Can any of the money men help me please

[wilts rover]

Apparently world currency traders are begining to lay bets on a big fall in the pound due to supply shortages, massive energy price rises and expectations of rising inflation.

Now I don't know much about the financial markets so is this a good or bad thing? And what are the government going to do about it either way?

https://www.bloomberg.com/news/articles/2021-10-06/a-wave-of-bets-against-the-u-k-pound-is-starting-to-build?srnd=premium-europe

[silent majority]

It's playing out in the FTSE 100 right now, serious declines in a market that is already vastly undervalued.

[River Don]

The government can't do much Wilts.

And they are not prepared to try. Boris has said as much in the Tory conference.

It is a bad thing and we should all be preparing now. Brace, brace, brace.

[Glyn_Wigley]

Any loss in value of the currency is overall bad for the economy, the only exceptions I can think of are for those exporting goods with a purchase price in sterling (their goods are cheaper to buyers who don't normally deal in sterling), and with a cheaper pound it's more attractive for overseas tourists to come here - if Covid doesn't put them off.

[River Don]

Just seen Pilkintons saying they can't shut off their furnaces.

It's costing millions a month now to make glass. This is very f**king serious.

[Filo]

Just seen Pilkintons saying they can't shut off their furnaces.

It's costing millions a month now to make glass. This is very f**king serious.

It takes about 3 months to bring a tank back online after shutting down

[normal rules]

It's playing out in the FTSE 100 right now, serious declines in a market that is already vastly undervalued.

It’s incredible isn’t it.
I’ve got some shares in Cineworld. One of the most shorted stocks out there and hugely undervalued. Yes they have debt, but they are well placed to recover.
Rolls Royce seem to be bucking the trend though.

[BigH]

Apparently world currency traders are begining to lay bets on a big fall in the pound due to supply shortages, massive energy price rises and expectations of rising inflation.

Now I don't know much about the financial markets so is this a good or bad thing? And what are the government going to do about it either way?

https://www.bloomberg.com/news/articles/2021-10-06/a-wave-of-bets-against-the-u-k-pound-is-starting-to-build?srnd=premium-europe

It's quite conceivable Wilts.

The UK economy is in a vulnerable position given an unfortunate confluence of events. You could argue about how we got to this point but the fact is we're here. A five fold increase in energy costs will impact those industries that use a lot of energy unless the costs can be passed on but then someone else takes the hit. So new building developments for example won't happen because the cost of steel has suddenly leapt.

The problem with the pound falling - or even a run on the pound as it gets shorted - is that, at some point, the government will have to intervene and increase interest rates to try and restore value (otherwise we won't be able to pay our bills). Sound familiar to anyone who was around in 1992? However, if interest rates went up to 1% that means that anyone having a £250k mortgage could expect to pay another £2k a year in interest. That's another rise in the cost of living which then has a knock on effect in other areas of consumer spending, businesses reliant on this then close, jobs go...

Given the huge debt incurred to date because of Covid (£400Bn and rising), the fact that we can no longer club together with former EU partners to collectively manage an adverse position and our current underlying inflation rate (anywhere between 5-15% is what I heard quoted earlier this week), I would say that sterling is seen as especially vulnerable.

What can the government do? In the short term not a lot; hope and pray that the market sniffs richer pickings going after some other currency!

[SydneyRover]

Which is why private equity groups are buying up UK companies.

[selby]

Buy AstraZenica shares, their new Covid 19 vaccine will not be at cost.

[silent majority]

It's playing out in the FTSE 100 right now, serious declines in a market that is already vastly undervalued.

It’s incredible isn’t it.
I’ve got some shares in Cineworld. One of the most shorted stocks out there and hugely undervalued. Yes they have debt, but they are well placed to recover.
Rolls Royce seem to be bucking the trend though.

I've been tracking Cineworld for quite some time, and can't make my mind up as to whether they are cheap or at their correct price post-covid. I suppose it depends on what price you got in at originally.

[Colemans Left Hook]

Apparently world currency traders are begining to lay bets on a big fall in the pound due to supply shortages, massive energy price rises and expectations of rising inflation.

Now I don't know much about the financial markets so is this a good or bad thing? And what are the government going to do about it either way?

https://www.bloomberg.com/news/articles/2021-10-06/a-wave-of-bets-against-the-u-k-pound-is-starting-to-build?srnd=premium-europe

let's get real for a minute 

here's the £ $ rate for the last year  the £ is up over a year against the dollar and euro - so has a long way to fall to the rates a year ago (if there is any meaningful fall)

https://www.xe.com/currencycharts/?from=GBP&to=USD&view=1Y


and here's the £ euro rate for the last year

https://www.xe.com/currencycharts/?from=GBP&to=EUR&view=1Y


you can all play around with the time period

if i had to invest your money

CLH would suggest an Australian mining company (do some research ) so you can get currency gains as well. China has been buying up small independant mines in Canada and yes it's trying not to buy OZ coal  ( who isn't China threatening at the moment)

Blair used to say "Education Education Education"

CLH says "Resources Resources Resources"

What resources is Australia endowed with?
The Resources Sector

    The world's leading producer of bauxite, alumina, rutile, and tantalum;
    The second largest producer of lead, ilmenite, zircon and lithium;
    The third largest producer of iron ore, uranium and zinc;
    The fourth largest producer of black coal, gold, manganese and nickel; and.of course you have access to Sydney Rover's train of thoughts on the matter to act as your consultant.

[selby]

  In most if not everyone of past economic crisis Banks have made a killing.

[wilts rover]

Apparently world currency traders are begining to lay bets on a big fall in the pound due to supply shortages, massive energy price rises and expectations of rising inflation.

Now I don't know much about the financial markets so is this a good or bad thing? And what are the government going to do about it either way?

https://www.bloomberg.com/news/articles/2021-10-06/a-wave-of-bets-against-the-u-k-pound-is-starting-to-build?srnd=premium-europe

let's get real for a minute 

Thanks Coleman's. I am not interested in investing my money. I am interested in whether or not the story in that Bloomberg report, of large financal institutions believing that current and near future situations in the UK are setting up the situation for an economic crash are accurate.

I have no idea but I would like to think the people who run the country are working to ensure it doesn't happen.

[Colemans Left Hook]

Today on bloomberg bit different eh

[selby]

  The Bank of America sees most European stocks in decline except putting an overweight ticker on banks and airlines.  Pharma companies still have some upturn to go, a good local bet which has done well for me is Croda which supplies raw materials to companies in the pharma and wider industries such as toiletries. Happy hunting do your due diligence and only gamble money you can afford to lose shares go down as well as up and should be viewed as a long term investment.

[big fat yorkshire pudding]

A good investment is a good investment regardless. Unless you're trading daily ignore the noise and stick to what you believe.  There's always opportunities and always disasters, pick the right ones.

I'm fully expecting a rate rise before end of year to combat inflation, not necessarily a bad thing.

[drfchound]

It’s a good thing if you have savings.

[selby]

  Well Wilts, I hope nobody bet against the pound snort term this week buddy on your research tip, you might want to make yourself scarce.

[Campsall rover]

The sensible thing imo is to have a professional investment broker and have a fund which spreads the risk across a wide range of funds and companies.
Uk, Europe, USA, Asia etc.

Doing it yourself is fraught with high risk.  If your a professional investor then fair enough.

Like Brian ( Selby ) says it depends how much you can afford to lose. If you can’t then do not do it yourself would be my advice.

[normal rules]

It's playing out in the FTSE 100 right now, serious declines in a market that is already vastly undervalued.

It’s incredible isn’t it.
I’ve got some shares in Cineworld. One of the most shorted stocks out there and hugely undervalued. Yes they have debt, but they are well placed to recover.
Rolls Royce seem to be bucking the trend though.

I've been tracking Cineworld for quite some time, and can't make my mind up as to whether they are cheap or at their correct price post-covid. I suppose it depends on what price you got in at originally.

Alot rests on the current litigation case with cineplex. Which is a test case for pandemic litigation.

[Superspy]

I got in at an average of about 65p, so a touch under where they are now. Treating them as a speculative gamble for the long term as a relatively small % of my overall portfolio but as an individual company they definitely fall into the "money I can afford to lose" bracket as opposed to the bigger chunk of companies I expect to be more stable.

[wilts rover]

  Well Wilts, I hope nobody bet against the pound snort term this week buddy on your research tip, you might want to make yourself scarce.

My research tip, when I asked the money men what they thought about world currency traders? Are you saying they are wrong Selby?

As I said to Coleman's, I dont bet on the stock market - which is why I was interested in the opinion of those that do.

I have read a lot about financial crashes throughout history tho - and the conditions that occured in the economy of the relevant countries which led to those crashes. And the resulting problems and unrest in society that followed. Which is why I was wondering what the government could do to ensure it DOESNT happen.

[Superspy]

Don't you have a pension wilts? if so, where is it, if not on the stock market? Or was your comment more about not investing personal savings outside of your pension?

[selby]

  No Wilts, just a short term observation that the pound is up since your post, I expect the pound and the euro to take a hit v the dollar, the euro more so. I don't deal in currencies and financial problems in the past have been very productive in banking ( interest rates generally go up and the cost of borrowing in those circumstances) so they come out the right side, and there are good solid companies in Europe as well as the UK that are worth investing in.
  For people wanting to invest without the hassle Camps is correct go for  good managed funds with a wide spread of investments and let time take its course.

[big fat yorkshire pudding]

In theory given inflationary risks and the potential for the BOE to be the first to raise interest rates that should strengthen the pound, but times are so unconventional that it's hard to know what else could impact it.  The BOE can't control supply issues for example.