coronavirus and personal pensions

Username999

Thrugelmir said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

MarkCarnage said:

A buyback programme can destroy value by doing so at an inappropriate price, it can also weaken the company's balance sheet, perhaps fatally. 
The tax efficient argument is irrelevant if done in a tax wrapped account. Personally, I like the certainty of dividends, clearly while it's appropriate to pay them. 

Amazon and others who either don’t pay dividends or pay little or started recently, having made trillions for investors. 

 

Amazon hasn't made trillions. As an investor you have valued the shares as worth buying. With the consequence that the value of the company has risen. Not unsurprisingly Bezos cashes in a $1 billion of stock every year to spend on his play projects. Just as an side. Walmart has a greater revenue and makes more profit than Amazon. Yet it's market value is only a fraction of Amazon.

In the Dot Com bust than followed the boom. Microsoft lost over 50% of it's value. Not recovering to the January 2000 highpoint until 2016. From which it has more or less trebled. As night follows day. History has a habit of repeating itself. 

I didn’t say “amazon made trillions”. I said non-dividend and low div payers and listed 3. Between these 3, they did. You want to bet on Walmart vs Amz - go ahead. And you know who didn’t fall for dot com in the 90s?  Buffett. Who did ok by investors. BRK never paid a cent in dividends and has always been equivalent with value. Ignoring dividends is silly; making a fetish out of hem - ditto. Just one easily manipulated number. 

Reminds me so much of the Dot Com era. 

Me too!
History repeats.
Still hurts: Nortel Networks, Marconi, Siebel.
Market Eye forum (My username was "NightTime"), white on black background - young lady constantly buying some israel video compression stock until she hit £3 million, then watched it ALL disappear.
Easy getting in, it's the getting out that's difficult.
Yep that was an education (very expensive)!
The good ol days

Thrugelmir

BT trading at £20.     Not that I held any. 

Lastminute.com was my favourite share of the era. Stagged the IPO then dumped the lot as soon as I could. How anyone could value a concept company that had a turnover of £2.9m and never traded a profit at £523m. Was beyond comprehension. Of course ended up in tears. 

The whole episode reinforced my belief that market traders tell their clients one thing and do the opposite when trading on their own account. 

[Deleted User]

Thrugelmir said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

MarkCarnage said:

A buyback programme can destroy value by doing so at an inappropriate price, it can also weaken the company's balance sheet, perhaps fatally. 
The tax efficient argument is irrelevant if done in a tax wrapped account. Personally, I like the certainty of dividends, clearly while it's appropriate to pay them. 

Amazon and others who either don’t pay dividends or pay little or started recently, having made trillions for investors. 

 

Amazon hasn't made trillions. As an investor you have valued the shares as worth buying. With the consequence that the value of the company has risen. Not unsurprisingly Bezos cashes in a $1 billion of stock every year to spend on his play projects. Just as an side. Walmart has a greater revenue and makes more profit than Amazon. Yet it's market value is only a fraction of Amazon.

In the Dot Com bust than followed the boom. Microsoft lost over 50% of it's value. Not recovering to the January 2000 highpoint until 2016. From which it has more or less trebled. As night follows day. History has a habit of repeating itself. 

I didn’t say “amazon made trillions”. I said non-dividend and low div payers and listed 3. Between these 3, they did. You want to bet on Walmart vs Amz - go ahead. And you know who didn’t fall for dot com in the 90s?  Buffett. Who did ok by investors. BRK never paid a cent in dividends and has always been equivalent with value. Ignoring dividends is silly; making a fetish out of hem - ditto. Just one easily manipulated number. 

Reminds me so much of the Dot Com era. 

What does? BRK? https://www.macrotrends.net/stocks/charts/BRK.A/berkshire-hathaway/stock-price-history

The problem with dot com was that loss making companies attracted lots of shareholders. 

Today Apple, Microsoft, Berkshire Hathaway, Google, Facebook and others driving the market are highly profitable and the profits have been growing fast. Things can change for sure; nobody knows the future. And Coronavirus effect isn’t over

Prism

Deleted_User said:

Thrugelmir said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

MarkCarnage said:

A buyback programme can destroy value by doing so at an inappropriate price, it can also weaken the company's balance sheet, perhaps fatally. 
The tax efficient argument is irrelevant if done in a tax wrapped account. Personally, I like the certainty of dividends, clearly while it's appropriate to pay them. 

Amazon and others who either don’t pay dividends or pay little or started recently, having made trillions for investors. 

 

Amazon hasn't made trillions. As an investor you have valued the shares as worth buying. With the consequence that the value of the company has risen. Not unsurprisingly Bezos cashes in a $1 billion of stock every year to spend on his play projects. Just as an side. Walmart has a greater revenue and makes more profit than Amazon. Yet it's market value is only a fraction of Amazon.

In the Dot Com bust than followed the boom. Microsoft lost over 50% of it's value. Not recovering to the January 2000 highpoint until 2016. From which it has more or less trebled. As night follows day. History has a habit of repeating itself. 

I didn’t say “amazon made trillions”. I said non-dividend and low div payers and listed 3. Between these 3, they did. You want to bet on Walmart vs Amz - go ahead. And you know who didn’t fall for dot com in the 90s?  Buffett. Who did ok by investors. BRK never paid a cent in dividends and has always been equivalent with value. Ignoring dividends is silly; making a fetish out of hem - ditto. Just one easily manipulated number. 

Reminds me so much of the Dot Com era. 

What does? BRK? https://www.macrotrends.net/stocks/charts/BRK.A/berkshire-hathaway/stock-price-history

The problem with dot com was that loss making companies attracted lots of shareholders. 

Today Apple, Microsoft, Berkshire Hathaway, Google, Facebook and others driving the market are highly profitable and the profits have been growing fast. Things can change for sure; nobody knows the future. And Coronavirus effect isn’t over

These are certainly profitable companies and I have a good chunk of my money invested in them, I guess like many other people. However the profits are not growing especially fast at the moment - Apple for example has managed to increase its profits around 20% over the last 5 years. Share price has tripled in the meantime. There is lots of hope in these prices and lots of price increase from buybacks. Nothing to be done about it of course unless you want to get active and start playing with country and sector allocations. 

[Deleted User]

Prism said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

MarkCarnage said:

A buyback programme can destroy value by doing so at an inappropriate price, it can also weaken the company's balance sheet, perhaps fatally. 
The tax efficient argument is irrelevant if done in a tax wrapped account. Personally, I like the certainty of dividends, clearly while it's appropriate to pay them. 

Amazon and others who either don’t pay dividends or pay little or started recently, having made trillions for investors. 

 

Amazon hasn't made trillions. As an investor you have valued the shares as worth buying. With the consequence that the value of the company has risen. Not unsurprisingly Bezos cashes in a $1 billion of stock every year to spend on his play projects. Just as an side. Walmart has a greater revenue and makes more profit than Amazon. Yet it's market value is only a fraction of Amazon.

In the Dot Com bust than followed the boom. Microsoft lost over 50% of it's value. Not recovering to the January 2000 highpoint until 2016. From which it has more or less trebled. As night follows day. History has a habit of repeating itself. 

I didn’t say “amazon made trillions”. I said non-dividend and low div payers and listed 3. Between these 3, they did. You want to bet on Walmart vs Amz - go ahead. And you know who didn’t fall for dot com in the 90s?  Buffett. Who did ok by investors. BRK never paid a cent in dividends and has always been equivalent with value. Ignoring dividends is silly; making a fetish out of hem - ditto. Just one easily manipulated number. 

Reminds me so much of the Dot Com era. 

What does? BRK? https://www.macrotrends.net/stocks/charts/BRK.A/berkshire-hathaway/stock-price-history

The problem with dot com was that loss making companies attracted lots of shareholders. 

Today Apple, Microsoft, Berkshire Hathaway, Google, Facebook and others driving the market are highly profitable and the profits have been growing fast. Things can change for sure; nobody knows the future. And Coronavirus effect isn’t over

These are certainly profitable companies and I have a good chunk of my money invested in them, I guess like many other people. However the profits are not growing especially fast at the moment - Apple for example has managed to increase its profits around 20% over the last 5 years. Share price has tripled in the meantime. There is lots of hope in these prices and lots of price increase from buybacks. Nothing to be done about it of course unless you want to get active and start playing with country and sector allocations. 

Without looking at it company by company, one can certainly argue that US has become overvalued. Overall, the price has been growing a bit slower than earnings for the first half of the decade and a bit faster for the second. https://www.factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_022120.pdf

CAPE is a bit high for the US, although February “helped”. 

I am just saying you can’t compare it to the tech bubble of 1990s when sky high valuation were routinely given to loss making companies as long as they had dot com.  At the time I contributed to the bubble by buying into egg.com credit card IPO (whole 500 pounds). Sold the shares a few years later at 2% loss. They were turning a profit; just not enough. The rest was invested in broad markets internationally and did fine. 

Parking_Trouble

lilactime1936 said:

How long is a piece of string question . But what impact is this going to have on a personal private pension in short and long term ?

Still waiting patiently for the IFA who 'manages' my wife's SIPP to give some advice.

Prism

Parking_Trouble said:

lilactime1936 said:

How long is a piece of string question . But what impact is this going to have on a personal private pension in short and long term ?

Still waiting patiently for the IFA who 'manages' my wife's SIPP to give some advice.

There is nothing to advise on here. The initial allocation should have taken care of all minor drops like this as well as the major crashes. 

cfw1994

Prism said:

Parking_Trouble said:

lilactime1936 said:

How long is a piece of string question . But what impact is this going to have on a personal private pension in short and long term ?

Still waiting patiently for the IFA who 'manages' my wife's SIPP to give some advice.

There is nothing to advise on here. The initial allocation should have taken care of all minor drops like this as well as the major crashes. 

You have an IFA who can take care of major crashes?   Awesome!
Is that by cunningly moving to cash before the crash? 
I think more to the point, the IFA ought perhaps to have explained the risk of market drops or crashes and mentally prepared someone for them: I'd be very surprised if anyone claims their IFA manages the possibility of the market dropping 10/20/30% - do share if yours did!
(I do, however agree there isn't really much to advise on....now is too late to start chopping and changing )

Prism

cfw1994 said:

Prism said:

Parking_Trouble said:

lilactime1936 said:

How long is a piece of string question . But what impact is this going to have on a personal private pension in short and long term ?

Still waiting patiently for the IFA who 'manages' my wife's SIPP to give some advice.

There is nothing to advise on here. The initial allocation should have taken care of all minor drops like this as well as the major crashes. 

You have an IFA who can take care of major crashes?   Awesome!
Is that by cunningly moving to cash before the crash? 
I think more to the point, the IFA ought perhaps to have explained the risk of market drops or crashes and mentally prepared someone for them: I'd be very surprised if anyone claims their IFA manages the possibility of the market dropping 10/20/30% - do share if yours did!
(I do, however agree there isn't really much to advise on....now is too late to start chopping and changing )

Well yes, I should have said that the initial allocation should enable them to cope with a crash or correction without making changes at the time

[Deleted User]

Agree. If someone requires hand holding (presumably why they have an IFA) then the IFA should say “do nothing “.  Time for action was when an investment strategy was developed and reviewed rather than after a correction.