Down 5%. Is this due to shorting? Rock have crossed 5% threshold according to RNS feed.
Bookies are currently offering 1/3 odds on that the EU vote will be to stay. And the trend is currently reinforcing the 'stay' vote. That's good enough for me to consider taking action on the basis that we will continue to stay.
So. I am looking at sectors and within these sectors, the stocks likely to bounce post 23 June.
Any views?
Housebuilders and property I think will bounce up after the vote. Problem with stop losses is they make you sell at the wrong time. Had that many times.
Yes another sector that has fallen, I hold Empresaria (LON:EMR). Retail maybe will pick up, not sure about that.
Yes, I hold Staffline which I expect will bounce. It is some 20% off since the start of the year. There is some evidence that companies have been holding back from recruiting over the past few months. If the vote is to stay then I can see companies in a catch-up mode recruitment wise, post June.
All IMO
I am interested to consider how the impending vote may impinge on some investors. I have no problem in understanding why a period of doubt about the possible outcome might stay the hand of some, particularly foreign buyers and I can see how anything remotely negative might be compounded by that anxiety. I can also see why, for some foreigners, the prospect of Brexit might create a jaundiced eye on UK companies who depend on EU trade, banks and others in the financial sector and even companies whose earnings are largely within the UK would be hit by probable changes to the value of the pound, affecting the dividends. The only scenario that seems unlikely to me is a foreign investor taking a position in the hope of Brexit. Are we seeing a load of shorting in this run-up because of this and will we then see a massive sigh of relief once the matter is put to bed?
I'm for staying in, but I'd be interested to know what proportion of Stocko subscribers are for leaving, and why, and how they imagine leaving the EU will affect their own portfolios, both in the long and short terms.
I'm for leaving, I think there will be problems in the short term but in the long term think we will be better off. Not really considered the impact on my portfolio but of course you can sell and buy other shares, I've gone more cash anyway. Small companies it seems want to leave the EU especially ones that don't trade with the EU. Larger companies are ok they can employ staff to deal with the EU bureaucracy, which will probably get worse. More EU control over our laws and us, no thanks. Our vote in EU is very small, their parliament and expenses are a joke. End of the day its the richer countries supporting the rest and the rest is set to grow.
Immigration is a real issue, there are probably too many people in this country already, England is the most densely populated country in Europe I believe.
On the thorny subject of immigration, I wish someone you could believe would discover what the true population of the Uk actually is and then devise some way of establishing what the maximum numbers could be supported by our present economy. If, for instance, we found that we had 75 million but the country could feed and shelter 100 million, the entire issue could be seen in context and planned for. Similarly, if we have that number and can only feed that number, should we do something about the birth rate?
Thats a good point, I'm sure we could take another 35m, plenty of space in some parts of the country but not many jobs. If we have 100m then France could have 200m? Not sure that would go down too well there. If you started doing that you would have an bigger influx of immigrants from Africa and Middle East, everyone would be coming.
My feeling is that migrations essentially normal; animals, insects and birds do it all the time for simple survival. The human race migrated from the early hominids nearer the equator and acquired skills to survive in less comfortable climes or got the Darwin Award. People come here because it is the land of milk and honey and, apart from erecting a Hadrian/Trump fence, we can't keep them out. We might encourage them to stay where they are if we find a way to stop wars ( not adding bombs could be an easy start) and giving the poor a very much larger slice of our cake than we do.
Brexit seems quite likely but it occurs to me that it is more likely to be supported by those who fear being impoverished, along with those who are, if only in global terms, extremely rich and want to stay that way by sharing as little as they can get away with. The current uncertainty has cost me, on paper, some tens of thousands and looks to continue at least until June 24th. After that, anything could happen. My guess would be that if we vote to stay, the current slide will reverse, as the entire world stops holding its breath, but who could be sure?
Coming back to Alumasc, another day of heavy losses. Anybody have any idea why? This cannot all be Brexit surely? Is there anything else out there that I am missing?
Hi Whitbyview, it seems to me there are broadly three options:
- a seller is rebalancing their portfolio and because Alumasc (LON:ALU) is so illiquid a few modest sales (only 20-30K shares at a time) have pushed the price down. See the chart for 10 May for example - 27.3K shares sold at 154.3p then another 21K at 153p were enough to move the price significantly.
- one or more insiders are aware of bad news to come and the news has got out, leading either to these sales or mark-downs or both.
- the level of variability in this share is inherently high and these are random fluctuations of the kind you would expect; see for example Waterman (LON:WTM) recently. It will bounce back on results.
I have no idea which it is and in any case the three are not mutually exclusive. I agree with you it cannot be Brexit, that is not rational. The polling evidence suggests Brexit is less likely today than a month ago. And anyway, why would the prospect of Brexit mean that this company in particular is worth so much less? And if this sector is affected, why is a company like Epwin (LON:EPWN) holding up much better? It makes no sense.
FWIW I am going for the random fluctuation theory and holding on. But I'm not tempted to top up, happy just to see what transpires. Looking at past announcements I am expecting a trading update any day now - in both 2013 and 2014 it was in mid-May. It was delayed to June last year because of the disposal of APC, their loss-making engineering business.
Thank you, that's very interesting. I believe that small and mid-caps are getting squeezed right now so perhaps as you say, someone or fund is needing to liquidate part of their holding. What I hold wouldn't move any price but I suspect that it wouldn't take a huge cash in to move the price. I'm just hoping that the reverse is also true when hopefully the situation is reversed. I did notice an announcement about new management today but it would be a pretty scary appointment if it moved the price down to such a degree. Thanks again for your thoughts.
Hello again, I contacted the company's adviser to test out these options. He was very prompt in replying and said:
- there is no longer a requirement for an update (IMS) in mid-May similar to those in 2013 and 2014 and so there is nothing planned at present.
- if there is news that the market ought to know then there will be an update. The company is aware of its responsibilities.
- the shares are tightly-held and so a few transactions can move the market, even relatively small ones. He cited the movement last October at the time of the AGM when the price moved quite significantly, on no news.
So it is basically a liquidity problem. A few people are selling (for random individual reasons, not because of bad news) and there are so few transactions each day that these sales are having a disprioprtionate impact on the price.
It is of course possible that there are issues emerging that the adviser doesn't yet know about and that have prompted well-informed sales. But I don't really go for that explanation when the one offered is simpler and backed by the evidence (i.e. very low volumes, when you look at the record).
Conclusion: don't buy Alumasc (LON:ALU) unless you are either dealing in small sizes or have a good broker who can ring round and place the shares for you when the time comes to sell. Otherwise you could get trapped.
I think the liquidity issue is overstated regarding Alumasc (LON:ALU) certainly compared to shares such as James Latham (LON:LTHM) and STM (LON:STM) its easy to buy shares upto 1,000, the spread also is quite narrow for such a share around 2%. I have always been put off Alumasc (LON:ALU) by the pension deficit however at 140p I think the shares are good value so I bought a few this morning. Yes there do seem to be some value shares popping up now, time to buy before the Brexit vote?
That is very proactive of you - thank you for doing this and sharing the feedback. In terms of what is going on, if there is a choice between cock up or conspiracy, 99 times out of a 100 it is the former. I have no reason to believe anything suspicious is going on. I bought a small number on the basis that at this price I think they look good value and I also think that liquidity can work in your favour in the right circumstances, as we might see after the vote. Just today I wiped out the cost of the spread and my dealing costs! I'm trying very hard to buy and hold anyway so a lack of opportunity to leave might actually work in my favour :)
That's how I feel and although I am trying to stop timing the market, it seems a chance that I shouldn't waste. Many of the shares I have had half an eye on are falling to more reasonable levels so I'm taking the plunge. Others are pulling out and that is probably the time to move in. Well, that is what I am telling myself. That said, buying between May and September is not known for its success, so I'm going to keep some powder dry and ration my purchases over the summer months.
I don't see anything wrong with timing the market, it has worked for me on many investments but I do prefer tucking shares away for the long term. Warren Buffet liked to buy when the shares fell, I have many on a watchlist and I have picked up a few recently as they became better value like Next (LON:NXT) and now Alumasc (LON:ALU). I'm still a value investor. Momentum investing often seems to go wrong for me.
