The Simpsons, as if you didn’t know, is an American animated sitcom created by Matt Groening for the Fox Broadcasting Company. It is a satirical depiction of a working class lifestyle epitomised by the family members Homer, Marge, Bart (our hero), Lisa, and Maggie. The show is set in the fictional town of Springfield and parodies American culture, society, television and many aspects of the human condition.
Since its debut on 17 December 1989, the series has broadcast 591 episodes over 27 seasons and, in 2009, surpassed ‘Gunsmoke’ as the longest running American scripted prime time television series.
In the UK, shorts are what one wears on holiday; and maybe not even then. In the US, they are under-pants. In the financial markets, shorts are a means by which one sells a borrowed security, commodity or currency with the expectation that the asset will fall in value. If it does, the investor buys it back and makes a profit; and if it does not, the opposite.
Berkeley Group Holdings Plc (LON:BKG), in a blunt proxy for the London residential market, has been the most heavily shorted stock in the Capital; and its share price fell 13% in Q1 – twice the Sector average.
First-off we think this is inefficient, secondly – wrong – (other than the self-fulfilling part of it) and we agree with Bart Simpson and his most quotable quote: “eat my shorts”.
For sure, the tide has ebbed at the top end of the London residential market – and Berkeley has said so. Similarly, Berkeley’s chief script writer, Tony Pidgley, has gone liquid twice before; and he has been right twice before. This time, though, the Group is sustaining work in progress.
After 27 seasons, since its inception in 1989, The Simpsons is embedded in US culture. Berkeley was floated in 1984. “Don’t have a cow”.
Berkeley Group Holdings Plc included, though, it has not been a banner start for any equities in 2016 and, specifically, the Sector has shed 6% of its value; albeit this is net of two IPOs in Countryside (encore) and Watkins Jones – and both followed McCarthy & Stone from November last year. This is encouraging. All three stocks are included in our coverage, too, and we have also added Gleeson and Inland Homes (we probably should have done so earlier).
We are not breathlessly bullish but nor do we believe the credits are rolling either.
We are still watching.
