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Leverage, BTL and Shares
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Maybe I'm being pedantic here, but Connaught, the banks, Railtrack etc didn't fail while in the FTSE 100, they had already fallen out of the FTSE 100 because it is defined by market cap. So my questions are these: if you buy only in the FTSE 100, can you make a 100% loss, or will the fact that you are selling when shares fall out of the bottom of the FTSE mean that you always have a chance to get out before the company fails? Will there always be a market for shares as companies fall out of the bottom of the 100, or are buyers stuck with them at any price? I don't know the answers btw which is why I'm asking.Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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vivatifosi wrote: »Maybe I'm being pedantic here, but Connaught, the banks, Railtrack etc didn't fail while in the FTSE 100, they had already fallen out of the FTSE 100 because it is defined by market cap. So my questions are these: if you buy only in the FTSE 100, can you make a 100% loss, or will the fact that you are selling when shares fall out of the bottom of the FTSE mean that you always have a chance to get out before the company fails? Will there always be a market for shares as companies fall out of the bottom of the 100, or are buyers stuck with them at any price? I don't know the answers btw which is why I'm asking.
Railtrack was still in the FTSE100 when it failed.
Northern Rock had dropped into the FTSE250 by the time it failed.
I think you're confusing or maybe conflating 2 things: The FTSE 100 and the London Stock Exchange.
Put simply, the FTSE 100 is an index of the 100 largest companies traded on the London Stock Exchange. It is a way of tracking the change in the average price of the shares of the biggest companies over time.
Now just because a company is no longer one of the biggest 100, doesn't mean it has failed or will fail, it just means it's not in the biggest 100 any more. Companies like WH Smith, the London Stock Exchange Group(!), ITV and the Daily Mail Group are all former members of the FTSE100 and are still doing ok. Their shares still trade on the London Stock Exchange and will be bought and sold many times each day, they are just no longer big enough to be included in this average called the FTSE 100.0 -
vivatifosi wrote: »Maybe I'm being pedantic here, but Connaught, the banks, Railtrack etc didn't fail while in the FTSE 100, they had already fallen out of the FTSE 100 because it is defined by market cap. So my questions are these: if you buy only in the FTSE 100, can you make a 100% loss, or will the fact that you are selling when shares fall out of the bottom of the FTSE mean that you always have a chance to get out before the company fails? Will there always be a market for shares as companies fall out of the bottom of the 100, or are buyers stuck with them at any price? I don't know the answers btw which is why I'm asking.
Only 3 companies remain that were listed from when the FTSE250 was first formed .
Sunday question. Who are they?0 -
Railtrack was still in the FTSE100 when it failed.
Northern Rock had dropped into the FTSE250 by the time it failed.
I think you're confusing or maybe conflating 2 things: The FTSE 100 and the London Stock Exchange.
Put simply, the FTSE 100 is an index of the 100 largest companies traded on the London Stock Exchange. It is a way of tracking the change in the average price of the shares of the biggest companies over time.
Now just because a company is no longer one of the biggest 100, doesn't mean it has failed or will fail, it just means it's not in the biggest 100 any more. Companies like WH Smith, the London Stock Exchange Group(!), ITV and the Daily Mail Group are all former members of the FTSE100 and are still doing ok. Their shares still trade on the London Stock Exchange and will be bought and sold many times each day, they are just no longer big enough to be included in this average called the FTSE 100.
Apologies if Railtrack was still 100 when it failed, I thought it had dropped below the bar. Here's my thought process because I don't think I've been clear: if I'm tracking the FTSE 100, the fact that the shares have dropped out of the FTSE 100 should mean my portfolio rebalances. So we rebalance when shares drop out, though granted you may not get anywhere near as much. Now if a company like those mentioned drop out, will there be sufficient demand to buy them at any price: ie if they are cheap enough someone will take the risk, or are there circumstances under which this would not happen. I get that they are all LSE listed, but the falling out of the 100 is a trigger point. Does that make more sense?Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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Thrugelmir wrote: »Only 3 companies remain that were listed from when the FTSE250 was first formed .
Sunday question. Who are they?
I'm guessing Barclays Bank is one, because I can't remember them undergoing the same change as Lloyds/TSB then Lloyds HBOS or Nat West/RBS or Midland/HSBC. Haven't got a clue about the other two.
Oooh that's hard!Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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vivatifosi wrote: »Apologies if Railtrack was still 100 when it failed, I thought it had dropped below the bar. Here's my thought process because I don't think I've been clear: if I'm tracking the FTSE 100, the fact that the shares have dropped out of the FTSE 100 should mean my portfolio rebalances. So we rebalance when shares drop out, though granted you may not get anywhere near as much. Now if a company like those mentioned drop out, will there be sufficient demand to buy them at any price: ie if they are cheap enough someone will take the risk, or are there circumstances under which this would not happen. I get that they are all LSE listed, but the falling out of the 100 is a trigger point. Does that make more sense?
Generally, if a company like WH Smith falls out of the FTSE 100 then you'll still be able to sell at a similar price to the price it traded at when it was still in the FTSE 100. Really it depends on the reason for it dropping out of the FTSE 100.
It is very unusual for a company that is solvent and in the FTSE 250 not to be able to be sold at a reasonable price (by reasonable I mean at a similar price to the price you'd pay to buy it).
Also, as many funds either directly or indirectly track the FTSE 100, the share price usually takes a hit when they drop out of the index.0 -
Thrugelmir wrote: »Only 3 companies remain that were listed from when the FTSE250 was first formed .
Sunday question. Who are they?
Do you mean always in the 250, never in the FTSE 100 either?0 -
Do you mean always in the 250, never in the FTSE 100 either?
B*gger, that makes it even harder.Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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Guest Keen and Nettlefolds, Imperial Tobacco and Rolls-Royce0
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Thrugelmir wrote: »Only 3 companies remain that were listed from when the FTSE250 was first formed .
Sunday question. Who are they?
Complete guess:
Brewin Dolphin
F&C Investment Trust
Hiscox
Actually I bet it's 3 investment trusts. I'd put money on F&C Investment Trust being one of the the three given suitable odds of course.0
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