[DaveO]

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 12:00 pm  

Sal Paradise wrote:

Traders seldom own shares - they borrow them from the owners at a fee.

I never said traders own the shares and what that has to do with the general point made and why you would mention this one aspect I don't know.

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 12:51 pm  

Sal Paradise wrote:

I think the last statement is completely untrue - do you think Justin King is running J Sainsbury on that basis? Most well run companies are focused on delivering long term value to their shareholders - that requires long term strategical planning not fluffing up the edges.

Sainsbury's (and plenty of other listed companies) may well be run on those lines but share price is still the compass by which they steer.
That share price is also affected by the market's view of whether the market can make a profit on those shares.
So my statement is completely true.

BTW ... Sainsbury's shares actually dropped recently when they INCREASED market share, why was that?
Because the market (which is notoriously generally short-term in its views) thinks there's not much money to be made in trading those shares.

Sal Paradise wrote:

Traders seldom own shares - they borrow them from the owners at a fee.

Thanks for that point ... borrowing shares for trading affects the price without actually owning the shares ... which is even worse than I described and just underlines the short-termist views prevalent among traders.

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 1:56 pm  

El Barbudo wrote:

Sainsbury's (and plenty of other listed companies) may well be run on those lines but share price is still the compass by which they steer.
That share price is also affected by the market's view of whether the market can make a profit on those shares.
So my statement is completely true.

BTW ... Sainsbury's shares actually dropped recently when they INCREASED market share, why was that?
Because the market (which is notoriously generally short-term in its views) thinks there's not much money to be made in trading those shares.

Thanks for that point ... borrowing shares for trading affects the price without actually owning the shares ... which is even worse than I described and just underlines the short-termist views prevalent among traders.

Using Sainsbury you have just shown the opposite to your argument - this is company that has a set strategy of growth regardless of the share price. Sainsbury and King in particular will be much more interested in pension funds that actually own their shares than the traders who borrow them.

Most pension funds are looking for safe places to park their funds e.g. bonds and blue chip stocks and are in for the long haul. They will be as interested in the dividends as they will be in the short term price of the shares.

If you think King as his like have their whole growth and opperational strategy dictated to by a few traders working on miniscule margins then we must agree to differ.

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 3:16 pm  

Quite how the following will work out is totally beyond me but the fact that JobCentre+ are advertising a f/t position for up to 26 weeks with zero pay makes we wonder just what will be in store for our young unemployed:



An internship for frying chips FFS?

Mind you, this lot would probably refer to it as an apprenticeship

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 4:10 pm  

cod'ead wrote:

Quite how the following will work out is totally beyond me but the fact that JobCentre+ are advertising a f/t position for up to 26 weeks with zero pay makes we wonder just what will be in store for our young unemployed:



An internship for frying chips FFS?

Mind you, this lot would probably refer to it as an apprenticeship

I don't know what is worse about that - the fact that it ISN'T illegal to advertise unpaid six month contracts, or the fact that the Job Centre agreed to carry the advert in the first place.

Should be easy enough to work out who it is though...

Re: Deregulation, casualisation and low pay: how will it wor : Fri Oct 04, 2013 8:19 am  

Sal Paradise wrote:

Using Sainsbury you have just shown the opposite to your argument - this is company that has a set strategy of growth regardless of the share price. Sainsbury and King in particular will be much more interested in pension funds that actually own their shares than the traders who borrow them...

No, Sainsbury will interested in Sainsbury.
But the share price will also be affected by short-term trading.

Sal Paradise wrote:

Most pension funds are looking for safe places to park their funds e.g. bonds and blue chip stocks and are in for the long haul. They will be as interested in the dividends as they will be in the short term price of the shares...

Short-termism has become more and more of a worry as more fund managers' contracts actually reward it.
The Kay report for the government was mainly about how to curb this increasing short-termism, which is absolutely not "restricted to a few traders on miniscule margins", that's why it has become a worry.

Sal Paradise wrote:

...then we must agree to differ.

Indeed.

Re: Deregulation, casualisation and low pay: how will it wor : Fri Oct 04, 2013 10:51 am  

El Barbudo wrote:

No, Sainsbury will interested in Sainsbury.
But the share price will also be affected by short-term trading.

Short-termism has become more and more of a worry as more fund managers' contracts actually reward it.
The Kay report for the government was mainly about how to curb this increasing short-termism, which is absolutely not "restricted to a few traders on miniscule margins", that's why it has become a worry.

Indeed.

Share price movement are seldom linear if you look at Sainsbury since 2011 it has shown a massive growth during that period but during that period the price movement hasn't always been upwards. The trend suggests that Sainsbury's long term growth strategy is paying off in terms of balance sheet robustness, profitability and market share - the most important factors to most serious CEO and companies and shareholders.

Do you seriously think BP care a jot and the short term movement in their share price when they are deciding where to drill for oil? I would suggest their thoughts are around the long term survival of the company.

When was the last major takeover of FTSE 100 company against the will of incumbent mgmt. team i.e. shareholder/pension fund revolt?

Re: Deregulation, casualisation and low pay: how will it wor : Fri Oct 04, 2013 10:58 am  

Sal Paradise wrote:

... The trend suggests that Sainsbury's long term growth strategy is paying off in terms of balance sheet robustness, profitability and market share ...

Thirty years ago, the supermarkets in the UK had 20% of the grocery retail trade. Now it's 80%.

That "market share" comes at the expense of variety, of genuine choice and of small, independent businesses. It might be "paying off" for the company, but there's a price being extracted along the way; a price that many feel is not in the best interests of the country as a whole.

And it's unsustainable. At what point does the City stop demanding further growth? Or what happens when, logically, there are no more lines of business or places without a Sainsbury's to take over?

Sustainability isn't just some trendy green word – surely only an idiot who only sees things in the short term would see sustainability as not being something that should be aimed for?

Which rather brings us the question of who the economy is there to serve: itself (in effect) or the general population?

Re: Deregulation, casualisation and low pay: how will it wor : Fri Oct 04, 2013 11:35 am  

Sal Paradise wrote:

Share price movement are seldom linear if you look at Sainsbury since 2011 it has shown a massive growth during that period but during that period the price movement hasn't always been upwards...

Quite so ... I made the same point myself earlier.

Sal Paradise wrote:

The trend suggests that Sainsbury's long term growth strategy is paying off in terms of balance sheet robustness, profitability and market share - the most important factors to most serious CEO and companies ...

No problem with that.

Sal Paradise wrote:

... and shareholders...

Long term shareholders, sure.
But the point I'm making is that short-termism skews the share price ... all that effort to please shareholders is ignored by the short-term investor who isn't actually interested in long-term viability or growth.

Sal Paradise wrote:

... Do you seriously think BP care a jot and the short term movement in their share price when they are deciding where to drill for oil? I would suggest their thoughts are around the long term survival of the company...

That's basically the same point again.

Sal Paradise wrote:

... When was the last major takeover of FTSE 100 company against the will of incumbent mgmt. team i.e. shareholder/pension fund revolt?

Not sure what you are saying here but short-term investors generally love takeovers, see the share price lurch upwards.

Let me underline my basic points (which, lets remember, were about automation, mainly in manufacturing but ... OK ... also elsewhere) ...
1. Savings due to automation have not accrued to the workforce but to shareholders.
2. Often, those shareholders are not in it for the long term and the traditional pension fund manager view has often, in recent times, been supplanted by a short-term view, possibly or probably encouraged by quarterly reviews and annual bonuses. Hence the Kay report.
3. Long-term investors assist in the future stability of a company and are rewarded in dividends and, eventually, by profit from the share value. Short-termers add nothing but gain the benefit from changes in share price ... and actually affect the share price in a way that is not reflective of the company's value but is reflective of the likelihood of making a profit on dealing in those shares.
4. The very people who have lost-out by losing their jobs via automation are unlikely to have large shareholdings or large pension pots.
5. The gap between "haves" and "have-nots" is widened.

Re: Deregulation, casualisation and low pay: how will it wor : Fri Oct 04, 2013 1:05 pm  

El Barbudo wrote:

Quite so ... I made the same point myself earlier.

No problem with that.

Long term shareholders, sure.
But the point I'm making is that short-termism skews the share price ... all that effort to please shareholders is ignored by the short-term investor who isn't actually interested in long-term viability or growth.

That's basically the same point again.

Not sure what you are saying here but short-term investors generally love takeovers, see the share price lurch upwards.

Let me underline my basic points (which, lets remember, were about automation, mainly in manufacturing but ... OK ... also elsewhere) ...
1. Savings due to automation have not accrued to the workforce but to shareholders.
2. Often, those shareholders are not in it for the long term and the traditional pension fund manager view has often, in recent times, been supplanted by a short-term view, possibly or probably encouraged by quarterly reviews and annual bonuses. Hence the Kay report.
3. Long-term investors assist in the future stability of a company and are rewarded in dividends and, eventually, by profit from the share value. Short-termers add nothing but gain the benefit from changes in share price ... and actually affect the share price in a way that is not reflective of the company's value but is reflective of the likelihood of making a profit on dealing in those shares.
4. The very people who have lost-out by losing their jobs via automation are unlikely to have large shareholdings or large pension pots.
5. The gap between "haves" and "have-nots" is widened.

To answer your points:
1. I would disagree - in a good Kaizen environment people displaced in one area are redeployed in others - have Sainsbury or BP reduced the size of their workforce? Firms actually give very little of the gains to shareholders in the form of dividends - they tend to invest the monies in other ways. Sainsbury improve their supply chain then they invest the gains in a new store - overall affect on labour numbers nil.

2/3. Serious companies will not be bothered by a market activity of short termers, they will not have to explain their strategy to these people. Do you seriously think Sainsbury would change its strategy because a pension fund manager wasn't going to hit his quarterly target?

4. See point one - how many people are actually employed in this country and how does that compare to 20 years ago? The mix of economic output is very different from 20 years ago yet the employment numbers will be higher - increase population plus economic migration, average salaries will also be higher - how has this happened?

5. Agree