The Banks

For a longer term investment, would buying UK bank shares be a good move about now?

I'm thinking Barclays and HSBC, both have dropped quite a bit in the recent sell off, especially barclays

Is now a good time to buy do you think? for a long term 5 years + buy and hold or do you think there are more falls to come in the stock market, the FTSE has dropped almost a 1000 pts and Bank shares like Barclays have like halved in value over the past 3 months

am i missing something as in a the banks are all going bust again or is now a good time to buy, i kinda kicking myself for not buying bank shares when they were like 50p for Barcs, 10p for RBS etc

but i dont want to rush in, so thought i would ask on here for opinions to help make by mind up

Absolutely

Peter, When you asked this question here the last time, how did it work out for you?

Why do you insist on wanting to buy bank shares? It's about the biggest gamble you can bet on. There are much better industries to invest in.

Peter

peter450 said:

i kinda kicking myself for not buying bank shares when they were like 50p for Barcs, 10p for RBS etc

but i dont want to rush in, so thought i would ask on here for opinions to help make by mind up

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Are you kicking yourself for not buying Lehman when they were "cheap"? It's a crapshoot. My honest, sincere advice is to stay away from banks.

Peter

Just because the price is low it doesn't mean it can't go lower, bet everyone who got tricked/sucked in to that 70 pence a share deal is pretty pissed right now, bet loads of em held on thinking its gotta come back when it get back to where it was yesterday I'll get rid, so upto you but some shares are cheap for a reason, because they're sh1t

G.O.A.T said:

Peter, When you asked this question here the last time, how did it work out for you?

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I did not buy any when i asked the question last time, i had some shares in RBS before

But these were bought before the credit crisis really exploded, After said crisis i asked re the bank sector, but decided to stay away, the shares had already gone up a fair bit by then and i felt most of the gains had probably passed me by and what chance it after earlier experiances, there were still question marks over dividends etc the picture looked very unclear

The reason i ask again is Banks shares are cheaper now than last time i asked and some are starting to pay dividends again (Barclays) abeit quite small ones, i guess my thinking is, even factoring in lower future earnings, the price now seems to look good on some of them

My Worry is, that the shares a cheap becasue another full blown crisis could be in the winds re Europeah soverign Dept, or some other reason. Banks have already made write downs on Greek dept, but that could be the tip of the iceberg if spain/Italy etc go the same route as Greece, i'm not sure how likely that scenario is

wackypete2 said:

Why do you insist on wanting to buy bank shares? It's about the biggest gamble you can bet on. There are much better industries to invest in.

Peter

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Could you please eloborate on this, i'd be interested to hear yours/others thoughts on what sectors look good at the moment

There are plenty of people who like to buy value; and make it work. But in my experience the better stuff goes up more than the crap stuff when the tide changes.

More importantly than that I would say if you feel the need to ask on a forum then keep your money firmly in your pocket, it will be safer.

We are in a bear market. The banks will be cheaper if you wait.

Buy the strongest in a rising market and sell the weakest in a falling market, thats all there is to it ! Here endeth todays lesson.

A mate of mine bought loads of bank shares when everyone was queueing outside their doors to withdraw money. He made over 100k when the Market recovered. Buying them now is a very good idea. Its just a function of when to buy so that you can maximise your returns. The big banks are not going to fail and this represents a golden opportunity.

counter_violent said:

Buy the strongest in a rising market and sell the weakest in a falling market, thats all there is to it ! Here endeth todays lesson.

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Alternatively buy the strongest and sell the weakest in all markets.

peter450 said:

For a longer term investment, would buying UK bank shares be a good move about now?

I'm thinking Barclays and HSBC, both have dropped quite a bit in the recent sell off, especially barclays

Is now a good time to buy do you think? for a long term 5 years + buy and hold or do you think there are more falls to come in the stock market, the FTSE has dropped almost a 1000 pts and Bank shares like Barclays have like halved in value over the past 3 months

am i missing something as in a the banks are all going bust again or is now a good time to buy, i kinda kicking myself for not buying bank shares when they were like 50p for Barcs, 10p for RBS etc

but i dont want to rush in, so thought i would ask on here for opinions to help make by mind up

Click to expand...

Most of the people on T2W are forex traders that trade intra-day, so a 5 year timescale is not in most of their mindsets, so you might not get the advice you're after.

I would ask yourself a few questions:

Can you afford to lose 100% of the money you want to invest?

Are serious about the timescale? i.e. are you willing to buy the shares and forget about them for 3-5 years? Or are you going to watch them every day tick by tick and be upset if they drop another 70% from here and stay there for over a year or more.

Do you think the banks are going bust? Or do you think they have a much better liquidity position than in 2008 and that this is just a panic?

I could go on, but at the end of the day it's your money and only you should decide what you invest it in, so do your research and good luck.

Any good sources for sites with in-depth intelligent discussion regarding the status / direction of banking sector shares? For short-medium term that is.

The health of the financial industry is normally a sign of how well the economy is doing. If you look at the basic fundamentals (low economic growth, crap results by GS, etc...) we're no where near a recovery yet. I would wait a little while before buying bank stocks.

isatrader said:

Most of the people on T2W are forex traders that trade intra-day, so a 5 year timescale is not in most of their mindsets, so you might not get the advice you're after.

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OK, fair point.
Even so, no one wants to take too much pain on long term investments either. Watching your long term investment(s) stay in the red after 1 or 2 years can be emotionally draining.

Peter

isatrader said:

Most of the people on T2W are forex gamblers that trade intra-day, so a 5 year timescale is not in most of their mindsets, so you might not get the advice you're after.

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I've changed where appropriate.