Blimey - BLND took a hammering today.

[Arborbridge]

Let's just remind ourselves that BLND comments have always been something like: slow but steady, a dependable dividend payer. I see other more worrying offerings than this one, though I do acknowledge that nothing is for ever. But if a London property company isn't pretty sound, what can be?

Oh yes, supermarkets - everyone needs food.


Arb.

[funduffer]

You lot are in trouble!

Write 100 lines!

HYP is a LTBH strategy.
HYP is a LTBH strategy.
HYP is a LTBH strategy.
HYP is a LTBH strategy.
........

FD

[OLTB]

Morning all

I wasn't suggesting in my OP that I was considering selling, it was simply an observation, that's all whilst nursing a very red looking portfolio - roll on No-look November. Maybe I'll do a self-imposed Oblivious October.

I have some money sitting in cash at the moment in my SIPP and am tempted to top-up something, but really unsure. Maybe I'll just sit on it a bit more and Picker™

Cheers, OLTB.

[idpickering]

You could take a look at Primary Health Properties. Their share price does not do much but they are steady and yield around 4.6%

Dod

Thank you very much for your input, but I will stick with the devil I’ve known all these years. Sounds like an intro to a song by The one and only Beatles.

Ian.

[absolutezero]

BLND is one of those I have dithered about over the years but held on to regardless.
But I suspect yesterday's share price moves were just the usual random noise that infests the market every day.
It went XD which explains a small amount of the drop but the rest is just noise - the was no RNS or negative press coverage as far as I can see.
It's free cash flow compared to dividends leaves a lot to be desired though.
FCF (p) Dividend (p)
-53.5 26.4
4.38 27.0
12.5 25.6
3.49 24.8
12.6 24.8
16.0 24.1

[pyad]

Blimey, BLND went up 2% so far today.

And that's in a market down about half a click.

[richfool]

BLND and other prop stocks are up today because of this:

Intu (INTUP) meanwhile surged to the top of the index, up 27.8% at 189.8p after a consortium including British billionaire John Whittaker and Canada's Brookfield Asset Management (BAMa.TO) said it was considering a bid for the shopping centre owner.

The news buoyed shares in other property groups. Hammerson (HMSO rose 3% to 441.2p, Land Securities (LAND) was up 1.7% at 854.8p and British Land (BLND ) jumped 1.5% to 585.2p.

https://citywire.co.uk/money/ftse-falls ... e=readmore

[OLTB]

Blimey, BLND went up 2% so far today.

And that's in a market down about half a click.

Understood Mr B.



Doris duly channelled.

Cheers, OLTB.

[Itsallaguess]

One day, as is inevitable, we could suffer another 20-40% drop - and what would our reactions be? Sell off and start all over again building our HYPs? Hold tight, of course. But it'll need steady nerves when your capital values go haywire across the board.

Never mind keeping hold of what we've got in those types of situations, and that's hard enough given the emotions that will be evident during those times, but I'll also always advocate having a relatively worthwhile amount of emergency capital available for just those types of market-conditions, which allows us to actually buy some additional dividend-income at what might well be sale-prices....

For anyone really wanting to stick to a LTBH strategy through those types of market conditions, being able to tell yourself that you've just bought some dividend-bargains does great wonders for the income-investors soul....

I've got to say though, that hitting the BUY button during those periods is comparable to how difficult it can be to not hit the SELL button on your other investments, but pushing on through those relatively temporary emotions and doing what you know is the right thing to do is very rewarding once things have settled down again in the markets....

Cheers,

Itsallaguess

[idpickering]

Blimey, BLND went up 2% so far today.

And that's in a market down about half a click.

And I thought sp movements were to be ignored?

Ian

[dealtn]

It's free cash flow compared to dividends leaves a lot to be desired though.

I would be sure you are happy with the definition of any particular version of "free cash flow" when using it as useful comparator for property companies, and REITs in particular.

Companies that do a lot of property development as well as buying and selling completed assets will have "lumpy" real cashflows in addition to the smoother rental flows. In a REIT with a dividend stream where 90% of profits from the rental business are paid out (incidentally not as dividends but as PIDs) these are (usually) smooth and stable, but also will depend on asset sales, asset purchases and new developments coming on-stream, and sometimes assets being redeveloped and losing their previous rental stream.

Not wishing to "teach eggs" if this is already known by those here, but I would treat cash vs profits vs dividends for a REIT a lot differently to other companies where cash flow is a good sense check of profitability. (We could all think of an example of a company that looked to be profitable but that didn't stack up with cash flow analysis, and may no longer be with us.)

[pyad]

Blimey, BLND went up 2% so far today.

And that's in a market down about half a click.

And I thought sp movements were to be ignored?

Ian

Although my comment was true I intended it as a pisstake on the whole silly thread, making the same point about price movements Ian.

[idpickering]

Blimey, BLND went up 2% so far today.

And that's in a market down about half a click.

And I thought sp movements were to be ignored?

Ian

Although my comment was true I intended it as a pisstake on the whole silly thread, making the same point about price movements Ian.

I thought as much Stephen. Thanks for taking my comment in the good humoured manner I intended it to be taken.

Ian.

[88V8]

Price movements can be an augury.

HMG apparently thinks there may be troubles ahead, as the song goes... 'Hundreds of thousands of small investors in property funds will have their holdings temporarily frozen in the event of a shock to the market that leads to material uncertainty about the value of shops and office blocks, regulators have ruled. The Financial Conduct Authority proposed new rules yesterday designed to strike a fairer balance between investors wanting to redeem their holdings and those wanting to stick out a sharp downturn in the commercial property market. - The Times'

Holding BLND, but not sure it's such a great idea.

V8

[idpickering]

Price movements can be an augury.

HMG apparently thinks there may be troubles ahead, as the song goes... 'Hundreds of thousands of small investors in property funds will have their holdings temporarily frozen in the event of a shock to the market that leads to material uncertainty about the value of shops and office blocks, regulators have ruled. The Financial Conduct Authority proposed new rules yesterday designed to strike a fairer balance between investors wanting to redeem their holdings and those wanting to stick out a sharp downturn in the commercial property market. - The Times'

Holding BLND, but not sure it's such a great idea.

V8

Thanks for that V8, do you have a link to the item please? I must admit that I view newspaper items, even from The Times, in the same way I do analysts, I read them, then make my own mind up. I do suspect the story has no firm base tbh.

Ian

[Breelander]

Thanks for that V8, do you have a link to the item please?

This is the article. Free registration will let you read it all.
https://www.thetimes.co.uk/article/free ... -m7nwqm0zr

I must admit that I view newspaper items, even from The Times, in the same way I do analysts, I read them, then make my own mind up. I do suspect the story has no firm base tbh.

This appears to be the FCA consultation that the Times article was based on. Now you can make an informed assessment.
https://www.fca.org.uk/news/press-relea ... uid-assets

[idpickering]

Thank you Breelander. I shall have a read.

Ian.

[Arborbridge]

Thanks for that V8, do you have a link to the item please? I must admit that I view newspaper items, even from The Times, in the same way I do analysts, I read them, then make my own mind up. I do suspect the story has no firm base tbh.

Ian

How do you make up your own mind, if not by a spread of interpretation from various sources? You, me, analysts and newspapers, presumably all select whatever information is "floating around" and try to make sense of it - and most (including "us") will clearly have an agenda of their own and want to project a particular picture, subconciously or otherwise.

Unless one is an accountant (even if one is an accountant) and an expert in reading company accounts, how does one make up one's own mind without information? I reckon the analysts and the better commentators probably know much more than I do about this type of information processing, and by taking a view across them all I get a more reliable view than trying to do this myself.

The only wider concensus one can use is the chart which sums up the views of thousands of people.....

Arb.

[Gengulphus]

How do you make up your own mind, if not by a spread of interpretation from various sources? ...

By using the actual information that is available. Using others' interpretations of that information might be worthwhile as well (though I would as far as possible do that after getting the actual information), but it's important to distinguish between information and interpretations of it - especially when those interpretations are presented by media people and organisations who have an interest in sounding informed, decisive and succinct. What they say often ends up clearly distorted from the source material, and not infrequently plain wrong.

For example, in this case look at the first sentence of the Times article:

"Hundreds of thousands of small investors in property funds will have their holdings temporarily frozen in the event of a shock to the market that leads to material uncertainty about the value of shops and office blocks, regulators have ruled."

Sounds like the relevant regulations are definitely being changed to say that that will happen in such an event, doesn't it? In particular, the words "will" and "ruled" don't really imply any uncertainty about the change happening.

The next sentence:

"The Financial Conduct Authority proposed new rules yesterday designed to strike a fairer balance between investors wanting to redeem their holdings and those wanting to stick out a sharp downturn in the commercial property market."

does somewhat counteract that impression by saying that the new rules were "proposed", but in the context of the first sentence, I would read that as probably just indicating they aren't actually in effect yet rather than that there was any doubt about whether they were going to come into effect.

Yet when one looks at the FCA link, it is very clear that this is about proposed rule changes, they're consulting on them and that "The FCA will consider feedback to this consultation and will publish a Policy Statement with our final rules and guidance next year. The consultation remains open to responses until 31 January 2019."

At the very least, I'd say that makes the start of the Times article significantly misleading. How that came about, I don't know - it could be that the author of the article somehow totally failed to understand what the FCA had said, it could be that he basically added an opinion of his own that the proposed rules wouldn't be modified in the light of the consultation, it could be that he didn't dig out the primary source himself but relied on what others had written about it (one can get a good 'Chinese whispers' effect from a sequence of reporters each basing their report on what the previous one had written), it could be that what he wrote described what the FCA was saying properly but a subsequent copy editor had made it more succinct and hard-hitting without realising (or without caring) that the meaning was being altered, there could be other causes I haven't thought of offhand.

But whatever the cause, the FCA link provided actual information about what the FCA is doing, and the start of the Times article a rather misleading misinterpretation of that information. And for anyone who is worried about the possibility it raises, by the way, the difference is important to what they can do about it: if it were rule changes that are definitely going to come into effect, all they could do is sell any investments they have in funds that could be affected; as it is, they can also (if they want) send a consultation response to the FCA.

However, before anyone here does that, I will point out that it's all about "Open-ended funds that invest in illiquid assets". BLND and other REITs invest in property, and as most who have bought or sold a house will know, property can be a pretty illiquid type of asset (i.e. not guaranteed to be convertible to cash at short notice). But neither REITs nor any other type of investment trust are "open-ended" - that's a description that applies to funds like e.g. unit trusts and OEICs, and means that investors can freely buy new units from the fund manager and sell existing units to the fund manager, and the fund manager is basically obliged to deal. Which can be distinctly embarrassing financially if there is a 'run' on the units, obliging the fund manager to pay out a lot of cash at short notice, and the assets the fund manager needs to sell to obtain that cash can only be sold at anything like their market value at several months' notice...

That simply doesn't apply to BLND and other REITs: they're "closed-ended" and if you were to approach the company with a request to buy your shares off you for your fair share of its property portfolio's value, you would simply get pointed to the stockmarket as the place to sell the shares. I.e. this FCA consultation is of no direct relevance to BLND or any other HYP holdings, and anyone who produces a consultation response on the assumption that it does have such relevance will simply be wasting both their own time and the FCA's...

Gengulphus

[Breelander]

... I will point out that it's all about "Open-ended funds that invest in illiquid assets"...

...That simply doesn't apply to BLND and other REITs: they're "closed-ended"...

That was my interpretation too, but I felt I should just gave the link to the FCA without comment so that others could make their own interpretation of the facts. I'm glad to see your conclusion is the same as mine.