Bull investors visiting Vets for Sedatives. Recovery in three mind steps

Monday, Jun 27 2016 by

Good morning fellow troubled investors,

Unless you are in cash you are likely to be hurting with rapid share price falls across your portfolio with few exceptions. If you were buying Friday and again today Monday morning than you are likely to be losing extra percentage points on top of that. 

A few possible Monday recovery stocks like Lloyds, ITV and Talyor Wimpey on my list spiral further downwards. Some price declines were even steeper than the Friday before.

Something is definitely happening that we don't understand. Too many investors are too bullish, hence the market will continually challenge the collective wisdom. We cannot price risk adjust valuations, because we cannot quantify the risk or upside of Brexit.  We follow stocks mostly from one RNS announcement to another.  We can normally leave economics and politics out of the equation. 

Most stock market investors don't spread bet or do put options.  Therefore they need a rising market to make money and are always long only with varying percentage amounts of cash at a point in time.

Investors like us have only three options to sell, hold or purchase. Our first reaction is to hold and do nothing .  The 2nd reaction is to buy selectively stocks or average down. The third stage is when we begin to sell our conviction stocks because the pain of loss is too much.  

On CNBC early this morning, I heard something that struck a chord with me that "populist vote is not good when it goes against national interest".  Will the elected government over the weeks and months ahead do the Michael Jackson Moon Walk! In this scenario, they create the circumstances where they look as if they are going forward but rather they are seeking an honourable rejection of what has been democratically decided.

If this was to suddenly to happen those shorting sterling or shorting market indices would be badly stung.  Bulls could  yet be saved. That sedative is kicking in.  I am hallucinating.....


Dearg Doom

PS (When we run out of stocks to recommend to each other in volatile markets than it is possibly a good time to buy. When we recommend stocks to sell that is also a good time to buy. Share suggestions below, please. Keep them coming!)

(Disclosure bought Lloyds this morning at 55p.  I'm in the 2nd stage)

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Lloyds Banking Group plc is a provider of financial services to individual and business customers in the United Kingdom. The Company's main business activities are retail and commercial banking, general insurance, and long-term savings, protection and investment. The Company's segments are Retail, Commercial Banking, Consumer Finance, Insurance and Other. The Retail segment offers a range of financial service products, including current accounts, savings and mortgages. The Commercial Banking segment offers a range of products and services, such as lending, transactional banking, working capital management, risk management and debt capital markets services. The Consumer Finance segment offers consumer lending products, including motor finance, credit cards, and unsecured personal loans. The Insurance segment provides a range of protection, pension and investment products. Its brands include Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, Colleys, Lex Autolease and AMC. more »

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Taylor Wimpey plc is a residential developer. The Company operates at a local level from 24 regional businesses across the United Kingdom, and it has operations in Spain. Its segments include Housing United Kingdom and Housing Spain. The Housing United Kingdom segment includes North, Central and South West, and London and South East (including Central London) divisions. The North division covers its East and West Scotland, North East, North Yorkshire, Yorkshire, North West, Manchester, North Midlands, Midlands and West Midlands regional businesses. The Central and South West Division covers its East Midlands, South Midlands, East Anglia, Oxfordshire, South Wales, Bristol, Southern Counties and Exeter regional businesses. The London and South East Division includes Central London and covers its East London, North Thames, South East, South Thames and West London regional businesses. It builds homes in various locations of Costa Blanca, Costa del Sol and the island of Mallorca. more »

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ITV plc (ITV) is an integrated producer broadcaster (IPB) and creates, owns and distributes content on multiple platforms globally. The Company operates through two segments: Broadcast & Online and ITV Studios. The Broadcast & Online segment operates commercial channels in the United Kingdom (UK) and delivers content through linear television broadcasting and across multiple platforms. ITV also engages directly with consumers through subscription video on demand on the ITV Hub+, competitions, live events, gaming apps, merchandise and pay per view events, driving value from consumers' increasing willingness to engage with brands. The ITV Studios segment is the Company's international content business which creates and produces content in the UK and internationally across 12 countries. ITV Studios produces programming across a range of genres including drama, entertainment and factual entertainment for ITV's own channels in the UK and local broadcasters in the UK and globally. more »

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9 Posts on this Thread show/hide all

herbie47 27th Jun '16 1 of 9

Taylor Wimpey (LON:TW.) now down 12%. Airlines badly hit by easyJet (LON:EZJ) profit warning. I bought some £LOY as well, only small opening, may top up if goes below 50p. Oil and gold doing ok or well.

I may look at Next (LON:NXT) again now about £45, I sold mine last Friday, looking a bit oversold now.

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Dearg Doom 27th Jun '16 2 of 9

Hi Herbie,

Waterman (LON:WTM) looked cheaped at 72p  down 11%+ and decided to grab a few.  I looked at this morning's company RNS annoucement, which while positive may have been released due to nervousness of the company regarding future quantity of work and pricing terms. 

The re-assurance has not worked in the mass market banks and construction sell off.

Now we come to the guessing game as to the extent of the economic slow down or do we have an outright recession in the making.

Extra Sedatives for Bulls urgently required.


Dearg Doom

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herbie47 27th Jun '16 3 of 9

Hi Dearg,
I hold some Waterman (LON:WTM), yes looking cheap but i don't think I will be topping up, as you say future is rather uncertain. I notice some food companies are down which seems a bit odd, are we going to eat less? I may buy some Cranswick (LON:CWK), Finsbury Food (LON:FIF). Also supermarkets are usually a good bet if there is a recession which I think is very likely, with prices going up and uncertainty I think some contracts will be put on ice. How about J Sainsbury (LON:SBRY).?

Another one I hold which has fallen is Fairpoint (LON:FRP), don't really understand why, thought they may benefit from this situation. Maybe tarred with the fincancial fall out.

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xcity 27th Jun '16 4 of 9

Fairpoint (LON:FRP) has been falling steadily for quite a while.
Something going on? Big seller?

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herbie47 27th Jun '16 5 of 9

In reply to post #139160

Not sure can't find anything at the moment.

Marshalls (LON:MSLH) maybe worth considering, down about 30% now to 220p.

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paraic84 27th Jun '16 6 of 9

In reply to post #139160

I have wondered why that is. Is there something EU-related that I am missing about Fairpoint? Are any of the claims it would deal with governed by EU law? Or is it just a victim of indiscriminate selling post referendum?

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herbie47 27th Jun '16 7 of 9

In reply to post #139124

Some shares have bounced off their lows like Persimmon (LON:PSN) but its been a grim day. Think I will go more defensive, already have about 40% cash, many small companies now sold. Most of my large ones are holding up well. The FT250 has taken a beating.

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Dearg Doom 27th Jun '16 8 of 9

A difficult day for almost every investor.  Best to limit one's time each day watching the stock market in order to allow one to sit back a little and observe from afar.  Being to near the action can frustrate and lead to poor decision making. Likewise  soccer games should also be left alone and possibly newspaper sports pages skipped to allow for a period of  deep reflection..

Tomorrow is a new day and another opportunity for bulls and I to pick up further stock in a few unloved stocks at seemingly bargain prices. Investors are already hurting on their existing share holdings which are simply being re-priced to reflect riskier future environment. Buying something else a bit cheaper makes the situation not feel quite as bad as it might be do otherwise.

This is not the time to double down on sectors in which you are already over exposed but to diversify risk into other declining areas where one have less exposure.

Eventually the market  will re- consider TINA (There is no alternative) where shares earn dividends when bond yields are so unrewarding.  Currently the capital preservation by some investors has proven the best play. The downside is that having sold correctly, the same investors can't pull the trigger to re-invest and lose out on outsize capital gains over a few days or a week that often occur subsequently.

A lot of investors are not fully invested.  Investors will concentrate mostly on buying shares rather than disposing of  shares in their portfolio. When investors are fully invested the only option is to sell something. Possibly best  buying opportunities occur at this point in the relentless selling pressure as  negative news is headlined on television, newspapers, and bulletin boards.


Dearg Doom

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herbie47 27th Jun '16 9 of 9

In reply to post #139490

Hi Dearg,

Yes tomorrow is a new day, think some of these sectors must be near the bottom now, may see a bounce in the next few days. Prudential (LON:PRU) down again looking very tempting now, most earnings seem to be outside the EU.

Greggs (LON:GRG) have come down quite a bit, will watch them.

Do you know anything about Hikma Pharmaceuticals (LON:HIK), there has been massive director buying today?

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