Is the Time to Invest in Banks approaching?

stevetodd

cwcw wrote: »

I will make a pledge here and now, based purely on my own personal hunch: RBS, Lloyds, and Barclays will all still be trading as private companies in 6 months time. All of them will have share prices at least 10% higher than their levels as of today.

I will quote myself in 6 months ish time on this. :beer:

That's a very brave prediction for the RBS

Fella

mrposhman wrote: »

I'd like to see the main reasons why people think the banks will be nationalised.

Because house prices will fall a long way from here.

mrposhman

Fella wrote: »

Because house prices will fall a long way from here.

not necessarily. Housing prices will fall a long way from here IF current credit conditions continue. If housing prices start to stabilise, more buyers will enter the market if they can gain credit.

I don't think its just banks not offering credit that has created the housing bubble crash but it has been the fact that people still see house prices are falling and don't want to buy their prospective house at too high a value.

Also, for the record, thats another non-cash item which can affect profits but not cash.

Ian_W

Quite an interesting article with a "non-herd", contrarian view against further nationalisation on CITYWIRE.

mrposhman

Ian_W wrote: »

Quite an interesting article with a "non-herd", contrarian view against further nationalisation on CITYWIRE.

Quite a good article.

I'm glad someones finally spoken up about the exit strategy. Having a lack of privately controlled banks will mean that full nationalisation will cost the taxpayer more money than they are currently indebted by. It will be a slow and difficult move back to private banks. How many corporations do you know that could fund the purchase of a bank in the current and future climates?

mrposhman

Nobody care to explain why they have been coming on here stating nationalisation will occur??

brasso

I'm sure the more knowledgeable will have some ammunition for the nationalisation argument though I get the impression that the great majority of nationalisers are just exercising wishful thinking and schadenfreude.

gozomark

mrposhman wrote: »

Nobody care to explain why they have been coming on here stating nationalisation will occur??

do you mean why will occur, or why should occur.

sabretoothtigger

A positive note from Mr peston

As of now, no irredeemable damage appears to have been done. And although it may jar to say so, shares can rise as well as fall - even bank shares.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

I,_Brian

As always, in investing, you need to have a plan, such as risk levels, investment term, etc.

Sure, bank shares are cheap - and despite the doomsayers there's no reason to imagine most banks cannot reasonably get past the current problems and survive for the long-term. The only alternative is economic armageddon for the entire country.

The credit card analogy earlier is good - if the government is paying the credit card debt then it allows the banks to sort out their finances.

Don't just run into putting your money on shares if they look cheap, though - price is relative. How would you feel if you bought Lloyds at 40p a share and it fell further, such as 12p after RBS? That would be 80% of your investment wiped out.

At that point, as evidenced here, people panic and look to sell.

You need to be able to accept risk, be able to live with further falls, and keep to your longer term aims.

Takes steel balls, sometimes.