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The Big Short Thread


sancho panza

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sancho panza

image.png.8e614e6134bdd3ba98ba5db464a6ba3a.png

 

Lose some win some.

 

TPK getting mullered as below.This is a massive red flag for the construction sector if anyone is looking.Strangely,builders up today.

 

https://www.theconstructionindex.co.uk/news/view/travis-perkins-mulls-quitting-diy-market

Travis Perkins mulls quitting DIY market

5 hours Builders’ merchant group Travis Perkins has posted a first-half pre-tax loss of £123m because of its exposure to the consumer DIY market.

640x480_1533024172_wickes.jpg

Business is going okay for Travis Perkins in the construction industry; its problems relate to its chain of Wickes DIY stores, a sector already struggling across the board even before a snowy March and April kept DIY-ers out of the stores.

Travis Perkins booked a £246m write-off of goodwill in Wickes in the first half of 2018 and is slashing cost from the business.

The board is now looking at whether it wants to be dealing with the High Street consumer at all.

A comprehensive review of its business has been launched, focusing on “defining a simplified group structure aligned more closely with its core customer base”.

Overall group revenue was up 4.4% to £3,364m for the six months to 30th June 2018. Excludi ng exceptional one-off costs, adjusted profit before tax was £167m.

Chief executive John Carter said: “Our trade focused businesses in General Merchanting, Contracts, Toolstation and Plumbing & Heating achieved good sales growth despite experiencing a volatile first half. These businesses exited the period with encouraging momentum and, supported by a continued focus on cost, they remain on track to deliver modest profit growth for the full year.

“Our consumer-focused business, Wickes, has had a far more challenging period as weaker consumer spending trends, combined with a difficult competitive environment, have held back profitability. Consequently, the Wickes team is executing a significant cost reduction programme. Whilst these savings will help drive improved profitability through the second half of the year, Wickes’ profits will be lower than previously expected.

“Against a backdrop of changing market conditions which are expected to continue for the foreseeable future, the group has commenced a comprehensive review of its business, with a view to driving stronger performance and enhanced value for shareholders in the medium term.”

 

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59 minutes ago, sancho panza said:

image.png.8e614e6134bdd3ba98ba5db464a6ba3a.png

 

Lose some win some.

 

TPK getting mullered as below.This is a massive red flag for the construction sector if anyone is looking.Strangely,builders up today.

 

https://www.theconstructionindex.co.uk/news/view/travis-perkins-mulls-quitting-diy-market

Travis Perkins mulls quitting DIY market

5 hours Builders’ merchant group Travis Perkins has posted a first-half pre-tax loss of £123m.. 

Travis Perkins booked a £246m write-off of goodwill in Wickes in the first half of 2018

Again could BTL be to blame? My rental house is falling apart.. the amount of glue a sealant I go through just to stop the roof from leaking and my cracked tap from flooding the worktop... How do you sell to buy to let sharks who just don’t care.. Landlord told me to fix it myself.. I’m not buying new stuff.. 

Maybe the new HMO licensing in October might force a few slum lords to tidy up their slave boxes.. 

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sancho panza
4 hours ago, macca said:

Again could BTL be to blame? My rental house is falling apart.. the amount of glue a sealant I go through just to stop the roof from leaking and my cracked tap from flooding the worktop... How do you sell to buy to let sharks who just don’t care.. Landlord told me to fix it myself.. I’m not buying new stuff.. 

Maybe the new HMO licensing in October might force a few slum lords to tidy up their slave boxes.. 

I suspect a lot of maintenance is getting canned.

We rent.Our LL is well off enough for now but I have my doubts longer term.

Marginal BTL LL's will be badly hit and I suspect will stop delivering to the tenants they so regularly claim to do 'chariddee' work for.

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2 hours ago, sancho panza said:

I suspect a lot of maintenance is getting canned.

We rent.Our LL is well off enough for now but I have my doubts longer term.

Marginal BTL LL's will be badly hit and I suspect will stop delivering to the tenants they so regularly claim to do 'chariddee' work for.

Mines better than my cuz’s Room/apartment/front room a converted house.. her front door (patio door) gets stuck.. she can’t have more than 3 electrical items on or the power trips.. The place is a death trap.. only £1000 per month + £75 to park her motorbike in the front garden..

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7 hours ago, macca said:

Again could BTL be to blame?

Of course it is.  I have lots of ideas how improve my rented place but there is no way I am spending any money in addition to rent on it.

Plus even getting wall paint of non-magnolia colour was enough of an achievement. 

I had worse - remember one of my previous landlords only allowing a repaint of exactly the same colour.  Which happened to be some precise shade of pink.  

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Simple economics.

Policies put in place to keep house prices going higher for voting boomers, have left a younger rent generation that doesn’t give a shit about doing up a place that isn’t theirs.

On top of that, the ‘skills’ required to learn DIY (for non-tradies) is usually passed down from father to son etc. That has been ousted due to being able to get cheap EU labour instead, same as washing your car for a fiver.

Now put on the added pressures of the cost of living/mortgage/rent pushing the average joe into reliance of credit/debt, causes people to make do and put off any non essential repairs/redecoration.

It’s a dead sector as far as retail non-trade goes. This is also the reason why we’re seeing other retail sectors suffer also like generic restaurants and entertainment. My local Vue cinema has reduced their prices by 50% and are charging £5.99 at any time just to get bums on seats.

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 I got the distinct impression the last time I went into Wickes a couple of months ago the pricing had shifted upwards. The get slaughtered on pricing for basic consumables by Proper Job locally and will be  buying sand and alike loose from now on in the trailer as it should be worth the effort hauling it out for the price difference. 

Agree on the BTL, dire for the quality of work done on increasing proportion of housing and renters do not want to splash out on furnishings that they have to cart around with them every time they move.

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Talking Monkey
6 minutes ago, azzuri82 said:

Just as well I didn't touch those Tesla shorts - absolute insanity stock!

Dji0mFeUcAA5eVY.jpeg

So it makes another whopper of a quarterly loss and it goes up even more, is their future so much brighter than Ford or GM, the market is valuing them more than Ford. Maybe it won't be till next year they start coming back down to earth. I got to say it smells fishy does Tesla

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1 hour ago, Talking Monkey said:

So it makes another whopper of a quarterly loss and it goes up even more, is their future so much brighter than Ford or GM, the market is valuing them more than Ford. Maybe it won't be till next year they start coming back down to earth. I got to say it smells fishy does Tesla

I wouldn’t touch Telsa stocks with any large amounts (shorts or otherwise) with a barge pole. Far too much speculation makes it completely irrational.

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Donald McFlurry
4 hours ago, azzuri82 said:

Just as well I didn't touch those Tesla shorts - absolute insanity stock!

Dji0mFeUcAA5eVY.jpeg

I had a feeling this might happen after the earnings release. Last week I sold my puts, for a slight profit (also from the strength in the USD). I still believe that fundamentally their valuation is too high. However there is still too much belief in the story for it to go down yet. 

 

Overall the emotional cost of this short is too high for me. Much prefer the quiet boring ones.

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3 hours ago, Sideysid said:

I wouldn’t touch Telsa stocks with any large amounts (shorts or otherwise) with a barge pole. Far too much speculation makes it completely irrational.

A third of the stock sold short - potential for large squeezes and like I said seen it before, he's fought that battle already before  and won that one. Production volumes seem to have picked up and some of the major production issues may be behind them, how many business CEO's would sleep at the factory and also have started other companies like SpaceX. Profitability of Model 3 predicted to come in earlier than previously expected. Yes it seems bonkers same market cap as Ford but then the last time I bought a Ford was the late 80's and the likelihood that I would buy a Tesla vs Ford in the future is trending towards the former. You are looking at a very talented and driven individual with a long term plan, he's basically forced the whole of the rest of the market to seriously look at developing competitive electric cars but he has done it on his terms and worked out short cuts - like taking out the whole distributorship model (fighting the unions all the way) and this latest Chinese deal refusing to give them co-working agreement, he's thought this through as well as biting the bullet in regards battery production in-house. Next logical product is a  premium super mini at say around $20K with a 200 mile range - get that right and make it in volume in China..............

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Democorruptcy
On 16/07/2018 at 12:53, Cunning Plan said:

We have a Pappa Johns and a Dominoes.

ALL the youth now use Pappa Johns as it is half the price.

 

I got a Dominoes flyer through the door yesterday. £11.99 for a small Margherita seems expensive. The Wetherspoons around the corner from them is getting a pizza oven and in their other  pubs I've seen a Margherita including drink glass of wine, Guinness etc for £6.49.

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2 hours ago, onlyme said:

A third of the stock sold short - potential for large squeezes and like I said seen it before, he's fought that battle already before  and won that one. Production volumes seem to have picked up and some of the major production issues may be behind them, how many business CEO's would sleep at the factory and also have started other companies like SpaceX. Profitability of Model 3 predicted to come in earlier than previously expected. Yes it seems bonkers same market cap as Ford but then the last time I bought a Ford was the late 80's and the likelihood that I would buy a Tesla vs Ford in the future is trending towards the former. You are looking at a very talented and driven individual with a long term plan, he's basically forced the whole of the rest of the market to seriously look at developing competitive electric cars but he has done it on his terms and worked out short cuts - like taking out the whole distributorship model (fighting the unions all the way) and this latest Chinese deal refusing to give them co-working agreement, he's thought this through as well as biting the bullet in regards battery production in-house. Next logical product is a  premium super mini at say around $20K with a 200 mile range - get that right and make it in volume in China..............

I am a fan, I think he’s a very forward thinking innovative guy. I’m a bit of a aircraft buff, so love the SpaceX stuff. I just don’t think the numbers crunch for long term profitability against the established players in any financial downturn which will tighten the screws in years to come. We shall see.

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sancho panza

this story will build and build.

Decl:Still no position

http://www.propertyindustryeye.com/rightmoves-share-price-does-not-reflect-reality-of-difficulties-agents-are-facing-says-analyst/

Analysts at international bank Berenberg have cut its rating of Rightmove to from ‘hold’ to ‘sell’, saying that there are “too many risks”, with agents feeling the heat.

It follows similar advice from UBS, which last month told investors it was time to take their profits.

In a new report, Berenberg says that Rightmove’s current share price does not “reflect reality” – specifically, the difficulties that estate and letting agents are currently seeing.

Berenberg says that it is “of the view that a business model so reliant on price increases is ripe for disruption”.

In its report, the bank says that it sees both OnTheMarket and Zoopla as strong competitors.

It says that while Rightmove has strong pricing power and high recurring revenues, agents’ own margins are under pressure.

It says: “Newsflow over the coming months is unlikely to be supportive, in our view, which could lead to a significant de-rating. With the shares not too shy of all-time highs, and risks greater than we have seen for some time, we cut to Sell.”

The report says that both estate and letting agents are feeling the heat: “One only needs to look at the share prices of listed estate and letting agents to get a sense of the troubles that some players are currently going through.

“Rightmove also admitted at its H1 2018 results last week that sentiment amongst its members is low.”

Berenberg says that Brexit and other uncertainties mean that there will not be any growth in the housing market in the near term.

In addition, hybrids and an over-supply of agents are putting pressure on fees.

It says there are too many agents chasing too few instructions, while the lettings fee ban, due to come into force next year, “can only add to the woes of the industry”. It says that loss of revenue will be a bitter pill to swallow.

Berenberg, which has cut its price target to 4,100p for Rightmove shares, also makes reference to OnTheMarket in its report.

It says: “Our point is not that we believe OnTheMarket can replicate the success of Rightmove, or even materially dent its dominance.”

However, Berenberg says Rightmove investors are “too relaxed” about the impact OnTheMarket could have on the giant portal.

It says agents could leave Rightmove, and/or the portal might have to lower its profit margin.

Of ZPG, it observes that the business might have “materially more firepower at its disposal” after its acquisition by private equity firm Silver Lake and could now compete more heavily with Rightmove.

Berenberg also says that ZPG could change its business model to allow customers to advertise directly – although it does say that this could trigger an uprising from agents.

Of OnTheMarket, Berenberg says OTM’s ‘new and exclusive’ offering is a clear differentiator and that agents still have a vested interest in OTM’s success.

It lists the top 20 estate agency shareholders in OTM, led by Spicerhaart with a 2.6% stake, Savills with a 1.9% holding, and Knight Frank with 1.7%.

Rightmove shares yesterday closed about 2% down at 4,772p. OnTheMarket’s shares fell 0.60%, or down 1p, to finish at 164.5p.

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see - https://empresa-journal.com/2017/12/30/can-netflix-ever-make-money/

Netflix is in a Race against Time

These disparate sets of figures tell us that Netflix is in a race against time. The company is struggling to grow its revenues fast enough and big enough to cover the losses before the bills come due.

Netflix is also borrowing a lot of money to cover its losses and keep the company in operation. Netflix reported $2.522 billion (€2.13 billion) in cash from financing on 30 September 2017.

This number indicates that Netflix borrowed around $2.552 billion (€2.13 billion). Not the most responsible strategy for a company with revenues of $10.88 billion (€9.17 billion) and liabilities of $13.62 billion (€11.48 billion) on September 30, 2017.

What’s scary is that those liabilities now approach the value of Netflix’s assets which was $16.95 billion (€14.29 billion) on September 30, 2017. It looks as if Netflix has borrowed a mountain of debt, and is now rushing to find ways to pay that debt.

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Talking Monkey
5 hours ago, azzuri82 said:

see - https://empresa-journal.com/2017/12/30/can-netflix-ever-make-money/

Netflix is in a Race against Time

These disparate sets of figures tell us that Netflix is in a race against time. The company is struggling to grow its revenues fast enough and big enough to cover the losses before the bills come due.

Netflix is also borrowing a lot of money to cover its losses and keep the company in operation. Netflix reported $2.522 billion (€2.13 billion) in cash from financing on 30 September 2017.

This number indicates that Netflix borrowed around $2.552 billion (€2.13 billion). Not the most responsible strategy for a company with revenues of $10.88 billion (€9.17 billion) and liabilities of $13.62 billion (€11.48 billion) on September 30, 2017.

What’s scary is that those liabilities now approach the value of Netflix’s assets which was $16.95 billion (€14.29 billion) on September 30, 2017. It looks as if Netflix has borrowed a mountain of debt, and is now rushing to find ways to pay that debt.

I was reading somewhere that a lot of the content that they buy in from Disney will no longer be available as Disney launches its own rival streaming service. They will have to borrow even more to produce content, can't see it ending well. If we move into recession in the next say 18 months, I would have thought cash strapped customers would drop the Netflix service to pay the electricity or mortgage

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I read similar too. Also the fact that when Netflix was younger it got programmes on the cheap but now there has been mass adoption the market rate has increased substantially.

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sancho panza
22 hours ago, azzuri82 said:

see - https://empresa-journal.com/2017/12/30/can-netflix-ever-make-money/

Netflix is in a Race against Time

These disparate sets of figures tell us that Netflix is in a race against time. The company is struggling to grow its revenues fast enough and big enough to cover the losses before the bills come due.

Netflix is also borrowing a lot of money to cover its losses and keep the company in operation. Netflix reported $2.522 billion (€2.13 billion) in cash from financing on 30 September 2017.

This number indicates that Netflix borrowed around $2.552 billion (€2.13 billion). Not the most responsible strategy for a company with revenues of $10.88 billion (€9.17 billion) and liabilities of $13.62 billion (€11.48 billion) on September 30, 2017.

What’s scary is that those liabilities now approach the value of Netflix’s assets which was $16.95 billion (€14.29 billion) on September 30, 2017. It looks as if Netflix has borrowed a mountain of debt, and is now rushing to find ways to pay that debt.

A lot of the Fang stocks are jsut car crashes waiting to happen.However,sane people would have shorted them and lost their shirt years ago.

Timing these bubbles popping is like trying to pot  a golf ball from 10 feet with a blind fold on.

16 hours ago, Talking Monkey said:

I was reading somewhere that a lot of the content that they buy in from Disney will no longer be available as Disney launches its own rival streaming service. They will have to borrow even more to produce content, can't see it ending well. If we move into recession in the next say 18 months, I would have thought cash strapped customers would drop the Netflix service to pay the electricity or mortgage

As well, people can surf the differnet companies.There are no long 12 month contracts,Mrs P switches us between providers adeptly as we get bored.

One reason ITV makes such a compelling short for where it is is that I know a lot of people under 50 are leaving terrestrial providers in droves.I saw the ITV CEO the otehr day saying how great Love Island had done with 4 million viewers.

Coro back in the 80's had 15 million iirc

Decl:short ITV

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sancho panza
20 hours ago, Castlevania said:

But then they can sell Love Island to Netflix to be shown around the world

They're broadcasting 24/7.Watching repeats of past Big Bro style shows isn't really going to pay the bills.

Just my view.

Even allowing for the odd success,their audience figures are way down on 10 years ago.Share price is up 100%

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5 minutes ago, sancho panza said:

FTSE 350 General retailers:pick thereof.

 

image.png.b422a84bfee36b48a5d3ef033348d374.png

image.png.1de306afce601294e997287071193acc.png

image.png.cbbcdbe47c90481901f641c1af1cdfc5.png

image.png.67bc35dab15ff946fe82ee5244c55c6f.png

Wasn't sure when I seen the Dunelm and the Card Factory charts whether you were recommending these to buy or short. Then I looked at the WH Smith one. Absolutely bonkers! 

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I want to add some to this. My “bitter shares of regret” as I never bought.

Christian Dior (CDI Paris) - exploded after July 2016. Come on, that can’t be due to just the sale of that awful sauvage perfume can it?

and ted baker. Just a trendy for the moment brand.

 

cant seem to put up the charts here.

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Elon Musk's tweet today sent TSLA sky-rocketing! Shares were suspended from trading at $367'ish.

Apparently at $369 they can convert over $900million of bond debt (due in Feb 2019) to shares - wonder if the tweet had anything to do with pumping the shares to get rid of the debt obligations?

 

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