Member Info for steph

I'd agree that the origins of modern distrust in politicians and "experts" started with Blair and Iraq.

Current lot on the blue side seem particularly dire though. A PM who almost certainly would have been sacked for incompetence and outright cruelty if she had remained in the home office long enough to be found out.

From current SP I think we will advance against the headwinds over the next few months so long as we do not crash out of the EU. I give the odds of that at 15%.

Expecting some fudge on our final arrangements (black box Brexit) and a long transition period where we are in the single market and customs union but without a vote or veto.

A Canada plus arrangement is probably OK for the London housing market. Not as good as Norway plus and certainly not as good as remain but not catastrophic for us.

Crashing out pretty bad. The loss of business confidence would be long lasting even after the dust had settled, flights restarted,car production unpaused and food in the shelves.

We have extra businesses and HQ's specifically because we are regarded as a well run and sensible nation. Once taken away that reputation will be very hard to get back. I would expect that crashing out will almost inevitably lead to rejoining sooner or later as that will be the only fast route to reestablish business confidence and claw back lost GDP. The alternatives will simply take too long and the public will get impatient and demand action.

The hard Brexiteers who claim crashing out is not a bad thing will be exposed to the harsh light of reality and will not be trusted again. The political pendulum will swing in a different direction shorn of their influence. Maybe even the Telegraph will swing and follow the populist mood. All a game for the billionaire owners but ultimately they will follow the readership as that is where the circulation is.

yes pretty silly.

IN spite of the headwinds I think 350 has plenty of bad news baked in and I topped up by 5k shares on my spread and may do more if another "flash" dip to 340. Update was actually pretty good and in normal circumstances would have given us a boost. Pipeline looks to be expanding rapidly which is what I like to see.

Behaving as if we are big shorted but shorters will need to close their potions at some point.

Bought a few We have never dropped on update like this and was not bad news. Just general jitters . Headwinds still about and now Italy added it to uncertainty.

great value at the moment but there are Bexit headwinds about that will keep it "great value" until the headwinds lift.

I expect the SP to fight it's way up slowly (with some volatility) for the next 2 years against the headwinds and then spurt when the headwinds lift. No other share I feel comfortable holding right now with these headwinds.

Sain quite agree. Councils able to offer up borrowing as well as land and CPO powers is significant for TEF’s cash light model. Hugely underutilized the cpo element but maybe with money some of the stronger inner london authorities will get more ambitious.

the news for TEF just keeps getting better and better. As mentioned I do think TEF advancing its position on it's merit fully counter the headwinds about due to Brexit and the chance of a flash crash due, perhaps, to Trump finally spooking the markets with his trade wars.

I remain fully invested in my ISA and expect great things in 10 to 15 years time on that. I remain cautious on whether is a good time for a bit more TEF focused shorter term speculation on my spread. Fear missing the boat but also fear a short term crash or correction of the market over the next few months and thus a long wait to make money and a missed lower entry point.

Brexit certainty in November would help but what passes for Brexit certainty will certainly come with a heavy dose of fudge with a lot of major rows simply beamed up into the post March 2019 transition period -when we are formally out and with little leverage except to threaten to crash out. Real certainty on Brexit is at least 2 years out and I expect strong headwinds until then. I do expect quite a bounce if and when Brexit uncertainty lifts.

Of course Parliament could spring a surprise on us all. The votes for May's Checkers starting point are not there but I suspect the Tory rebels on the Eurosceptic right will cave when the alternative is a referendum or an election the Tories might lose. I think it is too late for any cross part proposal. Too many bridges burned, May not a natural team player and Labor too tribal. So I expect lots of fudge where the hard Eurosceptics will have reassuring words but not be able bind the negotiations to come too much or the Europhile wing of the Party will also rebel. Can't see Checker's becoming soft enough to bring any of the major 3 parties into orbit. Of course Labour has it's Eurosceptic rebel 5 but beyond that very unlikely any Labour, lib dem or SDP will vote with the government.

Checkers for me is a dogs dinner but better than no deal -although that is a very low bar. So is Labour's position to be in the customs union but not in the single market. If we are to have a soft Brexit much prefer Norway model with a customs border down the Irish sea but the opportunity to advocate that has passed for now.

So for us investors a bit of a roller coaster ride for 2 years. Money to be made if one can guess the dips but on what criteria? Strictly 's methodology guides between builders but not between the sector as a whole and cash as a whole That requires guessing politics and right now that is really hard to do.

https://www.telegraph.co.uk/business/alex/

I too am very grateful for the deep analysis of strictly, terr, cov, cyber, sain. I doubt without it I would be quite so invested and concentrated in TEF. All different analysis from my own. I've made many mistakes.

Mainly when trying to make money in a sector or on a share I don't fully understand. I used to have 2/3rds of my portfolio in UK banks but I had not realized at the time how profound the impact on profits the new post crash regulatory environment would become. Politics was the driver of deep changes. Barclays has never recovered it's pre crash SP and is unlikely to do so in the foreseeable future. Lloyds and RBS never recovered at all. I assumed, not unreasonably and not without an awful lot of company, that within a few years of the crash all would be back to pre crash profitability conditions.

Populist politics and not economics is driving the Brexit changes beyond what I predicted. I thought we would end up with a Norway plus model. Now wide open what we might get.

What is actively being debated and put forward by persons not a million miles from power is quite radical. Far more radical that anything on the Corbyn side of the house -just a bit of socio-democratic tinkering amplified by the Mail and Telegraph.

The radicals want us to withdraw from all trade that requires some form of international or bi-national binding conflict resolution and return to a purely treaty based trade system where the only sanction one has during a dispute is political negotiation and, if aggrieved enough, withdrawing in protest from the trade agreement. May by promising just this in her Chatham House speech (no ECJ) I don't think understood what on earth she was actually talking about.

That was the way the world was. Might made right and if smaller you just put up with a big nations interpretation of any trade agreements, signed or imposed, you had. It has been hugely stabilizing to have a rules based system complete with conflict resolution. The resulting international supply chains that have built up can't exist without it.

Who would invest in a UK export business based on a model where a populist politician on either side of any number of minor disputes can suddenly tear up the very trade agreements that your business is based on? Foreign manufacture include the UK in their complex international supply chains after that??

The time we could impose trade conditions on our partners by force of arms if need be is well and truly gone. At one time we were so powerful we could force the Chinese to buy our Indian produced Opium when the Chinese were trying hard to make it illegal for excellent public health reasons.

Rees Mogg pines for yesteryear and I am not talking about the 1980's but the 1880's. At least Corbyn pines for the 1960's and no further back.

As an investor I can't believe the UK, with an excellent reputation for good governance, is in this mess.

https://www.thetimes.co.uk/article/warren-buffett-sees-hot-property-in-london-vdh35z782

We are such a diverse economy serving the new growing global economic sectors. London can take quite a bit of nonsense from our political masters and still grow.

Talk of some business and financial service jobs being forced by the regulators to move to the EU is sad. They don't want to and we need the high paid jobs and the taxes the bring. However my expectation is that backfilling will mean no net job losses in the sector and modest growth as well.

Midlands really scr...ed though and ironic as they voted most heavily for this economic chaos. Bet the midlands will be asking for "redistribution" from successful London rather than take responsibility for what they have sown.

https://www.bloomberg.com/news/articles/2018-09-04/u-k-would-vote-against-brexit-in-second-referendum-study-says?srnd=premium-middle-east

Wish I was not an investor and could look at this mess without my financial future partly at stake.

Of course problems create opportunities and buy in points that otherwise would not have been available.

as a landlord I rather liked a large deposit. Damages can quickly mount to over one months rent with even a moderately bad tenant never mind a really bad one. 3 weeks is pretty light and might mean more lawsuits when it falls short -benefiting no one but lawyers ( I think Khan is a lawyer!).

As Sain says insurance or a bond as an alternative would tie up less tenant capital and provide the landlord with the full needed protection. The deposit holder paying interest on the deposit another reform that could make the deposit more palatable for the tenant. Better arbitration procedures between tenant and landlord when they disagree on amount owed might help tenants more than a gimmicky 3 weeks.

My guess is the market adjustment we are suffering for Brexit uncertainty is 100 points for TEF from where we would have been. That would still be quite a low P/E and in no way reflects TEF's growth potential highlighted by the Graham formula but closer to your calcs of value.

It will be 100 points more down if we crash out of EU April 1. Quite a lot of catch up if clarity is returned on any half decent exit terms. Even more if we miraculously reversed Brexit. I have pegged "only" 100 points down due to reasons in my earlier post today.

I now consider the Brexit headwinds to be fairly strong and that any UK company sensitive to market conditions (as the residential building sector is) has to jog to stay in the same place.

That said I do believe TEF is moving forward at a "fast jog" so I think it is OK to hold short term positions in TEF outside my long term bet inside my ISA (which can ride out even a 2-3 year "normal" recession). There is no other company at the moment I know well enough and I think is moving forward at a "fast jog" to compensate for the headwinds about.

To this end I hold 25,000 shares on a spread right now. I believe this will rise by the preliminary results due April 2019. By April 2019 we will either have crashed out of the EU with no deal or have patched up some sort of compromise, deadline extension or reversal. In all scenarios except crash out (still in my book "only" a 10% chance) I expect to make money on my spread position by then. I expect (80%) between a 50 and 100 point rise from current values. Worth the short term risk (10%) of a 50 to 100 point dip due to a chaotic Brexit.

I believe the dip risk is "only" up to 100 points from here because our banking sector is so much better capitalized (at the expense of bank shares' SP's I should add) and the tools (and political willingness) to fight a sharp recession are so much better than when Mervin King fretted about "moral hazard" in 2008. Our national debt at 90% of GDP is too high but it has been over 200% post war and Italy is over 200% right now. Japan is 250%. Our ability to print money (which means we can never technically default on bonds) is a tool we can and will use again. International investors tolerance for the printing presses is now known and tested and for the UK will not be restrictive (unless we have much worse governance than we do now -which is unlikely. Whatever the weaknesses of our two main parties leadership the UK civil service and the courts remain -in relative terms- strong. Besides we are weak in political leadership only if compared to our past not compared to most of our major trading partners. The global stagnation of middle class middle income economic advancement is destabilizing for most establishment parties at the movement. Investors don't have alternatives. Money must go somewhere. UK whatever it's troubles will mop up it's proportionate share.

May and/or Corbyn are not as bad as the current situation in USA or Italy never mind Russia, Africa or the Middle East. France has the national front who make UKIP look like a minor distraction. The UK system is self correcting -even if it looks bleak now- and investors take that into account. Strong men in some nations cover a domestic brittle dysfunctional economic system that can easily crack.

Nice to imagine business administration as "poetry in motion".

Without a company that is so precisely aligned with my analysis of a strategic opportunity and so seemingly competent in execution of exploiting that opportunity I doubt if I would be much invested in the UK market at all right now. I hate the Brexit induced uncertainty and Trump is a wild card who could yet crash the global markets.

Forgot to conclude on the implications for TEF.

Any detailed agreement (Canada to Norway/Switzerland it does not matter) will be beneficial for our SP now that uncertainty on "no deal" has been carelessly bantered about. The closer to Norway/Switzerland the better for our SP but even clarity on Canada is now better for our SP than the current uncertainty.

The more likely "kicking the can down the road" and entering the transitional period as more or less a full EU member (minus a vote) with a vague agreement to guide the negotiations of our full exit will still also steady the markets and result in an immediate SP rise -at least until the transitional period end date approaches. So we might get a year of so of politics not hurting our company specific growth story.

There could be a surprise on the upside before Christmas such as a more detailed framework agreement than expected and parliamentary support for that (even if by just one vote).

The odds of an upside surprise are in my book equal to the downside risk of no deal so they cancel each other out in SP terms. Hard to see where the parliamentary support for an upside surprise might come from. Lib dems seem beyond reach. SNP might deal but would extract a heavy cost similar to the DUP blackmail. Labour rebels quite tribal in the end. Would need to be a pretty soft Brexit proposal to stand a chance and then 60 Tory rebels would push back. Arithmetic pretty tight and Maybot has had trouble counting in the past.

Labour's official position of supporting a customs union membership blocks the most obvious compromise and that is to remain in substance if not in name a member of the single market but not of the customs union. That would allow us to sign independent free trade deals.

I doubt if much of substance is to be gained by that against the backdrop of the free trade deals the EU has already negotiated and will negotiate over the next decade but it does give the UK the appearance of sovereignty and that clearly tickles an emotional nerve. Free movement can be rebranded as some reciprocal mobility agreement with limits and the theoretical ability of Parliament to withdraw. Does mean a customs border down the Irish sea but the DUP should not be the tail that wags the dog.

I believe the end game (at least until the "transition" period runs out some tie in 2020/21) will be an almighty fudged "agreement".

We will continue with all the contributions, benefits, trade agreements, memberships and free movement regulations we have from April 1 2019 forward until the formal end of the transition period. The "agreement" that was meant to spell out in detail what our future relationship post transition will be short, vague and disagreement basically kick the can down the road.

Once we are out and in a transition period the balance of power will shift further in the EU's favour. They can afford to be vaguely encouraging as they can be obstinate later.

What the EU will do with that increased power is hard to game. They hate the "al a carte" Switzerland model even though the Swiss accept free movement and pay big net contributions. The Sun today in an editorial hinted at editorial support for a "pay and play" model which will surely be part of any Checkers based deal on access. Fox hinting free movement for workers who have job offers is interesting as it opens the door to some form of modified free movement.

The Brexateer ultras clambering for a no deal outcome are becoming slowly discredited. Trump undermining the WTO is hardly helpful to them as is reality on how modern trade agreements actually work. No major nation will ever submit themselves to UK court jurisdiction on international trade disputes. It is a basic fact that brexiteers have ignored and have no answer to. A nation of lions led by mice.

The Russian links are not helping the ultras either as wrapping themselves up in the UK flag was part of their grass roots appeal. Can't be an "ultra nationalist" and accept Putin's rouble at the same time.

No nation of any significance trades exclusively on WTO terms. While WTO (if we are accepted as a member and that is not guaranteed nor applied for yet) does protect us from being charged by the EU a higher tariff than other external members of the EU (roughly 5% on manufactured goods) it does not allow us to charge zero tariff on EU goods unless we do that for everyone. That would violate article 1 of the WTO.

So even if the UK unilaterally said zero tariffs on manufactured goods for everyone (which it is allowed to do under WTO) the EU is not allowed to reciprocate as under WTO it must charge the same tariff as for all external members. So the existing EU-UK manufacturing supply chains that rely on zero tariff barriers would be affected.

Besides the UK treasury would lose 3,4bn in customs duty if we had zero tariffs for all and some uk businesses would lose comparative advantage as well. . Australia lost it's car industry immediately it reduced tariffs.

All in all an incentive for Maybot to hide the true stupidity of her Nick Timothy mindless red lines in a vague agreement that defers the hard choices ahead. A con artist deferring the day of exposure. EU happy to oblige.

drat topped up at 4.24 and then down 4.5% a few days later.

Even though I have said much of what is in report I think it is a bit apocalyptic. 1/3 chance of a crash next year is too high. It takes a lot to crash the UK property market. It has only happened twice post war. The first was 16% interest rates, a big recession and withdrawal of interest rate deductibility on residential mortgages all at the same time. The second was a freeze up of interbank lending. Neither likely to be repeated.

A disorderly Brexit could do it but I still give the odds of that as 1/10 and even a disorderly Brexit with current ultra low interest rates and other measures to prop up the market is probably not enough for a real crash. Printing money might come back as well.

Underlying frustrated demand in London just too strong. Need a big drop in well paid London based jobs and I don't see a disorderly Brexit doing that. Indeed perversely in financial services employment might go up temporality to clean up the mess and write and apply the new regs. For other London sectors it will just be background noise. Even Fox talking about no restrictions on EU skilled labour with job offer so not much change for TEF market.

If they really wanted to do this properly need to go back further to the 1948 planning act. In the act all development rights were nationalized and a fund of £300,000,000 was set aside for compensation of landowners. IN combination the UK embarked on a world leading new town program and world leading "slum" clearance (which had it's own draconian legislation for the needed CPO powers).

The result of those 3 initiates was a post war house building program that was twice as fast as anything we seem to be able to achieve today. The new towns by benefiting from the uplift in value of urbanization even made money for the exchequer.

Not even "radical" Corbyn is advocating the above. IN such a system builders such as TEF become true house builders rather than developers as the risk and cost of obtaining planning permission and utility provision is taken out by the state.

https://en.wikipedia.org/wiki/Dunton_Technical_Centre
https://www.bbc.com/sport/formula1/23048643

There is a whole arc of advanced auto parts research and development just beyond London. Most formula one cars, even those branded with foreign names like Ferrari and the like need to go within the arc for advanced product development.

London has skills and product development legacy benefits to having been the largest manufacturing hub in the world in 1900. Our financial services are so large due in part to legacy benefits of being the centre of a global colonial and trade network as well as Thatcher's "big bang" changes that allowed the sector to grow right at a time when we had an opportunity to dominate the EU and beyond.

London's (and slightly beyond) University cluster is stronger than New York's -although the USA as a whole beats the UK as a whole on having the largest number in absolute terms of higher education institutions in the top world rankings. Still a 6 hour flight from New York to Stansted University and Berkeley is not much less than a 7 hour flight from New York to London (door to door might be the same given US traffic congestion and less rail services). Plus London has within a 2 hour flight some great EU technical universities as well.

the numbers are small though and even within those small numbers many still need to commute in.

TEF's near prime London centric business model depends first and foremost to a growing well paid London jobs market.

While Bloomberg may be regretting setting up his EU HQ in London now we have Brexit (he said Brexit is the second stupidest thing a G 7 country has done recently) there is so much critical mass even with Brexit. Well paid jobs growth in business and financial services as well as ICT and all manner of creative industries will continue. It is part of a global trend for high paid jobs growth to cluster in a few world cities at the top rung of the managerial, financial and creative hierarchies. London's cluster or world ranked universities in or around it help enormously. So does our existing skills base and existing company HQ's. Even in sectors where we don't' lead anymore on manufacturing we still lead on product development such as Ford car engines and racing car transmission research. Within financial services, hated as the sector is, there is much innovation that drives skills and salaries levels to eye watering levels.

My TEF bet is a proxy for a bet on London's global economy. Shooting ourselves in the foot with Brexit is not enough to derail London's 20 year potential. Beyond 20 years I do think Brexit (assuming Brexit lasts that long) will hurt as Frankfurt and Paris slowly take advantage of London being cut off but their business and financial service sectors are much too small to rival London just yet and there are strong agglomeration benefits to the exiting cluster not easily reversed.

Also planning restrains in Frankfurt are more severe than London and the current office supply not up to the job. Berlin could develop a financial cluster but it would take 20 years to rival canary wharf never mind London as a whole. Paris only has la defence and that is nearing full capacity. Dublin too small. Brexit would have been much more damaging if there was a strong EU number 2 financial centre but there is not.

As Bloomberg points out Trump deterring companies from considering New York due to immigration concerns which helps us mitigate our own stupidity of making highly skilled immigrants feel unwelcome. Can't be a knowledge economy international hub without a fairly liberal immigration policy for skilled applicants.