare that with Wimps 54% and we're in a better place here.
https://www.retailgazette.co.uk/blog/2022/11/primark-sales-pre-covid/
The CGT change has been on the cards for a while now. I've done my homework and moved all my shares into a stock ISA over the last several years. I can see that affect the property market though.
Richard, my thoughts exactly. Someone must be buying this slowly but surely. Considering that most UK retail stocks have got killed HOTC has bucked the trend.
Well, yes. If you're massively in debt of course your creditors call the shots. True in personal life, true for a country like the UK with debt to GDP close to 100%. If it were 15%, nobody would care what the markets think.
I sold this around 1100 taking a 60% loss. It's since fallen another 60%! In this situation I used to think, oh this is so beaten down, surely it's safe to invest now. But thanks to ASOS I've learned that no matter how much the share price has declined, it can always go lower. Luckily, I missed the last 60% drop.