Member Info for steph

Would not mind these prices staying until April 5 so I can put 20k in behind isa wall but I suspect this Brexit mess will be clearer by then and the sector part way back to where it otherwise would have been. Still cautious though on my spread. Will be an interesting week. Every Brexit and also remain very much still in play.

Yes sector resilient. Everything (bar a real recession) but the kitchen sink has been thrown at it and still trading updates are positive for sector. In normal times it would be good news with P/E's over 10 and 2x book.

Arbitrage for the brave I think. I am still all in in my ISA and will top up when I get my divi and again on the 5th of April. Almost all out on my spread.

Waiting for some chink of light at the end of the Brexit tunnel for that even if I have to miss the lowest buy in point.

Just worry that the no deal fanatics in the Tory party combined with Corbyn overplaying his hand (or maybe actually thinking that some economic chaos advances the Socialist cause ) could combine to crash us out of all our international trading relationships at the same time on the 29th of March.

Whatever our views on the merits, or lack of, of Brexit can we always work it back to SP impact. The market rightly or wrongly does not like Brexit so political moves to make it softer or to cancel it can be expected to have a positive sp impact, that is the point of me raising the issue in so much depth here and no other, In the very long run Brexit might prove the economists wrong and uk will outperform g20 after exit but that is useful only if you plan to hold 10 + years.

Any pathway forward will help our SP make a significant jump. It is not Brexit itself that is causing the SP to be at this level (any Brexit an SP drag but not enough in itself to justify this SP) but the uncertainty of which Brexit including crashing out on March 29th.

It may well be that over the next few days some pathway forward will emerge. May's cabinet is openly discussing it. Options seem to be a referendum on May's deal with remain on the ballot. This might have the support of remainers and Mays deal supporters alike and thus stand a chance of a parliamentary majority. Similarly a pivot to a much softer Norway plus Brexit might win a majority in the H of C. Both would mean delaying or canceling article 50.

There is a faction led by the intellectual of our times Andrea Leadsom that favours crashing out but where the Parliamentary votes for that would ever come from is impossible to say. Still a risk of crashing out by inaction so can't be written off yet.

I fear all real options will probably remain rumours after the meaningful vote on May's deal and that might not be until Jan 12th. May not putting her deal to parliament is delaying the strategic adjustments needed.

I think the odds of a referendum is now over 50%. Crashing out 10% and who knows what up to 40%.

May is leaving it too late to ask for an extension of article 50 as that needs 27 sovereign nations to approve it. So UK unilaterally canceling article 50 before March 29th becoming the most likely way of getting an extension. What happens after that is unknowable. Good leadership would create white paper on the Brexit options and put the most popular ones to a referendum before retriggering article 50 -but we do not have good leadership on either side of the house.

Corbyn is stuck in a 1980's opposition to the EU based on "socialism in one country" fantasies. I don't think May occupies the same Universe as you or I either. Deluded both of them. Can't stand Corbyn playing partly politics right now on Brexit. I get it (when the Tories are tearing themselves apart why throw them a lifeline) but feel the issue is too big. Labour should be reaching out to Tory rebels to create a face saving way forward that they can all live with. An Evette Cooper would have but Corbyn is too rigid. Cooper found out what EU immigration restrictions can be enacted within existing EU rules and it is a long and untried (by UK) list. Lateral thinking please.

I have not yet had the investment signal from our broken politics to buy a lot of TEF on margin. I have now some shares on margin and a lot of TEF shares in my ISA. Happy with my ISA (will not sell any for 10 years so beyond current political chaos) but nervous on my spread holding.

Can't say our SP will be higher in 3 months time. I think there is a 60% chance it will and thus the 5k on my spread but not the 80% chance that would lead me to go hell for leather. Cautious optimism that we have reached

I expect it now Hard to see anouther way forward. May’s deal needs to be tested in a referendum to gain the necessary legitimacy. Corbyn in the same deluded mindset that the divorce deal can be substantially renegotiated without a major shift in red lines. If I were advising Corbyn I’d say I’d unilaterally cancel article 50, then have a white paper on the main Brexit options sponsored by any group of 50 MPs with an expert committee to take out obvious unicorns and then put to the nation the 3 most popular options for Brexit in a new referendum with remain an option, single transferable vote until one option gets 50% If any of the leave options win article 50 is then declared again and the sponsoring group of 50 MPs or more then have to form the core of the government (pm and Brexit minister) to negotiate the details and govern, What was stupid is we had a referendum with none of the parties in parliament in favour of leaving so it was s mess. This way the sponsors of a specific Brexit option own it have the nation behind them and would have to implement it and not just sit back and complain, If erg win good luck to them. I suspect they would be grown up if they had actual responsibility.

It is healthy we have on this board passionate remainders and leavers just in case our emotions on the issue get in the way of our SP analysis. I have been transparent that I am a remainder for reasons that go beyond economics. Cov the reverse. What we have now is hp inflation not driven by economic fundamentals but by a lack of buyers confidence driven by politics. In short emotion is driving a key determinant of TEF SP. with record employment and low interest rates HP inflation should by firmly positive. So if we can all get on the couch and figure out the emotions of the body politic it will give us better price guidance than reading the financials

A strong rental market is in many ways a more reliable indicator of TEFs market than house prices and professional build to rent able to step in nicely to keep Tef volume expanding year on year,

nearly all economists believe that the harder the Brexit the lower the GDP for us. There are a few exceptions but not considered mainstream nor well rooted in accepted theory.

Economists, though, as a group have been wrong before. The did not predict that printing money in the 2009 crisis would not lead to inflation. Also econometric economists overestimated the impact on financial services in London of the 2009 crisis. The did not take into account backfilling of high priced long lease office space in London which resulted in job neutrality for London in spite of UK and global losses.

For my money I think they are right on Brexit. The harder the Brexit the lower the GDP forecasts and the worse the housing market for TEF product. Certainly because the market believes the consensus economist forecasts we are are experiencing extreme headwinds. Even if they are in the end wrong -for now we are in a market that assumes they are right.

Is there a soft or no Brexit on the horizon that would make our SP suddenly jump? Will May get her relatively hard brexit through and we negotiate a smooth transition? Will we crash out? Will we end up with a harder but orderly Brexit than May's? I really don't have an ability to call the odds anymore. So fast moving.

We really can't not pay most of the 39bn. It is part of a legally binding treaty we signed. Maybe a stupid treaty but we signed it.

Unilateral and contested abrogation of an existing treaty, even if we were willing to tough it out a la Argentina, is hardly the way to start negotiating new trading treaties with every country on earth simultaneously. Who would trust us? International courts might seize UK property abroad such as ships, gold or embassies al la Argentina.

As I've mentioned WTO is not ready for us as an independent member. We have yet to agree our independent schedule of tariffs and 19 nations are objecting to us rolling over the exiting tariffs schedule they have with EU. We need the EU's support on this as we need to divide up existing fishing an agricultural quotas. So not the time to unilaterally abrogate any divorce treaty obligations. These are covered in our divorce agreement.

Maybe May should have done more to get UK ready for WTO but it will not be ready on the 29th of March. Some experts think it might take years. Others think we are in with a chance for fast track approval within a year or two. We need EU support for fast track though.

So we are truly stuffed if we crash out and stick two fingers to the EU whatever ones view on the long term benefits of getting out. As investors we should not be hoping that will happen -unless you are shorting the market.

BOE's estimate of a 8% GDP loss due to crashing out assumes a relatively orderly crash out. Nobody has modeled a chaotic acrimonious crash out without WTO and with the EU suing us in international courts for money owed. It is really just too horrible and economically stupid to model. Without some minimal level of UK EU cooperation literally planes will not fly. What international footloose investor will trust the UK as a preferred location after that? It would be heavy damage to business confidence for a very long time.

EU told us to use a template that exits please no bespoke deals. They hate Switzerland.

SO basically Canada, Turkey or Norway as a starting point. Our choice.

Against advise May went for a hybrid of Canada and Norway. EU consented but UK not happy.

I'm surprised she got as far as she did on a hybrid. NO fees and no free immigration yet closer market access than Canada.

Trouble is the result does not contain all the unicorns promised. No actual agreement ever could. She has failed in expectation management. Brexit has always been about hard choices. A good politician can frame these trade offs in a way that builds consensus. May promises everything to anybody just to get by for another month. Bad communicator and thus a bad politician.

I know we are on opposite sides of the Brexit issue but we probably agree on a few things.

1) Brexit at least in the short run not good for our SP. The harder the Brexit the less the markets like it. Any softening relative to expectations will cause the SP to jump.
2) May has made a mess of putting together a Brexit that can move us forward. The meaningful vote was a game changer and May did not adjust accordingly.
3) Cameron and Osborn probably booby trapped Brexit as they did not want us to vote for it. May is too thick to see it was badly booby trapped and fell strait in rather than first remove the booby traps.
4) Triggering article 50 before a parliamentary majority was obtained on which Brexit was daft.
5) removing the booby traps probably required a white paper on which Brexit to support with perhaps a referendum between competing Brexit options. The exact opposite of the opaque May's Brexit means Brexit my way or the highway nonsense.
6) may being honest from the start on the difficulties of the Irish border. Can't have different tariffs and food and product standards with EU without a border somewhere to enforce them. It can go between north and South or down the Irish sea but needs to be there. We either shaft the DUP or have an independent trade capability. Can't have both. Choosing DUP as coalition partners was short termism. Should have run a minority government and sought majorities for legislation issue by issue.

welcome back to our madhouse.

Markets bizarrely seem to like the no confidence vote as they expect an 80% chance May will win it and thus considered more stability in the strange time we live in.

Wish I'd topped up more at 2.78. I should really at 2.91 right now but having just got 2.78 early yesterday seems dear.

These political gyrations having a larger impact on our SP than company performance right now. Hard to read those gyrations even for those of us who normally are game to give it a try.

Well so far so good I got 2.78 Hard to see how it could be worse. Market commentators seem to say 10% chance of crashing out about the same as we have discussed. All other scenarios will lead to a major SP lift. Terr market is irrational for periods but value in the end trumps all. I think we hit peak irrational this morning. The ecj ruling allowed tm a bit of time to waste. Previously getting agreement of eu 27 to delay or cancel article 50 needed time. I suspect the closer to March 29 she leaves it the greater the chance of a confirmation referendum and a cancellation or extension of article 50 to allow that. It will by eliminating options be the only way forward left, Maybe she is a clever tactition trying to guide us to remain against the long odds by playing the fool for so long. Fits the facts except my suspicion she really is a fool. Remain now a real possibility when a soft useless exit seemed almost inevitable after referendum. Many brexiteers had campaigned on the basis of staying in single market. Maybe just TM overreach and not counting the votes. A real hard bespoke Brexit needed to occur in staging posts due to the complexity.

Peak Brexit chaos now Uk still adding jobs Entirely a temporary self induced crisis that will end at some point

https://www.governor.ny.gov/news/governor-cuomo-announces-25-million-rail-infrastructure-improvements-statewide

we spend 25m in daily cost overruns for one rail project. London will prevail .

on top of this Brexit mess the Crossrail delay is not helpful to TEF's marketing. Also the odds completing of crossrail 2 go down as 1 is funded by 2 business rate money.

I still think TEF can double every 4 to 6 years in volume and EPS but for the next 6 years it will be closer to 6 and not 4. Still a plucky growth share but not being helped by incompetence. Lucky London economy pretty resilient. and Trump's New York suffering from immigration and trade policy uncertainty as well. New York does not have a Crosrial 1 equivalent so better late than nothing.

more like in denial mode. Even Lord North had parliamentary majorities when he passed the bills that led incompetently to the loss of the American colonies.

Best historical parallel to May is treasurer George Grenville described as "great in doing but little in views" whose hard faction (step forward ERG and Mogg "no deal" faction ) in favour of bills to tax the colonies led to the unrest and eventual loss. Whatever Grenville hoped to gain by the extra taxes was lost many times over in war expenses and lost trade and lost prestige.

Delay not good for us investors.

Thanks for your wonderful updates on TEF specific progress.

TEF could perform commercial miracles right now and the SP will still not rise until some political uncertainty is lifted. Not fair but that's how it is.

I have some funds waiting to go into my TEF spread position. Waiting for "peak" political chaos to do so. Getting close to that. I can just about see the whites of the SP's eyes. Maybe this week.

I also want, simultaneously, to see a way forward emerge. I am betting (in my ISA) that sanity will prevail and we will not crash out on March 29. Any orderly Brexit or no Brexit at all will result in the UK builders jumping.

Market spooked by 2009 dip where almost all builders lost money and many had to do capital raising to survive. Just a suspicion it could all happen a second time . I don't think so. Builders and banks much more stable and less leveraged. Central bank fingers much more willing to push the print money buttons if need be. Brexit, even a chaotic Brexit, just not the same order of magnitude as the 2009 crash. I think the market has overcompensated for the risk.

https://www.theguardian.com/commentisfree/2018/dec/09/mrs-may-has-no-choice-but-to-charge-into-valley-parliamentary-hell

Our modest blogs on this small share does, by trying to make sense of our oscillating SP, touch on the main issues of the day.

Business is business and unless the economy really gets wrecked by it all the underlying value strictly and terr keep referring to will, in say a years time, determine SP more so than now. For my money I think we will find a way through this political turbulence within 12 months without substantial damage to TEF's business environment or model. London is not a one trick pony and can adapt to substantial economic change if need be and still generate a ever growing number of highly paid jobs that is TEF's core market.

head above the parapet time:

I really think this Brexit turmoil is temporary. We are not going to exit on March 29th 2019 without some orderly process to follow -although it is in the interests of a number of players to pretend we might. Thus markets in the short run will be lower and more volatile than need be due to the doom and gloom headlines being generated. Whether TEF dips a bit from here on volatility is impossible to say. This might well be bottom. What is knowable is that TEF is likely to rise significantly when political conditions are more stable. So if yo have faith in our Parleamtary system to find a way forward -buy.

By end of 2019 whatever is gone to happen will be much clearer. It might be a relatively hard brexit or no brexit at all. Clarity will help the SP considerably. Probably more important to have clarity and predictability than what type of Brexit between hard and soft. Hard Brexit already priced in.

SO I predict 4.50 by end of 2019. Not my 5 quid which requires a resolution so I am still expecting negotiations are ongoing but around a more stable framework agreement that can pass parliament and the EU.