Member Info for sageoflondon

Of course you will. The problems, will be problems for whoever is elected. I'm not saying I prefer one to the other - there will be some differences but they aren't so far apart on the face of it. Either way there will be challenges.

You might be right re further privatisation - in reality however, it will be Labour making those calls. Unless Rishi grows a magic money tree, there isn't a chance there will be a Conservative government after the next election. Just don't see it.

The whole sales growth piece in isolation doesn't mean a great deal to me - anyone can make sales, it's all about actual margin and whether the business is actually feasible or not long run. It doesn't tell you much. It's also very easy to frame / manipulate given there is no additional detail provided. There will be a number of failures in the portfolio - that's just the game / pool Grow play in - I have no idea re the extent of this or what proportion will fail. 2023/2024 isn't going to be a repeat of 2020/2021 for tech valuations, we won't be going back there for a long while. Maybe this moves up once interest rates look like they have peaked and inflation subsides, but any meaningful increase going forward needs success. At present it looks like the failures will come prior to the successes - those aren't generally publicised though. I still don't think the NAV is an up to date accurate representation - neither does the market. We will however see - time will tell.

I had wanted to buy ABF shares for 5-7 years but never fancied paying £30 a share for the privilege. So when they moved down significantly due to no online for Primark in the pandemic I thought it was a good opportunity. Heavy Weston family ownership, still growing, well diversified business, albeit one that is increasingly dependant on Primark for growth. Low debt, small dividend etc. What Grow needs is a big sale, but more than that a big success, i.e. a sale that gets off and then increases in price due to the fact it is making a lot of money. We haven't had one of those for a good while.

You did well with Yu. I have been playing things safely at present. I used the Truss debacle to pick up some fixed income, a few preference shares at circa 8% yields, down at 6.5% now, SCS was a buy a little while back - I know consumer sentiment very negative but a steal at 120p, strong balance sheet, decent yield whilst you wait for recovery - at around 200p at the moment, ABF was another buy for me. All the way from £16.50 down to late £13's hoping for a decent update tomorrow - at around £18.50 today. I have deliberately avoided most things that can't pay a dividend (compared to don't - the two are very different for me, I focus on free cashflow, ROCE, ROE etc. My own value approach ultimately. Very light on Grow at the moment. Ultimately my objective is to double over the next 7-10 years through a mix of compounded dividends and capital growth. I think returns are going to be much lower next 5 years and potentially US markets could have 10-20% further to fall at present. I'm probably wrong though.

As close as possible to the end of each of these years (ie. 31st December), this was the Grow share price by year:
2017 = 391.50
2018 = 555.00
2019 = 483.75
2020 = 658.67
2021 = 1009.33
2022 = 354.20

That's a 9% loss roughly from 2017 to 2022, I believe inflation was somewhere around 23% over that period. So in reality 32% down since 2017, excluding opportunity cost of investing elsewhere. Not relevant to today's share price in anyway, just a bit of interesting information - or I thought so.

Not sure there's going to be any big rally this side of 2022. It's ok knowing or thinking the inflation / rate curve will stop rising, but what we haven't yet seen is the stress that higher rates place on many companies in terms of their ability to make an actual real profit. Earnings downgrades yet to really come through.

A very capable presenter and so far appears to have done a solid job as CEO. Looks capable, which is reflective of the relatively high level of remuneration, along with the sector specialism, CFO also has a solid background and appears to be a safe pair of hands. If you want a decent CEO/CFO you have to pay for one. I will follow this with interest. I have started with a small holding. It looks like there is value here, but those metrics can change in extreme conditions. This could easily double or more in a 5 year timeframe - all the usual caveats. I also noted that Lord Lee or Trafford did (and assume he still does) have a holding here.

In reality, todays (UK) house prices (and likely some other asset prices to) don't make sense at normalised interest rates. Where they stabilise or land who knows. Without an element of capital growth a lot of buy to let investment (utilising any amount of debt, or even without) doesn't make sense in areas where house prices look full. A good example - say £550k for a 2 bedroom apartment in SW London, say £2k per month in rent. That's just under a 4.4% rental yield, that includes no agents fees, repairs or maintenance etc. So say 15% agent fee, 1% of capital value on repairs etc. That reduces the yield to somewhere in the region of 3.75%. That's not worth it, ignoring any hassle factor at all - property ownership is often more involved than investing in financial assets. A no brainer with rates at 1% and property prices rising at 5% per annum, not so clever with property prices stagnating and certainly not falling property prices.

I get the article, but it's very one sided, in trying to make a point. Interest rates will actually have a huge impact on say motor vehicle purchases in reality - given the proportion of vehicles bought on credit. I don't however think rates will need to go beyond 'normal'. This might happen in the US but can't see it happening in the UK. I don't however think, we are quite at that normal yet - so likely to be more pain to come. Over inflated property prices are a huge problem that the government is only just waking up to. I might gain, but I will eventually lose as my kids won't be able to afford to live near me etc. If my house drops 20% in price as a result of the normalisation of rates, that's just fine, if it's 30% so what. I bought it to live in, not as an investment. Lower capital values will eventually lead to lower rents as well, but that will take time to work it's way through the system. Sure there will be some 'investors' who get hurt if that happens, but that's the same with any business - it carries risk. It might however ease the pressure as lower prices work their way through the system - i.e. lower house prices, eventual normalisation of rates somewhere below peak, stable inflation. Ever increasing house prices and asset values based on abnormally low rates is not the way forward - particularly when that component of the electorate that has benefitted from this is only going to decrease over time. The UK government must be particularly aware of this.

22 cents for a Cazoo share today - that is some fall from the heady heights. $13.60 the peak - 98.4% of the peak equity valuation gone. How long will it last?

I believe Primark is approximately 50% of ABF at present. For me - the existence of the diverse food business provides great diversity.

Private equity hasn't avoided it at all. Just like investors haven't avoided it. Currently their assets are worth a lot less - that's why they aren't or can't sell things. So they haven't avoided it at all. Whether they sell or not is a moot point. The assets are worth what they are worth. The avoid fire sales at distressed valuations providing they have the balance sheet to ride things out. Next year or two will show who really has that capabiity. The Apollos, CVCs, Blackstones will be just fine. Not everyone will be however, but we won't hear a lot about those.....after all - it's private equity. That's the whole point.

Regardless of what Goldman's think, this is a solid company with good wealth preservation charateristics. The family ownership stake and charity relationship mean they are unlikely to bet the bank on any one deal etc. It won't shoot the lights out or double in value in a year or two, but should provide solid returns over time. I liked this company for a while, but I didn't want to pay £30. Very happy to get in at around the £15/£16 mark. I think this will get back to £18-£20 in the next year or two. Then its all down to whether we grow / maintain margins etc post recession. I think these shares will be considerably higher in 5 years - I'm looking for around 8-10% per annum total return.

More than I had it down as to. I think I had it down at $5bn to $10bn, probably somewhere in that range. No guarantees they got it away at that price in the secondary market though.

Will be interesting to see - we might not find out the value / purchase price though. Who knows. There was an article in the Telegraph today that suggested shares in Revolut were reportedly being offered for sale at half the value achieved in the last funding round - £28 billion, in the secondary market.

All else being equal the share price will drop on an ex dividend date - all else isn't equal though so it could go up, it could go down, impossible to tell in reality. If another higher offer came in (very unlikely given this is a recommended offer with significant synergies / benefits) then the share price might go up regardless of dividend etc. Either way if the acquisition goes ahead and you wait you will get the divi and the offer price, which is a little higher than the price today.

GLG likely got caught short. This has turned out well overall for most holders. I invested in this as I thought it was undervalued, paid a decent yield and would eventually reach it's potential in terms of share price / value. I have to admit it reached it's potential faster than I expected. I will now have to find a suitable home for that capital again.

Very true - but I won't be!! I have no interest in this type of food. Charlie Bingham or M&S will be just fine. I am sure there are plenty of vegetarians / vegans who might though. I don't dislike vegetarian food as such, but unless it actually tastes better then I'm not going to eat it. It's also just as expensive as the animal protein equivalent..

I think there does need to be some balance in terms of the risks here. This is not a stable low growth type operation. This has potential (and providing it survives intact) will likely incubate some excellent companies. This isn't however a low risk option, it's a lot more 'high octane' by design. This isn't something I would have as a mainstay in my portfolio, a decent holding yes. Whilst there is potential, there is also the possibility that the market remains depressed for a number of years, meaning liquidity events don't happen and liquidity here is put under pressure. There will likely also be a 'new class' i.e. operators picking over the bones of companies that have liquidity issues - dry powder / cash will be king here. I don't think we are in that position - i.e. we do not have lots of dry powder - it looks like we have enough to meet current commitments etc, but not for significant new investments without further liquidity events. Time will tell how we do. This is not a one way street though and whilst I am not in anyway suggesting survival is in question, there will be tough times an likely volatility ahead. This could easily go down again (or up). It won't be a one way street.