The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
"Hi Jack, sorry to hear about your big hit. What I don't get though is why anybody bets on the sp, spread bets, c.f.d's etc when the odds are stacked against you."
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Hello Dan,
Thanks & ditto for your other comments. Good question. Tellingly, I’ve never advised anyone to take up SBs, having been asked a few times by others. I always say, if I had my time back, no question I’d stick to real shares. However, having put a decent 5-figure sum into it previously & now well down, I’m trading to get most of it back.
Also a bad move on my part not setting stop losses here, missing exit opportunities when damage would've been far less, as well as banking on dividends being safe for long enough to cover holding costs until better recovery. Foolish to assume anything in this business.
Indeed, relatively few are profitable with leverage. Maybe 10%, or slightly more. Losses & gains snowball fast. Patently, I’m not one of those profitable. Eventually, I’ll pack it in for said reasons, whether I get my money back or blow my account. I guess I also enjoy the challenge of that, despite some bitter disappointments. But all losses 100% my fault.
Re claims that FCF ensuring divi was safe: indeed, that line was parroted on various VOD BBs, not just here Also on ADVFN & ii. Many times! Any dissenters were usually lone voices, often drowned out by the majority with accusations of scaremongering. But such is the nature of most BBs, not just VOD's. Bulls tend to be more present. - Regards.
Hi OFAH,
Thanks! Good to hear from you & I hope you're keeping well. Maybe you're prospering elsewhere since you exited this mess? I sincerely hope so!
Indeed, definitely the right call for me in view of the heightened risks ahead if VOD's next update disappoints markets again. Couple more leveraged hits due elsewhere quite soon. Deserve all I got for not exiting at circa 170 in December as, however briefly, I actually considered it at the time.
Like you, I'll also be posting less in future as I'll be focused elsewhere. Will pop in here to catch up with posters comments, links, germane news items, etc. Will give the VOD shares I have left a little longer as at least those incur no holding costs. - All the best!
For transparency's sake: Closed all 5 leveraged long positions in VOD at 133.30. These were from 214+ to 189+, as posted live on ii's VOD BB. Huge hit taken, though whilst first entry was over £20 a point, thankfully they dwindled to £5.
Two tranches of real shares left at 198.32 & 175.85. These to be reviewed after taking more dividends.
Reasons: seems little hope of huge recovery anytime soon. Certainly not this year. Also, since 40.02% divi-cut announced 14th May, SB holding costs no longer covered. This mess now costs me net loss every week I hold.
Key questions I asked: how may markets react if VOD’s next update sees more falling revenues & earnings, mindful that debt will rise? What chance of VOD turning results around soon? Where’s the future growth coming from? VOD have been losing millions of customers, especially in EMs like India.
If no turnaround, whilst by no means 100% certain, IMO, we may see new 10 year closing lows, so below 123.32 from late May, intraday 122.22.
Looking ahead, this ought to recover over a longer timeframe. Just hard to be bullish now.
Competition in this field rising, lowering customer prices. Key markets in EU facing downturns. 5G uptake expected to be slow. All reports I’ve read say that even by 2023, over 70% of smartphones will be 4G due to high 5G running costs. VOD’s debt expected to rise further.
So too much risk for me & never again will I buy into stocks that require tens of billions expenditure just to upgrade technology, whilst seeing little to zero net benefit to holders. For all the past gains made here, a huge error hanging on & fully deserved losses.
By the by, so much for all the majority claims on all VOD BBs that divi was safe as FCF covered it. Not a dig at any individuals, but a cautionary note: most BBs are investor dominated. Confirmation bias runs supreme, without exception.
Dumping this total leveraged mess is the right call for me. Will focus on UKX with SBs. But more deleveraging elsewhere to be done soon. - GLA.
Trendfriend's posts are very useful to me & others. As is all well-founded TA. Not that I follow TA as gospel, but is still has its value. For L/T holders from a fundamentals side, I can see why they feel differently. But no need to knock it.
Off for a long walk & will post again later. - GLA.
JD1972,
Encouraging & there have been bigger buys before that. But mind also that someone sold over 2 million VOD shares at 08.51. SP 130.93. - Regards.
Hi Longish,
Thanks again. Obviously a seismic event in the recent history of UK investment funds. Bound to make some more cautious.
My honest opinion: since 2008's financial meltdown & interest rates reduced to near zero, many ordinary people have been drawn into stock markets for yield & capital growth in SP. It seemed easy enough when stocks went up from L/T lows in 2009.
But this business is never easy for long. Before 2008, many people would've been far better off holding their capital spread across different banks paying an average 7% to 8% interest. Still a significant safe annual returns for those with over £100K to 250K.
Since rates collapsed, many of the less wary have seen that nothing is 100% safe with stock markets. Yield is fine, but only as long as stocks maintain value. As we've seen with various stocks, for example: BT, CNA, DEB, ITV, OML, LGEN, RMG, VOD, banks, food retailers, et al, FTSE 100 really is a poor index compared to many global indices. It's still not that much higher than levels seen 20 years ago. Speaks volumes - Regards.
Hi Longish,
Thanks. Last "zero hedge" link appears to be temporarily inactive for now, but will find it via Google. But VG point taken about hasty promotion of fund managers in general.
Re VOD: closing SP will be key, as will be volume. If volume very average or below, chances are any rise will be sold off soon after, on top of the drop for going XD. - All the best!
"Hit to be taken before 4.30 pm TOMORROW unless... " - Cheers.
Hi Longish,
Good morning & thanks for link. Appreciated. But my decision is pretty much made on VOD leveraged longs. Hit to be taken before 4.30 pm unless there's significant breakout past 131 resistance, back by volume. Very stressful decision as a huge 4-figure hit. But it's right for me.
I'll also be exiting all leverage in ITV, IQE & rest of my BARC soon. Will focus on UKX index & real shares. Reasons: now preparing for a very hard Brexit in a few months.
Undecided about my VOD real shares, but nothing further to add to my last comment. Value of those is higher than the longs, so I'll leave that until closer to end of play tomorrow. - Regards.
PS: Nothing to do specifically with VOD, but another reminder of how even those once considered be one of the best can get it badly wrong. Woodford's Flagship Fund in trouble & all investor withdrawals & other activity currently suspended.
https://www.bbc.co.uk/news/business-48506032
Fleetwood & Dragonforce,
Much agree. Said comment is clearly discriminatory against people with certain disabilities. There should be no place for this type of garbage on ANY BB, period. - Regards.
ICC,
Good decision staying out. In fairness, MRW & TSCO also well down from their recent highs. Entire sector down & the macro-climate is bearish for most other sectors.
Looking much further ahead, next improved data ought to see the downtrend here reverse again. But things could get worse before they get better despite SBRY's ex date on 6th June. So a firm hold for me, but I'm unlikely to add at these levels. - GL.
Patently, last week's poor Kantar data for all big food retailers has put paid to any notion of booking gains here anytime soon. Looks like a hold for at least a few months, so will book the dividend this week after all. - GLA.
https://www.sharesmagazine.co.uk/news/shares/supermarkets-slide-on-sales-slowdown
FWIW, for transparency's sake, I closed 5 BARC longs at significant loss last week (all posted live on ii where trades were originally opened) due to PM May's resignation & increased risks of a hard Brexit. That would prolong recovery here & other UK banks for a lot longer. Now only hold shares at 157+ & 198+, plus one small long position. - GLA.
Hi Longish,
Thanks. You've obviously thought things through at least as carefully as I have. You'll be your own best judge of what's right for your capital, timeframe & your risk-appetite. I don't go against your rationale. It makes sense from a more patient outlook. I just have different plans. I'm confident that VOD will be much higher again at some future point, but I no longer have much of a clue when.
Once I've held underwater positions for well over a year, as here, then despite substantial divis already booked collectively, I start looking more closely at resistance levels ahead. What are the prospects of them being broken over the next few months & my targets reached? Or could we see new L/T lows? Those sorts of questions.
For me to see an outright profit on ALL my shares (175+ & 198+), NOT including dividends booked, I'd need to see close to 188. But I also have long positions, with some even higher than 200. Previously, holding costs on said longs were more than covered by VOD's top yield. That no longer applies. In future. every week will see net losses from just holding.
Hence some huge decisions on my side which, as financially costly as they'll be, HAVE to be taken soon. The only doubt is whether I delay that due to more bullish price activity before VOD's XD. We'll see.
Naturally, whatever I decide, I'd hope that you & others here see your goals in very good time. - Regards. Catch up with all later.
Date inserted for others. "The only thing I'm confident of is that if 131 not broken before XD on 6th June, this might go nowhere fast." - Cheers.
"I am getting more interested in technical analysis particularly as I make increasing paper losses this last 24 months across my portfolio particularly as div stocks and capital income ratios have moved more to the downside.
I had 131 as a support level, but the recent debt restructuring activity and the SP behaviour make me think 130 is the current resistance level. If I could be guarenteed 130 throughout a prolonged downturn (higher interest rates) then I would increase my holding in Vod to avoid proportionately more paper losses in other div stocks in my portfolio.
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Hi Longish,
Thanks & for your other points. Much agree technicals, whilst no cast-iron science, have a role to play alongside fundamentals.
IMO, resistance at 130 only from a day traders view. Looking at longer timeframes, we had previous support at 131. Tested a few times & held until results on 14th May. That's now a key resistance level. We saw highs of 130.80 yesterday, from which it predictably fell back. This happens often with many stocks: previous support, once broken, becomes new resistance.
The only things I'm confident of is that if 131 not broken before XD on June, this might go nowhere fast. After holding some of my VOD buts for over a year, I'll be proactive in future. Rather than be stuck in the 120's range, I know I can do better elsewhere. Hence my decision already made. If VOD significantly over 131 before 4.30pm on 5th June, which sees a good chance of recovering the XD divi drop sooner than later, I hold on. If however SP is around these levels, I'm out at huge losses on shares & longs.
By the by, I took a rare, but very significant hit on leveraged positions in BARC just before PM May's resignation speech. Freed-up margin to trade UKX. I've hit that index for hundreds of points profit since March. All trades posted live on ii. I've since been able to increase stakes there. If I exit VOD, I can do more of that, whilst the losses from the VOD shares will be put into other stocks.
I have a few stock in mind that have also been recently sold down, but appear to have hit bottoms. They are in sectors that don't require spending tens of billions & increasing debt just to upgrade technology & of no net benefit to holders. - Regards.
PS: Needless to say, what I decide to do on 5th June should be of ZERO influence to others. I have plan that's right for me. IMO, VOD WILL be much higher again in future for the more patient to see their rewards.
Mikey,
Until we break 131 resistance, I agree it's nothing to write home about. If we can't break 131 before XD on 6th June, possibly plenty more downside here after the divi drop. So as stated, I'll make my decision on 5th June as I've an eye on transferring funds into other stocks. If I exit, will post any crystallised losses for transparency's sake. - GL.
Hi TLWilliams,
Thanks, but in fairness I think you & those like Longish have been more consistent on VOD than I. I've had more doubts ever since recent results & loss of 131+ support. On the plus side, I've never been one to panic. Not in markets as not in real life. So I've hung fire on any decisions, but continue watching things closely. For eg. new support or resistance levels, daily volumes, changes in short positions, et al. Basically looking for confirmatory signs that a price floor has been reached with 123+ closing lows. Still too early to be sure.
Much agree that VOD faces a really key period. Arguably more so than for a long time with the EU decision on Liberty deal pegged back to 23rd July. If those fall in our favour &, all other things being equal, markets in general start to recover, this may well set the stage for a strong recovery here in good time. But I continue to be open-minded & circumspect, so not assuming anything.
As mentioned before, if we can break 131 before XD on 6th June, mindful that some stocks can recover any drop for the dividend within days, I'll probably continue to hold for higher. Things can change fast in this game & in either direction. - Regards & GL.
"Well Mikey I'm sure everyone knows it won't."
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Mandrill,
You may be right & I'm not calling anything for having called this wrong too often. However, neither is a fallback certain.
I've been discussing VOD this morning on ii, same alias (actually on a BARC thread where I took significant leveraged losses since PM May's resignation). Gist of my view: if this can break 131+ resistance & keep above that after XD on 6th June, a rally back to at least 140s over summer seems far from inconceivable. Not a confident call mind, but something I remain open-minded about. - GL.
Hi Longish,
Thanks. Whilst in a speculative takeover we could all be pleasantly surprised & there's little I'd want to rule out, I personally would see those values (300 to 340) as extremely optimistic. If parts of VOD are sold off, who settles their liabilities & net debt?
By the by, ADVFN have VOD's NAV at 225+. But that's with current liabilities, so not including expected higher debt ahead due to Liberty Global deal. - Cheers.