Bank Shares - Private Investors

G42

Do you own Bank shares as a private investor. If so please read this petition and add your name.

http://petitions.number10.gov.uk/PrivateInvestors/

Reaper

Already posted
http://forums.moneysavingexpert.com/showthread.html?t=1235647

Castleman

Eh? What's that about then? Surely if you buy shares you accept the risks associated with them. You can't ask for your money back!!

MrExample

Castleman wrote: »

Eh? What's that about then? Surely if you buy shares you accept the risks associated with them. You can't ask for your money back!!

There's a difference between the risk of rising/falling markets and having the value of your shares destroyed by heavy-handed action on the part of the government.

Consider RBS: the gov't comes along and essentially halves everyone's chunk of the company, demands extremely expensive preference shares (far more so than the US is doing), and says that no one else is allowed dividend payments.

This kind of thing completely changes the rules of the game. It's no longer about taking a chance that a company might shrink or become less profitable... we now have to worry that the powers that be can just come along and nationalise a sound business and take the handsome profits for themselves in a few years.

What incentive is there to invest?

Many private investors put their money into these companies in good faith... not to get rich quick, but to try to grow their wealth a little bit for the future.

We merely want to our legitimate rights as owners of the company to be recognised and respected... and not demonised.

Just saying.

Masomnia

These are pretty unusual times, you have to admit, and I'm not sure normal rules of decency apply.

If the 'heavy-handed action' of the government lowers the risk of another Great Depression like America in particular saw in the '30s then I'm all for it.

We're in an economic downturn, companies go bust, people will lose out. Bank shareholders should be no different from other shareholders in my opinion. And yes, I do currently hold bank shares.

tradetime

This kind of thing completely changes the rules of the game. It's no longer about taking a chance that a company might shrink or become less profitable... we now have to worry that the powers that be can just come along and nationalise a sound business and take the handsome profits for themselves in a few years.

No offense, but you take the chance that the company may go bust, not just shrink or become less profitable, you take the chance that your holding could become worthless. The banks have been very bad boys and girls, anyone not out of the banking sector quite some time ago was assuming, and still is for that matter, a very high risk. Assuming such a risk is, dare I say it, risky, as it should be.

Many private investors put their money into these companies in good faith... not to get rich quick, but to try to grow their wealth a little bit for the future.

That I understand, and to a degree sympathize with, but just because someone undertakes a risky venture, whilst not fully understanding the risks, can't make it less risky.

We merely want to our legitimate rights as owners of the company

Unfortunately your "legitimate rights" are to do well when the company is well managed, and behaves itself, and to suffer the financial consequences when it isn't.

MrExample

Well - like I said, there is a difference between a business going under due to its own mistakes, and being forcibly removed from its owners. The government is taking over businesses that would be considered safe and sound in a different economic climate. They stand to make a killing when they sell on all the goodies they bought. Shareholders ought to get back something when this happens, IMHO. Just what was taken from them, nothing more.

If not, then at the very least taxpayers in general should see something from the profits... but will we? Like hell...

For what it's worth, I think the gov't's actions are by and large a good thing, and I am not shedding any tears over my (admittedly small) losses... as I do build in the possibility of complete failure into my risk assessment.

JamieJM

Couldn't agree with you more - Are you a RBS shareholder MrExample and will you be taking up the rights issue? For now the fate of the banks still lies with shareholders. It is down to them to decide how much of a chunk the government gets its hands on!!! I suppose we'll see how the situation plays out in the next couple of months with how successful the rights issues are!

MrExample

JamieJM wrote: »

Couldn't agree with you more - Are you a RBS shareholder MrExample and will you be taking up the rights issue? For now the fate of the banks still lies with shareholders. It is down to them to decide how much of a chunk the government gets its hands on!!! I suppose we'll see how the situation plays out in the next couple of months with how successful the rights issues are!

I'll probably take up the rights simply to average down my losses. But with each day I become less and less convinced that there is any value left in this company. Back at the last rights issue, despite having taken a battering, and with the threat of recession looming, the fundamentals looked good, even to a cynic like myself.

When you can't even rely on basic information, the stock market is just a giant casino.

As you say, the outcome of the rights issue will be interesting...