Debt is deflationary if governments repay it and in democracies they never do. In a bad year they borrow more claiming it will be repaid in the good years. In a good year they either increase spending or cut taxes. Ultimately we the voters are to blame, politicians give us the fantasy we want. Eventually reality always wins, what a day that will be! |
Debt is arguably deflationary,
you can make an opposing case. |
Get ready for more inflation in coming years. US, Europe, UK, I can't see any reason why inflation won't rise. Can't have ballooning government debt funding fragile electorates without further inflation. Gold almost certainly has higher to go in coming years. |
I think the ROCE has always been too low on Heinken. It can't compare with Diageo. |
Poor news from Heineken |
Market Cap today is £1660m - 2 years ago market cap was £1770m - so buybacks have not eroded the trust significantly over that time. Share price was a little higher back then. |
 Discount control looks great when a trust is trading at a premium, new shares are issued, as the trust increases in size its percentage costs are reduced and there is a small increase in the NAV per share for existing holders, Troy's fee also increases. It also appears to work when there is a short term shock, the trust buys back shares for a few days then returns to a premium (whether this is because of discount control is questionable).
But now the trust is experiencing long term selling and the shares are stuck at a small discount despite continuous buybacks. The trust shrinks in size, the trust's percentage costs go up, Troy's management fee is reduced, there is an increase in NAV for remaining shareholders but this is very small because Troy are trying to keep the share price close to NAV. Perhaps attempting to keep the share price around NAV was just too ambitious, a 5% discount is more realistic but changing the target discount would penalise existing shareholders (is this one of the causes of the selling?). PNL is a large trust but this cannot continue for ever. |
Hopefully Personal Assets Trust won't have the same problem as CGT have run into, as announced today. They will need to convert their share premium account into distributable reserves as well - at least CGT will have reminded them today on how not to do it! They have £150m of capacity, but that will be burnt through quite quickly if the run rate of buy-backs accelerates! |
What I mean is that the next 5 years are not going to be comparable to the past 5 years.
I am not confident that equities are going to be a buy and hold with inflation. A bit of diversification could prove a good thing. Especially as bonds have already fallen (and yields risen) a lot last year. |
5 year performance is backward looking. Who cares about 5 year performance? |
5 year performance is .... I will be polite and not say!. |
Don't be naughty thamestrader!
You know very well that PNL invests in very short dated gilts, as each is redeemed it is replaced with another and currently this will have a higher interest rate. The interest on the index linked treasuries and gilts is also increasing. |
>>Their fixed interest holdings will be paying more interest
Hmmm, so not fixed then. |
September fact sheet shows equities down to 25% and they are reducing Alphabet and Microsoft which have both fallen heavily in recent days. Waiting for the half year report later this year to see how much of the reduction in equities is down to sales and how much to share price falls. Their fixed interest holdings will be paying more interest so at long last we might get a dividend increase! My previous doubts because of the tech holdings have lessened, looking to add now. |
Core holding for me ( with CGT)Think the charges here are very reasonable |
Because of the share split my Halifax ISA showed a balance of £5 million yesterday! Back to normal today though. PNL doesn't seem so special to me now, CGT and selected ETFs can do the same job at a lower cost, maybe this time next year I'll have no PNL which would have been unthinkable 5 years ago. |
Terrible dog day |
Charts, as usual, get mangled! |
Share split today 1/100 |
Thanks We can all go back to sleep on this now |
I am very very very happy to see this in the report:
"...After deep consideration, the Board believe that it is appropriate to seek shareholder approval at the upcoming Annual General Meeting to split each Ordinary share on a one hundred for one basis..."
Divi reinvestment becomes a whole heap easier now ... in one of the PAT quarterlies a few years ago this cropped up and was dismissed - and I am delighted they realise that they have a significant shareholder base who would benefit from this. |
Annual results:
All good, and a special dividend of 140p ontop of the expected 140p. |
interview with Sebastian Lyon fund manager www.investorschronicle.co.uk/podcasts/2022/03/30/sebastian-lyon-i-think-we-re-in-a-regime-change-vis-a-vis-inflation/ |
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