Member Info for LordAdam

Looking at the RNS sub page here for RDSB suggests that they haven't posted an RNS for the last 18 months ... which I suspect is not true. So where are they being posted? Has anyone a good (free) link to a page with the most recent notices on? Mike

Think about it for a short while ... this is an insurance company ... if they couldn't do anything for fear of full extent of claims they wouldn't be able to do anything -- including trading etc. So that's not how it works. Surviving these claims is built in ... with a surplus ... the CEO has reiterated that nothing is out of place on this one ... ergo there is a surplus. The question is, how much and how large a special will they declare? Mike

Sadly your reasoning is not correct ... the problem with buy backs is that they replace the certainty of a cash payout with the fickleness of the markets valuations. PLUS half of the 13m shares came from JP Morgans own stock pile of shares and not the market in general. The buy back is effectively a cosy arrangement between VOD and JPM where they get to shift 6m or their own shares each day without going through the market. Seems to me that when the original loan was created it was made risk free by an agreement to buy back the shares in the future. It's not so much a buy back as paying back debt. Mike

You've inspired me to revisit my spreadsheets and re-investigate the long term implications of buy back vs. dividend reinvestment ... our discussion has prompted some thoughts that I'd like to look into more deeply. The numbers example is of course the basic analysis of the situation that most investors both see and subscribe to. It's straightforward and exceptionally credible and for both accuracy and logic it can't be faulted -- it is after all essentially correct. The inevitable conclusion is that the two scenarios are equivalent. However, there is a subtle issue which is normally not raised ... it's the use of the word 'value' in terms of the value or worth of the company. Now we both know that the value or worth of a company is a very tricky thing to nail down. For a liquidator its one thing, for a bidder its something totally different, for investors it can be almost anything from zero to infinity depending on optimism, pessimism or foolishness. Most though have a tendency to think of value of the company as its market capitalization ... share price times number of shares in issue -- and that's where the simple model falls down. Implicit in the simple explanation is the expectation that the share price will respond precisely to the reducing number of shares in issue. Clearly this doesn't hold ... the psychology of the market is far more complex than this. During long term buy backs share prices can go up, down or remain the same. Often they appear to be blissfully unaware of the effect that the theory says should be occurring. It's not helped if you go down the multiple of EPS route either ... it all puts the value (and the benefit of the buy back) into the lottery/voting/weighing machine of the market. I'm going to have another look at the compounding argument that I put forward earlier -- I want to be really sure about the details having stopped my analysis a few months ago when it seemed to confirm what I felt to be the reality. Conspiracy theory ... umm ... you've not been hanging around my local have you? They're into conspiracy theories big time down there -- me I don't go along with them. I don't subscribe to the idea of the Illuminati running training courses for CEOs on how to diddle small share holders. But I do subscribe to a theory of emergent behaviours of systems ... If you want to look at and think about a rather unusual buy back have a look at Berkeley Group (BKG) and in particular the public (RNS) announcement that having completed one buy back at what they felt was below market value they were now going to start a second substantial buy back of shares regardless of price. Mike

Thanks for taking the time to have a look at GCP ... you're right it does suffer from the systemic risk of government changing the rules. But then all shares do that in one way or another -- there's nothing they couldn't change if they chose to do so. Even gilts can be manipulated, defaulted and unilaterally restated ... markets/prices can be capped and whole sectors controlled in various ways. But enough, I use GCP more as a place to stash short term cash within an ISA. Historically, you weren't allowed to keep cash in an ISA and even today generally you get no interest on the cash balance of your ISA or share dealing account. Our two tax situations couldn't be more different ... the large majority of our holdings are in two ISAs that have been maxed out since the beginning and have been steadily earning 5-6%+ over the years plus some capital gains along the way. So dividends are zero taxed and are very attractive to us as they compound within the ISA in a hands-off sort of way (I'm not by nature a trader, preferring a HYP approach). On the subject of buy backs we are probably going to have to agree to differ ... which is a pity as I rather suspect that we both have some very interesting insights into the games that are played. I think for me the fundamental difference is trading certainty of income against the vagaries of the market's valuations. In the noise of the market I'm not convinced that money that could have formed the dividend is yielding 5-6% year on year for my net worth. It's not sufficient for the SP to rise by the value of the lost dividend ... if I'd had the dividend I would have reinvested it and had compound growth out of it. A buy back only step changes the SP in year 1 -- in year 2 it's history and has no effect (there's a very, very small increase in dividend due to lower share numbers but it is very small). As I say, we'll probably have to agree to differ ... it's an interesting and emotive subject ... and I suppose each will need to make their own mind up. Mike

OK ... a few pointers that hopefully you'll either take on board or research more fully yourself. GCP is a surrogate bond stock ... it won't change much -- that's actually its advantage -- it yields a more or less constant 6% and its a great place to park cash within an ISA for that return. It's almost unique in that there's no stamp duty on it and with the spread being tight I can get into and out of it again with any amount for �5. With quarterly dividends it has a place in almost anyone's investment arsenal -- look into it and you'll see its advantages. On the subject of buy backs ... I can see you believe that its a return of value to shareholders. It's no such thing. It replaces the certainty of a dividend payout with the vagaries of market valuation at best. I've had this discussion many times and spent a lot of time with spreadsheets evaluating different scenarios etc and come to the judgement that buy backs are a sign of inwardly focused, self serving boards who have no regard for small shareholders. If you really do want to understand what's going on do a google on "why buy backs are a bad idea" and read the top ten articles or so -- you may not like what you read, but then we investors are used to reading what we don't like and picking through it so that we can learn and make better, more informed decisions. Mike

Well I'm out ... having been a very long term holder here I've become increasingly frustrated with the board of directors over the last 12-18 months and have decided I can put the equity that I had here to much better use in my income portfolio. So I've sold out and moved the money to GCP (consistent 6% yield) for the short term en-route for a better home in due course. Interestingly because of the way the ExDiv dates have worked I get the 0.7% for the SN dividend paid in a couple of weeks _and_ the 1.5% (quarterly) GCP dividend paid in November. Good luck folks, I hope it works out for you ... may your losses be small and your gains big! Mike

No announcement as yet ... in previous years it has been about 3 Nov. I think it coincided with a trading update? Mike

Good luck folks ... I'm out ... sold about 2/3 of our holdings in ASHM a while back at the 365 level ... sold the rest on Friday at almost 380. It's done us well, bought in at about 260 back in 2015 with about a 5.9% yield back then, took the dividends, but now that the yield is down to the low 4's level (static dividend and increasing SP) decided to cash in the capital gain and go eleswhere for my income driven portfolio. Let's hope the SP continues to rise and the board adopts a progressive dividend policy -- it would be a disaster if they started a buy back. Again good luck everyone, may your losses be small, and your gains large! Mike

If there's spare cash in the company that they can't use for business purposes they should have declared a special and returned it directly to shareholders rather than use it to artificially increase their EPS numbers. The two buybacks together would have given a 2p special dividend. I'm very disappointed that the board has continued with and extended its buy back policy. Almost always in these cases there is a 'bonus' scheme in the background that converts EPS growth to executive pay/nonus and the buy back (which uses our money) helps to secure the trigger/payout. Today the board declared a 4.4% growth in EPS ... what they didn't say was that 1% of that was due to the small buy back that has already occurred. Overall, in time, the 6m buy backs will generate over 3% growth in EPS and virtually guarantee any executive bonus payments that are in place. Mike

iWeb is the place to go ... �5 per trade, really cheap reinvestment option for small dividends (0.5%) and a very traditional way of doing things over the phone if you need to speak to someone. Plus they have zero cost limit orders for ISA holdings. Costs �25 to open an account ... Me, my wife and each of our three kids have accounts with them now, oh and my mother too! Mike

I must confess this share has got me stumped ... Does anyone have any explanation, however far fetched or tenuous, as to why we've seen a steady drop over the last 3-4 weeks from 1400+ prior to what I saw as good results to less than 1300 today? Mike

It's a nice idea ... but the difference is probably not enough to make the game worth playing. Basically after stamp duty its a 1% turn on the buy/sell and to protect your capital you'd need a stop loss at say -5% ... so you'd have to be reasonably sure of winning the game ten times in a row to clear a 5% profit. I wonder if anyone has done a regression analysis on this and would be willing to share their results? Mike

Don't be fooled .... it's the 'end of day' auction that automatically takes place at 16:35 each day when market makers adjust their books between themselves. You can spot these trades as they are coded as UT for 'Uncrossing Transactions' or 'Uncrossing Trades'. In essence its the market doing its house keeping and has no real relevance to us PIs. There's a similar auction that takes place just before/as the market opens. Mike

Thank you for the additional and prompt information ... I'll concentrate now on the results and see if it makes sense for me to go down this route -- I'm an 'income' investor on the whole with a tendency to buy and hold very long term for the income stream. Mike

Interesting results ... and interesting market reaction -- but then again nothing unusual for the crazy world they call the stock market. Largely I'd put it down to 'buy on the rumor, sell on the news' type thinking. But forgive a noob (only been monitoring here for a week or so) style question but what were the two projects that gave rise to the exceptional charges? Apart from those the results seemed very good, but ultimately those charges will have to be met, and that may cause dividend problems in future years (or certainly remove reserves which would have helped guarantee them. Mike

I don't think you're wrong either ... whilst it's always possible for any insurance based company to be wiped out by some combination of claims it is the business of the management to make that so far removed from statistical possibility as to be practically impossible. Given the past performance of LRG at the very worst we would be looking at a lean year and in the normal course of things a surplus overall. Whilst it will take a while for the numbers to come in regarding Florida it would seem that the financial losses are not likely to be the armaggeddon that the market gloomily anticipated towards the end of last week. Mike

So just to get this straight ... you are saying that the Texas floods didn't happen, that they are 'fake news', a scam being pulled by a bunch of PR/Spindoctors for some nefarious purpose. And the answer to the question "you want folk to take the rest of what you say seriously?" is no? Mike

So Arsenal ... you're saying that the Texas floods didn't happen, that they are 'fake news', a scam being pulled by a bunch of PR/Spindoctors for some nefarious purpose. And you want folk to take the rest of what you say seriously? Mike

It's difficult to work out from your posting what you mean by "Texas con" ... perhaps you could spell it out a little clearer? Mike