Tesco Shares

Minrich

We have quite alot of Tesco Shares and watch their price fluctuate up and down . We get them under Options and SAYE as one of us works for Tesco . They pay about 4% divi and we are quite happy with that . What do others think about them ? We are likely to continue to buy as many as possible (£50pm) until retirement , about 8 years away

Archi_Bald

Do you have other shares or funds? Holding all your investment in a single share is a massive risk. Buying shares at an employee discount is generally not a bad idea but keeping all your eggs in one basket definitely is.

IrnBruMan

I agree with Archibald, having all your shares in one basket is risky.

If you get your shares on preferential terms then take advantage of this by all means but if the amount you save is really important to you you should think of moving some of the money in your Tesco shares to other investments. Maybe skimming it every year or two.

I don't think Tesco is a bad stock to own and they're in the process of cutting back some of the loss making operations in the US & China to concentrate on the UK/Thailand/South Korea/Hungary.

The risk with one stock is that something unexpected might go wrong that affects that company or sector only, whilst the wider market is perfectly okay, so only you, the tesco or supermarket share holder loses out. Something like the horse meat affair but more long lasting, maybe a salmonella scandal where Tesco is found wanting. Maybe Philip Clarke is just to small a man to fill his illustrious predecessors boots.

I'm an analyst of investment trusts and I'm clear in my own mind that equities is the place to be right now but maybe better via an investment trust or open ended fund.

opinions4u

I used to collect HBOS shares for fun through various incentive / savings schemes.

I was lazy / greedy and held on to them. They lost 98% of their value.

If I had my time again I'd accumulate shares, sell them soon after receipt (within CGT limits) and reinvest them in diversified funds within an ISA wrapper. Or reduce debt.

The supermarket sector works on narrow profit margins v turnover. All eggs in one basket is rarely a good idea.

IrnBruMan

Oh poor you opinions4u My Mum had HBoS shares too but I persuaded her to switch in to a portfolio of investment trusts. She still lost almost 30% in the crash but she has made it back and much more now.

opinions4u

IrnBruMan wrote: »

Oh poor you opinions4u My Mum had HBoS shares too but I persuaded her to switch in to a portfolio of investment trusts. She still lost almost 30% in the crash but she has made it back and much more now.

The outcome was a disaster. But it was my own fault.

grey_gym_sock

i can't think of anything quite that bad (for the share price) that could happen to tesco. and i own some of the shares, so i have tried to think about it

however, there's a limit to how much i'd be comfortable holding in any share. because there are always the "unknown unknowns".

1 way of looking at it is that tesco shares are < 5% of the total value of shares i own. which seems a reasonable limit. actually, i could live with it being a bit higher than that. but over 10% or 20% might be too much.

another way of looking at it is: how long would i have to work to buy this many tesco shares, at the full market price, out of my after-tax income? in my case, it would be about 2 months. which seem OK. if it were getting near to a year, i'd start to be worried.

Glen_Clark

Tescos problem, as a middle of the road retailer, is that as the gap between rich and poor gets wider, Tescos rich customers are going to Waitrose, and their poor ones going to Aldi & Lidl http://www.youtube.com/watch?v=RKsGKERivTQ

bigadaj

opinions4u wrote: »

The outcome was a disaster. But it was my own fault.

My mother in law was ina similar position with lloyds share. Worked there for years, took all bonuses in shares and reinvested the dividends, I tried to persuade her of the risk, and thinks he did manage to cash some in before the last collapse but still lost a packet.

The scary thing was that she retired to get away from the targets for selling that staff were continually pushed on, whilst like many of her colleagues she had no understanding of the risk she was taking with her own money.

Interesting to contrast the banks in this regard, compare them to bp for example and there has been some criminal destruction of wealth within huge institutions.

Glen_Clark

bigadaj wrote: »

there has been some criminal destruction of wealth within huge institutions.

not criminal because politicians decide what is criminal and what isn't. Hence no bankers have gone to jail.

Thrugelmir

Glen_Clark wrote: »

Tescos problem, as a middle of the road retailer, is that as the gap between rich and poor gets wider, Tescos rich customers are going to Waitrose, and their poor ones going to Aldi & Lidl http://www.youtube.com/watch?v=RKsGKERivTQ

Tesco's has a far broader base than it's competitors and it's started to diversify. One added attraction is that it's the largest property company in the UK.