Does anyone know why this share has gone down by some 25p in just over a week.
No real bad news whatsoever, global climate may not be good but there seems no good reason for this Plummet. No strange ridiculous broker forecasts either. Sunday openings are being piloted. Is it again manipulation and government involvement ( selling now or soon ).
No Richard. I am fully invested in RMG for the moment and it remains a hold. With respect to BP this is just the start of a long legal battle which could drag on for years (remember Exoon Valdis). The BP share price is being hit not only by the gulf disaster but exposure to the problems in the Ukraine via the tie in with Rosneft. As I said below my strategy is a long term hold on this and I am still well in profit even after recent falls. The only consideration that would prompt me to sell would be a dividend suspension (as happened with RSA), but if that were to happen then a more likely home for the cash thus liberated would be Shell as BP is my only oiler and I would like to remain invested in that sector (Energy) of the FTSE100.
now may be a good time to offload some BP. money to RMG, eg offload to cash, and then buy in at the next RMG low, such money could triple, recouping the 6.1% lost on BP. today
then when eventually the BP litigation is complete, you can return the money to BP.
because the RMG price is so suppressed, it could be immune to a market crash
looking at the longer term BP. graph, the price tends to rebound quickly within a few days from lows, but not necessarily regaining money lost. but maybe its not at the low yet, that's the risk.
ultimately the US court deciding against BP is a negative, and for investing is an opportunity for holding cash rather than shares. with negatives you wait to buy in at the low, and with positives you wait to sell at a high. you are on the wrong side of the trade at the moment. similarly with RMG there are negatives and positives, eg the french court action is a negative, but the 500 million euro loan is a positive.
the RMG circumstance is complex, the graph is the ultimate way to decide which factor is the most important.
RMG plummetted on the french court action announcement on 16th July from 475 to about 400 on 6th Aug, so that french action was quite detrimental. the loan note announcement didnt halt the plummetting, but I think when they announce what they are doing that will boost the price.
I think the price was pushed upwards to avoid the SAYE price being too low,
as regards the future, I think the SAYE price will act as a lower bound for the price. this is entirely guesstimate, but I think it wont go below 350. because otherwise the employees could complain that they got a bad deal.
all financial sites have to say that, as there is always risk. you need to sign up really, and then look at the stats which are only available when you sign up, you dont need to invest any money to sign up. anyway to this day they have never defaulted anything, and of all the investment options I have looked at, I think ratesetter.com is the safest, as they have maximal division of risk, and have carefully audited default protection which exists as cash. versus say Wellesley whose guarantee is based on property, increased interest rates could erode that guarantee. Basically when you invest, you will make profits like clockwork. provided you use autoreinvest, then 100000 quid would make 500 quid profit every month. if defaults did increase, the rates would also increase to mitigate. it really is ULTRA LOW RISK and 6% return. a lot of their loans are for cars by private individuals: the car is itself a security!
@Grayling I had a look at BP. : todays plummet was clearly caused by the RNS about the gulf of mexico court case. it plummetted about 6.1% from 310pm, and the price is back to where it was in October last year. 29 oct 2013 price rocketed on the Q3 results. one approach is to offload the shares and dont reinvest until the court case is resolved either way. at least reduce the holding or offload continually. its best when everything about a company is positive. the problem is that the americans look at BP. as a stranded whale. once the court case is complete will probably be the best time to rebuy, price will be suppressed creating extra profit
according to lse.co.uk 58 million shares were sold and 32 million bought. converting the price to dollars and using the Dec 2013 profits, the P/E ratio seems to be 5.7 which is quite low. the multiyear trend isnt yet affected.
tomorrow morning at 8am, see if there is a major stampede, if so join the stampede,
what is the maximum payout liability being talked about?
the payout could increase the P/E as a one off.
with such an announce it could be months for the price to regain, as the spread is a mere 0.09%, you could offload everything, and then rebuy in steps each time you think its at or near the low. you would then only lose 0.59% on rebuying. versus potentially much more if it continues to plummet. when the spread is high, money then becomes trapped. FT100companies tend to have small spread.
generally the more risky something is, the less money you should put, eg bet 1 quid England wins the world cup, but 10 quid on say Germany or Spain.
Dont worry about BP once all this issue about the 2010 disaster gets sorted out and that hypocritical judge barbier this stock will only go one way so just hang on in there ,remember its oil not food .
I agree that my strategy is tailored to my needs and sympathise with your requirement to constantly generate income on a monthly basis. I would not have either the spare time or inclination to devote that much attention and analysis to the markets. At the moment though I am nervously watching BP go down in flames. Now that is what I call plummetting! A buying opportunity for some I am sure, once the dust settles. It will have to fall a lot more than this to wipe out my gains as I have been sitting on these since immediately post Macondo and collecting more shares as divi ever since. However, it could really go a lot lower and if they start to reduce the divi to pay the fines then things could get very uncomfortable for a lot of ordinary folk who hold this either directly or indirectly.
26 aug low 448.6 27th low 448.2 28th low 447.1 29th low 443.3 high 448.6 1st sep low 444.9 high 448.7 2nd sep low 437.8 high 448.5 3rd sep low 434.9 high 442.7
today's high 442.7 in particular is below 1st's low 444.9 which I define as plummetting.
versus yesterday, the high is 5.8p lower, the low is 2.9p lower,
more data needs to occur to confirm trends, but the price is unambigously now moving downwards, its not yet outright plummetting. but its descending faster now.
I talk of the price heading to 400 not to annoy people, but as ways to make more money, by 2 means, first to not hold onto money at the higher price, and secondly to buy in at a lower price. but maybe my predictions will be wrong. the price could even end up moving between 350 and 400.
as a general rule, prices usually move downwards before they move upwards, the price currently has rebounded from 450, and 400 is probably the next barrier.
you can invest and forget because you are working with surplus income,
whereas my investments account for 38% of my income, I cannot take the risk of invest and forget EXCEPT from the surplus from my lending income.
invest and forget (buy and hold) has a liquidity problem for the early years, ie you cannot access the money for maybe even some years without losing money.
I dont like the terminology "peer to peer", for me its "bid/offer lending", eg ebay, amazon, betfair, bullionvault are bid/offer. with a bid/offer market you have buyers and sellers, the sellers compete with one another for the buyer money, the buyers compete with one another for the seller money. the buyers want cheaper prices, the sellers want higher prices, so the buyers compete with sellers.
with bid offer nexus sites, the nexus has no risk, they just take a commission on each trade and are a bit like stock brokers or estate agents. estate agents usually dont own any houses. most people wrongly think they own the houses in the window. they dont.
so the peer to peer lending sites are different from banks and savings, because with the latter the risk is by the bank. whereas with peer to peer the risk is by the lenders, as such the lenders get much more of the profits, and the lender knows all their risks, which is the borrowers on your loan book defaulting, versus banks and savings where you have no idea at all where the money really goes, with Northern Rock it went on toxic US mortgages (derivatives).
to mitigate against defaults, if you lend 1000 at ratesetter, they will put something like 10 or 20 quid of that per borrower, ie you'd be lending the 1000 to 50 people. its very risk averse.
according to their stats they have 204 million quid lent out, they estimate 3.3 million will be defaulted, and their provision fund has 7.4 million quid. they say 0.17% of their loans are 1 month late, and 0.05% are 2 months late.
they have been going for some years and have never defaulted to any lender. its much safer than the government and EU and US govt guarantees which are baseless promises. the subprime crisis is because the US official guarantees went bankrupt. politicians are well known for not keeping promises!
with bid offer, you need to avoid bidding wars, so ensure your bids are a margin of the liquidity. eg if a loan is for 50000 quid, dont try to bid 30000 as that will push the rates down. there could be 100 people bidding on that loan and 30 of them will start to underbid your 30000. ratesetter right now has 301k being bid on the 5 year, and 55k on the 3 year. if your bids are 1% of the market that is probably safe. ie bid up to 3000 for the 5 year, and 550 for the 3 year. and at FC for a 50000 loan, bid say 500.
you shouldnt put more than 1% of your money on any one loan, but at the beginning the percent will be high.
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