Taylor Wimpey Share Discussion Threads

[omg48] 04/1/2019 17:48

Steeplejack
Have you missed the boat?

[steeplejack] 04/1/2019 17:37

Was but not currently.Sold higher up.Remain nervous of market but the stock appears to building a good support base as is the sector in general.

[dr_smith] 04/1/2019 17:24

Steeplejack.
Interesting replies, thank-you.
Wish we were on phone with dialogue, not web exchanged monologue. ;-)

Post 22364.
I assummed winners would need to be sold from a Trust (as opposed to client unit) perspective.
Given the incentive to maximise returns (against peers), to feed losers from winners would seem a poor strategy, though they are of course compelled to keep to fund definition regarding consituents/balance/strategy.
That's one reason I dislike Trusts as an investor, but was asking question to better understand market behaviour.

So, as per your post 22365 these adjustments can happen any time, not just when PI buys/sells units.
I have seen third hand comment they shuffle folio just before reporting dates (say qtr end) so that publicised statements look tidy, correctly balanced.

My second question is whether in a bear market all sectors are dragged down as you say.
If as a PI we pick a share in an expanding sector, is this doomed in a bear market due to selling at macro level, with trusts and the like selling regardless, all tarred with same brush.
I would argue/hope not, but you and my economist friend saying these bold statements re bear markets is making me re-think.
Maybe we are both right in different contexts, but currently asking myself (and you) questions to see if I've missed something. :-)

[tlobs2] 04/1/2019 17:01

steeplejack, are you a shareholder in TW. ?

[wbecki] 04/1/2019 16:55

@steeplejack
4 Jan '19 - 15:25 - 22364 of 22365

"If there are redemptions then fund managers MUST sell to raise cash and unless they wish to radically alter their portfolio weighting’s they will top slice all or most of their larger holdings"

Not necessarily.

Open Ended funds - Unit Trusts/OEICS yes.
Closed End Funds, eg Investment Trusts, No.

Investment Trust FM's have far greater flexcibility than their OEIC/Unit trust counterparts.

[steeplejack] 04/1/2019 15:49

In answer to point one,yes fund managers will rebalance their portfolios.If one stock is a great performer and grows to become say 10% of a portfolio,they are more than likely to take profits and maybe buy a new holding or perhaps average down a weak portfolio performer.

Point two....market phycology comes into play.Whether we like it or not,we all have a tendency to take profits and run losses.Thus,if the markets are weak,their is a tendency to sell the good performers,rightly or wrongly.I think this is what you’re saying but actually,when it comes to fund managers receiving a wave of redemptions I don’t think they’ll wish to significantly alter the “shape” of their portfolio.Funds of course often have inherent restructions.A high income fund won’t be buying a biotech with no yield and a growth fund won’t be dashing out to buy dividend stocks per se,it’ll be more orientated to buying stocks they perceive as able to deliver capital growth.

[steeplejack] 04/1/2019 15:25

If there are redemptions then fund managers MUST sell to raise cash and unless they wish to radically alter their portfolio weighting’s they will top slice all or most of their larger holdings.
Also,”fund managers need to make money” is a rather rose tinted view of things.Of course,they aim to make money but the primary goal is to outperform the competing funds.Hence,they want to be in the upper quartile of competing funds in order to attract money.If the fund loses money they will aim to lose LESS money than other funds ie....”our fund went down 10% in 2018 but the majority of funds went down a good deal more!....”

When redemptions occur,the money is returned to the customer,the fund manager can’t sit on it waiting for a good entry point.In similar fashion if a customer buys units in a fund,the manager must invest that money pronto,in order to fulfill investors wishes.Please appreciate that the majority of fund managers are fairly mediocre and have great trouble beating the market indices.Hedge fund managers,the epitomy of active managers,have been beaten hands down by passive indexed funds in recent years.They might do better this year because they won’t be fully weighted in Apple,Amazon etc but they’ll still struggle to beat the market.Its not really their fault,the volatility of markets,a corollary of algorithmic trading makes life very difficult.

[tlobs2] 04/1/2019 12:18

Fund managers need to make money for their clients and they are not going to do that by having cash in the bank.

They will do what other investors do and that is look for shares in good quality companies who regularly pay healthy dividends. IMHO

[dr_smith] 04/1/2019 12:09

The economist comment on Nationwide housing stats is interesting here:


Maybe what we know/suspect, but nice to have someone with an important title say it. :-)

[dr_smith] 04/1/2019 11:44

Steeplejack. You make some interesting points. 2 questions.
1) If you have a unit trust that is focused on a sector of say 10 co's and they buy with even spread, do trusts tend to periodically re-balance to maintain that even spread.
e.g. 5 of the co's do well, share price up and 5 do bad, share price goes down, so unit trust obligated to sell some of the good to buy more bad to maintain that same spread?

2)You reckon bear market drags all down. An economist friend of mine said same to me at weekend, but I disagreed, on basis that if you have a company in an expanding sector (e.g. internet of things, smart appliance, driverless car technology) then bear market may take cream off, but shouldn't affect it too much.

Your comment on trusts dragging all down regardless is making me re-think. In theory, you would expect non-trust buyers to exploit the buying opportunity. I guess part of the answer is what percentage of market transactions are by unit trust style buyers.

Thoughts please :-)

[tlobs2] 04/1/2019 11:42

Whilst others don't appear to support the benefits of any share buy back by TW, the impact on the share price could well be quite significant.

I have experienced it previously with Next and their buyback scheme riding from 3800p all the way to over 6000p driven by daily purchases of their own stock over a sustained period. I also qualified for a shareholder discount voucher which came in very handy for all the family :-)

As and when the TW buy back kicks off (if it does) it will be interesting to see what impact several multi-million pound buy orders have on the share price!

[gbh2] 04/1/2019 08:12

I don't think we'll ever see a "Stock shortage" in TW shares without they consolidate and bring the number of shares in circulation down to a respectable figure.

[disneydonald] 04/1/2019 00:30

Steepljack. I agree re the impact of ETF’s tracking sectors or direct indices. This is a quite arbitrary process as investors flee the market everything gets sold off, in relation to the respective weighting per particular indices. Trying to buy back in this environment can destroy significant shareholder value. Wimps tried this as the previous financial crisis started to take hold, and lost huge amounts. IMHO, PR is unlikely to repeat that mistake.

[steeplejack] 03/1/2019 22:14

Whilst “older” style investors tend to buy specific stocks,the relative youngsters ie under 40s tend to buy funds to gain an exposure to equities.In part,this is probably due to the excessive compliance requirements weighing upon individuals in anyway involved in the City or connected with it by way of relationship.Thus,the under 40s are likely to buy funds because such purchases don’t require to be sanctioned.My point is this,there is a lot of money that will exit the market as investors sell ETF ,investment trust or unit trusts holdings,a wave of redemptions that will pay no attention to the stock specifics of the likes of Taylor Wimpey but will necessarily require fund managers to top slice holdings to fund those redemptions.Nearly all stocks go down in a bear market.So if Taylor Wimpey want to embark on a share purchase programme then all good and well but don’t think that this will necessarily lead to a stock shortage that will drive the price higher,sellers might be surpringly forthcoming.

That said,the markets are now guessing that the Fed will have to defer future US rate increases and its probable that China will try limited stimulus programmes so perhaps equities may enjoy a bounce over the next week or so.I can’t help thinking that this is probably an unfortunate economic climate in which to “Brexit” but hey,no gain without pain.

[tlobs2] 03/1/2019 12:54

You might need to double check that Donald ........

[disneydonald] 03/1/2019 12:32

Tlob. The company cannot undertake a share buyback without announcing its intention to do so first, otherwise it may be trading on insider information. If they intend to, and I very much doubt it, then likely get that announcement at next weeks trading update.

[disneydonald] 03/1/2019 12:32

Tlob. The company cannot undertake a share buyback without announcing its intention to do so first, otherwise it may be trading on insider information. If they intend to, and I very much doubt it, then likely get that announcement at next weeks trading update.

[gbh2] 03/1/2019 10:52

The current positive trend appears to be sector wide.

[tlobs2] 03/1/2019 10:47

Hence the ? at the end of the sentence.......

If it has started then there will be an RNS for you in due course.

[wfl1970] 03/1/2019 10:28

Until the company actually states they're undertaking a 'share buy back'....
I'd ask, what share buy back tlobs2?

[tlobs2] 03/1/2019 10:17

Has the share buy back scheme already started to kick in today then? ;-)

Three or four weeks of this would be most welcome.....

[m4rtinu] 03/1/2019 09:33

Tempting fate, but share price seems to be recovering a bit now. No doubt Brexit "nervousness" will return once MPs start upsetting each other again next week.

[tlobs2] 02/1/2019 07:59

Disney, I am quite happy that the mistake was a typo.

If you put together this plus the directors share buying and the hurried meeting to correct the typo then you get quite a different picture.

I think they will be kicking off the share buying in the near future......if not why not just correct the typo after the Christmas and New Year shutdown period?

[jugears] 31/12/2018 15:20

WFL- Judging by the timing of the directors buying shares I assume the up date will be fairly positive.

[wfl1970] 31/12/2018 14:53

TW Trading update due on the 9th.