The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
It needs to be done. UK markets are obviously incapable of valuing equities. The historically low valuations and huge discounts to peers need to be addressed. In many cases these are not UK companies at all, they are multinationals that make almost all their money outside the UK, but are subjected to obscenely low UK market valuations. In depth scrutinization of trading patterns, broker recommendations and collusive hedge fund trading activity need to be addressed. Countless examples of catastrophic shareprice plunges on innocuous announcements are available for scrutiny. What were the forces that drove those unlikely falls?
We need 100,000 signatures for the government to debate the issue in parliament. If someone can set the petition up we can circulate it. The government knows of the gross misconduct involved in UK equity activity, but is reluctant to react for fear of reputational damage to Britain’s broken markets. Enough is enough. UK investors have been violated for far too long. Time to bring this issue into the open and wheedle out the perpetrators.
https://www.gov.uk/petition-government#:~:text=Create%20or%20sign%20a%20petition,considered%20for%20debate%20in%20Parliament.
cheat
keep it real mate, the board wouldn’t risk insider trading before an announcement, all of which would be made public.
the problem here isn’t the board, it is the index in which aa is listed.
it’s becoming evermore common place for uk shares to be smashed when making trading updates - even when those updates exceed market expectations.
whereas once you needed a global event (such as the financial crisis or covid) to smash a share, a market beating trading update can smash a uk listed share now. this only happens in the uk. our markets are in the straitjackets of a cartel of hedge fund, broker and market makers who run the market, with the sole object to make it profitable to short.
this is specific to the uk
in 1999 the ftse100 hit 6950
in 1999 the dax was 5000
the dow was 8000
now
ftse 7500 - up about 8 percent
dax 16800 - up over 350 percent
dow 36600 - up over 450 percent
does it really make any sense to trade uk shares based on that performance.?
my view is the uk has some great companies, but instead of treasuring our most valuable companies, like other developed markets, the uk market makers sole objective is to smash the valuation of every uk listed company. and they have succeeded in systematic value destruction and decimation.
that’s why uk listed shares trade at all time historic low valuations, and trade at a huge discount to their peers.
and did anyone notice on monday - the cac closed higher than the ftse for the first time in history.
i propose every uk investor demand an investigation into the way uk markets are run. if someone can set up a poll and enough people reply the government is obligated to debate it in parliament.
it’s just not right that every share should get smashed, quite often on innocuous trading updates, or even on rumours or other such pretexts.
aa has the misfortune of being solely mired to the uk. the manipulation and value destruction the uk market has inflicted on aa over the past 3 days would be much more difficult to do to other miners listed in the index. because bhp has moved its main listing. rio is protected by its australian listing and would relist in au if the uk market smashed it. anto***asta is protected by chile. and glencore are protected by its swiss listing. it’s a sad state of affairs when even a mighty mining giant can have its value decimated by an index which is one hundred percent controlled by shorting forces.
in short the uk market profits from decimating the value of every company that lists here, whereas in other markets the opposite is true.
anglo american has been violated and abused by the uk market. it has fallen 26 percent (so far) on the announcement of a 4 percent production cut, implemented because of excess stock.
in september 23 -its market capital was £37 billion
now its £22 billion
it still has all the same mines, all the same assets.
it is still about the 5th biggest mining firm in
Midland boy
My advice
Be patient
Wait until 1500
It’s obvious the market makers are working hand in glove with Beremberg and are desperately trying to drive the share price down to comply with their target. Market makers are pricing AA to profit mass hedge fund shorts even though there have been 2 buys for each sell today.
Anything is possible in UK markets
Even a fraction of the true value of one of the world’s biggest mining giants.
This kind of valuation could only happen in a stock mired in the UK index
“jpm also upgrades rio tinto to "overweight" for its aluminium exposure, but notes the metal accounts for only about 2% of its 2024 earnings
* rio tinto should also benefit from rising iron ore demand next year as chinese demand grows, jpm adds
* the broker remains "overweight" on anglo american , citing a "more credible value unlock potential" in its
met coal business
* while jpm expects copper demand from energy transition to grow strongly by 2030, it stays "underweight" on anto***asta “
Watch out for share-price to dive after 4pm
This is when all the many hedge funds that are shorting AA collude to smash the shareprice with loads of small algorithmic sell orders.
Also another new target for the forces that keep uk valuations on their knees - Hargreaves Landsdown - been trashed today - low of 690p
But expect that to be breached in the final minutes of trade after a Bear Raid attack
What once needed to be a singular event to smash a share down 10/20 percent in a day can be done on a rumour these days.
How much longer are the FCA going to allow rogue traders to mint money at the UK’s expense?
Predictions for closing
AA to close at a new low
HL to close below 690
Berenberg slashes target price on Anglo American”
compare their 1500 price targets to other beancounters' PTs issued yesterday
* Anglo American : Barclays cuts target price to 2575p from 2865p
* Anglo American : Jefferies cuts target price to 2,500p from 2,600p
* Anglo American : RBC cuts target price to 2,200p from 2,400p
42 percent lower than Barclays
40 percent lower than Jeffries
32 percent lower than RBC
In what world does one of the world’s biggest miners trade for less than £20 billion?
And yet this is what the ftse100 has become
A graveyard for giant blue chip companies
An index of wealth destruction, in which Britains most valuable companies get systematically trashed under any pretext.
UK markets are broken - to work shareprices have to go UP as well as down. no matter how good you are at stock picking the odds are impossibly stacked against you in an index that never goes up over the long term. The index is for shorting only.
And you can bet your life the market makers will use Berembergs 1500 price target over all others.
Tbere can have 12 different price targets on UK shares but market makers will always comply with the lowest one.
Shorting UK shares must be the easiest money in the history of shorting.
Even though they trade at huge discounts to their peers and are at all time historic low valuations.
JG
“Totally agree , we have become the laughing stock of Global markets.”
That’s why BHP pulled out of the Permabear and changed their main listing to AU.
If they had stayed in the toxic UK index, BHP would be trading at £5/6 a share less now.
Unfortunately AA has nowhere to run, it’s condemned to float in the UK cesspit - at least until it gets taken over. And as every company that’s listed in the UK knows, the price is wealth destruction on an unprecedented scale. ARM would be £30 if they had listed on the UK market, rather than $65. ARM knew that when they made the decision to list in the US, despite groveling politicians begging them to list on the Permabear. As does every other British company that chooses to list in the US.
Having a toxic market, incapable of valuing stocks is grievously wounding this country’s economy.
JG
Metaphorically speaking - the beancounters, market makers and hedge funds are doing the same to UK markets as Israel is doing in Gaza.
Despite the fact uk shares are trading at all time historical lows, the beancounters are issuing evermore lower price targets. How does that work?
The two/three fold increase in blue chip profits over the past two decades has not been factored into shareprices.
The Stone Age troglodytes responsible for valuing uk shares have smashed
Barclays
Diageo
Bats
Unilever
And several others recently.
No UK listed blue chip is safe from decimation
And the scary thing is no matter how low valuations fall the troglodytes continue to smash them down.
Other countries’ stock markets don’t trash their most valuable companies. That’s why they trade on valuations 3/4 times higher than those mired in the ftse100 cesspit.
AA’s production cuts were more because of lower demand and excessive stockpiles, than transport infrastructure.
But as usual the obtuse UK market didn’t interpret it like that - in a normal market the shares would have still fallen of course, because it was a profit warning of sorts (predicting lower revenue on decreased demand)
Is it any wonder why no decent company wants to invest in the UK, when market makers and hedge funds constantly trash UK listed companies (especially on trading updates) AAL would have fallen 5/7 percent in other markets. The 19 percent drop was extreme, even by the Permabear standards.
It makes excellent business sense to trim the workforce and production when demand wanes. They addressed know issues and that is positive.
The current dividend (40 percent of profits) is 2.5
covered. It’s affordable. Even if profits fall I cannot see it being cut. The ritual slaughter of UK shares is extremely costly to the nation. No company is going allow itself to have its valuation decimated by Stone Age trogodytes, by listing here. London’s reputation is sullied beyond redemption. It does not know how to value equities fairly.
London shares a have risen by a fraction of a percent in 2023
That compares with 20 percent in the S&P
And 10 percent in Eurostox.
Familiar story in 2022
Be the same story in 2024
That’s why every bear in the world comes to hunt in the UK. My advice to wannabe traders is to buy anywhere except the UK. Your chances of making money will increase a hundred fold.
I don’t have access to the article because I don’t subscribe to the Times, but there’s an article in today’s edition tipping AA as a takeover or merger target.
With metals playing a huge role in green energy transition AA must look like a screaming buy at current valuations. If it were to relist on a decent stock market its value would soar. The Permabear is toxic, it destroys the value of everything that lists on it.
* Anglo American : Barclays cuts target price to 2575p from 2865p
* Anglo American : Jefferies cuts target price to 2,500p from 2,600p
* Anglo American : RBC cuts target price to 2,200p from 2,400p
Only moderate price target reductions, nothing in line with the shocking shareprice plunge.
AA’s update also reflects the challenges facing the sector; weak metal prices are not only specific to AA
AA’s biggest issue is its UK listing.
Hedge funds don’t trade fundamentals they trade numbers. So AA will be relentlessly targeted by concerted and collusive hedge fund shorting activity.
The Permabear 100 is where every bear on earth comes to hunt. Hence the paltry valuations; which I believe are at an all time historic low.
Negative news is priced in 5/6 times on UK markets. Positive news is dismissed. It’s become a global ritual to smash UK company valuations on trading updates, irrespective of the results.
Bad
“For long term holders, the opportunity to add at these prices is fantastic”
That’s what conventional logic would suggest.
But apart from a handful of uk stocks, all others are in terminal decline. You could have made a compelling argument to buy uk shares for being obscenely cheap when they were much higher. For stock markets to function properly shareprices have to go up as well as down. The Permabear is toxic, it destroys the value of almost every company that lists on it.
“Johnson Matthey : JP Morgan cuts target price to 1460p from 2000p”
A case in point. JPM issued this recommendation today and the Market Makers have marked it down to 1460.
It seems the beancounters at JPM are valuing British stocks. And shorting them at the same time. Big ugly bullying American corporations waxing rich on insider trading.
It was as though that last market beating update never happened. British market makers are incapable of valuing shares fairly. They ignore all good news and price all negative news in five or six times over.
And the beancounters at JPM are issuing ever lower price targets on UK listed companies DESPITE THEM TRADING AT ALL TIME HISTORIC LOWS.
These aren’t distressed companies, these are companies in rude financial health.
JPM are issuing price target. Nodding donkey UK market makers are complying with those valuations.
No other global market works like that. UK markets are broken.
The only solution I can see to fix a market, no decent company in the world would list on, is to go through the current market makers with a wrecking ball and install new ones. UK markets are a joke. They are like casinos where the house chooses its own cards. And it’s common knowledge JPM are advising their clients to short the very companies their beancounters are issuing never ending price target reductions on. As usual, no protection from the government. No other country in the world would tolerate this abuse. Uk markets must rebuild their shattered reputation before they can be regarded as viable indexes again.
Clued
“nothing would surprise me about the dishonesty of humans. What a sad world we live in.”
Regrettably, that’s very true.
As Immanuel Kant said
“Out of the twisted timber of humanity, nothing straight can ever be made”
One only has to look at markets for evidence of that. Especially UK stock markets.
Slow
“Absolutely hilarious“
Really?
Look no further than boiler room operation Shadowfall who were constantly spreading pathological lies about Darktrace, while shorting them in concert with other boiler room outfits.
It took a much publicized independent audit by Darktrace to quash those false rumours. If Shadowfall had pulled that stunt in the USA they would have been put out of business with a huge regulatory fine.
The problem is, how can you prove an opinion is wrong? Boiler room outfit can say what they like about companies, even if it is outright lies. It goes on all the time.
And there’s a hierarchy too. JPM and other big banks have affiliations with hedge funds, and those funds have affiliations with boiler room operations.
Which all adds up to market manipulation.
“You have to ask yourself why JP Morgan cuts their rating right on the day the phoenix rises, it just so obvious they are shorting this“
JPM have indeed advised their clients to short Phoenix. There is regulation in place to prevent this type of blatant manipulation in every other global market. It’s only in the UK, where hedge funds and brokers can short a stock and determine its price direction simultaneously, by disseminating fake news and fabricated lies.
The FCA should act on this, but they’re toothless fairies. The problem with being listed on a cesspit index with no protection, against insider trading and rogue traders, is that shareholders are left wide open to abuse from every boiler room operation on the planet.
Hjkl
You are so right. Beancounters follow the shareprice, not the other way round. However market makers do accommodate them when they downgrade a share though by marking it down aggressively, while completely ignoring upgrades.
In my view, every UK market market needs removing and new ones brought in. They are incapable of doing what they’re paid to do - which is to value equities without bias or external influence.
Case in point today with Phoenix - it absolutely SMASHED market estimates, yet it is only up 5 percent; and they will probably mark it back down to 460 tomorrow. Whereas if Phoenix had come in a fraction short, the shareprice would have been hammered 12/15 percent.
No other global stock market works that way. Insane valuations set by nodding donkeys, listed in a cesspit index.
There are some great companies listed in the UK. Just a pity those responsible for valuing them are unspeakable *#^~_•**
Adem
“The mentality of the "trader" I find often ensures that they very often miss the "best " / optimal opportunities”
No the mentality of the trader is to buy and sell somewhere in-between trading ranges on a short term basis. It’s about money - now. Technical trading, not trading fundamentals. Active all the time, in the quest to exploit price action.
There are those of us that trade, and those that invest. You need to distinguish between the two.
Mick
Closed at £28.50