4% bonds - AFC Wimbledon football club

george4064

My thought is that the 4% coupon is nowhere near enough for the risk you would be taking with this bond.

I would only ever consider this bond if I was a die-hard AFC Wimbledon fan, and should be considered more like a donation than an investment.

Good luck if you do 'invest', you'll need it!

verybigchris

This sort of investment always makes poor financial sense, by definition.

A normal corporate bond is boring. Nobody's getting excited about it. The return is therefore determined solely by supply and demand: the market will determine a rate of return that is commensurate with the risk.

A bond like this, where there's emotion attached to it, sees an increase in demand from people investing with their hearts not their heads. That will inevitably pull down the return to a level lower than the market alone would have demanded.


(BTW, Bury FC had a mini-bond scheme running too)

Murphy_The_Cat

chucknorris wrote: »

Do they own the stadium and is the bond secured on the stadium? I have £67k invested in the Wasps bond. .

Wow.. Did your heart sink when Wasps last set of accounts were released ? Without the windfall payment from CVC, they would have been as grim as grim.

chucknorris

Murphy_The_Cat wrote: »

Wow.. Did your heart sink when Wasps last set of accounts were released ? Without the windfall payment from CVC, they would have been as grim as grim.

No, the cashflow problem (in terms of paying off the bond) is well known, that's how I was able to buy at only 84 pence, you wouldn't be able to do that if everything was fine! But their situation has improved immensely this year, have you not heard what has happened to Saracens?

Thrugelmir

aroominyork wrote: »

I would like to see the FCA (or other appropriate authority) try to do something to change the use of wording and reduce the confusion out there.

People ultimately have to accept responsibility for their own decisions. There's far more resource available these days than in the past for research. Prior to making any investment choice.

Murphy_The_Cat

chucknorris wrote: »

No, the cashflow problem (in terms of paying off the bond) is well known, that's how I was able to buy at only 84 pence, you wouldn't be able to do that if everything was fine! But their situation has improved immensely this year, have you not heard what has happened to Saracens?

How does Saracens misdemenours positively impact Wasps, other than taking away any possibility of relegation this season ?


But and its a huge but, if you're happy with your £67000 investment in Wasps and you made your investment with your eyes open, then thats all that really matters - as you won't have any complaints if/when it all collapses.

chucknorris

Murphy_The_Cat wrote: »

How does Saracens misdemenours positively impact Wasps, other than taking away any possibility of relegation this season ?


But and its a huge but, if you're happy with your £67000 investment in Wasps and you made your investment with your eyes open, then thats all that really matters - as you won't have any complaints if/when it all collapses.

Avoiding relegation is significant for Wasp's cashflow, and it would have been more difficult to refinance the bond if they were playing in the championship. It isn't just this year either, it means next year there will be a weaker team in the premiership, making relegation less likely. There is also talk of Saracens staying in the championship for more than one year (although that is not certain).

Also because Saracen's fine is being shared between the other premiership teams, Wasps will receive about £0.5m.

I am happy with it, I consider it to be one of my better value investments that I made last year, I originally only invested £30k, but I later topped up with another £37k. £67k is only about 1% of our portfolio, so it isn't as if there are significant implications to us, if it does go wrong. Recently I have been thinking of investing more, but on balance I thought that I should avoid topping up to £100k. It also gives me another interest at weekends following Wasps, which I have really been getting into. Last Saturday's game away at Worcester was particularly exciting. Complain? Why would someone complain when they make and investment and it doesn't pay off, I have made a lot of money from investments, I would just consider it a small loss compared to what I have already made by taking on risk, But what I did regret was putting about £200k into savings accounts last year paying only about 2% (so a guaranteed loss after tax and inflation) I hold my hands up to being a total mug for doing that.

aroominyork

Thrugelmir wrote: »

People ultimately have to accept responsibility for their own decisions. There's far more resource available these days than in the past for research. Prior to making any investment choice.

The govt has a responsibility to ensure people have clear, appropriate and accessible information on which to base decisions. The word ‘bond’ confuses people. They could fix that. (While they are at it, they should address the similar situation with the word Doctor. When someone calls out “Is there a doctor in the house/on the plane?” it’s not much use if my son offers to read his thesis about Henry James.)

AnotherJoe

aroominyork wrote: »

The govt has a responsibility to ensure people have clear, appropriate and accessible information on which to base decisions. The word ‘bond’ confuses people. They could fix that. (While they are at it, they should address the similar situation with the word Doctor. When someone calls out “Is there a doctor in the house/on the plane?” it’s not much use if my son offers to read his thesis about Henry James.)

Maybe it would anesthetise them? :rotfl:

face_to_face

aroominyork wrote: »

The govt has a responsibility to ensure people have clear, appropriate and accessible information on which to base decisions. The word ‘bond’ confuses people. They could fix that. (While they are at it, they should address the similar situation with the word Doctor. When someone calls out “Is there a doctor in the house/on the plane?” it’s not much use if my son offers to read his thesis about Henry James.)

And while we're at it, what about "house"? Otherwise, people might reply: "Yes, there is at least one MP who is also a doctor (of medicine)."

More seriously ... I think the term "bond" is too well established to get rid of it, or to restrict it to only one of (safe) fixed-rate savings accounts and at-risk investment products.

Perhaps they could could insist that "bond" is always qualified somewhere within the description of a product. E.g. perhaps it should always be spelt out prominently that it is either a "savings bond" (the safe type) or a "at-risk investment bond" (the less safe type). That's just one idea for descriptions — probably they can be improved upon.

There are still plenty of problems with describing bonds without misleading people. E.g. the terms "secured" and "guaranteed" do have specific meanings, but they tend to give people peace of mind in a way that they wouldn't if people understood their real meanings (and so automatically asked what should be the next questions, viz. what is the value of the security? and how credible is the guarantor?). But should the regulators not allow at-risk investment bonds to be described as "secured" or "guaranteed" when they are (as those terms should be understood)?

(And then there are people who will just ignore any rules the regulators make. But that's another issue.)