LAD2 Ladbrokes finance retail bond

Aside from the impact of the coronavirus on their business, is there any news I have missed that would explain the recent sharp fall in price?

Comments

  • Not heard any other news, therefore suspect the Corona Virus is responsible. A few other bonds in similar position
    ALP2 = 61.00
    BUR1 = 78.50
    ENQ1 = 30.30
    ICG3 = 74.25
    IPF2 = 65.50
    PAG2 = 68.08
    PMO1 = 37.92
    PF21 = 70.00
    RGL1 = 63.00
    WAS1 = 38.20
    Retail bonds, ranging around 80p in the £

    LAD2 = 65.00

    The majority took a hammering last Monday (16th March)

    Very sad news for pensioners who were hoping for reliable investment for their retirement. In some ways the bonds are better than Equity shares, as large number of dividends have been stopped, where as the ORB bonds etc will continue paying their coupons. I suspect a few Preference Shares may have their Divs cut or delayed (if Cumulative). but too early yet to tell.
    Lets hope the duration of the shutdown is short, and that no company defaults on their obligations.

  • Thanks. I have been buying some more LAD2 recently. I am holding some very risky ones right now, including Premier Oil, Enquest & Burford, but view LAD2 as a great bet right now. Could really do with the Russians & Saudis sorting out their "price fixing" of oil!
  • edited March 24
    It's not the Corona Virus, it's the mass hysteria and sensationalism that media and politicians are fuelling to public in this running 24x7 news cycle

    ORB bonds are most definitely not the reliable investment for retirement. It's cash or cash equivalent for your next 10 years and remaining portfolio in the stocks which obviously you should look to liquidate over time as your cash levels decrease with the passage of time.

    Bonds are worse that Stocks as with no interest cuts possible, they create unnecessary emotional and financial pressure on businesses, increasing the possibility of outright defaults in future. With dividend cuts however, the emotional and financial pressure on the businesses have eased allowing them to break inertia and adapt in this ever changing business landscape.

    If you ever find yourself hoping, wishing or praying when it comes to the market, it's time, to exit the market.

    If however you have spare cash, can hold your nerve, yes, buy some and enjoy the ride

    Oil as a commodity is done, Russians can see it, Saudis can see it, and every other producer can see it, so the rational thing here is for them to sell as much as they can, while they can still get something for it

  • Shotgun, I'm keeping mostly in cash until more is known regarding the virus. Could be a good opportunity for Fixed Income securities, once we see a tiny light growing bigger as we traverse in a long dark tunnel of an unknown length.
    It is my belief that the majority of the ORB bonds will return to proper valuation within 12 to 18 months without any defaults, Equities on the other hand will face a longer haul & struggle with some sectors being possibly part-nationalised (eg airlines etc).
    Long-term & undated securities may be best avoided due to Central Banks opening the flood gates, inflation may return with a strong vengeance.
  • Re Oil, I agree that the Saudis and Russians will eventually come to their senses
    However with total lock-downs (little oil usage), oil tankers full to the brine being unable to offload their cargoes due to full storage facilities, prices will continue to stay low for the foreseeable future.
    Casualties are expected in this sector
    Lower prices unlikely to increase "consumer demand", as we can't use our vehicles for "non-essential travel"
  • I am fearing one or both of Enquest & Premier Oil going bust. As for the return of inflation, index linked gilts presumably is the thing to go for in those circumstances. Any other options? I have always thought that, were we to get a real 50%+ collapse one day, that gold will be hammered as well.
  • I am fixated on this site & particularly South Korea. (No faith in China data) Log the scale of the chart to see the rate of change. https://covid19info.live/southkorea/
  • You really can't predict next week's price action, leave alone next year's price action, based on your expectations of unfolding events, pls look through other people's eyes, watch their votes and come to reasonable subjective evaluation of what they are able to see that you alone are not able to see.

    And because our need to be right can be more important than our need to find out what's true, we like to believe our own opinions without properly stress-testing them. We especially don't like to look at our mistakes and weaknesses. We are instinctively prone to react to explorations of them as though they're attacks. We get angry, even though it would be more logical for us to be open to feedback from others. This leads to our making inferior decisions, learning less, and falling short of our potentials - https://www.principles.com/principles-for-success
  • edited March 24
    Inflation is nowhere to be seen, not with such a severe demand and supply shock, and even if it comes back, it's easy to deal with, tighten monetary and fiscal policy, and you are on your way to deflation

    Both Russians and Saudis don't want to give market share to other producers, so they are very much in senses and acting very rationally, the cartel is dead

    Inflation Linked Gilts performance is quite correlated with Regular Gilts due to underlying driver of real growth expectations overwhelming any movements in the inflation expectations. Stocks are much better for cases of higher future inflation expectations. This is because growth and inflation are usually correlated apart from Stagflation. Therefore, higher gilt yields would cancel out any uptick from higher inflation expectations, thus Inflation Linked Gilts are going to easily lag stocks in growing inflationary environment.

    During a 50% crash, Gold would definitely be hammered as well, much like the past month, though the resulting low interest rate environment could be good for it, but compared to 7% earnings yield in stocks, gold yields negative and is completely unproductive, don't get me wrong, gold is everything to everyone, it's perfect for speculation, just like the useless bitcoin

    Yes, South Korea has been very impressive given their proximity to China -
    https://en.wikipedia.org/wiki/Template:2019–20_coronavirus_pandemic_data/South_Korea_medical_cases_chart

  • “Oil as a commodity is done”
    What exactly do you mean by that? The data up to 2018 does not support that statement at all.
    https://ycharts.com/indicators/world_oil_consumption
  • The biggest struggle the humanity has got this century is the climate change crisis, thus oil as a commodity is done

    We didn't stop using horses because the need for horse power went down, And we didn't stop using coal because the need for hydrocarbons disappeared

    Reminds me of the Great horse manure crisis of 1894 -
    https://nymag.com/news/features/establishments/68513
    https://www.businessinsider.com/david-tepper-speech-horse-sh8t-2010-9
    https://en.wikipedia.org/wiki/Great_horse_manure_crisis_of_1894
  • Oil has many different uses eg Petrol-chemical industry etc, too versatile as a commodity to be dumped!
  • Shotgun, "that gold will be hammered as well."
    Not so, in times of economic unrest, many a person would have stored his wealth as gold
    https://www.investopedia.com/terms/s/safe-haven.asp

    see https://www.hl.co.uk/shares/shares-search-results/i/invesco-markets-physical-gold-etc-gbp

    Another good safe haven could be food eg hogs
    https://www.hl.co.uk/shares/shares-search-results/w/wisdomtree-lean-hogs

    ps without oil, there be some difficulty getting pigs to the market, and of course moving gold bars around.
  • You are welcome to invest in oil, though there are plenty of other better ideas to put your limited capital to work

    I just got a text from God verifying that gold is a safe haven, trust

    Actually forget that, what a broker is peddling is probably a safe haven, weren't these the same people peddling Woodford as the God

    The raw materials come from Earth and Asteroids, The Energy comes from the Sun, Oil is just a stepping stone like Horses and Coal, Reminds me of the Great horse manure crisis of 1894 -
    https://nymag.com/news/features/establishments/68513
    https://www.businessinsider.com/david-tepper-speech-horse-sh8t-2010-9
    https://en.wikipedia.org/wiki/Great_horse_manure_crisis_of_1894
  • I bought some LAD2 last Friday at 72p. On the Monday, they were trading around 61p. Today, I sold them at 85p. I find it very hard to resist, when such a carrot is dangled in front of me. I'd guess we might get some more big dips & rises in the coming months.
  • When it comes to investments, people lose more money on losing positions than they make on winning positions - Imagine a wager. You have two choices. Choice A, we flip a coin. Heads, you win $1,000, and tails, you win nothing. Choice B, we flip a coin, but heads or tails, you win $450. Which would you choose? Over many flips, say 100, choice A makes sense. If you get heads half the time, you'd make $50,000. The more heads you get, the more you make. With B, the most you can make is $45,000. Human psychology suggests most people choose B, because the guarantee is perfectly acceptable. Let's flip the wager and run it as a loss. Choice A, heads you owe $1,000, and tails, you owe $0. Choice B, you owe $450 regardless of heads or tails. Again, psychology suggests the majority of people pick A every time. People avoid risk when it comes to a potential profit but accept risk to avoid a guaranteed loss. We take more pain from loss than pleasure from gain.

    This is why they say it's so hard to cut your losses, run your profits, and trend is your friend, which are central to having an outperformance on your investments.

    You are not only who finds it very hard to resist when such a carrot is dangled in front of you, most everyone does as says the above experiment : )

    as for more big dips & rises in the coming months, nobody can predict the future as this is going to be determined by 8 billion people making economic and everyday decisions based on their biases
  • I have not got a holding in Ladbrokes however it is clear people are buying bonds again. i have enjoyed buying some charity and some commercial bonds well below par.
  • edited March 26
    The prices are a bargain, so it's no surprise, doesn't mean that this was the exact bottom

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