Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Potential big swings between now and close of play tomorrow. I think we will hear major announcements from both the BOE and the government. I think the Gov't will reign in on some of its mini-budget tax cuts and I think the BOE will agree to carry on QE (or whatever its called these days) - for now. I'm predicting big upswing initially and sell off towards Friday close of play. I might join in the action!
Unfortunately, whilst in Office, Bailey is pretty much un-sackable. It needs the consent of the Government to get rid of him. But I have said it a number of times before - when he open his mouth - the markets tank, or at least bank shares do. He loves it, he loves the power.
Down down down... and this is before the global recession is acknowledged, before the energy crisis really bites this winter and before Putin's patience finally snaps and he unleashes the terror he is capable of.
If it keeps falling like this then a couple more rounds of buybacks and the bank will soon be owning itself!
And there goes the purported resistance at £1.40.
Hello Malchance. On a general view, look at all the economic global issues that have done for Barclays this year. Downturn in American markets - war in Ukraine and nuclear war threats - inflation sky rocketing - interest rates skyrocketing (perversely, markets now think high interest rates are bad news for bank shares!) - home, European and global recession - energy crisis - concerns about customers not taking out new loans and defaulting on existing ones - Chancellor considering a stealth tax on banks which might look like a windfall tax times fivefold - Chancellor and new government who, two weeks in have lost the confidence of the markets and so on and so on. How many of these are likely to get worse before better in the next 3 months? Most of them I would wager. So the expectation for me is there is more pain before gain. The only hope is that market sentiment rules that the Barclays SP has fallen far enough and there is now a bargain to be had. But I suspect any perceived rally to be short lived and if I see one, I'll sell and buy back on the drop. What happens on results day I think will take into account what happens between now and then and how jittery the markets are on the 26th. But in general, regardless of how they are perceived, I think the reaction to them will depend on the SP at the time. If there appears to have been a rally between now and then, I think the market might see something in the results to encourage a sell-off. If the SP falls between now and then, the markets might look positively on the results and take reassurance in the belief that even if the SP continues falling well below £1.40, in the long run, it is still a dirt cheap (I hope!) price. Whatever, I am not expecting the markets to act rationally on production of the results!
Looks like it is going to give up all of yesterday's gains - plus some, by the end of the day. Heading for sub-140 by end of week, I fear.
Hello Supernorm. whilst it is exacerbated by global market conditions, I think the continued UK downward spiral is a combination of the markets scenting blood and attacking the pound in particular and their anger at the arrogance and naivete of Truss / Kwarteng. I actually think that Truss is going to have to sack Kwarteng as a matter of urgency and have urgent costings provided by a new Chancellor with some reversal of the proposed tax cuts. Otherwise, this thing is going to gain traction imo and a vote of no confidence in the government might succeed, triggering a general election. It all has the feel of George Soros and the 1992 Black Wednesday situation where Major / Lamont were powerless to stop the attack on the pound - at one point raising interest rates to 12%! So if nothing is done, my guess is the floor will be around 120 - 130 for Barclays. But I don't see an immediate arrest on the slide this week until something more meaningful is done to stop it. But if I had bottomless pockets I would be chasing stocks down at this moment in time - it's how the rich get richer!
Thank you for your post Mr A. Very interesting. I note that the Chartists believe sellers are targeting a fall to £1.50. Yet a couple of days ago Mr Strang was suggesting the charts showed that the SP was just a fraction of a penny away from triggering a rise to over £2. But because it was a fraction out, the SP might now fall to £1.00. Meanwhile - back at the bat cave - it is as plain as the nose on every non-chartist's face, as to why the Barclay's SP and the rest of the FTSE is in retreat.
My apologies JayK. It seems my poor attempt at humour has struck a nerve rather than a chord. I am sorry.
Just dropped 7p in a little over half an hour!
I think over the next week and the next couple of days in particular, there is money to be made with the volatility of the market - if of course you read it right. I read that economists believe that the US markets have priced in a 0.75% rise this week - I am not so sure. If Powell doesn't go for the full 1% (which certainly hasn't been priced in) then I think even his supporting commentary to a 0.75% rise will jolt the markets. So for Barcs shares for example, I would not be surprised to see a significant tail off of the SP towards the 4.30 closing bell today. As for Bailey, well you might think that Liz Truss and her energy costs mitigation might have taken the heat off him (excuse the pun), but whilst a 0.5% rate rise is probably to some extent priced in, you are dealing with a man who is so arrogant and pompous (and hopeless) and so full of his own self-importance, that he actually seems to enjoy upsetting the markets and the sense of power it gives him. So again, I think he will let his mouth run away with him and upset the markets further, even when there is actually no need for him to do so. As always I may be entirely wrong and if the SP takes a northerly trajectory over the next week or so, I will be pleased to be proven wrong. Where are the Chartists at the moment? I love reading there insightful analysis ..."so £1.70 might be the new floor or it might be the new ceiling depending on whether the SP goes up or it goes down - and the caveat to this is if the SP hits £1.69 or £1.71 in which case the analysis is self-invalidated" which I find crucial in making decisions as to how to invest my pension pot! But it seems that we only hear from them after a period of SP northerly travel and in periods of short-term benign economic climate. Hope it all works out well for you all in your Barcs investments.
I think my timings were out. Prepare for a spectacularly bad day today - close below 170p.
Good evening Mr A. Am I reading this right? Crispus posted this lengthy piece at 9.39 this morning and by lunchtime, by his own criteria, it was invalidated when the SP dropped below 170p? If so, I have my own prediction for tomorrow. I think the SP will creep up to 173 / 174 by mid-morning and fall back down to 169 by close. Of course I may be completely wrong, but one thing I can say is that, between now and opening bell tomorrow, my prediction will hold valid for longer than Crispus' did today and nobody is paying me to write this stuff - I happily give my views for free! Have a good night.
Slightly worse than expected CPI data in the US and in little more than half an hour, Barcs SP had fallen 2.15% - such is the power of the Dow. Whatever the chartists say, in my opinion and for the next six months, I think global share prices will be shaped by inflation, interest rates and the energy crisis and how deep into recession that takes us. It is impossible to calculate at the moment, but I fear that regardless of whether the Ukraine war escalates further, Putin is going to make the energy crisis pretty serious for Europe this winter, to the point that I think enforced energy restrictions will be put in place. I also think that the FED will surprise the markets next week and add a 1% increase in the base rate - rather than a 0.75 increase (and I suspect that whilst a minimum of 0.75% increase has been well telegraphed, I still think that together with Powell's supporting speech, such an increase will still jolt the markets). I sold a tranche of Barcs shares on yesterday's highs. If the SP falls to the low £1.60's - I'll buy them back and sit tight to see what happens next.
Back down south with the Dow again I am afraid.
Good morning Mr A.
You know I don't take my frustration with barcs out on you - but with those who write the articles you post and this annoying hogwash of an article, is no different.
"It pays a healthy dividend estimated at 4%" - No doubt the Barclays board love this as a headline. This however, assumes you are investing at around £1.56 per share and receiving around 6.25p per share annually. What is Barclays view on those who might have parted with say £20k at £7 per share all those years ago, who have not only seen their capital pot erode by 75% but only receive a dividend equating to 0.9% - 'Big Suckers' presumably?
"Complemented by share buy-backs - the preferred method of returning capital to shareholders" I know I am the proverbial broken record on this one, but no-one has yet shown to me that a single penny piece of capital has been returned to shareholders through buy-backs. Anyone reading this prepared to tell me they have had capital returned to them through buy-backs and prepared to tell me how it was done?
Reason 1 - deep recession - "I believe that these concerns are way overblown and BCS should comfortably be able to ride out any plausible economic storms". In my view an ignorant comment. Take a look at history and see what a deep recession does to the share price of bank stocks. If the article means by 'riding out' the storms that the share will bounce back after the recession, that is no comfort - most shares will. But don't suggest that the Barclays share is impervious to a fall, in a deep global recession.
I do however agree the article where it suggests the depressed SP, in part, is down to the way the bank has been run - even post the financial crash of 15 years ago. I only wish the bank itself would recognise this and show some contrition by slashing its obscene pay and bonus culture and sacking culprits - but it never will.
The article is almost laughable on the point of inflation and increasing interest rates. Ever since the rate of inflation exceeded the BOE target last May (when Bailey said it was only transitory and ignored it completely until December) the media have alternated between 'interest rate rises are great for the SP of a bank' to 'interest rate rises signals rampant inflation and loan & credit card defaults and less spending and therefore a disaster for bank shares'. The current evidence actually suggests that if interest rates rise, then its bad news for someone and 'bad news' means Barclays SP will be hit, which is why I jokingly suggested that the best time to sell, is just before Bailey and Powell next open their mouths - as whatever they say, will send the SP down.
The truth is I am weary of reading articles that suggest the barclays SP is too cheap to ignore. I have no doubt that articles along the same lines have been written when the SP was around £7 and when the SP was around 80p and at every point inbetween. My view is that the biggest impediment to the Barclays SP is Barclay
Hello JayK. I am not sure I support your optimistic sentiment. It seems to me that the global markets reaction over the last few days, seems to be acceptance of a global recession and in such, the FTSE could yet fall a further 10-30%. In that scenario, I think Barclays could be hit as hard as any other FTSE stock. I do hope I am wrong. It seems to me that in the current climate the potential way to make money on Barclays is to sell a tranche just before any UK / US CPI data is released or just before Jerome Powell or Andrew Bailey opens their mouths and then to buy back at the significantly lower price, after such data is released, or just after Powell / Bailey have shut their mouths.
Crikey Darkknight, I do hope you are wrong. Even if the SP was to hold at the pathetic price of £1.62, that would take £1bn a year for the next 13 years to achieve. I don't think even the most optimistic shareholder is prepared to wait 13 years in the hope the buy-back programme will start to make a difference.
Immediately before the buy-back programme commenced on 19/3/2021, the SP stood at £1.83. Now £2.3bn and 17 months later the SP stands at £1.60 and heading down. Along the way the securities issuance fiasco cost an additional estimated £1bn and still doesn't seem to have been put behind us. And for us ordinary investors we are powerless to change anything and hold any of the board to account. And rather than pay the owners of the bank reasonable returns on our ever-shrinking capital pot, the board continually insist that throwing billions at buying and cancelling shares is what is required to get the SP moving in the right direction. They are misguided. Subject to wider global and economic conditions, what is required is for the market buyers to outweigh the sellers on a consistent upward trajectory. What is required for that, is the buyers belief that they are buying into solid and trustworthy stock that pays a good return on their investment, with likely capital appreciation. For a decade and more, the bank has failed on these two basic principles and yet stubbornly continues to plough their infuriating furrow.