Member Info for TakingMyTime

Well, I do think it makes sense to have a mobile cash reserve because I think we'll see further turmoil and more lows between now and 31 October.

Not sure I'd have sold PSN, though, because I'm not sure how much lower it will go. But it depends on what the rest of your portfolio looks like.

@Bamps, I can pretty much predict what the PSN update is going to say. Our renewed focus on quality, delays in activating sales sites, etc, has slightly reduced our margin, but sales are still good and we're still building houses, and we're still going to be pumping out the special dividends according to the schedule already announced.

They won't announce any further special dividends than what has already been announced until they have more time to assess how the quality push is affecting profits, whether the slew of bad publicity is going to significantly affect sales, what impact there will be re: Brexit, and what happens with Brokenshire's threats about PSN and HTB. If the net of all that is positive and the company keeps making money at close to the same rate the special dividends may well be extended -- or they may start pumping money into increasing their pool of skilled labour to enable them to make even more houses.

So, I'm not expecting anything to be announced that will actually change the story with PSN. There's really only two questions: Can they change the build quality (and the optics and politics surrounding it) without seriously damaging profitability? Will Brexit hurt the company badly? I'm gambling that the answers are yes, and no -- pretty sure about the latter, and good reason to be optimistic about the former. If those both work out reasonably well, we're on a winner, even if it takes a few years for the share price to really go.

1. The market as a whole was down almost 1%.
2. Builders in general were down. Bovis, PSN, BDEV, all dropped. Nationwide's house price report came out and it wasn't great so housebuilders were hurt, in general, even worse than the market.
3. The main news in today's TW report was not the dividend, it was the margin. You can only maintain dividends if you maintain profit, and when margin starts dropping, it hurts the ability to keep paying. So, TW lost 8%, but effectively 6% compared to its peers. I'm guessing that is almost entirely due to the margin dropping.

It will no doubt bounce tomorrow, but how high remains to be seen. The company did not overnight become a bad investment. I was sorely tempted to buy today. I still think we'll see fear and paranoia in October and there might be even better buying opportunities. And anyway, I'm still not convinced TW is a better place to put my money than BDEV. The drop in margin is somewhat off-putting. But the drop in price is certainly appealing for someone looking for a place to park some money. If it drops that much again I'd be in even and not wait for October.

Hi, Nige. If we're going to dish out prison or fines for greed we've got a lot of trouble coming. We can count the politicians who used the whole thing to gain or safeguard political power and nice salaries and pensions. We can count the people who greedily bought houses they couldn't afford, gambling that prices would just go higher and higher and they'd be able to cash out. It's not just the bankers. It's fashionable to blame them but there's a lot of blame to go around.

Arguably the bankers paid some back in higher taxes through the additional tax rate (it wasn't in place before the bailout), and some had significant bonus clawbacks. There was also the banker's levy, and significant loss of shareholder value which hit the banking executives heavily.

I'm not saying it was all made right, it wasn't even close to made right. But you can't throw people in prison for operating within the rules, even if their behaviour was unethical and/or foolish. You can take civil action in many cases, and you can certainly impose taxes.

Limiting factor is gearing, it will be held back some until that is brought down.

Hi, Nige. Yes, some of the banks were bailed out. It was a repulsive necessity, in my view. And it was right that those who were bailed out should have effectively moved into public ownership. In principle, I agree with the silly boy ranting here on that point. I'm just not prepared to expand it to everyone who benefited, since the whole society benefited from those bailouts.

Nor are those bailouts any longer a significant factor in the fiscal position of the UK. If we hadn't been spending beyond our means before the bailouts, and kept doing so after the bailouts, we'd have recovered from that long ago.

As to nationalism, and socialism, the horrors of National Socialism can be fully attributed to neither of those, but to the fact that they were combined together, and added to that a particular virulent racism. I don't see anything approaching that combination in any of the people you mention, though Putin perhaps gets closest. Corbyn gets uncomfortably close with his radical socialism, and his tolerance, at least, of virulent anti-Semitism. And we shouldn't forget that he's a nationalist, too -- he's never wanted the UK to be part of any group that would restrain what he wants to make the country to be. If I were Jewish, I'd be getting ready to leave the country so that I could move quickly if he came to power.

It's what I get for turning off filtering to watch a train wreck.
'Crown estate worth £100 billion. 90% bailed out by tax payer therefore £90 billion owed.'

The Crown Estate is worth £14.3 billion, not £100. The '90% bailout' he's pulled out of his rear end, just totally made it up. But 75% of the revenue of the Crown Estate goes to the Treasury, so the taxpayer is getting 75% -- actually not all that far off his 90%.

The full compensation of the Crown Estate executives is a matter of public record and none approach a million pounds a year.

He's all about green energy - they say their offshore wind production is up to 7.7 GW, enough to supply 6.6 million homes. He should love the Crown Estate.

What a guy, makes up his own facts and rants about them. Idiots everywhere, and all it takes is an Internet connection and a keyboard and you can put your idiocy on display for the world. Filter back on....

https://www.ft.com/content/7ee8c2c6-b136-11e9-8cb2-799a3a8cf37b

Anything gained here is pure profit, of course. And locking in longer leases carries some risk but also locks in the low rent for a long time. This seems a very good move.

Thanks, Nige. I'm happy with 5% in PSN, when I buy into TW or BDEV (or both) in October I will be builder-diversified. I could do it now but I expect a better price later.

I know that builders have a lot of upside right now, but there is some risk if Corbyn gets in. I've got a lot of money in US shares right now that will be coming back when cable drops below 1.15 (which is likely. Won't do that if Corbyn looks likely to me, though. In that case, I'd probably leave a lot of it over there.

I realise I may be leaving some money on the table by not going more heavily into builders. I do view them as somewhat risky, so I wanted to limit my exposure, but decided if I was going to go in, I was going for the biggest upside, thus PSN. I've become convinced that going in a little further probably makes sense with my investment horizon and overall strategy, but not more on PSN.

The other place I'm heavy on risk is the mining company Evraz. I'm sort of in that for the fun of watching what happens -- it's not enough to hurt me badly if things go wrong but it really could do very, very well if earnings are maintained. It's my inner gambler that bought that one.

Hi, Nige. Thanks for the thoughts. I'm about 5% in PSN right now. I'm about 10% in cash. I'm not expecting any deal before the last fortnight before Brexit, if then. So I'm expecting a further fall, leading up to Brexit, as people panic about no-deal, and then I'm putting at least half of that cash in another builder, haven't decided what to do with the rest of it for sure. It will be British, whatever it is, that's where the bargains will be. Maybe National Grid, I think it's undervalued right now too.

So anyway, I'm trying to decide right now if, when the time comes, that builder money is going into TW or BDev. I actually still think PSN is the best buy and biggest upside but you are right about the risk. So that's part of the reason I'm hanging out here as well, because chances are good I'm coming in here in late October.

@Bamps21 'Hi Tmt
If I remember rightly the last change in stamp duty didn't have much effect on the sp'
Probably not, but I'd guess it's a factor. Sentiment is a funny thing.

'Big rise this week is due to BoJo's promise that we will be out after October, rather than dragging on indefinitely.'
And also probably due to hopes that he'll reduce stamp duty, which would be positive for builders.

'Your logic is fine as far as it goes, but think you can't assume they will be built as fast as they were. One of the reasons for poor quality was the rush to get them up and sold, so if 10 builders could build 10 houses in a year but now (with new checks...) they can only build 9, there will be a 10% decrease in Profits and Eps.'

I agree, Nige. I think there's two different factors and it helps to see them in isolation.

Factor 1 is the need to improve build quality. That's going to slow completions and thus be a permanent factor in earnings. Hopefully they can get better at doing quality faster, but the focus has to be on doing quality even if it is slower.

Factor 2 is the later opening of sales sites. That, in itself, should not slow building. It is a one-time hit to earnings. It should have a positive impact on customer satisfaction, but if it has any (indirect) impact on the speed of completions I'd assume it is very minor.

Yes, I think we're in for a bumpy ride, too. Makes little difference to me, I can withstand some bumps for a few years if necessary.

Hope we get someone willing to honestly assess rather than knee jerk reactions to press.

Meant to respond to this: 'So the big question is Invest before 20/08/19 (IntRes) or not?'

It's really hard to say, isn't it? I don't think the IntRes means anything much. We're in a transition. The big question is whether or not you believe in the transition, and whether the market believes in the transition. I think if you believe in the transition that the SP is way under the real value of the company. If that's the case, trying to pick the bottom is a fool's game.

I'm holding some extra cash back for the event of a no-deal Brexit -- I expect the market to drop to stupid levels if that happens, and then I'll buy in on British companies. Might take a while or might happen quickly but they'll recover. Always buy when a panic hits, as long as you've thought through before what you want to buy.

Hi, Nige. Check my logic and tell me if I'm wrong.

Let's use specific numbers. Assume the exact same number of houses are built, and they are built at the same speed as before, and all the houses sell for the exact same price they would have sold. The only thing that changes is the timing of sales.

Now, let's say sales are 10% lower in the first half of the year because they are selling houses later. The second half of the year, those 10% of house sales that were deferred come through. But, 10% of the ones that would have sold are sold later, so they are now deferred. In the second half of the year, then, it's a wash. First half of the next year, the same applies -- you've kicked 10% of the last half's sales into this half and 10% of this half's sales into the next half, and so on.

If that's true, then a policy of delaying opening sales on a site is a one-time hit to revenue, in the period in which you make the shift. Every other period will be a wash. That hit to revenue will mostly be a hit to profit, because you still have all the expense of building the houses. But it's only one time.

It improves customer satisfaction because it decreases the chance that customers have an expectation of something that doesn't materialise. They are buying a house they can see rather than one they are dreaming about.

So I see this part of the quality push as a one-off hit to earnings, one that PSN can well afford.

Other measures may well impact earnings long term. The retention policy will push them to resolve snagging quickly, and that means not necessarily in the most cost effective manner. My view is that is a good thing -- if you've taken someone's money you should get the snagging done. But it will impact on earnings. If they spend a little more inspecting houses to make sure they don't have stupid things like leaving out fire safety features, that also might cost a little more, but that's as it should be.

So I expect the push to quality to impact profitability marginally, and that's ok. But I think taking sales sites live later is only a one-off hit.

Politics is like sport. Some of us actually do some stuff on a limited level. All of us speculate on what the professionals are going to do and who is going to win. Some of us rant and rave about what our team, or the other team, has done. Some of us keep perspective sometimes.

My understanding is PSN is delaying opening up sales at their sites until homes are closer to delivery. That means fewer active sales sites, and fewer early sales as a result. I suspect they are going to be building close to the same number of homes and that they will have no difficulty selling them. Their last statement didn't anticipate any long term drop off.

If my understanding is correct, that would mean marginally lower sales in the one time period in which the change was made, but then in the succeeding time periods, the loss of early sales would be compensated for by higher later sales (the homes that weren't sold early will juice the level of later sales). So it's a marginal hit to earnings but only in the short term.

I took it as reducing active sales sites, not necessarily active building sites. Early sales are being reduced, they are waiting a little longer in the building process to start selling, so they don't have as many active sales sites.

@johnson 'Exstatex Do you ever post short posts ?'
LOL. They look very short if you click on the filters tab and type his handle in.

@Nige. I think fundamentally the difference here is that you think Brexit would lose if another vote and I think it would win with more like 54-55% of the vote. If I thought it would lose, I probably would agree with you on all the rest. But I think it would win, and I think the politicians have polls they aren't telling us about that would show that. If they believed Brexit would lose, since a strong majority of MPs are Remainers, we'd have already had another Ref. That's my take on it. Could be wrong.

What I'd like to see is a negotiated trade deal. May's withdrawal agreement leaves me cold. It gives the UK nothing important and the EU everything they want. If you pair it with a good trade deal fair enough. But just passing it eliminates all leverage for a good trade deal. If we're going out (and I think it is inevitable), I want a trade deal, not just a divorce deal. I don't mind Brexit if we get a good trade deal. May's agreement to the EU demand to split the WA from the trade deal virtually guaranteed there wouldn't be an agreement worth the UK signing up to.

That's the way forward, for Bojo, too, if he wants to make Brexit happen. They won't change the WA? Fine. Add to it, nail down a trade deal as well, that makes the WA palatable.

They are slowing some things down but I don't think they ever said no new sites. That WOULD be a negative.

Well, we'll see. I wouldn't expect a formal alliance. I would expect 'we'll run a weak candidate in this constituency, you take it from Labour' and 'don't run a strong candidate against JRM', etc.

Of course, it's possible Tory Remainers are just bluffing. Hard to see them actually thinking Brexit is worse than Corbyn, but maybe they do.

But I also think a 2nd Ref will be Brexit again and then BoJo will be strengthened in going for a hard Brexit.

I'm not saying that's what I want to see, just what I think is likely to happen. Either no-deal or a GE followed by a hard Brexit or a 2nd Ref followed by a hard Brexit.