Hi KB, thanks for your response - we need to be careful here as...

Hi KB, thanks for your response - we need to be careful here as we (IMO) seem to be veering towards actually engaging in constructive argument.

let me be clear firstly on a few things that might cloud my assessment. (A) I am a massive RAC bull. (B). My position is significant to me (perhaps not to many of the HC high rollers). (C). I think RAC will ultimately be successful.

With regard to your post, my comments/response are numbered by paragraph:

1. If the buyback ends up purchasing 4m shares, then that’s approximately a concentration of 4/140x100% or ~3%. not sure about you, but I think the upside to RAC is much more than 3%, I’m think 5 to 20 times from here. So in the case it all works out, I’m non-plussed about the impact of the buyback.

2. i don’t think management are lying (I really like management in this company). Your statement... “.. or if it forces the company to raise further capital at lower prices...” THAT’S THE RISK! The upside if things go well is small, the downside of things go to the dogs is large.

3. if that poor market scenario that I describe eventuates, you can’t claim it’s “poor timing” by management, it’s “poor logic”. Management can’t predict the future, but they can scenario plan - as above, if things go well the upside is limited. If things turn for the worst the downside is much much larger. (btw we should all agree now that BG’s selling has had little impact - we’ve moved with the sector over the last 6 months due to macro factors - but I don’t want to get into that because it will get emotive and encourage a lot of rubbish posts).

4. This paragraph started out strong (sentence one). Markets are indeed (incorrectly IMO) priced for rate cuts and more free money. My base view is what I put in my initial post... I think the massive economic stimuli and economic dislocations from the Covid period and a war in Europe mean that inflation is in real danger of becoming entrenched and this scares the econocrats more than anything. Central banks are not coming to the rescue this time. Your second sentence however, I think, adds to my argument in some sense... central banks won’t want to continue to add to “extreme levels of debt and leverage”, everyone knows that eventually this can’t be sustained. I agree we will see recession. We probably have to have recession to normalise and see an environment where central banks can retain credibility AND reduce interest rates with governments also having somewhat stimulatory fiscal policy that would provide the “constructive environment” for stocks as you see.

let’s see what the fed does tomorrow. They might even go with a 100 basis point increase to grab the attention of those that share your view they are preparing to let the cash loose again.