Member Info for shal1000

No worries Jeff

In simple terms, say you gave me 1,000 quid so I give you the return on FTSE 100 in a years time. Now I will invest in all 100 shares that make up the FTSE 100 in the same proportion that makes up the index so I can pass on the same return. Now if I don't invest in those shares and in the same proportions, I have a risk that I wont give you the same return as the return on ftse 100. This risk is basically basis risk.

Those investment managers who take on a basis risk expecting to generate higher returns than the ftse 100 are called active investment managers and those that mimic the ftse 100 and no basis risk are called passive investment managers.

Hope that helps.

Looks like someone's sixth sense stopped working after a milli second lol. Percentage of correct predictions by dbno 0.0005% and that's me being kind lol

I agree disinform that faulky reasoning was so childish. I guess he does not have any real financial background on what drives a market etc

Could be wrong, but USA released some solid job growth numbers at the same time of jump - so I guess its linked to that - more demand for bank money as more employed?

You got no sense!

Nice one very useful stuff as always.

Sos jeff

I use that word quite often for my day job! Definition from the net

Basis risk is the potential risk that arises from mismatches in a hedged position. Basis risk occurs when a hedge is imperfect, so that losses in an investment are not exactly offset by the hedge. Certain investments do not have good hedging instruments, making basis risk more of a concern than with others assets.

https://www.londonstockexchange.com/indices/ftse-250/constituents/table

Can't see hbr in the list. Is it in ftse250 or were we lied?

Looks like someone told someone else to shut up and got the whole thread deleted. Not sure why my post got deleted when I just mentioned the bid offer spread this morning has been way to big at 11p vs usual 1.5p.

Exactly. Bp and shell were upgrade big time today by Morgan Stanley and HSBC. Guess what their sp gone down today even when oil prices are up and stable sterling. So market makers only listens to downgrades - bunch of crooks the lot of them!

The high volume could be tracker funds buying enough in their funds to represent hbrs proportion in the FTSE 250, otherwise there is a basis risk to from the tracker fund vs underlying index!

A agree - pathetic analysis from GS

It's just GS reckons there is gonna be a mortgage pricing headwind whatever that means. Effecting other banks also.

https://www.proactiveinvestors.co.uk/companies/amp/news/956947

Big shout out to you bro. Tomorrow will be a great day!

I reckon 1.5% in 4 years time.

Motbuck hope this answers your question

https://www.proactiveinvestors.co.uk/companies/news/956932/lloyds-banking-sinks-as-goldman-sachs-downgrades-shares-to--sell--956932.html

We will

After ending asset purchases in December, Pickering continues to expect the first rate hike of 0.15% to come in August next year.

“Today’s meeting suggests the risk to this call are for a rate hike somewhat sooner than we project. If, as we expect, the BoE hikes the bank rate to 0.5% by end 2022 (following a 25bps hike in December), the newly outlined exit strategy opens the door for the start of a passive balance sheet reduction beginning in 2023.”
https://www.proactiveinvestors.co.uk/companies/news/956910/ftse-100-slouches-in-red-as-boe-ups-inflation-forecast-wall-street-opens-higher-956910.html

Tbh all three are bad to compare against ftse 100. Our industry is made up oiler, bankers, domestic insurers and crappy high street shops with a few decent health care and engineering firms. Us is made up of it technology, auto makers, fast food chains and global insurers. Any good firm we invent gets taken over by us firm like meggit this week and left with crap stocks.

OK as long as you are not referring to me that's OK.