Member Info for Love_You

The thing about leaving is that it would be expected to do one thing which would boost the UK economy … that is to cause a temporary devaluation of Sterling.

On the other hand I think the Brexiteers need to fulfil their promises if they are to be taken seriously any longer....hence they need to reaffirm that as soon as we leave there will be an extra £350 million per week paid to the NHS on top of the current existing NHS budget and purely as an additional amount. They also need to keep to all their other promises which they made on national media in order to win the vote.

If we were a shale company in the US with our production, reserves, resources, and debt, we could easily be valued at a market cap of around $5 billion, giving a share price of £4 per share.

The markets have literally become a joke ... everyone is working in their own tiny little areas now and there is far too little comparative metrics being used at a global level to base policy making upon. I would say this is a sign that globalisation is dead and that countries will become focused more on themselves in future from an economic perspective...as for whatever reason there seems a lack of desire to compete to take stakes in the best projects at a global level - partly because I sense that people are attaching such a high level of political risk to projects outside of their own borders (that maybe you would invest to bring a very low cost resource to production in another country....and then the other banks involved might double cross you...and you might not be able to use either the local or international systems to protect your stake - based on their incompetence at protecting interests in the last global financial crisis). Hence my own explanation for the lack of comparative valuations at a global level is that many institutions/governments have given up on globalisation and are actively trying to cut themselves off from foreign investment, rather than trying to encourage it.

I sometimes wonder if the politicians have given up on markets to be rational and that is why there are growing calls politically for nationalisations and for more socialist policies. Ultimately I do feel that markets have themselves to blame.....being full of highly intelligent analysts they know which are the economically most efficient projects....and yet due to self-interest they are rarely honest with governments about what things are really worth or which are the best projects at a global level to get involved in...hence as governments sooner or later you would just see markets as a bunch of charlatans (who know exactly how to create economic growth but never give honest advice due to self-interest).

Actually to compare over 10 years is not a very useful thing to do because in 2009 most share prices were only just above rock bottom, after suffering large value losses due to the financial crisis in 2008/09.

However the general trends are fairly clear, a loss in equity value for many of the large UK retailers - this despite a relative fall in the value of Sterling, which from a bigger perspective, is the same as a currency devaluation (only a gradual one).

Also the fact the Bank of England switched interests rates to 0.5% and kept them that low for ten years has in effect devalued people's savings and transferred some of this value to people who had taken on irresponsibly high levels of debt ...seems rather unfair if you were planning to invest your savings but didn't think you should have to overpay for something just because someone else had borrowed an irresponsibly large amount to buy it before you could.

Trying to create a sense of balance to my posts as I try to be middle-of-the-road - hence why I think interest rates should be about 5% to create a level playing field between savers and borrowers. After all you shouldn't really be borrowing unless you are creating something which is definitely in demand by the economy...and therefore you should easily be able to pay back you debts plus interest at between 5-8%. If borrowers can't afford to pay down their borrowings after ten years of being able to borrow at 0.5% interest then really, over most of history, they would be looked upon as insolvent ... as if their products were really in demand by the economy they would have no trouble paying down their debts plus 5-8% interest per year.

Anyway, I suppose there hasn't been hyperinflation like in Argentina or Venezuela - something positive at least for people in the UK as hyperinflation generally leads to rioting and a great deal of chaos

https://www.bbc.co.uk/news/business-47636156

Carney said that 0.5% interest rates for ten years have done the economy a power of good (well also doubling the national debt, plus £430 billion in newly created money, QE).

Well all that creation of new money (at the expense of savers/pensioners/gilts) might have done the economy a power of good - except most share prices are now lower than ten years ago if you exclude companies which earn a portion of their revenues in foreign currencies (any company earning in dollars and paying dividends in pounds has seen a rising share price).

However, it is not Carney's brilliance or intellect which has boosted the economy - it is simply he has taken money from the gilt market, from savers, and from people holding Sterling and transferred some of that wealth to people holding bonds, to debtors, and to people holding foreign currency.

Seems strange to praise the Bank of England for making the UK poorer. Yet Carney has received a lot of praise in the media and very little criticism - just shows how corrupt and self-serving the 1% (who are already the richest) have become in my opinion.

Personally I think Carney should set out a public vision for the UK economy and the two political parties should debate it and say how they would adjust/modify that vision if they won the next election. Than at least at the next election people would know what they were voting on...they would know the direction of travel that the policy-makers had in mind for the UK. Under the current system everything is secret and very little of what is spouted in the manifestos of political parties is ever enacted at an economic level.

https://www.telegraph.co.uk/business/2019/03/22/easyjet-strip-investors-voting-rights-no-deal-brexit/

Well the UK government would just create a law saying that the UK utility sector has to be at least 50% owned by Uk shareholders - hence EDF would have to forfit their investments in the UK as well as Chinese and other foreign investors.

It would be tit for tat - what you lose here you would gain from holding Centrica and other utility shares - as the existing UK shareholders in those companies would pick up the EU shares for free - and quite possibly the shares of Chinese investors for free also.

Every action has a reaction - simples.

How can you strip investors of voting rights in a FTSE100 listed company .... I've never heard of this ever happening before ....surely the London market couldn't agree to something as unprecendented (to my limited knowledge) as this?

Grateful we don't have these in the fleet

https://www.hindustantimes.com/world-news/indonesia-s-garuda-cancels-49-plane-boeing-737-order-after-crashes/story-0q1ti9HCAZwFQofdKG7LRI.html

However I suppose 49 planes is not a big order for Boeing and they would have probably expected some cancellations anyway....other the initial contracts would be watertight rather than either provisional or a memorandum of understanding.

I enjoyed reading that JohnLewis79. However I think if there is an investor sell-off then it would logically (and I know logic very rarely applies to the people running the markets) affect poorly capitalised companies the most.

Genel is one of the best capitalised of the smaller oil and gas companies....now the quality of the capital I am not sure of....but in terms of pure metrics/debt ratios it is extremely well capitalised....

Hence if people are selling out whole portfolio and going to cash then I guess they won't look too closely at individual companies and their capital ratios ...however if people are going to be more selective (the tide going out only leaves the people without shorts naked and exposed) then why would you hold the shares of companies without much more production than Genel and yet with billions in debt?

I think Genel's net debt is below $100 million now - so soon they will be free of the clutches of the bond market who charge small oil and gas companies a rather high 10% per annum to borrow - it's not too bad until you realise projects in the oil sector often take 6-10 years and by that time the compounded interest is between 150-300%.

Anyway - the big questions remains to me will any sell off be general or selective. And if it is selective then why sell the better capitalised companies (in the absence of any other information as to the quality of that capital - which is something many people will not be able to understand/forecast - partly because if the US government changes then suddenly what was good quality capital sources can become villains and villainous sources of capital can suddenly become the golden investors to have onboard with your company).

It's annoying how the Indian government can just sell the shares that they were holding on behalf of Cairn's shareholders...isn't this a matter the Bank of England should be investigating?

The Indian tax office can't have done this without believing they have a right to some tax that they believe was never paid...so if nobody else in the accountancy/tax profession agrees with them then why isn't it being investigated at the highest levels?

I mean just say that the arbitration finds in favour of Cairn and also say that the Indian tax office says we can't give you back your shares as we have sold them and pocketed the money...then surely as a last resort the Bank of England is obligated (morally/ethically at least) to compensate Cairn's shareholders who could not reasonable have predicted that the Indian tax office would break international law like a street thief.

Also this all raises questions about why do the lawyers take years to sort out these sorts of issues...or more to the point...why do shareholders let the companies which they own pay tens of millions for the lawyers to take years to sort out these sorts of issues.

Is there any way for shareholders to better protect the misuse of their capital by companies? Currently most shares in certain sectors seems to be in long-term down trends ….it's pretty galling for shareholders to see their companies working hard (getting oil out of the ground, selling products, improving infrastructure etc) only for the share price to keep falling ...it seems very much related to sectors as well....hardly seems by chance ….seems some sectors are destined to lose value (such as the oil sector) despite the fact citizens would soon be up in arms if their was no fuel to drive to work or to put food in the supermarkets.

Malvinder & Shivinder Singh former Indian billionaires lost a recent mega arbitration in Singapore & running helter skelter to pay up else they will be jailed & assets liquidated!!!

Maybe the Central Bank of India will just print more rupees which they will convert on the black market into dollars to repay their debts. The Indian taxpayers will lose whilst Messers M&S Singh will continue to use the same strategies that made them billionaires in the first place - to look for opportunities and not to worry too much about breaking/destroying others people's wealth in the process.

And that's the last you'll hear of me - too disgusted by the fact no-one seems to be able to compromise anymore - landlords need to take a good look at their ethics when they are trying to stick to contracts from pre 2008 regarding perpetual rent increases, when in fact the last financial crisis changed everything...and especially the valuations of commercial property in the UK.

How can you say this is a good lesson when people might have lost tens of thousands, or significant percentages of their portfolio here. Next time someone mugs you I hope some random passer by shouts that's a good lesson for you. I'm basing that on the fact I know many people who like Debenhams, who shop at Debenhams, and if it wasn't for the greed of the landlords (and their contract stating rents can only ever increase - even as UK commercial property values are falling) then this would probably have been a profitable business gradually growing shareholder value and delivering a valuable shopping experience to consumers.

My comments to you might sound a bit harsh, and please don't take them personally (I am against all mugging to be clear) - however the shareholders have lost out here due to the greed of the landlords. Some might say that it's been a slow-motion mugging by the landlords of the shareholders. So please I am going to show some respect to anyone who has lost money on these shares - as really the landlords greed is probably going to put this company into admin and the landlords are going to have to accept less rent because market valuations have fallen. So why the landlords couldn't have just done the obvious and struck a deal to reduce rents without going through putting the company through admin/shareholder wipeout is probably down the board looking after their own jobs rather than prioritising the good of the company as a whole. Anyway my point is that there is many ways that you could view this situation as a slow-motion mugging of one group of people by another...so I would like to offer my sincere condolences, respects, and best wishes to anyone who has lost money here.

I know you think the shareholders here have only themselves to blame....but I do think there are a couple of other mitigating factors in this situation....the landlords have not behaved reasonable...and the board has not nehaved reasonably as Mike Ashley's offer seemed seemed to offer more potential...although a CVA would of still been necessary to create a long-term future for shareholders here in my opinion.

Sad to say there has been so little protection for shareholders from landlords and a self-interested board of directors....it must be making everyone think twice about the business ethics of all those involved here.

If you don't have much experience of markets try this as a first step in your learning.

Select 8 companies at random and get the graphs up on screen (bar charts would be better but line graphs will do).

Then with a ruler (or using a tool on the share price chart) draw one line touching as many high-points on the share price as possible - and draw another line touching as many low-points on the share-price graph as possible.

You should see that more often than not these two lines are normally parallel and over a period of several years are either creating a channel gradually rising in price, or a channel gradually falling in price. This is a result of markets now being regulated and politicians/financial head honchos in effect setting strategies which last for many years (and they never seem to alter them whether the strategy is achieving their original goal or not).

Hence the share price will generally be a zig-zag gradually going up, or down, over many years. If you sell everytime the share price hits the top of the channel and buy everytime it touches the bottom of the channel (whether the channel is going up or down makes no difference if you are buying selling based on these rules) then you will probably make more money whilst this works (than the missed opportunity when the share prices breaks through a channel and continues beyond the channel (either above it or below). Also once the channel is broken there will normally be a back-test (look up what this term means, as it is commonly used in technical analysis) and this back-test will allow you to buy/short-sell the share so as to profit from the new move outside the channel - because if the channel is truly broken the share price will tend to continue moving away from the channel in the short-term (normally by at least 10-20% which is a decent profit over one week, or one or two months).

Hope that helps to anyone getting started on trying to make money from trading.

This is too much for me ...not only is the government interfering in markets but in such a way as to most likely legally force specific companies to sell their products at a loss (under the most realistic scenarios for wholesale energy prices).

Personally I would like to see the government cap the prices of specific foods, of water bills, and of mobile phones. You would soon seen the shareholders of Tescos and Vodafone up in arms...and the majority of the population would agree that the government shouldn't dictate the prices of individual items in a free-market economy ... so why no support for Centrica from the media??

Where did the energy cap come from anyway? I always thought generally the Conservative party believed in the market being free to set prices, and if prices rose too high then other companies would enter that sector to compete for a share of the better profit margin...hence all sectors would end up with similar profit margins if financial markets were efficient...as nobody could raise their profit margins without capital flowing into that sector from the sectors not having raised their profit margins. Clearly the market is not efficient anymore as companies have become too large and smaller companies can no longer move in to compete for the profit in sectors where the profits are the highest. However a large part of the lack of ability for smaller companies to compete has been driven by regulation which makes entering a new sector prohibitively expensive. But if the Conservatives really believe in markets then they could always try cutting regulation and testing out their true beliefs on the real economy....that in a market freed from all regulation their would be constant competition and all sectors would perform at a high level of efficiency unless capital from another sector would replace the inefficient capital from companies who became inefficient.

Okay, the government only have their jobs due to regulation - so they are never going to see if a truly free market works in practice (they are happy just debating it in theory and drinking/eating in their little box the HOC).

However, it does come across as extremely hypocritical that a government which supposedly believes in free markets has not only regulated the energy sector in terms of environmental regulations and special green taxes (which favour private landowners directly at the expense of the majority of taxpayers) but they have, additionally, imposed a blanket price cap on the price to customers...whilst not imposing a price cap on the wholesale price of gas/electric. This is too much for me. Centrica buys energy and distributes it to consumers and bills them. So the government has in effect regulated to put Centrica out of business...as they have capped the cost they can sell the energy at have not capped the price at which Centrica need to buy that energy from others (allowing other companies to use the UK legal system squeeze Centrica into a position whereby they have to legally sell every unit of energy at a loss...which will only grow with time as the wholesale price of gas/electric is only going to rise in future...meanwhile the price for consumers is now capped).

This is too much for me ...not only the government interfering in markets but interfering in such a way that they're actually going to legally force specific companies to sell their products at a loss (under the most realistic scenarios for future wholesale energy prices in this sector).

Anybody got a different view?

I looked at Centrica accounts before I bought in - their accounts looked great to me. I think the market is nuts. Centrica is doing a great job and the market is probably just waiting for bored people to sell out. Of course there are events such as Lehman, RBS, Enron, which make you realise that the published accounts might not be an accurate reflection of Centrica's financial health. However, as investors what else have we got to place out faith in other than the published accounts. I know I would prefer to base my investment decisions on the information in the annual report/financial statements provided by the company to the market. I mean fraud is always happening on the London Stock Exchange ...see Patisserie Valerie, Carillion or Afren (only a few examples out of scores of others). However you can't live a life just believing that most other people are going to behave fraudulently...that would be crazy. So I'm going on the published financial information and as they have stabilised the debt...and helped out the government (by agreeing a price cap) then shareholders really deserve to be rewarded in future - unless the government is of the ilk to throw people who have previously helped it under a bus in the future ….nothing would surprise my anymore. But rationally (and I do believe it's important to try and make decisions based on rationality rather than looking to others opinions' about what is trendy is terms of stock-picking) I think you have to place your faith somewhere...and I don't see why the City of London can't at least ensure that the financial facts (in the form of balance sheets and cash flow statements) provided to investors are correct at the time of publishing. Then after that it's up to each investor to decide which company is going to provide the greatest return on their shareholders' capital.

So who is going to be buying a new Aston Martin, McLaren or Ferrari with their profits from Hurricane?

But what are the chances that if Corbyn ever came to power the Labour party would vote to ban all new oil production/projects in UK waters? Labour seem these days to think of their traditional supporters as "biggots" and as long as they have a support of a few greens who want to go back to the days of horse and carts then they would be happy in Parliament ...as whatever happened to the rest of the country there would probably still be a steady stream of horse-drawn carts delivering top-notch grub and fine wine to the MPs chewing the cud in the HOC.

Both Enquest and PMO are dogs. You think Enquest is bad spendind $2 billion for an asset currently producing 14,000bopd. Well PMO spent $2.2 billion on Solan and that has never consistently done more than 5,000 or 6,000 bopd. I'm pissed off with both companies as they both had the chance to get on with big projects in 2011/2012 - Premier to forge ahead with SeaLion (600 million barrels) and Enquest to focus solely on heavy oil with Kraken and also they could of bought out the Bentley field from Xcite Energy. (Alma/Galia seem a complete waste of shareholders money with hindsight as they haven't produced at even 50% of the expected flow-rates). With Kraken and Bentley Enquest would of been developing about 250 million net barrels of heavy oil - much better than 13 million barrels from Alma/Galia and all the production issues due to a water cut of 92%.

I agree that the uptrend still seems to be the long-term trend here. However, I've not exactly been brilliant at investing wisely in the past. But that's my honest opinion for what it's worth ...I still see a longer-term uptrend that should eventually (within a year) take us past last summer's high and up towards £2 per share. However...Trump is doing all he can to keep oil prices low ….constantly encouraging more lending to companies in the shale sector despite the fact BHP billion had to exit the US shale with a $15 Billion loss between 2011 and 2018. If you think BHP was a large enough global company to have had a decent stab at making a profit from US shale then wise investors wouldn't touch it with a bargepole ...as like I said BHP sold out having written down their assets by over $10 billion and having spent another $10 billion in capex most of which they never recouped through cash flows - I'm not sure of the exact loss their foray into US shale caused their shareholders...but somewhere around the mark of $15 Billion.

So when that kind of money is being pumped into keeping US oil prices low (at the expense of shareholders/investors in the silly companies wanting to enter that sector) then it will be tough for oil prices to rise. Also don't forget that the FED lent Petrobras a load of money in the form of 100 year bonds paying virtually zero percent interest. This was just to ensure there was a plentiful flow of cheap oil from offshore Brazil in the future (some of their deepwater fields contain 8 billion barrels). Nobody really knows where a 100 year bond will be paid back - especially when it was lent to the oil sector (at a time when many governments have announced agreeing to ban petrol/diesel cars by 2040).

So yes, think a long-term uptrend is still a valid play here - but I had to mentioned to headwinds keeping the oil price low (both currently and for the foreseeable future - I mean the production levels from offshore Brazil are going to be pretty stable for the next twenty years at least - conventional wells can produce for twenty or thirty years without needing to be re-drilled, unlike shale wells).