Worth a Punt on Rolls Royce?

On the one hand air travel is shafted for the foreseeable, loads of airlines will go under and plane makers will be hard pressed to sell anything at all for 5 years.

On the other hand RR is at 266p which is near as dammit the lowest it has ever been (7% off) this year.

So Shirley it can’t go down any more 🙂

Whaddaya think… any other suggestions for a Friday afternoon shares flutter?

So Shirley it can’t go down any more 🙂

Many small fortunes been made out of large fortunes with this sort of thinking 🙂

Nah, don’t be negative. It’ll be great.

/checks what happened to the 12,000 Intu Trafford Centre shares he bought last month….

Bet what you can afford to lose.

But don’t take my word for only made a profit when China bought lego land.

That’s the best advice, bet only what you can afford to lose.
When Northern rock was through the floor I bet on the government stepping in (it was profitable, but had cash flow issues basically)….. Thankfully I only bet what I could afford to lose!

https://www.fool.co.uk/investing/2020/07/15/heres-why-i-think-the-rolls-royce-share-price-can-double/

They went down to 68p a share after 9/11. My brother made £800 in 10 days off RR shares a few weeks ago so always worth a punt.

Airlines don’t decide to buy aircraft on a whim..these are long term decisions and airlines tend to be bailed out by governments and that leads to a review of the fleet and often new orders.

The short term 3 – 5 years will be rocky for sure for RR but they also have other sectors that are not affected by COVID and are doing well and though civil aerospace is by far their biggest sector, they’re not yet destitute. Also their global fleet is young and of the latest generation of technology so most efficient and cleanest engines so airlines are more likely to bring them back into service over and above the old smokers in their fleets, so when the recovery comes, it will be led by the youngest and most modern aircraft of which RR makes up a good proportion of the global wide body fleet.

I’m no financial advisor, but if you do decide to buy either be prepared to bet on short term fluctuations to make a quick buck like my brother, or buy with the intent of having them sat there as a long term investment to ride out the next few years.

That’s the best advice, bet only what you can afford to lose.
When Northern rock was through the floor I bet on the government stepping in (it was profitable, but had cash flow issues basically)….. Thankfully I only bet what I could afford to lose!

I almost bought a chunk of NR at the time, but luckily didn’t. Did teach me a valuable lesson though. I just buy managed funds / trackers now….

Oh I though you were buying a car………

I saw the title and thought you meant buying a car as a new bike transport vehicle. Pretty sure I’ve never seen one with a bike rack on the top. It would be a bit different to the T5s at the FOD!

Worth a Punt on Rolls Royce?

Probably better off on a canal TBH.

BP will be quicker to recover imo.

yep, got stacks of BP over the last couple of weeks. Alas not at the low point, but averaging 3.01 so hopefully some potential in there.

Yes.

Looks like nearly half their revenue is power systems and defence outside of Air.

Not a useless bank, must have a ton of IP.

Sounds a bit more promising than a toxic debt laden Northern Rock with close to zero IP / long term strategic value.

Sounds a bit more promising than a toxic debt laden Northern Rock with close to zero IP / long term strategic value.

Yep. Anything to do with Aerospace is nothing but long term and strategic. Always Jam tomorrow but as long as there is tomorrow they will exist. No coincidence that there are only really two aircraft manufacturers, two engine manufactures… No wonder Elon Musk decided to skirt the aviation industry and skip strait to space. It’s a tough industry.

I seem to recall Bentley have seen a MASSIVE bounce back in China in the last couple of months. More than the predicted annual sales are back on offer sdo RR cars should be fine.

Airplanes is more dodgy. If you run an airline and are making a loss as most are, dio you keep draggin on with the old ones and accept 5-10% extra costs or o you buy new at 100%+ cost and if so, where do you find that money. Then again, money has never been cheaper.

Trust me. I have no investments and less than a months savings in the bank. I am an internet expert

Not sure, guessing that their main revenue is selling/leasing aircraft engines. The vibe I get is that many large corporations, and I work for one, are reconsidering ways of working and I would expect this to result in significantly less international business travel. therefore less demand…..might be better to invest in a fund that has RR investments then you have spread the risk….

My brother made £800 in 10 days off RR shares a few weeks ago so always worth a punt.

Which, when you think about it, means that someone else lost £800 in 10 days. I’m not a financial advisor, but this day trading idea of making a quick return off short-term fluctuations is a great way to fritter away your money. You’re basically gambling on random fluctuations, so, as above, only gamble with money you can afford to lose.

RR cars should be fine.

Nothing at all to do with the RR the OP is talking about. Buy BMW shares for your scenario.

I looked into trading, all be it spreadbetting, and came across a couple of very usfull points.

You only want to risk 1-2% of your fund in any one day, commission will be about £10-20 a trade. So you need to have a fund where 2% is a large enough figure to generate enough to cover costs and make profit on market moves. In which case keep doing what you were doing that generated the fund. Or your risking markets so volitile that you will get caught out.

No one every really knows where a price will go it’s 50/50. You can have an educated guesses but it’s still a guess.

Do you have a portfolio already? If not and assuming you’re in for the long term just by a tracker. You’re buying when the markets low which is what the bug long term funds will do

The financial experts, analysts, investors and markets have decided that Rolls Royce share price is what it is.

Whether they are under priced or over priced compared to the overall market is a coin toss.

If you want a punt then go for it. If you’re looking to invest then you should pick something more diversified than shares in a single company.

Which, when you think about it, means that someone else lost £800 in 10 days.

It really does not.

Seems a bit risky…I just bought shares, market price £1.15 but buying from gross salary effectively makes them about £0.76.

Still a bit nerve racking, the company I think are pretty resilient to Covid and Recession but with lots of changes going on at work with redundancies, it could go either way! Cut a load of costs which makes the investors happy, but at the same time they are kicking out loads of experienced employees with countless years of experience, and recruiting new ones in alternative locations, a few weeks training is not a patch on experience and this could impact on service levels.

Oh I though you were buying a car………

It would be more fun. Silver Shadow’s are still very low in price and I would love to drive around in one.

Which, when you think about it, means that someone else lost £800 in 10 days.

It really does not.

Across the whole market, it does. Question is, can you beat the market average by making short term trades and paying fees on each transaction?

Do you have a portfolio already?

Nah just a random collection of shares in about 6 different companies.🤔

Doing various short term trades in contravention of the accepted wisdom that you can’t beat the market. I’m sure the wisdom is correct, but it’s quite fun so far. One the market settles down, perhaps ina year or so then I’ll just leave it in whatever I’ve got. But for the moment I’m just pissing about trading.

Hugo:

The financial experts, analysts, investors and markets have decided that Rolls Royce share price is what it

Yep, totally agree. I did read that part of the book.

Across the whole market, it does. Question is, can you beat the market average by making short term trades and paying fees on each transaction

Nope, but having fun trying. Keep making a few hundred here and there and building up s reasonable gain, then do something stoopid like buying 13,000 Trafford centre Intu shares the week before they went bankrupt. Currently 14% up since march, which is probably way behind the market in general.

Nope, but having fun trying.

Enjoy it while it lasts. Just don’t gamble with money you can’t afford to lose.

Seems a bit risky…I just bought shares, market price £1.15 but buying from gross salary effectively makes them about £0.76.l

That’s a great discount. Those company factors you mentioned are priced in and so should already be taken account of.

If you just want the car, this one is available on autotrader…

Rolls Royce are significantly more vulnerable to the pandemic than others in he commercial aerospace sector. The vast majority of RRs revenue is derived from long range and servicing and these are two sectors which are going to be SLOW to recover. RR has almost no presence in the short haul sector anymore. Thats all covered by Pratt and CFM.

Across the whole market, it does.

Not at all. People sell shares and generally make some return. it might not be the biggest return you could have made. The thing that makes shares drop in value is an increase in the number of people selling. All those people selling at any given time will have bought at a variety of purchase prices and the overwhelming majority will have made some return. People don’t tend to sell shares at a loss. You may not make the biggest return possible and might not make as much as you could have if you just chucked your capital in a high interest savings account. You might be ditching RR shares to free up capital to invest in another stock that might look like a better bet for example. Impossible to say who the winners and losers are.

Rolls Royce are significantly more vulnerable to the pandemic than others in he commercial aerospace sector.

Not really in the round. Everyone in the sector is shafted until people start flying again. Boeing and GE were in the crap before COVID…all the MAX issues to sort out, the 777X just about to be launched and all that on hold…hundreds of billions of dollars of investment for Boeing and GE that has yet to return one cent and who knows when the 777X will take to the skies now and when it does will it sell enough given airlines currently ditching very large aircraft like the big 777’s, A380’s and 747’s in favour of smaller more efficient aircraft? Pratt’s have similar woes with the early retirement of the V2500 slashing their expected future income from that engine type and yet to pay off the development costs of their latest gen engine.

All the companies involved – airframes, engine manufacturers and the huge global supply chain are ditching around 25% to 30% of their workforce to manage costs such is the severity of the crisis, and this is only this years impact. Hundreds of thousands of people lost their jobs. There probably will be more cuts and redundancies to come next year. And the year after. And the year after that in all likelihood. The industry is looking at a 5-ish year recovery just to get to Pre-COVID levels of flying.

If they survive the next 5 years the future is looking rosey….

People don’t tend to sell shares at a loss

This happens all the time.

People don’t tend to sell shares at a loss.

Sauce ?? It happens all over the shop. Folk get nervous when price drops and they panic sell

Folk get nervous when price drops and they panic sell

Those folk should not dabble in shares then.

This happens all the time.

Alot of things happen all the time. But generally if you’re not being daft and are not backed into a corner such you have to sell at a given point in time then shares tend to increase in value over time. Wasn’t so long that RR shares were breaking £13 a share. Based on the fact they were 68p a share not so long ago many people/portfolio’s have made a ton of money on RR shares. They’ll be back up again. Maybe not as high as £13 a share, but alot more than they are today.

Also shares pay dividends so your return on the stock is not always in the difference between the buy and sell prices. And some equity based investment schemes are tax efficient too so got to take all that into account.

So your suggesting share prices don’t ever go down ?

Rolls-Royce isn’t just a civil aviation business of course too.

Big, steady Defence sector, growing and only moderately hit Power Systems sector and a growing and increasingly influential digital group developing and selling into the data market.

Then electrical stuff too.

See

Erm no.
See what?

Ps. I bought some. Only a little bit though.