The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Steve, it’s a dangerous game trying to buy short term bounces based on patterns etc when the economic headwind is dragging the stock down long term. Take a step back and look at the bigger picture.
Steve, how do you know that me and Mike haven’t opened a short? Everyone is entitled to their opinion regardless.
I wouldn’t base any investment decision based on British bulls. The number of crosses shows they get it wrong far more than they get it right.
Even if interest rates have peaked, we haven’t seen the effect filter through to the housing market yet, or the HB’s bottom line, and that is when the real pain comes.
On the balance of probabilities, there’s no doubt PSN is likely to fall further because the economic headwinds are only getting worse. I understand investors like yourself are reluctant to cut their losses, but having sold at £12, I can tell you it was a very wise decision.
For any sudden upturn “without warning sign” ie no reason for doing so, it would come back down as happened many times in 2008.
Sustainable rises will only happen when interest rates start coming down. I wouldn’t be interested in buying a dead cat bounce.
Steve, I get your argument but the way I see it is I’d rather pay a 10% premium for it once we’re out of the sh*t instead of risking a 40-50% fall from here. Add to that my capital is doing very nicely elsewhere and I’ll probably have made the 10% premium elsewhere anyway.
Bottom line is there is money to be made here but the horse won’t bolt overnight.
Steve,
Nobody knows, this may well be the bottom, it may fall among her 50%.
The fact is until high inflation/interest rates is well and truly in the rear view mirror, this hasn’t reached the bottom. If the economic climate changes, I’ll buy in. It might cost me 10% extra, but at least I have t risked a 40~50% fall, and my capital in doing very nicely invested in centrica in the meantime.
I never try to get in at the bottom, you almost certainly take a haircut first. Just suppose we are at the bottom now (I don’t think we are) and interest rates come down and everything starts looking rosy, I’d rather get in at £11/12 moving upwards than at £10 with a risk of moving downwards.
Hope it does paddy. I sense the desperation in your posts.
If it’s only the debt level holding this down then why doesn’t the same apply to all other companies with high debt like carnival or IAG?
Yes, anyone buying asos on the way down were fools as well, not sure what the relevance is though. At least it’s not been as bad as that just yet.
Nobody who panic sold in the past 2 years regrets doing so. Only the buyers of this share regret it.
Paddy still kidding himself all the way down.
The relevance of other people’s commentary is that it may stop others losing their shirt here.
Shorts don’t cause stocks to go down, they predict they will go down, so they short it.
If they could take stocks down, why don’t they do it to momentum stocks?
I think we all agree they won’t stay down for long. 2025 onwards I’m sure the Housebuilders will boom, but I think we’ll see at least 30% further falls from here in the short term.
The BoE is fuelling core inflation imo with these interest rate rises. Companies have debt to service, increased finance cost = increased prices. Workers have higher mortgage payment so they demand higher salary, company them has to put prices up, fuels inflation.
Higher interest rates only reverse asset inflation (not core) because people can’t afford to borrow as much.
Going to be difficult to find a way out of this spiral.
I think they’re being very optimistic there.
Lorenzo is bang on with all he said!
I’m not sure a 2% short can be solely responsible for a 60% fall. Anyway, we’ll go with your philosophy, how far will “they” drag it down? There’ll be no change in direction of SP without a change in direction of interest rates and they can’t come down do I guess it will be this dog instead.
Except the debt isn’t unchanged paddy, it just got a whole lot more expensive, which will wipe out any profit. These interest rates are the norm, we won’t see the historic lows we had 2009-2021 again.
Panda, I wouldn’t value any housebuilder on profitability ratio at the moment. PSN is priced at the book value, all other housebuilders were priced below 80% of book value last time I checked.
Would expect them all to bottom out at somewhere around 50% of nav.
6x EBITDA 😂 when the biggest expense is interest on the debt mountain, followed by depreciation of the busses.
Try 6x actual profit and you come up with a value of £0.
Try net equity excl goodwill and you come up with a value of £0.