Member Info for LordAdam

Londoner ... thanks for the input/reply ... as I clicked the post button and disappeared out of the door this morning I realized that I'd not created quite the right impression with my posting, the aim of which was to show that with an infinite-hold type income driven investment strategy the capital value as such didn't really matter -- provided the income stream remained intact. I rather over-simplified the numbers that I used and the description of how/what we held. In reality we hold a basket of income generating stocks all chosen with the intention of holding for the very long-term. RDSB is indeed the largest of the holdings, but there are about 6-8 others alongside it to even things out a little. Also I chose the �100K figure to allow me to do the annuity comparison easily, in reality there's a significant multiple of that and that is held in two separate ISA's (plus some traditional brokerage accounts). The 65 bit though was very nearly spot on ... whilst we are currently still building wealth and investing the derived income rather than spending it that will probably change in the coming years! Mike

Just to put a few numbers on the way I think of it ... I'm 65 I want to retire and have �100,000 to help supplement my pension .... I can ... 1. Buy an annuity ... gives me �5,600 of level taxable income guaranteed until I die ... then zero capital return. (If I take inflation linked income it drops to about �3,300.) 2. Buy �100,000 worth of RDSB shares ... gives me �5,100 of income per year, raising in line with dividend increases over the years ... then when I die the whole of the capital (plus any gains or losses) is available to the estate ... plus being inside the ISA the income is completely tax free as is any capital gains. So that's why I think of it that way. This way of looking at it means that dividend flow is the major criteria and capital value is only secondary. Mike

I agree ... if you are an income investor then what matters is the dividend, it's consistency, and ultimately that the company doesn't actually go bust. Oh, and that the company doesn't get taken over for a stupidly small amount, usually with a massive cut in the dividend. Mike

17000 * 13.80 = �234,600 ... umm ... hard to take the rest of what you say seriously ... if you really are playing around with a quarter of a million pounds on what is just a range trading strategy on GSK then what are you doing spending your time posting on this board? Mike

OK, let's see if we can head this one off at the pass before we all go nuts with postings about "What is consolidation?" and "Why are they taking shares off me?" ... here's four links that everyone who doesn't know what consolidation is should read before they post anything about it! https://blog.shareinvestor.com/share-consolidations-and-share-splits/ https://www.investopedia.com/terms/c/consolidation.asp https://www.drwealth.com/what-is-a-share-consolidation/ https://pocketsense.com/share-consolidation-7755315.html Now, I don't claim that the links are prefect but they will give you a broad understanding of what's going on. Mike

A quick stab at the calculator suggests that the B-shares will be issued 1:1 against the ordinary shares, then �1b split over them to give the 34p price for redemption. That will convert what would have been income via a special dividend into capital gains for PI's which I'm happy with. The share consolidation is an arithmetical operation and has no effect except it often has a negative psychological effect on the market. Regular readers of the board will not be surprised that I'm not keen on the buy-back part of the offering ... I think they should either have retained that part of the cash or better returned it via the B-Share scheme (giving us 50p) ... especially if they intend a consolidation (which can be used to manipulate the number of shares in issue quite nicely). What's clear this morning is that the market's first reaction to the announcement is not an overwhelmingly positive one ... on the other hand it's not a major thumbs down either given the general down movement today. Mike

Oh no they're not ... it was the market makers swapping stock ... 5296 278.2 9174232 UT 280.2 280.4 16:35:27 9,174,232 Notice the time 16:35 and the trade type ... "UT" ... it's the end of day automated auction. Do try to learn how the market works! Mike

Well ... results tomorrow (Friday) ... Fingers crossed that my pessimism and cynicism about why they were put back a week and moved to Friday is/was unfounded! Mike

Yes, the way I read it ... given the trades are for small, very random numbers of shares at irregular times through the day is that it's small investors who took a 'punt' and are getting bored waiting for a surge/news and are selling out. BUT ... something funny happened in early May when 100-200,000 shares changed hands in either a late posted transaction or an off-market deal ... since then (about 8/5) there's been about 100,000 shares acquired by the market makers. Now it's not like this bunch of MMs to accumulate a big stock position in TRAK so I wonder what's going on? Are they quietly holding the stock down so they can make good a big order that they supplied in early May? ... are they acquiring stock for someone that they know is wanting to build a position? ... or are they intent on going into the results with a big stock position because they know that they will be good and there will be a surge in demand? I can't see a definite buy since 10/5 and that usually means a falling share price for TRAK as the MMs make money out of the churn ... so something is going on if they are holding the price steady. Mike

Dinoken, thank you so much for that information and the pointers to the Simply Wall Street site. When you first mentioned DCF I thought it might be the DCF of the income stream to the investor via dividends -- that's the approach that I've seen done a few years ago -- but it seems that it's based on the free cash flow coming into the company and effectively being converted into equity. Now that you've got me going again on the subject I'll research it further! It's always good to learn! Mike

Last year the prelim results came out on 17th (Wednesday) ... if they had been a year to the day they would have come out on Wednesday this week but the company are issuing them some 10 days later and on a Friday (the 25th). That doesn't leave me feeling very comfortable, especially the Friday bit ... we shall see. Mike

@Dinoken ... DCF = Discounted Cash Flow? The thing where you work out the present value of a future income stream over a period of time? If that's the case then I'd be very interested in how you arrived at the 525 as it's a way of looking at things that fits really well into my sort of investment strategies. Mike

@Dinoken ... DCF = Discounted Cash Flow? The thing where you work out the present value of a future income stream over a period of time? If that's the case then I'd be very interested in how you arrived at the 525 as it's a way of looking at things that fits really well into my sort of investment strategies. Mike

On paper the 7.1% increase in dividend looks attractive ... but nearly 5% of it is paid for by the cancellation of shares bought back by using what should have been returned to shareholders directly as a special dividend equivalent to a year's dividend of about 1.2p If I'd been given a choice I would rather have had a special for double dividend this year than have a 5% increase. Mike

As I said back on 11th of April ... "I can see that at some point in time, probably sooner rather than later, there is going to be some questions asked in a legal context or public inquiry as to why some commercial operator had not deployed ADAS systems to detect micro-sleeping or driver inattention. Both before then, and subsequently, there will be a defensive deployment by companies of this technology in order to diminish or absolve their liability. At that point which ever company has proven technology deployed in this field are going to find themselves very popular indeed." Mike

Google doesn't report live prices in the way that you would hope that it did. Rather than reporting the mid price between the bid/offer prices or some other measure actually taken from the order book it reports a smoothed average of the actual trade prices. Normally for a high volume stock with a minute spread and lots of trades there is no effective difference and we see what we want to see. But for a stock that is very thinly traded ... like TRAK which often has 5-10 trades per day ... the smoothing breaks down and Google starts to report the individual trade prices. As TRAK has a big spread 5-8% sort of thing, this means that the Google live price swings around very significantly for what is really zero change. When the main market is out of hours then there are very few trades and Google prices can be wrong for even big stocks like VOD or GSK. It's not that they are wrong per se, just that the price is being driven by strange off market deals and people moving shares around for artificial valuations ... also some trades are posted late for a variety of technical reasons and Google doesn't spot those for what they are. Hence out of hours the price displayed could be almost anything ... we need to look at the closing price for a more accurate picture. On the other hand ... there could be somebody building a stake or dumping a pile of shares prior to the market opening tomorrow! Mike

If they returned the full amount that would equate to about 98p per share. Of course they could return less ... they could return nothing ... or worse than nothing do a buy back in which case we get nothing and "hope" that the market re-rates the shares appropriately - and if they do, I have to sell my income source to realize the money they should have given me in a more straightforward manner! We shall see what we see. Mike

Nah ... they shouldn't be at all concerned about the script issued dividends -- that's water under the bridge and has long gone. Buying the shares back just puts good money, our money, our distributable cash after bad for no guaranteed return. And before we all start arguing about the return of capital to shareholders via a buy back notice that I said 'guaranteed return'. You can buy back all you like but it doesn't guarantee a return to the existing shareholders like a special dividend or even an ordinary dividend. The company should retain the cash, use it or pay it out in normal dividends. Mike

A couple of points ... firstly these shares really do exist ... they have been issued and are included in the count of shares for total voting rights. They are real, they count ... they aren't being held in treasury, if they were they wouldn't be in the count, that's the statutory purpose of the total voting rights count. Secondly if we look at the RNS detailing the LTIP for employees in the six months leading up to Dec 17 we will see that a total of about 5,000 shares were issued under the SAYE scheme and *0*, zilch were issued as bonus or share incentive to ordinary employees. Thirdly, reading through the RNS's for directors dealings reveals that some of the higher ups bought shares, some at reduced prices ... however ... DJ was *given* 482,000 shares and JF was *given* 55,000 shares ... these easily swamp those bought by the employees and were funded directly by share dilution of our holdings. And that's just with a cursory glance over the easily accessible public figures for the last 6 months. Your belief in the redistribution of company profits to the employees is very touching ... but when I see DJ receiving 12 million pounds worth of shares and no evidence of the employees receiving anything I must say that I don't share your belief. Mike

I use the amounts paid in pounds sterling (133.75p for the last 12 months) ... but I haven't actually bought any RDSB shares for some time now for two reasons: 1) I mostly bought when the price was artificially low ... so my average buy price is about 1850 2) The dominance in my portfolio of RDSB shares is far too high at about 40% The reason behind the (2) is that I'm carrying quite a lot of cash at the moment -- my thought is that late summer will be a better time for buying generally ... so the 40% is numerically bigger than it would be, I 'd expect more like 33% (still too high). Historically the yield I'm getting on the money I invested is 7.3% and the current yield at today's prices is just over 5%. The dividends that we get from RDSB are invested elsewhere as the 5% is really a bit too low and there's a desperate need to re-balance the portfolio. Now the capital gain that I have on the holding is equivalent to about 5 years income and so I should be thinking of selling at least some of these RDSB shares ... but for RDSB I make an exception for the following reasons: 1) I believe the right price for the share is about �25 ... I did when I bought at �15-20 and I still do. 2) If I sold I'm not confidant that I could get back in again at a substantially lower price than today. 3) The dividend has not been cut in living memory, and whilst it has not grown in the last 4 years growth will return. 4) It's a power house of income for my portfolio and funds many other investments. 5) Finally ... "Never sell Shell" ... there's some truth in that for us income feeders! Mike