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[ExPat2B]

I have small punt on Persimmon....House prices may slow down, they may drop, but is demand going to be 26% down ? I don't think so.

And there will still be migration into the country, and the type of migrant who can afford to buy a new house is going to be the kind we will welcome with open arms, so demand is not going down.

London based companies with big exposure to expensive London property, I can see the risk there. Persimmons average selling price is around 200K, so I don't see them as having a problem.

Of course the market may not see it that may but I have taken a small enough punt that I am happy to sit on it for a few years and ride out the storm.

[walm]

ExPat2B said:

I have small punt on Persimmon....House prices may slow down, they may drop, but is demand going to be 26% down ? I don't think so.

Jesus.
That isn't how it works.

[Burwood]

walm said:

Burwood said:

If anything they will sell more houses, not less.

What makes you say that?

Migration will probably increase before we shut the door. Local demand is still strong. They build most of their properties in the North to North West. It isn't London. Just my view. There is also a shortage of property but I'll accept that I'm not sure what their average pricing is like vs the sweet spot demand.

After just writing that I googled and found a recent comment by their CEO. Business is booming and they see no Brexit (fear). Their run rate is 12% ahead of last year and they are building as fast as they can. Their trailing PE was 10 and at 16 quid its 8 worst case.

Edited by Burwood on Friday 24th June 16:09

[walm]

Burwood said:

walm said:

Burwood said:

If anything they will sell more houses, not less.

What makes you say that?

Migration will probably increase before we shut the door. Local demand is still strong. They build most of their properties in the North to North West. It isn't London. Just my view. There is also a shortage of property but I'll accept that I'm not sure what their average pricing is like vs the sweet spot demand.

After just writing that I googled and found a recent comment by their CEO. Business is booming and they see no Brexit. Their run rate is 12% ahead of last year and they are building as fast as they can. Their trailing PE was 10 and at 16 quid its 8 worst case.

The question isn't more or less than last year though.
It's a question of more or less than what people thought they would do in the future YESTERDAY vs. what they think today.
And not only is it going to be fewer but also the prices they achieved will be a lot lower, no?

[Burwood]

walm said:

Burwood said:

walm said:

Burwood said:

If anything they will sell more houses, not less.

What makes you say that?

Migration will probably increase before we shut the door. Local demand is still strong. They build most of their properties in the North to North West. It isn't London. Just my view. There is also a shortage of property but I'll accept that I'm not sure what their average pricing is like vs the sweet spot demand.

After just writing that I googled and found a recent comment by their CEO. Business is booming and they see no Brexit. Their run rate is 12% ahead of last year and they are building as fast as they can. Their trailing PE was 10 and at 16 quid its 8 worst case.

The question isn't more or less than last year though.
It's a question of more or less than what people thought they would do in the future YESTERDAY vs. what they think today.
And not only is it going to be fewer but also the prices they achieved will be a lot lower, no?

well, I think most people are irrational. 25% drop is a lot and a potential opportunity. I could understand it is traded on a huge PE. To think it will have no impact on the future is being a little naive but a big impact. I'd wager not. You know the market is mental sometimes.

[Femur]

walm said:

ExPat2B said:

I have small punt on Persimmon....House prices may slow down, they may drop, but is demand going to be 26% down ? I don't think so.

Jesus.
That isn't how it works.

[Burwood]

Femur said:

walm said:

ExPat2B said:

I have small punt on Persimmon....House prices may slow down, they may drop, but is demand going to be 26% down ? I don't think so.

Jesus.
That isn't how it works.

quite. It work today as follows- companies with zero earnings and hefty losses get insanely high valuations. When that company turns a tiny profit they get rewarded with a PE of at least 1000. They can miss earnings for 20 quarters and quadruple in price every 6 months. Then you have companies that make 100's of millions in free cash flows and trade on single digit PEs. A sniff of any bad news and the price is cut in half.

[walm]

Burwood said:

quite. It work today as follows- companies with zero earnings and hefty losses get insanely high valuations. When that company turns a tiny profit they get rewarded with a PE of at least 1000. They can miss earnings for 20 quarters and quadruple in price every 6 months. Then you have companies that make 100's of millions in free cash flows and trade on single digit PEs. A sniff of any bad news and the price is cut in half.

...is the right answer!!!

[Burwood]

walm said:

Burwood said:

quite. It work today as follows- companies with zero earnings and hefty losses get insanely high valuations. When that company turns a tiny profit they get rewarded with a PE of at least 1000. They can miss earnings for 20 quarters and quadruple in price every 6 months. Then you have companies that make 100's of millions in free cash flows and trade on single digit PEs. A sniff of any bad news and the price is cut in half.

...is the right answer!!!

the sick thing is it's largely true

[dufflecoat]

Had a stab at Lloyds and Taylor Wimpey. See what Monday brings and if another drop, probably another punt on the same. Then ride it out.

[timbrooks]

heavily investing in 'Don't blame me, I voted remain' t-shirts ...

[K12beano]

timbrooks said:

heavily investing in 'Don't blame me, I voted remain' t-shirts ...

There's a huge market! Size XL please - or make it XXXXXL, as I AM a Powerfully built Director as PH requires


But there seems to be a need for some "I know I voted to leave, but I didn't realise that's what it meant" (if you read the tosh in the Standard....apparently)

[twinturboz]

Not really share specific, but worth a watch if you have the time or interest in how the Brexit negotiations might play out.

https://www.youtube.com/watch?v=oRKOr_RhdyA

https://www.youtube.com/watch?v=iEh6MPLff9M

[Burwood]

I've noticed some household names like M&S yields now 7%. Worth a look for the more conservative investor

[Zippee]

dufflecoat said:

Had a stab at Lloyds and Taylor Wimpey. See what Monday brings and if another drop, probably another punt on the same. Then ride it out.

I've just taken a punt on 3000 Wimpey shares at £1.19 each - fingers crossed

[Output Flange]

Why have house building companies dropped as much as they have - potential availability of cheap labour / potential of falling house prices / something else?

[walm]

Output Flange said:

Why have house building companies dropped as much as they have - potential availability of cheap labour / potential of falling house prices / something else?

Prices.
Look up "operational leverage"!

[lukefreeman]

Reckon the banking sectors seen the worse yet?

Time to buy ?

[red_slr]

Was seriously thinking about Barclays and RBS today but tbh I think its too risky for my tastes at the moment.

[NRS]

lukefreeman said:

Reckon the banking sectors seen the worse yet?

Time to buy ?

I certainty wouldn't buy with money you can't afford to lose now/ wait long term with.