Bank shares on the rise........
Discussion
Barclays, RBS and Lloyds Banking Group have all enjoyed decent increases in share price over the last few months. Any thoughts on the reason for this?
I invested some money in 2008 / 2009 after the big crash but the shares fell even further after I bought. I'm just about back to break even now.
All the best
I invested some money in 2008 / 2009 after the big crash but the shares fell even further after I bought. I'm just about back to break even now.
All the best
Bumpy ride
Some thoughts.
When you buy something that you think is worth a 100 and it drops in price to 80 (or 50) one sometimes has to accept that we were wrong and the correct price was 80. Suck up the loss and sell it.
Or....if you think it is REALLY worth 100 and the price is 80 then buy some more and reduce your average cost.
You gotta have a plan, know what you are going to do before it happens, of course buy and hold is a plan and will pan out if you bought at the right price.
Here is a screenshot of Barclays against a Financial mutual fund over 3 years. As you can see Barclays did not keep up with the fund despite its fund expenses.
Also had BARC not had its recent run up the graph would be worse.
Barcs a hold, although I would prefer B of A or UBS.
Some thoughts.
When you buy something that you think is worth a 100 and it drops in price to 80 (or 50) one sometimes has to accept that we were wrong and the correct price was 80. Suck up the loss and sell it.
Or....if you think it is REALLY worth 100 and the price is 80 then buy some more and reduce your average cost.
You gotta have a plan, know what you are going to do before it happens, of course buy and hold is a plan and will pan out if you bought at the right price.
Here is a screenshot of Barclays against a Financial mutual fund over 3 years. As you can see Barclays did not keep up with the fund despite its fund expenses.
Also had BARC not had its recent run up the graph would be worse.
Barcs a hold, although I would prefer B of A or UBS.
I'm not into banking shares (as its just not an industry i can get my head round unlike others) but Lloyd's look like a good long term share. Talks of a div announcement for 2014 and a good steady increase in sp.
Could also be the time of year though. I've got 5 different holdings and each one so at has gained circa 10% or more since December.
Could also be the time of year though. I've got 5 different holdings and each one so at has gained circa 10% or more since December.
CRB14 said:
Could also be the time of year though.
Individual shares just get dragged up (and down) by perception.
Actually Draghi was in the news today, but positive news this time, he reckons Europe will begin to heal in 2013 blah blah blah.
I think I will be waiting a long time before they are back up over £6 :/no effort said:
I'm thinking of buying some Lloyd shares they went up around 85% last year better than Barclays.
Know what you are buying, it is a very different animal since it bought HBOS.The Gov owns a massive chunk! That means despite having a decent CEO (who is a bit sickly) he can be influenced.
That is generally considered a bad thing, as it could be argued that had Lloyds not bought HBOS under gov pressure Lloyds would still be the Lloyds of yesterday.
That happened before gov ownership!!!!!!
It has quite a lot of bad Irish debt and a low EPS
Unless its EPS rises it will never shed the millstone round its neck (UK Gov)
EPS cannot get going 'til probably 2015
On the upside it has a massive share of the UK savings market.
(snipits from a two page analysts report)
jeff m2 said:
Know what you are buying, it is a very different animal since it bought HBOS.
The Gov owns a massive chunk! That means despite having a decent CEO (who is a bit sickly) he can be influenced.
That is generally considered a bad thing, as it could be argued that had Lloyds not bought HBOS under gov pressure Lloyds would still be the Lloyds of yesterday.
That happened before gov ownership!!!!!!
It has quite a lot of bad Irish debt and a low EPS
Unless its EPS rises it will never shed the millstone round its neck (UK Gov)
EPS cannot get going 'til probably 2015
On the upside it has a massive share of the UK savings market.
(snipits from a two page analysts report)
The government are in at 74p. Couldn't it be argued that the government wants them to do well so that the tax payer can get back the money they (we) pumped in? The Gov owns a massive chunk! That means despite having a decent CEO (who is a bit sickly) he can be influenced.
That is generally considered a bad thing, as it could be argued that had Lloyds not bought HBOS under gov pressure Lloyds would still be the Lloyds of yesterday.
That happened before gov ownership!!!!!!
It has quite a lot of bad Irish debt and a low EPS
Unless its EPS rises it will never shed the millstone round its neck (UK Gov)
EPS cannot get going 'til probably 2015
On the upside it has a massive share of the UK savings market.
(snipits from a two page analysts report)
CRB14 said:
jeff m2 said:
Know what you are buying, it is a very different animal since it bought HBOS.
The Gov owns a massive chunk! That means despite having a decent CEO (who is a bit sickly) he can be influenced.
That is generally considered a bad thing, as it could be argued that had Lloyds not bought HBOS under gov pressure Lloyds would still be the Lloyds of yesterday.
That happened before gov ownership!!!!!!
It has quite a lot of bad Irish debt and a low EPS
Unless its EPS rises it will never shed the millstone round its neck (UK Gov)
EPS cannot get going 'til probably 2015
On the upside it has a massive share of the UK savings market.
(snipits from a two page analysts report)
The government are in at 74p. Couldn't it be argued that the government wants them to do well so that the tax payer can get back the money they (we) pumped in? The Gov owns a massive chunk! That means despite having a decent CEO (who is a bit sickly) he can be influenced.
That is generally considered a bad thing, as it could be argued that had Lloyds not bought HBOS under gov pressure Lloyds would still be the Lloyds of yesterday.
That happened before gov ownership!!!!!!
It has quite a lot of bad Irish debt and a low EPS
Unless its EPS rises it will never shed the millstone round its neck (UK Gov)
EPS cannot get going 'til probably 2015
On the upside it has a massive share of the UK savings market.
(snipits from a two page analysts report)
Also; Lloyds has agreed to sell 632 branches, as required by the European Union, at a cut-rate price in 2013 which could affect their "savings"
I'm not saying it's a bad investment, just that there are a lot of "ifs" and a lot of them are dependent on int. rates and the UK economy in general.
Basically...... get a few if you are young enough
I bought a load of Lloyds shares at 50p mid 2011, was sitting on quite a loss for a while, but now they are up about 6%. I'm not sure if it will stick unless there are some promising figures released but my plan was to go long-term and get some good dividend income out of it eventually.
On the brighter side watching UK bank shares so closely for that time let me see where I thought RBS had bottom'd out, and they are up 55% at the moment
Always a gamble.
On the brighter side watching UK bank shares so closely for that time let me see where I thought RBS had bottom'd out, and they are up 55% at the moment
Always a gamble.
there is a proposed legislation that banks need a certain amount of liquid funds to be able to payout on a bank run. In the mean time, all banks are getting scared on liquidity so they are stocking up funds anyway - especially thaose funds handed (loaned) out by BOE,via IMF, what-have-you etc.
If they are sitting on all this cash, are they allowed to put it into the stock market as opposed to lending it out i.e. it is still liquid fund which they could easily cash out of the stock market? They still have a duty to maximise shareholder return.
However, it does mean that they can pile a whole load of cash (billiions) back into the stock market which in turn increases prices. Increased prices builds increased confidence and more investment in the stock market. Isn't this a time bomb waiting to crash again? In the mean time, at the end of the financial year, if the price is higher than last year, then all the senior bank managers are happy because they are due big bonuses, with no personal penalty if the price goes down.
If they are sitting on all this cash, are they allowed to put it into the stock market as opposed to lending it out i.e. it is still liquid fund which they could easily cash out of the stock market? They still have a duty to maximise shareholder return.
However, it does mean that they can pile a whole load of cash (billiions) back into the stock market which in turn increases prices. Increased prices builds increased confidence and more investment in the stock market. Isn't this a time bomb waiting to crash again? In the mean time, at the end of the financial year, if the price is higher than last year, then all the senior bank managers are happy because they are due big bonuses, with no personal penalty if the price goes down.
leef44 said:
there is a proposed legislation that banks need a certain amount of liquid funds to be able to payout on a bank run. In the mean time, all banks are getting scared on liquidity so they are stocking up funds anyway - especially thaose funds handed (loaned) out by BOE,via IMF, what-have-you etc.
If they are sitting on all this cash, are they allowed to put it into the stock market as opposed to lending it out i.e. it is still liquid fund which they could easily cash out of the stock market? They still have a duty to maximise shareholder return.
However, it does mean that they can pile a whole load of cash (billiions) back into the stock market which in turn increases prices. Increased prices builds increased confidence and more investment in the stock market. Isn't this a time bomb waiting to crash again? In the mean time, at the end of the financial year, if the price is higher than last year, then all the senior bank managers are happy because they are due big bonuses, with no personal penalty if the price goes down.
Its not quite as simple as bunging a load of money into the markets and watching it rise.If they are sitting on all this cash, are they allowed to put it into the stock market as opposed to lending it out i.e. it is still liquid fund which they could easily cash out of the stock market? They still have a duty to maximise shareholder return.
However, it does mean that they can pile a whole load of cash (billiions) back into the stock market which in turn increases prices. Increased prices builds increased confidence and more investment in the stock market. Isn't this a time bomb waiting to crash again? In the mean time, at the end of the financial year, if the price is higher than last year, then all the senior bank managers are happy because they are due big bonuses, with no personal penalty if the price goes down.
The directors have a duty to maximise return, but also run the business with calculated risk. Gambling on the stock market isnt the answer.
leef44 said:
there is a proposed legislation that banks need a certain amount of liquid funds to be able to payout on a bank run. In the mean time, all banks are getting scared on liquidity so they are stocking up funds anyway - especially thaose funds handed (loaned) out by BOE,via IMF, what-have-you etc.
If they are sitting on all this cash, are they allowed to put it into the stock market as opposed to lending it out i.e. it is still liquid fund which they could easily cash out of the stock market? They still have a duty to maximise shareholder return.
However, it does mean that they can pile a whole load of cash (billiions) back into the stock market which in turn increases prices. Increased prices builds increased confidence and more investment in the stock market. Isn't this a time bomb waiting to crash again? In the mean time, at the end of the financial year, if the price is higher than last year, then all the senior bank managers are happy because they are due big bonuses, with no personal penalty if the price goes down.
Banks need a certain percentage of their funds available, their tier one capital ratio is probably the most important. Suggesting that banks turn themselves from banks into investment funds is the kind of thinking that got us into the current mess. If they are sitting on all this cash, are they allowed to put it into the stock market as opposed to lending it out i.e. it is still liquid fund which they could easily cash out of the stock market? They still have a duty to maximise shareholder return.
However, it does mean that they can pile a whole load of cash (billiions) back into the stock market which in turn increases prices. Increased prices builds increased confidence and more investment in the stock market. Isn't this a time bomb waiting to crash again? In the mean time, at the end of the financial year, if the price is higher than last year, then all the senior bank managers are happy because they are due big bonuses, with no personal penalty if the price goes down.
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