II Editor
21 Aug 2017
NEW ARTICLE: Tactical Asset Allocator: Emerging market exposure on the up "The @GB:UKX:FTSE index recovered lost ground over July, moving back up to its mid-June levels, but fell again recently as the US-North Korean stand-off intensified and investors fled to safe havens such as gold and the yen.No one yet believes a ..."[link]
gravy
16 Aug 2017
Re: Sold Each to her/his own view but I see value here, and relative safety so I'm staying in.
IAmShareCrazy
10 Aug 2017
Re: Sold Not looking good for the holders here. Now back down below the 200 day moving average. Imperial Brands also continuing down, although has been trending down for a while.
IAmShareCrazy
05 Aug 2017
Re: Sold What are smoking? Ha ha!
gravy
04 Aug 2017
Re: Sold Looking miles better now. Sentiment changes so fast.
tradingup
03 Aug 2017
Re: RELAX just keep seat belts fastened for next few weeks.
charlus
03 Aug 2017
RELAX Back to where is was in February.This is one of my long term hold shares. Good and bad news comes and goes. I don't believe recent news is all that bad.Holding for income rather than Capital Gain. I think we will all be OK, if you are a buy and hold punter.GLA,Cheers,Chozza
Bill1703
01 Aug 2017
Re: Overdone "The fall in commodity & oil prices,now partially reversed caused a major short term fall in profits & asset write downs against profits.In addition we have continued historic provisions against UK bank profits for PPI etc plus other "one offs" like BP Gulf provisions. If we include these factors the PE of these companies will be very high... "Yes, TX2, a good summary of why the historic P/E looks so anomalously (and misleadingly) high. But your attempt at the true underlying P/E - as below - is still way too high IMHO. "If we look at FTSE100 with normalised earnings for the mining,oil & banking sectors its PE is probably in the low to mid twenties.Quite high to be frank but not quite as high as it first seems."See the link below to an article on this very issue - from late December last year, but still perfectly valid I would say:[link] key concluding paragraph (as below) is the crucial point here... "The index also looks more attractive on a projected p/e basis, which is calculated using forecast earnings for the next 12 months. This value stands at 14, according to JP Morgan Asset Management."Given the market is up (by some 4%) since then, and on the (reasonable?) assumption that not much has changed on forecast earnings overall, this would imply a prospective UK market P/E around 15x, perhaps (if anything) a bit lower. Which squares with my impression from other sources, as previously outlined.
TX2
01 Aug 2017
Re: Overdone The rating of the FTSE100 is heavily influenced by the performance of international mining,oil & UK bank shares as these constitute a major proportion.The fall in commodity & oil prices,now partially reversed caused a major short term fall in profits & asset write downs against profits.In addition we have continued historic provisions against UK bank profits for PPI etc plus other "one offs" like BP Gulf provisions.If we include these factors the PE of these companies will be very high as their profits are much reduced however going forward their profits are now much higher and in the main their actual PE much lower.If we look at FTSE100 with normalised earnings for the mining,oil & banking sectors its PE is probably in the low to mid twenties.Quite high to be frank but not quite as high as it first seems.
Bill1703
01 Aug 2017
Re: FAO Bill - Off topic "...Stokes is turning into a genuine test batsman rather than the 6 or out man. And Bairstow only let 2 balls go straight through his legs. (Why can't England pick a proper wicketkeeper?)"HB - on the latter, my impression is cricket in general - and top coaches in particular - are very much data-driven these days. Duncan Fletcher was the first, for England... but they now abound, at both international level and below.And as I understand it, they have run the numbers and concluded that the incremental benefit of having, say, a Jack Russell or a Bob Taylor - taking the odd marginal catch that others wouldn't, saving a few more byes here and there - is NOT worth what you would be giving up in likely runs from a genuine test-class batsman/wicketkeeper (in that order). Even if the aesthetic equation for the purists would go the other way ...It also seems clear that it is (much?) easier to turn a good batsman into an "adequate" test-class keeper than vice versa... Bairstow is a markedly better keeper now than he was when first doing the job - though still no Jack Russell of course - and Alec Stewart was turned (whether by himself or others, or a bit of both) into a pretty decent keeper over a period, from more or less a standing start. Like you, it doesn't always sit particularly easily with me - but I am sure they have "done the math" and if wasn't so, they would go the other way! And of course, over time, it is a self-fulfilling prophecy... if you need to be a good batsman to keep wicket at the top levels, the game will simply not produce top-quality keepers, if that is all they can do. They'll be weeded out and disappear a long way down the line...On Stokes... I think he has quietly been a "genuine test" batsman for a while, it just gets overshadowed by the periodic more explosive stuff. And if occasionally he errs in his attacking mindset, he is hardly alone in this, either in the England team or across world cricket - such is the way the game has gone, for better or worse (and opinion is divided here!)I think the bigger issues for Stokes is whether this quality will survive the 20/20 workload which the "market" will undoubtedly force upon him... and whether his appetite from test cricket at all will likewise be sustained. God knows, within a year or two he will hardly need the central-contract money...
Hardboy
01 Aug 2017
FAO Bill - Off topic "And a very worthwhile use of your time IMHO, Hardboy... a trip to the Oval that is"It certainly was - despite cloudy skies most of the day and some light drizzle there was no play lost & they played through till 7. That must make the channel 5 editors' job tricky!. A good day - Stokes is turning into a genuine test batsman rather than the 6 or out man. And Bairstow only let 2 balls go straight through his legs. (Why can't England pick a proper wicketkeeper?) Sadly Broad was in his "let's be economical" mood so the batsmen hardly had to play a shot at him. And I followed it with a trip to the National Film Theatre to watch Wag The Dog - a very much forgotten film about fake news during a US Presidential Election Campaign. As if that ever happens!
Bill1703
01 Aug 2017
Re: Overdone "I was at the Oval on Friday... so I bought an IC - which I don't do that often... I was amazed the PE for the main UK index was so high, but assumed something as basic as this the IC would get right. Even if it is not what we expect it to be, presumably all index PEs would be calculated in the same way..."And a very worthwhile use of your time IMHO, Hardboy... a trip to the Oval that is, NOT buying the IC rag, which has long "earned" a reputation for dodgy information, and this one, as they say, takes the biscuit. Surely someone there with some editorial clout would know this is not a representative figure of any use, either absolute or relative to other markets??Yes, if the true, underlying P/E was over 30x, UK equities would be insanely expensive vs history and a massive SELL... but it isn't, and they aren't! It is quite hard to come up with reliable figures, without forking out for a Bloomberg subscription (never a necessary expense IMHO)... many of the usual third-party financial websites will churn out their own figures, but again, these are notoriously unreliable due to the random, inexpert way their data is compiled, riddled as it is with obvious mistakes - even the more reputable ones.That said... a quick perusal this morning throws up a recurring figure around 16.5x for the UK market, which I assume is also an "actual" (ie. historic, most recent reported) figure... this could still be a tad high IMO, but much nearer the real picture. And of course, stocks tend to move most around the "forward" (ie. current year prospective) data, and on this basis, I believe the UK P/E is (broadly) around 15x, though I don't have a 'real time' source for this. FWIW the only source I actually rely on is my own "database" (ie, spreadsheet), with my Watch List of (now) around 120 stocks, and bottom-up data compiled by the only source I trust (ie. me). This is not quite a true "market proxy" of course, but over the years it HAS tended to produce aggregate valuation data fairly adjacent to the overall market... this currently shows an average P/E of 14x (current FY forward), divi yield of 4.1%, EV/EBITDA 10x, FCF yield of a tad under 5%. If it helps at all, I would back this profile against the vast majority of all external sources - and particularly the IC - any day of the year!"People are saying US Equities are very high, but the DJ is around 60% of the FTSE. That surprised me."Yes, it'd surprise me too, if it were true... but it ain't! The IC data for the US still looks a tad high, but at least much closer to the real picture. (Not that the DJ is a useful index anyway, with only 30 stocks and being a price-weighted (rather than cap-weighted) index... when it comes to the US market, the S&P 500 is really where it's at.) Bottom line is, the US is trading at a notable premium to the UK, some 20% or so (broadly), rather than the IC's 60% discount (disgraceful!), and is certainly in "expensive" (though not, as yet, "bubble"
territory...Of course, the fact that the UK is "cheaper" than the US (or less expensive, depending on your POV) won't save it if an overheated US market leads a correction... it will doubtless take everywhere else down with it. But it does provide a useful guide to where you should be focusing when the dust settles in the aftermath... all IMHO, of course, as always!
Hardboy
01 Aug 2017
Re: Overdone Bill,"According to the IC FTSE 100 PE is 31.6: But I will pick you up on this point. I have seen others quote a 30+ PE multiple for the market, but it's effectively nonsense "I was at the Oval on Friday, and always make sure I have something to read in case of long rain delays, so I bought an IC - which I don't do that often - They have a summary page of all the major indexes. I was amazed the PE for the main UK index was so high, but assumed something as basic as this the IC would get right. Even if it is not what we expect it to be, presumably all index PEs would be calculated in the same way, and the FTSE100 was high be comparison. Only the AIM (which I think is pretty meaningless - I only look at AIM companies on an individual basis) & NASDAQ were higher. For info these are some of the key PE figures. FTSE100 - 31.6FTSE250 - 22.8Eurofirst 300 - 23.8CAC - 19.06Dax - 19.79DJ - 18.72SAP - 21.58NASDAQ - 34.24Hang Seng - 14.48Nikkei - 19.1Brazil - 17.7Australia - 20.43Russia - 7.0India - 23.25China - 17.45People are saying US Equities are very high, but the DJ is around 60% of the FTSE. That surprised me. Totally agree with your strategy attitude. But for me the tobacco sector is one of a closely watching brief. There could be a great opportunity coming up. Interestingly I started my post graduate career within the BAT family. I was working in the Paper Industry (when there was one in the UK) at a subsidiary; and I recall one of the first real business management lessons I learnt was when someone pointed out how great the tobacco industry was, because it was so heavily taxed. I would have thought a product being heavily taxed would be bad. Not a bit of it. What it means is the end price the punter pays is mainly affected by tax levels, and you can vary your own selling price considerably without affecting the end price significantly.
gamesinvestor
01 Aug 2017
SFO - Africa [link] like it's all happening at BATS all of a sudden.Games
IAmShareCrazy
31 Jul 2017
Re: Overdone Well Neil Woodford has sold because of valuation. Of course he doesn't always get it right, but if you're income is bigger from share dealing, then show me your money. Sentiment has changed and millions have been sold off. If you have held for years it would be greedy to hold and first timers foolish to buy.
