Greetings all - a little advice??

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Old Jun 25, 2012, 3:52pm   #1
 
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Greetings all - a little advice??

Hi guys and gals,

My name is Luke and I'm new to the world of trading. Just to give you a bit more background information about me - I'm 22 and I start university later this year studying International Business and Economics at Aston University (England).

I became interested in trading while doing an assignment earlier this year. I had to decide whether Tesco PLC was a good investment over a ten year period. After my research I became so convinced that it was, that I decided to spend £1000 of my own money and bought 316 shares in the company at 3.10728p each.

Now, I don't actually intend to hold onto these shares for ten years. I've heard the rhetoric about keeping your winners and selling your losers, but I feel a nice twenty to thirty per cent gain would be more useful to me right now.

So my question is, do you guys think I've made a good bet? Certainly the price has went down a bit since I first bought them, and I could have got them cheaper if I had waited longer. However, it seems to be coming back up slowly. I would like to sell somewhere around 4.00p.

Here is a link to the london stock exchange Tesco page to save you guys some time - TESCO PLC ORD 5P Interactive Chart - London Stock Exchange

Hope to get some interesting responses!

~ Luke

Last edited by Syntaxis; Jun 25, 2012 at 4:14pm.
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Old Jun 27, 2012, 12:35am   #2
 
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Re: Greetings all - a little advice??

Syntaxis started this thread *bump*
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Old Jun 27, 2012, 7:10am   #3
 
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Re: Greetings all - a little advice??

So you did your research based on a 10 year view, but are looking for a quick 20-30pc pop. Why did you do the research? Tesco is a mature consumer staples retailer, operating with significant competition in most of its key markets. Why do you think that the market is going to suddenly think this business is worth 20% more, or create an additional £5bn of value for investors? Where do you think that additional value is going to come from? Or do you think the market will rise 20% and the rising tide will lift all ships (in which case you could have bought anything)? Have a think about these and you'll be able to answer your question yourself in future.
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Old Jun 27, 2012, 10:24am   #4
 
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Re: Greetings all - a little advice??

Hi there,

Im also new here in forum . but, im doing research about trading and still learning. Reading some books about fx and etc. Looking forward to gain friends here and learn as well. Hope to hear from you soon, guys!
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Old Jun 27, 2012, 10:41am   #5
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Re: Greetings all - a little advice??

Quote:
Originally Posted by Syntaxis View Post
So my question is, do you guys think I've made a good bet?
I think not. Your risk is too high.
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Old Jun 27, 2012, 12:46pm   #6
 
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Re: Greetings all - a little advice??

Syntaxis started this thread
Quote:
Originally Posted by Jack o'Clubs View Post
So you did your research based on a 10 year view, but are looking for a quick 20-30pc pop. Why did you do the research? Tesco is a mature consumer staples retailer, operating with significant competition in most of its key markets. Why do you think that the market is going to suddenly think this business is worth 20% more, or create an additional £5bn of value for investors? Where do you think that additional value is going to come from? Or do you think the market will rise 20% and the rising tide will lift all ships (in which case you could have bought anything)? Have a think about these and you'll be able to answer your question yourself in future.
Thanks for your response Jack. The thing is, I had to do the research on a ten year view because that was a part of my assignment. Now as I said, I'm new to investing and I don't claim to know very much, but here are the reasons why I felt/feel my investment in Tesco could be profitable. You can all advise me as to whether these reasons are valid or not.

Back in January 2012 Tesco had a small profits warning whereby like-for-like sales contracted marginally. This caused the share price to fall from 4.11p to 3.12p. The price has fluctuated up and (mostly) down since then. Philip Clarke announced a GBP1bn investment in Tesco to combat declining like-for-like sales. It appears to be working thus far.

Tesco's International sales growth in Asia and other international markets is doing very well, and some analysts believe that Tesco could become the world's second largest retailer overtaking Carrefour. The only market Tesco is really performing badly in is the USA (Fresh and Easy). However, that division of the company is expected to break even by 2013/2014.

I know this might seem a bit naive, but, Warren Buffett.

Plus, Tesco plays a pretty reasonable dividend.If I'm wrong and the price doesn't go up in the next one or two years, I can wait it out.

To me, this represents a darkest hour moment for Tesco, the perfect time to snap up some good shares while they're selling cheap. Remember, Tesco still controls roughly twenty-nine per cent of the UK grocery market share.

Last edited by Syntaxis; Jun 27, 2012 at 1:29pm.
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Old Jun 27, 2012, 1:02pm   #7
 
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Re: Greetings all - a little advice??

Rather like M&S a few years ago, Tesco have fallen behind the pace as far as the "shopping experience" is concerned. Many of their stores have become shabby by comparison and a straw poll amongst my wife's friends says that they don't like shopping there at the moment (just like they said about M&S).

Tesco have recognised all this, but it'll probably take a bit of time for them to turn it around. That's not to say price won't go the right way in the meantime, of course - I've got some, but I don't expect fireworks.

Gotta listen to the ladies you know
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