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The FTSE is UP first thing this morning. Welcome to a parallel universe.


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On 05/01/2021 at 09:47, TheCountOfNowhere said:

NS&I IRs are 0.

Savings rates are 0.

People are selling their BTLs.

Where do you think the money is going to go ?

 

Yep.

Doing a review of my cash, I really don’t like shares but with some real ftse100 companies paying 5% I am starting to look seriously at just putting money into a few companies

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1 hour ago, Pop321 said:

Yep.

Doing a review of my cash, I really don’t like shares but with some real ftse100 companies paying 5% I am starting to look seriously at just putting money into a few companies

Diversification is usually the most sensible policy as no one knows what'll happen next. But if you do then it's off to Vegas for you to put it all on red.

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20 minutes ago, micawber said:

Diversification is usually the most sensible policy as no one knows what'll happen next. But if you do then it's off to Vegas for you to put it all on red.

Hey, you read my earlier post. Viva Las Vegas. 👍🏻👍🏻

The problem I have with shares is the lack of assets underneath. When house builders share plummeted 12 years ago I couldn’t get my head around why a company that had built and owned so many houses, and had generated massive profits for decades could be almost worthless (and that applied to more than just house builders of course).  Then I realised the blindingly obvious....like a well paid individual with no assets and a bad housekeeping habit....the money had been earned but never saved or invested. Company money used to pay shareholders, employees, director bonuses and loans. Past profits were gone...and indeed often little or no tangible assets with the share price based on ‘potential future earnings’. However as with Kodak, BHS and currently airlines etc....that’s an understandable but wobbly path to follow. 

I like assets whilst appreciating those assets can fall in value. 

However, with the best saving rates below 1% then it’s off to the roulette table I think. 

My SIPP is invested in a diverse range...it dipped, now it’s back up...but it’s boring. 

BAT, BP, Shell, M&S even wobbly Lloyds etc....just wait for a dip and buy some. I will let you know what I buy because an absolutely sure way of making money in shares is to do the exact opposite of whatever I do 👍🏻😆

* infact I have got it. If I could invest in the directors of these FTSE 100 companies ie own a % share of their personal wealth and not the wealth of the company vehicle they abuse and leave behind to make their wealth....then I would invest all my cash. 👍🏻
 

Edited by Pop321
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43 minutes ago, Pop321 said:

Hey, you read my earlier post. Viva Las Vegas. 👍🏻👍🏻

The problem I have with shares is the lack of assets underneath. When house builders share plummeted 12 years ago I couldn’t get my head around why a company that had built and owned so many houses, and had generated massive profits for decades could be almost worthless (and that applied to more than just house builders of course).  Then I realised the blindingly obvious....like a well paid individual with no assets and a bad housekeeping habit....the money had been earned but never saved or invested. Company money used to pay shareholders, employees, director bonuses and loans. Past profits were gone...and indeed often little or no tangible assets with the share price based on ‘potential future earnings’. However as with Kodak, BHS and currently airlines etc....that’s an understandable but wobbly path to follow. 

I like assets whilst appreciating those assets can fall in value. 

However, with the best saving rates below 1% then it’s off to the roulette table I think. 

My SIPP is invested in a diverse range...it dipped, now it’s back up...but it’s boring. 

BAT, BP, Shell, M&S even wobbly Lloyds etc....just wait for a dip and buy some. I will let you know what I buy because an absolutely sure way of making money in shares is to do the exact opposite of whatever I do 👍🏻😆

* infact I have got it. If I could invest in the directors of these FTSE 100 companies ie own a % share of their personal wealth and not the wealth of the company vehicle they abuse and leave behind to make their wealth....then I would invest all my cash. 👍🏻
 

Haha. Busted. Sorry but I couldn't refuse.

Just a couple of points. Pedantically (?), Premium Bonds pay a regular 1.1% if you have a large enough holding. So my 'cash' is pretty much matching inflation.

I only hold about 14 UK companies including Shell, BP, BAT and also BHP and RIO. I love the companies close to the core commodities as they'll benefit from demand-pull and cost-push inflation. I'm less keen on the consumer stocks like M&S and finance like the Banks.

Even though Shell is up 50% over the year it's still trading on a stupidly low historical P/E (around 8 or 9). All the woke investors have been selling, apparently not realising that they'll be needing Oil and Gas for at least the next 20 years. How are those wind turbines built, transported, run and maintained without Oil?

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3 hours ago, Pop321 said:

Yep.

Doing a review of my cash, I really don’t like shares but with some real ftse100 companies paying 5% I am starting to look seriously at just putting money into a few companies

A lot of chatter about a share bubble, despite the FTSE being below the previous peak :lol: 

This is a self fulling prophecy now.

I've started to cash in now, 10 years free rent is too good to lose.

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22 minutes ago, micawber said:

Just a couple of points. Pedantically (?), Premium Bonds pay a regular 1.1% if you have a large enough holding. So my 'cash' is pretty much matching inflation.

 

https://www.nsandi.com/interest-rates

 

Premium Bonds prize fund rate

From December 2020 prize draw

Odds per £1 unit Annual prize fund rate Tax information
34,500 to 1 1.00% variable All prizes are tax-free

 

 

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49 minutes ago, TheCountOfNowhere said:

A lot of chatter about a share bubble, despite the FTSE being below the previous peak :lol: 

This is a self fulling prophecy now.

I've started to cash in now, 10 years free rent is too good to lose.

I've been banging on for about a year or so now that the UK stockmarket and US stockmarket are no longer as in line as they were before - the US stockmarket may well be in a bubble; the UK one seems to me to have gone from undervalued to more like fair value.
 

1 hour ago, micawber said:

Even though Shell is up 50% over the year it's still trading on a stupidly low historical P/E (around 8 or 9). 

Exactly - oil shares seem to plummet in recessions, and then bounce back fiercely as the economy recovers.  If you're holding shares for 5-10 years they still look very good.  I had some and bought more of both back in March at the height of the panic, because as you noted - oil's importance is going nowhere in the next 5-10 years.

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On 05/01/2021 at 14:25, wighty said:

The FTSE's are about the only major indices not to have gained in the past year.

 

UK shares are very cheap compared to the rest of the world. The yields are impressively high.

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18 minutes ago, Peter Hun said:

UK shares are very cheap compared to the rest of the world. The yields are impressively high.

It's free money at the moment but when the commentators are shouting bubble, despite the index being down yoy, people should be wary.  Look at America last night, we could have woken up to a collapsed index so IMHO best to take the profits sooner rather than later.

The Biden bounce is coming soon after which I suspect we are going to see the Big Kahuna

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2 hours ago, Pop321 said:

Hey, you read my earlier post. Viva Las Vegas. 👍🏻👍🏻

The problem I have with shares is the lack of assets underneath. When house builders share plummeted 12 years ago I couldn’t get my head around why a company that had built and owned so many houses, and had generated massive profits for decades could be almost worthless (and that applied to more than just house builders of course).  Then I realised the blindingly obvious....like a well paid individual with no assets and a bad housekeeping habit....the money had been earned but never saved or invested. Company money used to pay shareholders, employees, director bonuses and loans. Past profits were gone...and indeed often little or no tangible assets with the share price based on ‘potential future earnings’. However as with Kodak, BHS and currently airlines etc....that’s an understandable but wobbly path to follow. 

I like assets whilst appreciating those assets can fall in value. 

However, with the best saving rates below 1% then it’s off to the roulette table I think. 

My SIPP is invested in a diverse range...it dipped, now it’s back up...but it’s boring. 

BAT, BP, Shell, M&S even wobbly Lloyds etc....just wait for a dip and buy some. I will let you know what I buy because an absolutely sure way of making money in shares is to do the exact opposite of whatever I do 👍🏻😆

* infact I have got it. If I could invest in the directors of these FTSE 100 companies ie own a % share of their personal wealth and not the wealth of the company vehicle they abuse and leave behind to make their wealth....then I would invest all my cash. 👍🏻
 

AT&T For instance 7% yield - it depends what you call an asset a book of recurring revenue is as much an asset as bricks and mortar hence why Tech businesses and insurance companies have value

Edited by GregBowman
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1 hour ago, micawber said:

Superb! They snuck that in on me. Still above inflation I think.

Spend less......thousands already are, they are saving money because are not spending it......money not getting out into the economy because they are not borrowing it.......they don't want it.;)

 

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46 minutes ago, winkie said:

Spend less......thousands already are, they are saving money because are not spending it......money not getting out into the economy because they are not borrowing it.......they don't want it.;)

 

Contribute less all round and the price must reduce.

Deliberately inflate the price of something and that's an instant no sale for me.  counterproductivity economy

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3 hours ago, GregBowman said:

AT&T For instance 7% yield - it depends what you call an asset a book of recurring revenue is as much an asset as bricks and mortar hence why Tech businesses and insurance companies have value

I completely understand that. I don’t disagree it works in most cases.

I am just more sceptical than most (perhaps) over the theory. 

I guess a lower level translation is I would be wary of buying a business of paying for “good faith”.

My feelings are not ‘right’ just my feelings and what makes me wary of companies.

As I say I would happily invest in Philip Green rather than BHS....and that’s Philip Green 😆😆

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the uk stock markets are about the best value in the world right now. they have been battered down like no other. from brexit from covid from high debt burdens etc. 

 

well due a large rise. its comical when you hear all the left shouting about all the fat cat shareholders sucking the people dry with public utilities etc and corbin said he would re nationalise them all.  they should take a wee look at the 5 year share prices of everything that was a national company. and they will see that shareholders have been subsidising the tax payer. every single utility an ex nationalised industry has lost money for the shareholders for years. ofgen and ofcom etc means the public are getting all the benifits of nationalisation with the negatives ie strikes and government losses. the burden has been put on the shareholders they should actually be thanking them not trying to re nationalise them. 

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12 minutes ago, Pop321 said:

I completely understand that. I don’t disagree it works in most cases.

I am just more sceptical than most (perhaps) over the theory. 

I guess a lower level translation is I would be wary of buying a business of paying for “good faith”.

My feelings are not ‘right’ just my feelings and what makes me wary of companies.

As I say I would happily invest in Philip Green rather than BHS....and that’s Philip Green 😆😆

Totally get it  👍 that's why I mentioned signed recurring revenue - its what I know as you know property having had a tech support business. Its very sticky - recurring revenue and gives a view of cash and profits years out due to high barriers to entry and customer inertia

I am by no means a stock market gambler probably much the same as you but some of the really large companies I look to hold really as a cash type deposit account they pay many times what you could get on deposit and their shares don't fluctuate that much 

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3 minutes ago, jimmy2x3 said:

the uk stock markets are about the best value in the world right now. they have been battered down like no other. from brexit from covid from high debt burdens etc. 

 

well due a large rise. its comical when you hear all the left shouting about all the fat cat shareholders sucking the people dry with public utilities etc and corbin said he would re nationalise them all.  they should take a wee look at the 5 year share prices of everything that was a national company. and they will see that shareholders have been subsidising the tax payer. every single utility an ex nationalised industry has lost money for the shareholders for years. ofgen and ofcom etc means the public are getting all the benifits of nationalisation with the negatives ie strikes and government losses. the burden has been put on the shareholders they should actually be thanking them not trying to re nationalise them. 

Good point re energy utilities are prices are absurdly low compared to the Nordic countries . Same with supermarkets try getting the range of world food available in a small town Tesco's and at a sensible price in a Walmart in middle America.

They charge $6 for a c*** loaf they pass off as European style and their range of cheese. How big do you want that block of industrial by product ?  is effectively the range 

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3 hours ago, GregBowman said:

I am by no means a stock market gambler probably much the same as you but some of the really large companies I look to hold really as a cash type deposit account they pay many times what you could get on deposit and their shares don't fluctuate that much 

I'm an advocate for equity investment but I would never suggest that large company values don't fluctuate much. They have been wild over the last year. And you never know when a Deepwater Horizon incident or Enron scandal will take out any one stock so diverisifcation is key both within an asset class and across asset classes. And rebalancing once a year or after % shift.

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8 hours ago, micawber said:

Superb! They snuck that in on me. Still above inflation I think.

I think this includes the big prizes...take these out and it reduces realistic return.

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3 minutes ago, Wayward said:

I think this includes the big prizes...take these out and it reduces realistic return.

It does. But if you have the maximum holding (*2 for a couple) then you'll get close. I just view the difference as the cost of my entry into the monthly prize draw for the top prizes.

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I'm pretty much max'd out on premium bonds, and was receiving around 2 £25 prizes per month on average. But now it's about 1 x £25 every other month. I've 'won' £175 so far this tax year. I hope to top £200 by April. Mustn't grumble. 

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1 minute ago, micawber said:

It does. But if you have the maximum holding (*2 for a couple) then you'll get close. I just view the difference as the cost of my entry into the monthly prize draw for the top prizes.

Agreed...I also have max holding.  I know past performance is nothing to go by but I have done okay over the years on the winnings and rare no win a month.

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2 minutes ago, Orb said:

I'm pretty much max'd out on premium bonds, and was receiving around 2 £25 prizes per month on average. But now it's about 1 x £25 every other month. I've 'won' £175 so far this tax year. I hope to top £200 by April. Mustn't grumble. 

It's a statistical situation but with £50K you often have £0 one month and £100 the next. As soon as you double it with a couple you see a smoothing where you usually get £100 between the both of you.

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On 05/01/2021 at 09:50, Peter Hun said:

Yes, share prices tend to look to the year ahead. The vaccine rollout is far more relevant than the latest lockdown. If the shares I buy today will be worth 50% more in 6 months, plus a 8% dividend is incoming,  then why not?

Overtime (from today not retrospectively)  stocks will outperform bitcoin going forward by a wide margin and are much lower risk.

 

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