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LLOYDS is going to FLY

lse:lloy

#1938

Hi @J_Westlock, Well I would accept your point that things may indeed get harder from here for everybody if (when ?) we brexit, but especially the poorest in society. But I understood Eadwigs point to be that this HAD ALREADY HAPPENED and all I was saying was that so far I personally have not felt much financial damage since the referendum, and our accounts confirm that.

So I accept that GBP is worth a whole lot less wrt to the USD & EUR since the referendum and that has fed thru to inflation (but not as dramatically) as inflation is still below 3%. And maybe if I was buying a lot of expensive stuff from abroad or going on lots of foreign holidays I would have noticed it, but as we dont do any of those things we havent been too badly affected - yet.

Just to be clear I am really not saying that I am in favour of ANY of this, just that personally that the impact on us has been pretty limited so far…

ATB

Pref


#1939

Pref

I sold my LLOY short term holdings at 59p expecting EU to say no deal agreement this week.

However my gut feeling is that UK and Ireland have come to a verbal agreement to make the N. Irish border work and subsequently tweak rules based on ongoing amendments.

In return, Ireland will not accept an extension request.

Regards

White_rose


#1940

@PrefInvestor1, as Frida closed, I suspected a safety sell off by cautious traders. No bad news came out to my knowledge and I see a positive Monday for the GBP.

Next weekend as you point out is full of risk/reward. Just getting there will be interesting.

If the predictions are correct and Boris has negotiated removal in some form of the back stop, then my guess is MP’s accept it.
The only thing MP’s voted for was the Brady amendment. This means that if mid-week the EU have agreed things are looking good, then you’ll be better than even money odds to presume parliament pass it on Saturday.

Doesn’t mean parliament will pass it as other parties do not want to make Boris look like the deal maker. Tricky path to risk your investments on isn’t it.


#1941

GBP opened down 0.3% tonight against USD & EUR.


#1942

Hi @White_Rose, I think that taking your profits from Friday was probably a very wise move. TBH I have no idea what the FTSE or LLOY are going to do tomorrow, Friday was SUCH a big move that one might think that a pullback was likely, but if sentiment remains strong on a brexit deal it might continue. I don’t see much new news coming out, not tomorrow anyway. We may get some clues in terms of what happens at the EU summit later in the week.

Good luck whatever you decide to do. I’m just going to continue too hold what I have - which doesn’t include any LLOY or any housebuilders.

ATB

Pref


#1943

Hi @swamp_rat, Yes I am watching the GBP/USD rate ATM actually, down 0.25% as I write this. But early days at the moment and things may change. As I said to a White_Rose no idea what the FTSE and LLOY are going to do tomorrow really, could easily go either way.

Good luck with whatever you decide to do…

ATB

Pref


#1944

What is the play on that Pref?


#1945

Hi Again @swamp_rat, Well I’m just looking at it as a potential indicator of tomorrow’s FTSE and GBP moves prior to the futures opening at 23:00. Up a bit since 21:30 but still negative so far.

I’m not planning to start currency trading, I’ve tried that in the distant no plans to ever do it again…

ATB

Pref


#1946

Yes, but I don’t believe that most canny investors will be too troubled by Brexit in terms of their investments.

The real hit will be when the Government has to start making cuts and seek more income in the years following the UK departing the EU… when taxes increase… or when they decrease the Pension LTA to £200k… or the ISA annual allowance to £2k… or remove the Divi allowance entirely etc. All these are measures that won’t hurt the 95%+ too much… nor will they understand it.
Or when you start needing medical care in later years… and find that the service is shite… even worse than today.

We’ve heard again just recently that aerospace, automotive, chemicals, food and drink and pharmaceutical sectors are warning that Brexit could pose “serious risk to manufacturing competitiveness”.
But that is when they are based in the UK… many of these organisations can equally move elsewhere… and will if the Deal isn’t what they need.
Most of these larger companies will survive Brexit or no Brexit… but they might not be paying taxes in the UK anymore… and they might not be employing people in the UK anymore.
That will be the real cost… the decline in the services that we all use and the increase in stealth taxes.


#1947

Hi Again All, Well that didn’t take long, the EU has said BJs deal is not good enough as it stands after the weekend negotiations. So while a deal isn’t totally dead ATM I personally I am now expecting at least a partial reversal of Fridays moves and what did well will likely do badly and vice versa. GBP down 0.34% already but IG still has the FTSE up a bit - but then we do have the partial China trade deal as a positive I guess. Far East up slightly on that and US Futures up slightly as well.

I have a couple of holdings that were up a lot on Friday, I’m considering selling them at the open (or perhaps applying stop losses ?) with a view to pocketing the gains and buying back in when they’ve dropped back. Potentially risky but might be worth it.

ATB

Pref


#1948

I wasn’t. I’m actually trying to get some recognition that devaluation of the pound has indeed been caused by Brexit, as has the increase inflation we have seen since the referendum. I think the case is proved beyond doubt after the market moves related to a possible deal last week.

It is a breakthrough to the truth, imo, to get that admitted to by those who don’t wish to acknowledge ‘Project Fear’ has indeed played out in the first phase, which to my mind means it is very likely to also be right in the second phase. I.e. post Brexit.

Individual’s net worth is interesting but rather irrelevant to these macro economic questions. My net worth has more than doubled since the referendum if measured in GB pounds, however, without checking any stats, I’m prepared to bet that the rise in the FTSE 100, if you could strip out the foreign earnings effect, is well down on other major indices.

Indeed, with an 8% extra for UK-centric stocks as mentioned in an article above, we will still be well down on what our net worth would have been, when measured against a basket of foreign currencies.

@PrefInvestor1 is sticking to his GBP valuations, which might well be 100% relevant to his own situation, but I’m doubtful you can just strip out GBP versus other currencies in a globally connected trading world.

If this current deal goes through, we’ll see a rise in UK-centric stocks (although NOT to valuations above pre-referendum levels in most cases) and we will see a drop in many FTSE 100 foreign earners as a response to a rise in the value of GBP…

Then it is a question of uncertainty surrounding the content of the deal and the start of trade negotiations. Investors will have to make some adjustments to the way they think about the UK stocks we are most used to. Even if there is a deal with the 8% predicted rise, I think it will then fall back as we settle in for the long-haul. That might happen very quickly because there are bound to be some immediate company exits from the UK and also some smaller companies will go under because of unforeseen complications (lets hope they don’t have outstanding loans with LLOY)

Longer term, say over a year, we may start to see how earnings are affected. However, if the deal means we have a 2 year grace period, as I believe is supposed to be part of a deal where nothing much changes initially, it could take 3 years for that to start showing up.

It is going to take a lot of nimble footwork to avoid getting burnt during the process. No one on any side is predicting that the UK will be better off, especially in the short-medium term.

I think we’ll be worse off in the longer term also, not least because we have a lot of losses to make up from the pre-Brexit process. Personally, I might be about to get a big boost because Poland’s Law and Justice party appear to have just won a majority which should weaken the zloty - in which a lot of my planned spending is priced in. When they became the bigger party in the last election, the zloty lost about 15%.

I find discussing this (Brexit) with people is worthwhile and helps me to plan my investment strategy. However, far too often when I point out what I think are the facts, I get shouted down by people saying I’m supporting ‘Project Fear’ when actually i’m just trying to make, or avoid losing, money in the game we’re all playing - but it is difficult to get people to see what playing field we are actually on, which means it is almost impossible to get a proper discussion going. In 25 years of investing, I’ve never known such a mad situation.


#1949

Very wise. The fastest way for an amateur to lose money, it is generally said.

Unfortunately, as you know, I’ve been forced into it in a small way. I would much rather that wasn’t the case, but there it is. One can’t deny realities which are very stark when standing in a foreign exchange with a bunch of GB pounds in your hand and facing the actual numbers.

By the way, one thing I didn’t mention previously when listing some of my woes in this area - mortgages in Poland tend to have to be in Euros, so even if the zloty slips on the general election result I mentioned earlier (result yet to be confirmed officially), that will help me, but the GBP/Euro is as important to me these days as the GBP/USD.

Still, no one said life would be easy.


#1950

I think there is a very good chance Johnson has bought a veto somewhere in the EU. I haven’t figured out how he is paying for it yet, but you may well be right.


#1951

I think cashing in on Friday’s rise, at least with part of any holding, is probably wise. The fact the EU is prepared to negotiate to Wednesday may give a little more chance of doing so.

I’m selling about 2/5ths of my inherited PSN holding (still at a loss from its valuation in Feb 2018) IF the price hasn’t dropped a lot. Unfortunately I have to advise the executors and they can’t make a 5 minute phone call until this afternoon (apparently) so we might well miss out on the chance.

PSN made up about 50% of the inherited portfolio in value and UK housebuilders 67% by value. I’ve divested some already, but the dangerously undiversified nature of what we have inherited has been something of a nightmare given the recent UK-centric stock volatility.


#1952

Emergency budget early November. Just another degree of post-Brexit uncertainty added. Expect it to be the most leaked budget in history.


#1953

Hi Again All, Well I decided to just sit and watch the market for the first 30 minutes to see what happened, didnt sell or set any stop losses. Most everything that was up dropped a fair bit at the open and within a couple of minutes I would have hit where I had planned to set my stop losses. But there is nothing more annoying Ive found than selling, only to find that the share price then recovers after an initial dip, and stock prices do appear to be stabilising at 2-3% down (maybe !).

So I may have missed the opportunity now, should have sold Friday afternoon really to get the maximum gain.

20/20 hindsight, Doh !

ATB

Pref


#1954

You can’t have a rise like that without seeing profit taking. I too realised a few minutes ago that the time to sell was actually Friday afternoon. After all, you can always buy back after the drop, and these moves are large enough to do that. E.g. LLOY down 5% at one point. A sell on Friday and a rebuy nets you a year’s dividend yield in a day.


#1955

Just for interest sake I updated my old High Yield portfolio valuation (mostly FTSE 100 single stocks, lots of housebuilders and LLOY amongst other things) on Friday and it was UP three times as much as current portfolio.

Today it is DOWN four times as much…but still significantly ahead obviously.

ATB

Pref


#1956

Another illustration of how Brexit uncertainty has impacted negatively on our relative wealth in the UK

image


#1957

Hi Eadwig,

Indeed & credit to anyone who achieved that. That also assumes a sell at least near Friday’s highs & a buy-back near today’s lows or later. No easy task even for the pros if dealing with larger amounts of shares.

LLOY my biggest stake in shares by some margin. FWIW, I too held on, including with some LLOY shares bought at 52+, thus resisting a VG profit. I saw by midday that LLOY’s volume was going to be very high & so it turned out. A huge over 569M versus daily average of some 232M. That suggests some significant institutional investment fund buying. IMO, some of the big buyers may well also ride out any fluctuations in SP.

I also think it’s helpful in this game having a solid, premeditated idea of what one’s personal aims are. For eg, am I a LLOY trader, as I trade UKX almost daily? Or am I a longer-term holder with certain stocks for much higher targets? I’d decided long before that with LLOY at least I’d be a holder. No regrets as there’s profit to be made elsewhere. - Regards.