FCA to investigate Tesco after £250m accounting error

[Unix]

Averaging down, i.e. adding to a already losing position, i.e. throwing money down the tulipter.

[SimonMac]

Averaging down, i.e. adding to a already losing position, i.e. throwing money down the tulipter.

Didn't know the name of the term, but yeah, throwing good money after bad, but its just reinvesting dividends and I am in for the long term, so whats the worse that can happen

[Unix]

Didn't know the name of the term, but yeah, throwing good money after bad, but its just reinvesting dividends and I am in for the long term, so whats the worse that can happen

The worst is probably sitting on a loss for a while until it eventually goes up, if you are in long term then it's probably ok as long as you are not leveraged. However there is always the risk a company can go under.

[The_Equalizer]

Averaging down, i.e. adding to a already losing position, i.e. throwing money down the tulipter.

However, Tesco is still a profitable company and seem to be undertaking some serious price cutting to win back market share. This has more of a feel of M&S during its rough period rather than a Woolworths. Averaging down is quite useful under certain circumstances.

[d000hg]

Did you get in?

Nope I think the idea is sound, but wait for it to finish the current dive and wait for it to rebound from the panic selling a bit.

Probably not my style, not really into high-risk very short term trading.

[Unix]

Analysts at Portuguese bank Espírito Santo have a dire warning for Tesco - they reckon its UK arm could eventually stop being profitable at all.

They cut their price target on Tesco to 165p from 190p (compared to 211p now), and predicted that profits this year will almost halve:

We believe most of the accounting issues will centre on UK profitability. As a result, we expect UK profits to be down 48% in 2014/15 implying a UK margin of 2.7%.

With some prices 38% more expensive (ESIB estimate) than Aldi, questionable pricing architecture and higher levels of salt and sugar in some fresh products alongside an ailing non-food business, we believe that Tesco could eventually generate zero profits in the UK – the extent of the risks to us remain large and uncertain.

[Unix]

Nope I think the idea is sound, but wait for it to finish the current dive and wait for it to rebound from the panic selling a bit.

Probably not my style, not really into high-risk very short term trading.

I think it works if there is a sudden move without much underlying reason, it usually reverts to mean, don't think this is such a case though.

[Unix]

~ 13% now.


https://www.google.co.uk/search?q=te...m=122&ie=UTF-8

[d000hg]

I think it works if there is a sudden move without much underlying reason, it usually reverts to mean, don't think this is such a case though.

The drop is still a panic reaction to a very unusual event though, not a considered reflection on how the underlying financials are affected. i.e. if they'd released the correct financials in the first place, the shares would not have fallen this much or this fast.

There is always money to be made when the market panics.

[vetran]

Tesco have changed to Starbucks accountants?