Should i buy Lloyds and Barclays shares?

somethingcorporate

Thrugelmir wrote: »

At the height of the Dot Com boom BT traded around the £15.60p level. On Friday share price closed at £1.95p.

So would you regard current price as a buy signal?

Up from 75p a couple of years ago!

grizzly1911

Thrugelmir wrote: »

At the height of the Dot Com boom BT traded around the £15.60p level. On Friday share price closed at £1.95p.

So would you regard current price as a buy signal?

Thanks for reminding me

Doshwaster

I wouldn't touch Lloyds with someone else's bargepole but Barclays is a solid business.

I bought shares in them at the bottom of the banking crisis when they were 70-odd pence - they were just being dragged down by the market but they weren't the basket case that other banks were. I sold a few months ago and quadrupled my money. My only regret is that I didn't invest more to start with.

I'm thinking about going back into Barclays. Apart from HSBC, they are the only British bank which I would consider buying shares in.

deutsch

Doshwaster wrote: »

I wouldn't touch Lloyds with someone else's bargepole but Barclays is a solid business.
QUOTE]

i know nothing is ever definite, but the government will eventually want to sell their holdings for profit or a least breakeven? i know it won't be anytime soon, but they took action in rbs and lloyds because they were too big to fail? must be worth a punt in the long term - these shares right? (even if it's 2 years or 10!) i just can't imagine the government selling their holdings at a loss (that would be any party in power).

gadgetmind

That was my thinking when I bought Nat West and Lloyds shares, but I went for the NWBD and LLPC prefs as they are senior (not that that seems to have bothered the Irish!) and the divi is fixed, if they pay it. The ordinaries could be a long slog, particularly if the peons all get a cut, as they'll ditch at the first twitch into profit and present the resistance from hell.

pqrdef

deutsch wrote: »

i just can't imagine the government selling their holdings at a loss (that would be any party in power).

Why? When did the government stop pouring money down the drain?

gadgetmind

pqrdef wrote: »

Why? When did the government stop pouring money down the drain?

Well, quite, and it's our money. Whenever I pay a tax bill, I hear the sound of distant toilets, flushing over and over again.

SAHD_Jim

ckyuen wrote: »

Thanks for the replies guys.

The banking share prices are so low now, and I noticed the trends of going up and down at least 1/3 of its price in a number of occasions during the past 2 years therefore I thought this is a good opportunity to invest in as a short term (within a year) investment - anyone agree?

I understand the need to spread my investment wider, but my knowledge in the stock market is so limited therefore I would like to hear your advise in what markets/companies should I be investing in at this current time?

A few thoughts from me:

It is dangerous trying to catch a falling knife - what seemed cheap when you first posted is not as cheap as at the close yesterday and Lloyds could be at 35p in a week.

Past trends do not guarantee future trends in any way.

If you have limited knowledge, you should be very careful directly investing in shares, and certainly in basing any decisions on advice from internet forums. People spend years analysing and researching markets and can still lose the farm.

gadgetmind

SAHD_Jim wrote: »

It is dangerous trying to catch a falling knife - what seemed cheap when you first posted is not as cheap as at the close yesterday and Lloyds could be at 35p in a week.

If you have a large and well-balanced portfolio, adding a bit of spice via some value/recovery plays is OK, but I didn't get the idea that this was the OP's position.

There are a few dangers with banking shares.
1) Total loss and/or massive dilution. The latter has already happened and it could happen again.
2) Value trap. Buying into value for value's sake, without any idea when you'll start to see growth or income, is a mistake. Things are cheap for a reason.
3) No income. Having price bimble along for years is OK if the yield is good. Lloyds currently has a 0% yield and banks are very unlikely to return to their previous status as high-profit machines.
4) Reistance. HMG own swathes of Lloyds shares at an estimated price of 78p. As soon as the price reaches this, HMG can exit without making a loss. There is even talk of these shares being distributed to the tax payers. Do you really think your average Joe will be able to resist a price of 79p so they can make a penny a share? With this as a cap, and restricting growth upside, is it really worth the risk?

SAHD_Jim

gadgetmind wrote: »

If you have a large and well-balanced portfolio, adding a bit of spice via some value/recovery plays is OK, but I didn't get the idea that this was the OP's position.

Me neither

gadgetmind wrote: »

There are a few dangers with banking shares.
1) Total loss and/or massive dilution. The latter has already happened and it could happen again.
2) Value trap. Buying into value for value's sake, without any idea when you'll start to see growth or income, is a mistake. Things are cheap for a reason.
3) No income. Having price bimble along for years is OK if the yield is good. Lloyds currently has a 0% yield and banks are very unlikely to return to their previous status as high-profit machines.
4) Reistance. HMG own swathes of Lloyds shares at an estimated price of 78p. As soon as the price reaches this, HMG can exit without making a loss. There is even talk of these shares being distributed to the tax payers. Do you really think your average Joe will be able to resist a price of 79p so they can make a penny a share? With this as a cap, and restricting growth upside, is it really worth the risk?

All very good points. I can't believe the Government (Clegg) are still on about giving the shares away.