Trying to buy ORB bonds via Selftrade with no luck

Decided to be brave (likely foolish) and top up a few of my small ORB holdings but can't get a quote out of Selftrade. I own 2,000 ICG3 5% 2023. Tried to buy another 2,000 at the offer price of 70p (so just a £1,400 trade) and no online quote available and when I routed it to the dealers seems nobody would sell at that price. Tried a few others with similar results. I also own some REITs and am having similar problems e.g. trying to buy 5,000 Empiric Student Property at the LSE offer price of 60p doesn't seem possible. Oh well, may be for the best . . . .


  • ESP.L - AJBell quoting 0.60888.
  • I did manage to buy ESP eventually. Now need to keep my fingers crossed they don't shut down the universities. I usually buy too soon so likely these may fall further, but long term I'm hoping the yield should be more secure than some. Annual results published yesterday seemed more positive than other property funds in respect of the virus.
  • edited March 2020
    It's nor brave nor foolish, it's perfectly logical to buy something at 30-40% discount, if you have spare cash that is

    Markets top out when last buyer has brought in, and markets bottom out when last seller has sold out

    So looks like we might be finally out of sellers here, don't be afraid to pay bit more to buy, it's still a great bargain

    Universities lockdown would be a mistake as i explained here -

    You don't buy too soon, everybody buys bit early or bit late because nobody can pick the exact bottom, the bottoms are finalised only in the retrospect

  • I do have spare cash, that's part of my investment strategy to attempt to buy in panics. However it still isn't easy to do. I have always liked the idea of Harry Browne's Permanent Portfolio of 25% cash, 25% long dated government bonds, 25% gold and 25% equities. At least one or two of those assets are likely to perform well under most economic scenarios. Warren Buffet also holds plenty of cash. I have a physical gold ETF although for less than 10% of my portfolio, 30% bonds split long gilts and shorter dated corporates and around 30% in equities (including VCTs) and 10% REITs. I took some profits in equities at the end of last year to top up my cash which I have now reinvested at lower prices (although they have fallen further). My plan was to invest half the cash in three chunks at 20-25% down, then another at 30-35% down and save the final bit in case things get really bad (40-50% down). On average I will get around a 30% discount from the highs and participate in the eventual recovery. So far I am following the plan which gives me some reassurance even though I am feeling the pain. I don't need this money for 8-10 years and the logical part of my mind says things will look better before then. I feel strongly that everybody has to have their own investment philosophy including some kind of plan for when (not if) assets crash. I really think that is key. Have a plan and stick to it. Buy and hold an appropriately diversified portfolio for the long term will likely continue to work for most people. Mine is comfortable for me and should produce returns that are sufficient for my retirement needs. It comes from my personal experience of the the various ups and downs since the mid 90s and a lot of investment reading. So, have a plan and enough non-investment cash to ideally cover at least 6-12 months expenditure (plus toilet paper and some long life food)
  • edited March 2020
    me too, even though i have been buying pretty much ever day for past few weeks, i still maintain a much larger cash position than the equities position, i was born in great financial crisis and my first experience of markets was a 60% drawdown in S&P500 which, much of the wall street, and most of the high street, didn't see coming

    It's unnerving to see stocks down 33%, but you have to recognise stocks as a piece of future human potential which is now available at bargain prices, with the potential of 50% rally in short order as we saw in Q2 2009

    The problem with Browne's Permanent Portfolio is that there is lot of inertia in there, you have to adjust % based on the existing paradigm, you have to maintain enough cash or cash equivalent so that you can ride out a rough decade in stocks, long govvies are anywhere from 0 to 2% yield, that's really tiny compared to 7% earnings yield in stocks, while 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

    so if you have a lot of gold and govvies, you are going to miss out on all the upside from holding stocks instead, which is what buffett avoids diligently, in the past decade, stocks were the only game in the town, all of the rest, cash, gold and govvies were left in the dust

    You have to balance out the planned performance with the adaptive performance, the pain u feel is the emotional and financial pressure which decreases your adaptive performance, instead focus on play, purpose and potential -

  • edited March 2020
    It's great you have enough cash or cash equivalent for the next decade, but there is absolutely no assurance that things would look better before then -

    This is the reason you have to balance out the planned performance with the adaptive performance, like Tyson would say - everybody has a plan until they get punched in the face

    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 and run your profits, which is central to having an outperformance on your investments.

    Most people wouldn't be able to navigate personal investments because of lack of understanding or application of the above ideas, it's no different in other fields like medicine, i would depend on health specialists to help on the health strategy, just going to google and figuring out yourself is a recipe for disaster at some point in the future.

  • edited March 2020
    Having a plan and sticking to it would kill your adaptive performance. You have to balance out the planned performance with the adaptive performance. People would be unable to buy and hold for the long term due to emotional and financial pressure. For eg, Most people would be unable to buy at the lows due to panic and miss out the sharp rally thereafter. Worse, some people might be forced to sell at lows because of the low cash % in their portfolios.

    Most people don't have your personal experience of the the various ups and downs since the mid 90s. They also don't have time for a lot of investment reading. So their plan ends up being a flawed one, that has too much inertia, which then kills their adaptive performance

    Pls stop buying excessive toilet paper and long life food, the production of these haven't gone up in the last month, so if you buy too much of those, it means when i run out, i have to go queue at 5am outside some large Tesco to buy some toilet paper, because i, definitely am not going to add to the panic by hoarding, So when you reduce your emotional and financial pressure by hoarding, you are increasing mine by leaving less on the aisle. We shouldn't be having zero sum performance, we should instead be working with each other to increase both our performance and potential.

  • Don't worry, the toilet paper and longlife food comment was supposed to be ironic. I do now have a dilemma with the government bonds though. They were there in the event of a crash/recession/deflation and arguably have largely served their purpose. Long US treasuries would have been even better due to sterling falling v the dollar which has cushioned some of my US equity losses. However back in 2010 almost everybody thought gilts were likely to be a poor investment (less than 3% yield) and yet they have returned over 6% per annum since then. I agree it is hard to see them repeating that. Index linked gilts have done even better over 10 years (even with no inflation). I suspect I will continue to hold both in an attempt to hedge future inflation or deflation. I will also have some equities as an inflation hedge and cash in case of deflation. The ORB bonds were a great deal after the credit crunch but I haven't been replacing them as they matured. I have posted previously on this forum that I felt there were unknown credit risks and I don't need high yield bonds, I would rather hold equities and property.
  • edited March 2020
    As i have said over and over again, Govvies are great in low growth, low inflation environment. But the problem there is sustainability of that environment. There would be obvious changes in the next election. People, who obviously would be tired of low growth and low inflation, would vote the previous person out, and the next person would do everything they can to get the growth and inflation up. Then you are likely to experience drawdowns on your long Govvies.

    Long Govvies at 0-2% yield, pale in comparison to Stocks with 7% earnings yield. I can also see the recency bias in the view that bonds did well the last decade. What puzzles me here is why the massive outperformance of stocks is not being considered here instead. Yes, S&P500 now had 33% drawdown, but this was the same case in 1987 with 36% drawdown and the secular bull continued to run for another 13 years producing a massive 607% returns over that period.

  • You can instead maintain a large cash or cash equivalent position like 1-3Y NS&I Bonds for the event of a crash/recession/deflation. I do also maintain a large outright USD, EUR, CNH and JPY positions to diversify the intrinsic GBP and BoJo domicile risk.

    10Y Gilt Yields topped out in Feb 2010 at 4.27% and yes the general consensus since then has been that there is limited upside in bonds. But just because the consensus was wrong before doesn't mean that Gilts at 0.55% yields are still likely to be better choice than US Stocks with 7% earning yield over the coming decade.

    Index Linked have done even better because they had really low inflation expectations to begin with and with the secular GBP declines, this clearly hasn't been the case -

    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. And thus 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.

  • edited March 2020
    The ORB bonds are really stocks with limited upside, very limited liquidity and all the downside. I really couldn't get my head around the general obsession with them. Plus ORB Bonds are an unnecessary emotional and financial pressure for both the buyers and issuers, thus decreasing their adaptive performance. As an equity holder, you share the common purpose and potential together, thus increasing the mutual adaptive performance.

    Property is another obsession in UK i haven't got my head around. You take on a lot of debt/mortgage, put on unnecessary emotional and financial pressure on yourself and then wonder why your adaptive performance have gone down. Instead you can easily rent, keep your balance sheet free to take on some other new ideas, maintain your flexibility to break your inertia and thus increase your adaptive performance

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