A good time to buy banks stocks?

This is a discussion on A good time to buy banks stocks? within the General Trading Chat forums, part of the T2W Archive category; Would now be a good time to buy big bank stocks? in terms of long term buy an hold strategy, ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Mar 17, 2008, 7:23pm   #1
Joined Aug 2005
A good time to buy banks stocks?

Would now be a good time to buy big bank stocks? in terms of long term buy an hold strategy, they seem to be trading at pretty low prices at the moment and a lot of it seems down to all the negativity surrounding banking

Are big banks like RBS and barclays a good long term bet at todays prices?
peter450 is offline   Reply With Quote
Old Mar 17, 2008, 7:46pm   #2
The Staff are paid members that perform various roles such as editorial, advertising, support or technical work.
 
Trader333's Avatar
Joined Jan 2003
Quote:
Would now be a good time to buy big bank stocks?
No, how do you know they wont fall a lot more ?


Paul
Trader333 is offline   Reply With Quote
Old Mar 17, 2008, 8:17pm   #3
The Staff are paid members that perform various roles such as editorial, advertising, support or technical work.
 
timsk's Avatar
Joined Mar 2002
Quote:
Originally Posted by Trader333 View Post
No, how do you know they wont fall a lot more ?
Yeah, spot on Paul.
Tom Orton and I (regular contributor to Barjon's 'Swingin' the FTSE' thread) have a friend who's essentially a LTBH investor who was seriously considering buying Northern Rock last September '07 when it was around the £3.00 mark, on the grounds that it "couldn't fall any further". Said friend asked both Tom and myself for our take on the NRK chart and, independently of one another, Tom and I recommended that he leave well alone. He duly took our advice and, needless to say, he was very glad that he did. That's not to say that RBS and Barclays won't rise dramatically of course (forgive the double negative) - they probably will.

Tim.
__________________
I'm New To T2W - Where Do I Start? - a must read for anyone new to T2W
I'm New To TRADING – Where Do I Start? - a must read for anyone new to TRADING
The Trading Plan Template - a must read for anyone without a proper TRADING PLAN
timsk is offline   Reply With Quote
Old Mar 17, 2008, 8:28pm   #4
The Staff are paid members that perform various roles such as editorial, advertising, support or technical work.
 
timsk's Avatar
Joined Mar 2002
Addendum . . .
Having posted the above and re-read it - it sounds as if I'm recommending not buying the banking sector which is totally the wrong impression to give. Sorry! There may well be very good reasons to do just that and buy into this sector. However, my point (and Paul's point too, I think) is that to buy into it on the grounds that "it's cheap" or, in my friend's case "it can't fall any further" are very poor reasons indeed which are likely to result in loss and regret. (Paul - forgive me if I'm speaking out of turn and please correct me if I've misinterpreted your post.)
Tim.
__________________
I'm New To T2W - Where Do I Start? - a must read for anyone new to T2W
I'm New To TRADING – Where Do I Start? - a must read for anyone new to TRADING
The Trading Plan Template - a must read for anyone without a proper TRADING PLAN
timsk is offline   Reply With Quote
Old Mar 17, 2008, 10:08pm   #5
 
8 Posts
Joined Dec 2007
Agreed, buying even for long term buy and hold in a strong downtrend is probably not the smartest thing to do and represents too much risk in my view.

However, given that banking has historically been a good sector over the longer term, and present issues aside, many banks are still fundamentally good businesses and will continue to be so, the opportunity to buy at value levels will be worth looking at in the future. If we see substantial falls and a sustained period of the price having based out then I will look to buy, holding on a long term basis.

So if we see prices which represent excellent fundamental value in terms of earnings, with technical (chart) confirmation, I'll be a buyer.

Something to keep an eye on imho...
forexangel is offline   Reply With Quote
Old Mar 17, 2008, 10:33pm   #6
Joined May 2004
These are the types of situations which made Warren Buffet and other value investors legends. Amidst the panic stages of Bull/Bear moves, the market often forgets the underlying basic fundamentals. Banking would be a decent play for those who haven't been hurt by subprime, however you'd have to look around the market for strong companies who are tracking the ftse fall. As always in this game, don't put all your eggs in one basket though.
SAINT is offline   Reply With Quote
Old Mar 18, 2008, 1:01pm   #7
Joined Feb 2008
Quote:
Originally Posted by peter450 View Post
Would now be a good time to buy big bank stocks? in terms of long term buy an hold strategy, they seem to be trading at pretty low prices at the moment and a lot of it seems down to all the negativity surrounding banking

Are big banks like RBS and barclays a good long term bet at todays prices?
For me, right now, banks are still offlimits. Most people have run away for the wrong reasons though. We all know of the Mortgage messes but no one has factored in the Recession, yet. Earning have yet to account for this contraction. Right now everyone is only worried about the writeoffs.

If you must own banks...
Leg-in (4-8 part buy in, DCAing every quarter) or MARRIED PUTS/w tight stops on the stock.
luckyd1976 is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
A list of good UK day-trading stocks Traderuk Stocks 14 Oct 12, 2010 11:53am
US stocks EOD Adjusted for dividends, GOOD or BAD!!! FT79 Stocks 0 Jul 5, 2005 8:43pm
Good spreadbet companies for US stocks gbr128 Spread Betting & CFDs 3 Jan 19, 2005 12:25pm
Good US Stocks screening software vasanthan Trading Software 6 Jan 18, 2005 12:03pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)