Reply With QuoteI owe a thank you to someone on here. I don’t know much about shares etc but someone on here recommended THCA ages ago. Just checked my HL account and my £1000 is now £1250! Thank you.
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Could be a good time to buy prime property.
Low rates, high inflation and the never ending shortage of supply of prime housing stock should mean it'll continue do ok over the next 10 years.
If you want to do it inside your SIPP or ISA then there are a few good UK based REITs.
I owe a thank you to someone on here. I don’t know much about shares etc but someone on here recommended THCA ages ago. Just checked my HL account and my £1000 is now £1250! Thank you.
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Which REITs are you dabbling with?Originally Posted by mr noble
I'm not. I am currently buying another property.
However I have traded LXI in the past, and another which I can't find the ticker for (can't remember what it was called)
They can be a good alternative to Buy To Let as they give a reasonably comparable yield (3-4%) and you can hold it within a SIPP or ISA which hugely improves the longer term profits over owning a real house. Then there is the capital gains tax issue. If you own a real property as a BTL and it doubles in value, you're left with a huge CGT tax bill when you sell it. If the cash is in your ISA instead, and you've built up a big pot over many years, there is no CGT to pay as you can just remove your annual allowance each year, rather than having to take it all in one go when you sell a property. (This is still an advantage even if the REIT is not held inside a UK tax wrapper.)
Obviously there are also advantages to owning the real thing.
https://www.hl.co.uk/shares/shares-s...lc-ord-gbp0.01
I rely on turmoil to make money.
The more volatile the better.
Given all the positives you outline why bother buying another property?
The only reason for buying physical property is the ability to leverage via a mortgage.
Most REITs I’ve researched are focused on commercial property of various types. None seem to hold domestic property.
Last edited by Montello; 8th April 2022 at 21:45.
I’ve sent you a PM Rick.
I decided that while I could still bag a couple of good interest rates on BTL and a holiday let mortgage, and while inflation is likely to be high for a few years, it ought to be a good time to take on a massive debt to buy prime UK property.
I expect the inflation rate (house price appreciation) to be 2 to 3 times what the mortgage rate is, so in effect, the borrowing is free.
But going on my recent run of luck with investing, I’ll be having the houses repossessed and will be bankrupt by next Christmas.
I’ve sent you a PM Rick.
I decided that while I could still bag a couple of good interest rates on BTL and a holiday let mortgage, and while inflation is likely to be high for a few years, it ought to be a good time to take on a massive debt to buy prime UK property.
I expect the inflation rate (house price appreciation) to be 2 to 3 times what the mortgage rate is, so in effect, the borrowing is free.
But going on my recent run of luck with investing, I’ll be having the houses repossessed and will be bankrupt by next Christmas.
If you can get access to cheap money the leveraging opportunity is obviously attractive.
Do you need a specific product for holiday let’s?
You're certainly supposed to, yes.
BTL mortgage companies are apparently cracking down on their clients who are found to be Air B&Bing the house. I'm not entirely sure why it's a problem as long as the monthly repayments are being met, but it does seem that having the wrong type of mortgage for what you're using the property for is a big no-no.
I imagine if you had a BTL mortgage and wanted to turn it into a holiday let, your lender might let you do so, but best to let them know.
The proper holiday let mortgages are currently roughly 1% more expensive than the average BTL loan.
I think BTL loans are currently about 0.5% to 1% more than a regular primary residence mortgage.
The risk is greater for holiday letting as there is no assured shorthand tenancy with semi-guaranteed rental income.
Last edited by mr noble; 9th April 2022 at 13:49.
With inflation running at 7% any products known that come close to this figure?
Chase 1.5%
Vanguard S & P 500 EFT ?
Friend of mine uses this - think he weighed up Fidelity vs Vanguard. He is a 'newbie' on it, think he chose it due to its ease of use online etc. Fund amount is around 10k to start, so not massive/not small.
Newb here as well, after rotting on an expression of interest list for too many years I have a decent sum earning FA
Need easy access in case the unicorns arrive.
Pretty big news I think
I just signed papers to engage a wealth management firm to manage my 'wealth.'
I've been sitting with the large majority of my assets out of the market in cash, just waiting for some clarity in the markets. I'm now convinced that the professionals at this firm can do far better than me in making informed decision on a daily basis, under the umbrella of my 'conservative' style.
I've enjoyed playing hunches with small amounts, but at 74 I can't risk big plays.
Feeling good.
Any sneaky punts on Tesla?
New short from today at $1,082
Someone who lies about the little things will lie about the big things too.
Thought so, good luck!
Not a bad first day for a new position, ehh?
Someone who lies about the little things will lie about the big things too.
Perfectly timed
Markets seem worried about covid, rampant inflation, world war 3 and global recession, big babies
Just checked the Argos Blockchain boards and all seems to be going well, bitcoin just in front of a huge upswing, new ETF in Australia, huge whales looking to buy and unicorns on their way to save it all. One pound per share only a question of time and then £5, followed by £500. Get in before it's too late.
Someone who lies about the little things will lie about the big things too.
I'm remortgaging!
The JP Morgan Cryptocurrency Basket, scheduled to wind up this weekend, ain't looking so hot either. Currently sitting a touch shy of -30% by my reckoning. And that's before deducting the initial purchasing costs (~1.6%), 'Basket Charge' (1.5%) and selling costs (tbd).
My positions did very well for a week or two, but are now under water.
Tempted to keep them, but Gold better hold this $1,890/1,900 range or it could become ugly.
Someone who lies about the little things will lie about the big things too.
Nice!
Best day so far this year.
Short Tesla, bitcoin and Carvana, long PHRRF. Some smaller losers, but the big tickets all in the right direction. That was badly needed.
Someone who lies about the little things will lie about the big things too.
I have no individual stocks but my pension is heavy on an emerging markets fund, which has tanked over the last year (down 15%). I don't know whether it will rebound well over the next 5-10 years or whether I should switch it out to a different/safer index fund.
Second biggest weighting is small cap, and that isn't doing so well either!
You must love Musk
I do.
To watch his slow motion train wreck is giving me a lot of satisfaction. He has painted himself into a corner that he won't get out anymore, unless he walks from the Twitter deal. He could obviously do that (and the selloff in TWTR tells you something about what the market think), but I don't think he has the ability to admit that it was a shite idea to start with. So he will go through with it, and so far it doesn't seem like he will find co-investors - which means he will have to sell quite a bit of Tezzla to make the cash equity requirement for the TWTR financing, which will in turn impede his collateral for the loans. The moment TSLA hits $600, it will enter the accelerator when Morgan Stanley will start selling Tezzler stock. Delicious. Then, you have a number of other triggers that could accelerate the selloff: the FSD investigations, the $420 buyout litigation with the SEC and not least the class action suit about the Solar City takeover. Any of these has the potential to be the deadly trigger for the final selloff. My target for TSLA in 12 months is below $200.
I sold more today at $914.
Last edited by Raffe; 27th April 2022 at 22:27. Reason: SCTY lawsuit just ruled in his favour (pending appeal).
Someone who lies about the little things will lie about the big things too.
I think you suggested the same PT 12 months ago.
In fact I think your PT was something like $40.
Yes, and I still expect it. Dunno about the $40.I think you suggested the same PT 12 months ago.
In fact I think your PT was something like $40.
Remind what your price targets for Argo was and what it is?
Someone who lies about the little things will lie about the big things too.
When you say yo sold more, are you talking about options to buy $914 in the future - or have i misunderstood.
(I'm assuming you don't physically own Tesla stock)
I borrowed stock and sold it to the market, knowing that I have to buy it back at some time in the future to deliver it back to the lender. My expectation is that the share price is lower in the future and that it will cost me less to buy the stock back versus what I received for it when I sold.
https://en.wikipedia.org/wiki/Short_(finance)
I also sometimes use options to express bullish or bearish views, for the moment I am owner of puts to sell Carvana stock at a fixed price because I expect it to go lower.
https://en.wikipedia.org/wiki/Option...nd_application
Someone who lies about the little things will lie about the big things too.
Oooopsie.
Someone who lies about the little things will lie about the big things too.
Never a boring day with Tezzler.
Someone who lies about the little things will lie about the big things too.
Could be an interesting development to watch the effects of - https://finance.yahoo.com/news/bitco...000246487.html
I've stopped talking about Argo on here, but today's FY results are worth a mention. They are transformational for the company.
https://assets.website-files.com/619...esentation.pdf
They announced a 4X of the hast rate by year end. They will be firing up the first miners at the new Helios facility in the next week or two, with the first of the 20,000 new Bitmain S19J miners already having been delivered. The full 20,000 miners are already 2/3rds paid for.
They also assured shareholders there won't be any more dilution this year, which was a major concern that was holding the SP back.
I don't expect to win my £3 bet with Raffe by the end of June, but I do expect to see £3 SP by the end of the year.
Amazing that they've built and paid for this entire enormous facility in the last 12 months.
https://www.youtube.com/watch?v=qhp6GC7IMzk
Also, if Argo meet their hash rate predictions by year end and if Mara continue to stagnate with theirs, Argo could have a higher h/r than Mara, despite currently having an MCap that's one sixth of theirs.
Argo has always under promised and over delivered.
Mara have continually massively over-egged their expected future hash. The chart on this page has looked the same all year, just with the last two blue bars moving along each month.
https://ir.marathondh.com/news-event...production-and
Has Argo ever managed to reach their own revenue or EPS targets?
Another bet for year's end?
Someone who lies about the little things will lie about the big things too.
They certainly did in the results just released.
Let’s see how it turns out on 30th June.
I am old enough to remember their catastrophic H1 2021 financial performance and how they missed all of their revenue and earnings per share targets. I just tried to quickly look for the outlook that they communicated at the time, but somehow none of those presentations is available on their websites anymore.
I can't be fussed to waste more time on this but they certainly have never reached their own financial targets.
The area that they have consistently overperformed is the issuance of new stock and the sale of stock by company insiders. At least in this area they are world-leading.
Best of luck, you will need it.
Someone who lies about the little things will lie about the big things too.
Bought some stonks earlier.
MSTR at $329
SQ at $95
RIOT at $10.40
All seem incredibly cheap.
Let’s see how things pan out after Jay Powell’s speech.
Generational buying opportunities, day after day.
Let's see what happens after the Fed releases the new Fiat staking rate in 20 minutes.
Someone who lies about the little things will lie about the big things too.
How's this prediction coming along btw?
About as well as your crypto and stock price predictions.
Banter aside, I am still not sure if this bout of inflation is going to be sticky. It started off by a demand explosion combined with a temporary resource shortage - but has meantime been complicated by so many seemingly unrelated issues that it has gone much further than I ever expected. On the other hand, I am still leaning to discount all the conspiracy theories and give the Fed the benefit of the doubt that they are in a better position to judge this than all armchair experts on Twitter or TZ. The Fed have certainly underestimated it, but still don't seem too worried about it.
We shall see, but I am prepared to accept I was wrong.
Someone who lies about the little things will lie about the big things too.
Fed statement:
Although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.
The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain. The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in conjunction with this statement.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
https://www.federalreserve.gov/newse...y20220504a.htm
Someone who lies about the little things will lie about the big things too.
Fed bounce
No matter the relief of market that the Fed has signalled a 3% top of the nascent hiking cycle, I think this is one of the last bumps in this market cycle. As you will know from my posts, I am not a macro trader as I am really bad at sizing and maintaining long term bets so not sure how to implement my view in the portfolio other than to reduce some beta in the long term account. But the fact of the matter remains that easy credit is on its way out at too much leverage exists, there is only one way out for that leverage.
Stumbled across this WaPo article this morning, which describes my views rather well. It was written two days ago, when Tesla was trading about 10% lower than today because, well apparently high interest rates are good for a company that relies on consumers taking loans to finance their product - whether that product is the cars or its stock is another question.
A cocky, publicity-seeking libertarian billionaire bets virtually all of his stock in his overvalued electric car company to finance a highly leveraged, $44 billion hostile takeover of an overvalued, money-losing social media platform, on which he boasts 84 million followers. It’s hard to imagine a megadeal that better captures the absurdity of the era in American finance than Elon Musk’s ploy for Twitter. The only plot twist making for a better tale of speculative excess would be if Musk, a crypto evangelist, had arranged to pay in bitcoin. I’m going to go out on a limb here and predict that we will come to see this deal as a market top, when sky-high valuations and over-indebtedness reach a convulsive crescendo in a megadeal driven by hype, overconfidence and ego. In many respects, it is reminiscent of AOL’s disastrous takeover of Time Warner two months before the massive tech and telecom bubble burst in the spring of 2000. At some point in the not-too-distant future — once the hype has finally drained from the tech-crazy stock market and defaults start to roil the overleveraged credit markets, once housing prices fall back to earth and the crypto fantasy is dispelled, once we’ve settled into an extended period of stagflation — people will look back at this moment and say, “What were they smoking.”
Let’s put aside for a moment the overwrought debate about freedom of speech and content moderation and unpack the bubbly financial details of this transaction. For while Musk may be the world’s “richest” person, at least on paper, $44 billion may be a stretch even for him. So far, Musk has arranged with a consortium of nine banks, led by Morgan Stanley, to borrow $13 billion secured by the assets and cash flow of Twitter itself — a common financing technique in the buyout world. The same banks have also agreed to lend an additional $12.5 billion using some of Musk’s Tesla stock as collateral. Musk has not said where he plans to find the $21 billion in equity, or risk capital, that he has promised to invest in the deal. He could sell some of his Tesla stock, as he did last week, generating $8.5 billion before taxes. Or he could take on some hedge funds or fellow billionaires as partners, who presumably would want some say in how the company is run. The balance he’ll have to borrow by pledging his Tesla stock as collateral.
There are several problems with this financing scenario. According to Tesla’s regulatory filings, Musk had already pledged about half of his 173 million shares of Tesla stock to fund other ventures and activities. He has now pledged an additional 40 percent to secure the new loans to buy Twitter. That leaves only 10 percent of his Tesla shares available as collateral. Because Tesla’s policies allow major shareholders to borrow only 25 percent of the value of each share that is pledged, that would appear to limit further borrowing against his Tesla shares to less than $5 billion. All that borrowing might work out just dandy as long as the value of the collateral — Tesla stock (TSLA) — remains at or near the $1,000 per share it was trading at when the deal was announced last week. Yet in the week since the announcement, it dropped 15 percent, to $870, at least in part out of fear that the stock could get caught up in Musk’s Twitter misadventure. Should it fall below $750, Musk could run afoul of Tesla’s own leverage ratio. And if it were to fall much below $600, the banks could demand that Musk pony up additional collateral, requiring him to quickly sell some of his shares. Should Tesla stock fall below $400, the banks would probably demand immediate repayment, triggering a massive, forced sale of Tesla shares, depressing the share price even further and prompting other investors to bail out of the stock.
A further decline in TSLA shares is a real possibility, given the bubble in tech stocks over the past two years, with already highly priced shares doubling in value. With last week’s dramatic sell-off, the tech-heavy Nasdaq has fallen 24 percent from its all-time high late last year, as the Federal Reserve has moved to raise interest rates and withdraw the extraordinary monetary stimulus that has propped up the pandemic-challenged economy and inflated the price of financial assets. Adding to the downward pressure, tech giants like Netflix, Apple and Amazon have reported or warned of disappointing earnings and sales growth, further undermining the confidence of a new generation of investors who’ve convinced themselves that tech stocks have nowhere to go but up. Even when judged against the tech sector, however, Tesla has been a frothy outlier. Since March of 2020, Tesla shares have soared from $85 to as high as $1,243 in October, briefly giving the upstart carmaker a market value of more than $1 trillion — more than Toyota, Volkswagen, Daimler, Ford and GM combined. Even with its shares down to below $900, Tesla is selling at a price 118 times its profit from the previous year. By comparison, Google’s parent, Alphabet, boasts a price-earnings ratio of 21, with Amazon at 38. By that or any other measure, Tesla remains overvalued. Tesla is only now beginning to feel the impact of big league competition in the fast-growing market for electric cars, in which it boasts a technological head start as well as a good deal of cachet among environmentally conscious consumers. Those advantages brought Tesla rapid sales growth for the past two years, once its early production problems were ironed out, and allowed the company to charge premium prices that last quarter generated a copious operating profit margin of 37 percent. Even with that impressive record, the only way the sky-high valuation for Tesla makes sense is if you think those profit margins and sales growth will continue into the future. But with Volkswagen, Ford and other competitors rushing to bring out their own lines of electric vehicles, that seems unlikely.
Another reason for Tesla’s inflated stock price is the relentless hype that Musk has created around it through his use of social and mainstream media to market his cars, his company and himself. The Twitter purchase is of a piece with that innovative and cost-effective marketing strategy. But according to a recent study by David Kirsch and Mohsen Chowdhury of the Smith School of Business at the University of Maryland, those 84 million users following Musk on Twitter didn’t just show up on their own. Many were cultivated by bots — fake accounts programmed to respond to tweets by or about Musk or Tesla with tweets crafted to boost the company’s reputation, driving the momentum investing that’s inflated the tech bubble. The robots, they wrote, were also programmed to troll critics of the company with nasty or threatening messages. Using a software program called Botometer, Kirsch and Chowdhury found that of 1.4 million tweets from the top 400 accounts posting to the “cashtag” $TSLA, 1 in 10 were from bots. While it’s unclear who is behind the bot effort, and the two researchers are still working on directly linking tweets to movements in Tesla stock, the data “raises questions,” they write, about whether the activity was part of an organized effort to boost Tesla’s price.
Musk, of course, is no stranger to charges of market manipulation, having agreed to pay a $20 million fine to the Securities and Exchange Commission for doing just that, in connection with 2018 tweets in which he suggested he was prepared to take Tesla private. This year, Musk tried to nullify that settlement, which requires that his tweets be reviewed by a Tesla attorney. Just last week, a federal judge in New York denied that request. But Musk shows no sign of letting up in his battle with the SEC, which he regularly accuses of unconstitutionally muzzling his speech. That challenge to the SEC will continue to cast a legal shadow over the company and its stock price. If Musk’s overvalued and rapidly declining currency — his Tesla stock — is one glaring problem with the Twitter deal, another is that he’s using it to overpay for a company that has lost money for the past two years as user growth has slowed. With no net earnings, it’s not possible to calculate its price-to-earnings ratio. But an alternative value measure — the ratio of stock price to sales — now stands at 8, which looks rather rich for a money-losing operation. (Highly profitable tech companies are selling at 4 to 6 times sales.) Musk now boasts of plans to grow and monetize Twitter back to profitability, but that is hardly a sure thing. The social media platform is already shut out of the all-important Chinese market because of censorship, while many younger people are migrating to TikTok and Snapchat. And just last week, the European Union announced a bold set of regulations that will require platforms to take more aggressive steps to control disinformation, limit hate speech and disclose how their algorithms amplify divisive content. U.S. regulators are considering similar requirements.
There’s also the little matter of where Musk will find the money to service all those loans he’s taken out to buy Twitter. In the typical leveraged buyout, the purchaser looks to the company he’s buying to generate the cash to cover the interest payments on the buyout loans. Musk is now on the hook for about $1.25 billion in interest payments, assuming a 5 percent interest rate on those $25 billion in bank loans to buy Twitter. But the most free cash flow that Twitter has ever generated was $868 million back in 2018, and it’s been all downhill since then. Last year, in fact, Twitter’s free cash flow was a negative $370 million. For all these reasons — the financing challenges, the bursting of the tech bubble, the economic and regulatory head winds facing both Tesla and Twitter — there’s an even chance Musk will walk away from this deal and pay the billion-dollar “breakup” fee required under the purchase agreement. Whether the deal goes through or not, however, it will have helped expose how thoroughly out of whack tech stocks — and stocks in general — have become in relation to the price of everything else.
The market’s wild swings in recent months are all the proof you need that the Great Repricing has begun. The giant economic and financial bubble created by a decade of aggressive government borrowing, money printing and persistently high trade deficits produced an economic mirage in which workers’ wages, interest rates and the price of goods were too low, while prices of stocks and real estate and credit instruments became too high. Now that fantasy of high growth and low inflation will need to give way to a painful period of low growth and high inflation as stock prices are brought in line with profits, credit in line with the prospects of repayment and house prices in line with the incomes of the people who live in them. The question is not why this re-pricing is happening now, but why it didn’t happen years ago. And the way to think about what lies ahead is not that we will be less wealthy but, like Elon Musk, we were never really as wealthy as we thought we were.
WaPo
Someone who lies about the little things will lie about the big things too.
Great post, will read and digest later appreciate the effort
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