Lloyds shareholders "Furious" - why?

SamIAm_3-2

1echidna wrote: »

I have quite a number of smallish investments. Life is too short for me to continually read up all I could on all of them, it would occupy all my time and then some. I suspect that the investor who does this properly is a very rare beast indeed. I rely on quick skims of company literature and keeping an eye on the financial press. This seems a very esoteric argument to me.

Maybe it is. I have a question for you, though: if one of your smallish investments goes bad, do you immediately apportion 100% of the blame for your stake being worth less with the company with whom you invested? Or would you consider that you need to take partial responsibility for your loss.

At the end of the day, the initial purchase is made with the knowledge that it may not pay off.

SamIAm_3-2

pizzagirl wrote: »

The only problem is that the share price crashed between the intention of having a vote being announced and the result being known.

This may have been the case. With a vested interest, you would have to ask yourself the question why it was crashing at the time and act accordingly. In any case the decision to keep/sell the shares or not lies solely with you. (I don't mean you personally btw.).

pizzagirl wrote: »

More widely, everyone can see that the government had a major hand in this comedy errors. This was no normal corporate deal

This, we agree on.

1echidna

SamIAm wrote: »

Maybe it is. I have a question for you, though: if one of your smallish investments goes bad, do you immediately apportion 100% of the blame for your stake being worth less with the company with whom you invested? Or would you consider that you need to take partial responsibility for your loss.

At the end of the day, the initial purchase is made with the knowledge that it may not pay off.

Oh I take full respponsibility for my loss and wouldn't be looking to blame anyone other than myself. I looked round for advice upon an inheritance about two years ago. I compared the advice given and my gut feelings based on a long (amateur) interest in finance and economics. I went for investments rather than savings for less than 20% of the capital more as a hedge against being wrong in my assessment of equities which I felt were destined for a shake up (though not as bad as is turning out).

Entertainer

The reason why they are angry is the same reason why the rest of the banks shareholders are angry. This has been misrepresentation on a colossal scale. The banks have been either wilfully or negligently misreporting the gigantic, insolvency inducing losses on their balance sheets for at least the last two years. RBS have the biggest rights issue in history last year, stating that they are fundamentally sound and a few months later they are insolvent and being rescued by the government.

Barclays Bank announce profits last April unchanged on the year before, increase their dividend by 10%, say they have little sub prime losses; a few months later they are being bailed out and their share price falls 80%. A few weeks ago, they announce last years profits of £6.1bn and yet the whole company is only worth £9billion according to the share price. How can you have any confidence in accounting like that??

In the case of Lloyds, we now find out that the bank didn't do one fifth of the due diligence they should have done during the HBoS takeover. In the process thay have bankrupted themselves (you can file that under incompetence) in a matter of months.

As Mewbie said, people thought they were buying conservative, blue chip shares when they invested their savings in the banks.

No one can ever again invest their money in bank shares and trust a word that they say. They are nothing more than leveraged gambles. You would be better off buying an option in the derivatives market.

SamIAm_3-2

1echidna wrote: »

Oh I take full respponsibility for my loss and wouldn't be looking to blame anyone other than myself. I looked round for advice upon an inheritance about two years ago. I compared the advice given and my gut feelings based on a long (amateur) interest in finance and economics. I went for investments rather than savings for less than 20% of the capital more as a hedge against being wrong in my assessment of equities which I felt were destined for a shake up (though not as bad as is turning out).

This, I guess, is my point. I have never invested in shares myself so I can't say this with absolute certainty; I would like to think that I would take full responsibility for any loss I made - even if that loss came about through my inability to take enough interest in my investments because of the sheer number of them.

My interpretation of the shareholder quotes from the original article was that some shareholders are furious because their investment which they believed was low risk went really bad.

SamIAm_3-2

Entertainer wrote: »

The reason why they are angry is the same reason why the rest of the banks shareholders are angry. This has been misrepresentation on a colossal scale. The banks have been either wilfully or negligently misreporting the gigantic, insolvency inducing losses on their balance sheets for at least the last two years. RBS have the biggest rights issue in history last year, stating that they are fundamentally sound and a few months later they are insolvent and being rescued by the government.

Barclays Bank announce profits last April unchanged on the year before, increase their dividend by 10%, say they have little sub prime losses; a few months later they are being bailed out and their share price falls 80%. A few weeks ago, they announce last years profits of £6.1bn and yet the whole company is only worth £9billion according to the share price. How can you have any confidence in accounting like that??

In the case of Lloyds, we now find out that the bank didn't do one fifth of the due diligence they should have done during the HBoS takeover. In the process thay have bankrupted themselves (you can file that under incompetence) in a matter of months.

As Mewbie said, people thought they were buying conservative, blue chip shares when they invested their savings in the banks.

I now understand that the shareholders are furious because of this mis-information (lies?). I guess a further question is: was the mis-information deliberate? And if so, shouldn't the banks be held accountable under charges of fraud, as mewbie suggests ,or otherwise?

1echidna

Entertainer wrote: »

The banks have been either wilfully or negligently misreporting the gigantic, insolvency inducing losses on their balance sheets for at least the last two yearsThe reason why they are angry is the same reason why the rest of the banks shareholders are angry. This has been misrepresentation on a colossal scale.. RBS have the biggest rights issue in history last year, stating that they are fundamentally sound and a few months later they are insolvent and being rescued by the government.

Barclays Bank announce profits last April unchanged on the year before, increase their dividend by 10%, say they have little sub prime losses; a few months later they are being bailed out and their share price falls 80%. A few weeks ago, they announce last years profits of £6.1bn and yet the whole company is only worth £9billion according to the share price. How can you have any confidence in accounting like that??

In the case of Lloyds, we now find out that the bank didn't do one fifth of the due diligence they should have done during the HBoS takeover. In the process thay have bankrupted themselves (you can file that under incompetence) in a matter of months.

As Mewbie said, people thought they were buying conservative, blue chip shares when they invested their savings in the banks.

No one can ever again invest their money in bank shares and trust a word that they say. They are nothing more than leveraged gambles. You would be better off buying an option in the derivatives market.

Can you prove these allegations? Accounts were presumably audited and it is the declining value of assets which has produced losses that were not there two years ago.

1echidna

Edit If you say that the banks should have known that a recession and house price crash was in the offing two years ago please remember that official and other reputable bodies predicted no such thing.

Optimist

SamIAm wrote: »

This, I guess, is my point. I have never invested in shares myself so I can't say this with absolute certainty; I would like to think that I would take full responsibility for any loss I made - even if that loss came about through my inability to take enough interest in my investments because of the sheer number of them.

My interpretation of the shareholder quotes from the original article was that some shareholders are furious because their investment which they believed was low risk went really bad.

So you don't have a pension at all then ? If you do have a pension you have invested in shares if indirectly, Many pension schemes had holdings in Lloyds

SamIAm_3-2

Optimist wrote: »

So you don't have a pension at all then ? If you do have a pension you have invested in shares if indirectly, Many pension schemes had holdings in Lloyds

Actually, no I don't. This is something I have been meaning to correct for the last couple of years but didn't get round to it.