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This is just the short term view.
Since 2000 the FTSE has returned 16% which is absolutely appaling return equivalent to c0.6% per year.
It's very puzzling and the FTSE is regularly hyped as "the cheapest in the world" but I really dont see it. It's just a dog of an index full of defensive, established companies. The glitzy start ups of this world just dont list in London.
Been out of IAG since July as fully expected at best drift with us locked into a 5% interest rate environment and high inflation.
Low and behold a £30k bond I had matured this week and I have some cash lying about
I think IAG looks good tbh, strong fundamentals and rates to fall as the year goes by
Happy new Year
It's not 182
Use your head for a second, its a straight line between two data points, after hours.
It happens sometimes with the reported share prices
Most likely, we will open at maybe 152
Can you not see the direction of travel of rates?
In the US inflation is c.3% now and rate rises are expected to end pretty much immidiately
In the UK inflation remains >7% and there is no end in sight to rate rises.
Investors dislike inflation, rate rises and uncertainty. The UK has these and until all 3 disapate, IAG isnt going above 160
Oh there is no doubt at all that it is interest rates which are keeping this at 155
I do very much like IAG still, what I dislike are interest rates at 5% and rising. If they were at even 3% and steady, IAG would be at 200 already. That, and only that, is what keeps IAG where it is. And given that rates do not look likely to some down, or even stop rising, soon, I dont particularly like IAG or any equity.
Cute though that you think Marshall Wace, or any institutional investor, is even aware of this forum
Finally, IAG has returned -2% in 6 months. you'd certainly beat that with a Cash ISA. With near certainty, you will do better in a Cash ISA over the next 6 months.
I'm not particularly negative around IAG, I just see it threading water in the 150-160 range until inflation gets under control. Until then, there are better places to put your money
Yep. I get 4.36% at the moment and will be getting closer to 5% by year end I am sure. What's more, I get it risk free and dont get moody as I do with IAG shares down 5% every now and again in a day....
I dont think equities are the place to be right now basically .
We'll be at 6.5% base rates by year end.
The question then becomes, as with all equities, can I beat what I would get at the abbey national savings account with IAG??
Well probably go to 6%
Do you realise what 10% annual inflation means pal?
Prices doubling every 7 years...
Even 5% is attrocious.
Do not fall into the trap of thinking that we can live with inflation, so you dont see any more rate rises. Controlling inflation is not a luxury, not a "nice to have", not an appendix to the report card of the government's policy. It is page one, paragraph one, underlined, italics and bold.
But I admit that I am worried about the impact of monetrary policy on ending it. We just dont seem to be getting to even <10%. As any economists would predict, expectations have become entrenched and wages are chasing prices in a death race. It is completely possible that we'll see 7% interest rates next year.
main issue is interest rates
The SP is the discounted sum of future divdends and these are much lower at 5% rates than 0% obviously
It's definitely not like for like. It's akin to comparing the price of a pint in 2023 to one in 2008. The baseline is just different.
Having said that, the SP will rise to £2 by year end. My point is simply that with 0% rates it would be closer to £3,
But dont assume interest rates are only significant for "animal spirits" when the BoE/Fed make decisions. They are fundamental and behind all movements in one way or another.
Agree completely
Incidentally, I also love a gamble but with stocks, the sensation is not enjoyable as the feeling of "loss of control" is disconsorting. If I back ****nal to win the league then I am in control of the bounds of that bet, the stake and the binary outcome are within my control. Owning IAG is like sitting in the bookies and being obliged to gamble on every single race, what is enjoyable about that?
Well its basic finance theory. I can earn 4pc yield on a risk free govt bond over the next year, so I prefer to hold bonds over equities. The two are always and everywhere is direct competition.
IMF today warned of "hard landing" for the world economy if inflation doesn't come down faster. I'm quite skeptical it will given all the huge pay risew we've seen over last year. Why inflation, once in the system is such a horrible curse
Feel as if not focusing 100% on getting the debt down was a strategic mistake by IAG with interest rates at 5% and rising
Saudis are genuinely comic book evil
That's fair enough. I am talking about a years time really so in between we can have 20 incidents like last week
The only thing that will stop airline SPs in general are non-airline factors whether that be banking issues, rate rises, recession etc etc.
A "fair" price for IAG is closer to 200 than 150
Sorry 0/20000 50/50
If you accepted $9k for my original bet then I must have seen you coming!
Common phenomen in behavioral Finance
If I offered you a 50/50 chance of $10,000/$20,000 youd take probably $9000 to avoid the risk