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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Hbos | HBOS | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 70.10 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 70.10 | 70.10 |
| Top Posts |
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Posted at 29/8/2009 18:51 by jennyj "Jennyj is 888 not down about 10% after you got in pre results"I bought at 85p see the 888 thread, and im really more a long term investor i havent got a clue about charts, buy signals etc. I normally go by fundamentals, growth, brand, marketing etc etc. With all the wierd things going on at RBS and lloyds its very hard for me to keep track of the fundamentals. I believe its safe to assume RBS will be making 10 billion again at some point but maybe not for 3 years or so. fatboy jazza, i dont know if you could help me out as to how the goverment insurance deal will effect the current shares of rbs/lloy, same effect as a r/i if so how much by? |
Posted at 12/12/2008 07:02 by wig123 Trading UpdateRNS Number : 0101K HBOS PLC 12 December 2008 TRADING UPDATE - 12 DECEMBER 2008 The following Trading Update is being provided in anticipation of the launch of the proposed placing and open offer and in advance of the meetings to be held today at the NEC Birmingham, to approve that placing and open offer and acquisition of HBOS plc by Lloyds TSB Group plc. Group Overview Since the Interim Management Statement published on 3 November 2008, (the November IMS) the Group has been operating in increasingly difficult market conditions. There has recently been an acceleration in the deterioration in credit quality, and further sharp falls in estimated asset values. In addition, pressure is building on net interest margins due to the significant reductions in UK base rates. Wholesale funding costs, including funds obtained under UK Government guarantee, remain high relative to base rate and by historical standards. Deposit flows have improved with Retail inflow in November. Divisional Review Retail As stated in the November IMS, the Retail net interest margin remains stable relative to that reported for the first half of 2008, but will come under additional pressure due to the impact of recent base rate cuts. There has been a deterioration in the trend in secured lending arrears which, taken together with continued sharp declines in house prices, has resulted in an estimated secured lending impairment charge of £0.7bn for the 11 months to 30 November 2008 (£0.4bn 30 September; £0.2bn 30 June 2008). The estimated impairment charge for unsecured lending arrears is £1.0bn for the 11 months to 30 November 2008 (£0.8bn 30 September 2008; £0.5bn 30 June 2008). In light of the worsening economic climate, trends in Retail impairment charges are likely to come under further pressure. Corporate Corporate credit conditions have continued to deteriorate significantly since the November IMS. This has resulted in an estimated impairment charge of £3.3bn for the 11 months to 30 November 2008 (£1.7bn 30 September 2008; £0.5bn 30 June 2008). This charge reflects an increase in the migration of exposures into the higher risk and impaired categories and sharp declines in asset values with a consequent impact on estimated recoveries. These factors are expected to continue to impact results in the short to medium term. Recent pronounced falls in the estimated valuations of property and other investments have impacted significantly on the value of the HBOS investment portfolio with an estimated loss of £0.8bn for the 11 months to 30 November 2008 (£0.1bn loss 30 September 2008; £0.1bn profit 30 June 2008). Investment valuations are expected to remain under significant pressure in our private equity and joint venture businesses. Insurance & Investment Consistent with the November IMS, our Insurance & Investment division continues to make a good contribution to Group results. From January 2009, we will move to offering our personal loan customers a more flexible regular premium payment protection product to protect against accident, sickness and unemployment; this will defer the timing of Group profit recognition in 2009 and later years. International The sale of BankWest and St Andrew's Insurance in Australia received approval from the Australian Competition and Consumer Commission (ACCC) on 10 December 2008 and is expected to complete by the end of December 2008. Credit conditions continue to deteriorate in Australia, Ireland and North America and this has resulted in some increase in impairment charges. Treasury Portfolio As at 30 November the estimated losses due to market dislocation totalled £2.2bn (£1.8bn 30 September 2008; £1.1bn 30 June 2008), including impairment losses in the Banking Book of £0.6bn (£0.5bn 30 September 2008; nil 30 June 2008). In light of increasing illiquidity in the markets for asset backed securities (ABS), HBOS has changed the classification of ABS in the Banking Book from Available for Sale (AFS), where they were carried at fair value of £35.4bn as at 31 October 2008, to Loans and Receivables at the same carrying value. Following this change in classification these securities are no longer subject to measurement at fair value, although they will continue to be subject to regular impairment testing. For the period to 30 November 2008, estimated negative Fair Value Adjustments (FVAs) in respect of the Banking Book totalled on a post tax basis £4.5bn after the reclassification to Loans and Receivables. Market dislocation losses reflect deteriorating market conditions and credit downgrades, including downgrades to monoline insurers in November 2008. Exposure to monolines calculated on our own internal methodology totalled £1.2bn at 30 November 2008 (£1.1bn 30 September 2008; £0.7bn 30 June 2008). At 30 November 2008, 84.4% of our ABS portfolio by nominal value was rated AAA, 5.3% AA and 3.1% A, compared to 88.3%, 6.4% and 2.0% as at 30 September 2008. Financial Services Compensation Scheme (FSCS) The Financial Services Authority (FSA) has issued draft guidance regarding the levies to be made by the FSCS to enable it to fulfil its obligations and compensate deposit customers of failing banks. Based on the information currently available, HBOS is likely to accrue a charge of around £200m in 2008 in respect of the FSCS levy. Outlook Global market and economic conditions, UK recession and increasing unemployment will continue to present a particularly challenging operating and credit environment. Lower interest rates should ease the debt burden but exert further pressure on net interest income. These factors will impact on HBOS capital ratios. However, through the injection of capital and liquidity facilitated by the UK Government, both currently and going forward, HBOS remains confident in its ability to navigate through this difficult period, as it becomes part of the enlarged Lloyds Banking Group. Contacts Investor Relations: Charles Wycks Director of Investor Relations +44 (0)131 243 5521 charleswycks@hbosplc John Hope Director, Investor Relations +44 (0)131 243 5521 johnhope@hbosplc.com Press Office: Shane O'Riordain General Manager, Group Communications +44 (0)131 243 7195 +44 (0)7770 544585 (mobile) shaneo'riordain@hbos Certain statements made in this announcement constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward looking statements can be identified by the use of words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or similar expressions and relate to, among other things, the performance of the various business units of HBOS in the near to medium term, the amount by which HBOS expects to write |
Posted at 20/11/2008 23:24 by lisa279 Interesting view:Ken Fisher of Fisher Investments 19.11.08 14:42 Sometime soon we'll see the end of the 2008 crash. When will the bear market bottom and stocks bounce? I don't know. But I do know if you're dwelling on the world economy as it is today you're going to miss most of the market recovery. Economic data lately hasn't been good. Investors fear a big, long-lasting global recession. What to do? Buy stocks. Bear markets always end long before news or sentiment improves and while the economy deteriorates. Bear markets arrive when investors run to the sidelines because things seem bad without potential redemption - basic human nature causes many to rationalise a way to believe misery will endure and progress remain dormant forever. These same folk end up missing the initial surge of the next bull market. Fact is, today doesn't much matter. Today's fundamentals were priced in long ago. Markets constantly look way into the distant future-so should you. In every bear market I've studied, stocks turn around as the economy worsens - except for those few where there was no recession at all. In the last seven US recessions, stocks stopped falling an average five months before the economy did. Even if a global recession is here or one's just ahead, it's too late to sell - stocks already reflect that scenario and then some. It's no small irony so-called economic indicators only describe the past. That's useless data for investors. Better to ignore lagging reports. Don't expect headlines to ever announce the turnaround - the thrum of bad news will drone on and on through 2009 and long after stocks rise-particularly with the media the grumpy the way it is now. Any improvement will be seen as "a sucker's rally" - considered an opportunity to get out before bigger declines appear. New bull markets thrive on such pessimism-defiantly climbing past investors stubbornly focused on yesterday's data by reflecting the recovery ahead. We likely won't know the real catalyst for the reversal until well after stocks have rallied hard. What to ponder instead? Where the economy will be in a few years. My guess is most of today's angst will be a distant memory. Those who got scared out of tech in 2000-03 didn't find those problems around by 2004. Three years from now we won't be worrying at all about the 2008 credit crunch demons. By now, the bulk of the financial crisis must be past, US elections are done, and stocks have already fallen enough to account for a big global downturn. Beat the recovery! There won't be a much better time to buy stocks for many years - get them now before the recovery is priced in. Don't dwell on today - look to a brighter future ahead, that's where markets will focus. (((((((((())))))) Lisa:) |
Posted at 03/11/2008 15:31 by masurenguy CitywireLloyds dismisses reports of counter-bids for HBOS By Deborah Hyde 03 November 2008 Lloyds TSB chairman Victor Blank said he is unconcerned by reports that one, maybe two, rival bids for HBOS are in the offing. 'I'm not losing any sleep over it,' he told journalists at a press conference today. 'We've heard nothing tangible whatsoever.' This was echoed by chief executive Eric Daniels. 'Shareholders feel good about this deal,' he said, suggesting he believes that investors many of whom have holdings in both HBOS and Lloyds would not be lured into the arms of a rival suitor. Over the weekend it was reported that Jim Spowart founder of HBOS unit Intelligent Finance has been approached by a foreign institution to broker a possible counterbid for the whole of HBOS. But Daniels said there are few financial institutions in the world that are strong enough to do a similar deal. This sentiment echoed the view of analysts earlier. Alex Potter, analyst at Collins Stewart, said 'The likelihood of this seems low funding and political considerations being the key barriers.' Elsewhere, the Lloyds management team sought to calm fears that key HBOS brands like Halifax, bank of Scotland, Cheltenham & Gloucester will disappear from the High Street. Daniels said the enlarged group (Lloyds Banking Group) is facing a more difficult trading environment than in recent years but is hopeful that it can still offer 'superior value and good growth'. Discussing the very poor savings ratio in this country, Daniels said there is no doubt that the UK consumer needs to save more. He said the group had been working to attract high net worth customers who have a propensity to save more and this has been paying off. Daniels said that the group places a great emphasis on relationships with customers and offering 'great value'. The management team said they remain committed to providing good deals for first time buyers and teams from Lloyds and HBOS are working together to identify products. Daniels, though, does not believe the government will be putting undue pressure on Lloyds' operations in order to see political aims achieved. 'We don't see this as something that would go beyond what we would normally do. The government is a 'value' investor,' said Daniels. As for jobs they were more tightlipped. Daniels said it was 'premature' to talk of redundancies and job cuts as the deal was only announced a few weeks ago, although he conceded there would undoubtedly be 'some overlap.' Neither Daniels nor Blank would give a clear timetable on when there might be more news but Daniels told the press they 'shouldn't hold your breath waiting for something dramatic to happen tomorrow.' 'It is too premature,' he said. The pair also refused to be drawn on whether they had been in discussion with potential investors as they prepare to pay back the government's preferential shares. 'There are multiple ways to repay the preferential shares - managing the balance sheet - alternative investors - disposals,' Daniels said. But asked repeatedly whether like Barclays it has been in discussions with sovereign wealth funds, Daniels was mute. 'We have not commented on whether we have been approached or have made an approach,' he said, leaving many experienced Daniels watchers in the audience speculating that the group must therefore be in such talks. |
Posted at 19/10/2008 12:08 by propane Published Date: 19 October 2008 By Rosemary Gallagher HBOS merger reaches point of no return LLOYDS TSB's takeover of HBOS looks set to go ahead now that the deal is winning institutional backing and stands as the only option on the table for the stricken Scottish bank. But Lloyds will have to work hard to win support from its army of small investors. They will lose out, because the £37bn Government banking bailout prevents dividends being paid on their ordinary shares. Under European Commission rules, the stipulation in the bailout that ordinary share dividends will not be available until the UK Government's preference shares have been paid off cannot be dropped. This measure applies to all the banks that have benefited from the rescue plan, including HBOS and Lloyds. Jim Wood-Smith, head of research at investment firm Williams de Broe, said: "A lot of small shareholders in Lloyds are feeling they've been thoroughly stitched up because they are investors in a healthy bank. Lloyds has a lot of public relations work to do to sell the deal to those shareholders." But Lloyds' total shareholder base, including large institutional investors, overlaps with HBOS's. Those big investors support the deal. Legal & General and Standard Life Investments are in favour of it. There have been some calls for the takeover to be reconsidered after HBOS and Lloyds TSB received the cash injection of £17bn from the Government as part of the bailout. Some commentators say HBOS, which received the bulk of the new capital, can survive on its own. But analysts said HBOS, which depends on the beleaguered mortgage market and investments in sectors badly hit by the credit crunch, still needs the deal. One analyst said: "Lloyds TSB is the only name in the frame. Without it, HBOS is facing full nationalisation." The Government will be a 43.5% shareholder in the new 'superbank' and is unlikely to let the deal fall through, given its role in brokering it. James Huston, analyst with Keefe, Bruyette & Woods, said: "The Government owns 60% of HBOS and 30% of Lloyds. It has the majority of the vote, so the balance will swing in its favour." Charles Davis, of the Centre for Economics and Business Research, said the deal now looks more attractive for Lloyds since it lowered its offer. Eric Daniels, Lloyds TSB group chief executive, is ironing out details of the deal and reassuring the City that it makes business sense. HBOS's main attractions are its mortgage book and savings customers. The new group will have 30% of the UK mortgage market and 35% of savings. Daniels said: "Because we have repriced the deal, to take into account the extra cost of funds, it continues to represent a very good deal." Under the new terms, HBOS shareholders will get 0.605 shares for every HBOS share. The Government will be able to exchange HBOS preference shares for the equivalent in Lloyds TSB. Shareholders are expected to vote in December, with the deal due to complete in January. |
Posted at 17/10/2008 12:35 by chris001 October 17, 2008Op-Ed Contributor Buy American. I Am. By WARREN E. BUFFETT Omaha THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary. So ... I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities. Why? A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now. Let me be clear on one point: I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month - or a year - from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over. A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price. Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497. You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy. Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts. Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: "I skate to where the puck is going to be, not to where it has been." I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in an empty bank building and then advertised: "Put your mouth where your money was." Today my money and my mouth both say equities. |
Posted at 15/10/2008 20:10 by mellious22 Lloyds TSB shares rally on hopes it will win concession from TreasuryLloyds TSB has persuaded the Treasury to allow its rescue takeover of HBOS to go ahead on better terms than originally negotiated, it has been claimed. By Harry Wallop, Consumer Affairs Editor Last Updated: 6:24PM BST 15 Oct 2008 City investors have become increasingly wary about the controversial deal, pointing out that Lloyds TSB is taking on a failing bank and allowing the Government to become a major shareholder. As a result of allowing the Treasury to take a large stake, Lloyds TSB is not allowed to pay any dividends to its shareholders. Previously the bank had been one of the most generous payers of dividends, which made the shares particularly attractive with private investors. The shares in both Lloyds TSB and HBOS have fallen heavily in recent days on fears that the deal is in jeopardy and, even if it goes ahead, Lloyds TSB's hands will be tied too tightly by the Government. However, the banks have been lobbying the Treasury hard and are understood to have won an important concession that might allow it to start paying dividends to its shareholders sooner than expected. Leigh Goodwin, analyst at Fox-Pitt, Kelton, said: "Reinstating or amending the dividend conditions is a necessary step. It may or may not be sufficient to keep shareholders happy, but it will certainly be very helpful." On Tuesday, Eric Daniels, chief executive of Lloyds TSB, insisted the bank's takeover of HBOS would go ahead on the existing terms. He said: "I am very comfortable with the value of the deal and have no intention of renegotiating." By the close of business on Wednesday, Lloyds TSB's shares finished at 157.8p, up 4 per cent, the biggest riser on the FTSE 100 index of leading shares, as investors shrugged off Mr Daniels' and the Treasury's denials. A Treasury spokesperson said: "The terms of the agreement reached with the banks were set out clearly by both the Government and the individual banks in detailed statements on Monday, and the terms of the agreements remain unchanged." |
Posted at 14/10/2008 22:30 by wikroberts From The TimesOctober 15, 2008How they managed to botch the bailout The Bank of England has a lot to answer for. The competitiveness of British banks has been ruinedTim Congdon Is the Government's rescue programme beast or beauty for Britain's banks? The leap in share prices has been beautiful for short-term investors in the stock market. But a strong case can be made that the Government has been beastly to the banks, with dangerous long-term consequences for our financial sector. What effect will the Government's actions have on the structure of the British financial system and, in particular, on the international competitiveness of the City of London? In a recent speech Paul Tucker, an executive director of the Bank of England, referred to a "social contract" between the Bank and Britain's commercial banks. The heart of that contract used to be the lender-of-last-resor Britain's bankers have been greedy, naughty and irresponsible in the past few years. Well, bankers are greedy, naughty and irresponsible everywhere and at all times. For all their faults Britain's banks are not insolvent or unprofitable. At the end of June this year the book value of the much maligned Royal Bank of Scotland's equity was more than £60 billion, while the total profits in 2007 of the eight institutions negotiating with the Treasury last Tuesday night was about £40 billion. Background Tension rises between Bank and Treasury Bank of England's £100m Icelandic loan Bankers: No one likes them and we don't care Brown's boom will end only in bust When the Northern Rock crisis broke last August, the Financial Services Authority responded appropriately. It tried to marry Northern Rock, which could not fund itself in the wholesale markets, with Lloyds TSB, which had a strong network of retail branches. But Lloyds TSB was worried that even the retail network might not be able to raise enough money, and sought to borrow from the Bank of England. This would have been a classic lender-of-last-resor Since then King has insisted that it is not the Bank's job to provide long-term finance to Britain's banks. He seems to have repudiated the lender-of-last-resor The damage to confidence has been done. The world believes that Britain's banks are bust or semi-bust, whether at the last reporting date (end-June 2008) they had shareholders' funds of £200 billion or not. The British Government seems to agree with the world that organisations with capital about three months ago of £200 billion may be bust, and has decided that these organisations must raise more capital if they want to access the Bank's facilities. Potential private investors cannot overlook that this year the British State has nationalised two banks (Northern Rock and Bradford & Bingley) without their shareholders' consent. If the British State can bully banks to take actions that neither their management nor shareholders approve, isn't it understandable that the capital markets are reluctant to put more money in? Banks are forced into the hands of the State. Superficially the "preferred capital" made available last week was rather like a long-term lender-of-last-resor The banks could access it only if they also handed over to the Government chunks of their equity, the £200 billion or so that belongs to their shareholders. As with Northern Rock and Bradford & Bingley, the Government is determined to drive a hard bargain. Its rhetoric is that the bankers must compensate the taxpayers for any rescue funds. The trouble here is that British banks compete head-on with banks from other countries, where the governments are being more lenient. In the US the Bush Administration is avoiding nationalisation. A fair bet is that the nine banks identified as beneficiaries of yesterday's American package will be set softer terms than their British counterparts. In sharp contrast to the Bank of England, the Federal Reserve is lending on a massive scale for periods that may extend into a few years. It is acting as a lender-of-last-resor Two conclusions cannot be avoided. The first is that it would have been better if the Bank of England had reacted to the recent troubles in the same way that it did, so brilliantly and effectively, in past crises. The support should have been pre-emptive and low-key, and it should have come as a traditional lender-of-last-resor Secondly, the international competitiveness of Britain's banking industry is being destroyed. Nationalisation will cause undue caution and rigidity in banks' operations, while talented and experienced bank executives will seek to work elsewhere. In many cases they will emigrate. New investors in British banking will be reluctant to come forward when the Government tries to privatise the assets it has taken from banks' existing shareholders. In the past 20 years Britain's economy has led the world in one, and only one, activity: international financial services. That leadership - and with it the prosperity of the City of London - is now in extreme peril. Tim Congdon is an economist. He was a member of the Treasury Panel (the so-called "wise men") that advised the last Conservative Government. |
Posted at 14/10/2008 12:03 by hardie1960 Whisper it softly, but there's just a chance that Royal Bank of Scotland won't be nationalised after all. Its shares have been lifted this morning on the wave of global stock-market euphoria to around 70p, a margin above the 65.5p price being paid by the government. At that level, it would be rational for RBS's existing shareholders to exercise their right to buy the new shares and "deprive" taxpayers of this investment. After all, if apples - or RBS shares - can be bought from the orchard at 65.5p when the market price is 70p, you'd be a fool not to buy in the orchard, even if you plan to dump them almost immediately in the market rather than hold them. Which means that if RBS's share price were to stay at this level or rise, the state's stake in RBS might turn out to be far less than the 60% that taxpayers would own if we bought all the new stock. The big imponderable is how much spare cash is available to our battered pension funds and whether some cash-rich overseas investors might be tempted to buy - because the £15bn that RBS needs is a lot of wonga. But the important point is that, for all its hideous booboos, RBS is a fearsome moneymaking machine. And its new chief executive, Stephen Hester, has a formidable record of sorting out complex financial problems (which he demonstrated from his time at Abbey). So private-sector investors might just conclude that this is too attractive an opportunity to leave for taxpayers. Whatever happens, RBS will still be lumbered with paying off £5bn of preference shares which we as taxpayers are buying willy nilly. Hester didn't want these but he's lumbered with paying the 12% coupon and ceasing dividend payments on all ordinary shares till the £5bn has been repaid. That said, it's all looking a lot less bleak than Hester might have feared yesterday. Hester may find himself running a bank that can claim with conviction that it's still largely in the private sector. And that's all the more humiliating for HBOS, whose shares have also risen this morning but remain firmly below the subscription price being paid by HM Treasury. What is it about HBOS, owner of the Halifax, that makes it less attractive to investors than RBS? It's our viciously deflating residential housing market, to which the fortunes of this market-leading mortgage lender are inextricably linked. Probably almost nothing can prevent us as taxpayers becoming the full or partial owners of the three mortgage lenders most closely associated with the bubble years in UK residential housing. Soon we'll have the full set of Northern Rock, Bradford & Bingley and HBOS - which will be seen by many as confirmation that the near-catastrophic failure of macro-economic management by Bank of England and Treasury over the past few years was to allow house prices to rise and rise and rise and rise and |
Posted at 12/10/2008 22:57 by k38 Mail on SundaySir Alan Sugar trawls High St for value Financial Mail 12 October 2008 Cash is king and rich investors with a fistful of readies could be heading for massive profits in the next few years if their timing is right. After record falls in share prices in recent weeks there are signs wealthy investors are dipping a toe in the water in the hope of spectacular returns in the long term. Last week, Sir Alan Sugar, entrepreneur and star of TV's The Apprentice, spent £1.8m on a 3.9% stake in beleaguered retailer Woolworths. The outlay will hardly dent Sugar's estimated fortune of £830m, but it was brave given Woolworths' share price was trading at a record low of 2.63p last week, putting its stock market value at six times less than its debt mountain. Another investor gambling more of his fortune last week that a share price was near the bottom wasbnaire Joe Lewis, who paid £137m for a 25% stake in pubs group Mitchells & Butlers. Buying shares when everyone else is selling is known as contrarian investing, or more commonly 'bottom fishing' since it involves trawling among sunken share prices in search of a prize catch. '''''''''''''''''''' Crashing markets can lead to huge losses for investors, but history shows that those who brave choppy waters and invest for the longer term can make spectacular returns. '''''''''''''''''''' One of the most famous examples of this approach is when American value investor Warren Buffett bought $1bn worth of Coca-Cola shares a year after the 1987 stock market crash. Buffett, whose favourite drink is Cherry Coke, paid $5.46 a share for a seven% holding. Ten years later the shares were trading at $88. |
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