Thursday, 7 July 2016

LYG -oops didn't close my position.

Investing Idea: Lloyds

I bought and held a chunk of LYG overnight. It was only 2 cents above my average buy price so decided to hold instead of closing the position.  The next day, LYG was one of two banks identified by analysts as "most exposure to commercial estate loans" and promptly crashed 9%.  Oops. 

Recall that property funds have suspended redemptions pending sale of assets OR have marked down the fund NAV to take into account falls in asset prices. The median cut seems to be about 10%.

I did one average down and so buy average buying price not so far away from current price.

I still feel the 'worst case' is being assumed, as is usually the case. LYG is still a buy for me but I am not all-in LYG and am still purchasing other FTSE100 dividend yielders. If it rallies, I will close my position and look to rebuy at lower price. Otherwise, I will continue accumulating.

Investing Idea: British Telecoms
Something other than Vodafone?

BT has one advantage, its not Vodafone. After Brexit, panicked investors and UK focused funds sold UK-exposed stocks and bought stocks that were not so UK focused like Vodafone. In other words, in times of panic, defensive stocks are overvalued.

  • I bought a large chunk of Comfort Delgro during the last GFC, I think $1.80 all the way down to $1.30, average buying price $1.50.  During the stock market rally, CDG price hardly moved so it ended up as my worst-performing stock. Probably because during the rally, investors were selling defensive stocks and loading up on higher beta stocks. At least it gave (and still gives) a decent dividend.

Back to BT, it has definitely been sold down compared to Vodafone. Justifiably or unjustifiably, you have to do your own analysis.

I am holding VOD but I am not buying anymore at this point - its a good company, but too many investors have rushed into it as a 'defensive' move.

No comments:

Post a Comment