What happens next in Europe?

[RuleNumberOne]

Unlike me, hedge funds can go to Europe to investigate to find out when things are going to crash. Does anyone have useful insights? My thoughts are below:

 

- ECB has revealed in meeting after meeting that it is maxed out.

 

- Germany is entering or is already in a recession. Economic and manufacturing surveys at 9-year, 7-year lows.

 

- Italy, Greece debt to GDP keeps going up and up, never down. Why doesn't Italy quit the Euro?

 

- Italy youth unemployment is at 33% (Greece is even worse). Why doesn't Italy quit the Euro instead of doing this to their youth?

 

- German 30-year is already at 0.2%. Debt is free, but growth is nowhere to be found. ECB has removed free-market pricing in bonds and created a gigantic bond bubble.

 

- Some people suggest the ECB should nationalize the private sector by buying equities. Do people in Europe believe in free markets or not?

 

- If Italy were to leave, they can run budget deficits of 10-15% (like the US did in 2009). Devalue their currency and do whatever it takes to give their youth a chance. They can't keep destroying generation after generation.

 

- Italy is the third-largest debtor in the world (after US and Japan.) French banks will be wiped out if Italy leaves the Euro.

[RuleNumberOne]

I read somewhere this week that the European stock index is up only 14% over the last 5 years since they started the negative-yield campaign. Clearly it doesn't work.

 

Germany GDP growth:

Q1, Q2, Q3 Q4 2018, Q1 2019 = 0.4, 0.5, -0.2, 0.0, 0.4

 

Germany is I think negative for Q2 2019.

 

Italy GDP growth:

Q1, Q2, Q3 Q4 2018, Q1 2019 = 0.1, 0.1, -0.1, -0.1, 0.1.

 

Will a German recession pull down others in Europe into a recession too?

[Spekulatius]

U.K. is a great Real Life Experiment on leaving the EU. They have elected Boris Johnson, who is going pursue the exit, either hard of soft by October this year. We can watch the show from the sidelines and take positions as we fit, as some volatility can be expected. There are quite a few cheap stocks in the UK, like property companies with very little leverage trading at ~50% of NAV.

 

I think  there is a setup for some great investment opportunities. I would caution on the banks, but if they fail, they will just be nationalized. Contrary to the US, thats not a big deal in Europe.

[RuleNumberOne]

Yeah, I feel safer investing in the UK because they would be more insulated from a Euro debt crisis. What is a good source for finding British and German stocks?

Ray Dalio shorted Italian banks and European stocks last year before the Italian elections. He has written a long article I very much agree with.

 

https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio/

 

"sometime in the next few years, 1) central banks will run out of stimulant to boost the markets and the economy when the economy is weak, and 2) there will be an enormous amount of debt and non-debt liabilities (e.g., pension and healthcare) that will increasingly be coming due and won’t be able to be funded with assets. Said differently, I think that the paradigm that we are in will most likely end when a) real interest rate returns are pushed so low that investors holding the debt won’t want to hold it and will start to move to something they think is better and b) simultaneously, the large need for money to fund liabilities will contribute to the “big squeeze.” At that point, there won’t be enough money to meet the needs for it, so there will have to be some combination of large deficits that are monetized, currency depreciations, and large tax increases, and these circumstances will likely increase the conflicts between the capitalist haves and the socialist have-nots. Most likely, during this time, holders of debt will receive very low or negative nominal and real returns in currencies that"

 

U.K. is a great Real Life Experiment on leaving the EU. They have elected Boris Johnson, who is going pursue the exit, either hard of soft by October this year. We can watch the show from the sidelines and take positions as we fit, as some volatility can be expected. There are quite a few cheap stocks in the UK, like property companies with very little leverage trading at ~50% of NAV.

 

I think  there is a setup for some great investment opportunities. I would caution on the banks, but if they fail, they will just be nationalized. Contrary to the US, thats not a big deal in Europe.

[bizaro86]

There are quite a few cheap stocks in the UK, like property companies with very little leverage trading at ~50% of NAV.

 

 

Interesting! Any suggestions there?

[RuleNumberOne]

It seems Paul Volcker said Ray Dalio's firm produces more relevant statistics and analysis than the Federal Reserve. More quotes from Dalio's article:

 

"Right now, approximately 13 trillion dollars’ worth of investors’ money is held in zero or below-zero interest-rate-earning debt. That means that these investments are worthless for producing income (unless they are funded by liabilities that have even more negative interest rates). So these investments can at best be considered safe places to hold principal until they’re not safe because they offer terrible real returns (which is probable) or because rates rise and their prices go down (which we doubt central bankers will allow).

 

Thus far, investors have been happy about the rate/return decline because investors pay more attention to the price gains that result from falling interest rates than the falling future rates of return. The diagram below helps demonstrate that. When interest rates go down (right side of the diagram), that causes the present value of assets to rise (left side of the diagram), which gives the illusion that investments are providing good returns, when in reality the returns are just future returns being pulled forward by the “present value effect.” As a result future returns will be lower.

 

That will end when interest rates reach their lower limits (slightly below 0%), when the prospective returns for risky assets are pushed down to near the expected return for cash, and when the demand for money to pay for debt, pension, and healthcare liabilities increases. While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

At the same time, the liabilities will be coming due, so it’s unlikely that there will be enough money pushed into the system to meet those obligations. Then it is likely that there will be a battle over 1) how much of those promises won’t be kept (which will make those who are owed them angry), 2) how much they will be met with higher taxes (which will make the rich poorer, which will make them angry), and 3) how much they will be met via much bigger deficits that will be monetized (which will depreciate the value of money and depreciate the real returns of investments, which will hurt those with investments, especially those holding debt)."

 

 

[Spekulatius]

There are quite a few cheap stocks in the UK, like property companies with very little leverage trading at ~50% of NAV.

 

 

Interesting! Any suggestions there?

 

DJAN.L. Very clean balance sheets owning residential and commercial real estate in the UK and to a lesser extend in the US (East coast). They readily publish NAV. The stock has an interesting history  and was initially a plantation (hence the name). It became a property stock after WW2. It is run more for wealth preservation than returns, controlled by an owner operator. I own a little.

 

3rd Avenue‘s real estate owns some U.K. property stocks as well. It’s worth checking out their letters and holdings.

[JimBowerman]

While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

Dalio produces a lot of good stuff but imo is dead wrong when he says we are "pushing on a string" or suggests that monetary policy is out of bullets.

 

Monetary policy is never out of bullets.

 

If we all think monetary policy is out of bullets we, then only need to go ask for advice from Argentine central bankers...they have no problem getting nominal rates to 25% or higher.  Are they using some magic voodoo to get growth this high...or is it possible that monetary policy never runs out of ammo and the current batch of central bankers are just too timid to get the (nominal) growth they say they want

[mcliu]

That will end when interest rates reach their lower limits (slightly below 0%), when the prospective returns for risky assets are pushed down to near the expected return for cash, and when the demand for money to pay for debt, pension, and healthcare liabilities increases. While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

I don't really understand this. There shouldn't be a lower limit for yields if ECB will buy at any price.

 

Yields don't matter anymore if ECB can buy at ever higher prices. Even when yields are negative, expected (nominal) return can be positive because you can sell to ECB at higher prices.

[Viking]

That will end when interest rates reach their lower limits (slightly below 0%), when the prospective returns for risky assets are pushed down to near the expected return for cash, and when the demand for money to pay for debt, pension, and healthcare liabilities increases. While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

I don't really understand this. There shouldn't be a lower limit for yields if ECB will buy at any price.

 

Yields don't matter anymore if ECB can buy at ever higher prices. Even when yields are negative, expected (nominal) return can be positive because you can sell to ECB at higher prices.

 

I was listening to an analsyst last week; i think it was Bloomberg Surveillance. The analyst was asked why anyone in their right mind would buy European debt that has a negative yield. His reponse was if you believed prices would be going higher (yields lower) then it was rational to buy bonds today even if they have a negative yield.

 

My immediate reaction was to think of the greater fool theory.

 

We are in very interesting times.

[RuleNumberOne]

The ECB has bought 33% of each country's outstanding debt (except junk-rated Greece), so the remaining 67% is held by private investors such as pension funds. The ECB will have to bump up the 33% limit if it wants to buy more.

 

ECB has also bought investment-grade corporate debt, I don't know what criteria it applies there. I expect the majority of any issuer's debt is still held by the private sector.

 

The problem for a pension fund is though the price of the bond rises due to the negative yield, when the bond matures it results in a loss. If the only bonds in the market were Tulips (aka 100 year bonds), they could sell it to a greater fool at higher speculative prices and pay out the monthly pension payments.

 

These pension funds and insurance companies have to buy the negative-yielding debt.

 

I don't know what the weighted average maturity is for the negative-yielding debt.

 

That will end when interest rates reach their lower limits (slightly below 0%), when the prospective returns for risky assets are pushed down to near the expected return for cash, and when the demand for money to pay for debt, pension, and healthcare liabilities increases. While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

I don't really understand this. There shouldn't be a lower limit for yields if ECB will buy at any price.

 

Yields don't matter anymore if ECB can buy at ever higher prices. Even when yields are negative, expected (nominal) return can be positive because you can sell to ECB at higher prices.

[RuleNumberOne]

The FT in its articles has started adding that "negative yielding bonds guarantee a loss if held to maturity" along with the standard "prices rise when yields fall" explanation for bonds.

 

Monetary policy cannot fix the European Project's problems. If zero rates and free debt or nationalization resulted in prosperity, every nation in the world would be "developed". Low rates and free-market-suppression cannot make a country more competitive. Communist countries would be the most prosperous and the US would be poor if it were true.

 

Italy has lower rates than the US, but just look at the 33% youth unemployment. Zero GDP growth over the last 1.5 years and a little above zero before that.

 

Euro needs to be broken up. Spain had 56% youth unemployment some years ago if I remember correctly. Greece unemployment is worse than Italy.

 

I can't understand why Italy stays in the Euro. Their existing youth are unutilized/idle, even as the population is shrinking rapidly. Leave the Euro, devalue, run as big a fiscal deficit as you want, and give the youth something to do. There is no way out if one-third of your youth are unemployed.

 

That will end when interest rates reach their lower limits (slightly below 0%), when the prospective returns for risky assets are pushed down to near the expected return for cash, and when the demand for money to pay for debt, pension, and healthcare liabilities increases. While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

I don't really understand this. There shouldn't be a lower limit for yields if ECB will buy at any price.

 

Yields don't matter anymore if ECB can buy at ever higher prices. Even when yields are negative, expected (nominal) return can be positive because you can sell to ECB at higher prices.

 

I was listening to an analsyst last week; i think it was Bloomberg Surveillance. The analyst was asked why anyone in their right mind would buy European debt that has a negative yield. His reponse was if you believed prices would be going higher (yields lower) then it was rational to buy bonds today even if they have a negative yield.

 

My immediate reaction was to think of the greater fool theory.

 

We are in very interesting times.

[RuleNumberOne]

According to Bloomberg, non-Italian banks hold 425 billion euros of Italian debt.

 

Of that, 240 billion euros is held by two French banks: BNP Paribas (143B) and Credit Agricole (97B)

 

Wikipedia says:

BNP Paribas and Credit Agricole each had equity of 100B, total assets of 2T and 1.7T.

 

https://www.bloomberg.com/graphics/2019-italian-banks/

 

[JimBowerman]

Monetary policy cannot fix the European Project's problems. If zero rates and free debt or nationalization resulted in prosperity, every nation in the world would be "developed". Low rates and free-market-suppression cannot make a country more competitive. Communist countries would be the most prosperous and the US would be poor if it were true.

 

Italy has lower rates than the US, but just look at the 33% youth unemployment. Zero GDP growth over the last 1.5 years and a little above zero before that.

 

Euro needs to be broken up. Spain had 56% youth unemployment some years ago if I remember correctly. Greece unemployment is worse than Italy.

 

I can't understand why Italy stays in the Euro. Their existing youth are unutilized/idle, even as the population is shrinking rapidly. Leave the Euro, devalue, run as big a fiscal deficit as you want, and give the youth something to do. There is no way out if one-third of your youth are unemployed.

 

 

"Nominal shocks have *real* effects" (because of sticky wages)

 

Hard to believe that at this point anyone is arguing that the the EU should have *less* robust nominal GDP growth.  What in the world is the risk with unemployment so high?

 

The main advantage of breaking up the EU would be to allow individual countries to inflate. Why in the world cant the ECB just inflate across the board...?

 

If Spain or Italy leaves the EU tomorrow, the only way they recover is by devaluing their (new) currency...ECB just needs to print more money...its so easy and yet we are all making it out to be rocket science

[RuleNumberOne]

1. If hyper-inflation resulted in economic growth, Venezuela/Argentina/Zimbabwe would be the powerhouse right now and not Germany/USA.

 

2. If Italy leaves the Euro, they can run a budget deficit exceeding the 3% Euro limit. Even today the US runs a big deficit under Trump, percentage wise greater than Italy's deficit. In the aftermath of the 2008 crisis, the US ran a big deficit of around 10% AFAIR. Under Trump, the deficit is around 4-5% in a currency controlled by the US. The government's debt is some private sector company's income. Your debt won't be in a currency you don't control if you leave the Euro.

 

3. If each Euro were to devalue across the board into two Euros, nothing changes. Europe has 1.4% inflation right now and the US is at 1.7%. Inflating across the board won't fix the disparity. The US has a 50-year low in unemployment.

 

4. If Italy were to leave the Euro, it could redenominate the debt in a new currency it controls or simply refuse to pay. Get a fresh start. Make use of the human capital instead of leaving it idle until expiry.

 

Monetary policy cannot fix the European Project's problems. If zero rates and free debt or nationalization resulted in prosperity, every nation in the world would be "developed". Low rates and free-market-suppression cannot make a country more competitive. Communist countries would be the most prosperous and the US would be poor if it were true.

 

Italy has lower rates than the US, but just look at the 33% youth unemployment. Zero GDP growth over the last 1.5 years and a little above zero before that.

 

Euro needs to be broken up. Spain had 56% youth unemployment some years ago if I remember correctly. Greece unemployment is worse than Italy.

 

I can't understand why Italy stays in the Euro. Their existing youth are unutilized/idle, even as the population is shrinking rapidly. Leave the Euro, devalue, run as big a fiscal deficit as you want, and give the youth something to do. There is no way out if one-third of your youth are unemployed.

 

 

"Nominal shocks have *real* effects" (because of sticky wages)

 

Hard to believe that at this point anyone is arguing that the the EU should have *less* robust nominal GDP growth.  What in the world is the risk with unemployment so high?

 

The main advantage of breaking up the EU would be to allow individual countries to inflate. Why in the world cant the ECB just inflate across the board...?

 

If Spain or Italy leaves the EU tomorrow, the only way they recover is by devaluing their (new) currency...ECB just needs to print more money...its so easy and yet we are all making it out to be rocket science

[DTEJD1997]

Hey all:

 

Years ago I heard about the incredibly high youth unemployment in Europe...so I found some Europeans and asked them about it.

 

They told me that it was indeed bad, very bad...but that there were a few things going on.

 

The first is that those figures are somewhat inflated.  Some people are actually employed, but claim to be unemployed for benefits and such.

 

Another big thing that they pointed out to me was that a lot of youth worked in the underground/informal economy.

 

Another thing was that a lot of youth worked part time/seasonal/on off.  A lot also worked in the "gig" economy.  A good chunk also traveled overseas and would on cruise ships/resorts/foreign countries.

 

So the people I spoke with said that things were indeed bad, but not as bad as you would first think.  This was maybe 10 years ago?  Have things changed at all?

[RuleNumberOne]

https://www.ft.com/content/7fb1a0e6-9f0d-11e9-9c06-a4640c9feebb

 

I think its worse than 10 years ago (googling for Italy unemployment shows it has doubled over the last 10 years).

 

"The 32-year-old, who has a master’s degree, occasionally picks up casual work as a waitress and distributes flyers, earning about €300 a month. She is not the only young Italian who is struggling because of the lack of job opportunities. One in four Italians aged 15 to 34 is not in education, formal employment or training (Neet) — more than 3m people in total. In Sicily, Italy’s largest island, the proportion rises to 42 per cent.

 

That has repercussions for other areas of life: the lack of a secure income makes it hard for adult children to move out of their family home and have offspring of their own. Italy registered the lowest number of births on record last year, as well as the highest ever number of emigrants — weighing on the country’s weak growth prospects and fragile public finances."

 

[meiroy]

My advice is not to invest following macro tourist maps. It's fun and all, but better to avoid it unless you're Druckenmiller. The US market is big enough, especially for small investors. Of course, if you find something really, really cheap, and the risk-reward is awesome, then why not.

 

Europe economic issues are due to  German local policies, which caused a decrease in demand in Germany (rise in inequality, wealth accumulate with the rich, rise in saving rates, etc.). Until whoever controls Germany is willing to accept this, it will not be solved. Or, it will be solved the hard way. Beggar-thy-neighbor can only go so far.

 

The UK leaving, might signal the beginning of the collapse of the Eurozone (and the forced rebalancing of Germany), but more than that it means the divide and conquer of that place called Europe so each of the tiny countries there can be played by the big economies. Read: what a bunch of idiots.

 

It's extremely hard to time these things, which is why it's not really tradable for mortals like myself. If there is some way for the politicians in these countries to postpone the inevitable and make the eventual outcome worse, then they will do it. So, you think it's going to happen in a year or two but it happens 10 years later, just much worse.

 

Regarding Brexit, personally, I think the probability they will actually leave is far lower than what it seems right now, maybe just 10%. Could happen.

 

 

[scorpioncapital]

While there is still a little room left for stimulation to produce a bit more of this present value effect and a bit more of shrinking risk premiums, there’s not much.

 

Dalio produces a lot of good stuff but imo is dead wrong when he says we are "pushing on a string" or suggests that monetary policy is out of bullets.

 

Monetary policy is never out of bullets.

 

If we all think monetary policy is out of bullets we, then only need to go ask for advice from Argentine central bankers...they have no problem getting nominal rates to 25% or higher.  Are they using some magic voodoo to get growth this high...or is it possible that monetary policy never runs out of ammo and the current batch of central bankers are just too timid to get the (nominal) growth they say they want

 

absolutely agree. Japan too. It is comical to watch 30 years of Japan cb saying they want 2% inflation and not achieving it and saying they will do more. Obviously the will is not there and so it is a kind of 'read between the lines'. It's one thing to hand out to every person $1000 cash and another to 'buy bonds or even stocks and hold them by the CB'. The CBs do not want the inflation they claim they are trying to produce and get spooked. BUT, I don't think with dysfunctional politics and global tensions they will need to try much harder for much longer.

[meiroy]

 

Also, remember that Japan, while not exactly thriving, didn't completely fuck up either, despite the intrest rates and debt being where they are. Standard of living remained stable. Europeans might just have to accept the fact that it's time for others to grow and prosper, while most European countries will stagnate for years.

 

Japan did not fuck up completely because they chose not to rebalance quickly but rather go into decades of a downward spiral and it still has not been resolved.  They could have been in a far better position today. They got lucky with the rise of China and other aspects but as said it's not over yet.

 

Europe will not stagnate for years, people would vote to break it up even if they do not realize why.

 

edit: and, of course, Japan is a surplus beggar thy neighbor just like Germany and China.

 

 

[Cigarbutt]

The question that remains open-ended is to what extent the powers that be will go to do whatever it takes.

 

Europe can ease some more and can eventually extend their presence in the corporate bond and equity markets. Japan (always done with the described intent to reverse course when the time comes...) is establishing new benchmarks and now the central bank owns 70 to 80% of the domestic ETF market (!) and is a significant shareholder in most major corporations. I don't know the end game and there is obviously the kick-the-can-down-the-road issue for timing but the whole thing just seems unhealthy.

 

Another fascinating aspect is that the concept of helicopter money seems to be making its way as a potential solution. I don't buy it. For those interested, in the context of looking for opposing views, I had looked at a paper made by Mr. Adair Turner, a British businessman and academic.

 

The paper shows that the application of the concept is technically sound.

https://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf

 

Mr. Turner has been made a baron for public services rendered and has called himself a technocrat. When alluding to his plan, he has compared it to a helicopter on a leash. Opinion: I don't like the concept, think that monetary finance occupies a disproportionate position in our financial lives (European and otherwise) and wish for the global downside risk to eventually be lower.

[JimBowerman]

Agree with most comments here in that other political factors come into play, making higher inflation in the ECB unlikely.  The failure, when looking at the political situation isn't all the ECBs fault.  That said, no one at the ECB should be confused about the technical reasons why inflation is low. Its seems like i've heard some of this confusion from the ECB and that worries me a bit - because it implies that even if they did have the political support, they wouldn't know how to raise inflation.

 

Another political factor going against higher inflation is the unhelpful bullying comments coming from the U.S. of "currency manipulation" - its a false term to begin with (a central bank must always and everywhere "manipulate" its currency as a central bank completely and totally controls the path of the monetary base). Even so, sub 2% inflation is in no sense "currency manipulation". That said, its real, and the ECB won't piss off the U.S. so they are stuck with low inflation

 

Finally, would agree with ruleNumberone about the different conditions across the board and yet the forced single monetary policy. If the EU was an optimal currency area - that is if residents could more easily move across borders (much like residents easily move to different states in the U.S.) then a single monetary regime for the entire EU would be less problematic.

 

That said, given the current political reality, I think the EU should move to a 3% inflation target. This might result in a bit higher than desired inflation in some countries but would likely help eliminate the 0.7% inflation you're seeing in Italy etc. 

 

Budget rule probably doesn't help but inflation is a monetary phenomenon (not fiscal phenomenon) and keeping the 3% budget rule, but increasing inflation target to 3-4% would be massively helpful imo

 

(finally, prev. post was not arguing for hyperinflation, only showing how easy it is for central banks to raise inflation and nominal interest rates and that central banks are "never out of ammo" or "pushing on a string", etc.  How come Argentina is never out of ammo or pushing on a string? Since nominal shocks have real effects, I'm arguing that raising NGDP (especially in the EU) would have benefits in the short run.  In the long run, money is neutral, but that doesn't me we shouldn't be arguing for a stable 5% NGDP now - It would greatly improve the lives of EU citizens)

[no_free_lunch]

I agree with spekulatius.  There are good individual names in europe, and to get a touch more specific in the UK in particular with it's big yields.

 

On the bigger issue I think that demographics play a role, similar to Japan.  If that's the case I could see there being stagnant growth for a long time.  There are low growth stocks in Europe where you can still do okay in that scenario.

[RuleNumberOne]

There is not a lot of distress in either the FTSE 100 or DAX 30.

 

The FTSE 100 is close to its all-time high of 7778 in May 2018.

 

If German industry is in "free fall", it has not been reflected in the stock market yet. It is off 9% from its peak. The DAX high of 13340 was in January 2018.

 

I agree with spekulatius.  There are good individual names in europe, and to get a touch more specific in the UK in particular with it's big yields.

 

On the bigger issue I think that demographics play a role, similar to Japan.  If that's the case I could see there being stagnant growth for a long time.  There are low growth stocks in Europe where you can still do okay in that scenario.

[Spekulatius]

There is not a lot of distress in either the FTSE 100 or DAX 30.

 

The FTSE 100 is close to its all-time high of 7778 in May 2018.

 

If German industry is in "free fall", it has not been reflected in the stock market yet. It is off 9% from its peak. The DAX high of 13340 was in January 2018.

 

I agree with spekulatius.  There are good individual names in europe, and to get a touch more specific in the UK in particular with it's big yields.

 

On the bigger issue I think that demographics play a role, similar to Japan.  If that's the case I could see there being stagnant growth for a long time.  There are low growth stocks in Europe where you can still do okay in that scenario.

 

Individual names are <> stock market indices, You can find quite a few good companies that are off 30% from their heights and probably valued lower than their LT averages. With respect to the overall stock market, I agree that Europe does not look that cheap and differences in quality account for much of the difference in PE ratio between Europe and the US (foremost the lower representation of faster growth tech companies in Europe vs US).

 

Anyways, it is a good idea to keep an open mind for opportunities.I mentioned already 50p other GBP property companies. Another one are hidden champions in cyclical sectors, imo.