10% Preferred Stock

Cannon_Fodder

In the light of Warren Buffet helping out Goldman Sachs, as per the link;

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4816023.ece

"However, Goldman is paying a hefty price for Mr Buffett’s stake, having agreed a 10 per cent coupon on the preferred stock. It is understood that Goldman can repurchase the shares from Mr Buffett at any time but at a 10 per cent premium."


...Is there a practical, man-in-the-street, option to get a 10% return ??

purch

...Is there a practical, man-in-the-street, option to get a 10% return ??

If you have $ 5 Billion burning a hole in your back pocket, and can find an Investment Bank tring to convert itself into a Real Bank, and in desperate need of Capital...............then yes !!!!!!!!!!!

peawack

purch wrote: »

If you have $ 5 Billion burning a hole in your back pocket, and can find an Investment Bank tring to convert itself into a Real Bank, and in desperate need of Capital...............then yes !!!!!!!!!!!

Exactly ! That's when it gets easy.

Although, recently you have been able to get similar rates on tiny amounts, for short periods.

purch

...Is there a practical, man-in-the-street, option to get a 10% return ??

If you have slightly less than $ 5 Billy's and want to get a 10% yield on Banking Stock

Currently some Permanant Interest Bearing Shares yield similar..

Bank of Ireland 13.375 Yield about 10.05%
Bradford and Bingley 11.625 Yield about 13.8% :eek:
Bradford and Bingley 13.00 Yield about 13.5%

Britannia 13.00 Yield in the region of 10%

Halifax have 3 PIBS that Yield between 9.75% and 10.25% :eek:

The Northern Rock 13.375 one still yields nearly 12% :eek:

sdooley

There are plenty of UK banks whose subordinated debt or preference shares are trading at greater than a 10% return. Like Buffet though, if the bank goes under you lose your whole stake.

sdooley

purch wrote: »

The Northern Rock 13.375 one still yields nearly 12% :eek:

Which is outrageous because it is a subordinated instrument and should have had its value wiped out. It may still be repurchased at a discount if there is a formal insolvency process for NR.

sdooley

As a follow-up, the Bradford & Bingley equivalent seems to have had its value wiped out.