Member Info for steph

http://certainruin.blogspot.com/2009/07/earnings-and-pe-ratios-in-great.html

even in the great depression low point in 1932 P/E's were 10. Nothing like that will befall the UK builders for the next 20 years. I just think the business model of the sector of 2007 is assumed by the market and TEF gets priced in with that. Whole sector more stable and government less likely to make the same Mervin King liquidity mistakes.

great IC link. Spot on.

Strange times but the UK building sector has underling strength to weather any storms that it did not have in 2007. Also some housing investment tis counter cyclical. The bigger the "do do" we are in the more the government will stimulate the sector through help to buy, stamp, funding for housing associations and councils, interest rates and land. I would not call it a fully countercyclical play like gold but a mitigated countercyclical and as such the current P/Es are in no way justified and are overdone on the downside risks.

Funny world we now live in but skilled high paid immigration is what drives TEF market so a post Brexit immigration policy that does this is good for us. Of course just another lie by leading Brexteers that Brexit means bringing immigration down. I can imagine that those who voted Brexit in the midlands faced with closing car plants and increased immigration will be royally p__d but London will be OK and as long as London is the main or sole focus of EF I am happy all in with a 20 year time horizon.

" Net migration could rise from 273,000 in the year to June to almost 400,000 under planned post-Brexit immigration policy, according to a report published today by Migration Watch UK. The figure would be four times the government target of a reduction to under 100,000. Almost four fifths of the migrants would come from outside the EU, with a doubling in the number of skilled workers after scrapping the cap and relaxing rules for employing them" .

yes an easy to market block near 3 successful TEF developments.

https://www.standard.co.uk/business/anthony-hilton-blame-the-banks-for-house-price-surge-as-lending-soars-a4060451.html

May be wrong but I expect this to stay permanently. The only affordability multiples are permanently changed.

If anything the government will use the same stimulus if we enter a recession.

The only thing to watch for is central bank rates back up to 4% but I don't think that is going to happen for at least a decade.

Pre referendum I was predicting the HPI would keep on going in London at 3% per year or better (feels like a long time ago) for the foreseeable future.

Part of that was believing that affordability measured by earnings over average cost was not a good indicator of a ceiling on HPI for the London Boroughs TEF operate in. This was due a little to "doubleing up" but mor significantly to "regeneration churn". Existing residents on lower incomes were moving out and higher income residents who can afford TEF product moving in. Also very low interest rates have upended historical affordability calculations. The new normal is 2% central bank rate (even getting up to that is some way off). Against historical norms of 3.5 to 4% this is a massive boost to affordability.

sector still in rude health. When will P/E start to align with historical norms?

https://www.theguardian.com/politics/2019/feb/06/uk-can-avoid-no-deal-brexit-recession-says-economic-forecaster

First mainstream economists who say "crashing out" would not lead to an immediate recession. NO growth for 2 years and reduced long term prospects to be sure but maybe no recession -or at least no deep recession.

For tiny TEF we only need no deep recession to keep chugging along and even expanding EPS, net profit and dividends. Maybe not my doubling every 4 to 6 years but maybe still doubling every 6 to 8 years. Our current SP probably has more bad news priced in that is coming even under the worst scenario (MAYBE). Any surprise on the upside will allow us to get above 4 quid pretty quickly.

I expect lots of fudge on Brexit. Small extensions to article 50 and no clarity on what our future trading relationships will be for years. Abdication of leadership by both Tories and Labour. May will say anything to anybody to hang onto power for a few more weeks and label it "serving the nation". I think she really believes that which is both delusional and frightening.

Corbyn like a rabbit trapped in the headlights in the middle of an 8 lane freeway well out of his comfortable little burrow he was in for almost all his political life. A consistent campaigner against extreme poverty but that is not the central issue at the moment. One has to settle our long term trading relationships before the funding for new poverty programs can be robustly looked at.

Money that might have gone into such programs will be spent on fire fighting to avoid a recession (which this article alludes to). The 62 billion extra debt the article mentions would fund the highly successful sure start Blair introduced early in his successful first term (before he became in his own mind the messiah who could ignore 2m brits marching in the streets against the decision he was about to make) 12x over.

In short 62 billion wasted on a no deal Brexit (and this is the lowest estimate of all mainstream economists) could fund some really big programs targeted at low income Brits. Say there are 6 million Uk families in serious economic trouble. 62 billion is over 10,000 each -enough to lift them all into needed training or a supported job.

at least or my ISA I have your mantra. I've always been fully invested up to my ISA limit and never gone to cash in my isa. I am looking forward to topping up April 4th and taking my isa holding over 50,000 TEF shares.

On my spread I have been too cautious and that led to unnecessary losses. I baled out before a small dip but did not go back in and missed a much larger rise. Overtrading and being overly sensitive to political gridlock. Political gridlock does not seem to automatically transfer to SP losses. Perhaps a lot of chaos is priced in and was always priced in ever since the big dip just after the Brexit vote.

https://www.theguardian.com/cities/2019/feb/05/super-tall-super-skinny-super-expensive-the-pencil-towers-of-new-yorks-super-rich

We are seeing this a bit around Canary Wharf. Probably more to come.

Completely don't understand the recovery from 2.80 to 3.43 with such political uncertainty. Happy as I have a large ISA holding. Frustrated because I did not buy and hold some on my spread at sub 3.00

Maybe sub 3.40 was simply artificial and not sustainable in spite of the bad political mood music. An overreaction or driven temporarily by shorters.

https://www.bloomberg.com/news/features/2019-01-31/inside-twentytwo-the-london-skyscraper-rising-during-brexit?srnd=premium-middle-east

We have not had the 50 new skyscrapers plus we might have had without Brexit but there is still new space being created that should support TEF market. Stable office rents is not a bad thing. What we don't want to see is falling office rents due to low demand.

One bank street at canary wharf 700,000 sq foot nearing completion with a French bank of all things taking nearly half and moving in this year. Canary seems to be adding as much residential than office right now with wood wharf and newfoundland (60 stories) so may not be helping our tef market as much as they did.

If you don't like our existing trade agreements with the EU who do you think we should trade more with to compensate? Remember all trade agreements come with enforceable reciprocal obligations.

Personally I think a chaotic exit (and thus a TEF SP drop) odds have increased. If Parliament can't pass even the mild Grieve or Cooper amendments then what can they pass? May denouncing her own deal she herself negotiated is a sign of incompetence and national embarrassment. Other nations just seem to feel sorry for us rather than bear any ill will -in spite of our insults to them.

A period suddenly out of EU will certainly shift public opinion (and then remain or a very soft brexit will be realistic options) but we will have lost our right to keep the same membership terms as what we had. We keep that unilateral remain option only with an agreed extension or a formal transition period.

I can't see any stability for a long time.

Norway never intended to be "stuck" in the EFTA but found that a semi-detached position vis a vi the EU suited it and there is neither a clamor for membership nor a clamor for more "freedom". I have always felt that the most stable point post Brexit vote was something similar for the UK. Close but not in. A few more brakes on immigration but essentially free movement and in time coming out of the customs union and having few token free trade agreements different than the EU ones we can piggy back on. Of course that means in time a DUP busting customs border down the Irish Sea.

May has led the country into a dead end and has not the skill, intellect, self awareness, or Machiavellian guile to get us out. No doubt when she is finally thrown on the scrap heap she will join Blair and Nick Clegg in reaping the material rewards for simply having been in "power" as a "public servant".

Churchill, Thatcher, Wilson, Atlee and many others never cashed in. We are a nation of lions led by mice at the moment.

What you refer to gave me the flashes of pride. It was the dismal in denial conclusion that depressed me. Another 2 weeks wasted before real decisions are to be made.

we are now firmly into the metaphysical rather than the merely political or administrative.

How many angels on the head of a pin is a more tangible reality.

I listened to a lot of the debate last night and there were flashes of national pride at points but overall I feel very let down by Parliament, my Labour party, the Tories and our nation right now. I trust the pendulum will swing to something positive from this mess at some point but hard to see when.

Barr. Good luck. Very odd investment environment. Only for the brave or long term.

sain, james It is a natural evolution for TEF to become enmeshed in multiple use sites. It is the way many of the better sites come to market as some dogs dinner of different uses -both community and commercial. I think they have cut their teeth on some great midsized pure residential and can move over to mixed use and in some ways become a "normal" developer" rather than a pure homebuilder play. In London the economics favour flats over almost any other use expect for a few core office markets. Even Canary Wharf is surrounded by high rise residential towers as on that fringe it is still the highest value use of the land. Those economics might change a bit.

IN the suburban town centers partial redevelopment of office and retail is a huge source of future sties within the critical 10 minute walk to a good tube line. TEF can not grow to the 5,000 unit volume per year I think they are in the long run capable without this sting to their bow.

https://www.thetimes.co.uk/edition/business/risk-is-paying-off-for-those-who-give-up-on-gilts-and-yield-to-shares-95x5v85jw

https://www.theguardian.com/politics/2019/jan/27/uk-cannot-simply-trade-on-wto-terms-after-no-deal-brexit-say-experts?CMP=Share_iOSApp_Other

https://www.theguardian.com/commentisfree/2019/jan/26/brexiters-never-had-a-real-exit-plan-no-wonder-they-avoided-the-issue

What a self imposed economic mess we are in. Confusing for investors to be sure. My view is that the 52% who voted leave should now be required to vote for a specific practical Brexit to complete the democratic process started by the 2016 referendum. The default position is the status quo not crashing out -which was hardly discussed in the 2016 referendum. That is not obstructing democracy but completing it.