Berkeley Share Discussion Threads

[sogoesit] 21/5/2016 06:09

On the BREXIT issue I too have been reducing holdings, in BKG for one as with others... and to reduce my leverage (although that increased due to investments in property in the last 6 months so a reduction in BKG is also an acceptance I would be overweight SE property exposure).
I don't speculate on why prices are falling, they are across markets so don't allocate it to BREXIT, BREXIN, CHINA, Europe crises, too much debt, ZIRP, NIRP, policy failure, etc. etc.
All I note is that they are falling and it's time to take money off the table.

As with you jrphoenix, the interest on my leverage gets paid for through dividends. In this respect the housebuilders look supportive of good yields (my investing criterion being greater than or equal to 6%) into the future so I was recently tempted into building a position in TW. So much for my diworsification!!

So, my view is, one way or another RemaingWeakIn or StrongerOut will all wash out in the future but may provide cheaper entry opportunities, but probably not for the reasons we thought.
I will be voting Leave on the principle that it may be the last time we get a chance to have a real democratic choice; sovereignty and self-determination wins out against all issues about (short term) money in my view. But also, long term, being shackled to a statist, totalitarian, unelected, undemocratic system which is already impoverishing all its citizens is not a good place to build wealth in the face of China and other Emerging economies.
So, my vote too, is swayed by "immediate personal self-interest". In my case, a long term view where a leap into the light of a self-determining, democratic future far outweighs the dark and gloom of never-ending crises (migration), impoverishment (Greece, Spain, Portugal) and evermore enlargement (Turkey, Ukraine).

Reminder: Consensus, a dangerous place to be!

Good luck whichever way you vote... but make sure to vote the "right" way ;-)!!

[jrphoenixw2] 20/5/2016 09:04

Oops, looks like my use of > and < together chopped the end off that para... it is...

'pretty [to] really bad thing. So I'd vote Remain purely due to immediate personal self-interest'. QED perhaps, just my personal variant vs a leap into the dark.'

ps. Woof, nice open on the FTSE this morning, all 100 stocks are in the green right now, quite unusual to see that :)

[jrphoenixw2] 20/5/2016 09:00

You hear constant talk over market fears due to BREXIT; it is a shame that there is no way to quantify that fear. Either way markets usually price in the worst case scenario, and that right now would apparently be a scenario of a BREXIT followed by years wallowing economically whilst trying to negotiate international trade agreements. The UK becoming less attractive to foreign investment, blah-blah etc*100.
Whether that's realistic or not matters less of course, the fear carries a price. And IMHO the current prices currently reflect all that fear.

I invest on margin. Pretty simple logic, (for me anyway :)), the leverage costs c2%, and the likes of BKG yield significantly more than that. Since I'm pre-retirement all the divs I get progressively reduce the margin, and via that route I forecast being margin-free in c2 years [possible 'early retirement time'].

That said BREXIT fears have got to me too it seems, I've additionally pulled my horns in a bit, done some minor trimming of positions and margin is now at 70%. That gives me a buffer, *just in case*, for a BREXIT fuelled market dive and the leverage going up to 100%.

But I actually think the vote will be No. It's close but looks that way now. Plus, I have in mind that voters might have 'radical thoughts' on how they might vote, but as voting day nears such thoughts can often be put aside. Probably same as how quite a lot of people support UKIPs views, but ultimately it translates into minimal votes. 'Stick with what we know, rather than take a leap into the dark' etc., that's human nature. And if that's right, and it is a No vote then... well, I'd expect a hopefully pretty material relief-rally. Even if a No vote looks certain on the eve of the poll, the market's nature is it won't price all of that in until the result is official.

Asked by some friends this week how I'd vote I replied: 'I'd *LOVE* to stick 2-fingers up to the EU and vote for BREXIT, but because of my investments a BREXIT would likely be a pretty>

--- the markets in the week of 23 June are going to be fascinating!

[garycook] 20/5/2016 02:15

Nice performance seeing the FTSE 100,was down 1.82%.Up over 1%,and the top riser among the Housebuilders.Lets see what happens today.Think BKG has been oversold.If the UK stays in the EU,then this could rocket,with all the good news,and positive results eg Taylor Wimpey etc.Anyone else have an opinion ?

[jrphoenixw2] 07/5/2016 13:12

An analysis from a technical perspective of BKG. From Friday after the close.


'Three big dividend payers with capital growth prospects
...Here are three dividend payers at, or approaching, possible areas of value from a technical perspective.'
hxxp://www.ig.com/uk/view-ig/2016/05/06/three-big-dividend-payers-with-capital-growth-prospects-32183

[bluemango] 05/5/2016 09:14

Odey have increased short position again but aggregate reported short at 4.14% is still some way off the peak it was around a month ago.

[garycook] 28/4/2016 01:53

It looks that way.Hopefully BKG will be more stable,and a nice rise if the UK stay in the EU.Which looks the likely outcome now.Think that is why the shorter,s are closing.

[bluemango] 27/4/2016 14:47

Anchorage Capital and Millennium have now both dropped below the 0.5% short positions tracked by Shorttracker. Others such as Odey also reducing. Aggregate tracked total is now 3.57%. Are the hedge funds now closing and banking their gains?

[bluemango] 24/4/2016 18:23

Aggregate disclosed short position has decreased from peak of around 5.5% a couple of weeks ago to just over 4% now.

EU polling still shows a close run thing, but Remain might just have the edge at present. If exit starts looking increasingly unlikely, this could boost sentiment for BKG; given this was a significant factor in the short positions being opened in the first place.

[garycook] 22/4/2016 01:55

Agree with you R Ball

[r ball] 21/4/2016 17:46

quite. I was hoping for £45 about now on the back of re rating re: barretts and psn. content with selling into any rally. expect £35 once short sellers disappear and focus returns to nat grid partnership, crossrail synergy and impressive landbank. bkg I think have called the top too re: yield and cash return.

[jrphoenixw2] 21/4/2016 09:09

The way I read it, since it's a privately owned operation, is it was more ... The Duke of Westminster calling the top of his particular sectors of the property market, Ultra Prime Central London + West End commercial.
Seems more broadly in the residential market he expects values to be constrained in future by earnings growth. Given the double-whammy of BREXIT and the Tories effectively killing off the upper end of the residential market via stamp duty it won't surprise me to see prices going nowhere'ish for the foreseeable.

The background is here...

hxxp://www.ibtimes.co.uk/property-prices-likelihood-correction-dramatically-increased-says-grosvenor-boss-1555767
hxxp://www.wsj.com/articles/global-real-estate-boom-is-coming-to-an-end-u-k-s-grosvenor-warns-1461071783

p.s. As usual I think you need to try to get as close as possible 'to source' on such a story, as the mainstream press love nothing more than being able to spin a 'property doomed' headline.
hxxp://www.grosvenor.com/news-views-research/news/2016/good-international-performance/
Here the actual summary of results -> hxxp://www.grosvenor.com/getattachment/ecfc1e8a-4db3-47de-9c68-d88a0c828e0b/Grosvenor-Group-issues-annual-results-for-2015.pdf Skim the latter two, and you might wonder where all the gloom derives. Seems more that *year on year* 2015 wasn't as good as 2014 simply because 2014 was good/better than was expected... ?


For more mainstream London residential I've a weather-eye on Brexit/stamp duty, which per above I expect to freeze a lot of activity. A greater unknown IMO is the Chinese economy, as if broader Asian discretionary investment dries up that'll hit the middle-market in London, incl the likes of BKG developments.

[beergut] 21/4/2016 07:39

The Times newspaper was interesting yesterday with Grosvenor Estates calling the top of the London property market and preparing for a drop or difficult times ahead

[jrphoenixw2] 18/4/2016 11:53

>>'We warned investors to exit the sector in August last year, and since then the sector as a whole is down more than 10pc.'

Hindsight is 20/20. The index as a whole is down 6% from early Aug-15. 'Wizard foresight' begins to look more like nuance and chance.

[cancun tango] 18/4/2016 11:11

From the link:

'We warned investors to exit the sector in August last year, and since then the sector as a whole is down more than 10pc.

We believe this is only the beginning of a painful correction. Sell'

[garycook] 18/4/2016 11:05

Bit late for a sell rec. Should have given it at £36

[cancun tango] 18/4/2016 10:15

Telegraph has a sell recommendation:http://www.telegraph.co.uk/business/2016/04/17/shares-in-uk-housebuilders-are-the-biggest-value-trap-the-market/

[barnesian] 16/4/2016 12:51

I think the dividends are secure for the next six years. The question is what is the business model in six years time and what will it be worth? There are so many unknowns that it is quite imponderable.

It is tempting to take the dividends - £12 over six years - and risk a capital loss. Momentum is against the share price at the moment but that is short term. There may be a buying opportunity in a few weeks but before 23 June as uncertainty and risk rise to a crescendo.

What to do? I sold up the first time it came down to £30 and regretted it when the price went back to £33 but now I'm content again and I'm not fretting about short term price movements. I'll still keep a close watch as this is a quality company in terms of its product and its management.

[r ball] 16/4/2016 10:29

oh cross rail coming soon?

[r ball] 16/4/2016 10:28

and in the absence of a profit warning? where does this leave us? could be buying opportunity??

[sogoesit] 16/4/2016 09:18

I think the property market, as a whole, can be misleading if looked at in an aggregate fashion.
Large developments, like Embassy Gardens, Nine Elms etc. have a range of size, and price, properties on offer so, in effect, represent different markets (segments). Demand will be determined by affordability (surprise, surprise!) so builders building, and selling, in different market segments, and the segment make-up of their portfolios, will affect them differently.
Analysing that is difficult and therefore giving evidence to general market assertions (speculation) is likely to be equally speculative.
From recent purchase experience, in my view, I would say that the SDLT "threshold", of £925,000, is probably a sticky affordability barrier (or £1million in round numbers and equivalent to about £1,000/sqft). Certainly, from observing central London property for the last year, property priced above this threshold has languished. What's more, new build sellers have not, in general, been willing to drop prices significantly. There have been SDLT teasers on the other hand (eg an offer of 3% discounts on Lillie Square in the last few months) and Parking Spaces thrown in "for free" (amounting to about 5%/6% discount).
Currently all is quiet on BtL in my view. In certain areas there may also be "gluts" which may only be temporary (eg walking down Upper Richmond Road between Putney and East Putney there are at least 8 large high rise apartment developments all coming to market at the same time!).
(My comments are all London and Greater London centric with a bias to SW London).

[r ball] 15/4/2016 16:06

even if we vote leave do you think that it would even happen?

we w