Are you new to shares but want to buy banks?

gozomark

can this please be the end of people posting about averaging down, when all they really mean is "I bought alot higher - if I buy more, I don't feel so stupid so it must be right to buy more now"

averaging down as a reason to buy more is a mugs game, and is only used to protect egos - you should see each separate purchase a completely unconnected

Blah99

mrposhman wrote: »

the best case scenario is not a stand still share price.

No, true, the best possible case is an immediate rebound to £5 or whatever, but the probability of that occurring is barely a shade above zero. Based on all the info available today I honestly can't see any prospects in bank shares for quite some time. We have yet to see the full effect of the current recession on corporate and personal debts, for example, which will lead to further writedowns.

mrposhman

It really depends if rationality returns to the market.

the sell offs of banks have been hugely irrational.

You just have to look at the prospective P/E that each bank is trading on based on expected profits. Its highly likely that all banks will return to profitability in 2009 in my opinion as if they are clever they will have overstated the losses that they are expecting in this years financials.

We will see how clever they are over the next year I assume but the current market caps of RBS, Lloyds and Barclays is terrible.

I wouldn't expect £5 to be the best case, thats well over the best case. The best case is getting back to the same market cap but with the new volume of shares.

I,_Brian

Just bumping this thread to show why panic and doom-mongering is misinformation.

Banks have all risen between 25% and 60% since this thread was posted, thanks to investors realising they were just panic selling.

Decadent_Fool

Here, here! I'm pleased to be smug over doubling my £6000 investment in a week.

gozomark

I,_Brian wrote: »

Just bumping this thread to show why panic and doom-mongering is misinformation.

Banks have all risen between 25% and 60% since this thread was posted, thanks to investors realising they were just panic selling.

there have been people on this forum going on about how its time to buy bank shares for months, and every time there is another fall its time to average down - only those who bought in the last week have made a (paper) profit, and only on their most recent purchases - all the rest are still losing money. I hope for all our sakes that the banks don't need nationalising, but other than the last few days its been right to be negative. People who "panicked" and sold the banks at any point last year are still better off than they would have been if they kept holding, or evern worse bought more.

tradetime

I,_Brian wrote: »

Just bumping this thread to show why panic and doom-mongering is misinformation.

Banks have all risen between 25% and 60% since this thread was posted, thanks to investors realising they were just panic selling.

Anybody who is a "bull" in a bear market accuses the bearish of being doom mongers, just as anyone who is a "bear" in a bull market accuses the bullish of hyping the market, that's just the market it's not about being a doom monger, or even a bull or a bear, it's about being bullish or bearish as the market dictates. Most of the banks were penny stocks last week, any significant up move is going to be double digit %, just as any significant move down would have been.
I don't really do the "I told you so" so the following quote isn't about what is happening now, so much as what I think is to come, how banks will fit into that, who knows

tradetime wrote: »

As long as you understand we are in a Bear market, until the market tells us otherwise, then ok. I had personally expected a pullback from early Jan since we were overbought short term, and a rally from Feb into around the end of March, however the sell off we have seen has been much stronger than I expected, so I would be cautious here. I certainly would not add to any positions, but look to sell if a rally develops, and I will look to initiate short positions around 1000 on the S&P500 which I think conforms to 4600 on the FTSE

Although we only have a couple of days gains I wonder if this is my rally, as I said the pullback was more than I had expected, and volume participation has been falling on this rise so far, (let's hope that ticks up) but if it is the rally I was expecting, then it should carry for a few weeks now, then I expect a major setback to set new lows. Having said all that longer term predictions are not my thing, a lot of technical damage has been done to the market lately we would have a lot of work to do to get to 1000 SPX from here, but we shall see.

I,_Brian

tradetime wrote: »

I don't really do the "I told you so" so the following quote isn't about what is happening now, so much as what I think is to come, how banks will fit into that, who knows

Indeed, that was on my thread when I stated we're at the start of a bear rally.

The point I was making is that there was a lot of fear driving perception of banks - because bank stocks were cheap, it was feared they would be nationalised - but there was no sane argument as to why 100% nationalisation would happen with the cataclysmic impact this would have on the UK economy.

However, to reiterate, this is a bear rally - and probably a strong one, too - so what I'm doing is using it to claw back losses, make a reasonable profit, and then sell up entirely and review matters August/September.

2c.

tradetime

I,_Brian wrote: »

Indeed, that was on my thread when I stated we're at the start of a bear rally.

The point I was making is that there was a lot of fear driving perception of banks - because bank stocks were cheap, it was feared they would be nationalised - but there was no sane argument as to why 100% nationalisation would happen with the cataclysmic impact this would have on the UK economy.

However, to reiterate, this is a bear rally - and probably a strong one, too - so what I'm doing is using it to claw back losses, make a reasonable profit, and then sell up entirely and review matters August/September.

2c.

Can't really disagree with any of that view, whilst nationalization of banks has to be a risk factor, I agree it would be economic suicide for the UK to take that sort of debt onto the governments balance sheet,

Strong bear rally would suit me nicely, as I said it's what I was looking for, but to be honest given the depth of the pullback we had, I can't, as yet see any technical support for more than a day or two upside, but that may change. Personally I am about 30% long at the moment, some of which I will exit, the rest I will hedge with short positions. Still we have to get there first, and it's FED day today, Bernanke could still say something to upset the "Bad Bank" euphoria.

cheggers

Nearly bought in at Lloyds at 40p last week, now at 92p

Nevermind. Could have easily been sitting on a loss.