Imo .,Stock brokers make money from buying and selling and charging fees. Us Investors make money using the buy and hold method ( which kind of goes against our logic). I bought some Boi at various entry points . At .23 i thought I bought at the top for many weeks and beat myself up. . When I saw it at .39 I felt the feeling of waving a friend off in the departure lounge emigrating without my last good byes said !!!. Now that I see it at .31 again. I feel like I'm getting another chance to say goodbye to Boi at .31 cent. ...,,, time to back up the truck before its next departure .,,,will .23 cent ever be seen again I ask ? Will .31 cent ??? I HOPE not and honestly think not !!!
I don't have any more knowledge than anyone else here and I certainly don't have a huge amount of my money in BoI shares. I do listen to what the main people of influence involved have to say and I read as much as possible about the companies I am interested in.
The problem a lot of us here have with boi is that we still see the company as it was duering the good times and we still see a share price of €18. We need to complete forget that because as we now know to our cost, it was never worth that to start with.
We need to look at boi today and try and analysis it like any other stock you might be interested in. As a starting point, the fund managers that paid 33c for 2billion shares this week are paid a small fortune not to screw up. So with their education and knowledge valuing boi at 33c today who am I to argue.
So the question is will boi improve its business and increase its profits from here. To mind mind the answer has to be an absolute yes. There is legacy debt but billions left aside to cover most of that and as housing demand and prices rise so the legacy debt shrinks.
Add in the other positives. Cost cut to the quick, staff numbers reduced, the vast numbers now banking without expensive human contact, an open goal as regards competition, an improving economy, the possibility of restoring a dividen and the new investors that that opens up, proven strong management, profitable margins on millions of transactions per day, improved margins on all loans ect.
To be honest radar they are in a position to screw a hell of a lot of money out of us and every customer for years to come. Its a business that will generate plenty of cash and is that not what we all look for in our stock picks. So from my observations I think the future will be bumpy untill normalized but with steady progress that I hope to benefit from over time.
I guess to be rEalistic about the small shareholder at this stage is almost irrelevant in the context of the above.
What we will take is what we get.
So for me personally I am happy to take the work out of this, have my targets and chill out until they are reached.
Now Johnny, you appear to be knowledgable son, so do you think that the banking sector has changed so much that we can expect the valuation of banks to be materially differrent to that of before the collapse.
Essentially what I am asking is would it be realistic to say that when normality arrives profits could be higher than before as that seems to be reflected in the hope value of this share and market capitalisation of this bank ?
I agree with a share buy back been needed. 32.3billion shares in issue a crazy number.
However, I think RB has a path laid out that involves normalization of the company. From interviews I have heard him give over the last while he seems to have a return of some kind of dividend in his sites for 2016. Paying a dividend, no matter how small, opens BoI up to a lot more potential fund managers.
At the moment, there are a small few investors with sizeable chuncks of the bank under their control, including the state. For the most part this present batch of owners are not long term partners for the bank and are liable at any time, like this week, to sell sizable numbers of shares and destabilise the price.
We need funds involved that are in it for the long road and these are the type of investors that require dividends as a price for their loyalty. the tax treatment of any small share holder is way down the priorty list of management I believe.
I reckon an eventual return to dividends is inevitable. Every 1 cent with today's share count though means 323 million distributable euros of profit and it doesn't seem to be as high on RIchie's to-do list as retiring the 1.8bn of now privately held coupon-paying preference shares, so it may be a while yet. 2016 was the year being touted in the Examiner article. Radar makes a good point regarding tax efficiency, but I'm not so sure it is an issue for institutional investors and billionaire investors who operate from non-irish tax jurisdictions and in most cases would be subject to some form of corporate, not personal, taxation. Where I live, dividends are taxed for example exactly at the same rate as CGT so it's indifferent. Anyway, BOI has to make 323m of pure profit for every cent paid in dividend and apparently will only do so after dedicating the first 1.8 bn of profit to retiring the pref shares, so unless they start printing money, it won't be for 2 or 3 years.
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