Buying Shares Low?

zildjian

The companies you mentioned in your original post are never going to see that share price pre-2008 unless your in it for the long term (and even thats pushing it). Their performance was based on a cheap credit and bubble market which in shouldnt happen again. But, i guess it will as the same people that got us in this mess are still there. So probably could happen again. imo.

lvader

zildjian wrote: »

The companies you mentioned in your original post are never going to see that share price pre-2008 unless your in it for the long term (and even thats pushing it). Their performance was based on a cheap credit and bubble market which in shouldnt happen again. But, i guess it will as the same people that got us in this mess are still there. So probably could happen again. imo.

The value of Lloyds bank was higher several months ago than when the share price was at it's peek. That isn't the issue, it's the 11 times the number of shares that is.

sabretoothtigger

^^^
MARKET CAP not price. Forget the price, that would be like buying a house for 10,000 and not finding out which currency its priced in.

JamesU wrote: »

Excellent stuff and a good laugh too. Had to bring this together.

JamesU

It is almost comedy except these are all real mistakes and Ive made them. Awful home investor type thinking, 'I must buy at the bottom'


Only the people who get shares free as their pay can say I got the bottom price

What to look for is expanding prospects. The company price doesnt matter, will it be worth more will they make more revenue, will they have a higher profit margin, lower costs, wider customer base, more available market and larger resources?
Then the share price is very likely to be higher.

Even then we dont know but it helps to get a growing company not a declining one

dqnet wrote: »

Bank of America.. Since they are low and probably will go up at some point down the years.. what do you think?

Seems like an awful way to look at it. Write down 10 reasons why they are making more money. Maybe half of those reasons should be why other people havent already guessed their positive future, why is it unpopular





Markets are a minefield. Unless you know all the companies that make up the BAC group I would say BARC is more well known to you and a better bet

DietIrnBru

I've toyed with the idea of buying more shares - but i'm sticking to my usual £10 pcm into my Virgin FTSE ISA.

It is boring and unexciting, but given my low wages, I prefer a low risk strategy. So £10 into the Virgin ISA, £50 in my Santander Cash ISA, £50 in my Regular Saver and finally £10 into my local credit union.

So I would say, do not invest more unless you know exactly what you are doing - many people rushed to buy the bank shares - and they are still in the doldrums and goodness knows where they will be in 10 years time.

IronWolf

sabretoothtigger wrote: »

What to look for is expanding prospects. The company price doesnt matter, will it be worth more will they make more revenue, will they have a higher profit margin, lower costs, wider customer base, more available market and larger resources?
Then the share price is very likely to be higher.

I disagree, price does matter, a lot. A company with good prospects and lots of money for growth should be valued at a higher ratio to earnings than a non-growth company, but it still has finite value and so you need to consider what a fair price for the share is.

For example a company like a utility, with few prospects for growth may be valued around 10x earnings, where as a company like Tesco that is continually reinvesting earnings at high rates of return is worth over 15x earnings.

But if you see the utility selling for 5x earnings and Tesco selling for 25x earnings, you're better off buying the utility despite its lack of growth.

A disregard for price leads to stocks markets seen in the late 1920s and 1990s, and it always ends up with a very large correction.