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Portfolio Positioning For Brexit Vote

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#81

I’m going to continue to hold LLOY. Selling and buying back is potentially more risky as it is widely expected the deal will be voted down. Thankfully, I moved a lot of my investments into funds investing in overseas companies prior to the Brexit vote in 2016 and have benefited from the fall in the pound as well as good performance.


#82

Hi All,

Well Friday was a tough day for the FTSE 100, only 14 stocks were positive and many more were down more than 2%. Could be that market has started to price in the likely voting down of the brexit deal ?. Likely it had started even earlier than that in reality I guess. Makes me think I had perhaps ought to sell the rest of my holdings sooner rather than later so as to maximise the buyback potential…….

Certainly housebuilders have taken a pounding (see chart below) and I confess it looks to me a bit as though these stocks might be heading back towards their values immediately following the referendum vote ?. Pure guesswork obviously, but somehow the chart gives me that impression.

If that was also true for lloyds (ie that it might return to its referendum low) then the result could be a share price of ~47.x by the look of it.

Please be aware that I have no supporting rationale for this theory, it is PURE conjecture and my be absolute nonsense. DYOR etc.

I note that the FTSE actually gained 0.7% after the close on Friday night according to IG. Perhaps due to speculation on G20 trade which seems like it boosted US markets ?. Hoping for a FTSE bounce on Monday when I will be ready to sell my remaining holdings.

ATB

Pref


#83

There will be a bounce IMO.

How long it lasts another matter.

You will need to be nimble.

GL

soi


#84

Hi @soi, Well being nimble at my age is not so easy, but I will do my best. Assuming there are some decent gains I think I may set stoplosses rather than sell, just in case the rally goes on for a bit - much as I did with Lloyds.

ATB

Pref


#85

Well I have taken the loss, I sold up 100% LLOY this morning circa 56.29 to 56.4.

This is a loss of many thousands but if I cannot back my convictions now, I never will. Yes the loss really hurts, especially not selling at 62p and than holding out for 58.5 when there was 58.3 on the table but that’s life.
I considered the trade all weekend and the US China ceasefire provided the opportunity with this morning rise.

Next thing is to compose a repurchase plan. There is an odd comfort in despite taking the loss, not walking into Mays vote when I truly am against the loss of sovereignty.


#86

@Swamp_Cat When #BrexitRef2 happens next Summer and “No Brexit” wins hands down then you may look back at these prices and wonder what you were doing.


#87

Well if I had to bet, I would bet on a total Brexit sell out, a brino.
But maybe what is happening in France is worrying them to go full on brino, so they might give the brexiteers a little so they can claim a small victory.
It’s a bit late to start positioning now, share allocation should have been balanced out with a few US or China stocks long ago.
I’m sure it will all wash over.


#88

Hi @Swamp_Cat,

Yes it does something to you selling at a big loss doesnt it. But hopefully you will have the opportunity to buy back in lower in the coming days. You can choose when you go back in. If indeed you want to still be invested in LLOY. I have no plans to re-invest my LLOY sale in LLOY, it will be going into ETFs or Investment Trusts of some description.

This bounce had come at the ideal time for me and I am busy today setting stop losses and nudging them up as the stocks rise. Sold 2 more things today as they fell back, only 5 more to go and Im done and ready for next week. No idea how that will how it will work out of course, but I am 100% committed to doing it now.

ATB

Pref


#89

Either way I think may needs to go, she has proven to be a very week pm in every way.


#90

Hi SC,

Sorry to read that & it’s not for me or others to judge anyone’s market approach or their risk-appetite. As stated elsewhere, I’ve achieved the success I have with real shares by 100% sticking to a plan. That comes easily to me.

L/T chart for LLOY shows we’re near support levels. LLOY may go even lower due to adverse macro-factors & sentiment, but I agree with others there is little question that LLOY will be much higher again later. Technically & fundamentally. So no stress in holding these. Shares & SBs. Don’t give them a second thought. I ignore most BB noise as I do brokers . No-one can outguess the market’s next moves.

I hope those who have sold get their money back, but taking hits near support levels & chasing markets is rarely profitable longer-term. If it doesn’t now go much lower to justify re-buying, one has lost huge sums quite unnecessarily. If however it goes lower & you buy back, it can of course continue dropping more & then you’re faced with exactly the same dilemma. That leads to yet more self-questioning & personal doubt at a time when one needs to be firm about reasons why you bought in the first place.

If those reasons have changed significantly regarding the stock’s fundamentals, why even buy back the same stock, unless trading? Rhetorical question.

All the best with your call working out well for you. - Regards & GL.


#91

Yes selling at support levels hasn’t gone unnoticed, and you may all prove me wrong.

My previous post hasn’t been ruled out yet. However it is not set in stone as i haven’t yet worked out what will follow voting down Mays deal.

If parliament backs May, I will be cursing!


#92

Hi @jackdawsson,

Well I see this as a risk management operation. I have got a significant sum in various flavours of UK equities. If that lot takes a 2%+ hit then that’s a 4 digit paper loss, I ought to get it back sometime later but personally I never like to rely on that. Selling and buying back, commission, spread plus stamp duty will cost me ~£500 already done the plan on my spreadsheet, just don’t know the exact prices. That figure is based on selling and buying back at the current prices.

So summarising possible scenarios:-

  1. Vote fails, FTSE drops 2% plus (and £ drops too), I make a decent gain buying back in.
  2. Vote fails/passes, FTSE does nothing much. Costs me £500.
  3. If I do nothing and the vote fails and the FTSE drops 2%+ I make a 4 digit loss. The bigger the drop the worse the loss obviously.
  4. If the vote passes and the FTSE rises another 1-2% then I lose a 4 digit gain BUT it’s a gain I never had and it ISNT a loss.

Which of those possibilities do you think is more likely ?. Personally I don’t give 4 much of a chance, but maybe things will change before the vote.

I have no plans to be out of the market for long. I will take stock and maybe even buyback in the same day as the vote if i can do so at lower levels. I won’t be worried about it going lower as I will have saved myself the “on the day” loss which I suspect will be the big one.

That’s my view of it anyway. Each to their own approach.

ATB

Pref


#93

I suspect it is more likely to be scenario (1)… but only in the short term if your attention is only over a matter of days. Brexit isn’t the only news out there impacting on markets… and given it’s a racing certainty for the Deal to be voted down then it’s largely already priced in. The volatility is/will be with respect to an emerging consensus on the way forward for the UK following the down vote.


#94

Hi Pref,

Thanks for further clarifying your strategy & approach. As with SC, I wish you only well in seeing the very best outcome for your longer-term aims. I appreciate that you have to do what seems right for your specific goals, as for anyone else.

As far as I’m aware from your posts, your buys tend to be in much smaller tranches as part of a fairly broad portfolio. A prudent approach. So any crystallised losses are also much smaller.

My optimism for possibility number 4 has certainly receded recently based on reading many more views from MPs on all sides. We’re seeing an unholy alliance against Chequers, be it for very different agendas. So like any one else invested in markets, I share some of your concerns.

However, I’ve never discounted the possibility that a significant number of more moderate MPs who disagree with Chequers may well view the alternative as so much worse that they abstain altogether next Tuesday. This seems the PM’s best hope of allowing her to win by a small margin. That outcome ought to lead to a temporary rally, until the next bigger hurdles come into focus. For this complex business will continue to see more volatility across markets for some while to come.

If she doesn’t win, we can assume more chaos is inevitable. Though it’s likely that she’ll fly to the Brussels meeting that takes place the next day after the vote to seek a tweaking of Chequers, then try to to win a 2nd vote. I also agree with JW. Presumably the market is pricing in some of that worst-case outcome.

If she loses another vote a number of scenarios can follow, including the PM resigning, being toppled, or even calling another early GE due to further calls of no confidence. All of which will further undermine confidence across UK markets. That probably opens up an increasing likelihood for a 2nd Peoples Vote after Article 50 is extended.

All in all, it’s such an unpredictable scenario in the short-term, with any number of variables possible, that I try to focus only on what I can absolutely 100% control. That is, whether I buy, hold or sell. As my cash position is limited for buying more shares & I need to hold ample margin with leverage to cover possible further falls in value, significant fresh buying isn’t possible. So I 100% hold, come what may regardless of anything, from both fundamental & much longer-term technical reasons.

Though this may sound over-confident, I have no significant doubts that all my holds will be much higher again once market sentiment improves. - Regards. Edit: typo.


#95

If nothing else Brexit must have made people in the know billions upon billions, you imagine if you knew what steps were being taken at what time frame and the likely outcomes.
Brexit must have made folks lots of money, enough to pay any yearly EU fee or EU exit for years to come.
And at least the public knows now that democracy was a sharade all along.


#96

You are right.

But it’s not about “People in the know”
It’s about dispassionately dealing with facts, keeping meticulous records and executing a process. I’m up over 40% this year, alone by shorting Sterling against the Euro, every time it hit 1.148. It’s not clever, it’s not rocket science, but it requires work.

People talk about the Euro collapsing, Italian banking crisis, Italian/German/French political crisis. Guess what, the same simple trade works.

In trading you find one simple thing that works and repeat the process until it doesn’t work.

First thing to do is stop watching media and opinions. It’s all low grade entertainment


#97

“Great minds talk about ideas
Average minds talk about events
Poor minds talk about people”

Eleanor Roosevelt


#98

I’ll have taken a new position before next summer JW:)


#99

I’m up too but not by 40%… largely via GBPJPY and GBPUSD… been a good 12 months or so though.

I’d be very careful over the next few weeks though… I’m hearing a lot of people expecting GBP down and stocks down following the forthcoming vote… but that will be tempered by the increasing potential for a #BrexitRef2 and a later “No Brexit” vote … and which would bring some strong reversals.


#100

I mainly have long term investments and have made plenty of money doing so, I am just saying that Brexit has brought lots of opportunities for buying certain company shares rather cheaply.
But I would imagine if you knew the moves and time frame etc before hand then you could make more gains with less risk.
Either way Brexit has brought plenty of opportunities and many folks have made money out of it, including me you and plenty of others on here. Brexit is the gift that keeps on giving.