I keep Mentioning this firm !
RIAC
Last edited by ~dadam02~; 30th March 2020 at 11:21.
It looks as if Rolls Royce are now a real worry - a great British company that could be in trouble
share price at one third of what it was 5 years ago,
although I'm not particularly speaking here of the company as an investment, but they probably employ over 50,000 people
when will the vultures start to circle?
an interesting comment which I was never aware of
"Airlines have “power by the hour” contracts with Rolls, paying for the number of flight hours on Rolls engines for their wide-body planes. Revenues have collapsed as demand for air travel plunges and borders close"
Last edited by BillN; 30th March 2020 at 12:30.
Interesting business model, I am sure the airlines were happy that they found a fool that was prepared to take that risk from them.
Only a few weeks ago I was lectured in this thread that RR didn't have much exposure to commercial airlines. Well, they are a whole pound cheaper today than on that day.
Their supply chain, (in the UK, I have only had experience of the RR UK), will suffer as RR traditionally have always taken at least 3 months credit, so obviously that will get extended.
It is extremely worrying employment-wise - unemployment in the UK will be at horrendous levels in the coming months/years - has anyone seen any estimates?
RR have played a very risky business model, credit is for banks which have much better access to capital markets than an industrial company.
Agree on the horrendous outlook for jobs, it's what politics are trying to address through the huge stimulus package but we got no idea how it will play out.
Someone who lies about the little things will lie about the big things too.
and nor should they, support businesses without a sustainable business model, I mean.
The Government will need to decide what industries to save and which should be exposed to the market. Whoever they decide to help, the Government should be setting extremely stringent conditions. Unlike in the US where the terms seem very short term and can be manipulated. Fingers crossed.
RR now down almost 15% today
I think oil is good to buy for long term but i am not experienced trader so any advice is welcome from trade pundits here
Why the hunch about oil ?
Worldwide demand down over 25%, massive over production, and talk of the oil producers having to pay to get rid of their crude as nowhere left to store it.
Good luck !
Sent from my iPhone using TZ-UK mobile app
"Oil prices have tumbled to their lowest level in 18 years amid fears that producers could quickly run out of storage space for crude rendered surplus by falling demand in the coronavirus crisis. Brent crude, the global benchmark price, fell by 9.5 per cent to $22.57 a barrel last night, its lowest level since early 2002 and down two thirds since the start of this year". - The Times
we are now into economic Armageddon - so many companies are going to go under
The Dow's gone from 18,600 last week to 22,300 yesterday! This when the US is starting to experience Covid19 properly itself. I just don't understand... Any thoughts on why?
How safe is your ISA?
as I understand it:
Cash ISA - £85k is protected under the terms of the Financial Services Compensation Scheme
Stocks and Shares ISA is treated differently from a cash ISA. For a stocks and shares ISA, the first £50,000 is protected, (under the terms of the Financial Services Compensation Scheme), should the provider go under
Please correct me if I am wrong!
Sounds about right Bill, after all IF you've decided to go the stocks/shares route you've weighed up the greater risks involved offset against greater potential for rewards and are comfortable with less protection than is afforded by cash, certainly one way of viewing it/ the reality of the situation.
from fscs.org
'The Financial Services Compensation Scheme (FSCS) will protect money that is put into a LISA. For cash amounts this limit will be up to £85,000, while the protection limit for investments held in a LISA will be £50,000; these are the same limits for cash, and stocks and shares ISAs respectively.Apr 1, 2017'
Applies to cash in a current account, IF the bank goes down only your first 85 k is protected, beyond that not...though in reality good luck getting your money back should you end up in the same boat as thousands, ten/hundreds of thousands of others at the same time.
Learning from '08 it became key/prudent to spread even 'risk free' cash around.
Money in all likelihood you'll have paid tax on in the process of earning , then tax on the interest quite possibly, then tax when you spend it...Governments can't/won't even safeguard the basics when you get right down to it, but they'll always take their pound of flesh from you. Sorry minor rant.
Last edited by Passenger; 31st March 2020 at 09:06.
Ive gone in fairly heavy with Barclays shares. Safe bet they will bounce back to around 1.50/180, currently around the 90p mark.
Optimism that the stimulus will work.
Personally I think it’s overdone.
I spoke to an American friend last night, a smart guy who is well travelled. He said most people are relatively unconcerned and view it on par with the flu. He lives in California and said his view was in line with the general view. The level of fear was much lower than the European view.
Maybe I should change my name to The Prophet of Doom
"Banks in Britain could face losses of more than US$15 billion on loans that backed leveraged buyouts and other highly geared transactions, research suggests. These loans risk going sour as an economic slump affects the cash flow of companies with heavy debts. Insurers, hedge funds and small investors in corporate bond funds are also at risk." - The Times
People will soon realise how devastating this will be long term. I am in the software industry and virtually every prospect we are talking to has now stalled all current projects with no end date to review that situation. Every single car dealer out there is going to have stock to sell and nobody will be buying it. The majority of the high street will go into receivership as people have no spare cash to buy things and people have across the board bought into online. The airlines will all struggle to recover and businesses lock down travel and encourage people to use video conferencing in the future. People will not be taking holidays abroad this summer. The list goes on and on and on. If anyone thinks there is a fast turnaround from this they are truly delusional, the long term repercussions of this across the worlds economy will take years to recover from. People just done want to believe it, but this is a reset of mammoth proportions and we are nowhere near the worst of it yet. The markets will crumble in the next six months, you mark my words on it.
Both, he was incredibly casual about the whole situation; there where a few of us on a conference call and we were all speechless. Like I say this is a smart guy and I was expecting he would see things like us. It was a real eye opener as to how people in different places are viewing this.
The cases in the USA are still climbing fast and when this really starts to hit the USA there has to be some realisation... the USA set the tone for the other markets around the worlds and right now they think they have this licked ... I’m less sure.
For those that are bearish, you can buy a 3x short FTSE 100 ETF: 3UKS.L
This is where I think we're at - the markets, in general have priced in Q1. So if you're day trading, we're probably at a bottoms of sorts. HOWEVER, Q1 is now over and as a lot of you have talked about, it is likely to get a lot worse. We have not hit the recession for instance that will come. And I think deflation is still the big risk.
The protection amount only refers to cash. All securities and funds are held on behalf of you, even if your bank or insurance provider goes under they are still yours. There have been problems with that principle when Lehman went under, but that was related to fine print in prime brokerage agreements and didn't apply to consumers.
Lying awake at about 2am this morning with my mind doing lots of unpaid overtime, I suddenly thought about my car. I haven’t driven for over 3 weeks so need to start it up. That led me to think about the miles I can do on my lease deal and how I’d be under when the deal ends, which led me to thinking about paying out £900 pm for two lease deals, which led me to think that I wouldn’t be doing that again in the future, which led me to think about all the pcp and ch hire financing out there that the finance industry have been predicting for a long time will be the next financial disaster, which will now come home to roost immediately because of the current climate, which in turn will have a devastating effect on the car industry.
Which led me to think that in almost every scenario you think about there will be consequences- house prices, travel industry, shops, financial, leisure, commodities, pubs, hotels etc etc.
So I don’t think this is overdone, I think it’s reality setting in very quickly. How bad the damage will be is the unknown. The quicker lockdown ends the less it will be, the longer the worse it will be.
The real sad thing is the loss of life which is truly awful. The positive is that we will bounce back and hopefully we’ll have different priorities going forward. I’ve seen some amazing acts of bravery from those on the front line to people just looking after their neighbours.
I share your same doubts, we skype the wifes family in the US a couple of times a week, my Fil has been in commercial/industrial real estate for about the last 60 year, because of their age to our great relief they chose to hunker down in their Florida home and not return to Philly after over wintering, there's a bit of an epicentre emerging close to their home...Although his stock tips mostly suck, his view, based on over a half century of business experience engaged with the 'real' nuts and bolts of the economy is that the bankruptcies from this are going to be bad, real bad.
I caught a piece in the Economist, iirc, the gist basically this first couple of trillion for corporate America will most likely be just the beginning.
Also, over the weekend Abbott Labs got FDA approval for a COVID-19 test that gives results in 5 minutes, vs 2 hours for the Novacyt one. Too late I'd think to buy into NCYT
If you are interested, it's actually simple maths:
https://www.morningstar.com/articles...ill-portfolios
https://etfdb.com/leveraged-etfs/lev...ing-with-etfs/
Friends and workmates in the US tell
me that the impact varies from state to state, based on the attitude of the Governor in the main (as the Federal govt has been largely AWOL). Obviously there are geographic and social differences as well.
Two Floridian friends tell me that their Governor is a close ally of Trump and has taken a similarly dismissive approach up until now. Combined with the elderly retirement population and the virus ‘refugees’ from the more northern states, they are anticipating a very bad situation there. Certainly no sense of it “only being ‘flu”.
In Hong Kong our office has gone back to ‘double teaming’, having cautiously returned to work a few weeks ago.
We all hope for good news (a little in the UK in the last 24 hours) but the expert from the WHO I listened to a couple of weeks ago said that the economic disruption would last all year and I don’t see any reason to disbelieve him.