Sunday, September 26, 2004
I've lost a lorry-load of lolly
Say that five times and my tongue is in a twist. Think it and I feel sick. But that is just what happened to me in the previous week. I lost, a lot.
Ben Bailey is comfortably my largest shareholding but no longer a share I'm holding comfortably.
Thursday saw Countryside and Countrywide, two of Ben Bailey's housebuilding peers, warn the market on trading. The companies announced profits would not match up to the market's expectations. These announcements are termed 'profit warnings' and are the most precipitous proclamation possible.
The recent Bank of England interest rate rises have loomed over housebuilder's share prices for much of 2004, prices stalled across the sector in spite of the strong interim results many reported. Now, the long-held fear that UK housing was due a turn downwards has been confirmed in Countryside and Countrywide's area of operations, will Ben Bailey escape unscathed?
Bailey operates in the North of England, the two 'country' companies the south-east, where housing is more clearly over-priced and indeed unaffordable. But sentiment is what sets the prices of houses and shares, even if Ben Bailey continues to enjoy the construction boom for awhile yet, the shares may not escape.
This is a frightening prospect for my portfolio. In the last week alone, Ben Bailey has fallen from 425p to 390p. With my 2000 strong holding, that's a £700 loss in just one week.
And Ben Bailey could continue falling yet, my calculated fair value won't stop it. The media and the public have turned bearish on the housing market, the bull run appears to be over. Of course, I can't second guess which way Ben Bailey will go from here. But it would be wise to start looking for new opportunities.
The Artful Dodger
Ben Bailey is comfortably my largest shareholding but no longer a share I'm holding comfortably.
Thursday saw Countryside and Countrywide, two of Ben Bailey's housebuilding peers, warn the market on trading. The companies announced profits would not match up to the market's expectations. These announcements are termed 'profit warnings' and are the most precipitous proclamation possible.
The recent Bank of England interest rate rises have loomed over housebuilder's share prices for much of 2004, prices stalled across the sector in spite of the strong interim results many reported. Now, the long-held fear that UK housing was due a turn downwards has been confirmed in Countryside and Countrywide's area of operations, will Ben Bailey escape unscathed?
Bailey operates in the North of England, the two 'country' companies the south-east, where housing is more clearly over-priced and indeed unaffordable. But sentiment is what sets the prices of houses and shares, even if Ben Bailey continues to enjoy the construction boom for awhile yet, the shares may not escape.
This is a frightening prospect for my portfolio. In the last week alone, Ben Bailey has fallen from 425p to 390p. With my 2000 strong holding, that's a £700 loss in just one week.
And Ben Bailey could continue falling yet, my calculated fair value won't stop it. The media and the public have turned bearish on the housing market, the bull run appears to be over. Of course, I can't second guess which way Ben Bailey will go from here. But it would be wise to start looking for new opportunities.
The Artful Dodger
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