Buying Opportunities or Falling Knives

[SKYSHIP]

Did a total volte-face with TFG - found myself worrying about it, so cut and ran with a few bob, purely on the back of a stronger US$..

A far more secure bet is regional propco AEWL: NAV, dividend & Update last week. I added to my holding there as the figures, both Dividend cover and NAV, were better than I expected.

https://uk.advfn.com/stock-market/londo ... o/81684852

I had thought that they might temporarily cut the dividend so as to have full year cover; but the stats show not really necessary.

At 73.5p the discount = 22.3% & the yield = 7.5%; so AEWL is certainly one of the best value minor REITs, with most of the others climbing to new highs and discounts disappearing.

The Liberum view to the statement was "we see the longer term goal of growing the size of the company as challenging given the current scale and share rating". More like impossible I would say; so a trade sale still the most likely outcome.

The BoD have been too self-interested by far; otherwise a deal would have been done at the time of last year’s Review. It has been suggested that AEWL with a MCap of just £59m could live on as a Zombie; however more likely that they will get taken out at some stage, albeit at a c10% NAV discount.

Still, such an outcome would deliver 85p - 15% up on where they are now! I could live with that; in the meantime I'll enjoy the 7.5% yield...

[SKYSHIP]

25% CASH, so casting around for VALUE my eyes alighted again on the liquidating NBDG!

I saw that the NAV unaccountably jumped 3.3% on the 11th February – from 81.82p to 84.56p; then on to 85.02p on the 12th.

The 4th Feb. Qtly Update (for Q4’19) states “The investment manager’s current expectation is to distribute 80%-85% of 31st Dec’19 NAV in 2020 and the remainder in 2021.” – see link below.

With the offer price of 69.1p the NAV discount = 18.73%.

It's easy to do the numbers for the possible return, making quite conservative assumptions:

# Achieve 80p on an average date of end Dec'20: 18.1%

# Achieve 77.5p on an average date of end Dec'20: 14.0%

# Achieve 75p on an average date of end Dec'20: 9.8%

I know the investment management of NBDD has been pretty disastrous; and if NB Partners had any honour they would waive their 1.5% management fee hereon in. That won’t happen of course; but in any event at this low level I’m prepared to make a small allocation.

http://www.rns-pdf.londonstockexchange. ... 20-2-4.pdf

[SKYSHIP]

DAEJAN Holdings (DJAN) - time for the family to buy it in...

I posted this on the REIT board a couple of days ago; but thought it should also be of interest here:
=====================================================================================

Mark Jenner, DJAN’s company secretary, said there are “no current plans” for Daejan to cease being a publicly traded company. Note: No "current plans"!

https://www.thejc.com/news/uk-news/fres ... s-1.483616

https://www.thisismoney.co.uk/money/mar ... women.html

The Freshwaters will not give ground on the increasingly vocal Diversity issue is, or anything else for that matter. But I suspect that taking the company private is increasingly likely so as to avoid investigation, publicity and criticism.

They know full well that a tender offer at a fair price will deliver certainly 75% of shares in public ownership, then Section 103 of the Companies Act permits them to buy in the balance.

A FAIR PRICE?
# 10% discount to NAV = £107……a 106% gain from £52
# 12.5% discount to NAV = £104……a 100% gain from £52
# 15% discount to NAV = £101……a 94% gain from £52

DJAN has been a value trap for years and years; however If people quite reasonably begin to think a buy-out is a possibility, then the sp will begin to close the alarming discount to the £119 NAV. That discount has traditionally waxed and waned in the 30%-60% range. So worth considering that as it now stands at 55%, a mere closing in to 50% delivers a 12% gain to the sp as it climbs back up to the Apr'19 level

I think it will happen; and will likely happen this year. There being no point in waiting any longer.

I recommend only a small allocation; but one which could well deliver a truly exceptional return.

[SKYSHIP]

Hopefully someone out there followed me into DJAN after my earlier post.

The bid duly arrived this morning. OK, only at a 50% premium, but still extremely happy with that as I recently upped to a full allocation holding.

https://uk.advfn.com/stock-market/londo ... c/81812621

[PinkDalek]

Yes, well done.

Unfortunately copying across already truncated links makes them inaccessible. For ease, here is where you recently raised Daejan at REITS etc:

DAEJAN (DJAN) - time for the family to buy it in...
viewtopic.php?f=87&t=21809

[SKYSHIP]

An Update on BBB's VPC Specialty Lending Investments (VSL).

Over the last few weeks VSL has ground slowly higher from 78p to 82.0p, their deserved re-rating seemingly held back by the tap selling by Invesco.

Then on Friday their entire 18% residual holding was sold at 79p – the tap has gone; so IMO the shares are likely to make more rapid progress in their re-rating to or above the 93.3p NAV.

The shares went to a new investment jointly owned by the investment managers and a large US insurance company.

On a 2p qtly dividend the yield at 82.5p = 9.7%. At 93.3p = 8.6%. At 100p = 8%.

[Stan]

Two many Companies to consider buying at the moment but a buying opportunity never the less IMHO.

[kempiejon]

I'll be buying the market as soon as we get to the bottom.

[moorfield]

I'll be buying the market as soon as we get to the bottom.

Do let us know when that is. In advance of course.

Keep an eye on the CBOE Volatility Index, once that spike calms down, that's your time to buy.

https://www.marketwatch.com/investing/index/vix/charts

[fca2019]

I'll be buying the market as soon as we get to the bottom.

I think many are waiting to buy, but when is the market going to bounce back, anyone's guess. I do think UK stocks were unloved and undervalued vs US stocks before this correction so definitely buying opportunities out there.

[dlp6666]

Keep an eye on the CBOE Volatility Index, once that spike calms down, that's your time to buy.
https://www.marketwatch.com/investing/index/vix/charts

Or try the 'Fear and Greed' composite index:

https://money.cnn.com/data/fear-and-greed/

[flyer61]

Bought VMID this morning. Trying to take a 10 year view that Britain will do well over the next x years.

[Steveam]

I've just bought a few (more) Aviva.

[moorfield]

I'll be buying the market as soon as we get to the bottom.

Do let us know when that is. In advance of course.

Keep an eye on the CBOE Volatility Index, once that spike calms down, that's your time to buy.

https://www.marketwatch.com/investing/index/vix/charts

Wow that spike is mighty tall. Taller than 2009.

Be cool like Fonzies, and wait for it to pass.

[BT63]

I built my HYP long ago and for the last several years excess dividends get recycled into the lazy option of index funds.

Each month on three different days an automated purchase goes through.

Depending on how high or low I feel the market is, I adjust the proportion going into index funds, cash savings or beer money.

Today I significantly upped the index buying and significantly reduced the savings and beer money allocation. Which is why I'm posting here tonight and not gone down the pub.

But that doesn't mean I think the bottom is in.
Maybe it is - VIX is high and earlier today FTSE was close to 20% down from its peak - and no doubt central bankers will come along soon to keep the party going with interest rate cuts and helicopters full of even more QE.
But maybe it isn't the bottom - we have had over a decade of questionable financial decisions propping up and boosting markets, and yield curves look recession-ish, so a much steeper decline could be quite possible.

Whether it's the bottom or not, I'm happy to begin accumulating at a much faster rate than I have for some years.

[moorfield]

Do let us know when that is. In advance of course.

Keep an eye on the CBOE Volatility Index, once that spike calms down, that's your time to buy.

https://www.marketwatch.com/investing/index/vix/charts

Wow that spike is mighty tall. Taller than 2009.

Be cool like Fonzies, and wait for it to pass.

Those knives are still falling, very volatile markets today, higher than ever.

Keep being cool like Fonzies, and wait for it to pass.

[TahiPanasDua]

What I need to do is absolutely ignore daily price fluctuations of specific stocks/ITs and, if anything at all, follow only macro market movements. For me personally, this helps to reduce the greed factor epitomised by "fear of missing out" which comes to the fore when I see a particular stock or IT I hold fall below a recent price. It may not work for everyone and diving in is not wrong even if it is not optimal.

For me at least, only following the big market picture helps me to feel a bit more academic, detached and relaxed. In the dotcom and following financial crises, this worked really well. Then I set reasonably modest targets for Shiller's CAPE which works best with big market moves. Reversion to the mean suggests I could be in for a big fall if I try again. Nobody wins all the time. At the moment, I am happy to sit out the virus fall but who knows? The virus panic could easily lead to a more general panic, probably based on high debt levels. I could get really interested then but I am fully invested, don't have oodles of free cash outside my holding fund, don't feel the same need to boost my net worth and will definitely not leverage this time round.

Doing nothing and sticking by a long term buy and hold strategy is also a good option. Or is that wishful thinking?

TP2.

[Midsmartin]

"Doing nothing and sticking by a long term buy and hold strategy is also a good option"

It's a good option in most circumstances, specially if you can reinvest dividends and so on at the lower price. There are bears out there who draw parallels between high stock markets now, high debt etc and 1929 - when buy and hold didn't work out too well. In reality, nobody knows of course. I failed to sell much just before the crash, even though I kind of knew I should be selling - I suffered a terrible Fear of Missing Out. I've reduced quite a bit on the way down, which may or may not be a terrible mistake.

[barchid]

It is really like asking how long is a piece of string, but I tend work on the basis that time in the markets is usually better than timing the markets, a hoary old saying but it does hold true, at least since I've been involved.
I always respected those fund managers (and there were a few), who carried on buying UK equities all through 1974, which was a truly vicious bear market with a terrible geo-political backdrop from 24% domestic inflation, oil price hikes after the Yom Kippur war, terrorists leaving bombs around the UK, miners strikes and Harold Wilsons prices & incomes policy, to mention just a few issues then causing mayhem in financial markets.
But as ever, only time will tell.....

[ADrunkenMarcus]

It is really like asking how long is a piece of string, but I tend work on the basis that time in the markets is usually better than timing the markets, a hoary old saying but it does hold true, at least since I've been involved.
But as ever, only time will tell.....

Ditto.

I got so excited when the red tide flowed over the markets. I’m hoping they’ll remain this low or even lower in April when I’ll have cash to use.

Also I’m young and virile so hope to have time on my side.

Best wishes

Mark