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Shorting Contrywide (again :) )


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ANswer to both questions. I said 'most' as I am unaware of all companies policies. I would assume they all do it but didn't want to be flamed!

As for buying xdiv, yes it can be a good policy as the market has a price memory to some extent and will quickly forget the xdiv adjustment. If a share always hangs around 600p but drops 20 on xdiv, it is likely to return to it's old range sooner or later, ceteris paribus.

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Guest muttley

A quote from today at t1ps.com

"I do not understand what is going on at Countrywide (CWD) at all. Why raise £29 million of new money then promptly fritter away a good slug on paying a 9p dividend. Given that earnings this year could be anything (plausibly less than 9p) I just don't see the point. Any institution who signed up to that funding is run by an idiot. That's official."

Recommended as a short.

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  • 2 weeks later...

Yes, very nice to see them continue to drop.

Did anyone have a short on topps tiles? .. they lost about 15% yesterday after releasing bad results.

Obviously the demand for laminate flooring is not what it was!

Anyone have any thoughts on the effect of a housing downturn on the home improvement chains such as kingfisher?

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Just a general comment about shorting Countrywide or any other share, and forgive me if I'm 'teaching granny to suck eggs' for a lot of you here:

The 'Efficient Market Hypothesis' states that in an efficient market (with perfect information, free entry & exit etc.) the current price of a share will already reflect all existing knowledge about the share. So if city traders think CWD is likely to suffer in the future as a result of a stagnant or falling property market, this will already be reflected in the price. This means that unless you have insider knowledge that they don't, you're likely to be taken for a mug by the professionals.

Be warned! ;)

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Just a general comment about shorting Countrywide or any other share, and forgive me if I'm 'teaching granny to suck eggs' for a lot of you here:

The 'Efficient Market Hypothesis' states that in an efficient market (with perfect information, free entry & exit etc.) the current price of a share will already reflect all existing knowledge about the share.  So if city traders think CWD is likely to suffer in the future as a result of a stagnant or falling property market, this will already be reflected in the price.  This means that unless you have insider knowledge that they don't, you're likely to be taken for a mug by the professionals.

Be warned! ;)

I could use some egg sucking lessons as I'll be the first to admit as my new spreadbetting hobby can not yet be described as "profitable" ! .. but it certainly is a good learning experience..

Yes, I guess its a gamble on whether city traders believe we are about to have a big HPC or not.. I think its still a minority view. I cant image the share prices wouldnt drop heavily if/when it happens.. but then I'm probably wrong :)

I certainly dont have any insider knowledge, just a belief that the housing market is going to go horribly wrong very soon.

and its a bit of fun...

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  • 1 month later...
Just a general comment about shorting Countrywide or any other share, and forgive me if I'm 'teaching granny to suck eggs' for a lot of you here:

The 'Efficient Market Hypothesis' states that in an efficient market (with perfect information, free entry & exit etc.) the current price of a share will already reflect all existing knowledge about the share.  So if city traders think CWD is likely to suffer in the future as a result of a stagnant or falling property market, this will already be reflected in the price.  This means that unless you have insider knowledge that they don't, you're likely to be taken for a mug by the professionals.

Be warned! ;)

Looks like either all those city traders were wrong, or the efficient market hypothesis was wrong. Either way, I'm its great to see the HPC finally coming into effect.

Edited by Flick
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Efficient market.

Hmmmmmmm. Ever heard of fear, greed and rampant speculation? I'm a follower of the 'blessed stocks' method. Some stocks are blessed by the market and will react well to bad news and better to good. Others are cursed and will react flatly to good news and plummet on bad. It's a matter of identifying which are which and building a balanced portfoilo either way. Quality will out in the end, despite the cities best intentions. For instance, I was short MONI for the last few months because it's a crud stock. My risk management strategy denied me the big profit in this case but it shows how badly cursed stocks react to bad news. Imagine if that had been SHEL or BP. Down 2% maybe? Get the idea?

The efficient market is a theory and should stay as such. It has no place in the real world.

Edited by Big_Bad_Bear
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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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