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RBS is not the only FTSE100 share to have dropped 50/60% in the past year, quite a number have. Having substantially reduced my RBS holding my task has been to select those that are at low levels and likely to recover quickest. Not easy! It could be that RBS shapes up as strongly as some others but without the expectation of 3-6% dividend. I guess that is the fun of it, especially in allocating how large a holding to take in individual companies. Which ones will come through, who knows! Maybe I should have stayed with RBS but it seemed to be a very serious gamble. Director purchases suggest a more positive future. We'll see.
And I thought it was something I had said! Pleased to hear that you are well and have better things to do, maybe we should all take note. If you are anywhere near Sidmouth over the next few days look me up and I will stand you a dram. All the best.
That's exactly what I am saying. Don't throw good money after bad, rather back a winner. Then, as your fund increases, start to sell RBS and take the loss, add the proceeds to your 'winner' fund, and continue until overall profit and beyond. Believe me the relief is comforting. I dropped RBS from 40000 shares to 1600 in two years. I still have the 1600 but only as a token and may yet sell these as well. There are quite a few shares that are much safer and rewarding, just be very strict on buying low. Good luck!
Sitting here I was prompted to look at the figures you might find on your spreadsheet. I seem to remember that you are in at 530p or thereabouts. Let's say you have 1000 shares. To average down to 340p will need 12.5K new cash and you will still be 130p above today's SP. If you had bought BATS in March pre Ex Div @ 3983p your 12.5K would have got you 312 BATS shares. With dividend at 1.046 and yesterday.s SP @ 4145p you would now have 13.240K. Repeat several times with increasing fund and you will see that it is a much better option.
Those of us who have been here for some years have seen it all before but where we are now raises all the serious questions raised in the past few days. At 200p it seems a great chance and I remember well all the excited thoughts when we were here in 2008/9. Will I dive in again> NO! Others will, indeed many who are new here will, so maybe the risk is not that great. Is it worth the risk? Maybe!
I guess the real point is how many of us can afford what has been a real risk when our buy-in view was so hopeful. With the SP as low as it is it will tempt a lot of people to fall into the same trap. Not me, I have been there several times and I still have some, but only as a 'maybe one day', certainly not as a serious part of my portfolio.
Yes, I understand, I have done that a few if not too many times. Before you do it might I suggest you set up a trial spreadsheet? Select a solid earner, eg: BATS (which was where I went two years ago) , and look at the past year. Pick out a low SP point and start there with your "huge amount of cash". Then, using mailman's system, pick a higher SP and apply that. Wait for another 'low' and 'buy' again, etc.. Do this for a whole year and see what your earnings could have been. Then add the dividend and see what the year could have done in total. I have done it for real over two years and my profit from BATS alone (I have spread to several others) has allowed me to take the loss on most of my RBS holding. Now down to under 5% of what I once held. My point is throw the money at something good, make the profit, and take the loss. But, seriously, try it on a trial spreadsheet first to convince yourself of the figures. Even dyor and repeat the exercise on several different shares. Good luck.
I am sure we have all been drawn in to the belief that RBS must surely show substantial recovery yet the reality has been a continuing saga of bad news after bad news, some of it verging on criminal. There is an argument for averaging down but remember what that actually means is ‘throwing good money after bad’ in the hope that there will be some, perhaps fantastic, recovery that will take the SP above the new average and beyond. What it also means is the expectation that this badly performing share, we are talking about RBS, will do good things for your fund. But how long should we give it? Is it a Leicester City or an Aston Villa? That is the question.
Another good Scot gone today. RIP
You can be so modest!
Its a tough situation for all. Maybe GO has to do the same as we do and decide when to bale out and take the loss or, pile in to reduce the average SP in the hope that will be achieved sooner rather than later. On the other hand, he could announce a date for sale and hope there would be enough interest to pump up the SP ahead of that date. I am not sure if that would be allowed? Whatever he chooses to do he will be well rid of this albatross.
Great entertainer, never missed his show. Condolences to Debbie, also a great part of the show.
My guess is that grandparents will use this as a means of helping their grandchildren. It may be possible to invest in Share ISAs in which case there should be growth and dividends to make a significant boost to the cash invested. As a grandparent I would expect to require the children to achieve additional saving from their incomes.
It seems to me that, as with food, peoples' eyes are bigger than their wallets. We have to hope that increasing numbers will get the message. Today's 'Lifetime ISA' may kickstart the value of saving, probably from grandparent encouragement.
Some of us have no need of a smartphone and choose not to buy one. We all have the choice. The same applies to the size of the first house/mortgage.
Ever since the use of computers became the means to recording figures and facts it is my belief that senior managements have been less aware of what is going on in their companies. I don't think they spend any time reading what is available either on their screens or printed off, the volume of information is so huge that it is off-putting and they actually read less than they did in times past. In return things that are ignored go wrong and companies fail. I guess the same applies all the way down the management tree. Just because the information is on the computer doesn't mean that anyone is aware of it.
Add in all the assets that have been sold, where has all that cash gone?
Good stuff, Graham, Buffett, and Munger, what a team! The trouble is in giving it the dedication these guys suggest and as you have done. Some of us read so much and fall asleep wishing we had started younger when the brain was willing. I first bought in here in 2008 and have had some good ups ups and downs so no real complaints though this past few weeks haven't been pleasant. You suggest RBS should be selling more assets. It seems to me that Hester sold lots and there have been further substantial sales since he left. It is difficult to understand why they haven't got it all under control in seven years, any other business would have disappeared. When the results come around each year I get the impression it is all about tax management (or evasion?) and that one day the boat will come in with a huge bow wave of profit, but each year seems to continue where the last left off. Is it just because the Government owns the majority stake, or some political nonsenses? How long can this go on?
Once had a farmer friend, Donald P, who also started ECL. A lovely man, too short lived.
It seems to me that the opportunity to own one's house is a means to helping develop self worth, hopefully also an understanding of commitment that will relate to such a level of prudence as may be appropriate. Every week we see stories of people with all kinds of electronic devices, some on contract, if not on credit, yet they do not have food, etc., to feed their families. For me that is where we have to start.