Member Info for Savage_KeyboardR

Completely agree with short sharp shock approach Taverham - They should have made early hefty hikes, as it would have sent a far stronger signal to borrowers the need to reign in spending. Even if oil spikes I don't think we'll see a further hike because now it appears to be more centred around the duration for which rates stay elevated and much less so about the specific 'peak rate' number on the page.

Sources:

https://oilprice.com/Energy/Crude-Oil/Oil-Poised-To-Become-US-Single-Largest-Export-Product.html

https://en.wikipedia.org/wiki/List_of_countries_by_oil_production

https://en.wikipedia.org/wiki/List_of_countries_by_oil_production#/media/File:Top_5_oil_producing_countries.webp

Cheers WackWack - Just a note on USA economic strength and on price of oil... it's very easy to forget USA is now the largest oil exporter and it has also been the largest global producer for a few years already, this means spikes in global oil prices today have a very different global economic impact - when compared with historic price spike events e.g. 2007/8/9 financial crisis - I think this additional 'supply security' benefit for many Western economies has been underestimated by media and some analysts in speculative forecasting of recession/slump. There are definitely issues of restructuring in economies of the West (rebalancing away from commercial real estate, bricks and mortar real estate etc...) but I don't fundamentally agree this equates to risk of a crash and widespread contagion.

Looking at data out this morning it appears a hold on BoE rate, at 5.25%, now looks a near certainty for Nov MPC meeting since tightening to 5.5% could cause inflation to quickly undershoot... probably means inflation is set to remain around 4-6% for medium term which should, over time, eat into debts and if UK rates have now peaked then EU is probably also close too. USA may diverge at this point with it's stronger economy and a small rates rise by the Fed looks likely for Nov. So what does this mean for TUI I hear you cry out?!... it should mean continued revenue growth, easily servicing Tui's debts plus the proportion of customers who reined in their spending will reduce, as fears on inflation and interest costs subside, significantly through these winter months. Expect strong summer holiday bookings this Dec/Jan/Feb!

Caveat being that one off COL bonuses, dished out over summer, will have caused temporary trend of pay outstripping inflation... the wider picture of the data suggests slowing pay growth and fewer job vacancies coming online. Looks like a hold on BoE rate, at current 5.25%, is a near certainty since tightening to 5.5% could cause inflation to quickly undershoot... Yes velindre, as presuming BoE prefers allowing inflation to remain on the boil above target, than to drop through the floor - looks as though inflation will remain around 4-6% for the medium term.

Affmead - I am interested in the Travel sector yes, as I'm invested in Tui but... I'm not invested in EZJ (also not planning on buying a position atm). I wouldn't go as far as to say never though, as EasyJet is a sound business for long term hold imo. just a thought... Not everyone is ramping/deramping for their own agenda btw... I've just been stating my thoughts today about EZJ recent update and shift in the SP since, as it's a discussion board for exactly that. I have no agenda here other than my declared TUI holdings.

Avocet123 - I think in 'normal times' investors would be pleased to see an ambitious spending plan for purchasing new and efficient airframes but... Context of zero Divi rewards since Mar 2020 and ongoing global market turbulence means investors are typically demanding far more cautious approaches... Yet in that climate EasyBoard announced an aircraft buying spree and dished out lacklustre short term rewards - essentially demanding investors take a leap of faith in a bold plan... clearly it was asking too much for some investors? - The SP diving is evidence suggesting it was a step too far for some.

Avocet123 - As I said the issue is not the fact EZJ indicated it'll restore divi's, it's the paltry rate when compared to inflation... Hopefully TUI will better reward its loyal investors.. though we'll need to wait until Dec for that announcement.

Beo1 - I take your point on my sloppy language on Divi announcement... yes, Divi naturally would fall in line with EZJ's past Divi cycles... However, point I'm making is latest update signalled small Divi size, far too small for the record results and context of global risks. Too much focus was had on buying up shiny new planes and too little on paying out a slice of the bounty as a reward to loyal investors or for encouraging new investors to buy into a booming company... I think in time that'll prove to have been a big mistake.

Timbo87 - Completely agree about whole travel sector currently booming and just to point out that I did say EZJ delivered record results... problem imo is with EZJ board decision in not quickly dishing out a slice of the bounty to it's investors. Board opted for 'nice PR language' approach by promising to restore Divi's one Quarter later, at a low payout sadly too. In my opinion this announcement has landed flat and the evidence is the weak SP since this recent update was announced.

Affmaead - I declared precisely that when I made my first comment on this thread "As an outsider (I'm invested in Tui but not EZJ) I think EZJ board made a big error..." - Now had this latest EZJ update been a little different I may have been interested in buying some EZJ... I'm hoping TUI don't make the same errors in their Dec update (as EZJ have done In my opinion) - this is a discussion board after all and whilst I'm not invested right now perhaps I will be interested in buying down the line sometime...

Bigjock36 - I've no interest in buying any EZJ shares, though I am observing what happens though because I hold shares in TUI. I've instead bought up some shares in other companies on these recent dips... in firms which are paying healthy divi's e.g. Bakkavor (7%+) and BT (6%+)

Affmaead - the issue is the latest update was clear about the timing for restoration of Divi payment. It said they'd announce the amount in November but wouldn't pay anything out until the New Year... With risk/market turbulence at high levels plus oil prices surging clearly investors are spooked at the prospect of receiving diddly squat until early 2024 at a time when if they move their money they can easily earn at least 5% elsewhere for an entire quarter... which would you prefer 0% or 5%+?

Bit of a non-story this one, as TUI investigated then replaced some parts and found there's no widespread issue... check out other articles on this and the finer details.

Avocet123 - Yes, currently little incentive to hold onto TUI as well, also why it too has seen SP fall. After all if a company delivers record trade and healthy profits then it has to share out the bounty, especially so during times of high inflation, offering 0% return to big investors is bound to land a tad flat. TUI senior board members (Director and Deputy) made some large share purchases recently, and they've not announced a big buying spree of jets either. Who knows what the TUI board will do at the Yr End update in December but... doesn't change the fact that I think EZJ board made some poorly though through decisions in their latest update which I think will hurt EZJ SP right through until Jan-Feb.

As an outsider (I'm invested in Tui but not EZJ) I think EZJ board made a big error in not handing out divi right away... pension funds and other big scale investors have zero motive to hold this throughout entire 3months ahead (plus risk of SP falling has increased for investors too, I.e. EZJ announcing big spending on planes and recent global events)... so I think EZJ is set to fall steeply... perhaps down to 320p and below?

Interesting avocet123 and maybe I am wrong? Perhaps the fact EZJ have not paid Divi's for years means investors are happy to wait some more?

Beo1 - just for clarity I never said EZJ board mis-managed the Covid situation 3years ago... I'm not saying that at all and I'm sure many investors understood those Covid challenges and dutifully stuck with EZJ, to see them through the tough times but... the problem here is for that backing investors will want a share of the profits the very moment they arrive and for EZJ board to cheekily delay restoration of the Divi was not just brazen... IMO it was a BIG mistake, and for it EZJ SP will be punished. I think if global turbulence rolls on forward EZJ could even plunge right down to ~290-320p

Stupmy - IMO there's a lot of reasons to have confidence in the TUI board and their decision making. I agree, I hope TUI will restore Dividends in their Dec update and not make the error EZJ has. TUI board were ahead of the curve with the Consolidation and RI, and albeit painful (saved the business IMO) it has ensured TUI's resilient position coping through these turbulent months of biblical weather gone by and the ongoing global turbulence too. The last update was super clear "TUI reconfirms expectations to increase underlying EBIT(2) significantly for both Q4 2023 and also for FY 2023 against FY 2022". They have also made sizeable Director + Deputy Director share purchases too with all evidence out there pointing to a sector wide boom in Travel/Holidays... Within the next few weeks I think we'll see a sustained SP rally and I think it'll head up beyond £7

Stas20 - it was Beo1 who said Divi 1% of yeild. Yes, the recent update stated 10% of PAT but from my outside look in (I'm not invested in EZJ) it's clear investors have shunned EZJ since the update and IMO that's because the board have not offered adequate incentive to hold the shares during the turbulent months ahead... they've essentially said to investors we'll tell you the Divi details in six weeks time (late Nov) but we won't be paying you until early 2024... Beo1 that's essentially asking investors to stay invested with zero reward for at least the next 3 months! And the EZJ board thought that'd be okay??!! I think they've taken leave of their senses!