Member Info for steph

it is worth looking at 100 year data to realize how unusual sub 10 P/E ratios for the building sector are. Strategically quite a good time to buy even if we do get a mild recession in the next 2 years which will push the SP a bit lower than now. For the sector and for TEF in particular my 20 year hold strategy is very solid. I've given up trying to game short term moments. Brexit has made it all too political. We could have a self induced recession due to tearing up our existing trading relationships. However unless we have a chaotic exit it will be manageable and not harm too much long term positive trends for London. Business confidence in the competnance of our government must be at an all time low. It really is a shambles -but much of the EU is also badly managed (Italy fragile, Spain split, Germany without a government, Belgium well Belgium, far right ton the rise in Holland, Poland and Bulgaria etc drifting to authoritarianism). Far right nearly able to get the French Presidency, , and don't get me started on trump's America. SO where does an unhappy investor with international staff visas to worry about go? Russia, China, middle east? SO competence is a relative thing. We are helped in this moment of need by the incompetence of others. By the time we have a real rival we will presumably have sorted this mess out and once again be a safe haven in an uncertain world.

the question was asked at the AGM and that was the answer. Seemed convincing. TEF have done all the right things. If it were easy to double volume and maintain margins every 4 to 6 years there would be a crowded field of new entrants to London into our patch. There is not because it is tricky. TEF are only now starting to exceed the pre crash SP -and even then quite hesitantly. However the base for this SP in 2017/18 is much more solid than 2007/8. EPS, volume (by Units and by value) have all roughly doubled resulting in P/E ratios halving. SO if the sector was in fashion as much as it was in 2007 we would be at double our current SP or more. Conversely if TEF had not improved i't's fundamentals as much as they did our SP would be half of what it is now. Not TEF's fault for the changing mood Just as it is not TEF's fault for the Brexit uncertainty that is almost certainly cutting 20% + off our current SP. However the market has not changed for TEF and TEF can achieve it's basic business plan of doubling every 4 to 6 years going forward for 15 or 20 years. It is having to skate quite clever to keep doing that in changing circumstances (no windfall HP inflation to flatter earnings and to help finance expansion). So far it has skated sector leading clever and there is no reason to believe it will stop doing so. TEF is less exposed to Brexit induced labour shortages as it has a more stable cadre of existing relatively well paid and relatively highly skilled London based construction workers. It has not been part of it's business model to rely on cheap transient labour such as might be possible in an out of town TW row homes (where skill levels can in aggregate be lower than complex infill London high rise).

Dan Roberts (@RobertsDan) As David Davis goes on today, it is clearer that he sees the answer on regulatory alignment as some sort of rebadging exercise, ie. their rules, our name: �[A] mutual recognition and alignment of standards that does not mean the same standards but one that gives similar results". December 5, 2017 This is hopeful. I predicted they would come round to some form of equivalence to the common market with some face saving name changes. Forced by Ireland, Scotland and wales they are doing just that. Good on Ruth Davidson. Still a big mess and May's approach to concur with everything the hard Brexiteers wanted and then be forced to backtrack bit by bit is foolish, makes her look weak, does not appear strategic and makes the nation look stupid. I think the Tory remainers who voted May and the Tory Brexiteers who voted May expected her to persue a pretty soft Brexit. However May went full hard on them and now is having to row back as full hard was never practical -without big economic damage and no mainstream Brexiteer really that. Of course there are some dinosaurs that don't care about the economic damage so fired up they are on a complete Brexit but they are a small minority in Parliament. The cake and eat it too approach is now thrown in the bin. What replaces it is still to emerge but most likely a giant fudge. We will be in the common market in all but name and will have some limited ability to strike free trade agreements (as EFTA does now) so long as the terms do not disrupt "EU alignment". We will have more control over EU immigration but will probably allow quite a bit of "free migration on a reciprocal basis as now. SO really just a beefed up emergency brake and the freedom to pull the plug at a later date. We probably lose passporting for our banks but who knows.

Odds going up a bit 15 to 20% Pain , holding us down a bit, Tef going from strength to strength

nice analysis. Probably a bit conservative. A 4.5% yield for divi's in 2020 (assuming those conservative calcs are not exceeded) should push the SP higher than forecast. Also by then some Brexit certainty will be returning to the property market and there should be some HP inflation to flatter earnings.

The track we are on where we are relying on some huge new trade agreement with the USA headed by a quite unstable Trump (beyond what we already have as an EU member) to partly compensate for the loss of frictionless trade with the whole of the EU is looking more and more like a complete fantasy by mostly but not exclusively Tory Brexiteers. Whole mess is an act of unforced error unprecedented since the Crimea -or maybe further back to the potato famine or further back to the loss of the American Colonies. According to polls 50% of the leave vote were not voting to come out of the common market so where is this electoral mandate to do so? Even at the time of the referendum 75% of those voting were not voting to come out of the common market and that was in the middle of a EU refugee crisis and Russian trolls urging us on. I doubt if there ever will be more than 25% of UK public wanting to come out of common market. Politics tends to swing like a pendulum. Go too far in once direction and there is an inevitable swing back. Surely this will happen with regards to a hard Brexit both within theTory Parliamentary Party, within parliament as a whole, within the Brexit supporting media and within the nation. UK can leave the EU if it wants to and it would not be catastrophic if we do but there are no quick wins and the process needs to take place in an organized way over a decade. That is how long basic trading relationships require for major change. An orderly hard Brexit could be achieved by EFTA membership for 5 to 10 years followed by a bespoke arrangement once all the ducks are lined up (or delayed if they are not). As an investor I am in the dark. I don't like to game my investments based on fine grain personality politics as outcomes are too random. I am positioned for a hard Brexit but not a chaotic Brexit. However as the days tick by I am getting nervous that a chaotic Brexit is really possible. Is not the Britain I know and love that a chaotic Brexit is really possible but we are where we are and the poison injected into our body politic by circulation and profit seeking private media over a 30 year period deliberately and maliciously winding people up to create a story and an audience is coming home to roost. At least we do not have US's Fox news and the right wing shock radio jocks (without which a Trump would just not have happened) but that is small comfort when a very small number of irresponsible print media is enough to do the same damage.

Topped up a tiny bit yesterday. First top up outside my isa in a while. It is so predictably good that it will not move the SP much in the short term. Confirmation of the long term strategy we have all discussed though. Bit like watching Fedora in his prime winning yet another game against a 100 seeded challenger. Almost inevitable but nice to see never--the-less.

For sure brexit has dampened the immigration of these high paid workers but London such a strong diverse economy that it can absorb it. A slowdown for London does not translate to a good market for the regions. Maybe temporarily but not sustainably.

there is churn of who wants to live in London that means the historical average wages of the Borough is not the same as affordability for the new households actually wanting to buy. Well paid younger workers are moving in and retirees and lower paid workers are moving out. London is becoming younger and more highly skilled in it's population mix in a measurable way compared to UK averages and the 20,000 to 30,000 odd new homes per annum is small beer set inside this larger churn. If one could do it you would measure the incomes and volume of those actually looking for a home vs average prices. A skilled professional couple on 80k each can buy a product up to half a million comfortably even though they live in Tower Hamlets. At the build rates we have you only need 1/200th of the resident households to be in that position to have a viable housing market for new half million pound homes. SO averages are not relevant just what is happening within the life cycle and preferences of the top 10% or so. Beyond that you are into exotic jobs and/or people with capital. A more fickle market.

of course best course is to have a crystal ball and know when to step out and when to get back in. IN the real world, however, we need to have a position. I am confident that a recession as deep as the great recession of 2008/9 is not happening over the next 20 years. I'm positioned accordingly. The very worst Brexit would be enough (up to 9% GDP drop) but I don't think the government that stupid. If they were thanks to our parliamentary system at work 15 or more of their own MP's would simply abandon them and Queenie would either ask a willing opposition to form a government or if Corbyn unwilling we would have a quick election where the Tories would almost certainly lose at least 15 seats. I just don't see a credible scenario for a chaotic Brexit unless a complete accident (which is avoidable as below). We (by this time Corbyn and allies) can 9if time left) always ask for an extension to the deadline (subject to EU 27 concurrence) and can apparently and with seconds to spare just unilaterally cancel article 50. He could then mischievously promise the UK public he will restart Article 50 again a year or two later with a new better prepared team (rapidly emerging as the best stop gap to avoid chaos). Corbyn could sell it as a jobs first Labour Brexit and just start all over again. Parliament's 40 or so Brexit crazies (including one or two Labour ones) would just be side-lined (which they would have been if May had any balls -which she obviously does not have physically or metaphorically). Ordinary recessions will come and go though. I've pencilled in 2 in the next 20 years and have no intention of trying to predict when and to pull out of TEF temporarily. I don't think we will see them coming and it will be too late to sell by the time we do. Nervous at the moment which is why I only hold fully paid for shares in my ISA. However at 4 quid TEF is pretty attractive even in the short run and with brexit risks to consider. If I come into some re-mortgage money tempted to top up at this level outside my ISA but san leverage.

BoE stress test: the details Today�s stress tests model the �doomsday� scenario for Britain�s banks, says Business Insider�s Will Martin. And here it is: In the UK economy, the BoE modelled the effects of a sharp recession of more than -4% GDP. This is accompanied by the pound collapsing to just $0.85, a fall of about a third from current values. Global growth is also hit, with banks tested on how they would cope with a worldwide contraction of 2.4%. This scenario also includes a collapse in Chinese commercial real estate of more than 40%. As a result, unemployment in the UK climbs higher than during the financial crisis. Commercial lending collapses, leading to disaster in the property market. House prices fall by 33% and commercial real estate loses 40% of its value.

If we had a Corbyn government that might be a worry. As a natural leftie as well as a share holder I'd be conflicted. NO worries at all with this timid lot though. Stamp duty was about as far as I think they will have gone and much of that ramp up was under Labour. Indeed I expect them to row back a bit on stamp today. They will pretending they are not throwing money at the sector but that is all they are willing to do. Fundamental reform of green belt and CPO powers is beyond well them as would be some form of windfall profits tax on builders taxing in one form or another land value rises that generated unearned profit. Expropriating for the nation the improvement uplift of land that is currently in rural use to urban would be key in a fully reformed system but that would be very bold indeed. Probably well beyond Corbyn -who is not as radical as the Sun and Mail makes out. The only bold thing the Tories are doing is tearing up 40 years work on our basic trading relationships. But trying to return to some perceived golden past (that for most of us does not actually exist anymore if indeed it ever did) is not bold. It is like watching someone high on drugs jump off a cliff thinking they could once fly and wanting to force themselves do so again as "bold" rather than just plain Darwin award level stupid. I don't know anymore what the end game will be on Brexit. I hope it is some form of soft Brexit where this famous independence from ECJ and an end to free EU movement is fudged sufficiently (yes we will be "advised" by the ECJ but that is not the same as "dictated' and yes we will have "free reciprocal EU movement" but it is because we "chose to " and not because we are "required to") so we can be quite close to the common market even if not formally not part of it. A whole lot of economic pain and financial uncertainty just to save the hard Brexiteers face for unrealistic "we can have cake and eat it too" promises made to the UK public. We might actually get a hard Brexit now and there is even a chance of miscalculation and just crashing out of the EU. May is the wrong PM for the times. Corbyn the wrong opposition leader.

we have long predicted that government of whatever stripe will help the builders in one way or another -yet stop short of releasing green belt or applying draconian CPO powers to brownfield land in quantities sufficient to change the basic structure of the market. So happy days for sector and TEF owners. For TEF 20 years of benign market conditions to grow volume at a rate of doubling every 4 to 6 years. Whole sector of course can not grow at that rate but whole sector will be nicely profitable for the 20 year foreseeable future (expect of course for one or two recessions that will inevitably come but only be minor set backs) . For London even a hard Brexit will not be enough to do more than stall well paid jobs growth for a few quarters. For the midlands, Wales and the North I am not so sure and that is why I like a London focus.

Goes from bad to worse I now put the odds of a hard Canadian style orderly exit at 50%. A chaotic crash out of common market 15% a soft Norway style Brexit at 15% and no Brexit at all 20% as parliament and the public just get tired of it all. Don’t know how to profit from the mess . Long term the only time frame I have confidence. Short and medium just too hard to call.

great analysis. TEF who did not write down it's land bank after the crisis of course did not get the flattered figures as the written down values fed through to booked profits on sale of units. Windfall profits such a difficult thing to factor in. Your analysis that shows that they can exceed 50% of reported margins is a call for caution in overusing unadjusted figures. TEF state that HPI are not factored in their forward forecasts of EPS so any HPI is a bonus. Good thing given the slowdown of HPI in TEF's patch.

diversification can be a bit like having a lot of kids hoping one of them will be successful rather than having just 2 kids and putting all your free resources into supporting their education. I really do think of myself as a mini Buffett. OK unlike Buffett only enough time to find one share I am truly comfortable with but feel that 100% in that one is lower risk than diversification based solely on the principal of diversification. One day I may find a technology stock I really like and that is not already priced at a silly P/E ratio. Until then only TEF for me. You only have to find an investment that doubles in SP every 5 years (plus inflation equalling divis) and to keep that up for 60 years for an initial 100,000 investment to become (in real inflation adjusted terms) over 400 million. Buffett's magic of compounding. I think in TEF I've found the first leg of that 3 leg journey. I fully expect to be enjoying life for the second leg. With a bit of new medical technology why not aspire to the third as well and be a tennis playing international travelling maybe even part time working senior of 100?

Still a number of years off retirement and my dad still going strong so I need an investment strategy that goes a long distance. Feels Victorian or earier to have a single company that is such an important part of those plans. Still I can’t see an alternative that can grow at a rate of doubling every 4 to 6 years at this relatively low risk level. If I had more dosh I’d probably diversify but my 40,000 shares and growing stake in my Isa is my best shot now of a genuinely comfortable retirement.

http://www.rightmove.co.uk/news/house-price-index/ treading water, nothing that gets in the way of EPS predictions.

cy. I find the short term to hard to call. I do try and talk about it here but to many failures to call it a science. I called the march 2009 nadir accurately but also missed the August 2010 and 2011 dips so only 1 out of 3 on major short term movements. Long term I feel I have an advantage (helped by this chat) over the pundits who move the market short term. I am confident TEF can and will double in size roughly every 4 to 6 years. That means Terr's prediction of 4x in 10 years is about right. Over 20 years even if we have a recession or two I will still be quids in regardless of my buy in point. So it is a get rich slowly strategy now for me and a simple one to administer -which is a consideration. I am nervious about Brexit. I now put the odds of a chaotic hard Brexit as 10% which is up from 5% only a few weeks ago. I think we are being led by idiots -and as an investor it is all quite frustrating. I've reduced leverage almost to zero but still hold a lot in my ISA which is 100% in TEF. Not temped to go to cash in my ISA in spite of my nervousness. The ISA shares are fully paid for and I can handle volatility and a 2 or 3 year recession if it comes to it. I think the balance of probability is that we will not have a significant recession over the next 5 years (so I don't wan tot mess the train if the SP goes up) but I am also prepared for the worst.

Yields in uk go up the closer one gets to the bottom of the market so naturally much higher in the regions than London. More a sign of low prices than higher demand for new build. Can pick up a decent two 2 bed inWighsm for 80k with a 6% yield or better but not a place house builders are rushing to go, For a buy to let investor willing to buy used properties happy hunting though.