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It beggars belief how far the Bank of England has fallen in the past 10 years or so. From Brexit to recession "predictions" to Covid to inflation to rate-cutting, it's just one mistake after another. Their international reputation is in tatters.
UK total state-pension spending -- as a % of total UK GDP -- has actually *fallen* in the past decade from 8% in 2013 to 7% in 2023.
That is worth repeating -- let it sink in -- the cost of the UK state pension, relative to GDP, is falling (not rising). Supporting the UK state pension is actually getting cheaper.
The biggest rise in underlying UK pension costs is coming from "sickness and disability" claims, which have *tripled* between 2000 and 2023.
All eyes on the S&P500 this week... It looks set top the record 5,000 level for the first time ever in history.
If you'd stuck £100k in LLOY in 1998, a quarter-century ago, you'd today have about £110k... If you'd stuck it in the S&P500, you'd have about £1m and be a millionaire.
The Tories are the world's oldest and most successful political party. It has been around ~200 years. They formed the backbone of the world's biggest empire mankind has ever seen in the 1800s, dominated most of the 1900s, and has so far dominated 60% of the 2000s.
China is years away from invading Taiwan. Western satellites track every inch of that area and there are no major forces lined up across the Taiwan Strait, China has 130km of choppy ocean to cross to even get there, while China's mounting domestic problems are pulling resources away from war. Taiwan is safe (for now).
Ukraine will soon have a ceasefire. A US election is coming up in H2 2024.
Iran will start to back down when they realize Trump is returning in 2025. They won't have forgotten that their top general got a visit from one of Trump’s twisty blade missile things.
The biggest threat to LLOY remains a possible Labour win or Labour-LibDem-SNP hung parliament in H2 2024. That's going to mean an even further lurch to the hard-left, and thus a growing risk for a painful bank windfall tax and anti-bank policies that will snip profits.
Lol.
UK food exports to the EU soared +7% to an all-time record high in 2023. UK food exports to Europe have never been stronger, bigger or healthier. British cheese and chocolate are wildly popular.
As for imports -- the UK is just equalizing with the EU. For years, the EU has placed extensive red tape on UK food imports. Now, it is only fair, and time, to also place similar red tape on EU food imports to the UK. Make it a level playing field.
Yes, this is a far more important topic than we realize.
War in Europe (beyond Ukraine) may be as close as just 1-3 years away. Norway said this week they expect war from 2026. If Putin decides he wants a holiday home in the Suwalki Gap, everyone's pension will crash 10-50% in a flash.
Has anyone on here made their investments or pensions war-ready?
If yes, what have you jiggled about?
Interesting to see the Evergrande CEO being (re)arrested and shares halted in Hong Kong this week. He was once Asia's richest person, with ~$40b in 2017. He now has $0 in 2024 and is facing life in the clink.
A timely reminder that China is still a mess and econo-political headwinds for the region remain bad. Not good news for HFEL at the start of the new year.
Vodafone is just one megadisaster after another. It's like a two-decade slow-motion traincrash. Can't people shareholders still pump it up.
First, they exit high-profit US and swap it for low-profit India!... Next, they build up gigantic levels of debt and dividends they can barely afford... Servicing the ridiculous debt and divvy means they underinvest in R&D, networks and growth... Now, they want to go 50-50 on a merger in Italy -- even tho Voda is contributing 65% of subscribers!
It's just one disaster after another. Decade after decade!
The global financial institutions (GFI) PE ratio is currently running today around 7. The LLOY PE ratio is today running around 9. So, on that valuation, LLOY is perhaps 10-20% overvalued. Add in the serious threat of Labour in 2024, and a possible bank windfall tax, and it's hard to get enthusiastic about LLOY for now.
Regarding the 2023 shareprice-prediction competition -- the crowdsourced average forecast (excluding the extremist outliers) was around 59p. The power of the crowd was roughly 20-25% too optimistic.
Perhaps the lesson for 2024 is to take the crowdsourced average, and subtract -20%. For example, if everyone guesses an average of 70p, then it might end up at 56p on Tues 31 Dec, 2024.