Berkeley Share Discussion Threads

[sogoesit] 15/4/2016 15:08

Nevertheless "technical" support is still a long way off...

[bluemango] 15/4/2016 14:12

I've seen press reports suggesting fears of Nine Elms issues impacting Berkeley are overdone and that most units already sold.



Collective short position looks like it may have already peaked. And as I said a while ago, I think though the Leave campaign may gain some ground, eventually the majority are most likely to vote for the status quo (whether or not one agrees that that's the right way to go)

[cancun tango] 15/4/2016 12:53

jrphoenixw2

Perhaps you have something to back up your assertions.

Zoopla has 455 sales in the whole of SW8 over last 12 months:

hxxp://www.zoopla.co.uk/house-prices/browse/london/sw8/nine-elms-south-lambeth-vauxhall/?q=sw8&search_source=house-prices

[r ball] 15/4/2016 12:49

Indeed. But what you also have to factor in is the fact that BKG has shied away from the big developments. It is being targeted by short sellers as its the natural (only) hedge for the high end London property market.

As to the future if you look at a 5 year time horizon then the relevant factors are:-

Secure dividend stream of at least £2 per share per year
Refocus away from luxury flats to family and small scale quality schemes in M25 area.

The big unknown is: what will the company look like then??

PS: This is an "accordion" company. It has been shrinking its land bank and reducing exposure for at least 2 years now.

[beergut] 15/4/2016 12:40

Just another 9,863 studios and apartments available in Nine Elms according to Rightmove this afternoon.

[jrphoenixw2] 15/4/2016 12:07

@Chillpill.
Zoopla shows 346 sales at BKG's Riverlight development at Nine Elms. Perhaps you have something to back up your assertions?

[swerves1] 15/4/2016 10:44

And that's not even taking into account any interest rate increase. Though might look unlikely now, I think it is inevitable it will happen sooner that people think

[swerves1] 15/4/2016 10:41

This is the most risky end of the market now imo. Very very expensive apartments for what they are. Especially if there is Brexit, buyers could start getting very scarce

[beergut] 15/4/2016 10:21

Any independent evidence of the Nine Elms problems?

[chillpill] 15/4/2016 09:29

It is the big developments like Nine Elms which are a complete disaster.Not a buyer in sight for thousands of flats they had thought were worth £2m+++

[ny boy] 15/4/2016 08:58

Broken support, in trouble, first test 2550 before eventually 2000

What most don't realise is central London property market has slumped. No buyers, price reductions coming in thick and fast, bubble has burst, this will slowly filter out to the suburbs.

[garycook] 15/4/2016 08:41

Oversold here.Time to top up.

[sogoesit] 15/4/2016 06:07

No worries, bluemango. I am also educating myself (so expect to be challenged)!
I found this document which may interest you, discussing "open lending":
hxxp://www.bankofengland.co.uk/markets/Documents/gilts/mechanics.pdf

[bluemango] 14/4/2016 21:59

Thanks Sogoesit for your interesting post.

My first point above, assumed an optimal scenario, I acknowledge it is clearly rarely quite as easy! You asked what my target is, I only have a rough idea of where to buy in, but I generally (all other factors aside) try to do this when the RSI is even lower than at present. And I'm also watching what Odey etc do meanwhile. Thanks again.

[sogoesit] 14/4/2016 14:39

Your last point, about knowledge of a disclosed short position, does give the market some transparency but the short seller has by no means "cornered" the market. Just because a (small fraction in most cases) of the overall market is short does not mean the whole market might move to thwart that position. If this were the case no-one would short!!
But you are also right that when valuation perceptions change the bulk of sentiment turns and buyers outweigh sellers and sellers may think they need to cover (depending on how risk tolerant they are and how deep their pockets are to accept paper losses until the market turns again in their favour). Some short positions can be held for years. The recent reversal of the crude oil price is a good example of this price action in play but who knew where the bottom was with foresight?

Your first point assumes you, or other market players, know what a share price is going to do in the future. Of course you may have spotted a strategy for maximising your returns when going short but I challenge you or anyone to execute it with any measure of predictable success!

For example today the price has fluctuated between 2950 and 3000p. Would you have forecast those two prices?
I sold today expecting the price to retrace possibly 2525p approx. on a break below 3000p. Is that also your target for the downside? I am sure lots of people would disagree with me!!
[Anyway brokers only lend shares when they get shorted. It is a simultaneous and coincident contract in my understanding. i.e. when borrower and lender have agreed the (same) price].

[bluemango] 14/4/2016 10:49

Thanks for your reply. Yes there's a cost to the borrowing, but their returns are clearly going to be more if they let the share price ride up periodically then hit it with sells, repeated on a regular basis. So at optimum, they are only selling at the points of maximum advantage to them. Also if the disclosed position was already fully sold, wouldn't that then be an invitation for buyers out there, knowing the short seller only had two choices from there on; either close/buy back at some point, or borrow more?

[sogoesit] 14/4/2016 10:27

bluemango, I would've thought they are one and the same thing but I may also be displaying my ignorance (it's costing the short seller to borrow and if they don't sell it would be cheaper to stay long or gear a long position, no?).

Anyway, they can have mine 'cos I sold out at the break below 3000p.
I can wait for the next dividend in September'ish if its worth it then to buy back.

Good luck.

[bluemango] 14/4/2016 09:16

Can anyone say if the disclosed short positions on short tracker by Odey etc represent simply the shares loaned to them for the intention/purpose of short selling, or whether it's the quantity already sold by them? Surely the authorities will only have a record of the former? Apologies if the answer is obvious to most, just displaying my ignorance ...

[sogoesit] 14/4/2016 08:28

Could, also, have the neck chopped off at 3000p...
Hmmm... a large core holding of mine... maybe sell down before Brexit?
PSN (non-London builder as they pointed out) quite upbeat today on a trading update.

[barnesian] 12/4/2016 13:08

Chart doesn't look so good. Head and shoulders. Elbow or wrist next?

[swerves1] 12/4/2016 12:35

Can't see any upside here for a while

[r ball] 12/4/2016 12:05

Quite. BKG are quite spartan with their newsflow. I won't expect any announcement from the company until June.

[bluemango] 12/4/2016 10:08

Further to my 1445 a few weeks ago, well it hit my 30p downward target but look at those short positions still increasing (as at the 7th, the latest reported change date). Some support at this level, quite volatile. Still over 2 months before Brexit referendum, with all the implications for sentiment here (and the unknowns eg how polls could swing either way or a big news story may strengthen one campaign against the other). The latest poll of polls shows growing support for the Leave campaign, around 50:50 now. The calculation is: what is the likely hedge fund strategy in terms of timing? Stating the obvious, one always wants to at least try to go with the direction of money flow and at the moment that will still in part be dictated by Odey etc. Views?

My gut feel is that short term this will still go lower, but not by a large percent further. Not an exact science by any means though, far too many variables.

[garycook] 11/4/2016 02:15

Sounds more like it NAV at £28.60.Cannot be as low as £11.60 ?

[barnesian] 10/4/2016 21:19

Yes double!

Edit: Actually its not double for the first case.

If you assume that dividends are maintained at £2 a year for six years and the share price in 6 years time is unchanged at say £32, then discounting at say 7% a year gives a NPV of £28.60.

A dividend of £2 forever at 7% discount rate gives a NPV of £28.

As I said, very theoretical but better to use the correct dividend policy!