Member Info for steph

Took some losses on my spread. Just too much uncertainty for me.

Still all in on my ISA. I have not traded within my ISA for years. Maybe should have aka Terr but too late now.

This volatility will end and the sunny TEF uplands await.

https://www.standard.co.uk/news/politics/first-poll-since-brexit-deal-voters-want-a-new-referendum-a3990851.html

MP's may get bolder to put the deal to a referendum as public opinion continues to shift.

Market volatility for a while I'm afraid.

Barratt Developments: -6.9% Persimmon: -6.5% RBS: -6.4% Taylor Wimpey: -6.3% Marks & Spencer: -5.8% Royal Mail: -5.4% Berkeley Group: -5.3% Lloyds Banking Group: -4.7% ITV: -4.6%

Odds of crashing out back up to 20-25% Pound back down Harder to see how this will get through parliament

Benjamin Graham “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

Bill Miller “Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain”

Charlie Munger “It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”

Warren Buffett “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Geraldine Weiss “Never is there a better time to buy a stock than when a basically sound company, for whatever reason, temporarily falls out of favor with the investment community.”

The fact that no cabinet resignations and enough government stability to put the agreement to parliament and EU member states has decreased the chance of crashing out to say 15% , so a short term small boost to the pound and our share price.

As an investor this is a step forward. If this somehow passes parliament (with or without the amendment of a referendum) it adds stability to the status quo.

Still can't see the votes in parliament to pass this unless linked to a second referendum -with remain on the ballot (to attract the hard remain MP's) and a hard brexit also on the ballot (to attract the 50 hard Eurosceptic MPs) so a 3 option referendum with single transferable vote or a round 2 allowed. Never know though as the bogey man of a Corbyn government and a referendum threat that gives the Brexiteers no Brexit at all may allow it to squeak through on a vote or two without a referendum carrot.

Squeaking through on a vote or two will kill the Tory party as we know it. They will get blamed for all that goes wrong afterwards even if not strictly Brexit related just as Brussels got blamed for many things over the decades that were nothing to do with Brussels. The Tory factions will eat each other. With Brexit it is not a coherent party with enough shared beliefs to survive in its current form.

The agreement itself is a detailed one for the divorce and transition and vague on the end state. So a black box brexit where Canada plus remains an option for the end state as well as a Norway style deal. DUP will get ditched at the next election, if not sooner, and a customs border down the Irish sea agreed finally giving the Brexiteers their opportunity to sign these fantastic free trade deals they think are out there.

Interesting the EU has conceded that we can for a period fish in their waters but EU nations not in ours. They must have conceded that this is unlikely to add up to much.

The most interesting bits is that the transition period can be extended up to 79 years and after that the customs union period can be indefinite. A 1000 year transition.

Customs union is actually a pretty good deal for uk if you prioritize restricting freedom of moment and stopping paying of fees to EU. What it does not do is allow us to sign independent free trade agreements -which always had a flying unicorn element. Why would the UK get a better deal on trade with any nation bilaterally than as a trade block with 450m relatedly wealthy members? it was always bluster.

For me the benefits of ending reciprocal free movement and ending many EU dues to get this is not in our interest but the debate on this blog is what is good for this share. This agreement if accepted and followed up by a long term agreement that builds on this customs and single market alignment will be good for our SP. Not as good as remain but still much better than some not improbable alternatives.

Interesting development Pound up so markets think this is progress away from crashing out Personally I can’t see the votes in parliament for this or any specific Brexit option, Of course may could get it voted through if she promises to put it to referendum . Maybe that is her end game.

I've upped the odds to crashing out to 25% due to the news you refer to.

Still I think the probability (50%) is something cobbled together that narrowly passes parliament and EU. Basically just a divorce agreement with a black box on what comes after the transition period. Utterly stupid statecraft.

We should have had a white paper on the Brexit options and a parliamentary vote (even a "which Brexit" referendum if Parliament gridlocked ) on the preferred leave option before triggering article 50. We have been negotiating with ourselves ever since. A complete shambles. May trapped herself.

A rising possibility (25%) is a second referendum on May's proposal or remain on the ballot. May would have enough votes in Parliament for that approach. I'd expect remain to win but you never know.

Even more clever for May, even now, would be a second referendum with 3 leave options and remain on the ballot. Something to please every faction within her party and "let the people" adjudicate. Labour would be forced to vote for it and if Corby tried to whip against many would rebel. I's still expect remain to win but it would be a much narrower margin. 3 leave options would draw out the full leave vote and they might have the magical 50% when second and third preference votes were counted.

May is not clever so if a referendum probably just 2 options and many dissatisfied Brexiteers screaming betrayal for years. Best to test their Brexit ideas on a ballot.

Still a fast moving situation now and anything is possible from a chaotic Brexit through to a quite hard Brexit, soft Brexit and no Brexit at all still in play. Amazing.

https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/uk-residential-market-survey-october-2018.pdf

even individual Surveyors calling for Brexit certainty to underpin market.

I can see a pathway to much improved certainty shortly and am positioned accordingly. Outside my ISA I am long.

1) May's deal will pass the EU negotiators with as much fudge as she is able to get away with. It will then either win or lose parliamentary approval. If it wins, no matter by a single vote, we in all but name stay in the EU for a potentially extendable period. If the fudge holds on NI and robust equivalence for financial services emerges as the final state then TEF's market will not be too badly off. Market confidence will be better than now as long as it is orderly.

2) If Mays deal does not pass the commons I expect the outcome will be a parliamentary vote to put it to the people in a second referendum which will include an EU approved extension of article 50. We may even be able to do that unilaterally. The "people" will either endorse the proposal or reject it in favour of staying in EU. Either way stability achieved.

I don' see Corbyn's dream of a no confidence motion passing nor a Conservative desire for a new election passing. Like John Major in the end the Tories will hold on till the bitter end hoping something will turn up. By then Corbyn will be replaced by a younger more voter friendly leftie he and McDonald can live with. They have shifted the party mechanisms and policy so decisively they might not feel the need to front it.

McDonald is keen for power based on keenness for his ideas to be implemented rather than because he enjoys the minsters car pool. As deputy leader on the 1980's GLC he described his role "to translate policies into concrete realities on the ground". One can criticize the GLC's 1980's polices but it was considered well run technically and led a global shift to use planning gain to cross subsidize low cost housing and pioneered the travel card which also has caught on globally because the lost revenue on off peak sales was fully compensated by increased ridership. GLC was brimming with new ideas that have become accepted global standard practice.

I can imagine he could be quite ruthless even to his friend if Corbyn's ego gets in the way of achieving power to implement ideas. I also feel that although Mc Donald is clearly the more left wing of the two he is also a pragmatic strategic thinker and not just a protester. HIs accepting tax cuts for relatively high earners is electoral pragmatism.

The Tories will get crushed if we have May's Brexit. All that is wrong with the UK will get blamed on that just as Brexiteers blamed all of the UK's failures on Brussels. Germany has had the same free trade deal as the UK for years with China yet exports 10x as much. It was always hot air to blame Brussels for our export underperformance. Chlorinated chicken

Markets like democrat control of house putting in a vital check on an erratic president.

Lower risk of a trade war and a hot war.

Italy and Brexit left. Italian 10 year bond yield down a bit (3.34 from recent highs of 3.6). When Italian 10 year bond yields hit 7 panic. Even 6 is probably a good time to go to cash.

Spanish 10 year bond yields down to 1.59 well away from the danger zone they were getting into in 2015 at 3.6. SO just Italy to worry about in the Eurozone. Even Greece coming in from the cold with 4.3 today from a high of 14 in 2015.

https://www.bnnbloomberg.ca/brexit-risk-prompts-113-billion-fund-to-shun-u-k-property-1.1163506

https://www.homesandproperty.co.uk/property-news/brexit-news-latest-london-house-prices-will-bounce-back-after-britain-leaves-the-eu-say-experts-a125291.html

the market hates uncertainty. Probably overcompensating for a risk of crashing out which is still improbable.

I thought I heard the bell last week but it was only my car warning system saying my alternator was in need of repair.

Anyhow I'm positioned to assume there will be some sort of deal cobbled together over the next few weeks that Bernier reluctantly signs off on followed by a close but positive vote in the house of commons, followed by full EU approval. I expect it will be as vague as both parties can get away with leaving large decisions for the now extendable "transition period". I expect the Irish backstop will become an ever extendable membership of the customs union for the whole of the UK with crashing out unilaterally as the token backstop to the backstop rather than a customs border down the Irish sea.

I don't mind, as an investor as well as a citizen, a Parliamentary defeat if that results in a referendum. However a Parliamentary defeat that leads to neither an election or referendum but Parliamentary gridlock is what I fear most. Maybe 5% odds.

NO deaths have chipped away at May's narrow DUP supported majority but as with Major there will be the march of time and I doubt if this government will last the full session. So something new before the transition is over.

https://www.theguardian.com/politics/2018/nov/01/brexit-deal-on-financial-services-agreed-report

This would be seriously good news for TEF. A very significant % of buyers for TEF product work in the business and financial services sector. Loss of financial passporting is a pain but equivalence agreements are a god second best and combined with token offices in EU to book some transactions (as needed or as an emergency backstop to any unlikely but possible sudden withdrawal of equivalence certification) the very successful London financial cluster should continue to grow.

I personably think it is a buying opportunity. The dip is overdone and not based on fundamentals nor on reasonable risk levels.

Even the standard predictions of a recession due to crashing out of the EU are not deep enough nor long enough to throw TEF off it's upward trajectory in terms of volume and EPS growth. One has to assume not only a few months of trade disruption but utter incompetence on behalf of our government and utter pig headiness on behalf of the EU and member countries to get us out of that mess.

"no deal" is not really ""no mitigating actions" by EU and UK to keep basic trade flowing and flights flying. That can be done by a serious of specific negotiations to stop ports and highways clogging up. Phased rather than full immediate EU implementation of additional heath and origin of goods checks first amongst those measures needed to avoid a cliff edge in materials and goods volumes.

TEF SP is pricing in utter chaos rather than organized chaos. From there almost all the surprises will be on the upside.

1% extra stamp for foreigners is small by international standards of other global property hotspots. Some have absolute restrictions some double digit extra purchase taxes for foreigners parts of Canada and Austria for example). .

In addition the UK has low yearly property taxes (0.1 to 0.3%pa of property value) as school fees and other potential local spending is collected nationally but spent (but not always controlled) locally. American, Canadian and and Australian property taxes are closer to 1% per annum.

So I don't see this as significant but as James says it may be a good marking angle to sell before the deadline.

Extension of help to buy while expected is welcome for TEF as a significant but not dominant part of its market is now assisted by that. Hopefully by 2023 foreign sales will pick up to backfill. A few years of low or no HP inflation is making the UK look more attractive as each year passes, as is the low exchange rate.

What was interesting was the multi year forecasts and the independent confirmation that they are still reasonable.

Also now talking about a "boost" to growth for just about any deal. IN short the economy and the UK sensitive shares are assuming a % of bad news on Brexit and any deal is an upside.

So if you believe as I do the risk of crashing out is 20% or less then the markets are overreacting. 1.4% growth at its worst for a few years is an environment where TEF will meet all profit expectations. NO need for the very low P/E ratio. Can be twice what it is easily as soon as the doom and gloom lifts. A deal -any deal- will do quite a lot.

I personally believe the Brexiteers wll quietly support a "Norway Plus (plus means customs union which Norway does not have) for now" options as they realize the Canada plus options they prefer takes considerable time to set up.

Brexiteers fear Norway plus or even Norway (no customs union, with the exception of N Ireland, and thus we can sign independent trade agreements) will be the preferred point of departure forever but they are starting to fear a referendum that reverses Brexit even more.

It would be very difficult for the Labour Party to vote down a Norway plus for now option. It meets their 6 tests.

Once in it even though we will have a process where we can diverge towards Canada plus I suspect the nation will be so exhausted with Brexit that we will stay I a Norway plus arrangement for the foreseeable future. Indeed that is what happened to Norway. The were meant to use the EEA as a step towards full membership but public opinion rather liked the EEA option and there they have stayed.

An EEA member only has to allow free movement if there is a job offer (not likely for the lower skilled jobs that the midlands is so nervous about) and the budget contributions are significantly less (more or less pay for specific agency memberships. Also an EEA member who is not also in the customs union can sign their own free trade agreements. Nor are EEA members directly under the ECJ. They must take account of ECJ rulings but have diverged on occasion and gotten away with it -so some face saving flex.

A 20% chance of something that will only pull growth down to 0.3% is for me as an investor a signal that the current retrace is well overdone. TEF can sell product in a 0.3% environment quite nicely. Probably still hit it's not very ambitious profit targets. OF course Trump may blow up the world, Italy might blow up the Euro and the Saudis may blow up the oil markets. Still all those risks while possible are still low probability risks to me.

"If the UK fails to reach a withdrawal deal with the EU, GDP growth can be expected to slow sharply from 1.4 per cent this year to 0.3 per cent in both 2019 and 2020, the National Institute of Economic and Social Research (Niesr) said.

This scenario, assuming an orderly shift to World Trade Organisation rules, would erode almost all of the space available for Chancellor Philip Hammond to increase spending on services.

By contrast, Niesr forecast that a "soft" Brexit with a deal with Brussels could see growth rise to 1.9 per cent in 2019 and 1.6 per cent in 2020."

https://www.telegraph.co.uk/business/2018/10/24/uk-service-exports-rise-led-business-finance/

amazing that our business and financial service industry is so resilient. Of course they still have full pass porting for EU markets (and are likely to retain that for a lengthy transition period) but never the less pretty good going.

unbelievable buying opportunity (whole company or us tiddlers) fro the brave. Bad news has not actually happened. Just speculation it might. I think we have overshot on the correct SP for the situation on the downside and by quite a wide amount, perhaps a 100 points so room for quite a large bounce back in the near term.

After a long slide it is easy to imagine it will keep sliding just as after a sustained rise it is easy to assume it will keep rising.