Member Info for LorenzoLynch

Nonsense (you speak nothing of the sort),

I agree that things can’t quite be turned on a dime, but I think 3-6 months is plausible, especially as there will be surplus capacity in other countries.

Also, Trump’s willingness to offer 90 days of grace before anything took heed tells me that he would be very, very open to an extension on the tariff pause.

Agreed on clothing being discretionary, and we might see a reduction in spending in the U.S in the short-term, but again, in a year or two, I think all of these issues will be forgotten about as the market is always forward-looking.

All it takes is a EPS forecast of 15p once this tariff situation blows over and we’re laughing imo.

I think JD could offer more upside than CARD, but like yourself I’m amazed at how overlook CARD is.

For me, with price factored in, it’s THE best stock on the market. I’ve also been a shareholder for a years now (aside from selling the top a few times).

There aren’t many companies that can’t shrug off any economic climate the way that CARD does. The only economic risk to it imo is if we all become millionaires over night in the U.K (said somewhat in jest).

Hoss,

I see, apologies, I understand what you’re saying now.

I imagine the ships that have already set sale for the U.S will remain on course there, so we’ll have to split the tariff costs with the manufactures and consumers, unless a quick resolution/pause is agreed.

Worst case scenario imo: some short-term pain, which is priced in multiple times over.

JD rises over 20% in a few days…

Wishingstar’s analysis of this: ‘it’s a falling knife’. 🤣

Yes little fella, it’s fallen upwards at exactly the time you expected it to fall into ‘the 50’s’.

Jonjoneedsashag,

Dead cat bounce is a cartoon he watches and loves. He’s even got the lunchbox

Runthoseprofits,

I think it’s because it’s simply not on many radars, it’s already multi-bagged from the lows, there are oil price fears and at a glance, it looks like a company which carries a lot of debt.

As debts fall and EPS increases at a rate of knots, I expect this to re-rate very quickly.

It’s a ‘put away for 2 years’ kind of stock for me. I’ll buy any silly lows and trim if it goes on a mega-rally.

Headline numbers were also quite unimpressive and that’s all most investors seem to look at it. Even in a year, I expect a nice re-rating.

It’s not without its risks, however, so I’m keeping my weighting to 5-7.5%, depending on where the share price is at any given time.

Nonsense,

Valid point on the dumping of stock in the U.K from China, but again, won’t stock from other counties which was due to land here from other countries be diverted to the U.S?

Are the yanks not going to need any clothes this year?

Honestly, I see this as a small setback.

I swerved Headlam for quality concerns, but I did invest in IG Design Group briefly (against my instinct in the pursuit of diversification; something I am usually dead against) at just over £1 (can’t remember the exact figure), because it looked like the turnaround was underway, but I never believed in the underlying business.

I sold over 80% of my shares at £1.45(ish) prior to the results which caused the collapse, simply because I didn’t believe in the strength of the business. On reflection, I have no idea why I held it at all, as it’s a pretty dire company with no moat, rapidly declining margins and too much customer concentration. Fortunately escaped with a profit and I sold the rest of my shares at 60p, putting that cash to work here and in CARD etc instead.

Avoiding value traps is imperative, I’m in complete agreement with you there. It’s why I’m sticking to companies with moat and competitive advantage from now on. I think JD demonstrated this whilst outcompeting Nike in their direct-to-consumer strategy.

The greed vs fear comment is only general: what you buy is more important than when you buy imo.

If investors don’t believe in JD, they of course avoid it in my view.

Lastly, if you don’t believe in what you own, you’ll sell when the SP tanks, so I think this is an important question to ask oneself: ‘if this falls by X% and encounters difficulties, will I remain as convicted as I am now, and will I buy more?’. It’s a great sanity check for me, and again, one of the reasons why I sold IGR prior to the demise. IGR could rebound, but I think that company is destined for long-term failure.

Further to my point on being greedy when others are fearful, and vice verse…

If we look at the chart, the worst time to invest in JD sports in the past year was in September 2024 at £1.62 per share.

At that time, there were no major headwinds… no tariffs… no NLW/NI increases… no talk of a global recession.

Within 7 months or so, the share price fell over 62% to the 52 week low.

Anybody who bought in at peak fear at 61p is currently sitting on a profit of over 21% on those shares in just a few days.

Personally, I’m going to continue aligning myself with the likes of Buffett, rather than with ‘WishingStar’ and any other bed wetters.

Carrot,

Your posts are exceptional, really.

From what I’ve read, it’s almost impossible to pin down a figure, but I’ve read that it’s probably between 10%-15% for Vietnam. I agree, this will likely a t & c in any deal.

I actually ended up homeless for the night on the Chinese-Vietnamese border in 2017 after being kicked off a train in the middle of nowhere… so they’re at least competent at stopping British people from crossing the border even a visa and passport, albeit I was heading into China, not out of it.

Hoss,

Paul Scott covered this in his Vox Markets interview yesterday:

https://www.youtube.com/live/WnESmGFwabk?si=Rh3lAwsXvrSrfswX

He used to work in the fashion industry, and said it is incredibly easy to move production, because it’s such a low skill industry. As I was saying on here the other day, the tariff pause has given us and other companies an opportunity to pivot out of China (albeit only partially in the short-term). Moreover, China doesn’t make clothing for the entire world. Their share of market supply has fallen significantly in recent years. Lots of clothes/trainers are made in Vietnam, Indonesia, India, Bangladesh etc.

Now I’m no CEO, but surely JD and the clothing manufacturers will send as much of the Chinese goods as they can to Europe and the U.K, whilst sending good produced in other nations to the U.S.

During difficult times the market often fails to differentiate between how headwinds will hit certain companies and certain countries. I think that mistake is being made here, and with companies which have an even lower exposure than JD.

Are JD completely immune? No, but I think the disruption is nowhere as large as people think it is.

I was listening to Buffett and Peter Lynch for much of last night… some great reminders of how to invest during times like this. In short, look through the temporary issues if the share price and quality of the company are attractive.

‘Be greedy when others are fearful’. The time to worry as an investor is when everything’s been on a rally and when no potential headwinds are priced in imo.

The price and quality of the company makes this a low risk investment in my view.

And even if all of the above is ignored and you think they’re in for a bad half year… so what? I think the question everybody should ask themselves about ant company is ‘where will this be in 2-3 years’, now where will it be in 2-3 weeks or months… unless they’re a trader.

Falcon,

I had a brief look at Elliott Waves after reading your post.

Very interesting stuff. Looks like many people apply it incorrectly though. How did you learn how to use it?

Also, what wave would you say this is in right now? And also the S & P?

Runthoseprofits,

I think you’re probably right about those cost savings.

This could definitely sway me as I’m a frugal guy, so can’t really understand why somebody would pay a premium for a minor convenience.

Lemonade,

Thank you for your input, I really appreciate it.

My understanding was that OTB charge a premium for supplying a convenient, tailored service, so I thought that AI could provide an engine for comparing lots of holidays and simply offer this at little to no premium.

You’re probably right though, and you’re certainly more educated on this matter than I am.

On the topic of moat, what gives OTB an edge over the likes of Booking.com, Airbnb, skyscanner etc?

A further concern for me with OTB is (what I suspect to be) the cyclicality of the business, especially with the possibility of a global recession looming over us.

The growth strategy here is astounding though. I can’t recall ever being more impressed by a webcast.

The Sunday Times are ramping (allegedly):

“The US is considering offers on tariff agreements from up to 15 countries and is close to deals with some of them, the White House economic adviser has said”.

https://stocks.apple.com/ADe1eZUdfRXy61Ixqgkgm3Q

Can be found on the Apple Stock app if the link doesn’t work.

Falcon,

In other words, neither am I 😂

Falcon,

I don’t follow the U.S market that closely as I like to know a business from personal experience.

I’m a hardline value (and oftentimes contrarian) investor.

Anything above a p/e of 15 doesn’t interest me, as a contraction in earnings growth can leave an investor underwater quite quickly.

I also love that twin-engine effect of earnings appreciation as well as metric expansion (to a higher p/e).

I simply don’t understand how U.S stocks are valued, but I was getting very tempted by Google on the dip.

If China play hardball with the yanks over rare earth metal (there are some decent news stories covering this on YouTube), I think a buying opportunity (at the levels I’m willing to pay) could present itself. I’m happy to sit on my hands for now though. JD is my only tariff-exposed stock… I want some serious upside potential to take on another.

Run1,

FT was right about one thing: I should be ignored. I’m not Buffett, nor do I have a crystal ball.

Everybody should form their own conclusions and invest accordingly.

For transparency, I have a c.19% weighting in JD following this little dip.

My portfolio is just over 28% cash, so I’m not throwing the kitchen sink into the market at present (mostly because I don’t see many undervalued high quality stocks which meet my criteria).

All my stocks are listed on the LSE, and I think the NYSE is still overvalued. Contrary to popular opinion, I don’t see much value in the market at the moment aside from a few extremely attractive stocks which imv each offer 80%+ upside within the next 2 years. Most of the cheap stocks atm are cheap for good reason imo.

Pokerchips,

I fully agree on the automation front.

It will be interesting to see how that change transforms this industry in the future.

I agree that these matters won’t be resolved overnight, but I do think agreements will be formed within the next 90 days. There’s a willingness from the U.S and from many other countries to reach agreements and delays have a negative impact on all parties… this suggests to me that resolutions will be established in a very timely manner.

Look at how quickly tariffs were imposed… they can be removed even faster. The move out of China will obviously take longer, but I don’t see it taking much time for flexible, low skill industries like ours.

Surely they is surplus production capacity in some countries? Moreover, loss-making and lower profit factories can be acquired from weaker companies in the likes of Vietnam etc.

There are many routes out of this situation imo.

When I compare these events to pandemic and GFC, it really pales in comparison in my view… yet the market has reacted as if we’re going through a comparable situation.

ForwardThoughts (minus the forward thinking),

How does one ramp what appears to be massively undervalued stock based on previous earnings, existing forecasts and probable positive outcomes in the future? That’s my view anyway, hence why JD makes up just shy of 20% of my portfolio.

This isn’t a loss-making Aim stock or a tech stock trading on 15x EBITDA.

I’m an average guy, working as a project manager in the construction industry, not a fund manager, so my words hold no weight. I just like to bring balance to the media stories which seek to instil fear.

Drowning? My average is 96p, and I’ll reduce that further on any dips and as I earn money. Moreover, I trimmed my position substantially at around £1.40.

My time horizon isn’t 90 days, it’s a little longer than that. I’m a long-term investor, not a trader mate.

What relevance does Apple have?

I think JD and the sportswear manufacturers can pivot out of China just a tad bit easier than Apple.

The fashion industry has been pivoting out of China for years, and this trend will continue imo. The 90 days of grace (with 10% tariffs in place), give breathing space… it’s a little bit better than 40% according to my calculator, or is this reduction not positive?

If you’re bearish, it makes no odds to me. You can hide under your bed with WishingStar while those of us with conviction and a shareholding patiently hold our shares through the headwinds.

I suppose the directors must be delusional for topping up and for announcing a share buyback as well (a real rarity for JD).

Good point on the 25% tariffs on steel etc though… that will really impact our industry won’t it? 😂

I opened a position here yesterday morning (it was my intention to do so anyway after researching the company in detail the day prior, but the RNS caught me off guard, and I thought the opportunity was missed).

I also topped up today.

Thanks to those of you who helped me understand the company in greater detail.

Pokerchips,

I agree, but I don’t expect tariffs to remain at anything close to these levels. It would be economic suicide for both nations, especially China.

Sorry, I didn’t explain myself properly: of course there will always be competition, but I was referring to competition for being the world leader and having the world’s reserve currency at their disposal. China have made huge in-roads by increasing their influence in many countries around the world in recent years (using the pay dictators, and get countries in debt model which has been so successful for the yanks), and with the U.S now being so hopelessly reliant on imports, they have left themselves exposed (as you’ve pointed out).

As for it being 30 years too late, I think that’s highly debatable (and unanswerable). The U.S have leveraged their economy with cheap Chinese imports, so it’s a double-edged sword. It’s a bit like being at the casino at not knowing when to quit. There’s no obvious time to walk away, aside from in hindsight.

China have made some huge mistakes in their pursuit of power though: due to the corruption in their markets and tampering with the free market, the world doesn’t trust them. If they’d played things more carefully, they’d probably be neck and neck with the yanks now. Ray Dalio points out several qualities required for a country to establish itself as the leader of a new world order… China is lacking massively in certain departments, mostly related to their government and currency.

What other value plays are you holding/shortlisting atm? I’ve seen you on many of the boards which I monitor down the years, likewise with several other JD holders.