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  1. #1
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    Default Capitalizing on Brexit

    Worth all this volatility, i feel like there should be a decent way to capitalize on brexit but can't see how.

    I see the pound decreasing in value, but don't have any to sell.

    After brexit I could do a contrarian investment, but there's no carrot at the end of that stick to suggest thing should have a quick turn around.

    Maybe short city of London?

  2. #2
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    Quote Originally Posted by Lewylewylewy View Post
    Worth all this volatility, i feel like there should be a decent way to capitalize on brexit but can't see how.

    I see the pound decreasing in value, but don't have any to sell.

    After brexit I could do a contrarian investment, but there's no carrot at the end of that stick to suggest thing should have a quick turn around.

    Maybe short city of London?
    You do not need pounds to sell them. With most FX markets you just take a position on margin and away you do. Check out IG.com if you are really interested.

    Caveat, the pound has probably already dropped as far as it will go with all the uncertainty around. So any sort of Brexit, even a hard one may not even do any damage to the pound.

  3. #3
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    Pound is on the way up again. I have been capitalizing on brexit but only because I have had USD income. Just after the vote, you could buy the pound with 57c (NZ), now it is a bit less than that. I doubt that it will be worth it unless you have a reason to have GBP. That said, many of the shares are horrendously undervalued now.

  4. #4
    always learning ... BlackPeter's Avatar
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    Default

    Good idea for a thread ... and I think that there would be more opportunities to benefit from a hard BREXIT than just to short the pound ...

    Pretty sure prime real estate in Dublin, Brussels, Frankfurt and Paris will go up when all the big finance institutes will need to find a new HQ in the EU. Buy into relevant property trusts if you think the hard BREXIT goes ahead ...

    It might be as well worthwhile to check out the European locations for e.g. BMW, Volkswagen, EADS. Instead of building new European factories to take over the British activities they might just spread the former British tasks to existing factories in e.g. Germany and France. Actually - Eastern Germany might see increasing property values and falling unemployment rates - but from an investment perspective in my view mainly a property game.

    Property prices in the UK will obviously go down, but I am not quite sure how to short property prices. Any ideas on that?

    There will be a huge increase of trucks waiting for long times on both sides of the new borderline. Whoever provides reasonable priced accomodation and food for the truckies at the relevant European and UK harbours will get a big push into the arm.

    Terrorism in the UK and particularly in the British colony of Northern Ireland will start again - actually, it started already. Not a big benefit to the economy, but it might pay to monitor the shares of weapons manufacturers. I guess the IRA will need some stuff to re-arm.

    Britain siphoned so far a quite overproportional amount of the EU research funds (due to the quality of Oxford and Cambridge). This money will now go to European universities instead. Pick some of the top 100 European universities and invest in high quality rental space in these locations. More academics need more room to live!

    So many opportunities - but obviously - only if you believe the hard BREXIT will come ...
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  5. #5
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    IMO, a lot has already been priced in the GBP. The turning point was 2+ years ago in (July?) when they had the Brexit vote. The direction back then was clear to go short on the GBP. To go in now would be little gain as most of the UK real estate, share equity, etc. have come down. Meaning over the past 2 years we've seen an exodus of 'capital flight' of wealth LEAVING the UK.

    I'm curious what NZ's capital gains tax would have on it's currency. If it would trigger an exodus of $?

  6. #6
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    It was nice buying GBP in 2016....and generally nice buying over the two years....the stock market it sorely undervalued....BUT BUT BUT....who is prepared to bid on which way it goes? For me, no big issues as I can use the money in the UK anyway....if the GBP and market strengthens, I will also have the choice to realise NZD or USD. Holidaying in the UK has been good! Educating child has been cheaper than planned ... sharemarket, cheaper than planned....but who knows....I also see that it has all been priced in for the time being...but who knows!

  7. #7
    Ignorant. Just ignorant.
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    Quote Originally Posted by BeeBop View Post
    It was nice buying GBP in 2016....and generally nice buying over the two years....the stock market it sorely undervalued....BUT BUT BUT....who is prepared to bid on which way it goes? For me, no big issues as I can use the money in the UK anyway....if the GBP and market strengthens, I will also have the choice to realise NZD or USD. Holidaying in the UK has been good! Educating child has been cheaper than planned ... sharemarket, cheaper than planned....but who knows....I also see that it has all been priced in for the time being...but who knows!
    That's the key, really - personal circumstances. I rather think that you're a bit of an outlier. . .

    If you can use those pounds in the UK, then it's plain sailing. But if you're coming from the outside, there is a real risk that those pounds, however cheap they may be to buy, are going to be held captive by the exchange rate.

    Personally, I have a sneaking suspicion that moving into the UK (or Europe) post Brexit would run the risk of your buying and/or holding more and more of something which is worth less and less.

    Tricky.

    I'm inclined to invest in pounds but outside the UK, or Euros outside Europe in the expectation that the pound and euro will both depreciate - in something like a GBP-denominated S&P500 fund, or a EUR-denominated ASX/200 fund as examples.
    Last edited by GTM 3442; 08-02-2019 at 07:50 PM.

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