My first trade - Shell / BP

[HerculeHolmes]

1 hour ago, HerefordBullyun said:

I'm waiting for BP to go below 1.80 although it's great entry point now I think. But it's going to be a bumpy ride

I'd buy some more right now but I don't have a penny left to spare. I hope the price doesn't bump back up before pay day.

[HighlandTiger]

11 minutes ago, Roy said:

At the beginning of the year, BP was 4.97.

£2.02 is a gift!

As a gold investor HT, you should know better! 😋

I'm employing different tactics to my pm strategy.😁 Not that I know what I'm doing in either scenarios.😂

 

[Kman]

2 hours ago, KDave said:

-65% headline is a bit misleading, as holders are getting 3 shares for 1. At 80p a share they still holding £2.40 worth of value, so is the share price down? Looks like they are up 20p equivalent on yesterdays value. 

Ohhh yes I remember that was discussed on another page, just saw the -65% on tradingview and etoro and assumed correct, thanks

 

[KDave]

24 minutes ago, Kman said:

Ohhh yes I remember that was discussed on another page, just saw the -65% on tradingview and etoro and assumed correct, thanks

 

I recall now it was 10 shares for every 3, RR is having a good day in real terms despite joining the sea of red.

[HighlandTiger]

Looks like I'm going to have to get used to seeing red on my portfolio for a while. 

The joys of investing I suppose

😁

[HerefordBullyun]

6 minutes ago, HighlandTiger said:

Looks like I'm going to have to get used to seeing red on my portfolio for a while. 

The joys of investing I suppose

😁

There's a big sell off going on today. Because there is no stimulus given in the fed. Come post elections though the new president regardless who it is will be on the phone to fed to wazz more money up the wall.

[Kman]

17 hours ago, KDave said:

Perhaps BP are refinancing at lowish interest rates for the long haul while they can. That yield is pretty low given the flexibility offered to the company. I have not found much to go on, I would like to see the details from the bond holder perspective to see if its a good deal for them beyond the yield, because if inflation picks up even at that yield this is still a better deal for BP than the bond holder. If I have this right its a great move; 11.9 billion in perpetual long debt at only 3.5% which can be turned off with the dividend (in a disaster scenario)?

I looked into this a bit last night, I read an article here -  https://www.investorschronicle.co.uk/tips-ideas/2020/06/19/what-bp-s-hybrid-bond-sale-means-for-shareholders/ 

Says things like "it is also a reflection that BP is facing very difficult times, as these securities are expensive compared to senior unsecured debt"

I also found this website with a little information about the bonds - https://cbonds.com/bonds/745015/ this one is 2.5 billion USD @ 4.875% which seems quite high 

• BP PLC, 3.625% perp., EUR - 2.25b
• BP PLC, 4.25% perp., GBP - 1.25b
• BP PLC, 4.375% perp., USD  - 2.5b
• BP PLC, 4.875% perp., USD - 2.5b
• BP PLC, 3.25% perp., EUR - 2.5b

All together it's  about $12 billion usd @ 4.075%

So it's about  $480 million a year for these, but I'm not sure if the 12 billion they got allowed to them to do anything else to lower other debt payments so maybe it's not just an additional 480 on top of whatever they paid before 

[HighlandTiger]

FreeTrade have just added 600 new stocks. 

Anything I should be looking at?

[KDave]

2 hours ago, Kman said:

I looked into this a bit last night, I read an article here -  https://www.investorschronicle.co.uk/tips-ideas/2020/06/19/what-bp-s-hybrid-bond-sale-means-for-shareholders/ 

Says things like "it is also a reflection that BP is facing very difficult times, as these securities are expensive compared to senior unsecured debt"

I also found this website with a little information about the bonds - https://cbonds.com/bonds/745015/ this one is 2.5 billion USD @ 4.875% which seems quite high 

• BP PLC, 3.625% perp., EUR - 2.25b
• BP PLC, 4.25% perp., GBP - 1.25b
• BP PLC, 4.375% perp., USD  - 2.5b
• BP PLC, 4.875% perp., USD - 2.5b
• BP PLC, 3.25% perp., EUR - 2.5b

All together it's  about $12 billion usd @ 4.075%

So it's about  $480 million a year for these, but I'm not sure if the 12 billion they got allowed to them to do anything else to lower other debt payments so maybe it's not just an additional 480 on top of whatever they paid before 

I have found another article going into detail as well, a good read;

https://climateriskreview.substack.com/p/buying-time-bps-sideways-approach

"One especially attractive feature of these instruments is their yield. Because the principal never has to be repaid, BP has to pay investors more than it would for “normal” senior bonds. One $2.5 billion slug of the dollar-denominated perpetual debt will pay 4.4% over the first five years before reverting to a lower rate linked to US Treasury securities. Another $2.5 billion will pay 4.9% for 10 years.

Compare that to the 2.8% rate paid on $1 billion of senior secured notes sold by BP last May. With rates the world over at rock bottom because of the coronavirus-induced economic crisis, the coupons on these perpetual notes can’t help but be tempting."

[HerefordBullyun]

1 hour ago, HighlandTiger said:

FreeTrade have just added 600 new stocks. 

Anything I should be looking at?

There were only 6 miners added. I'm still investigating some. No GDXJ 😭 if I see anything will keep you posted

[Kman]

https://news.sky.com/story/coronavirus-germany-to-enter-four-week-lockdown-from-november-chancellor-merkel-confirms-12117056

Germany and France are going into national lockdowns, Frances seems pretty nuts based on that article

"Anyone outside their homes will have to carry a document justifying their excursion, which can be checked by police. The newspaper Le Parisien said the office of the French Prime Minister has confirmed that people will be allowed only up to 1km from their home."

Incredibly draconian, I imagine lockdown protests and riots are going to become more prevalent and serious as time goes on

This will be bad for oil stocks - should be bad for market on the whole but banks and oil seem like the only ones really tethered to reality; maybe as stimulus isn't flowing as freely the others might join them. 

 

 

[KDave]

https://uk.reuters.com/article/shell-results/update-1-shell-increases-dividend-after-beating-q3-forecasts-idUKL1N2HK0FN

Well would you look at that 

[KDave]

The only issue I have with Shells increased dividend;

16.65p per quarter x 4 = 66.60p annual 

Bill Gates is that you? 

[HighlandTiger]

Finally decided on my stocks and shares strategy. I'm only aiming to put about 20% of my future income/savings into this, and I'm going for a relatively high risk, as I have a decent enough amount of fall back money. I'm aiming to retire in 8 years, so I've no intention of any day trading, or looking at the stock market every day,(although I probably will) I'm on a buy and hold strategy, (apart from my dip in and out with BP recently, which was more of a test of the freetrade app, and to put my mind at rest)

So, in my portfolio, I'm aiming for 50% to be ETFs, split evenly between ishares US Tech Sector, US Govt bond 20+yr, MSCI EM, MSCI world and Global Clean Energy,

The other 50% will be playing around with individual companies, mainly oil and retail, (both industries I've worked in, and have a rudimentary knowledge), and mining, for which I'll be relying on you guys for the in depth analysis, (or gut feelings and hunches, they're all the same).

My aim is to make at least 8% profit per annum. Anything over that will be a bonus for me. 

Feel free to shoot me down, or if I've made any rookie mistakes

 

 

 

Edited October 29, 2020 by HighlandTiger

[KDave]

2 hours ago, HighlandTiger said:

Finally decided on my stocks and shares strategy. I'm only aiming to put about 20% of my future income/savings into this, and I'm going for a relatively high risk, as I have a decent enough amount of fall back money. I'm aiming to retire in 8 years, so I've no intention of any day trading, or looking at the stock market every day,(although I probably will) I'm on a buy and hold strategy, (apart from my dip in and out with BP recently, which was more of a test of the freetrade app, and to put my mind at rest)

So, in my portfolio, I'm aiming for 50% to be ETFs, split evenly between ishares US Tech Sector, US Govt bond 20+yr, MSCI EM, MSCI world and Global Clean Energy,

The other 50% will be playing around with individual companies, mainly oil and retail, (both industries I've worked in, and have a rudimentary knowledge), and mining, for which I'll be relying on you guys for the in depth analysis, (or gut feelings and hunches, they're all the same).

My aim is to make at least 8% profit per annum. Anything over that will be a bonus for me. 

Feel free to shoot me down, or if I've made any rookie mistakes

 

 

 

All in my opinion for what its worth it looks diversified though depends on weighting; emerging markets - yes if including china and India industrial base, MSCI world yes if the weighting is in favour of diversified geography and not specific stocks (for example US tech stocks worth more than entire european stock market - is the fund keeping an even weighting or has it fallen into the bubble trap). Personally I would not want much in tech stocks (bubble), US long bonds (QE and inflation), and if investing in energy don't limit yourself to clean, the energy in vs energy out is too low (profit is low) and they are reliant on fossil fuels to make them happen. Might as well invest in global energy without the clean limitation, reap the rewards of the huge demand in energy that will follow government infra spending. 

Share wise I like it, oil and mining yes, retail maybe not so much. Have a look at telecoms, BT, VOD, TEF, AT&T, those will do well when inflation picks up, especially BT. No dividend on BT until 2021 though but when they do its 7.7p per share yesterday BT was £1 a share seems like a good deal if you can wait a year for some chunky yield. Telecoms will benefit massively from inflation, they are building infrastructure today using near zero rate debt with price rises on services via the new infrastructure linked to inflation (Ofcom agreed to this), where as retailers will be last in the chain trying to pass on a whole chain of inflation costs from farmers to manufacturers on to consumers who won't be willing/able to pay. The internet or phone bill though will be the last thing to go in hard times 👍

Who knows though we pay our money and live with what happens. 

[KDave]

3 hours ago, KDave said:

The only issue I have with Shells increased dividend;

16.65p per quarter x 4 = 66.60p annual 

Bill Gates is that you? 

This should be in USD/cents not pence apologies, +4% on the existing dividend. 

[Stacktastic]

3 hours ago, HighlandTiger said:

Finally decided on my stocks and shares strategy. I'm only aiming to put about 20% of my future income/savings into this, and I'm going for a relatively high risk, as I have a decent enough amount of fall back money. I'm aiming to retire in 8 years, so I've no intention of any day trading, or looking at the stock market every day,(although I probably will) I'm on a buy and hold strategy, (apart from my dip in and out with BP recently, which was more of a test of the freetrade app, and to put my mind at rest)

So, in my portfolio, I'm aiming for 50% to be ETFs, split evenly between ishares US Tech Sector, US Govt bond 20+yr, MSCI EM, MSCI world and Global Clean Energy,

The other 50% will be playing around with individual companies, mainly oil and retail, (both industries I've worked in, and have a rudimentary knowledge), and mining, for which I'll be relying on you guys for the in depth analysis, (or gut feelings and hunches, they're all the same).

My aim is to make at least 8% profit per annum. Anything over that will be a bonus for me. 

Feel free to shoot me down, or if I've made any rookie mistakes

Hang on would be my thoughts. You cold see a considerable collapse occurring soon. 
Well its not doing well now, but Im thinking march lows or worse. 

Not sure about anything linked to governments, especially US bonds! No way Pedro. 
No to retail (with physical locations anyway). Amazon, Shopify, Etsy, would be of interest but only in a crash. 
Niche retail possibly, like camping stuff, but thats only short term (remember yoga mat sales in April!)?
Self learning will be big - Possibly sites like Udemy, teachable & fiverr, don't know much about them? 

Mining yes, but I would wait to see if there is another world lockdown as that will really pull prices back down. Thread for that. 
BP is a good one now, but that may go down a bit more. Shell too, seems to be holding better than BP. 
Uranium. Cameco always gets mentioned. Very stable. Next year apparently. 
WTI crude would be a good short term play as i can see prices at least doubling within a year. Hopefully £70 a barrel?
Its dipped well since Wed, i would be tempted to wait for any major lockdowns. Also if Biden gets in he likes renewable, that will impact the shares. 

Pintrest would be on my list in a crash only, they monetised this year and are cheap compared to the rest. 
Air B&B are going public soon so thats a good opportunity, solid model with low operating costs (opposed to a hotel). 

ETF's - obviously look for decent dividend paying ones. Emerging markets would work well for future,
Nasdaq not a bad shout as thats mainly just linked to Apple, Facebook, Tesla & Alphabet!!! Or is it the S&P not sure?

If you want a risky one with a potentially Tesla beating upside, Virgin galactic are doing a test soon, price has already gone down quite a bit. 
I have just bought Energy transfer (US pipeline company), I need to look into the tax on the dividend though (it was 20%, but i am sure they reduced it recently by 50%), before I put more in. 
WTI crude oil might present some bargains if it hits an all time low in the next few months. It will go back up especially with a buggered economy. 

Have you thought about Etherium or Bitcoin? I am not going there unless it crashes, but its gone up £4k in a month or two. risky but the rewards are worth it I think. 
Long term its being dubbed as digital gold, starting to warm to it. 

Edited October 29, 2020 by Stacktastic

[HighlandTiger]

Cheers for the feedback guys. Virgin Galactic is already on my watchlist. Although i want it to drop a bit before I jump in. 

[Roy]

2 minutes ago, HighlandTiger said:

Cheers for the feedback guys. Virgin Galactic is already on my watchlist. Although i want it to drop a bit before I jump in. 

Ah..takes me back to my teens. 🤭

[Stacktastic]

5 hours ago, HighlandTiger said:

US Govt bond 20+yr,

Perhaps not then?? don't know really. i don't like any government having my money/currency.
My dad made a fortune as a SE member during the Falklands selling guilts. 
 

 

Edited October 29, 2020 by Stacktastic

[KDave]

Bonds might get one last go, but they will not do well when the QE resumes. 

[Kman]

@HighlandTiger Long US bonds are an interesting one

Bond prices go up when new bonds are issued with lower yields. more QE will guarantee new bonds will have lower yields

Hedge funds have record sell positions against 30 year bonds - when you hit peak sells that should be around the peak bottom yet long bond prices are sitting fairly strong  

 

This is TLT, I think there's IDTL on freetrade, not sure what the difference is but overlaying them on the chart they look the same

 

As you can see the trend has been up since 2018 with the bold blue line being a good spot to buy

It's been on a slow descent since August, I'd like to see the blue trend line be tested and hold or the pink line be broken and then that is buy for me - then later if it falls out of the blue trend line it's a clear signal to think about selling

If there's a market crash then it should be an easy 30% made in not very long and a safer thing to sit in than vix 

 

Because you're going to be on the side of the Fed and QE long bonds should be an easy tap in to make some money from 

And as said above you should have a clear signal to think about getting out; What more can you ask for for a stable, safe investment

Edited October 29, 2020 by Kman

[HighlandTiger]

2 hours ago, Kman said:

@HighlandTiger Long US bonds are an interesting one

Bond prices go up when new bonds are issued with lower yields. more QE will guarantee new bonds will have lower yields

Hedge funds have record sell positions against 30 year bonds - when you hit peak sells that should be around the peak bottom yet long bond prices are sitting fairly strong  

 

This is TLT, I think there's IDTL on freetrade, not sure what the difference is but overlaying them on the chart they look the same

 

As you can see the trend has been up since 2018 with the bold blue line being a good spot to buy

It's been on a slow descent since August, I'd like to see the blue trend line be tested and hold or the pink line be broken and then that is buy for me - then later if it falls out of the blue trend line it's a clear signal to think about selling

If there's a market crash then it should be an easy 30% made in not very long and a safer thing to sit in than vix 

 

Because you're going to be on the side of the Fed and QE long bonds should be an easy tap in to make some money from 

And as said above you should have a clear signal to think about getting out; What more can you ask for for a stable, safe investment

That last paragraph, is the basis of my thinking. I'm what you might call a lazy Investor. Although, when I retire and get a feel for trading stocks, after a few years under my belt, I may dabble in it as a hobby to keep the mind active. I can't be doing with the Carribbean and Porsche's every day.😏 

Ps. I like the graph analysis, makes sense, also means I need to buy a new ruler and a biro.

Edited October 29, 2020 by HighlandTiger

[Kman]

4 hours ago, HighlandTiger said:

That last paragraph, is the basis of my thinking. I'm what you might call a lazy Investor. Although, when I retire and get a feel for trading stocks, after a few years under my belt, I may dabble in it as a hobby to keep the mind active. I can't be doing with the Carribbean and Porsche's every day.😏

I think the best thing to do is learn basic technical analysis if you haven't been looking into it already

It makes everything much clearer and more simple, where to enter, where to sell - you can draw in trend lines that last months/years and if they stay above that line you're in, if they fall below look into why and maybe you're out

Some charts are more simple to look at than others and understand, @KDave likes BT and that's a more difficult one

What do you see when you look at it?

I originally saw something different but now I have more experienced looking at charts I broadly see this (you could replicate that line more and it fits in, but just want to give an idea of a bottom and top)

More zoomed in a see this

 

Price since August stabilised between a 15% range of ~97 and ~112, could this be a bottoming pattern after years of downtrend? maybe

Is there any point buying now? no, might as well wait to see if it can break out and establish itself above 112, if so and you're interested in buying then that would be the time, maybe with a modest stop loss and just leave it to see what it can do; fingers crossed it was the bottom of a multi year bear trend and you just got in on a multi year bull trend to the upside with tremendous profit 

If instead the bottom of 97 doesn't hold no worries, keep an eye on it and see how things develop

 

Edited October 29, 2020 by Kman

[KDave]

That is good analysis and a sensible trading plan kman. For dividend payers I would rather cost average/average down but setting a stop is sensible for non dividend payers, I don't know which is the better method long term, I suppose the answer is "it depends" or "ask me next year" 

Perhaps with this trading system if you are worried about the timing of the bottom, is it not better to forget the bottom all together, wait until an uptrend has established? Less risk and uncertainty for a tiny fraction of less reward, especially given BT is not paying a dividend you can just sit it out. Assuming BT does not act like silver you should see it break into the new range and then you can start buying more confidently that its on its way up, put a stop at the previous lows perhaps? I bought the first lot of BT in May and have neglected cost averaging a bit in favour of the oilies, but I have watched the share price bounce around the quid level for months; the chart is looking good for a bottom forming imo but who knows. I might start cost averaging and combine the stop loss with it inside the current range, then if it drops out of it I will save a few percent and can think of that as a dividend