High yield bonds: equity proxy… for what?

masonic

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

chucknorris

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

masonic

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

chucknorris

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. But the fact is that I was well aware of the risks, I could sell now at a profit of £80k at the current price. I know you will come back with that I would have to take a lower price for £180k because of the lack of liquidity, but the point I want to make is that the bond maturity date is close at May 2022, and I would rather take my chances, and carry on earning 10% interest, and avoid paying both the spread and a reduced priced due to size of.my transaction.

masonic

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. 

Ah, ok, I read somewhere earlier in the thread that you had no specialist knowledge. Perhaps you wouldn't consider that to be so, but I'd consider it to be and see why it would give you greater confidence than a typical retail investor.

chucknorris

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. 

Ah, ok, I read somewhere earlier in the thread that you had no specialist knowledge. Perhaps you wouldn't consider that to be so, but I'd consider it to be and see why it would give you greater confidence than a typical retail investor.

Thanks, what I meant that I had no real insight into Wasps exact position (what is going on behind the scenes), the one thing that did concern me was that Derek Richardson (Wasps owner) was a ex city boy, and although he might not want to commit insider trading, he would obviously have many contacts in the City, so I found it confusing that the price could be allowed to drop so low if the long term position was sweet (that was the risk that I perceived that I was taking on). And that is why I feel quite comfortable now, because the price has significantly recovered, and quite close to the maturity date. But I am fully aware risk still exists.

masonic

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. 

Ah, ok, I read somewhere earlier in the thread that you had no specialist knowledge. Perhaps you wouldn't consider that to be so, but I'd consider it to be and see why it would give you greater confidence than a typical retail investor.

Thanks, what I meant that I had no real insight into Wasps exact position (what is going on behind the scenes), the one thing that did concern me was that Derek Richardson (Wasps owner) was a ex city boy, and although he might not want to commit insider trading, he would obviously have many contacts in the City, so I found it confusing that the price could be allowed to drop so low if the long term position was sweet (that was the risk that I perceived that I was taking on).

I suspect many would not want their money tied up in a lengthy insolvency process if that's the way it went. So the price could fall even below the estimated fire-sale value of the stadium. There's an opportunity cost for money that needs to be continually making money.

chucknorris

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. 

Ah, ok, I read somewhere earlier in the thread that you had no specialist knowledge. Perhaps you wouldn't consider that to be so, but I'd consider it to be and see why it would give you greater confidence than a typical retail investor.

Thanks, what I meant that I had no real insight into Wasps exact position (what is going on behind the scenes), the one thing that did concern me was that Derek Richardson (Wasps owner) was a ex city boy, and although he might not want to commit insider trading, he would obviously have many contacts in the City, so I found it confusing that the price could be allowed to drop so low if the long term position was sweet (that was the risk that I perceived that I was taking on).

I suspect many would not want their money tied up in a lengthy insolvency process if that's the way it went. So the price could fall even below the estimated fire-sale value of the stadium. There's an opportunity cost for money that needs to be continually making money.

What I meant was that if Derek was negotiating a refinancing deal (so no insolvency issues on the horizon) I would have suspected a lot of people 'in the know' would have been investing in the bond and holding the price up. So I suspected everything was probably not so rosy, or at least unknown. But my view was that something sort of refinancing deal was likely to be forthcoming, but if not, investing at only 59 pence (and a running yield overall of 10%) was still a sound proposition.

But I won't be taking on risk like this again, or rather not in the size of investment that I did, it was value, but I do not need to chase value and take on risk.

masonic

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. 

Ah, ok, I read somewhere earlier in the thread that you had no specialist knowledge. Perhaps you wouldn't consider that to be so, but I'd consider it to be and see why it would give you greater confidence than a typical retail investor.

Thanks, what I meant that I had no real insight into Wasps exact position (what is going on behind the scenes), the one thing that did concern me was that Derek Richardson (Wasps owner) was a ex city boy, and although he might not want to commit insider trading, he would obviously have many contacts in the City, so I found it confusing that the price could be allowed to drop so low if the long term position was sweet (that was the risk that I perceived that I was taking on).

I suspect many would not want their money tied up in a lengthy insolvency process if that's the way it went. So the price could fall even below the estimated fire-sale value of the stadium. There's an opportunity cost for money that needs to be continually making money.

What I meant was that if Derek was negotiating a refinancing deal (so no insolvency issues on the horizon) I would have suspected a lot of people 'in the know' would have been investing in the bond and holding the price up. So I suspected everything was probably not so rosy, or at least unknown. But my view was that something sort of refinancing deal was likely to be forthcoming, but if not, investing at only 59 pence (and a running yield overall of 10%) was still a sound proposition.

But I won't be taking on risk like this again, or rather not in the size of investment that I did, it was value, but I do not need to chase value and take on risk.

Perhaps, although how many times has an entrepreneur been bullish right up until the point everything went to pieces. He'd be the wrong person to listen to if you wanted an honest appraisal of how negotiations were going. Things probably weren't rosy, because those with deep pockets have a way of knowing, but it seems things have greatly improved since.

chucknorris

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

masonic said:

chucknorris said:

aroominyork said:

masonic said:

chucknorris said:

aroominyork said:

chucknorris said:

JohnWinder said:

That’s an honest person admitting they can’t take any advantage of market inefficiency other than by the luck of the gambler. What does one think of one’s own skills/knowledge/capacity to exploit market inefficiencies?

It depends on the market, one of the reasons that I moved to London (from Newcastle) in the early 90's was to take advantage of the high yields available from residential property, that was just about the only thing that I invested in at that time (apart from ISA's, known as Pep's and Tessa's at the time). It was after I made quite a bit from property, and every man and his dog also seemed to be getting into property that I started to slowly diversifying into equities, and about 10 years ago much more so. It is only in recent years that I invested in bonds. But I don't have to beat the market, in fact, I should really be looking to avoid risk and preserve my investments, which I am slowly accepting (that is why I would never invest in something like the Wasps bond again). I think my problem is that I do have a tolerance for taking on risk without being uncomfortable, but that doesn't actually suit my financial situation. You could say that in the last few years I have been in denial and carried on behaving if I was still trying to make more, it's a hard habit to break, but I do realise that I need to change my attitude.

Rich people trying to get off the ladder of being even richer: a predicament many of us would like! Well done on amassing well over £20m!

I wish it was that much! It's in the £m's but nowhere near £20m, did I post something that implied that much (maybe there is a typo somewhere)?

The linked post stated "I only invested about 0.5% of my portfolio (still a significant well over 6 figure sum..." I did the same maths (£100,000 / 0.005 = £20,000,000) and figured you had quite the property empire at some time!

chucknorris said:

Ahh there is the typo, it should have been 5% (but it was quite a bit over £100k), thanks I will edit that post

Did you realise it was 5% and not 0.5% when you used the word "only"?

What you said doesn't make sense, how could I possibly be aware when it was a typo (think about what you are saying). A typo is something that you are unaware of. But if you mean me being relaxed about the situation, the answer is yes.

Because 5% of my portfolio was very likely to be at risk because the bond of £35m is secured upon a stadium valued at over £50m, so even in the event of a bizarre set of circumstances the actual amount at risk would probably not exceed 0.5% of the value of my portfolio. Which is why I invested a further significant amount (above my original investment) when the price fell under 40 pence, I thought that was fantastic value. I was very happy to be invested at an average of 59 pence when the bond is secured against an asset valued  at over 50% of the debt, and I am invested more than 40% below the face value (based on security being over 50% of the debt). And not forgetting the running yield being so high too.

I think the point aroominyork was making was that 5% is not generally considered a small percentage of one's total net worth to be invested in the assets of a single company or asset. Maybe it is for a BTL property investor

My response to that is that although 5% was invested, 5% was not at risk, and that was my comfort level, which would be reflected in any statements that I made.

That's what I used to think when investing in assets secured on property...

You need a lot of legal and finance expertise to really get to the bottom of what would happen in various distress scenarios. Even the professionals regularly get it wrong. As someone who has neither a legal nor financial background, I've been quite surprised by the variety of ways I've suffered losses due to unforeseen risks, each to the tune of £500 or less, thankfully. I'm therefore very cautious of translating an asset valuation into a creditor outcome.

I am a chartered quantity surveyor (although these days I teach it at university rather than in work in private practice), so I do have knowledge of both property and contract. 

Ah, ok, I read somewhere earlier in the thread that you had no specialist knowledge. Perhaps you wouldn't consider that to be so, but I'd consider it to be and see why it would give you greater confidence than a typical retail investor.

Thanks, what I meant that I had no real insight into Wasps exact position (what is going on behind the scenes), the one thing that did concern me was that Derek Richardson (Wasps owner) was a ex city boy, and although he might not want to commit insider trading, he would obviously have many contacts in the City, so I found it confusing that the price could be allowed to drop so low if the long term position was sweet (that was the risk that I perceived that I was taking on).

I suspect many would not want their money tied up in a lengthy insolvency process if that's the way it went. So the price could fall even below the estimated fire-sale value of the stadium. There's an opportunity cost for money that needs to be continually making money.

What I meant was that if Derek was negotiating a refinancing deal (so no insolvency issues on the horizon) I would have suspected a lot of people 'in the know' would have been investing in the bond and holding the price up. So I suspected everything was probably not so rosy, or at least unknown. But my view was that something sort of refinancing deal was likely to be forthcoming, but if not, investing at only 59 pence (and a running yield overall of 10%) was still a sound proposition.

But I won't be taking on risk like this again, or rather not in the size of investment that I did, it was value, but I do not need to chase value and take on risk.

Perhaps, although how many times has an entrepreneur been bullish right up until the point everything went to pieces. He'd be the wrong person to listen to if you wanted an honest appraisal of how negotiations were going. Things probably weren't rosy, because those with deep pockets have a way of knowing, but it seems things have greatly improved since.

I think that you misunderstood, what I meant was that he is very wealthy and will also have 'very close' wealthy friends who he could give the nod to, rather than !!!!!! false optimism. But that is history now, that didn't happen and the price did fall below 40 pence, and I just had to take on that chance, to me the value looked exceptional. I did think about investing a lot more at 38 pence, but I restrained myself.