Member Info for TakingMyTime

@kenj, you are correct. I got frustrated with the misinformation and typed too fast and ended up adding to it. Apologies.

@karv1 "The weaker will be gone or nationalized and become far stronger with no shareholders or debt."
The nationalised won't be stronger because they'll be subject to political interference and greatly empowered unions.

In the very short term, stronger due to no debt, but not long term. Customer service typically declines, too.

"The announced quarantine measures, whilst unwelcome, were something of a damp squib compared to the leaks. "

Typical government, they do this at budget time every year. Leak out a bunch of horrible news and the reality is never as bad, that way the bad news sounds like good news.

So we have a quarantine that already excludes Ireland and France. Next week, an agreement with Germany. Three weeks later, an agreement with the US. By July, no quarantine except for passengers from Uruguay, Niger, and the Comoros Islands (names picked out of a hat, maybe also Albanians and Burmese will be quarantined).

I was promised it! I wanted to buy more! I feel I've been wronged! I read it here so it had to be true!

I'd doubt it. Have to deal with the union, need to be able to justify that, can't easily square that with spending money on Virgin Australia.

The union has never acted as if BA's success was in it's best interest. They've always acted in the way to most hurt the company as a way to extract maximum concessions. It's never been "we're all in this together" for the union. It's hard to find it in my heart to weep much for them now.

If you are looking for a win-win deal you don't go on strike at Christmas time. If you do that, you can't be surprised if the company restructures at your expense when the good times are over.

"I would have liked to have been a fly on the wall when Biswas was presenting to these prospective debt buyers. He's obviously convinced them the long term future of Newcrest is very secure."

I don't think you understand how the bond markets are working right now. March set an all-time record for US corporate bond issuances. April topped it. 288Bn USD in April. This was a drop in the bucket. They are snapping up anything they can that looks likely to pay. 30 years and 10 years are very, very common in the US debt markets.

I can pretty much guarantee it was all bought by institutional investors. Banks, insurance companies, big fund groups, who have already done their own research on the company. It doesn't matter what kind of presentation he made, they wouldn't trust it, anyway. They are managing hundreds of millions and probably billions of bonds. They decided that in today's world, increasing their exposure to gold was a good idea.

They already knew all about Havieron, and knew that if NCM is going to buy out GGP they are going to have to pay a hefty price to do so. It would factor in their decision but not heavily.

My better half took a flyer on this, and we hope Havieron turns out to be the best find of the last century. But the NCM bond issue really has nothing to do with it. They would have sold those bonds anyway, and there would have been lots of buyers, just like there is for just about any other corporate debt that looks to be reasonably safe.

In case you care, 30 year US Treasury bonds yesterday were 1.31%, 10 year 0.63%. NCM is paying 3.25% on the 10 year and 4.2% on the 30 year. So the market is not treating this as a risk-free investment, they are paying 2.5% over Treasury on 10 year and almost 3% yield premium on the 30 year bond. That means that the institutional investors who bought this weren't buying because they thought it was completely safe. It's a good yield in today's bond market for the investors, but a nice savings for NCM compared to what they've been paying. That's all. Don't read into it more than it is or you might end up making a mistake.

Hi, RBR. In short, it's all a bet on the world moving again before the lockdown puts us into a severe depression.

Are we looking at 2008-2010, or are we looking at 1929-1945? If the former, oil, airlines, mining, and Boeing are great bets. If the latter, perhaps not. It's probably going to be worse than 2008 and not as bad as 1929 (and hopefully, unlike 1929, won't end in a war). But how much worse than 2008? That's the unknown.

I'm also in PSN but I don't see that as the same. People have to have a place to live even if the economy goes in the tank long term. They might change how much social housing they make but they aren't likely to go out of business. I'm in ROR and BBOX because of how I think behaviour will change. These are not plays on the economy reaching full recovery within five years or so.

I do see oil, airlines, mining, and Boeing (thus discussing it here) as bets on a strong recovery. Thus, it does seem similar exposure to me.

Nevertheless, your point is well-taken that oil might be a safer bet than airlines and companies like Boeing, because oil could recover pretty strongly even if air travel doesn't. So maybe I need to move oil, in my thinking, from a "bet on full recovery" category to "bet on 80-90% recovery" kind of investment. Which is a pretty significant difference in my way of thinking. Because while I expect full recovery even if it takes 5 years, I'm obviously not certain of that. But my confidence in an 80-90% recovery over 5 years is much, much higher.

It would be a mistake to see this as anything other than an opportunity to save on interest expense.

Interest rates are at all-time lows. Big investors who don't want the risk of stock markets right now are looking to buy bonds. There's loads of money running around in the bond markets looking for a safe home. Supply and demand means that is driving long term interest rates very low on corporate debt.

Any corporate finance officer with a brain is going to look to take advantage of that. If he can turn relatively short term debt at a high interest rate into 30 year debt at a lower interest rate, he'll do it. Then, any excess funds that come in can be used to retire higher rate medium term debt, perhaps doing so early.

Suppose you were paying 5% on an interest-only mortgage that has to be paid off in two years, so you are going to have to re-mortgage at who knows what rate. You have the opportunity to re-mortgage today at 3% fixed for 30 years. Would you do it? Most people would. It's just sensible debt management.

Does it give them more flexibility for a big capital expense, if one should suddenly materialise? Probably. But they'd be doing it whether they are thinking about a big capital expense or not, and in this debt market, if they needed to borrow more for that capital expense, they'd have no problem doing so.

I wouldn't bet against 180p, either. Don't care, either.

If BoJo doesn't say something helpful to airlines this weekend, we'll probably see another drop on Monday. If he does, we'll see a bounce. Won't matter either way. What matters is whether we can actually see planes start to fly.

Once we do start to see that, I expect this share to rise. Maybe gradually at first, depending on how many planes start to fly, how fast. Doesn't matter to me.

I'm quite confident that we WILL see planes flying, quite a few of them, soon enough for IAG to remain somewhat healthy, and that this company will come out of all this stronger than most of its peers. Doesn't matter whether it takes 2 years or 5 for the share price to top 500p, but I'm almost certain it will. (Would prefer 2 years, obviously.)

It might well drop to 180 or 150 or 130 in the next couple months if the short-term news is bad. I don't much care. I'd rather not see 80-100 just because some people are intolerable enough as it is. But it's no skin off my back if it goes down before it goes up, and if I didn't hit the bottom when I bought it, well, I never have hit the bottom on any share, and hardly anyone ever does.

"'TakingMyTime' - I am still confused. What if I sold my BP Shares on Tuesday 5th May. Im guessing and assuming no Div... even though i rebought (at a higher price mind you) today."
You sold shares (trade date) on 5/5. On 7/5 (today, settlement date) the new owner was added to the register and you were taken off. You will not receive the dividend for those shares. The person who bought them from you will receive that dividend, unless he sold them after buying them from you and before today.

You bought shares on 7/5 (today, trade date). That was an ex-dividend purchase because today is the ex-dividend date. You will be entered on the register of shares on Tuesday (12/5, settlement date). Unfortunately for you, that will not be in time to receive the dividend. The person from whom you bought them today will be on the register of shares on Monday (11/5) and so will receive the dividend.

If anyone really has trouble understanding all this, please, please, please, forget about the record date. It's an accounting technicality. The date that matters is the ex-dividend date. If you purchase the shares before or on the ex-div date and you hold them at the close of business on the day before the ex-div date, you will receive the dividend. If you sell them before the ex-div date, you won't receive it. If you buy them on or after the ex-div date, you won't receive it.

Get this and hold onto it. Something magic happens overnight the night before the ex-div date. The dividend entitlement magically and mysteriously attaches itself forever to the person who owns the shares that night. That's really all you need to know.

Well, there's something else you should know. Don't sell shares just before ex-div and then buy after ex-div for a higher price. You lose money on the price and you miss the dividend.

Unless you really, really know what you are doing (and you don't or you wouldn't have had to ask this question), try to find companies that you think will be successful over the long term and buy them and hold them. Don't flip in and out of investments if you don't really know what you are doing. You'll lose your money.

Someone below posted a link that explains record date vs ex-dividend date. It accurately explains it. Here's another. https://www.investopedia.com/terms/r/recorddate.asp.

In brief, for those who are horribly confused by this:
There is a difference, in the markets, between trade date and settlement date. On the trade date, the day you agree to buy/sell, the commitment is made but you do not technically own the shares until two business days later (the settlement date). It's referred to in the industry as T+2 settlement. (Used to be T+3 but we are gradually being dragged into the modern world.)

The record date, the date on which you have to legally own the share to get the dividend, is Monday. Since Friday is not a business day, if you did not buy (trade date, agreement to buy) on Wednesday, you will not legally own it on Monday. If you buy (trade date) today, two business days from now (settlement date) is Tuesday. That is when you will legally own it on the register of the company. That will also miss the dividend.

If you wanted the dividend, you had to buy or hold it (on a trade date basis) as of the close of business yesterday. If you did, your name will be on the legal register of shareholders on Monday (the record date) and so you will get the dividend. If you buy today, you are buying an ex-dividend share. Your name won't be there on Monday and you won't get the dividend. It's ex (ex meaning without) dividend.

Normally, the record date would be Friday for a share going ex on Thursday. This time, since it's a bank holiday, the record date is Monday. But the record date is not particularly important for buying and selling shares, it's a legal/accounting thing. It's the ex- day that matters. Buy on or before the ex-day, you get the dividend. Buy after it, you don't. Sell before the ex- day, you don't get the dividend. Sell on the ex-day, you do get it.

This is not just opinion. Look it up in the links, find out what record date means. Then, from then on, you will know and we will only have to answer this question in three months time for newbies. :)

"They also have £3Bn capital expenditure..."
Even if we took that out of the £10Bn liquidity today, that's £7Bn liquidity.

At £200 million a week, that would take 35 weeks. That's assuming zero improvement from today's picture. That's not reasonable. This company may not get back into profitability for more than a year but the bleeding is going to slow considerably by the end of the summer, at the latest.

Hi, IIV. Thanks for your comment on the other board.

I know Boeing is a defence contractor as well, but they, like airlines and oil shares, are very exposed to the airline/travel industry. Didn't they take a huge hit when the 737 Max got grounded?

Seems to me that the drop right now is for the same reasons the airlines and oil companies have dropped, and that investing in Boeing right now is effectively making the same play as investing in airlines or oil -- it's a bet that the world is going to get moving again, and if that bet comes off then you've got a big winner. But if it doesn't come off, whether in Boeing, IAG, or BP, you aren't going to do very well.

That was the thought on my comment about similar exposure. It's not exactly the same thing, of course. And perhaps Boeing would be a better bet than IAG because it isn't likely to be allowed to fail by the US government.

I think there's another risk with Boeing, too. If the Democrats take the White House and Congress, defence spending will be slashed.

All that said, I'm still intrigued by the opportunity. Anyway, I'm interested in your views on the above.

Would be fun if you are right, but I've got a feeling that anyone who invests based on the feelings of some guy on a bulletin board is not long for investing. :)

Boeing has been tempting me, too. I think they've got a long way back but it does seem appealing as a long term investment. But I'm already in IAG and pretty heavily in BP and I think Boeing has similar exposure so it might be a little too much exposure to the oil/travel segment for me. Mulling it over....

"Would be fine if they were Fed Ex but for a company based on flying passengers it really is a small consolation sadly"
Every bit of revenue that comes in extends the ability to hang on until normal flying begins to come back. So it's definitely good news.

"Takingmytime - that's sensible. However, would be interested to see how that squares with your prediction that the SP will fall another tremendous amount? Surely this is the worst of the news priced in - the only way is up??"
On Sunday evening or early Monday, not sure which, I said we were in for a big drop on Monday. That was because of the Buffett man running his mouth over the weekend. And we got it.

It's not relevant to my view that this share is likely to double or triple within the next 5-10 years, maybe sooner.

"The share prices of certainly Easyjet and BA bear no resemblance whatsoever to the current market conditions"
Yeah, the share prices of just about any company just about always bear little resemblance to the current market conditions.

Share prices are almost always driven by market sentiment / future expectations. Current market conditions are mostly relevant in how they impact future expectations. Investors buy shares based on what they think is going to happen with the company and in the market as a whole. It's always based on future expectations, and anyone who invests without any thought as to whether or not the company is going to succeed in the future is a fool.

The value in these shares lies in the belief by a significant portion of the market that operations will resume before too long, at a significantly reduced level, but will eventually ramp back up. Maybe not to where they were before, but to not that far from it.

If you don't think that is going to happen, you shouldn't buy. If you think it will take 15-20 years for that to happen, you maybe shouldn't buy. If you expect things to return to normal within 2-5 years, this is a pretty good investment -- phenomenal if it's 2 years, very good if it's 5 years.

The debate on this board is not really about current market conditions. We all know what they are. The question really is about expectations for recovery.

Yes, I expect to be flying in the next 12 months, too. At least twice. Long flights.