I have shares in the banks

elizw

if they part nationalise then I heard that it will dlute the price of the shares for ordinary shareholders.

gozomark

ExBanker wrote: »

Incorrect IMO- I was in at RBS at £1.50.. but managed to average down to just 90p. Then they hit £1.15 and a i sold at a profit. Had i not averaged down i could be waiting a long time for them to hit £1.50 and break even!

you took two separate decisions

1. buy at 1.50
2. buy at 90p

one worked, one didn't

gozomark

elizw wrote: »

if they part nationalise then I heard that it will dlute the price of the shares for ordinary shareholders.

it will dilute the earnings, but not necessarily the price

KorkyKat

Maybe short term but not long term. The BBC Money Box programme had something to say about this tonight.

http://news.bbc.co.uk/1/hi/programmes/moneybox/7657356.stm

ExBanker_2

Incorrect again- i brought at £1.50 and again when they fell at about 70 odd pence, averaging my investment down to just 90p a share overall. I then sold all of them at £1.15 on the bounce- almost 30% profit!

This is called averaging down, traders do it all the time- so overall the investment worked.

gozomark wrote: »

you took two separate decisions

1. buy at 1.50
2. buy at 90p

one worked, one didn't

sabretoothtigger

Thats a good point, dont aim to buy or sell just once. Unless you think they will go broke it doesnt sound like there is much point selling now but buying on the other hand could be justified for the reason given above

Private investors typically buy high and sell low because they go with their own feelings, right now the shares are low. This is why you shouldnt spend anything more then you would waste on beer or other rubbish, the less fear/greed you have the more likely you'll not act like a lemming.

I suspect you hold your hbos shares within their dealing account, in which case you could spend five pounds selling fee on just 250 pounds worth of shares and go buy some beer

The price is so low now, Im not sure its a given it will drop further. They are valued so low their last years profits were enough to buy back all their shares, less then 1 pe


Ive just taken a quick look at a ftse futures bet, it shows the market up 5%. Dont take that as fact its just an indicator not the actual value at all

gozomark

ExBanker wrote: »

Incorrect again- i brought at £1.50 and again when they fell at about 70 odd pence, averaging my investment down to just 90p a share overall. I then sold all of them at £1.15 on the bounce- almost 30% profit!

This is called averaging down, traders do it all the time- so overall the investment worked.

I can assure professional traders do not average down - each trade is separately accounted for - one of your trades, worked one didn't

think about the trades

you buy bank A as you think its the best bank to buy. The price of all bank shares falls. You decide to buy more bank shares - you do your analysis of the banks again, and decide this time bank B looks better value - do you buy more of A or buy B instead ?

ExBanker_2

Alot of daytaders including myself do use this technique- it is the overall investment that i am concerned about- which made a large profit.

gozomark wrote: »

I can assure professional traders do not average down - each trade is separately accounted for - one of your trades, worked one didn't

gozomark

I retired in my 30's having been a trader for a major bank - I've seen the errors traders make, and the concept of averaging down is one of the worst errors

thinkdust

Hi ExBanker, I've been reading your posts which are interesting. I have quite a large sum invested in hbos at a price of £1.57, I also did what you mentioned, bought low to get my price down from £1.93.

In your expert advice, what do you currently think with regards to how the market will act, and the outcomes for these banks.

Worth holding on, will this raise 30% this week?
Is HBOS going to be part nationalised, taking my share price down?
Is HBOs going to be fully nationalised, completely losing my investment?

Do you think panic selling will occur, or will this injection have a positive effect on the markets and slowly recover to the prices we saw last week 189 - 200 ish.

I'd love to hear your opinion? thanks.