The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
LTI,
Sorry I bothered. You're obviously typical of those who ignore anything you don't like. Kindly don't bother wasting my time again. Cheers.
Giving up using internet connected devices is one of the last things that people will give up.
For some it would be like having an arm amputated
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LTI,
With respect, this is the type of bullish, bias that BBs are full of, but as often, it has no evidence. In fact, it goes against past evidence. When EU saw a sharp downturn in 2013, VOD were very much impacted. - GL.
https://www.bbc.co.uk/news/business-23371747
Hi Dan,
VOD? Seems a misread there, Dan. I don’t disagree with H-hi's view that banks “technically own” most private UK homes at least until most mortgages are paid up. Ditto across other nations. Hence the severe consequences of the sub-prime collapse in US in 2008 & the contagion that followed throughout much of the global financial system, not least in UK
Hardly risk-free though. Many banks have never recovered their horrendous losses since 2008’s collapse. At anytime, for e. recession, many of those mortgages can turn toxic, becoming impairments or bad debt. Little is a simple as it's sometimes made out to be. - Regards.
"The MCBs were not offered to us shareholders or general public yet it got snapped up instantly!"
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H-hi,
Are you sure the general public couldn't get involved in buying MCBs for those who bothered to find out how? From link it suggests they were available on global stock exchanges.
“Vodafone Group Plc (VOD.L, VOD) announced its intention to raise approximately 4 billion euros of sterling-denominated Mandatory Convertible Bonds or MCBs, to be issued in two tranches maturing no later than March 2021 and March 2022. After the Bonds have been issued, Vodafone intends to apply for the Bonds to be admitted to trading on Euronext Dublin's Global Exchange Market or another recognised stock exchange.”
https://markets.businessinsider.com/news/stocks/vodafone-group-plans-to-issue-mandatory-convertible-bonds-quick-facts-1028003718
Re your other point: Indeed. But you also know that ALL investment banks & hedge funds always have the ability to short all stocks. There's nothing out of the ordinary in that. - Regards.
Hi Dan,
Frankly, it's hard to confirm or rule it out without knowing who exactly bought most of the recent MCBs. H-hi may be right. But without the data it seems more so speculation. As you know, VOD raised about £3.4bn from their recent MCB sale. The biggest such MCB sale ever in Sterling. That underscores the huge pressure that VOD is under trying to finance the Liberty Deal.
What seems more apparent is that some large funds invested in VOD are also now holding shorts. For eg. BNP Paribas. This isn't an unusual strategy when large institutional holders want to avoid selling off their investments on mounting concerns of even worse falls in SP to come. So they hedge their longs with shorts, hoping to close shorts near the bottom & then hold longs only. It's just a way of protecting bigger investments when there's huge doubt.
Why? Presumably said high debt worries. Moody's downgrade of VOD's debt in February to Baa2 with a negative outlook, evidently didn't help sentiment here & just spooked more investors.
Short positions on VOD remain at a high. - Regards.
https://www.shorttracker.co.uk/company/GB00BH4HKS39/
https://markets.ft.com/data/equities/tearsheet/profile?s=VOD:LSE
AW100,
Thanks. Fair points. We'll agree that circa 180 within a a fairly acceptable timeframe seems doable, but only as long as next results don't disappoint. I'm also mindful that on nearly every BB, naturally dominated by investors, there's overwhelming optimism due to confirmation bias. That basically sees all the positives of any stock & ignores risks.
I even saw it on DEB's BB for ages & CLLN's BB too. No comparison otherwise intended as VOD won't be going bust as things stand. But just saying. Sometimes one needs to stand back to see a truer picture, warts & all.
As we agree, 5G is expensive to roll out. It means VOD taking on more debt, at least in short-term. Not good. But though the advantages of 5G go well beyond mobile phones, it'll take years to be fully implemented. There are various serious, technical glitches still to be ironed out with 5G as highlighted in a fairly comprehensive article on 5G linked below.
This quote also seems telling as to possible timeframe for maximum rewards from 5G. - Regards.
“Most or all high-end smartphones should support 5G by 2022. Most smartphone users in the industrialized world will probably have 5G phones by 2025.”
https://www.computerworld.com/article/3310067/why-5g-will-disappoint-everyone.html
TLWilliams,
Thanks. Certainly can’t rule out a double-bottom (circa 131) with the way this is being chipped at every day or two. Then all rests on May's results. Anything underwhelming there & we could even see new 10 year lows below 130. That's not a prediction mind as I don't know. But I remain open to its possibility if fundamentals continue deteriorating.
Market action doesn’t augur well. None of the main concerns have gone away. Whilst confidence in the CEO may be wearing thin. Otherwise, we’d see significant large fund buying at these lower levels, if only for the yield. It ain’t happening. That's telling.
Well done with booking gains elsewhere so quickly.
As for topping up here, I’m no longer share others confidence in this, so won't add more. No advice intended to others. I’m well down enough with what I have.
Plan is to take a hit for a few grand at least on next significant bounce & then never touch this sector again. The tech changes every few years, requiring huge new investment just to keep apace of rivals. Frankly, VOD has been a huge error for me, notwithstanding VG yield already taken. Hopefully, a lesson learnt. - Regards.
AW100,
Thanks. Nothing is gospel here, but I think it's changed tangibly so. More debt planned, revenues falling, 5G will take some time to significantly increase revenues, competition in some regions increasing, EU maybe headed for recession. Latter would put more pressure on revenues.
Worst thing: future new growth seems limited. 5G won't be hugely profitable for ages as many customers are happy with 4G & seem glad to avoid extra costs. Market is increasingly competitive, if not near saturated.
I’ve decided I’ll eventually take a hit on this, but not yet. Next big bounce, especially if volume isn't high. I can make my money back otherwise, as I continue to do now elsewhere. No advice to others. - GL.
Dan,
Not all stocks, as you'll already know. If fundamentals change seismically & solidify, as for example with banks in 2008, or retailers & energy stocks over recent years, they may never recover their previous highs. Plenty of examples of that in just FTSE 100.
Huge debt is NEVER good, whatever form it takes. Because as soon as fundamentals deteriorate, such as a drop in revenues, increase in competition, et al, markets get spooked quickly. As here.
When one looks at VOD's total debt v market cap, mindful that more debt seems to be due, whilst key customer markets in EU may enter recession, it really is woeful. One reason why nothing is guaranteed here, for all the ramping from some. Most here have lost heavily in paper losses. Me too. But whilst we may recover a bit later, we are far from out of the woods with this mess. - Regards.
"Fellow investors concern for each other, well done all for reaching out."
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PotPot,
I sincerely strongly echo that. Credit to all posters involved here & also to LSE's admin for contacting this individual so quickly & offering some kind of support. Let's hope for a good outcome, mindful that some things really are far more important than money. All too easy to overlook that sometimes.
"Hey Jack....sell and move on if you think you can make quicker gains elsewhere, when a good opportunity arises ...you deserve some success with your funds tied up in VOD ...best of luck to you"
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Hi Poker,
Thanks. It's being actively considered. One reason why I've posted less here more recently is due to trading, including booking gains, on stocks like ITV, IQE & UKX. On latter I've taken about 390 pts profit since March. Trades posted live on ii. So despite holding this huge error on my part, I remain very proactive elsewhere.
But to return to the point: it's almost 100% certain that I shall take some hit here in the future. When, I'm not sure. However, it's highly unlikely to be before next month's results, or at SP levels barely 10p above near 10-year closing lows of 131+ seen a few weeks ago.
Interestingly as fears of No-Deal Brexit spread later on Friday, FTSE made a high not seen since early October, closing 7446+. Largely because Sterling fell back, boosting certain global FTSE stocks that make profits in dollars. Those more exposed to a hard Brexit, like UK banks, fell back. So everything still up in the air & until we see more clarity, I think now is not the time to sell VOD, unless in profit. - Regards.
"Debt was there when SP was 240. Think it's factors like 5g auction. Liberty. Vod operating in countries like Africa India and Turkey. And dividend."
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DJ,
It's the debt, decreasing revenues, increasing competition, downturns in ket markets & expectations of adding to existing huge debt due to Liberty Deal. All of that. Things have changed significantly since 240 levels. - GL.
OFAH,
Whilst it seems unlikely, it you ever read books by top investors (Buffett, Graham, Lynch), they do caution against touching anything with huge debt. Reason: little-to-no debt at least avoids risk of bankruptcy. Huge debt? If things take a sharp downturn, SOME companies go bust! As we know from other stocks.
Huge debt is ALWAYS negative & these idiots at VOD have allowed it to get out of hand whilst increasing divis for 18 successive years, ceasing it only at last interim. - Still a firm HOLD for me, but to be reviewed occasionally. - GL.
OFAH,
I see the logic of your approach & I hope that works out well for you. One would imagine we'd certainly see closer to 160 later. So your plan seems doable. Some of us are simply in from too high up to be able to do similar without spending massive extra resources. Not in a position to do so even if I wanted to.
For myself, the shares I'll keep longer-term. Even past 2020, if I think significant recovery is doable. However, if we're struggling in the low 130s by mid-Summer, I'm going to take a totally detached view to enable me to make some hard choices. If we're at least closer to 150, I'll stick. Low 130s & it'll be quite enough for me to take at least some hit on the longs. - GL.
OFAH,
I feel similar, but I'm probably in deeper despite taking some profit here recently. Sad reality is, sometimes FTSE stocks never recover from huge losses. Many examples abound: BT, CNA, UK banks, Uk retaliers, ITV, et al. But to each their own always applies as regards when enough is enough. - GL.
Mikey,
Whist it won't change anything, moaning is perfectly understandable sometimes. Even though I'm busy trading other interests, I too feel a bit deflated to see us back under 140 after being 148+ briefly days ago.
But my view remains unchanged. I shall give this ample more time for a turnaround. So certainly past May's results. Hopefully pick up more decent yield again. But everyone has their limits. If this is crawling around the mid-to-low 130s come summer, I shall take a hit on the rest of my longs & only keep the shares which at least incur no extra charges. To not be able to consolidate even above a piffling 140 is pretty poor by any standards. - GL.
DJ,
Not given up nor is it "a pile of junk". Most things fell back this week.
Some of us are busy trading other stocks, including volatile indices. For eg. I've taken about 275+ profit points from UKX in recent weeks. Not great, but okay by my standards. I stick to longs, with UKX divis more covering holding charges. It's partly paying for my mistimed errors here. - GL.
Exoplanet,
It's not a standard buyback. It's buying back shares from convertible bonds offered in 2016 which have now matured. Rather than risk further dilution in SP with loads more new shares in market from those bonds, VOD are buying them back to avoid that. That's all. - GL.
Interesting as released after market closed, but all rather inconclusive so it's hard to be sure either way. For others, it’s in yesterday’s VOD share news tab.
Seems like VOD will offer concessions hoping to address latest anti-trust concerns. So maybe no great effect on just yet. But certainly one to watch as things develop. - GL!
PS: This site was broken again for ages yesterday! Strewth. Happens much too often.
Compass,
You did right the right thing for you. Credit as due on booking some profit. I only sold a small part of my exposure yesterday. Regret nothing. Always follow your own guidance. I also trade other interests & have booked lost of profit just this year. Merely the right approach for me, but no advice intended or any reflection on others. - Regards.