Member Info for steph

thanks for all your posts. It's an angle I just could not possibly cover. I certainly am investing in TEF based on a management plus in comparison to the rest of the sector. Take a firm like TEF over 20 years that has the opportunity to expand 16x before bumping into the limits of the market niche they are in and it is all down to management to exploit the opportunity. Unrealized opportunity is just that. I really do think that they will double in volume every 4 to 6 year for 20 years before they will apply the brakes and return a higher % divis to shareholders and become more capital intensive in the land bank. IN the "apply the brakes" phase the divis will go up compensating me for the lack of further growth prospects at just the right time in my retirement plans. For me and my investing objectives it is a perfect fit. Terr has had an influence here. Patience rewards those who are content to "get rich slowly". I've stopped trying to get a short term boost. Too hard to read the market short term nowadays given that the SP is increasingly determined by politics and that is difficult to predict even though I consider myself a bit of a policy wonk. More rational to analyse economic trends than political ambition. As before I am positioned for a hard, slow motion but not chaotic Brexit. London can muddle through that without a Brexit induced deep recession. Any upside that looks certain will trigger me topping up. Some reaching out across the party divide to delivery a sustainable fairly oft Brexit would be a very positive investment signal for me. If the tories try to muddle through on their own here is a risk of a chaotic Brexit we must factor in. I'd give it only 5% but it is there -alongside Trump starting a war in the Korean Peninsular and the like.

I agree it is a time for caution. Certainly less leverage than I have traditionally had on my TEF spread position. However I don't see a major recession coming in spite of poor leadership and Brexit worries. Yes there is a risk of crashing out of the common market (and thus inducing a recession of some substance but probably not as deep as 2009) but I put that at 5% not 50%. Blowhard Boris is not helping prepare his party and the country for the compromises ahead. Quite a selfish individual it turns out in fragile times. There is quite a few of them at the top of his party. Even David Davis, hard Brexiteer as he is, at least wants an orderly Brexit. Boris does not seem to care if he is a wrecker so long as he personally advances. FS not enough for Boris and he is not even trying to do the best possible job as FS. A nation of lions led by rats.

https://www.theguardian.com/commentisfree/2017/sep/14/vote-leave-britain-single-market-tories-labour-brexit?CMP=Share_iOSApp_Other https://www.theguardian.com/politics/2017/sep/16/may-too-weak-fire-johnson-say-furious-tories How frustrating as an investor. All we as investors want is clarity ASAP. I suspect after all years of uncertainty we end up with something similar to what we have now as members but without a formal vote on shaping EU policy and standards for common market implementation and enforcement. What the hard Brexiteers seem to want is a time machine to go back 40 years and to have the trading relationship with the world we might have had if we had never jointed the EU. Bit like a teenage lover who in middle age realizes the girl he jilted was after all "the one" and tries to resurrect the relationship not accepting she is older, married, settled and with kids and has no interest. The world has moved on and is in no mood at the moment for new major trade deals with anybody. We are not held back by the EU but protected by the EU in trade terms and conditions. The focus is not backtracking on the trade agreements we have which are being challenged by populists everywhere but not least by the USA. The economic illiteracy of Boris and co is staggering. They just don't understand how modern trade agreements work.

https://www.theguardian.com/commentisfree/2017/sep/14/vote-leave-britain-single-market-tories-labour-brexit?CMP=Share_iOSApp_Other Still here

https://www.rics.org/Global/8._WEB_%20August_2017_RICS_UK_Residential_Market_Survey_tp.pdf Most dour RICS survey for East London but Brendon seems to be on holiday.

https://www.theguardian.com/politics/2017/sep/13/norway-solution-would-put-brexit-uk-in-single-market-but-not-under-ecj

https://www.theguardian.com/politics/2017/sep/13/philip-hammond-tells-the-city-he-will-protect-its-global-position We are inching towards a Norway Brexit with near equivalence for passporting for our banking services to be maintained. A handful of jobs will be lost as contingency planning for a hard Brexit is an obligation but it will not be a flood unless we actually get a hard Brexit. Too early to erase the market jitters over a hard Brexit but I can see light at the end of the tunnel. I am getting more optimistic about long term investments like property. I expect our SP to bounce about between 3.80 and 4.00 until the update and then maybe inch up a bit in the range until the finals. I suspect right now with market sentiment TEF can walk on water on the results and it will only be enough to maintain SP or for modest improvements. The uncertainty induced by Brexit about the London jobs market has to be lifted before sentiment really changes. I think the negative sentiment overdone so a time to top up if you have the means. Might dip moderately before it takes off but you can never call bottom just good relative value. Of course any major fund coming in or out will change that range.

completion =competition.

https://www.thetimes.co.uk/edition/business/housebuilders-hit-by-lack-of-finance-mv2jzbfwf With completion coming up form below decreasing and the majors no interested in growing market share TEF faces quite manageable completion to in time serve its London focussed market niche with up to 10,000 units per annum 15 to 20 years out before it will need to slow down it's rate of growth. London sub prime market TEF operates in can handle a single builder on 10,000 per annum which would probably represent only a third of the market niche.

https://www.theguardian.com/business/2017/sep/11/london-financial-centre-brexit-frankfurt-dublin-new-york-donald-trump As I have posted before London's real competition is New York. The chaos in our government and the weakness and anti immigrant tint of the May government is but nothing compared to the current chaos in the USA. Trump almost makes May look strategic and intelligent. Without Trump we would be losing jobs by the bucket load to New York rather than the trickle to Frankfort, Dublin and Paris we have to suffer. Not much of a upside for Trump in our lives but for us TEF investors he is golden. From my financial self interest point of view may he win re-election and cause further harm to New York's international standing for business and financial services. Ironic an opportunist climate denier having to deal with storm surges in strongly republican climate denying Florida. If I were an old testament kind of gal it would be divine retribution for their salt their scorched earth polices. Anyhow what is bad for the USA is good for TEF and my pocket book.

quite right. Incidentally I did buy a few at 27. I worry TEF dropped so much even though it was trading well in the great recession. Profit margins were much tighter as a result of tacking to the housing association builds but that was a great survival tactic not appreciated by the market a the time. Markets probably assumed the much lower profits were permanent and not transitory. I suppose small builders will also get punished in a great recession disproportionately. SO forget being able to sell TEF during any major recession. Just need to ride it out. In the short term it is not a defensive stock such as a utility that does not drop much due to steady earnings in a crisis and thus you can cash out during a recession. That said there is an enormous difference from a horrific but temporary drop in SP and bankruptcy or massive dilution due to forced capital raising. We probably won't see the next crisis coming until the SP has already been badly damaged. Calling the bottom too hard. Might sell just before a sharp recovery or buy before a further drop. Been there done that got the T shirt. However the option to ride it out is open to us in TEF that might not be available for some other builders. SO if we have a 20 year horizon as I do for TEF I can imagine a major recession setting me back 5 years in terms of targets of when SP and divis go to what by when but not destroying it. Just a 5 year set back. I don't think we will get another great recession in the next 20 years but if we do and I am patient it will just be a set back.

My 100% TEF focus is about security (best in class to weather a storm) and growth prospects to double in size every 4 to 6 years for a 20 year period. It s a rare combination. Growth prospects of that magnitude normally come with risker business models. So for me TEF is a get rich slowly play. I don't think it can be done any faster without taking on substantially more risk which I don't want or need to do. I admire Strictly for jumping about a bit along the way but for me the most spice I want is maybe a bit of leverage through holding some of my shares in a spread. Like Buffett just play the patient long game with compounding value of a growing company that has a distinct transparent business model that is somewhat protected from competition. The See's chocolates (for Buffett Sees was the premium brand and thus was protected from the likes of Hershies etc so Berkshire bought it for 25 m in 1972.) of the UK builders. https://en.wikipedia.org/wiki/See%27s_Candies To arrive at the growth potential over a 15 or 20 year period you can't look at 3 years of historic growth. Each builders market is a different mix. All the majors are now starting to slow down any growth and now of them wanted to double volume never mind double it every 4 to 6 years. Smaller regional players are limited by those smaller regional markets with the jobs drivers 15 years out a big question mark. One day the growth potential of EF vs the rest will get partially priced in as I suppose it was pre crash. I doubt with all this brexit uncertainty there will be a rebalancing any time soon and SP growth from here will be driven by company specific results.

I'm positioned for a relatively hard but not chaotic Brexit. A soft Brexit or a renewal of our membership itself would be a huge upside bonus for me. Lord Adonis points out a possible route. NO serious indication, though, that the EU will be agile enough nor care enough about UK membership to do that. There is a view that the EU can and should put some more restrictions of free movement and if the UK had stayed and fought that battle there would have been some advances. UK as a member heavily influenced EU policy on free trade and admission of the Eastern block applicants. NO doubt in time we could have "fine tuned" EU rules on immigration to lance the boil. There were already a lot of unused tools to assuage public anxiety on the issue. Under existing EU rules we were able to have a locals first hiring policy for the Olympics. W could have done the same on a more permanent footing for the midlands. Our social welfare system was not well designed to game the existing system and needlessly gave benefits to EU migrants (in work top ups and University subsidies) we were allowed to restrict but needed to be clever about how to design it. In short the EU got blamed for our own bad governance and now we are finding out slowly and too late that we had a pretty good deal already unlikely to be equalled outside EU structures. Even the hardest Brexiteers now only talk about Brexit not being too damaging. Gone are the silly promises of a nirvana awaiting us on "independence day". Independence from what exactly? reciprocal trade and immigration agreements within a club we were a powerful voting member? What is going to happen to the 1.3m Brits already living in the EU if we have a nasty immigration policy towards their host citizens? Really bad luck that the configuration of politicians at the top of the Labour and Conservative parties post Referendum have made such a hash of the Brexit negotiations. How dumb was it to trigger Article 50 before we had developed and agreed (at the very least within cabinet)r position papers on all the main topics Brexit throws up. Utterly and unnecessary unprepared for it and nobody pushed us to do that. Just stupid management at the top. Teresa May shod be strung up for her sins. "thick and stupid" comes to mind. Over promoted as home secretary and now utterly out of her depth as PM. No strategy, no vision, no realistic nor attractive negotiating position that stands a chance of success. Just lurching from one crisis to the next issue by issue. We went from one of the best governed G20 countries to near bottom of the league. I am betting we have a robust economy that can withstand most of the current incompetence at the top. Other counters have had bad government that did not hurt too much. Americans with worst politicians since Jackson still chugging along economically. Italian economy seems to defy perpetual bad government. Belgium does not seem to need

earnings over assets is a proxy I suppose for return on capital and thus it's attraction for you Strictly. EPS projections, to my amateur eye, are for me more clearly value projections. I don't see how earnings over assets gives you a solid comparable strategic view. Different builders have different models of capital intensity. Some sit on large and expanding fully paid for land banks which I suppose depresses return on capital yet is a good signal not a bad signal for resilience to a downturn. Going into the great recession the whole problem with the majors was they were too leveraged in relation to earnings over capital. Accounting tricks can also change the assets on the books or off which makes me nervous to use assets as a strategic tool. A land bank not more than 50% paid for can quickly become a liability in a similar great recession. What I want is a house builder that can trade through the different markets that the foreseeable next 20 years can throw up. Even in the great recession in the UK new homes sold and no builder was left with unsold stock. We were not Ireland or Spain. This is doubly true for the diverse economy of London and triply true for the near prime patch of TEF. TEF traded profitably through the great recession and now has an even more diverse and agile business model. Good enough for me.

As I've posted consistently the endgame is in part as follows due to fundamental economics and the dynamics of trade negotiations. https://www.standard.co.uk/news/politics/brexit-we-ll-copy-eu-trade-deals-with-rest-of-world-says-theresa-may-a3622941.html If that is the endgame of course one may ask what it is all for? A lot of disruption and economic uncertainty for very little of any practical benefit for us. Even on immigration we had not explored how to target local residents as much as we were allowed as a EU member. Local hire schemes are EU legal so long as they target local residents not nationality. We did this for the Olympics and could do it anywhere in the UK. EU was blamed by Brexiteers for their **** poor management of the UK system we had.

...and thus no hard recession we should be OK and TEF's business plan not disrupted due to Brexit impact. For those of us with buy to lets and unlike TEF dependent on capital gains to make a profit the Brexit impact is greater though. House price inflation is very sensitive at the margin to changes in jobs growth. Brexit has taken a good 2% per annum off all the pundits 5 year forecasts of house price inflation in TEF's patch. However this hit to us buy to letters is not the same as that to TEF owners. That is why I gave up 2 buy to lets yet keep maxed out on TEF. I suspect the market for TEF shares conflates the two and thus our relative underperformance of late.

https://www.bloomberg.com/graphics/2017-brexit-bankers/ http://colresearch.typepad.com/colresearch/2017/02/londons-growth-in-employment-sectors-and-patterns.html 30,000 total primary job losses due to Brexit (and another 30,000 or so secondary and induced job losses for jobs that depended on the spending of those companies and individuals) substantial as that sounds is not catastrophic for London . With a workforce of 5m and a workforce growth rate that is pretty steady at 2% (even averaging in the great recession) London adds some 100,000 jobs per year. SO a 60,000 loss spread over 10 years is "only 6%" of London 10 year jobs growth rate. London has a pretty big, deep, diverse job market with many leading new economy sectors (ICT, bioscience, entertainment and media, etc). Even within the 30,000 business and financial jobs losses to the EU capitals it will not be a pure loss. Backfilling of the empty offices within the sector as relocations from the UK and global network kick in plus other sectors taking up space at slightly lower rents than they might have achieved otherwise will mitigate the raw numbers. This occurred in Canary Wharf during the great 2008 recession to such an extent there we no net job losses in spite of a savage dip in the UK economy. So 6% job losses over 10 years may not be fully realized in any case and the replacement jobs only moderately less well paid than those lost. They are well paid jobs from the UK and international professional elite right in TEF's patch and not penniless east European waiters in West London serving overweight American tourists in "I love Trump" t shirts, though. Never-the-less baring a catastrophic disorganized Brexit (if FOx and Boris were actually in charge I'd worry more) and thus no hard recession.

I know. I eat Chlorinated chicken happily enough when in Canada (NAFTA) and more recently in New York. It is a simplified way of saying that what could be 'free traded" that is not currently "free traded" is not without controversy. Pubic opinion and national preferences take a role. These can be emotional such as on GM crops and other food or naked self interest of small lobbies within our trading partner (American truckers or American wood mills have caused havoc on NAFTA implementation and fairness). I very much doubt if there is free trade out there we do not already have as EU members (that is acceptable to Uk consumers and UK domestic interests) of a magnitude to offset any significant reduction in trade in goods or services with the EU. There will be some of course but the volumes and GDP contribution will be not of strategic significance. EU has over 40 years helped by it's market size and pushed on by the "free trader UK " plucked all the low "free trade" hanging fruit. What's left is controversial or damaging to our domestic suppliers in one way or another. In short "seconds".

I think the UK will have a big job post Brexit just to sign the free trade agreements with non-Eu countries that replicate the benefits of what we already have as EU members. Sign of staggering incompetence that Fox is getting involved in "chlorinated chicken" issues and not focussing on making sure we have as a baseline what we already have with the USA. Once the baseline is secured then slowly we can explore if there is any additional free trade agreements out there in addition to what we had as an EU member that might be of net benefit to the UK. I very much doubt if there is anything of great substance. The EU was a powerful negotiator on our behalf because it covered such a large market. The most radical approach is for us to allow (without reciprocity) anybody to export to us or to offer their business and financial services to us without any tariff, standards or regulatory restrictions. We can then be truly free of all international commercial courts and arbitration panels. Reciprocity on the other hand requires binding arbitration procedures with the participation of judges the other nation(s) will appoint. I very much doubt though if the UK pubic would be happy with that "free trade" and "freedom from international judges" scenario. ECJ jurisdiction (which had UK judges in it and was in part shaped by the UK) will quickly seem like a golden age. Some Brexiteers are that ideologically driven and insensitive to the basic economics of "pure sovereignty". Some like Fox and Farange are half way there and confused. Maybot is empty headed and plays to the gallery for short term cheers but long term strategic misery for us. . As a nation we can only challenge, vote, organize and educate.

unambiguously implementation