Bank shares

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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

andyfuller wrote:
Ferru123 wrote:A tweet by Lord Sugar (which Peter Jones from Dragons' Den agreed with):

Bank shares seem too low,I bought LLoyds RBS and Barclays Friday. Don't follow me I'm no expert.Take professional advise if u fancy a punt
Lord Sugar bought on 12/08/11:

LLoyds (LLOY) = 33.82p

Royal Bank of Scotland (RBS) = 26.49p

Barclays (BARC) = 187.20p

At Close 18/08/2011:

LLOYS = 29.81p (-11.86%)

RBS = 21.95p (-17.14%)

BARC = 154.00p (-17.74%)

There is a lot to be said for sticking to what you know and leaving other things well alone.
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staker72
Posts: 55
Joined: Wed Feb 17, 2010 9:08 am

Guessing Lord Sugar is looking a little longer term. Obviosly with hindsight could have bought better but isn't that the same when trading on betfair. If you make money great. Time to tell will be in a year or so's time.
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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Yeah sure he is looking long term, several years no doubt, but still it seems an odd time to have been buying them to me. The downside at the moment is huge it seems to me with so much up in the air so as I said early I would have held out for a while yet before buying.
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Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Reading between the lines, I get the impression it was more of a punt than a careful investment decision!

And if I were a fundamental trader, and felt that a equity had value, I'd leave it be if it were falling in price, and only jump in when the trend appeared to be reversing...

Jeff
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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

I guess he should be adding to his position at the moment if he thought they were value before, they are even better value now unless he has changed his thinking behind what made them value before.
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hgodden
Posts: 1759
Joined: Thu Apr 16, 2009 2:13 pm

Yeah maybe he'll double up!
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Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

There's an expression in trend following: 'Losers average losers' http://www.turtletrader.com/losers-average-losers.html (Not meant as a dig at anyone, btw!)

I'd let the trend run its course before I even considered a trade...

Jeff
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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Ferru123 wrote:I'd let the trend run its course before I even considered a trade...
What trend are you referring to? And what is your indicator it has run its course?
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Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

I must admit I've been lazy and not looked at the charts, but my guess is that the shares Lord Sugar bought were and are in a downward trend on the daily timeframe.

You can use any of a number of indicators - it's up to you. One I like is the Donchian Channel, which basically tells you when the price has reached a high or low point for the past x number of days.

Jeff
andyfuller wrote: What trend are you referring to? And what is your indicator it has run its course?
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Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

PS The daily chart for Barclays below has 35 and 95 period moving averages. You could chose not to go long until those moving averages cross over.

But common sense should have told Lord Sugar that the price was dropping like a rock, and was therefore likely to drop further...

Jeff
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Euler
Posts: 26426
Joined: Wed Nov 10, 2010 1:39 pm

You're a total bloody shambles, you lost me money. You're fired! :lol:

When the banks did this debt for equity swap it really killed them as an investment as it diluted things so much. There is a long way to go for them to come back but they may we worth a speculative punt if you are happy to see them half in value (or more) first. I reckon they will re-capitalise when the markets stablise so that may see your holding diluted even more. Not a great purchase.

If I did buy it would be something like HSBC which is still strong.
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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

They were just saying on CNBC that an unnamed European Bank took up the ECB on their offer of a loan which has been around for a while but not taken. They had to borrow $500m in the last few days.
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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Also isn't Short selling on European banks still banned for the time being?
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Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

I think it only applies to some countries.

Even though short selling is banned, non-short selling isn't however...

Jeff
andyfuller wrote:Also isn't Short selling on European banks still banned for the time being?
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andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Ferru123 wrote:I think it only applies to some countries.

Even though short selling is banned, non-short selling isn't however...

Jeff
It is a 15 day ban which started Friday 12th August and ends Friday 26th August and is in place in France, Italy, Spain and Belgium.

My point was that the falls would probably be even greater if there was no ban.
Last edited by andyfuller on Thu Aug 18, 2011 7:04 pm, edited 1 time in total.
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