Persimmon Trading Update.

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PSN is down so far today. Has "Mr Market" changed his mind yet again, all within 48 hours? If so he is staggeringly fickle, to the extent that he is totally unstable and deserves no faith whatsoever. The idea that very short term price movments are rational and that consequently they tell investors something which should influence their buying - (in an extremely long term strategy!) - is so obviously incorrect that it's hard to believe anyone who's been here more than five minutes can still think that.

I can completely relate to that. There is usually little or no relationship between company health and short term price movements. I think it's adviseable to say "usually", though

The longer the time expands from "short term" upwards, the less this becomes true : it's the voting machine versus the weighing machine analogy of WB in practice.

Arb.

Indeed Arb, though I think it was Benjamin Graham with the voting machine v. weighing machine analogy.

The short term in this thread is merely hours, way short enough to be meaningless and reasonless.

[scrumpyjack]

It is blindingly obvious that crashing out of the EU with no deal is likely to have a very major impact on the prospects for UK house prices and that will have a huge impact on the profits of builders.

A change of nearly 15% in builders share prices in a few days does therefore does say something about the views of investors on the changed probability of that event. The collective views of investors ("Mr Market") is worth considering even if it often turns out to be wrong.

If you can't see that, well good luck to you - you'll need it.

[IanTHughes]

It is blindingly obvious that crashing out of the EU with no deal is likely to have a very major impact on the prospects for UK house prices and that will have a huge impact on the profits of builders.

Not to me it is not, could you just explain why. If it is so "blindingly obvious" it should not be that hard


Ian

[Crazbe7]

Not to me it is not, could you just explain why

Try this from The Royal Institution of Chartered Surveyors

[list=]Enquiries, agreed sales, and new instructions all decline in December
New instructions remain in negative territory - have now declined in 19 of previous 24 months
Sales expectations point to a further decline over the next few months
Headline price net balance slips slightly deeper into negative territory[/list]

full link at https://www.rics.org/uk/news-insight/la ... mber-2018/

Crazbe7

[IanTHughes]

Not to me it is not, could you just explain why

Try this from The Royal Institution of Chartered Surveyors

[list=]Enquiries, agreed sales, and new instructions all decline in December
New instructions remain in negative territory - have now declined in 19 of previous 24 months
Sales expectations point to a further decline over the next few months
Headline price net balance slips slightly deeper into negative territory[/list]

full link at https://www.rics.org/uk/news-insight/la ... mber-2018/

Oh I do not doubt that there are pressures on the property market but the statement was ...

It is blindingly obvious that crashing out of the EU with no deal is likely to have a very major impact on the prospects for UK house prices

I see nothing at the link you provided to back up that very clear statement. What is it that I cannot see that others feel is "blindingly obvious"?.


Ian

[scrumpyjack]

https://www.bbc.co.uk/news/business-45516678

Brexit: Carney warns no-deal could see house prices plunge

Moderator Message:
Rather than delete the post as it does not conform to TLFs rules on posting links, I have added a quote from link. Please add a quote or your own owrds if a link is posted. Thanks in advance. Raptor.

[Dod101]

https://www.bbc.co.uk/news/business-45516678

Brexit: Carney warns no-deal could see house prices plunge

Moderator Message:
Rather than delete the post as it does not conform to TLFs rules on posting links, I have added a quote from link. Please add a quote or your own owrds if a link is posted. Thanks in advance. Raptor.

The trouble with the quote is that Mr Carney does not have a very good record in his forecasting.

Dod

[IanTHughes]

https://www.bbc.co.uk/news/business-45516678

Brexit: Carney warns no-deal could see house prices plunge

The only thing blindingly obvious to me is that if one takes the worst case scenario being used to stress test the British Banking system in the event of receiving a major shock, you will of course obtain a result that will be none to rosy for the housing market

Later on in the piece:

Independent property expert Henry Pryor told the BBC that Mr Carney was "not predicting Armageddon, he was not predicting house prices would fall by a third, they are just making sure that if, for some extraordinary reason* anything was to go horribly wrong, the bank is prepared."

* my bold


Ian

[Arborbridge]

Indeed Arb, though I think it was Benjamin Graham with the voting machine v. weighing machine analogy.

The short term in this thread is merely hours, way short enough to be meaningless and reasonless.

Ah! My ancient memory stands corrected, thanks.



Arb.

[GoSeigen]

The trouble with the quote is that Mr Carney does not have a very good record in his forecasting.

Dod

Yep, just keep repeating that...

...and only listen to people who get all their forecasts right.

GS

[ayshfm1]

He has been pretty rubbish though.

It's also not blindingly obvious to me that house prices will crash. I'm rather hoping they do as they are far too high but that prediction has been made many times and they don't, people have to live somewhere.

If I'm honest if the yields look good I'll be in the market for some diversification into buy to let (via a company), I doubt I'd be the only one.

Yes I hold house builders in my HYP, no I'm not selling them and they may well be topped up.

The list

Persimmon
Taylor Wimpey
Barratt Developments
Berkley Group
Galiford Try

[ElectronicFur]

The trouble with the quote is that Mr Carney does not have a very good record in his forecasting.

Dod

Yep, just keep repeating that...

...and only listen to people who get all their forecasts right.

GS

The majority of forecasts are wrong, so it's better to just ignore them all.

[Arborbridge]

The trouble with the quote is that Mr Carney does not have a very good record in his forecasting.

Dod

Yep, just keep repeating that...

...and only listen to people who get all their forecasts right.

GS

The majority of forecasts are wrong, so it's better to just ignore them all.

Although we might all loosely agree about "forecasters", ignoring some of the people best placed to know what is going on, reminds me of Mr Gove's assertion that we don't need experts. I profoundly disagree, and feel that would be a recipe for society charging this way and that following one popular belief or another.
We advanced beyond the middle ages because of our listening to experts, not because we ignored them.

Arb.

[Quint]

https://www.bbc.co.uk/news/business-45516678

Brexit: Carney warns no-deal could see house prices plunge

Moderator Message:
Rather than delete the post as it does not conform to TLFs rules on posting links, I have added a quote from link. Please add a quote or your own owrds if a link is posted. Thanks in advance. Raptor.

The trouble with the quote is that Mr Carney does not have a very good record in his forecasting.

Dod

Exactly, remember his "forward guidance" that did not last very long. The only people who are worse at forecasting are the IMF.

[Arborbridge]

https://www.bbc.co.uk/news/business-45516678

Moderator Message:
Rather than delete the post as it does not conform to TLFs rules on posting links, I have added a quote from link. Please add a quote or your own owrds if a link is posted. Thanks in advance. Raptor.

The trouble with the quote is that Mr Carney does not have a very good record in his forecasting.

Dod

Exactly, remember his "forward guidance" that did not last very long. The only people who are worse at forecasting are the IMF.

One of the logical problems is that what someone in his position says or does actually alters the outcome of the future that is being predicted. For example, altering interest rates because the Bank believes that the future course requires it, will alter the future and by definition the forecast will be wrong. There's the added dimension of B, of course, which now means that whatever Mark Carney says is likely to be commented upon with an added layer of the comentator's own particular ideological point of view - and it's usually "non-experts" giving that POV.

I'm not suggesting the the Bank has been right or wrong - just pointing out it is in a logically impossible position and likely to be criticised whatever it does. However, somebody needs to make such alterations or give guidance and I would rather it was in the hands of experts than politicians.

Arb.

[ElectronicFur]

The majority of forecasts are wrong, so it's better to just ignore them all.

Although we might all loosely agree about "forecasters", ignoring some of the people best placed to know what is going on, reminds me of Mr Gove's assertion that we don't need experts. I profoundly disagree, and feel that would be a recipe for society charging this way and that following one popular belief or another.
We advanced beyond the middle ages because of our listening to experts, not because we ignored them.

Arb.

All the research into economic forecasting that I have read has shown such forecasts to be wrong the majority of the time. Even the research from the IMF itself on consensus forecasts has shown that. So if that is the case, then it's better to just ignore them all.